The Mighty Amazon (and Facebook...and Google?)

EconTalk Extra
by Amy Willis
Matt Stoller on Modern Monopol... Kelly Weinersmith and Zach Wei...

Google school.jpg In our last episode of 2017, EconTalk host Russ Roberts welcomed Matt Stoller of the Open Market Institute to discuss his take on modern monopolies. In this lively conversation, Roberts and Stoller discussed the role and influence of technology companies in our lives- especially "the Big 3," Facebook, Google, and Amazon.

1. How great a problem is extremism on social media? Is the problem self-generated, as Roberts suggests, or inherent in social media's algorithmic nature?

2. What does Stoller mean when he argues that tech companies like Google and Amazon are disruptive to democracy and violate our rights as citizens? How does Roberts respond to this claim?

3. Roberts reminds Stoller that fears of companies growing too large and having too much power over consumers is nothing new. What does Stoller think is different about companies such as Google, Facebook, and Amazon today?

4. If the Department of Justice were to disallow acquisitions by the "Big 3," what effect would this have? Would it have the effect(s) Stoller desires?

5. The biggest bone of contention between Stoller and Roberts regards the plight of the creative class today. What do you think? It is easier or harder to be an author, musician, or craft brewer today than it was twenty or thirty years ago, and why?

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COMMENTS (8 to date)
Dr Golabki writes:
1. How great a problem is extremism on social media? Is the problem self-generated, as Roberts suggests, or inherent in social media's algorithmic nature?
It's a large problem and at least partly self-generated. It's also partly the nature of social media, the breadth and annonymity of social media normalizes extremism by allowing extremists interact with minimal social cost.

I don't know if algorithms are part of the problem, but Matt's claim seems plausible to me. These platforms want to keep your eyes and clicks. To do this it titillates in all sorts of ways, extreme social / political views seem like a likely candidate. If I'm a Republican who thinks Hillary Clinton has bad policy goals and is a bit more corrupt than the average politician, what am a more likely to click on, something about how Hilary is actually fairly moderate, or something about a hidden scandal of the Clinton's?

You don't have to believe that someone at Facebook said, "people like extremism so lets give them more extremism". You can get there just by the simple, myopic search for more clicks.

Brad Regan writes:

Stoller makes lots of intellectual leaps that seem to be driven by anti-capitalism. I had a hard time listening as he is so scattershot with his ideas. He makes points like "more book titles are bad because this reduces the number of different ideas because there are books like The Fart Book". As if all the increase of variety of information is all in areas that banal. I think his positions are ludicrous and unsupported by facts. Of course if you go to a search engine and search for something, you'll find it and similar things. I think people are being way too myopic thinking that you'll only search for more extreme things when you are offered both more and less extreme when you search. I'm glad Russ has folks like this on so we can see just how muddled and confused the thinking is in our learning institutions.

Karl Melrose writes:

I really struggled listening to this episode for two reasons - firstly, I violently disagree with the majority of Stollers positions, and secondly, the frequent degeneration of the discussion into rants by Stoller. Full credit to you Russ for keeping this one on track.

I agree with the comments from Brad above completely. I would have liked more focus from Stoller on systematic breakdowns in competition, transmission mechanisms, evidence, and positive vs. normative historical perspectives for consumers.

The simple truth that both Amazon and Google succeeded because they offered, and continue to offer, far better services than any of their competitors seemed to be of little importance to Stoller. The need to offer better services in a dynamic competitive environment in order to maintain their primacy also seemed to be unimportant.

Stoller didn't demonstrate to me any really systematic understanding of the markets in which he was railing against Google and Amazon, and had no real evidence. It felt like a confirmation bias driven grab at random anecdotes to support a position with little foundation.

I agree that algorithmic platforms are generating some negative outcomes. They have some inherent confirmation bias that does reinforce rather than correct extremist positions - but again, where was the evidence?

I'll probably read Stoller's book when it is released in the hope that it was a case of passion overcoming coherence. The whole thing felt like some kind of conspiracy driven panicky rant - which may have been driven by Stollers google results.

alex writes:

[Comment removed. Please consult our comment policies and check your email for explanation.--Econlib Ed.]

Mike B writes:

The problem seemed to be that Stoller thinks his self chosen elite are all that matter. Author average salaries are down? Why not look at total author compensation instead? Obviously with millions of people able to get their information out, the demand for a NYT bestseller’s book might be lessened. The same holds for the top tier musicians. Now you can get heard on YouTube. Once upon a time there were a handful of labels that were the gatekeepers to the big time.

As a consumer, I am made immeasurably richer by being presented with the nearly limitless options that didn’t exist 20 years ago. It sounds like Stoller is upset that competition has driven down the extra-normal profits of some of the elite and upset that we are reading things other that what a handful of publishers decide we should.

Weldon Turner writes:

[Comment removed. Please consult our comment policies and check your email for explanation.--Econlib Ed.]

Ramon Rivas writes:

[Comment removed. Please consult our comment policies and check your email for explanation.--Econlib Ed.]

C.Mueller writes:

The Big Three obviously have become gatekeepers. To deny this is to deny reality. Look at what they are doing to conservative voices now with the "shadow banning". I think Stoller was edgy but made some good points. We should be concerned with some of the issues that he brought up. I would LOVE to see a Libertarian or Conservative start a successful company that is able to successfully compete with them and actually maintain and protect the freedom that we assume the Liberals want but seem to always keep only for themselves.


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