China rises. Trump protects Americans. And tech giants monopolize digital platforms. Jeff Bezos, founder of Amazon, just eclipsed Bill Gates to become the world’s richest man. You don’t need a crystal ball to predict what lies ahead for Albertans.
Competition is not a level playing field.
Selling our beef, our oil and gas, and grain isn’t what it used to be. Even manufacturers of cutting-edge cell phones aren’t getting a fair shake in the digital market. Albertans can complain but what good will that do?
We live in the shadow of an elephant. Wide-eyed, we watch the lopsided rehash of the North American Free Trade Agreement. Trump’s launch of a natural gas project in Alaska, with the Chinese. A shale revolution that has made America self-sufficient. They don’t need us anymore.
We are in the fight of our lives.
Albertans can’t stop Trump, the Chinese, or giant tech moguls.
What will it take for our province to be competitive in the 21st century?
A crusade to shake up monopolies.
Harkening back to the days of Teddy Roosevelt and the antitrust era, The Economist magazine conjures up a power shift. A decisive swing of power back to the state, away from markets.
Yes indeed, a crusade to slow down malevolent tech giants. Google, Apple, Facebook. Free enterprise in the digital world has gone viral. It’s time to contain it. Protect jobs and consumers.
Governments often design and pay for roads, railways, telephone and electricity transmission lines. Governments didn’t design or fund these tech platforms. Now, politicians are seeing the problem.
The tech surge has changed how we do business. Just a few tech giants control all online platforms. By controlling access to their platforms, a small number of companies are seriously advantaged.
Enter, the politicians.
The number one job of a politician is to protect the interests of citizens.
Protecting workers who lose out as the tech surge changes how we work. Taxi drivers who lose jobs to Uber. Bookstore owners who can’t compete with e-books.
Protecting consumers as technology changes how we buy goods and services.
This is where it gets tricky for politicians. Thus far, the tech surge has made all kinds of stuff cheaper for consumers, not more expensive.
Yet, we know things are out of whack. Why don’t politicians just fix this?
Who ya gonna call? Trust-busters.
It’s tempting to slam down an iron fist. We’ve done it before. Big Tobacco, Big Oil, Big Pharma. Now, Big Tech. We need to stop this winner-takes-all approach!
In 1956, the U.S. government forced Bell Labs to license its path-breaking patents to all American companies. Royalty-free. Only by giving up its patents was Bell allowed to remain a monopoly. Imagine Google coughing up its algorithms!
In 1998, Microsoft was sued by the U.S. government for tying its web browser to its Window operating system. Remember how Bill Gates evaded questions? Played dumb. The courts decided that Microsoft should be broken up. But it never happened.
Fast forward twenty years.
Anti-trust regulators are flexing their muscles. This June, the EU slapped a $2.7 billion fine against Google. Of course, this wasn’t a case of consumers paying more. Their goods are free! Google was preferring its own shopping service at the expense of competitors.
Truth is, most of our trust-busting rules were built for a different economy.
In this 2017 book, Andrew McAfee and Erik Brynjolfsson explain what competition looks like in a digital world:
“Uber, the world’s largest taxi company, owns no vehicles…Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.”
Manufacturing competitively-priced products isn’t good enough.
“Excellent smartphones are no longer enough to ensure electronics manufacturers healthy profits in many markets; instead platform builders like Apple and Google capture the lion’s share of the value.”
If the old rules aren’t working, what else can politicians do to encourage competition?
Experimenting with ways to boost competitiveness in the tech sector.
French President, Emmanuel Macron, wants to tax digital companies based on revenues generated in the EU, not profits. He’s also promoting a “name and shame” platform to whistle-blow on aggressive predators.
German regulators are asking if citizens really understand the privacy rights they give up to social media companies. There’s a lot at stake, both ways. If you decline Facebook’s privacy conditions, you can find yourself friendless. Locked out of a 2-billion-person network.
South Korea and Japan are focused on all that consumer data sponged-up by Facebook and Google as we surf the web and make online purchases. Data flows across borders. Trade deals are starting to think about putting up virtual walls.
Maybe we’re already addicted.
We’re figuring out how these online platforms really work. Not just the technology. But how they get into our minds and purposely hook us. How they exploit vulnerability in human psychology.
Sean Parker, the founding president of Facebook, questions the unintended consequences “of a network when it grows to a billion or 2 billion people and … it literally changes your relationship with society, with each other … It probably interferes with productivity in weird ways. God only knows what it’s doing to our children’s brains.”
It reminds me of the questions we asked Big Tobacco.
Are you trying to get me addicted?
Yes, say Parker. The intention is to give you a little dopamine hit every once in a while, “because someone liked or commented on a photo or a post or whatever. And that’s going to get you to contribute more content, and that’s going to get you … more likes and comments.”
I know. Please, do like this article, or comment!
Back to Alberta.
To our marrow, Albertans believe in free enterprise and choice. Choice in our K-12 education. In where we buy liquor. In our electricity markets.
We also remember a time when monopolies weren’t uncommon, or necessarily evil. When I was younger, TransCanada Pipelines was the Canadian gas pipeline company. Canada Post was the only way to get a parcel delivered.
I don’t believe anyone is really suggesting we go back in time and turn online platforms into utilities (though China and India may be thinking about it). Some people are more comfortable taking risks. And, fair-is-fair. They should be fairly rewarded for that. But not unduly.
We didn’t need a crystal ball to know this day would come.
In a 1963 CBC Massey Lecture, literary critic & philosopher Northrop Frye described the emerging tech world as a Tower of Babel story. Civilization was building a skyscraper almost high enough to reach the moon:
“It looks like a single world-wide effort, but it’s really a deadlock of rivalries; it looks very impressive, except that it has no genuine human dignity…at any time [it] may crash around our ears.”
Carl Sagan saw this day, too. In his 1995 book, The Demon-Haunted World: Science as a Candle in the Dark, Sagan foresaw:
“an America in my children’s or grandchildren’s time—when the United States is a service and information economy; when nearly all the manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a few, and no one representing the public interest can even grasp the issues….”
Something does need to happen, and now. We need to get clear on our expectations for a fairer sharing of the upside of our digital future. And, our ethical expectations of companies who cast virtual anchors into our minds.
In Calgary, we’ve laid out the red carpet for Amazon. We’re hoping to lure Silicon Valley types to our cooler stretch of the Rockies. I’m encouraged by this. Not just because we need their tax dollars and jobs. We recognize that we need a strong infusion of risk-taking DNA. Sometimes we get bound up in our peace, order & good government roots.
In my crystal ball, I see Albertans remembering how to strive together, take risks, compete.
Think of it:
Our natural gas molded into tiny plastic pellets, ordered on Amazon, and delivered by courier to toy manufacturers in China.
Our durum wheat processed into pasta and shipped to Europe.
Our beef, aged, roasted and plated alongside root vegetables in high-end convenience meals purchased by Japanese families via vending machines.
What do you see in your crystal ball?
Donna Kennedy-Glans, December 14, 2017