Move Fast and Break Things | Jonathan Taplin

Summary of: Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy
By: Jonathan Taplin

Introduction

In ‘Move Fast and Break Things’, Jonathan Taplin explores how technology giants like Facebook, Google, and Amazon have monopolized the digital world and dominated modern culture. He delves into the roots of these companies, which he considers to be driven by libertarian economic philosophy. Taplin proceeds to discuss the consequences of their nearly unchecked power on democracy, small businesses, and the creative industry in general. By demystifying the complexities of the tech industry’s tactics and motives, the book aims to uncover the potential means for reestablishing balance and protecting democracy.

Public Sector Innovation

Innovation is not solely the domain of the private sector. This summary explores how government funding has played a significant role in some of the world’s most critical technology advancements, including the internet. Through examples like Doug Engelbart’s NLS system and Bell Labs, this summary highlights the role of government-sponsored incentives in fostering innovative breakthroughs that benefit society.

Libertarianism in Silicon Valley

Libertarianism has been a guiding force in the tech industry, with Peter Thiel and Jeff Bezos among its staunch proponents. Thiel, the founder of PayPal, was influenced by Ayn Rand’s ideology and sought to disrupt the rule of banks and credit card companies. Thiel’s principles quickly spread through Silicon Valley, with companies like YouTube, LinkedIn, and Yelp emerging. Bezos, CEO of Amazon, has taken advantage of a Supreme Court ruling to avoid state taxes, allowing the company to undercut local competition. Facebook and Google are also using their lack of physical presence to avoid paying taxes, resulting in an estimated loss of $60 billion in tax revenue each year. The tech industry’s embrace of libertarianism has also given rise to harmful monopolies that threaten to take over the internet.

Monopolies and the Founding Fathers

The absence of protection against monopolies in the Bill of Rights led to devastating consequences. The Sherman Act was later introduced, but legal scholar Robert Bork’s theory on the benefits of monopolies are still influencing the antitrust division of the Justice Department today, making it difficult to prevent harmful monopolies.

When it comes to market share on searches and advertising, Google dominates with an 88% share, while Facebook leads with a 77% share on social media. Surprisingly, there are no rules in place to prevent such monopolies. This summary takes a step back in time to see why the Bill of Rights did not provide protection against monopolies.

Thomas Jefferson believed monopolies could pose a significant threat to society after the East India Trading Company’s devastating impact on Britain. Visitors recounted the appalling conditions caused by the company’s legislation, resulting in the Great Bengal Famine of 1770. Despite Jefferson’s best efforts, the Bill of Rights did not include any safeguard against monopolies.

Alexander Hamilton, on the other hand, welcomed capital’s control over politics. He championed the government’s financial institution, the National Bank, despite Jefferson’s skepticism. The government owned only 20% of the bank’s shares, while the rest were monopolized by private interests, including Hamilton and his wealthy friends. The lack of protection against significant and powerful monopolies in the United States continued for centuries.

But in 1890, a century after the Bill of Rights, the Sherman Act finally passed, allowing anyone attempting to monopolize any area of trade to be subject to fines and imprisonment. Nevertheless, the legal scholar Robert Bork proceeded to take the US back by claiming that antitrust laws were harmful, and monopolies were ultimately beneficial to consumers. This idea still holds a lot of ground today, as Bork’s theories influence the antitrust division of the Justice Department.

In conclusion, the absence of legal protection against monopolies during the founding fathers’ time in America led to devastating consequences. The Sherman Act passed a century later, but theories like Bork’s still shape the antitrust division today, making it challenging to prevent damaging monopolies.

The Wealth and Influence of Tech Giants

The book outlines how the biggest tech companies exploit their dominance in online markets through the practice of rent-seeking. By controlling scarce resources online like Google’s advertising space, they can set high advertising rates which in turn boost their profits. Amazon is also highlighted for demanding exorbitant charges from publishers. The book explains how the tech giants influence US government decisions by employing lobbying and having former employees in government bodies. For instance, Google spends $15m every year on lobbying for government decisions. Furthermore, Google has a significant impact on public opinion; the book cites Google’s role in stopping the proposed Stop Online Piracy Act in Congress in 2012. The bill was supported by the entertainment industry but opposing Google’s business strategy that helps users access illegally pirated items.

The Cost of Counterfeits

The rise of internet piracy and counterfeit goods have decimated the royalties of many artists, like drummer and singer Levon Helm, who were once able to live comfortably from their music. While illegal file-sharing has skyrocketed, the creators of this content have lost out on billions of dollars in revenue, leaving many struggling to get by.

In 2005, Kim Dotcom founded Megaupload, which allowed people to share movies and music files online and quickly became a hub for pirated content. Megaupload amassed over 12 billion unique files, accounting for 4% of global internet traffic, and generated $174 million in revenue. Unfortunately, Megaupload was just one of many platforms contributing to the illegal sharing of copyrighted content. According to the International Chamber of Commerce, counterfeit goods shared worldwide in 2015 were estimated to be worth $1.7 trillion, reflecting 2% of the world’s total economic output.

The cost of piracy and counterfeiting is harshly felt by artists who once lived comfortably off of royalties from their works. Levon Helm, drummer and singer in The Band, is just one example. Prior to the advent of file-sharing platforms like Napster, bands like The Band earned healthy royalties from album sales. But with the rise of illegal file-sharing, members without songwriting credits, like Helm, saw their revenue plummet from around $100,000 a year to virtually nothing. Helm was sadly forced to perform despite his throad cancer diagnosis to cover medical costs.

The piracy problem not only affects individual artists, but it also deeply impacts entertainment industries as a whole. For instance, the Interactive Advertising Bureau estimates that pirated content costs each industry around $2 billion annually. Moreover, the elimination of pirated content would lead to an estimated additional $456 million in annual revenue from advertising.

Counterfeiting and piracy are an enormous worldwide issue with no clear solutions, leaving artists and creators frustrated and struggling to make ends meet. Meanwhile, illegal file-sharing thrives and profits.

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