Monopolies. The race nobody has run.
America can't break up its monopolies because China won't break up theirs. It is the same argument used against banking rules and child labour laws.
THE GIST ON MONOPOLIES: "Monopolies and China"
What is the argument?
Big tech says America can't break up its monopolies because China won't break up theirs. It's the same argument that got used against banking rules, emissions limits and child labour laws: you can't have rules because they don't.
It's the perfect argument. It's unfalsifiable. No one can see an alternative future where we acted differently, so you can never be proved wrong about a race you haven't run.
What does the precedent say?
In the 50s, the biggest company in America was AT&T, a phone company. Its R&D lab developed the transistor. AT&T used it to improve phone calls and sold the rights for 25 grand, because a phone company has no use for a computer.
Then the government sued it for running a monopoly, and the settlement forced it to hand over 7,820 patents to anybody who wanted them.
What did the break-up lead to?
That same year, one of the men who invented the transistor set up on his own in California. His company became Fairchild. Fairchild became Intel. And Intel's founder said that settlement was the reason America had a chip industry to start with.
So the argument that breaking up a giant would cost a country the lead is undermined by the fact that breaking up a giant is what gave the country its lead.
Where do new things come from?
The argument only works if you believe big things are where new things come from. They aren't. A monopoly protects what it already sells, which is exactly what AT&T did.
Somewhere in one of these digital behemoths right now, there's something like a transistor being used to make the existing business slightly better, or being wasted by people who can't see what else it's for.
Should giant tech firms be broken up?
Your take. One tap, then see how everyone else voted.
Quick answers
What is the argument against breaking up monopolies?
That America can't break up its giants because China won't break up theirs. It's unfalsifiable, because you can't test an alternative future.
What happened when AT&T was broken up?
Its settlement forced it to hand over 7,820 patents. One of the transistor's inventors set up on his own, his company became Fairchild, Fairchild became Intel, and Intel's founder credited the settlement for America's chip industry.
Do big companies produce new things?
Not usually. A monopoly protects what it already sells, which is exactly what AT&T did with the transistor.
See you on the next one.
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