Dr. Peter Klein on Silicon Valley Socialism

this is mises weekends with your host jeff dice [Music] if you're under 30 this might be hard to believe but silicon valley used to be thought of as a hotbed of libertarian thought in fact a lot of big silicon valley companies used to brag that they didn't have a lobbyist in washington dc because they considered the regulatory landscape irrelevant to what they were doing fast forward though to the late 1990s early 2000s everything changed when the justice department brought a huge antitrust suit against microsoft which resulted in the settlement and some humiliation by bill gates so today we think of silicon valley as almost pc orthodoxy enforcers we have companies like twitter and facebook making de facto editorial decisions and deep platforming people like alex jones so we have a great talk today for you from our own peter klein who actually presented this at our supporters summit last week on on the subject of how socialism came to silicon valley you're really going to enjoy this peter did a great job have a great weekend you know we're all here this morning like if you're like me i was uh scrambling to find a copy a paper copy of the schedule to check the timings and everyone's titles because i haven't been using the paper schedule i've been using a schedule on my uh electronic device right so if you think about the industries with which you interact on the most frequent basis nowadays aside from industries associated with food clothing and shelter right the technology sector is probably the one that you deal with on a daily basis more than any other it's hard to imagine now what life would be like without google without uh without maps without apple samsung and so forth uh life before the internet was you know nasty poor brutish and short uh for those of us who remember it uh of course we have our own challenges now so you know it really is hard to identify an industry over the last three four five decades that has had a bigger impact on the world than the technology industry which of course is a global industry but uh is centered around centered upon silicon valley uh in in california has been from for many years uh and the us continues to be the world leader in uh not in manufacturing of technology products but certainly in design administration and in software and in many other parts of that sector it's a great american capitalist success story and yet right there are many things about the technology sector uh that make many us many of us uncomfortable okay so um ideologically silicon valley appears to be much less uh sort of a load star of capitalism and almost like a bastion of socialism right if you look at kind of the words and and uh uh belief systems and so forth associated with that industry with that uh part of the world i mean remember this this is not if if if tech executives are socialists they're champagne socialists right i mean jeff bezos uh ceo of amazon is the richest person in the world and depending on how you measure maybe the richest person who ever lived apple is a one trillion dollar company uh amazon is not quite in walmart's neighborhood but it's getting close uh amazon had about 187 billion dollars of sales in 2017 which is uh you know about a third of walmart's total sales um but who what are the people like who operate these companies the people who work for these businesses the people who are the liaisons between the technology sector and the the the beast in washington dc well i mean you know there are lots of ways to sort of look at this you uh one one study estimated that if if you look at campaign contributions in the 2016 presidential election there's about 8.1 million dollars given by tech executives uh employee and employees 95 of that went to the clinton campaign so 7.7 million was donated by silicon valley types to hillary clinton's campaign trump got about four percent of that total uh you know we used to talk about silicon valley as an outpost of libertarian thinking right the tech tech executives in the 70s and 80s were thought to be kind of libertarian in spirit and of course you do have a few people like peter thiel who and patrick byrne who explicitly uh advocate for you know blockchain and similar technologies as a means of liberating people from the state but but you know even poor gary johnson got less than one percent of all of the campaign contributions in the 2016 president presidential election the libertarian candidate uh gary johnson lately there's a lot of discussion a lot of concern about the big social media companies facebook twitter uh um youtube which is owned by google and so forth you know imposing either outright bans or so-called shadow bans on conservative and libertarian thinkers right closing their accounts for making politically incorrect remarks uh or or you know adjusting the algorithm that the that these platforms use to to display stories in certain order in a certain order and so forth so that people are less likely to see uh um posts from individuals and groups that are thought to be you know politically suspect um uh if you do a google search even trump alleges that right if you search for donald trump on google google has either designed the algorithm in such a way or there are people explicitly coding it such a way that you know stormy daniels is the number one hit or whatever if you search for for donald trump lou rockwell even mentioned in his remarks yesterday that companies like paypal have refused to deal with you know websites and uh publishers and so forth you know who have kind of sort of disreputable ideas and there's the whole crusade emphasized over the last few months about fake news and that's how it's the responsibility of facebook and twitter and other social media firms to weed out the fake news of course what is fake news well the usual definition of fake news is you know news not approved by the state right and the and the established media companies and so forth so there's a lot of pressure on technology firms to put policies in place that make sure that only sort of approved opinions get out and are seen by people and so forth some of you may have seen uh oh it was about three weeks ago i think uh i believe it was breitbart uh produced or shared a leaked video video of an all hands meeting at google a few days after the 2016 election or the first one of their company-wide meetings that took place after the election uh with all of the top uh executives at google and including the founders sergey brin and larry page you know crying and people were sort of you know singing we shall overcome and so forth as people expressed their their sorrow and how hurt they were about the election results and so forth there was one survey of uh political opinions among google employees suggesting that those who identified as conservative or libertarian you know felt highly uncomfortable sharing their views with their colleagues as you can imagine and you may remember the incident from 2017 where an engineer at google named james demour published an internal memo i think it was called google's ideological echo chamber complaining that there was a lack of viewpoint diversity within google on issues not just related to politics but on issues such as uh gender diversity in the workplace and that it was harmful to google professionally that there was only sort of one official view that was allowed on these kind of social issues and that it would be better for the firm better for creativity and so forth if there were a little bit more diversity of opinion of course then that memo was outed and he was abruptly fired by google and what was kind of a pr blow for google at least among people like us right and i even when i was looking the other day for checking the date on that most of the news articles refer to him as you know the anti-diversity guy who wrote an anti-diversity street i mean it wasn't an anti-diversity screed it was actually a pro diversity argument if we if we mean diversity of opinion right he said well maybe we ought to think in other ways about what you know why there are relatively few female engineers at in silicon valley maybe it's something other than the patriarchy maybe there are other explanations we should explore but that is described in the media as an anti-diversity stance okay so how can we explain this how can an industry that is such a great driver of capitalist growth and progress be staffed by people who have such anti-capitalist views how can we explain that well i mean first keep in mind that um you know if we're talking about the social media companies right they maybe are better understood not as technology firms per se but as media companies right now the new york times is also a very large private for-profit company the washington post of course is owned by amazon owned by jeff bezos right so it's it's not at all surprising that many large profitable for-profit enterprises take a very socialist left-wing anti-capitalist stance i mean we see that in the traditional media and this has been uh you know there are many explanations offered over the years great social theorists like joseph schumpeter and fa hayek have pointed out that when you look at the media universities other kind of the publishing industry and and many sort of public intellectuals the reason that they're so left-wing is not because you know smart articulate people tend to be on the left but because of a kind of a selection bias that smart and capable people who are kind of uncomfortable with markets and commerce who like to tell other people what to do right tend to select into academia into journalism into the media and so forth whereas equally smart and capable and articulate people who are comfortable with the world of affairs tend to self-select into business and uh tend to be pro-capitalism and be in the capitalist sector where we don't see them as much right because their job is not to stand up in front of people and talk but rather to make goods and services and to you know make the world a better place um of course when you are in the universities or you're in uh the journalism industry it's to your advantage to be friendly toward the state uh to support the government murray rothbard of course wrote a bit wrote about this on many occasions this kind of unholy alliance between uh public intellectuals who provide sort of legitimacy and justification for the state in exchange for which they get access they get privilege they get special protection they get public funding and subsidies and so forth so we shouldn't be surprised that you know to the extent that facebook and twitter and so forth are media companies that their personnel have the same kind of ideology as other media companies namely an anti-capitalist uh kind of a view and of course there's also a lot of uh what we might call confirmation bias among media types right they interpret events when they look at what's going on you know the the hearings in the in the senate in the last u.s senate the last couple of days hardly anybody in the established media or in these new media companies is you know kind of trying to report on the facts of what happened in order to establish some kind of truth or discover the facts of what took place 25 or 30 years ago right every everything is interpreted to fit into a preconceived narrative right and depending on what your preconception is you describe these events in a way that reinforces your particular ideology okay but what about tech companies specifically right why are why are why are amazon and apple and microsoft and firms like that why why are there executives and employees why do they tend to have this particular ideology i mean let's keep in mind that these are private for-profit companies okay whatever you feel about twitter or facebook i mean their assets are owned by investors shareholders these are private companies they're they're businesses to make is to make profits by providing goods and services to consumers and of course these companies have tremendous created tremendous value for human beings right for consumers for humanity uh in in the last few decades so there's no doubt about that but of course we don't live in a pure capitalist economy we don't live in a free market society we live in a mixed economy in which many firms can become large and influential not merely by providing goods and services that people want but also by kind of cozying up to cozying up to the state right now of course we know from history you know patrick talked yesterday about his work uh editing rothbard's book on the progressive era right throughout history many big business people have not been pro-market but have been pro-subsidy pro privilege uh in a way that benefits uh themselves so we shouldn't be surprised that large wealthy um you know profitable companies can be staffed by people who are not pro-market yeah and again i think the social media companies are like media companies in that they don't want to offend the powers that be a good example is google you know has allegedly is working closely with government officials in china to make sure that google kind of enables the sort of censorship that is common in china in order to gain access to that market uh there was you might remember the whole thing in a big issue in 2016 where the fbi wanted apple to unlock an iphone to be able to provide some information about uh a criminal case and um apple ceo tim cook made a big deal of opposing the fbi on these grounds that kind of stuff is just a sham right that's that's theater that's political theater in reality the tech companies work very closely with the nsa and the cia and the fbi and other government and their equivalents around the world to you know partner with law enforcement in a in an appropriate manner to make sure that no one can use their technologies for you know uh inappropriate purposes uh again as patrick pointed out uh when we look at the progressive era right many of the the rules and regulations that were allegedly designed to protect consumers and the public from harmful big businesses were really you know written by and designed by those business big businesses directly in order to protect them against their younger smaller uh competitors i was really struck by a couple of scenes earlier this year when you know they had those hearings in the u.s congress and they made mark zuckerberg appear before congress and explain what facebook is doing to get you know to keep out the russian bots and so forth make sure the russians don't steal the election for for trump and at one point you know zuckerberg said uh you know look there's a real danger in allowing uh the government to have influence on you know information channels and then just a few moments uh then he pointed out and we facebook we're not a small company you know we're a large dominant firm it's relatively easy for us to work with you congress to meet your rules and restrictions uh but it's much harder for smaller younger companies like we facebook once were and so zuckerberg he's basically stating the thesis that rothbard emphasized right that uh regulation helps often helps big businesses at the expense of smaller businesses so hence big business typically favors regulation that imposes more costs on younger and smaller rivals than on big business itself you know and then 10 minutes later in the hearing he says to another congress person oh we at facebook would be delighted to work with you in designing the rules that will govern cyberspace you know to make sure we get rid of fake news well did nobody pick up on the sort of juxtaposition between those two remarks um so uh what is you know what does government do to help the technology sector why would why would tech firms have a more favorable opinion of government than they otherwise would well i mean in some cases it's obvious right there's some obvious cases of cronyism elon musk comes to mind right so let's let's put that aside because that one's too obvious uh there are more subtle ways in which government intervention helps these companies there's intellectual property protection right so most software products are are copyrighted uh other technologies hardware relies heavily on the patent system so in a world of a different kind of intellectual property regime uh there might be different business models that these firms would need to use uh and which might might be much more costly for them there's the internet itself which the origins of which owes a lot to government intervention right the internet evolved out of the so-called arpanet which was a defense department project from the 1960s and 1970s i wrote an article in the free market many years ago called government did create the internet but the free market made it glorious which got a lot of downloads a lot of hits on mises.org arguing that yeah the government did play a big role in the development of the internet but that kind of was harmful rather than helpful the internet might be better today if it had not been for massive government subsidies so i'm obviously not making a claim like the one associated with the british academic mariana matsukado who says well the government is really we really owe the government a big uh word of thanks for the development of technology and therefore we need more regulation and more subsidies and so forth i'm making the opposite claim the government has had a big impact in helping some technologies and technology companies but to the detriment of the overall working of of the system but another uh one one piece of intervention that's not talked about very much is a certain part of a 1996 law called the communications decency act which was sold to the public as a way of protecting you know minors from harmful and abusive material online but there was a little piece called section 230. now the communications decency act itself was struck down by the supreme court as being overly broad but the section 230 provision remains it explicitly gives internet firms immunity for any kind of sort of you know common law tort action like defamation or libel for material that is published on those platforms right so in other words if the new york times publishes an article an article that is you know defamatory towards tom de lorenzo i mean i know that's shocking to imagine um you know tom dilorenzo could potentially sue uh he could sue for defamation he could sue for libel or whatever uh and the argument would be well the new york times is a curated platform i mean some you know maybe patrick newman wrote the article but it was published in the new york times edited by the new york times so the new york times is legally liable for the content of its publication but section 230 says that facebook and twitter and youtube and so forth are not legally responsible for content that is on their platforms right so you some people have interpreted this as a kind of a subsidy that allows social media firms to made their business model more viable allowed them to attract investment and other forms of capital that maybe they wouldn't have been able to attract if investors were concerned that they could be subject to big losses in litigation and so the argument always was well the new york times is you know sort of constructed from the top down we're just an open platform where anybody can post anything so you can't hold us responsible for what people post well if that's the case then those companies cannot now be going through and removing fake news and banning certain authors and so forth well now you're like the new york times now you're curating you can't simultaneously curate and be immune from responsibility for what is published but that's what uh um that's what this legislation imposes uh one more thing too that uh might also be relevant is the famous antitrust case against microsoft in the mid-1990s before that time u.s tent companies were pretty apolitical they didn't donate to congress people they didn't have lobbying offices in dc and so forth after the antitrust case against microsoft they all stepped up and started donating money to politicians they all set up big lobbying branches in dc so you could look at the anti-trust trial as a kind of a shakedown right if antitrust is kind of an extortion racket so the government lets it be known that hey if you don't play ball we're going to come down on you and after that they played they played ball so what do we do about this um i certainly don't support the calls you hear from some conservatives well the government needs to regulate content and force them to include conservative views on you know force facebook and twitter not don't let them ban conservatives force them to have a balanced kind of opinion treat uh these platforms like so-called common carriers where anybody has to be allowed to use it i think that's a you know that's a cure worse than the disease right so i think there are two solutions in the short run those of us who are not satisfied with the ideological goods and services being provided by tech companies have a simple option don't use them right don't use the platforms that you find objectionable don't buy from the providers and don't buy the products that uh you know run by people whose opinions you dislike or find harmful use alternative products and services of which there are many to choose from but of course the long run as it won't surprise you here is to shrink the state so that there are fewer benefits accruing to entrepreneurs from partnering with and cozying up to the state so thank you very much [Applause] [Music] subscribe to mises weekends via itunesu stitcher and soundcloud or listen on mises.org and youtube

Channel: misesmedia

Views: 8,919

Rating: 4.9153438 out of 5

Keywords: Peter Klein, Silicon Valley, Technology, strategy culture politics, socialism, firms, libertarian, innovation, influence, wrong-think, Facebook, Twitter

Id: oXxyU7NTimI

Length: 24min 16sec (1456 seconds)

Published: Fri Oct 05 2018