It’s been 15 years since the 2008 financial meltdown plunged America into the Great Recession. Our economy has bounced back, but the populist fury the crisis ignited has yet to burn itself out.
manifests itself on the far left and right as general hostility to big business
and, more recently, to Big Tech in particular. Fortunately, the populists’
reckless drive to break up America’s most innovative and globally competitive
enterprises seems to be sputtering.
could prove liberating for Democrats, who will never outcompete rightwing
demagogues when it comes to stoking economic grievances. Instead, Democrats
need a post-populist economics that inspires hope in America’s ability to
innovate rapidly, generate abundant growth and opportunity and outpace China in
the race to master frontier technologies.
antitrust bills in the previous Congress failed to get floor votes in either
the House or Senate. Rep. David Cicilline (D-R.I.), who spearheaded the House
thrust, is quitting Congress later this year.
in the new Congress also look dim, despite President Biden’s ill-advised
endorsement last month of a blunderbuss Senate antitrust bill sponsored by
Sens. Amy Klobuchar (D-Minn) and Chuck Grassley (R-Iowa).
bill’s defenders naturally blame their failure to get political traction on Big
Tech’s formidable lobbying power. No doubt that’s a factor, but the fundamental
cause is the flimsiness of their case.
to show how U.S. consumers are harmed financially by the services they’re
eagerly snapping up from tech companies, Washington’s populists have cooked up
a new antitrust theory: The digital giants are using their market power to
suffocate or absorb smaller competitors.
marketplace for digital devices and services seems hotly competitive. In less
than a decade, for example, Tik Tok, a Chinese company, has zoomed past Meta’s
Instagram as the most popular social media platform for young people.
are another telltale sign. In highly concentrated markets, they tend to rise as
monopolists extract “rents” from consumers who can’t find what they want
elsewhere. Yet prices in the digital sector have stayed low, acting as a
moderating force on the inflation that’s otherwise plaguing U.S. households.
the antitrust bills raise alarms about market concentration, they are carefully
tailored to hit just four U.S. tech companies: Google, Amazon, Apple and Meta.
Amazon’s main rival is Walmart, an enormous company that isn’t on the
rightwing populists have jumped on the anti-tech bandwagon for parochial
political reasons. They complain that Big Tech platforms censure conservatives
by banning Donald Trump’s election lies and alt-right websites trafficking in
hatred and conspiracy theories.
the worst possible moment to dismantle or handcuff our major tech firms, for
three reasons. First, we stand on the brink of a fateful race to develop
commercial applications for two transformative technologies: generative AI and
quantum computing. Here the big four are followers, not leaders: ChatGPT was
developed by a small laboratory, OpenAI, which is bankrolled by Microsoft and
the supposedly omnipotent Big Tech firms are shrinking rather than spreading
their tentacles around the U.S. economy. They are laying off tens of thousands
of workers (Meta is set to reduce its workforce by 13 percent), and their
market capitalizations have tumbled.
and most important, the United States is locked in a momentous competition with
China for mastery of AI and other technologies that are crucial to U.S.
prosperity and national security. To prevail in this global contest for
“innovation power,” we’ll need some big competitors and the vibrant innovative
ecosystem that surrounds them.
critics raise some legitimate issues, especially around privacy, data security
and mergers. But today’s techlash also reflects the lingering outrage and
pessimism from the 2008-9 economic crisis, which shook public faith in the
stability and fairness of America’s free enterprise system.
left, Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) and the House
“squad” of democratic socialists rail incessantly against corporate profits and
capitalism’s “rigged game.” The Biden administration unwisely gave key
policymaking posts to academic theorists such as Lina Khan and Tim Wu, whose
antitech animus made them leftwing celebrities.
right, former President Trump jettisoned the Republicans’ habitual deference to
Big Business and lambasted U.S. companies for betraying working Americans by
moving production abroad and backing free trade.
justified the populist backlash may have been, it offers few answers to the new
economic puzzles we must solve: inflation’s return; cascading public debt;
public underinvestment in the skills and career prospects of non-college youth;
slow productivity and wage growth, especially in former industrial centers; and
outdated regulations that strangle entrepreneurs and slow to a snail’s pace the
building of new economic and clean energy infrastructure.
these challenges aren’t trivial, Americans have overcome worse in the past.
badly need leaders who inspire economic confidence, not despair and defeatism.
Democrats should leave populist doom and gloom to Trump and his minions, and
instead channel the forward-looking, optimistic and radically pragmatic spirit
of Presidents Clinton, Kennedy and FDR.
years of telling Americans how bad they have it, it’s time to offer them an
exciting picture of how today’s economic changes and technological advances can
make our lives better. That starts by celebrating U.S. ingenuity and
entrepreneurial verve, not punishing successful companies simply for getting
Marshall is president and founder of the Progressive Policy Institute (PPI)