Guest Opinion: Killing the golden goose
Break up big tech and we will slump back into a heavily regulated, non-innovative economy. The hype that now drives crypto currencies will deflate. The real positive outlook for the big tech companies will deflate. The strong creative forces in pharmaceutical and biogens will deflate. Is this what we really want?
Economic growth over the last five or 10 years has been driven by a belief in the ability of advanced technology companies to rebuild the present, to transform our world using all manner of chips. This belief has been created by some outstanding successes, in the areas of smartphones, electric vehicles and a chip transformation of many business processes. Markets have been expanded beyond what was thought possible by the internet, social media and the vanguard games.
Almost by definition, these changes have been disruptive, they have upset the usual business practices and encouraged innovative thinking about design, products, services and markets. The stock market is now dominated by the big five tech companies; a few decades ago, the top valued companies were in totally different areas — in energy, manufacturing, even to some extent finance. The pandemic, although it did impact this technology boom adversely for a short time, has actually benefited the technology sector through working from home, more distance contacts and ever rising stock prices.
But just look around, in the United States, Europe, Britain, China, the axes are out, the antitrust forces are circling around. The reasons may be different in different countries, but there are similar concerns, with one of the prime ones in the United States being size — the big tech companies are just too big, and they are ever expanding, buying up new companies, seeking new lines of business and so on. In the U.S. it is difficult to even count up the different agencies, departments and justice departments that are fighting against big tech. Sometimes these different agencies work together, or try to work together, but with the political divide in this country, even these cooperative efforts are flawed. In Europe a super powerful antitrust agency, unaccountable to the public, is setting new standards, effectively attacking the large U.S. tech companies with fines and court cases. China’s all powerful government is clamping down on the super successful Alibaba and Tencent companies, with the impact as yet being unclear.
One thing is clear. There are no counter forces other than the companies themselves. No one in any of the governments is focusing on the benefits in productivity and growth that have come out of the growth of big tech. These are being taken for granted. The default position for all of these aggressors is that the good times will continue, forever. There is no recognition of the positive impact of the companies’ activities over the last decade. No one has identified a public good that these companies are delivering.
Kill the golden goose, and we will slump back into a heavily regulated, non-innovative economy. The hype that now drives crypto currencies will deflate. The real positive outlook for the big tech companies will deflate. The strong creative forces in pharmaceutical and biogens will deflate. Is this what we really want? I suspect not. We need to evaluate and appreciate the benefits of our dynamic economy before bringing it down with short sighted concerns.
Dr. Andrew Hook is an economist who started his career as a senior international economist in 1977 at the Federal Reserve Bank of New York. In 1991 he moved to the International Monetary Fund, where he provided technical assistance to the former Soviet Union countries and other developing countries. From the mid 1990s he worked for different international and national organizations doing international consulting work. In his last assignments he was living and working in Afghanistan from 2002 to 2012. Hook is also a member of the Brainerd Dispatch Advisory Board.