Tuesday, November 12, 2019

Rent seeking as taxation without representation

Two stories on the front page of the Journal today point in the same direction:

The common thread is of the tech giants basically needing to police themselves. The Google project as currently constituted apparently complies with HIPAA, that's all fine and well. But given lapses in recent years over the protection of consumer data by the giants, can we trust Google to keep the data secure? Because, in the absence of a physical presence by an actual US Federal regulator on the premises (which exist at the big banks) with robust access to more or less everything, that's what we have to do.

Similarly, Amazon has a gajillion Chinese sellers, some of whom are selling fake crap. Amazon has to police them itself, because as the swamp is being drained, the government is ever less able to. But the only reason Amazon should really police this stuff is to protect its brand. But really, it should.

So the tech giants' rent-seeking behavior, because they are essentially tasked with a regulatory function (policing their own and their partners' potential misbehavior), insofar as they take money out of consumer pockets without offering us a voice at the table (aside from Bezos' famous empty chair for the customer), begins to look and feel a lot like taxation without representation.

Said the guy typing onto a Google-owned blogging platform, before getting into his car to listen to a book on an Amazon one. Sigh.

An aside. Thank God for the papers of record and their own role in the regulatory/control equation. The Journal continues to do great investigative reporting, even though I don't agree with much of what its Op-Ed team puts out. The Times and the Post do too, though admittedly their own captivity to the political leanings of their core audiences led them into at times insufficiently circumspect coverage of various Trump scandals. The LA Times, the Boston Post, shit, Teen Vogue has had some important stories. And then there's The Economist. As the government abnegates its regulatory responsibility, we are increasingly dependent on the fifth estate.

It would be interesting to have a look at the Post's coverage of Amazon. How many critical stories has it broken? Certainly I can attest that the Journal has acquitted itself well in certain stories like Theranos: when Rupert Murdoch, having invested $100 million in the company, was lobbied by CEO Elizabeth Holmes to stop John Carreyrou, the Journal writer whose investigative reporting eventually brought the company down, to stop investigating. Murdoch demurred, saying that he didn't get involved in editorial decisions, and that they were doing their jobs. He eventually sold his stock back to Theranos for $1 and booked a loss. Then again, the Journal rarely writes coverage critical of Fox News (or the Times or the Post, for that matter)

So it is up to us to watch the Watchmen.

No comments: