Tom Wheeler has spent the last four decades serving in leadership roles at the intersection of emerging technology and public policy. His contributions range from starting companies to representing companies in the halls of Washington, being a partner in a venture capital firm, and serving as the 31st Chairman of the Federal Communications Commission.
Below, Tom shares five key insights from his new book, Techlash: Who Makes the Rules in the Digital Gilded Age?, Listen to the audio version read by Tom himself in the Next Big Idea app.
1. Big tech has won—what’s next?
In the original Gilded Age, a handful of industrial giants took advantage of new technology to dominate both commerce and culture. We see a repeat of that experience in today’s digital gilded age, in which the Internet is controlled by a handful of new giants.
Digital technology has turned the world upside down: the Internet is inevitable, social media gnaws away at our sense of community and the lives of our children, and artificial intelligence promises great things while also threatening annihilation of the machines. .
The Internet is the largest unregulated space in the American economy. There being no meaningful oversight on the behavior of Big Tech companies shows that Big Tech has won. What do we do about it?
Well, we’ve been here before, during the Golden Age of the late 19th and early 20th centuries. During that period amazing new products were delivered at low prices, the pace of life sped up, new big businesses destroyed small local businesses, and wealth inequality was at an all-time high. This was a period of huge monopolies overseen by industrial giants, which harmed consumers. This was also a period of large-scale fake news. Sound familiar?
“The original Gilded Age ultimately resulted in guardrails to protect the public interest.”
Ultimately, the power of the industrial giants to protect the public interest was ended by a countervailing force. Antitrust laws were passed, the power of large corporations was regulated by new government agencies, product safety requirements protected food supplies and other consumer goods, and worker protection laws protected employees of large corporations.
The original Gilded Age ultimately resulted in guardrails to protect the public interest. Industrial traders became responsible for the consequences of their actions. The challenge of our 21st century is whether we will expect the same from the internet giants.
2. Innovators make the rules.
Because they see a future that others can’t, innovators always make the rules for that future. Great advances in science, technology, business, and the arts were the result of people who did not compromise for remain so But instead plowed new land. We should appreciate and encourage such exploration and innovative thinking.
However, at the same time, it is important to understand that right next to such a vision exists the basic human instinct to try to benefit oneself. In the 21st century, this means that a handful of companies play a pseudo-governmental role in making unilateral policies that prioritize their corporate activities at the expense of the public interest.
When Mark Zuckerberg coined the Silicon Valley mantra, “Move fast and break things,” it was a clever way of saying, “From now on, we make the rules.” What were being broken were not material things, but behavioral expectations that had provided stability for more than a century. The reason for moving quickly was to incorporate new behaviors into daily life before anyone could understand how their privacy was being compromised, competition was being destroyed, and truth and trust were being attacked. .
“So far in the digital age, Congress and policymakers have opted to allow digital innovators and their investors to become the rule makers.”
JPMorgan, the original Gilded Age financier, said the same thing as Zuckerberg, only in different words. Morgan’s mantra was, “A certain number of people who own the property can do whatever they want with it.” It was JPMorgan’s way of saying, “We make the rules.”
This type of selfish self-emphasis violates the rights of others and the public interest. It is at this point that we the people, acting through elected representatives, came forward to build guardrails for unchecked self-interest. So far in the digital age, Congress and policymakers have opted to allow digital innovators and their investors to become the rule makers. The time has come to re-emphasise public interest.
3. This is No “The Fourth Industrial Revolution.”
To effectively monitor the new digital reality, we need to move away from industrial age thinking. Monitor the digital Can’t be the same as monitoring the Gilded Age industrial The Gilded Age. Those who say we are in the “Fourth Industrial Revolution” misunderstand today’s reality, and start a discussion in the process. What to do about digital behavior Getting off on the wrong foot.
To start, digital age assets are different from industrial age assets. Industrial properties were hard assets you could get your hands on. Digital assets are soft assets of computer code. While industrial assets were exhaustible, digital assets are inexhaustible. Industrial assets were expensive—digital assets are cheap and the incremental cost of their use is approaching zero. Digital assets are iterative because using data to create a product creates new data for new products. And whereas industrial assets were rivalrous (meaning if I had that many tons of coal, you wouldn’t have it), digital assets are non-rival and able to be shared.
As a result, digital capitalism behaves differently. industrial activity was a pipeline production Activity where hard assets go through a step-by-step production process. digital activity is a coupling platform Where one set of digital information is combined with another to create a new product. Importing regulatory concepts and structures that worked in the industrial age into the digital age will not only miss the new challenge but will also harm digital innovation.
Monitoring of industrial activities followed the management practices of the companies themselves: top-down, rules-based, and slow-moving. Such sclerotic rigidity is the bane of the rapid pace of digital technology. Monitoring the digital age must be agile to keep pace with change.
4. Economic activity has moved from physical to cognitive.
industrial The Gilded Age was about replacing and/or enhancing human Physical Power. Intelligent The Gilded Age is about replacing and/or enhancing human cognitive Power. That till now we have not been able to distinguish ourselves in handling the new digital reality should be a cause for concern.
“Truth and trust are at risk as digital platform companies create content for engagement rather than veracity.”
Privacy is violated because personal information is collected (often without permission) to become corporate property. Competition is reduced because control over information assets allows market dominance and monopolistic behavior. Furthermore, truth and trust are at risk as digital platform companies select content for engagement rather than authenticity. These issues have become worse with the advent of artificial intelligence.
We may have been naïve in our understanding of the power of platforms to manipulate digital information (and thus manipulate us), but after witnessing that experience we may not be naïve anymore. The failure to deal with society’s first contact with digital intelligence is a clarion call to establish ground rules of public interest for a world increasingly defined by AI.
5. Inspection should be as innovative as the technology.
New digital technologies challenge us to become policy entrepreneurs. Industrial inspection took the form of micro management. This so-called “utility regulation” sought to control operations of companies through clear rule-based micromanagement. However, implementing such rigid micromanagement in today’s fast-paced technology-driven economy may cut off incentives for innovation and investment.
21st century oversight is needed instead of micromanagement risk management focuses on reducing Effect of an activity rather than giving instructions Operation of that activity. In doing so, this new approach can combine both consumer protection and competition with the encouragement of innovation and investment.
Such a vision cannot be achieved by granting new powers to existing industrial-age agencies of government. The new oversight requires its own focused digital agency staffed with experts with digital DNA and operating under a statute designed for the intelligence age to reflect new digital realities.
In the original Gilded Age, society faced never before seen industrial challenges, and created never before seen surveillance solutions in response. This is the same challenge that faces us in the digital gilded age. Like the citizens of the past century, it is our time to make history by being equally creative and courageous.
To hear the audio version read by author Tom Wheeler, download the Next Big Idea app today: