Another big factor with China is that their model favors monopolistic internet companies, as it's easier for the government to bully/deal with one company than 100. With government control over the internet required, China's government doesn't want a bunch of unruly web companies to deal with.
But let's face it, our Republicans aren't much better. They may talk about the 'creative destruction' of capitalism, but they continue to support monopolies and old technology like coal. As our twitterer-in-chief would say, not good.
China's tech companies are too "protected" i.e. controlled and monopolistic for much innovation, though. Look at how bloated Tencent's and Alibaba's apps are. Because of almost no competition they can complacently rape users whenever they please. China is so deficient in innovation that the government has to steal from American firms.
We've cut R&D investment by 50% since 1980 while China's increased 1200%.
As a result, according to the Japan Science and Technology Agency, China now ranks as the most influential country in four of eight core scientific fields, tying with the U.S. The agency took the top 10% of the most referenced studies in each field, and determined the number of authors who were affiliated with the U.S., the U.K., Germany, France, China or Japan. China ranked first in computer science, mathematics, materials science and engineering. The U.S., on the other hand, led the way in physics, environmental and earth sciences, basic life science and clinical medicine. China is also rapidly catching up in physics, where the U.S. has long dominated. It is spending more than $6 billion to build the world's largest particle accelerator, which could put it at the forefront of particle physics. https://tinyurl.com/ydeqeqnb.
Chinese technology (and deployment) leads the world all fields of civil engineering, all fields of sustainable and renewable energy, manufacturing, supercomputing, speech recognition, graphenics, thorium power, pebble bed reactors, genomics, thermal power generation, quantum communication networks, ASW missiles, in-orbit satellite refueling, passive array radar, metamaterials, hyperspectral imaging, nanotechnology, UHV electricity transmission, HSR, speech recognition, radiotelescopy, hypersonic weapons, satellite quantum communications and quantum secure direct communications.
"remember that no one dreamed that the personal computer, once little more than a toy for hobbyists, would displace the mighty mainframe."
But this never happened. Mainframes and your PC have nothing to do with each other and their markets and uses don't overlap.
We have also done massive damage to our global competitiveness by weakening our society and labor force via importing 10's of millions of desperate 6th grade education immigrant slave-wage workers and shipping millions of manufacturing jobs to be done by few rights $1.50/hour workers in China and Mexico. This "coddling" of our business owner, few percent US Nobility has done immense damage to our society's trust in government and our institutions that are supposed to enforce the rule of law (but allow 12+ million illegals and their employers to violate all manner of laws) which similarly has stalled innovation in labor productivity and seriously undermines the support of business and government for educating American workers to be more productive. An example of the impending labor catastrophe is due to our economist "priesthood", against the US majority's will, importing 10's of millions of workers from the global south that have little education, whose children have immense high school drop out rates, high teen pregnancy rates when at the same time in business publications experts predict most unskilled jobs will be done by robots in a few years. And the inefficiency of stoop illegal labor in the agricultural areas of California and the American south is a national embarrassment that can only exist in a distorted economy in which farmers are allowed to pay 1/3 of living wage and have the US working/middle class taxpayers "top off" the wages of their slave laborers.
2
In theory, the US prevents monopoly through government regulation. In practice, we have the equivalent of "regulatory capture".
In his book, "The New Industrial State", economist John K. Galbraith said that government would be forced to grow in size in order to serve as a "countervailing power" to monopolies and cartels. Galbraith failed to anticipate the rise of the modern-day Republican attitude, to wit: Countervailing power? We don't need no stinkin' countervailing power. We LIKE the concentration of wealth and power in the private sector.
1
I don't know why so many people hooked on FB or AMZN? I rather use phone, email or text message to communicate and physical presence to shop in Walmart, Costco or Target. Look what had happened to Wall Street titans? In the end, the government has to step in, using tax payers money to bail them out. And no one person has yet in jail to pay for the troubles we were in. It broke our capitalistic society. My simple answer is never to protect titan and hence hurt every day citizens. Prof. Wu made a good argument.
Mr. Wu is right that it's crazy to think that the U.S. can get ahead by keeping the rest of the world technically backward.
But Mr. Wu is wrong about the IBM-Microsoft story. IBM basically donated the IBM-PC architecture to the world, jump-starting the clone industry, when otherwise the Apple II was trundling along modestly.
Microsoft just rode on IBM's largesse. Its "innovation" was using conventional but illegal restraints of trade to keep competitors' software out of the public's hands. For which it was convicted in U.S. courts but silently pardoned by the Bush-Cheney-Ashcroft administration.
the difference is pretty obvious - in China, WeChat/TenCent and Huawei are hand-in-glove with the China's Communist Party
here Facebook/Google thumb their nose at the elected representatives of the American people - and even help swing elections.
Simple rule: U.S. companies should not be allowed to do in the U.S. what they cant do in China.
1
I wonder if Zuckerberg felt so protectionist when he went after MySpace. Delete your Facebook account, send him a message.
Google has the best search engine by far, in part due to the need to fend off competitors -- both those it faced from day one (Yahoo) and new ones (Bing). This is a vital service -- one every internet user needs to make effective use of the internet. On the other hand, if Google is a natural monopoly (like the electric company), then it needs to be regulated to protect consumers and smaller advertisers from abuse.
Facebook is a different story. It is not a vital service. Arguably, it is a service we could do without (like heroin distribution).
2
Facebook is evil and never should have been allowed to buy up so many competitors in the first place.
Hopefully following Europe's example, the worm is turning. Will America follow suit?
2
This is what happens when we turn our pseudo-capitalistic society into a monopolistic society.
It is the Government's role to level the playing field for everyone.
Without that happening we will be forever ruled by monopolies. Not a healthy situation. It is why we have Anti-Trust laws. However they, at the moment are not working very well.
Regarding Zuckerberg's warning about China, why should he be believed. He has only his self-interest at heart. He could care less about what is good for our citizens or anyone else for that matter.
Zuckerberg has proven it over and over. First he steals the idea from the Winklevoss brothers, then he tries to cheat his partner, without whom he never would have gotten start-up financing. All Peter Theil did was come in and invest in the expansion of Facebook . So why should the US Government believe anything out of his mouth.
In addition, U.S, Corporations, in order to pay slave wage earnings to its employees, ran over to China to produce their goods. It has come back to haunt them. It is because of their greed that China now is competitive with us. China had a front row seat to all of our Technology and took great advantage. They learned our secrets by producing everything they were trained to do, by American Corporations.
Greed has come back to bite us.
43
Facebook, Uber, Amazon etc. are all natural monopolies due to the network effects that create enormous barriers to entry. As the network grows, either the value of its product (Facebook) is greater or the expense of providing that product (Amazon/Uber) is lower than what any new market entrant could achieve. These types of market dynamics almost inevitably lead to a winner take all outcome.
Regulatory models for these types of markets are not easy. The times things have worked well typically involve some sort of modified free market. Some good examples are power markets, which have fared well after well designed and limited deregulation (like in ERCOT), rail networks, which also fared well after limited and well designed deregulation (Staggers act), and telecom networks. A similar story exists with telecom.
What all of these markets have in common is that regulation was specifically designed to enable competition within the regulated sector. There are also cautionary tales of what happens when regulation is poorly thought out and implemented, like the whole Enron debacle after California partially deregulated its power markets.
National champions isn't the right answer, nor is breaking them up. What history tells us is that in industries that lend themselves to a winner take all outcome, there must be well designed regulatory models that ensure fair competition. Hopefully we find one for our new generation natural monopolies.
4
Facebook is not out to do good; it’s out to make money. Providing a service isn’t a goal; it’s an expense. And any argument that potentially adds to the bottom line, like beating out China, is automatically to be supported, especially if it can be given a PR twist to make Facebook a champion of American values. (Like profit-before-all-else?)
25
The insistence that American tech monopolies must be carefully coddled is supremely infuriating because the argument - perhaps intentionally - is misleading about China's economic model
China is not the Soviet Union. The CCP leaders do not gather in a room and say "We are going to create an e-commerce rival to Amazon. We are going to name it Alibaba and found it in Hangzhou."
Instead, China will enable the creation of a business niche accessible to the largest single market in human history. Dozens or even hundreds of firms will fight tooth and nail to become the market champion. The victorious champions are showered with support from the Party. The founders become billionaires, albeit with a wealth that exists at the whim of the Chinese state.
Competition is the beating heart of capitalism. Anyone that insists on having less competition to preserve their market space knows that they would not survive otherwise.
23
@Nikko This is a very good point. Alibaba, for example, did not get its start as some kind of state-sponsored monopoly
4
@Nikko
You are absolutely right.
The ignorance of these commenters who have zero understanding much less actual knowledge of China and assume it is a socialist/communist state is unfortunate.
Moreover, Japan and China are as different as well.
Competition is central to China's meteoric progress in the last twenty years and especially the last three. The CCP has not only allowed private enterprise free rein but encourages competition between private and state owned enterprises.
That's why so many of the comments here are simply reflective of ignorance and provincialism. The NY Times series on China should be read by all.
3
Facebook and Google are not really stifling competition, they are pretty open and sharing with their technology. Apple on the other hand is very closed, they do stifle competition.
The problem Facebook had is being too open, sharing the data they accumulated, if not analyzing and using it for advertising.
They also create software programming tools and openly share them, both Facebook and Google, and Microsoft has jumped into that pool wholeheartedly with the purchase of Github and other sharing companies. They've open sourced much of their software. So there is a difference and how do you propose addressing it in today's market? There's quite a plethora of software startups and companies, how is Facebook and Google stifling competition?
5
@Todd My question to you is - How is Apple stifling competition? (It isn't, but I'd like to know your rationale.)
2
Yet another example of your rise and fall of information empires premise, as alas our once great US innovators like Google and Facebook are now the aging incumbents, seeking to use antitrust and intellectual property laws to maintain their dominance in the face of new technology offerings and challenges. As your famous "Cycle" foretells, each are doomed to lose the battle and eventually be outpaced by faster and nimbler rivals, now operating on a global scale.
7
@kbrownsirk You are correct. The basic premise is that the nations who manage to harness the power of that cycle will tend to be the winners
1
What makes any multinational company 'American"? Because one of their CEO's ten residences is a penthouse on West 57th Street? An American company would hire primarily Americans and not use every dodge known to man to shield their earnings from taxation. Corporations like Facebook and Apple have become stateless entities with allegiance to no one but their stockholders. Fine, but then, no one should have any loyalty to them. They play the loyalty card the same way Trump does - strictly one way.
33
@stan continople
This is the best prescriptive advice on this subject in response to the FB discussion.
Two addenda in ascending order of importance:
By comparison with FB and G, the Chinese enterprises - including those many created by competitive entrepreneurial individuals, are fiercely patriotic.
And, the application of law and the behavior of most of our elected representatives of both parties (albeit the GOP is much the more effective shill) are managed according to the rule of "shareholder interest first and solely." Performance/value is judged by this yardstick alone, making every for-profit entity a suprademocratic entity by definition, meaning, that it is formed, funded and promoted to one end: the enrichment of the shareholder. And, in general, the larger the corporation, the louder the voice and the more subservient the elected officials. No national borders impinge and no national codes of morality enter into the value criteria except as they may discolor the brand through adverse publicity and alienate would-be investors, thereby failing the shareholder.
5
Is Facebook really the type of technology we want to promote, preserve, and rally around as the preeminent technology to preserve technological dominance? Quantum computing might be something that is in the national interest but a platform that can be so manipulated and crippling to our democracy as Facebook does not make the cut. Companies are all about 'free enterprise'...until they are not.
43
This is interesting. I found the Japan comparison useful.
2
"...This — Big Tech’s version of the “too big to fail” argument — has a superficial nationalistic appeal...
Actually, Tim – it has a far more substantive basis, if you and your policy-centric ilk would look through the other end of the binoculars...
Because the US beat up on big tech while coddling big banks, cos like GE and GM essentially on life support...Because GE a strategic source for turbines, it’ll probably get some bank-like coddling when the puppet-masters think no one is looking...GM – unless they make tanks – probably to be auctioned off to some EUrocar maker...
For clarity, that wouldn’t be a bad thing...They’ve kept cos from SGI to FireEye going, in – unfortunately, a minority of – cases where they could grok the strategic leverage...
But I digress...
What our crowdsourced and continually adversarial approach to fundamental science and technology investment over the past two decades have done to us:
1.Given us several branches of junk science – where the smell of rot is becoming undeniable
2.Put us in a position – as a nation – where we are no longer “too big to fail”
Perhaps stop yammering about Zuckerberg stepping out of his FB job, and start yammering about him stepping in to the DoD Sec’s job...
Am dead serious – he’s already had...
> DARPA (at least their R&D) reporting in to him for period
> More influence on world affairs in the past decade than the four service branches combined
PS
Google’s guy already had the job, if not the title...
Facebook monopolized its folksy persona and is nothing more than a giant of self interested manipulation of concealed self interest. I loved their lawyers testimony before Congress. Give nothing, take everything. Yuck
1
Is it a mistake to compare the current China to the Japan in 70's ? They are very different countries, in a different global conditions.
1
Excellent article, many thanks. U R right!
Edouard baron Prisse, the Netherlands
Facebook along with all of America's social media companies are among China's useful idiot tools.
For most of the past 2200 years China has been a socioeconomic political educational demographic diplomatic military scientific and technological superpower. Before China withdrew from the world about 500 years ago allowing the European barbarians to rise.
Mao Zedong's China vanished when Deng Xiaoping chose to lead China to socioeconomic state sponsored reform aka capitalism with Chinese characteristics and political reform aka a term limited collective leadership model.
Xi Jinping is the 1st Chinese leader since Mao Zedong whose thoughts are deemed worthy of study by members of the so-called Chinese Communist Party. And Xi Jinping is the first Chinese "core leader" since Deng Xiaoping. Xi Jinping is the first Chinese leader since Emperor Puyi and the Dowager Express to claim the " Mandate of Heaven". Xi Jinping has not designated a successor and is more equal than all of his fellows combined.
The author conflates "not damaging us" with "protecting and promoting", but these are not necessarily the same thing, although if the author claims as such he should provide references to what the companies have actually said rather than asserting his own paraphrasing of them. The government does not invest in them or give them special deals (other than tax break xmas that all companies have gotten but that is another story). Does arguing for a less-aggressive anti-monopolistic stance amount to promotion? Any lack of anti-monopoly action could probably be portrayed as protection, but where to draw the line? I'm not discounting the historical context the author has laid out, but let's not oversimplify this.
Facebook is not the internet. Its but one website, one 'platform'. As Mr. Wu points out, there were many others before Mark Zuckerberg arrived. There's no real barrier to entry. Facebook "wins" as much by the herd behavior of crowds as anything else.
What Mr. Wu doesn't ask is whether social platforms should be international. Certainly the internet is and will remain global. But if there is value in sustaining transparent discussion of national and local issues, do you really want that to be in the hands of someone else? Trust. And Zuckerberg only illustrates its limits.
The deeper issue goes back to the basis of mass manufacturing and interchangeable parts. If you publish your chip specs or your bus protocols ( IBM's AT standards ) don't be surprised if they leave home for other countries. More insidious, though, is, when every chip on every board in every appliance is addressable, do you really want to weaponize your infrastructure (Stuxnet)?
I want to remind you of the Plaza Accord.
You gave an unreasonable example. The U.S. has great impacts on Japan, which you can see from the Japan reaction to Trump's words about trading. What's the China reaction?
China and Japan are different for the U.S. and never believe too much on the free market. If the free market is invincible, why Trump put limits on the world trading?
1
"Justice" headed by Trump and al. have declared a hegemony approach to US commerce laws that are now to be understood as applying everywhere. Trump/Kushner appease the sentiment that the Iran deal was not good enough and now we must head the wrongheaded way to regime change in Iran. The US government has no qualms attacking Huawei and its CFO in a vile manner with the surprisingly complicit assistance of the Canadians. It's not about fair competition anymore (or ever), it's about the US wanting to bankrupt Huawei just because it's better and cheaper. Shame!
4
Don't forget Google. They have one major competitor in the world and it is in China.
Our government has allowed monopolies and near monopolies called oligopolies. We do not have "free markets". The definition of free markets has been sneakingly changed over the years from industries where there are many competitors competing for business to mean one that is unregulated or barely regulated to protect consumers and citizens.
President Teddy Roosevelt was known as the "Trust Buster", breaking up the railroad industry and others. Since then the harm done by limiting free markets has been ignored. ... http://www.ushistory.org/us/43b.asp
Today, with the enactment of Citizens United, oligopolies buy protection with contributions to politicians, which needs to be reversed. ... http://lstrn.us/1aY5rG0
3
Stating that the mainframe has been displaced is about as accurate as saying that the New York Times "is failing." There are thousands of mainframes humming away across the globe, and we're all using them many times a day, whether we realize it or not.
6
@Peter Yeah. Mainframes have cleverly been rebranded as "The Cloud"!
1
A most revealing article about the folly of governmental support of a few giants in industry, drowning a healthy competition for innovation and progress, independent from whatever is being imposed by other nations' monopolies, a healthy acceptance of the risks required to advance our technology...and serve humanity as best it can. And the system ought to adjust to our needs and ability to respond, not the other way around, where we must constrain our creativity to a rigid modus operandi approved by a cadre of government officials, too arrogant in their ignorance, to know what's going on. And Zuckerberg, a giant in Social Media, with exponential information mixed with fake news, remains a dwarf in understanding what's relevant...and what is thrash...except the bottom line, as 'money speaks'.
"... thought to be infallible" I am 70 and I have cancer and will go out soon. It's nice to read someone who is honest about tech. Let's face it - even if it's a truth that is "inconvenient" - it's all about MONEY and GREED. And too many Amuricans buy into that. This country is not infallible. Despite what the "founding fathers" said. The whole world's laughing at us.
3
What is it with liberals and this paper that any successful enterprise in the US is a danger and has to be regulated out of existence? FB, Uber, Airbnb, etc. Reagan was right, government IS the problem.
3
@M I think you misread the article. The argument is that protectionism undermines the ideas that capitalism claims as its own -- innovation through competition. The "flaw" in capitalism is that innovation through competition is always in the service of market combination, which curtails competition lowers innovation.
4
@M You're using that word ("liberal") incorrectly
@John
How is Facebook being protected? By lack of regulations or central control?
Nice historic snapshot. Thanks. I’d like to read another recap of what it means to BE an American company. Just incorporating here? When all your manufacturing, assembly, sales are increasingly overseas?
As for Chinese government-backed technology- ha! There’s a trust issue that will only get worse. That’s a niche our companies need to exploit. If they can. And if they are still....ours.
3
"With IBM and AT&T under constant scrutiny, a whole series of industries and companies were born without fear of being squashed by a monopoly. " I'm not so sure this is accurate. plenty of companies did business before these suits emerged.
2
@arthur
Agreed. IBM didn't take the advent of personal computing seriously. Their PC development team was an afterthought, well away from Corporate offices in Boca Ranton, FL. They published their AT bus protocols, anathema to corporate honchos, and they spread like wild fire.
But the PC market was crowded with small start ups well before that. Those early machines are collectable.
The volume of whining about China is amazing. It can only come from those more interested in rent-seeking than actually innovating. No one who claims to be afraid of China can consider themselves an innovator, or even a capitalist. Put another way, to be afraid of China is to look backward and not forward.
By working so hard to steal American ideas, China admits that it is aware of its fundamental weakness: though it can cheaply make any design the world sends it, it cannot design itself and it can not satisfy either its own people or the rest of the world. When I'm interested in buying a product that says "designed in Guangzhou" instead of "designed in California" I'll be nervous.
By all means, protect your IP. But instead of using the fear of Chinese theft to maintain a monopoly on what you already have use it to continue to create and improve products and services that people actually want to buy.
2
If Google will censor there, surely they can censor here..by becoming a public utility.
Of course, their valuations will drop like a lead balloon, but that's the bed they've made. They now have to lie in it.
GDPR standards are inevitable here in the U.S and both FB and GOOG have spent tens of millions of lobbying dollars to water down the CA law that was rushed through in less than a week when it became apparent the ballot initiative for Consumer Privacy in CA was going to pas by a large margin. It's always nice when a state legislature and Governor can do the downfield blocking for FaceGoog.
Populism on both the right and left are demanding more consumer privacy protections and as long as the media continues to bash Trump 24/7...there is no relenting by the Trumpsters to demand anything less than a full capitulation by these platforms. Finding common cause, the AltLeft is also demanding more consumer privacy protection and everyone is now 'choosing sides.' It's tribalism to the hilt.
Unless and until the media dials down the temperature in the room, the room is going to remain overheated and Populist policies are going to be mandated by an angry public. FaceGoog just happen to be convenient targets because they're taking sides in this Tribal War.
A mistake they will soon regret.
If you want moral authority as an institution, you must remain apolitical in your words, deeds, and actions.
1
Interesting. Facebook is a predatory obstruction to a better operating social media. It is an out post for the wild crazies who have did so much to make the 2016 election into a complete fiasco. Their many traps for unsuspecting consumers to be harassed by advertisers and spam artists are all too apparent.
4
I don't use Facebook, but I don't see how they have a monopoly on anything. Nobody forces you to use social media, and if you do use it nobody forces you to use Facebook in particular. In fact out of all the tech giants constantly in the headlines, only Google is really guilty of monopolistic ambitions, but that's only with regards to advertising. In fact, Google and Facebook constantly innovate new front end technologies that they share with the open source technology community for free. Even Microsoft (Microsoft!) is now encouraging the free distribution and proliferation of its formerly proprietary software.
I'm not suggesting they do this out of altruism, there is a business strategy behind spreading your free technology everywhere. It means when other developers use it, they increase their compatibility with your own services and products and lower it with your competition's. If you make it just slightly more convenient to use a Google API instead of a Facebook API, suddenly you gain millions of customers (and their previous, lucrative data) because a handful of big businesses decided to switch to your open source framework.
If anything, it's this strategy of openness and trying to absorb as many people as possible that is backfiring now with China. Getting access to that huge market of people is worth any ethical compromise. See how Google has backtracked on its own moral stance from years ago with its "project Dragonfly" controversy.
5
Mr. Wu you say, "It’s certainly true that the Chinese technology sector is growing and aggressively competitive, and that many of its companies are embraced and promoted by the Chinese state."
I love how some Americans pretend that OUR United States of America takes the high road. WE coddle and promote BIG tech with tax breaks and no regulation. Companies based in OUR America get huge portions of OUR hard-earned taxpayer dollars to "compete", which is why they can dominate the world.
You also say, "But both history and basic economics suggest we do much better trusting that fierce competition at home yields stronger industries overall."
There is no "fierce competition at home". BIG international investors own/control all of it thanks to Reagan gutting antitrust laws and defunding regulatory agencies. Wall Street Robber Barons have gotten regulations meant to protect 99.9% of us thrown out. They decide what business WE THE PEOPLE can choose from and competition in every daily living category is shrinking by the day with their insatiable greed.
WE THE PEOPLE are hiring/electing Socially Conscious Women and men who will break up all corporate behemoths, seriously regulate them to protect 99.9% of us and tax them at 99.9% with the money going to preserve/restore OUR social safety net.
NOW is the time.
5
A well-thought, concise rebuttal to an argument that I had previously been more sympathetic to. Thoughtful and managed to nudge me in a different direction on this complicated issue.
6
The US benefited immensely from AT&T's monopoly. The invention-if you can really call it that-of small or "microcomputers" was an offshoot of IBM, Xerox and other companies which were benfiting from increasingly small parts and faster computers and chips. Up until the time when Jobs and Waznik introduced the early "apple" PC's, there was not much need seen for a person to have a computer at home. Up through the 1990's, after I learned to build my own from junked parts, the main use pof such devices in society was to do typing and micro-publishing or at least to aid students in college and HS.
The cell phone-as almost no one but me is aware-was invented before the first world war. The idea was of using phones similar to submarine rescue phones(gertrude), in the atmosphere. But before satellite s and small batteries, it was not a usable tech. The truth of the matter is that the invention of the WWweb and commercial internet have caused more trouble for the planet then not. I see thousands of empty stores across NYC and think: "
This is a good thing". Computer-phone companies have had too much their own way and foreign nations see how weak our unregulated system is and are picking it apart. I liked the USA better in 1988.
2
Facebook is banned in China, and Baidu is not used outside China - what competition are we talking about? More importantly, what is the competition over? Active users that share personal photos and likes which are AI profiled for marketing purpose (or worse, oppressing by governments). I feel that facebook's mission has already been accomplished by iOS and Android, and it would be great if Facebook finally admitted that they have now transformed into a media company
1
@Andy S
to the youth of the world-the "theoretical or proposed" competition between CHinese and outside online media is akin to the "circulation wars" of the era of newspapers. Then, newspapers had to have both editorial policy and reporting that attracted readers with -hopefully-extra money to use to buy the products advertised in newspapers. The newspapers had begun in the Revolutionary era as "broadsides " and at first, didn't advertise but were simple sheets pasted on walls or handed out. Advertising came into it's own in 19th century and the limited space-measured in column inches-made ad rates dependent upon the theoretical number of "eyes" which read a paper or magazine. It was a crude, dirty and messy business-not big until machine composition-(typewriters and machine compositors)-and the concept of ads and ad space moved firectly frfom papes to the internet-though in 1995 , the "question" was asked repeatedly: "How will the Internet-WWW pay for itself?" Since the CLinton administration, everywhere but Frace(which invented the concept in the Minitel) first gave almost everything away for free. Now, it has become a Frankenstein's monster-it has learned it's place in the world and discovered both its weaknesses and power-now the Net demands it's due from the creator(as in Frankenstein).
A main problem in a match between West and East is language-neither have easily translatable or decoded languages or writing systems and are somewhat incompatible.
1
Don't fall for Wu's monopoly argument, Facebook is not a monopoly. They don't produce any physical goods for sale. There is competition in the sector, a sector by the way that really didn't exist prior to Facebook. Wu is just another big government progressive who believes in the China central control model and believes Facebook should be regulated and controlled by Washington.
3
He is making the opposite argument, that the national government shouldn’t coddle and support the big tech companies at the expense of competition.
6
@Aaron Bondar
Perhaps you can illustrate how Facebook is being coddled? By not regulating them? Regulation is attempt to control.
@jaco Tim Wu should address these arguments; Facebook and Google are so open that they invite dangerous actors on their platforms as well as anyone else. How does freedom intersect, how are Facebook and Google's successes related to their giving Russians, and others who would do us harm, free access?
1
Market size isn’t equivalent to technological dominance and imitation isn’t the same thing innovation. For better or for worse, Facebook was a game changer: WeChat, Weibo, Renren and all the rest, not so much. And the same thing is true for other mighty knockoff apps like Alibaba or Tencent. Yes, the Chinese (or the rest of the world for that matter) can run with ball once they’ve gotten it, but what they can’t do very well is create the ball and invent the game it’s played with. At least not yet.
7
@N. Fidel
You have no clue how wrong you are.
China's nearly billion people pay for products and services with their smartphones; food is ordered and delivered with an app that combines uber type motor bikers and yelp and grubhub. AI implementation has surpassed our own.
You should watch Fareed Zakaria's show on CNN from this past Sunday on this topic.
Tim Wu makes a few interesting points but he is missing the larger point. At the extreme if Facebook was to be broken up or closed down, their copy in China would be left alone with laughter at our system. Facebook may need a few new restrictions however the same controls can occur with respect to Google. When was the last time the Times had anything at all positive to say about Facebook. Just say it Tim you want to shut Facebook down.
4
“And if no one can imagine doing social networking better than Facebook...”
Everyone can imagine doing social networking better than Facebook. I love being able to keep track of friends all over the world but Facebook’s algorithm of what you want to see if the worst.
Come on Silicon Valley. Give me something better.
12
@Suzanne
Maam, social networking used to be done at local laundrimats ,restaurants and bars. People actually went "out" and met one another and we had "commerce". People even bowled or played tennis and swam together!!! However, I cannot either buy a hot pretzel and meet a girl in a nice park, while sitting in front of a TV tube.
I feel sorry for the kids of today and those born since the new century. Computer intermediated "socializing" is like trying to do heart surgery while wearing a welder's mask and using tweezers and forceps.
Throw them into the sea for reef material. Or at least make them illegal for anything but typing until people are over 27years old.
We really need to get rid of computers with phone lines which children can use. I wasn't able to use them until my 30's. By then I didn't need Fakebook to find dates.
Facebook and Zuckerberg are evil incarnate, and deserve to be blown up. There is no doubt in my mind that Zuckerberg actively assisted Russia in putting Trump and the GOP in power so that he could personally put more dollars in his pockets, which are so full of dollars that he can’t spend them anyway.
Facebook must die. And if some foreign company puts a social media site out there, so be it. You must kill the cancer in your own body before worrying about your neighbor. Facebook and Zuckerberg are cancers in our body politic.
16
There is one word missing from this op-ed: Amazon.
11
So capitalism is not so perfect! To win, to succeed in business is to control your market and then expand and ultimately control other markets in order to control prices. What's new? How to balance the good with the bad associated with competition in the market place is dependent on government regulators who don't have their hands in the till.
11
The argument Professor Wu makes is similar to another recent Op-Ed that criticized states and municipalities for giving huge tax breaks to corporations to bring in new jobs. In both instances, corporations use fear as a motivating factor: give us the tax breaks and incentives we want, or we'll go elsewhere; if you don't protect our technology as it currently stands, China and other countries will take over. In the meantime, corporations make obscene profits and carry on with business as usual.
To guard against loss of governmental protection, tax windfalls, and possible anti-trust legislation, corporations purchase the votes of many Republicans. The anti-trust examples of IBM and AT&T were from a different era, when dark money hadn't so polluted our political system that standing up to corporations was still considered a function of good governance.
18
@jrinsc
"To guard against loss of governmental protection, tax windfalls, and possible anti-trust legislation, corporations purchase the votes of many Republicans."
Republicans have no monopoly on what is cynically known as "pay for play".
In this day and age, I find it remarkable that anyone would support either political party. There is a lot to be said for supporting independents.
3
@NorthernVirginia
Perhaps Republicans don't have an outright monopoly on "pay to play," but they're certainly cornering the market. Examples of Republican votes bought by corporations are far too numerous to mention, but just check out Mr. Leonhardt's Op-Ed today. While I share your misgivings about both political parties, I reject an idea of equivalence between Republicans and Democrats - that they're all equal and all corrupt. Just consider their different positions on climate change. This is a cynical view that plays right into authoritarian and anti-democratic hands, something that is very much part of the current Republican Party.
6
@NorthernVirginia No monopoly? Republicans can point to a few Democrats who do it too, but that's misleading. Don't fall for it.
The two political parties are NOT the same. Republicans try to make even a small potential infraction ("But her emails...!) by a Democrat sound equal to a thousand examples of blatant in-your-face corruption. They depend on people like you thinking "Oh, but math is hard," and not paying any attention to numbers.
Independents siphon votes away from the Democrats, who are your only realistic chance to get your country back from the crooks and mobsters who have taken over the Republican party. In this day and age, when you support independents you are, in fact, choosing to let guilty Republicans get away with bribery, corruption, and outright conspiracy against the United States.
Punish the worst crooks first. Support the best candidates within the only party that has the motivation and organization and ability to take the crooks down.
Once that's done? THEN, sure, turn your attention to making very sure the Dems don't turn into crooks. That's the time, maybe two or three elections from now if everyone does it, when independent candidates will make sense.
5
Facebook and google are big companies but their decline is already on the horizon. Both companies learned to do a few things well---connect people with information and information about people to those who want to sell things.
But as a young engineer or computer scientists would you like to work there? Do you think the next generation of tech worker will be dreaming of selling peoples' information to companies? NO. Thus far both of those companies have not found much success outside what they have proven to be good at decades ago. Google has many investments, sure, but driverless cars are still a ways out, and there is fierce competition in those domains.
19
Time will tell about the veracity of FB's position.
All I know is that Zuck's failures to investigate and timely respond to all of the negative things they have wrought, their responses to Congress' hearings, Sandberg's retention of unsavory right wing entities to confirm FB's opposition, doesn't promote a warm and fuzzy feeling about protecting it from viable and necessary regulation.
These behemoths obviously need to be regulated, as Wu argues. Without adequate regulation they're becoming the "Trumps" of technology running wild, and anything goes.
23
I believe Zuckerberg about the same as our lying, manipulating so-called president. He is not our knight in shining armor but a pirate out to steal us blind and sell us out to the highest bidder and he will by god.
44
Too late. Amazon is the new Standard Oil. You can't go anywhere else because everyone else can't compete. Amazon's Prime shipping operates at a loss, which is the definition of anti-competitive pricing, but nobody will take action. That's why Amazon can tell book authors what they can charge. That's why you get crummy goods, sometimes direct from China, and the cost of returning them falls on you. That's why cities shower them with tax breaks. The cost of this monopoly falls on all of us.
56
@Dan Ari It certainly looks that way right now. But I recall it wasn't that long ago that WalMart was the behemoth that could dictate terms and prices to suppliers , employees, and contractors. And remember when Barnes & Noble, Borders, and Books-a-Million were the boogeymen putting independent book stores out of business? Of course, it might take 10-40 years before someone figures out a way to do to Amazon what it's doing to other retailers, publishers, manufacturers, shippers, etc. By then we might end up with the same damage to multiple industries (and their employees) that WalMart did to retail. Once upon a time you could sell appliances in a department store and support a family. I worked at such a place in the late 1980's for a couple of years. There were still a few employees that had started 30+ years earlier, and were bitterly finishing out their time to get some remnant of the pensions they'd been promised when they started.
13
@Dan Ari
That's nonsense.
Yesterday an op-ed writer described how Amazon was instrumental to his father's last few years living alone. Millions of Americans whether elderly, ills, home bound, or youngsters living in rural areas have discovered products they never heard of prior to Amazon.
On the other hand, many commenters to this op-ed wrote about how they "refuse to ever shop on Amazon" because they "hate" it.
Amazon is not a monopoly - Competition is growing and offering free shipping as well as equally if not lower prices. Walmart among them.
People are so hung up about Amazon.
4
As a law professor, the author should know Facebook growth is attributed to network effects and cross network effects. FB has become a natural monopoly not because FB forced such a monopoly. The only way China could prevent FB was banning them from China. If not, FB would have 1/2 the world's population. China has built its tech companies including Baidu, tangent and others by preventing US companies. Such weak arguments in the article.
7
@Dave
"As a law professor, the author should know Facebook growth is attributed to network effects and cross network effects."
The network effect is an economics concept, not a legal concept.
4