So apple will capitulate on privacy in china. In ways that it would not dream of doing in the us. It is certainly subject to political pressure, differences in ways Different Companies regulated and will not fight beijing on these things. There are a couple other problems with apple that overlap problems with google and facebook. One is in terms of who gets what part of the innovation pie. One of the arguments when regulators say these companies are too big, we need to bring them to heal, make him smaller, break them up, they say this is a battle between regulation and innovation. I would argue these companies, apple is foremost among them, are implementers, not innovators. They are implementers of pretty much other peoples technology. You can see this playing out, there is a great story and headlines, the google battle and so now has a the to pick with a small innovator, a guy came up with a way to make smart speakers, very innovative company, came up a lot of technologies adapted by google and apple. As those companies are getting bigger and more powerful they started infringing on those patents, they have taken apple to court over Patent Infringement. It couldnt afford to take on both google and apple over Patent Infringement but apple has had major fights with other Big Companies like qualcomm. Apple in some ways is responsible more so than huawei, the chinese chipmaker gets a lot of flak for being the new go to chip company, infringing on qualcomm but apple was on a 3 continent battle with qualcomm, the biggest 5g innovator in the world infringing on its patents. At some point they said we dont want to pay what you are asking so these companies are implementing thousands of technologies, they want them to be inexpensive, in some ways they are legally taking this information or infringing on patents, sometimes they simply by up Small Companies in order to get rid of competitions so it is the big getting bigger and using the system to wrigley innovation environment in ways that are a 0sum game, to make one more point you cant have an economy in which four companies are taking all the wealth, you need a bigger unit Innovation Ecosystem. Host they would have sued amazon too but couldnt afford to take both of them on at the same time. Apple has been taken on by spotify, for all the names in. Host couldnt you argue implementation is innovation in a lot of cases . Even the beginnings of apple, they have a graphic user interface, how could you have this just sitting here, someone should bring this into the world and set out this version, there is the allocation but some could argue that part of what companies, even Big Companies become good at is bringing that innovation to life coming into the economy and getting it to people. Guest a lot of people would argue that. I dont see a Consumer Electronics product that hasnt had a Game Changing innovation since the smart phone in 2007. More or less everything has been iterative. Apple has been clever as a marketer, as a brand creator. Value lives in 3 places, it lives globally, in big brands, creating a veneer of desirability and real estate. That is where value lives. The new world we are moving into there is going to be an environment of deflation, commoditization of everything. You see apple fighting, look at apple losing the battle, a big chinese smartphone maker in a number of emerging markets. Apples success in packaging product and selling them in giant glass boxes is not helping put more americans to work, it is not helping to create the next big productive bubble in Green Technology or in things that would really bring along a Critical Mass of workers in volterra economy to the next good placement selling more expensive stuff. I would argue that a company like qualcomm not that that is a private company. Theyve done things i wouldnt want but that is a company that came up with the 5g chip. This is something that makes the smart phone smart. They have to duke it out to stay alive in continental legal battles with other American Companies at the same time you have china rolling out one built, one road, working seamlessly to execute huaweis chips and technology into a new ecosystem. That is a model we should be looking more carefully at than this sort of laissezfaire 0sum game, keep margins as tight as you can, outsource the supply chains wherever you want. We see the last few weeks and months the number of corporate scandals that that kind of 0sum Balance Sheet financial eyes thinking has led to. Host think about the differences. The legacy in the us is different from europe. In europe it is more about protecting competition and protecting the consumer. It seems in this digital era that kind of distinction cant work the same way it used to. When you talk about facebook, google, very often Companies Want to say look at the consumer. The customer for them is the advertiser, that is the consumer and they are paying a lot more than nothing. Does the old model for antitrust work in the us, is the european model better . Guest 2 or 3 points i would make, the tech giants, google likes to say competition is a click away. Eric schmidt saying that, lets be serious, back to your question, if you were doing a Google Search in your computer stopped working would you go to being or would you try google again . Host i am paranoid. I do i use google sometimes, i do some shopping on walmart. Com, spreading my data all over the place. Guest equal opportunity surveillance. The deeper point, the rules of freemarket capitalism do stop working like laws of gravity that has long as both sides know what the transaction is, what is the problem . In this world you are paying not in dollars but your data neither of those things hold. You dont know what you are giving up for what you are getting. You know youre getting a search but you dont know what the data is worth that you just gave google or amazon. It is a very asymmetric transaction and that is the problem right away. When you are doing barter and not paying in dollars that is not freemarket, that is not the way adam smith would have imagined it. Adam smith would have said you need equal access to data, transparency and a shared moral framework for markets to function properly. You do not have that in any of these things when dealing with a digital giant. It calls in a technical way into question this 1980s school of thought that it is Consumer Prices that matter. That is the school of thought that allowed walmart to get this big and destroy town squares. We get our cheap stuff, that is good for us i guess but there are a lot of negative externalities. You get less choice but in this world of 3, i put quotation marks around 3, you think it is free, you are paid but dont know how much, that model doesnt work anymore, you have to look at two things. You can look at the Innovation Ecosystem which is the way the europeans do it. They are like biological systems, looking at a petri dish or a pond, the plant and frogs and fishermen. How do we make sure the system is working for everyone . That is a very european way of doing things. That is why antitrust cases take years and decades. The outcomes are questionable. Interestingly theres an nyu academic, looking at how by many measures european markets work better in our fear in terms of diversity of players in the tech space because they are more sensitive to Small Businesses, the consumer doing well, do Big Companies that depend on patents versus open Software Everyone getting a fair shot, put that aside for a moment, you have to think about political power and the political economy in a way that we havent thought about in this country for 40 or 50 years. One of the things i spent a lot of time thinking about was the Nineteenth Century railroad paradigm. Back to the rockefellers and vanderbilt that you have networks of the Nineteenth Century economy being built by the Railroad Companies are just one point they owns not just the railroads but, the wheat and commodities, and they could preference who was traveling, how and when, they would hand out free passes to their politicians for their political rallies, you have to look at the tech firms in that way, you should not be able to both control the network and all the commerce that happens on the network because you inevitably come into conflict with your own suppliers. Look at amazon for example. A lot of companies will simply not take on antitrust issues because they can be disappeared from their business. They can become from all the consumers of amazon decides they dont want an algorithmic preference in their purse result, the same goes for google and you see antitrust come to light over this but they are very difficult to prove because there is this black box of algorithms, we should dig into that. Host with amazon it is amazon having the ecommerce site and Logistics Network deliver packages and allow third parties to operate but at the same time have its own brand of products competing against that and having an apps store where a thirdparty has to do business if they have an apps on the platform but having its own apps on that platform with podcasts or music, if i am spotify, you are competing with me. Thank you for decoding all of my academic wonky notice. There are rules in place 2 separate networks and ecommerce was the Company Provides a network competing against third parties that are not transparent and are often fair and in the financial sector, being financed, you have that say goldman sachs, you can trade aluminum but you cant own all the aluminum in the world and corner the market which was an issue that i covered in my first book, to get around those rules amazon not amazon. Other Big Companies, bought up a bunch of aluminum and moving from one warehouse to another to get around the commerce network. There are loopholes but a president does exist and it existed in the Railroad Business as well. You had a reformer, Louis Brandeis say we are going to bust up these trusts and took on the system and looked at the idea that political power exists. We are not living in a fairy world of everyone is making efficient choices and free markets are perfect. If we think about economics certainly since 2008 but really always, they are not perfect, markets dont always invest. Host in november your book came out, really puts a spotlight on the likes of google, facebook, apple, amazon and a few others as well and how their size, some would say success, their treatment of data and marketplaces have an impact not just on customers but all Global Society specifically in the us. Can we regulate data, information, without at the same time even unintentionally regulating speech . Because people are choosing a lot of cases to talk to alexa, pursue put information in the Search Engine on social networks, pictures on instagram that are giving away bits of location information, giving it away for free, making the choice what to do with their speech, how can it be stopped . Guest this something i really grappled with, this idea of whether platforms like facebook or google should be liable for what happens on them. On the one hand you dont want facebook monetizing the massacre of people in new zealand but also dont want Mark Zuckerberg to be the minister of truth. That is the line we are walking but let me point out a few things, as folks think about this argument these companies have this get out of jail free loophole that was written in Communications Decency act in 1996, allowing them to not be liable in the way you or i as journalists looking for media sources for what we say or do. If i print something factually inaccurate we could be suited i could lose my job, not so for google or facebook but look at what these companies do . They put tons and tons of content online and then sell advertising against it. They want to say we are town square but wants to have a Business Model that eats for lunch the traditional media and has created a post fact world which has led to all kinds of problems and challenges for liberal democracy. We have to consider rethinking cda 230. You are seeing chinks carved into it. There was a high profile case around backpage. Com. A website that was knowingly trafficking minors as prostitutes. This was something both the right and the left took on and now the platforms have a liability if there is sex trafficking for minors or federal high crimes, they have liability for those things, they do a pretty good job using algorithms to get child pornography off their websites. We have to look closely at how much more they can do and have to think about if they cant do it should they be allowed to monetize content at scale in the way they do . Turn the entire internet upside down or inside out, the idea being even the comments on news sites are covered under that. I want people to have conversations but i dont know, you cant have youtube, if a rogue upload the bad piece of content youtube will be liable. At the Financial Times we look over numerous employees to look over user content and if they are inappropriate or hateful we get them down. That a decision the publication has taken. These are decisions each government has to make individually and he was in countries like germany, france, the eu, china, singapore make desperate calls in terms of how content will be policed. I think it is important that this be a democratically led decision. I do not want individual private Companies One by one making these decisions because they will do what is best for their own profit margins. Something tangential the one of the key anecdotes and one of the reasons i wrote this book aside from looking at the economic power of these companies was full disclosure my own son became addicted to a free online soccer game. I came home and a card bill. Host 900. Guest 947 worth of tiny charges. Who could have done this . My 10yearold son alex had become addicted to a free apps that uses what is called persuasive technology, they are literally casino gaming techniques, all of this persuasive stuff takes you down a rabbit hole in which you are spending spending spending, minors are being marketed to in ways that may fall afoul of existing rules with children and media but i thought about this as it is like nicotine. This is as addictive and as nefarious as smoking. We need governments to put limits on things like that and we need a Government Agency of some kind, even in fda of technology to look at what are the whole battery of affects . Our Brain Science is being changed, children are being reshaped, Digital Natives that came of age using their phone they read less, their Attention Spans are lower, higher levels of anxiety and depression, difficult to prove causality and the research is pretty new but there is strong sociological Research Showing we are being affected in serious ways by this technology. Can we get this genie back in the bottle . In a sense the goal of marketing of advertising just got so good with data. These sites are constantly based on little pieces of information tweaking the layout of their apps, their site to drive drive engagement, doses of dopamine to keep them engaged. And investor would say that is why the stock is so high, love that. Do we need to have data on exactly how that works to regulate . I think we do and you are seeing social scientists come out. There was a wonderful book, looking at the last ten years or so of usage of mobile technology and correlating with things like depression and anxiety and isolation, a body of research developing that needs to be looked at, you have now in the dsm diagnostic, new ailments that relate to digital usage, digital addiction, these are real things and we need to treat them as such. Silicon valley has a real problem. They take credit for the wonderful things they do, they give up this wonderful technology, entertaining, productivity enhancing to a certain extent but not so good at taking responsibility for the downside. They are not so great at admitting they didnt do it all themselves, these technologies were built on federally funded r d, think about the internet touchscreen technology, gps, these were things became out of the pentagon, taxpayerfunded darpa innovations commercialized by the valley so you have similar to the 2008 crisis this privatization of profits but socialization of losses in so many ways, the human cost of automation, we havent even gotten into that, a chapter on everything, you and i, robots will be doing our jobs at some point. Reuters has experimented with algorithmic reporters. Theres going to be disruption higher up the food chain, you have a handful of doubledigit profits not taking responsibility for this and that has to change. Robots are already doing my old job with earnings releases. That is not the story that you write. You frame the issue this way early in the book, the issue is periods of great technological change are characterized by great disruption which needs to be managed for society as a whole, the religious wars of the sixteenth and seventeenth centuries which as Niall Ferguson outlined in his book might not have happened but for the advent of new technologies like the Printing Press which brought with it the age of enlightenment but not before it upset all orders the same way the internet and social media have appended society. There is a lot in there and very compelling. How do you go back to that time and fix that, information is good but bad things happened. Either licenses we can extract from looking at the past that help us figure out what to do now . I think there are. There is not one Silver Bullet and that is the problem narratively. You come on programs, my publisher is they want three solutions to a problem that has taken 20 years to create depending where you want to put the marker, capitalism in general are how markets are regulated and it is decades in the making. Host thank you for stopping that. Guest there is more than three solutions but the first step is creating the proper narrative. This is something i thought a lot about because i think one of the reasons we are in a polarized moment has to do with the fact that we didnt create a proper narrative about why we have had such disruption from globalization, tech related Job Disruption in rich countries like the us. We thought markets should be allowed to do what they want, that is fine. We didnt talk about big pockets of pain. We need to look at where this technology is going, where is it taking us and do we want to go there . I have a chapter in my book that juxtaposes the situation in the us with the situation in china. If we want to look at what a surveillance state looks like go to china, and there is no debate, about privacy. There is no assumption about that. The government can and does track everyone, harvests the data, there is a system of social credit so if you or i are doing things judged to be rightthinking by the party we might find it easier to get a job or get healthcare but if we fall afoul we may find ourselves like so many minority leaguers in a good log. That is where this can go. That power can be wielded by countries or corporations as it is potentially in the us. I think theres a third way. You are starting to see some bright spots, big, rich debate and i was phenomenally impressed by average people who turned out to hear these complex debates about with the visual economy should look like, capitalism in the era of data and theres a robust public debate, people making different decisions but it is happening. In this country look at california which interestingly has been way ahead on legislation, the birthplace of these companies but also the birthplace of a lot of solutions. You have california looking at a digital dividend, if data is the new oil, should these companies harvested for free or might they share some of that value, put it back into digital Sovereign Wealth Fund so like norway or alaska can do things for the Public Benefit with money collected from resources, lets use data as a resource and help people to buffer the problem of labor dislocation and automation. Sound like a tax. Specially targeted. They do wealth data. Guest the Trump Administration is fighting france for trying to put into tax like this going to the proper narrative there is a the bait and real push in washington in brussels and other capitals to create a very problematic and nationalistic debate about dont regulate big tech, google or amazon or facebook because we are your National Champions in the battle against china. I dont believe there should be National Champions. We should have a National Industrial policy and competitiveness strategy but i dont think individual companies particularly ones that operate in the countries they are complaining they want to go to battle with, they are not a national champion, they are forprofit company doing what is in their best interest, they are forced to do what is in the Public Interest and we need to have a conversation about that. Host for thing to do it in the public is hard when the public was in the mob and authoritarian government like china imposing rules. Is it one or the other . These days the government, not just the Trump Administration because the Obama Administration was doing the same thing, so they when they have good reason open up the device and see everything that has been done but apple argues, give you a backdoor, china is going to want it, turkey is going to want it . Is that the kind of privacy free world we want to live in . They are not easy questions but i would look to a couple examples in taiwan, you have a really rich, vibrant democracy being enabled by very decentralized technology, the same way china is using the big tech a big state model to create a surveillance state you have taiwan using block chain for digital identities for people to do quadratic voting on issues to capture the kind of nuance you are talking about the we have in our society, democracy is messy. We know that but i would like to see these technologies being used in service to democracy rather than degrading it which you have seen in the last few years. Host a possible solution that you cover in your book is the idea of individuals getting a cut in the use of their data. It makes me a little queasy, the social dividend is a little different. People data is worth more than others so if im in the right demographic do i get a bigger payment and theres the question of Network Effects and data, the sense my data might not be worth that much but my data plus another person if data is worth exponentially more than individual date of so is it possible on an individual basis to capture that . The idea of digital Sovereign Wealth Fund makes more sense because of the things youre pointing out. Reason to present this idea should individuals get a cut, some people are saying we are moving in the era of ai and more automation that can do more human labor, we are moving into a post work world. Sounds great at first. All of us have been on vacation two weeks and we get cranky. A lot of economists are saying our data is our labor and we need to think about that as something of value so i also wanted to show the numbers. It is impossible unless you are inside these companies to get a realistic view how much value the data is worth because it varies by individuals and how much you are layering. Just a conservative estimate shows that this is an enormous imagery, the fastestgrowing industry in the world so that is worth thinking about when you have Companies Making doubledigit profit margins, harvesting our data for free. Think about what that is worth, the appropriate tax system and this gets to a bigger and more profound point with away capitalism and globalization works. Laissezfaire globalization, freemarket capitalism as practiced in the us has been exported in many countries. The idea was goods, a and people should be able to go where they want. The problem is capital can jump across borders more freely than goods and people. In this Digital World it puts all those problems of neoliberalism where companies can fly above National Problems but labor is down here dealing with the reality on the ground, the Digital Transaction puts them on steroids because of capital can move across borders data can move across borders really fast. We have got to look at where this is going and set up parameters so you dont end up with what we have seen in swing states that have been decimated by globalization, having a very fractious ugly politics, you get that a broader level. Host we are talking about your book dont be evil how big tech betrayed its founding principlesand us where you look at google, apple, amazon and other Tech Companies the traffic in data with marketplaces and networks that have gone enormous power. So much work goes into writing this and so much learning. Do you do your work, deal with these companies and networks differently because of what you discovered . The first thing i did was take my sons phone after he racked up that 949 bill, with a lemonade stand, several months, in my part of brooklyn you do pretty well. Was one. I dont do smart speakers, i use encrypted email and more private apps. It has made me think a lot about the value of my own intellectual property and we are moving to a decentralized world in which the only value we have is what is in our head. The intellectual property, you have to keep control of that. When im negotiating contracts and thinking of my next project i make sure i keep control of my own data and intellectual property. Host you talk about solutions toward the end of the book and what you hope will happen. What do you think will happen or if you are generally an optimistic person put that on its head, what do you hope doesnt happen . What is the cost if we dont do anything . Guest i think this will be the topic of my next, we could see a rise of fascism. Particularly in the us because we are in a post truth world, a world in which it is so easy to create political manipulation, all these economic and technical changes that are driving change so quickly and dislocating so many people and that creates condition for our very extreme and hateful politics so that is the risk. I think that the upside could be if we get the framework right could be a world this is a stretch but Digital Technologies do allow distributed power, that is one of the things that is interesting, we can be sliced and diced by big Tech Companies but the power a own data and behavior online, businesses could be started more cheaply in the digital era. This could be a bill for labor if we get the framework right. Digital trade could be done more easily by small and midsized businesses more than in the 80s where if you wanted to see an International Company you needed size and have to. These are complicated things but there is potential the post work world could be a world in which labor is empowered relative to capital in ways that were impossible in the past. Host that would be an interesting outcome. Guest a concrete example, uber is just a piece of software, why should a Taxi Workers Union not have that . They do now. There are apps who share the profits from that, a cooperative model. One could imagine those things being done to scale, the Labor Movement itself being reinvigorated where you see the Freelancers Union or the aflcio trying to say hi paid Graphic Designer in silicon valley, youre a freelancer and you have the same problems with asymmetry as a cleaning lady does and that is an important point to make. Many are bringing up this points in 2020, active year politically and technologically, the book is dont be evil how big tech betrayed its founding principlesand us, rana foroohar. A lot of good thoughts. One of the things the rest of us can do is get smarter and read it so thank you for the great conversation. Guest thanks for having me. Member of congress testified before the House Small Business Committee on the Paycheck Protection Program and other measures intended to provide Economic Relief to Small Businesses impacted by the coronavirus pandemic. Live coverage begins at 11 am eastern on cspan2. Sunday night on q and a wall street trader turned photojournalist on his book dignity about the plight of those living on the margins of society in america. It was empty because all the semis were gone and immediately her intelligence just came right through and we spoke for an hour, halfanhour