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This is the age of the Microsoft and Amazon economy
Tim Harford

the big digital players: Google dominates search; Facebook is the Goliath of social media; Amazon rules online retail. But, as documented in a new working paper by five economists, American business is in general becoming more concentrated.

David Autor and his colleagues looked at 676 industries in the US — from cigarettes to greeting cards, musical instruments to payday lenders. They found that for the typical industry in each of six sectors — manufacturing, retail, finance, services, wholesale and utilities/transportation — the biggest companies are producing a larger share of output..... “superstar firms” tend to be more efficient. They sell more at a lower cost, so they enjoy a larger profit margin. ....Superstar firms are highly productive and achieve more with less. Because of this profitability, more of the value added by the company flows to shareholders and less to workers. And what happens in these groups will tend to be reflected in the economy as a whole, because superstar firms have an increasingly important role.
economics  monopsony  monopolies  Facebook  Amazon  superstars  David_Autor  retailers  platforms  corporate_concentration  economies_of_scale  network_effects  Tim_Harford  Microsoft 
6 days ago by jerryking
Washington Monthly | How to Fix Facebook—Before It Fixes Us
Thanks to the U.S. government’s laissez-faire approach to regulation, the internet platforms were able to pursue business strategies that would not have been allowed in prior decades. No one stopped them from using free products to centralize the internet and then replace its core functions. No one stopped them from siphoning off the profits of content creators. No one stopped them from gathering data on every aspect of every user’s internet life. No one stopped them from amassing market share not seen since the days of Standard Oil. No one stopped them from running massive social and psychological experiments on their users. No one demanded that they police their platforms. It has been a sweet deal.
digitalrights  failures  google  facebook  monopolies 
12 days ago by becky_hogge
Silicon Valley Is Turning Into Its Own Worst Fear
"Consider: Who pursues their goals with monomaniacal focus, oblivious to the possibility of negative consequences? Who adopts a scorched-earth approach to increasing market share? This hypothetical strawberry-picking AI does what every tech startup wishes it could do — grows at an exponential rate and destroys its competitors until it’s achieved an absolute monopoly. The idea of superintelligence is such a poorly defined notion that one could envision it taking almost any form with equal justification: a benevolent genie that solves all the world’s problems, or a mathematician that spends all its time proving theorems so abstract that humans can’t even understand them. But when Silicon Valley tries to imagine superintelligence, what it comes up with is no-holds-barred capitalism."

"Insight is precisely what Musk’s strawberry-picking AI lacks, as do all the other AIs that destroy humanity in similar doomsday scenarios. I used to find it odd that these hypothetical AIs were supposed to be smart enough to solve problems that no human could, yet they were incapable of doing something most every adult has done: taking a step back and asking whether their current course of action is really a good idea. Then I realized that we are already surrounded by machines that demonstrate a complete lack of insight, we just call them corporations. Corporations don’t operate autonomously, of course, and the humans in charge of them are presumably capable of insight, but capitalism doesn’t reward them for using it. On the contrary, capitalism actively erodes this capacity in people by demanding that they replace their own judgment of what “good” means with “whatever the market decides.”"

It’d be tempting to say that fearmongering about superintelligent AI is a deliberate ploy by tech behemoths like Google and Facebook to distract us from what they themselves are doing, which is selling their users’ data to advertisers. If you doubt that’s their goal, ask yourself, why doesn’t Facebook offer a paid version that’s ad free and collects no private information? Most of the apps on your smartphone are available in premium versions that remove the ads; if those developers can manage it, why can’t Facebook? Because Facebook doesn’t want to. Its goal as a company is not to connect you to your friends, it’s to show you ads while making you believe that it’s doing you a favor because the ads are targeted.

So it would make sense if Mark Zuckerberg were issuing the loudest warnings about AI, because pointing to a monster on the horizon would be an effective red herring. But he’s not; he’s actually pretty complacent about AI. The fears of superintelligent AI are probably genuine on the part of the doomsayers. That doesn’t mean they reflect a real threat; what they reflect is the inability of technologists to conceive of moderation as a virtue. Billionaires like Bill Gates and Elon Musk assume that a superintelligent AI will stop at nothing to achieve its goals because that’s the attitude they adopted. (Of course, they saw nothing wrong with this strategy when they were the ones engaging in it; it’s only the possibility that someone else might be better at it than they were that gives them cause for concern.)

There’s a saying, popularized by Fredric Jameson, that it’s easier to imagine the end of the world than to imagine the end of capitalism. It’s no surprise that Silicon Valley capitalists don’t want to think about capitalism ending. What’s unexpected is that the way they envision the world ending is through a form of unchecked capitalism, disguised as a superintelligent AI. They have unconsciously created a devil in their own image, a boogeyman whose excesses are precisely their own.

Which brings us back to the importance of insight. Sometimes insight arises spontaneously, but many times it doesn’t. People often get carried away in pursuit of some goal, and they may not realize it until it’s pointed out to them, either by their friends and family or by their therapists. Listening to wake-up calls of this sort is considered a sign of mental health.

We need for the machines to wake up, not in the sense of computers becoming self-aware, but in the sense of corporations recognizing the consequences of their behavior. Just as a superintelligent AI ought to realize that covering the planet in strawberry fields isn’t actually in its or anyone else’s best interests, companies in Silicon Valley need to realize that increasing market share isn’t a good reason to ignore all other considerations. Individuals often reevaluate their priorities after experiencing a personal wake-up call. What we need is for companies to do the same — not to abandon capitalism completely, just to rethink the way they practice it. We need them to behave better than the AIs they fear and demonstrate a capacity for insight."
ai  elonmusk  capitalism  siliconvalley  technology  artificialintelligence  tedchiang  2017  insight  intelligence  regulation  governance  government  johnperrybarlow  1996  autonomy  externalcontrols  corporations  corporatism  fredericjameson  excess  growth  monopolies  technosolutionism  ethics  economics  policy  civilization  libertarianism  aynrand  billgates  markzuckerberg 
29 days ago by robertogreco

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