Russ Roberts takes the other side arguing that life as a creator has never been better, and that a wide array of information is at our fingertips.
The following quote if from the guest, Matt Stoller:
If you're an author--and there are people that people used to make their living writing books, mid-level books. Bands, you know, are getting just savaged, it's more by YouTube more than by any of the others. What's happened is this whole mid-tier of the artistic, creative community whose livelihoods have just been shattered. And there are large numbers of books that have not been written because there's no money in it any more. And that's a massive loss to the free flow of ideas in America.There are people who still make a living writing books. There weren't a lot of them before, and there aren't a lot of them now. I can say the same for bands. It's not like if you were a teenager in the 80s or 90s and wanted to skip college to join a band your parents would say, "well that's a totally viable option."
It was a horrible decision to try to make a living as a writer or musician back then, and it's a horrible decision now.
Amazon can choose, and does choose which books to put in front of you. So, they had a big fight with Hachette, where they just pulled Hachette's books off of their shelves. And, if you look for certain books, they will choose to promote other books in front of those books, through their recommendation engine. And so, they are manipulating the flow of information to you. They are manipulating the flow of ideas from author to reader in a way that we have never seen before. And that is incredibly dangerous. So, sure: If you are just looking at low consumer prices and your ability to just acquire books for cheap prices, you might say, 'What a great time to be alive!' Even though I don't think that Amazon's prices are necessarily that good. I think it's undeniable that they, as a consumer, it's an amazing platform. There are all sorts of aspects about who we are as a people, as a free people, as a creative people, as a people that have ideas, as a people that bring crops to market, that are incredibly disturbing. Amazon is not something that you want to see if you want to have a free society, if you want to have a democracy, if you want to have citizens who have any dignity.An algorithm is going to decide which information is presented to you, whether that algorithm is designed and in a computer, or undesigned and formed by what books your local library happens to carry or what gossip trickles through your social contacts.
The thing about the google way is how many branches the algorithm allows. There are all kinds of weird internet clusters to discover. I found the Rationalists online, Nintendo hobbyists online, the Economist Blogosphere online, and some pretty fringe music. I'm sure google would love if I subscribed only to groups that paid google, but they're not able to make that happen.
I suppose this is the today version of the yesterday worry that Tv advertisers were controlling the masses through their Sprite and Eggo Waffle commercials. The thing is, they are. Why else would someone spend $5 million on a super bowl ad? But consider 100+ million people watch the super bowl, so all the super bowl ad has to do is intice each one of them to spend an average of $.05 to be profitable. This is not mind control, or social engineering, or herding the masses of sheep. This is nudging.
And that's how I feel about what Matt Stoller is saying. The CEOs of the companies he's talking about; Mark Zuckerberg, Sundar Puchai, and Jeff Bezos sure don't seem like Trump supporters. And even though Amazon controls what books they put in front of you, Facebook controls which news stories you see, and Google controls what Youtube videos are suggested for you, they couldn't stop Trump from getting elected, and it didn't seem like they tried, and it doesn't seem like if they had tried it would have worked.
I'm not saying that perverse manipulation of these algorithms has never happened. Matt Stoller has stories about times when they were discovered. But going from that to, "therefore it must be the most important thing in the world," is a leap I'm not willing to make.
When Stoller starts claiming all these undefined grandiose moral claims about freedom, Democracy and dignity or whatever, he really started to losing me. But he earlier in the interview he made some very good points that I want to take away with me.
One is that although Amazon historically has made little to no profit, because they invest back in, they could at any time they could spend a little less to show a profit.
Second, the point that maybe 3 firms have a database of information big enough to make a decent search engine. This is a great big barrier to entry that would predict a lack of competition and monopoly power. This point should have been emphasized more given that it's an economics podcast. Still, remember what Bryan Caplan said about potential competition long before Matt Stoller wrote his book; if firms raise their price above the competitive level, firms might start start springing up. So even when there is no actual competition, firms may act as though there were
Third, I learned the Russ Roberts is actually a conservative. After all these years, who knew?
