 Hi everybody, I hope you're enjoying the conference as much as I am and enjoying some nice lunch now It's my pleasure to make a few remarks and maybe hope to and maybe stimulate some discussion and and Have some dialogue here about about big tech. I don't have a I don't have a book to sell unlike the previous meal speaker I am I do have a book in the works that I hope will be available about this time next year Which is a highly politically incorrect defense of private hierarchies. So I look forward to pimping that book At next year's supporter summit in in Vienna You know, I think most most freedom-loving people have a love-hate relationship with technology Right. This is this is true as far back as the days of the printing press, you know and every other major technological innovation whether it's improvements in transportation in communication in You know calculating machines computers and so forth, you know, like any other tool Technology can be used for good or for ill and we certainly see a lot of that That certainly comes out in a lot of our thinking and and concerns and so forth about about technology today So I just want to offer a few a few claims or propositions about big tech that I hope will be useful in Formulating you know helping us sort of think through the relevant issues Figure out what we might want to do or not do to make things better. Okay? So point number one Big tech firms do a lot of bad things Okay, it's okay to have bad feelings About technology platforms technology products, even though they are private In the most case, you know, they're private entities operating on the market You know, I sometimes hear people say well Well, you know, how can you criticize something that you know? Google is doing or something that Facebook is doing aren't you in favor of big companies? Aren't you pro-capitalist? What do you hate the market? Yeah, to borrow an example from the great Tom Woods, you know If I go to a nice restaurant and I order a steak and it isn't prepared the way I want and I send it back It doesn't mean I hate capitalism, right? It doesn't make me a socialist It means I'm engaged in voluntary interaction and voluntary transactions And I don't like the you know what this the seller did not deliver to me what I expected Maybe I even go and leave a bad review on Yelp or something that doesn't make me anti-market Likewise being in favor of the market Right, we sometimes say, you know, we're in favor of competition not specific competitors Right doesn't mean I love every company that has become profitable Every company that's large and successful in the free market I can choose to patronize those I like and don't like and I can I can choose to encourage my friends and family To patronize those I like or don't like the great thing about capitalism and and the market as opposed to the political sphere Right is that we don't all have to consume the same product Right, we don't we don't vote on which company will be the provider of X and whichever company gets 51% of the vote Then we all consume that product. No, we can each consume whatever product we want And if you and I have different preferences over what we like, that's fine All you know both of us can be satisfied on the market What are some of the things that that big tech companies do that make us mad, you know, especially sort of the platform companies Well, obviously, you know de-platforming speakers who have views that are not sort of appropriate progressive views spreading misinformation While claiming to be fighting misinformation, right, whatever that is. I mean, that's obviously a dominant Feature of technology platforms today having these algorithms that are biased in favor of promoting content that supports one particular ideology typically an anti-market anti-liberty anti-freedom ideology while making it harder to find content that promotes the kinds of things that most of us like Obviously, you know, we've already talked a lot about about so-called woke-ism and woke ideologies You know all the fortune 500 are woke, right? They all have big DEI programs and so forth and many many though not all many of the big tech companies are sort of leading the charge You all saw the famous infamous video of a you know, internal Facebook meeting after the 2016 election where you had the CEO and the other Executives cry a literally crying About the outcome of the election, you know in an employee meeting, right? You might think well, it doesn't seem appropriate to bring one's personal political views into the room But it was taken for granted that that everyone virtually everyone in that company had the same ideology that this was appropriate You know workplace chatter But of course Big tech tech firms tech platforms They do a lot of really good things too Mises.org is a kind of a tech platform, right? It's a non-profit one But think about how groups like the Mises Institute other groups that we've heard about today and Groups that maybe you are all involved in that are promoting liberty that are promoting freedom that are promoting free markets, right? All of these groups are using technology to you know How we how we communicate how we disseminate information? I've been involved in You know the sort of education and outreach industry for more than 30 years and just looking at the publication process Right going from physical newsletters that you had to put in the mail with a stamp and send out And you know and relying on physical books and so forth to the electronic era of being of digital communications It's vastly improved our ability It's greatly lowered the cost that we have to share and promote the ideas that are important to us Look at how many books are available in digital form on Mises.org All the works of Mises and Rothbard and the other great Austrian economists available for people all around the world to consume at At zero cost. I mean none of that would have been possible without Technology and indeed without big tech the big tech firms firms that have now become successful on the market that there have been some estimates by Economists, you know mainstream economists have this construct. They call consumer surplus Which is which somewhat bogus from an Austrian point of view, but you know is the idea of their surveys They're trying to estimate You know, what would people be willing to pay for all of the services that you mostly consume for free You know, how much would you be willing to pay for Google Maps? How much you would be willing to pay for Wikipedia, you know You sort of take these things away and see how much people are willing to pay to get them back and so forth And I mean the numbers are really it's really amazing. I mean most people would pay a lot if they really had to To use Facebook or to use Microsoft products or other goods and services that they use for free or at low cost On the back side to a lot of the things that we that upset us about privacy Things we worry about not only, you know our personal communications and our social media activity But also our medical records and financial records. I mean yeah protecting one's privacy is extremely important and there are a lot of a lot of market solutions for You know for some of these alleged privacy issues, but also think about the benefits of Being able to share information when you go to the doctor not having to carry around all of your records and your x-rays and so forth in physical form Think about the ability how a credit ratings have greatly expanded the supply of credit Available to borrowers legitimate credit, of course not fed created funny money, right? You know financial transactions are enabled by the fact that it's easy to get a profile of a person's credit worthiness And so forth so a lot of benefits to the sorts of things that we often worry about so that's point number one You know, it's perfectly fine to be angry and mad at tech companies for things They do in their core business things. They do politically. That's perfectly fine But we also need to recognize of course that there are many benefits to liberty into the liberty movement from technology Okay, second point which I alluded to before but it's worth emphasizing because I think this point is not always clear Tech companies are private firms Okay, they are private companies literally right. I mean Facebook Twitter Google Apple Microsoft Amazon I mean they are for-profit corporations owned by shareholders just like other private firms You know the fact that in the case of You know Twitter Facebook and so forth the fact that they are hosting conversations among people That that reflect, you know, sort of a new version of the public square the fact that they are Promoting and indeed having influence over dialogue and Conversations and interactions that affect how people vote and how people think The fact that in some sectors like online retail you have firms that have a very large share of the market None of that changes the fact that they're private firms Okay, this first thing to get out of the way Right now like like other firms large and small in the what Mises called the mixed economy Big tech firms and small tech firms to benefit from a variety of special privileges special protections Subsidies that they get from the state, right? Let's not I mean there's no bones about that But tech firms are not unique with one or two possible exceptions They're not unique in getting all kinds of privileges protection subsidies from the state Right lots of companies get those not just tech companies. You hear people say well, you know They rely on subsidized electricity to run their servers. Okay. Yeah, but but lots of firms have subsidies like that Amazon relies on you know subsidized roads to ship its goods in trucks. Well, I mean so does Walmart so to small shippers So do lots of companies so, you know, it's very hard to disentangle Who is sort of a net recipient versus a net? you know Payor or someone who has harmed with this vast array of complex government interventions in the economy So the interventions are certainly making things worse than they otherwise would be But it doesn't follow from the fact that a firm exists in the mixie mixed economy that it's like, you know part of the state You even hear some libertarians say and you know, they're they're sort of half-joking, but only half-joking You know, well Google is really a state entity and should be treated as such. I mean come on I I make those jokes too, but I make them about like Goldman Sachs Like Goldman Sachs is like a fourth branch of the US government or something like that I mean, yeah, you can make that case. They're very tight with the state, but they are private Tech companies do partner with the state in ways that make us uncomfortable Right they build in back doors to their supposedly encrypted products and applications So that when the FBI or the NSA or the local police department or whoever needs access to your information It can be provided of course They cooperate with state surveillance agencies to do surveillance themselves and report on suspicious activities They happily receive lists of You know so-called domestic terrorist groups from the relevant authorities that there was a leak that was Published by the intercept last week about a black list that Facebook maintains of Foreign and domestic hate groups terror groups and so forth that they keep off of their platform And they're happy to risk they're happy to partner with state authorities and constructing and sharing those lists You know and obviously they should be criticized for that But again, it's not totally unique You know when in the last couple of weeks as you know There's been a lot of discussion about airlines and whether they'll enforce vaccine mandates for pilots and flight attendants and mechanics and so forth and there were the you know, there was the The Southwest Airlines sick out that the authorities insist didn't actually happen And then they sort of back down The airlines have back down a little bit But you're one of the points that the airline executives made at that time is that well, we are federal contractors Right, we deliver mail we deliver, you know, we have all kinds of Formal relationships with different branches of government for transporting people and goods and as a federal contractor We are required to abide by regulations x y and z including, you know Vaccine mandates it turns out of course that the Biden administration had not actually issued a vaccine mandate at that time But that was sort of the conversation anyway My point is we absolutely should be critical of tech firms or any firms for Collaborating with the state in ways that are harmful to liberty, but this is not something that is unique to tech firms I'll say a little bit at the end about, you know Section 230 of the communications decency act which may you could be interpreted as providing a sort of a special subsidy That's unique to tech platforms Because that you know, that may be an exception okay point number three We often talk about big tech I've sort of been talking about big tech as if it is a monolith as If big tech is one thing But there's a lot of variety within that category of big tech Big tech firms are different from each other Right some of them Some of them are basically advertising platforms You know Google Facebook Facebook gets about 99% of its revenue from advertisements on Facebook Okay, Google gets 85% of its revenue from advertising on the Google search page and other Google products and services So companies like Google Twitter Facebook so forth, you know these they offer Free to consumer products and services They then use the user data they analyze the user data to target Advertisements for which advertisers are willing to pay a premium and that's you know, that's their business model So you think well, I don't like there. I don't like that. They use my data. Okay, that's fine But not all tech firms Make money from collecting user data Apple is a completely different kind of company. Apple is basically a hardware company Remy can correct me if my statistic is wrong, but the last time I looked 63 percent of Apple's revenue comes from selling iPhones Okay, now iPhones do come with iOS and of course Apple is also collecting information on users But Apple's business model is totally different from Facebook's or Google's it's essentially a hardware company You can also buy Apple watches and iMacs and so forth and you can Apple makes money of course from the Apple store But it's primarily a hardware company Microsoft is a software company. It's quite diversified Microsoft makes it's number one best-selling product is office I don't have the exact revenue breakdown It gets a chunk of revenue from selling office and it gets a chunk of revenue from selling its back-end Azure database system for corporate users. It makes money from Other platforms that it owns and so forth. What about Netflix? Is Netflix part of big tech? Yeah, a lot of people criticize Netflix as another woke Tech firm that's you know making me uncomfortable by how much it knows about my viewing habits And it's it's using all these tricks like next episode starting in five four three to get me hooked Get me that dopamine hit, you know from the next episode of whatever. Yeah, all those criticisms are fine But I mean Netflix is a streaming movie company Netflix is not an advertising platform, right? You pay a subscription fee to access streaming content like like a magazine in the old days Okay, even Amazon is is different from the others Amazon gets about half its revenue from Selling goods and services on amazon.com it gets about another 20% from fees that it charges to third party sellers on its platform It's about 10% from amazon web services. It's a cloud hosting Services so again amazon also collects user information And amazon may you know collaborates with the feds and so forth in ways that make us uncomfortable But it's a very different kind of a company so my point is big tech is is quite heterogeneous And tech firms have different business models. They have different practices in how they use data What information they collect on on us whether they charge, you know What how they make their money and so forth and that's relevant to our discussion As well And so okay fourth point and this is the one that you know We're emphasizing this weekend and that jeff really wanted me to talk about what do we do about all this What do we do to make things better? Well, I mean like any other policy question. This is complex But there are a few things that I think we clearly should not do and some things that we clearly should do so you know What are What are approaches that you hear talked about even within libertarian circles? For dealing with big tech that we should avoid okay number one. We should not have the government take these over Right, we should not nationalize facebook We should not turn facebook into the postal service We should not demand that it be a neutral platform Like a like a government-owned public utility that supplies electricity to everyone and cannot discriminate and so forth I think it's pretty obvious that making platforms government owned or government operated would certainly not make these problems That we're discussing better They would certainly make these problems worse We should not use antitrust law to to break up firms into different pieces Forced facebook to sell off instagram forced amazon to divest It's cloud hosting from its online retail and so forth I mean for reasons that are obvious to those of you who have been around And have read any austrian literature on markets and competition and law and antitrust that's clearly going to make a bad situation worse By the way, you know on the point people say well Yeah, I don't like antitrust in general but You know tech tech firms are different because they benefit from this so-called network effect Right, they're sort of winner take all markets Yeah, everybody wants to be on the same communications platform You don't want a market that's fragmented into a bunch of different ones So whoever has first mover advantage can therefore sort of take the whole market And you have to use government to break them up because no one can compete with a dominant Platform, you know because of network effects You know on that point when I when I'm teaching when I teach about this Teach this in class. I often show my students an article infamous article that was published about 10 years ago by victor keegan called Will my space ever lose its monopoly? question mark right So there's a huge amount of competition among platforms Actually, I don't know how many people we have in this room who are like under 20 but I mean the fastest growing tech platform, of course is tiktok Which within the space of the year went from almost nothing to being one of the largest platforms Facebook has totally stagnated in terms of user growth During the pandemic We saw a tiny little startup company that almost no one had ever heard of Become such a dominant firm in its business market that we now use its name for a verb Right when you have a video call with somebody you you have a zoom. Yeah. Hey, let's zoom this afternoon um, and it's predictably Uh, as soon as zoom became the dominant, uh, uh video conferencing platform You started to see you know hand ringing from economists and public policy people and journalists about oh my gosh Yeah, how can zoom ever be dislodged from its monopoly position? We need to break it up with antitrust like zoom didn't exist You know six months ago almost And the the market was dominated by cisco webex and microsoft. Who knows what else? Right, I mean sort of a contradiction in terms zoom shows how network effects are irrelevant Or network effects do not prevent a new firm from entering a networked industry if it's better if it offers better features or whatever um Okay, we should not have uh government regulation that enforces so-called content neutrality Right, so you know congress should pass a law that says You know twitter is twitter cannot promote jeff deist's tweets And demote peter kline's tweets that should be some kind of an antitrust violation It should be forced to be like the old telephone network where anybody who wanted to make a call could make a call um Yeah, obvious reasons why that that's you know, that's just interfering with the business model Of course, okay The whole idea that these firms are part of the public square again is irrelevant because to You know to us to libertarians The public square just refers to places where people in public interact Which include private spaces like this hotel room right that we're in a privately owned hotel ballroom right now But we're interacting amongst each other. We're having a kind of a public square discussion here, but it's on private It's on private property. Um, you sometimes hear uh regulators say well Platforms should be forbidden from promoting their own products Right, so it used to you know It used to be the case if you did a search on google or some other platform for the weather forecast in tampa The first search result would be the weather channel Right, but now what comes up first is just google's weather forecast And you got to scroll down a little bit, you know to find the link to the weather channel Google thanks to google flights If you search for a flight route or something in google The first hit is google's own flight search engine And you have to scroll down a little bit to get to expedia or travel velocity or american airlines or whatever you want There's some regulators who want to make that illegal Uh, they say well the the platforms are using their dominance to promote their own Uh, products and services that compete with ones that are also on their platform Well, I mean, okay, if you want to do that then you then we would have to outlaw sam's cola Being available at walmart, you know next to the coca-cola on the shelf, right? You have to outlaw all private label products that are And generics and others that essentially compete with the the dominant label products I mean, there's no no good reason from an austrian perspective in terms of efficiency Or or or you know equity to to require some kind of a rule like that doesn't make any sense What about restrictions on data? I've heard people who identify as free market enthusiasts Advocate for laws that make it illegal for tech platforms to collect user information You know unless maybe you explicitly consent to every single You know bit of data they want to like computer in the computer sense bit Uh of data they want to collect. Yeah. Yeah, you click the license when you installed the app, but you didn't read it That doesn't count Or you have similar rules that say your data has to be stored in a portable format You know if I if I regularly use Expedia to search for flights It's got my search history so that it can help me find options that I want more quickly And then I decide oh, I don't like Expedia anymore. I'm going to move to travel velocity I should be able to like export my file and plug it into travel velocity and have the exact same experience on travel velocity Well, aside from that being technically impossible right You know that means that if if platforms that rely on advertising revenue if platforms that whose business model depends on Aggregating collecting synthesizing analyzing user information and using it to target high-valued ads If that's if that is Prohibited then those platforms will have to come up with a new revenue model There won't be any more free google searching Right, there won't be any facebook for free. I mean you'll have to pay a user fee For all of the services that you use or maybe There'll be some other kind of model that entrepreneurs will have to figure out a subscription based model Maybe they'll look for sponsorships. I mean who knows but the the You won't be able to use platforms the way you use them now for free And they won't be able to provide a lot of useful information to you that relies on having detailed information about your user profile You know, do we want that? Well, look, there's nothing on the free market that prevents firms from using that business model now And of course some of them do there are plenty of paid services that you can get on the internet Um, if consumers really valued privacy enough that they're willing to pay a fee To use a service rather than use a free advertised Advertise based advertisement based service Then they're they're free to do so now and many people do but not most Right. How many of you use duck duck go as your primary search engine? Yeah, I mean in a in a normal crowd If I were speaking to a civilian audience, you know, it might be one out of a hundred These are libertarians after all But uh, yeah, I mean duck duck go is a tiny tiny market penetration because the typical user thinks Yeah, the search results aren't as good as they are on the big g And yeah, I know google collects my stuff and I don't like it But I'm not willing to pay the price of having less accurate search results Or a search engine that doesn't have some other feature that I like Okay By the way, one You know, just a small side note on privacy because I think it often gets forgotten I mean in some ways you could say we have more privacy now than we did in the era before technology before big tech before e-commerce and so forth I mean, yeah, I mean I don't say I have some medical condition and it requires some Meta, you know some treatment or some ointment or something and I'm kind of embarrassed I don't want anybody to know that I have to have this product that I have this condition Okay, yeah, I don't like the fact that amazon knows that you know I've bought a whole bunch of this thing whatever it might be maybe have some weird I have some weird obsession with you know, tom de lorenzo books or something I buy huge quantities of tom de lorenzo books sort of a fetish for me I don't like the fact that mesus.org knows my transaction history I don't like the fact that amazon knows my transaction history But I mean prior to big tech the only way to satisfy that fetish We'll be walking to Barnes & Noble or walk into the local bookstore in my town and then I might see my friends and neighbors They might see me hauling off a bunch of You know tom de lorenzo books I mean at least I can do it from the privacy of my own home And in the current era that's something that is worth is worth Taking into account. Okay. So so what should we do? Well, look I mean, it's not that it's not that complicated In in terms of our behavior on the market If we're not happy with the goods and services that are being offered to us the best alternative is not to use them Right or to use alternative products and services as we've already heard this morning Entrepreneurs are very good at coming up with alternatives at working around obstacles and barriers There are plenty of alternative communications platforms and Web-based services available to us if we prefer to patronize those other than the dominant firms We can certainly do that We should encourage entrepreneurs and and roll back barriers to entrepreneurship that limit the ability Of new firms to compete of entrepreneurs to compete and certainly we should roll back eliminate any subsidies That are specifically benefiting tech platforms My view on section 230 is that we should get rid of it But we should get rid of the whole communications decency act of which section 230 is just a little piece I think that would go a long way to solving some of our problems So I'm sure I didn't have my phone in front of me to check the time But we have maybe time for one or two questions. No one question. Yeah, please Say it loud since you don't have a mic Yes, so the question is would we see more of the sort of freemium model free ad-based services You know outside of technology for physical goods and services I mean, sure. I mean, there are plenty of examples of that now There are lots of free giveaways You go into the grocery store, you know by the deli section sometimes they have a little You can have little pieces of cheese or whatever to Pastries or whatever to sample. I mean, that's a that's a giveaway to get you in the door Or to make you stay in the store longer to have you shop longer and so forth So that you'll then spend more money on the on the priced products That's essentially not too different from the so-called freemium model except it's on a smaller scale So in a pure free market, would we see more? Advertising based rather than fee based goods and services I mean my interest I really don't know but I would love to see how entrepreneurs figure that out So let's have a free market and give it a shot