 This is Mises Weekends with your host Jeff Deist. If you're under 30, this might be hard to believe, but Silicon Valley used to be thought of as a hotbed of libertarian thought. In fact, a lot of big Silicon Valley companies used to brag that they didn't have a lobbyist in Washington, D.C. because they considered the regulatory landscape irrelevant to what they were doing. Fast forward, though, to the late 1990s, early 2000s, everything changed when the Justice Department brought a huge antitrust suit against Microsoft, which resulted in a settlement and some humiliation by Bill Gates. So today, we think of Silicon Valley as almost PC orthodoxy enforcers. We have companies like Twitter and Facebook making de facto editorial decisions and deplatforming people like Alex Jones. So we have a great talk today for you from our own Peter Klein, who actually presented this at our supporter summit last week on the subject of how socialism came to Silicon Valley. You're really going to enjoy this. Peter did a great job. Have a great weekend. We're all here this morning. If you're like me, I was scrambling to find a paper copy of the schedule to check the timings and everyone's titles because I haven't been using the paper schedule. I've been using a schedule on my electronic device. So if you think about the industries with which you interact on the most frequent basis nowadays, aside from industries associated with food, clothing, and shelter, the technology sector is probably the one that you deal with on a daily basis more than any other. It's hard to imagine now what life would be like without Google, without maps, without Apple, Samsung, and so forth. Life before the internet was nasty, poor, brutish, and short for those of us who remember it. Of course, we have our own challenges now. So it really is hard to identify an industry over the last three, four, five decades that has had a bigger impact on the world than the technology industry, which of course is a global industry but is centered around, centered upon Silicon Valley in California. It has been for many years. The U.S. continues to be the world leader in not in manufacturing of technology products but certainly in design, administration, and in software and in many other parts of that sector. It's a great American capitalist success story. And yet, there are many things about the technology sector that make many of us uncomfortable. So ideologically, Silicon Valley appears to be much less sort of a load star of capitalism and almost like a bastion of socialism. If you look at kind of the words and belief systems and so forth associated with that industry, with that part of the world. Remember, this is not, if tech executives are socialists, they're champagne socialists. Right? I mean, Jeff Bezos, CEO of Amazon is the richest person in the world and depending on how you measure, maybe the richest person who ever lived. Apple is a one trillion dollar company. Amazon is not quite in Walmart's neighborhood but it's getting close. Amazon had about $187 billion of sales in 2017, which is about a third of Walmart's total sales. But what are the people like who operate these companies? The people who work for these businesses? The people who are the liaisons between the technology sector and the beast in Washington, D.C.? Well, I mean, there are lots of ways to sort of look at this. One study estimated that if you look at campaign contributions in the 2016 presidential election, there was about $8.1 million given by tech executives and employees. 95% of that went to the Clinton campaign. So $7.7 million was donated by Silicon Valley types to Hillary Clinton's campaign. Trump got about 4% of that total. We used to talk about Silicon Valley as an outpost of libertarian thinking, right? Tech executives in the 70s and 80s were thought to be kind of libertarian in spirit and of course you do have a few people like Peter Thiel and Patrick Byrne who explicitly advocate for blockchain and similar technologies as a means of liberating people from the state. But even poor Gary Johnson got less than 1% of all of the campaign contributions in the 2016 presidential election, the libertarian candidate Gary Johnson. Lately, there's a lot of discussion, a lot of concern about the big social media companies, Facebook, Twitter, YouTube, which is owned by Google and so forth, imposing either outright bans or so-called shadow bans on conservative and libertarian thinkers, right? Closing their accounts for making politically incorrect remarks or adjusting the algorithm that these platforms use to display stories in a certain order and so forth so that people are less likely to see posts from individuals and groups that are thought to be politically suspect. If you do a Google search, even Trump alleges that if you search for Donald Trump on Google, Google has either designed the algorithm in such a way or there are people explicitly coding it such a way that Stormy Daniels is the number one hit or whatever if you search for Donald Trump. Lou Rockwell even mentioned in his remarks yesterday that companies like PayPal have refused to deal with websites and publishers and so forth who have kind of sort of disreputable ideas. And there's the whole crusade emphasized over the last few months about fake news and how it's the responsibility of Facebook and Twitter and other social media firms to weed out the fake news. Of course, what is fake news? Well, the usual definition of fake news is news not approved by the state, right? And the and the established media companies and so forth. So there's a lot of pressure on technology firms to put policies in place that make sure that only sort of approved opinions get out and are seen by people and so forth. Some of you may have seen. Oh, it was about three weeks ago. I think I believe it was Breitbart produced or shared a leaked video video of an all hands meeting at Google a few days after the 2016 election or the first one of their company wide meetings that took place after the election with all of the top executives at Google, including the founders, Sir J. Bryn and Larry Page, you know, crying and people were sort of, you know, singing, we shall overcome and so forth as people expressed their their sorrow and how hurt they were about the election results and so forth. There was one survey of political opinions among Google employees suggesting that those who identified as conservative or libertarian, you know, felt highly uncomfortable sharing their views with their colleagues, as you can imagine. And you remember the incident from 2017, where an engineer at Google named James D'Amour published an internal memo. I think it was called Google's ideological echo chamber, complaining that there was a lack of viewpoint diversity within Google on issues not just related to politics, but on issues such as gender diversity in the workplace and that it was harmful to Google professionally, that there was only sort of one official view that was allowed on these kind of social issues and that it would be better for the firm, better for creativity and so forth. If there were a little bit more diversity of opinion, of course, then that memo was outed and he was abruptly fired by Google and what was kind of a PR blow for Google, at least among people like us. Right. And even when I was looking the other day for checking the date on that, most of the news articles refer to him as, you know, the anti-diversity guy who wrote an anti-diversity screed. I mean, it wasn't an anti-diversity screed. It was actually a pro-diversity argument. If we if we mean diversity of opinion, right? He said, well, maybe we ought to think in other ways about, you know, why there are relatively few female engineers at in Silicon Valley. Maybe it's something other than the patriarchy. Maybe there are other explanations we should explore, but that is described in the media as an anti-diversity stance. OK, so how can we explain this? How can an industry that is such a great driver of capitalist growth and progress be staffed by people who have such anti-capitalist views? How can we explain that? Well, I mean, first, keep in mind that, you know, if we're talking about the social media companies, right, they maybe are better understood, not as technology firms per se, but as media companies, right? Now, the New York Times is also a very large private for-profit company. The Washington Post, of course, is owned by Amazon, owned by Jeff Bezos, right? So it's not at all surprising that many large profitable for-profit enterprises take a very socialist left wing anti-capitalist stance. I mean, we see that in the traditional media. And this has been, you know, there are many explanations offered over the years, great social theorists like Joseph Schumpeter and F.A. Hayek have pointed out that when you look at the media universities, other kind of the publishing industry and many sort of public intellectuals, the reason that they're so left wing is not because, you know, smart, articulate people tend to be on the left, but because of a kind of a selection bias that's smart and capable people who are kind of uncomfortable with markets and commerce, who like to tell other people what to do, right? Tend to select into academia, into journalism, into the media and so forth. Whereas equally smart and capable and articulate people who are comfortable with the world of affairs tend to self-select into business and tend to be pro-capitalism and be in the capitalist sector where we don't see them as much, right? Because their job is not to stand up in front of people and talk, but rather to make goods and services and to make the world a better place. Of course, when you are in the universities or you're in the journalism industry, it's to your advantage to be friendly toward the state to support the government. Murray Rothbard, of course, wrote a bit, wrote about this on many occasions, this kind of unholy alliance between public intellectuals who provide sort of legitimacy and justification for the state in exchange for which they get access, they get privilege, they get special protection, they get public funding and subsidies and so forth. So we shouldn't be surprised that, to the extent that Facebook and Twitter and so forth are media companies, that their personnel have the same kind of ideology as other media companies, namely an anti-capitalist kind of a view. And of course, there's also a lot of what we might call confirmation bias among media types, right? They interpret events, when they look at what's going on, you know, the hearings in the Senate and the last, the US Senate in the last couple of days, hardly anybody in the established media or in these new media companies is, you know, kind of trying to report on the facts of what happened in order to establish some kind of truth or discover the facts of what took place 25 or 30 years ago, right? Everything is interpreted to fit into a preconceived narrative, right? And depending on what your preconception is, you describe these events in a way that reinforces your particular ideology. But what about tech companies specifically? Why are Amazon and Apple and Microsoft and firms like that? Why are their executives and employees, why do they tend to have this particular ideology? I mean, let's keep in mind that these are private for-profit companies. Okay, whatever you feel about Twitter or Facebook, I mean, their assets are owned by investors, shareholders. These are private companies. Their business is to make profits by providing goods and services to consumers. And of course, these companies have created tremendous value for human beings, right? For consumers, for humanity in the last few decades. So there's no doubt about that. But of course, we don't live in a pure capitalist economy. We don't live in a free market society. We live in a mixed economy in which many firms can become large and influential, not merely by providing goods and services that people want, but also by kind of cozying up to the state. And of course, we know from history, you know, Patrick talked yesterday about his work editing Rothbard's book on the progressive era. Right throughout history, many big business people have not been pro-market, but have been pro-subsidy, pro-privilege in a way that benefits themselves. So we shouldn't be surprised that large, wealthy, profitable companies can be staffed by people who are not pro-market. Yeah, and again, I think the social media companies are like media companies in that they don't want to offend the powers that be. A good example is Google has allegedly is working closely with government officials in China to make sure that Google kind of enables the sort of censorship that is common in China in order to gain access to that market. You might remember the whole thing in Big Issue in 2016 where the FBI wanted Apple to unlock an iPhone to be able to provide some information about a criminal case and Apple CEO Tim Cook made a big deal of opposing the FBI on these grounds. That kind of stuff is just a sham, right? That's theater, that's political theater. In reality, the tech companies work very closely with the NSA and the CIA and the FBI and other government and their equivalents around the world to partner with law enforcement in an appropriate manner to make sure that no one can use their technologies for inappropriate purposes. Again, as Patrick pointed out when we look at the progressive era, many of the rules and regulations that were allegedly designed to protect consumers and the public from harmful big businesses were really written by and designed by those big businesses directly in order to protect them against their younger, smaller competitors. I was really struck by a couple of scenes earlier this year when they had those hearings in the U.S. Congress and they made Mark Zuckerberg appear before Congress and explain what Facebook is doing to keep out the Russian bots and so forth, make sure the Russians don't steal the election for Trump. At one point, Zuckerberg said, look, there's a real danger in allowing the government to have influence on information channels. Then just a few moments, then he pointed out, and we Facebook, we're not a small company. We're a large, dominant firm. It's relatively easy for us to work with you, Congress, to meet your rules and restrictions, but it's much harder for smaller, younger companies like we Facebook once were. And so Zuckerberg, he's basically stating the thesis that Rothbard emphasized that regulation often helps big businesses at the expense of smaller businesses. Hence, big business typically favors regulation that imposes more costs on younger and smaller rivals than on big business itself. And then 10 minutes later in the hearing, he says to another Congressperson, oh, we at Facebook would be delighted to work with you in designing the rules that will govern cyberspace to make sure we get rid of fake news. Well, did nobody pick up on the sort of juxtaposition between those two remarks? Okay, so what does government do to help the technology sector? Why would tech firms have a more favorable opinion of government than they otherwise would? Well, I mean, in some cases it's obvious. There's some obvious cases of cronyism. Elon Musk comes to mind. So let's put that aside because that one's too obvious. There are more subtle ways in which government intervention helps these companies. There's intellectual property protection. So most software products are copyrighted. Other technologies, hardware relies heavily on the patent system. So in a world of a different kind of intellectual property regime, there might be different business models that these firms would need to use, and which might be much more costly for them. There's the internet itself, which the origins of which owes a lot to government intervention, right? The internet evolved out of the so-called ARPANET, which was a defense department project from the 1960s and 1970s. I wrote an article in the free market many years ago called government did create the internet, but the free market made it glorious, which got a lot of downloads, a lot of hits on Mises.org, arguing that, yeah, the government did play a big role in the development of the internet, but that kind of was harmful rather than helpful. The internet might be better today if it had not been for massive government subsidies. So I'm obviously not making a claim like the one associated with the British academic Mariana Matsukado, who says, well, the government is really, we really owe the government a big word of thanks for the development of technology, and therefore we need more regulation and more subsidies and so forth. I'm making the opposite claim. The government has had a big impact in helping some technologies and technology companies, but to the detriment of the overall working of the system. But another one piece of intervention that's not talked about very much is a certain part of a 1996 law called the Communications Decency Act, which was sold to the public as a way of protecting minors from harmful and abusive material online. But there was a little piece called Section 230. Now the Communications Decency Act itself was struck down by the Supreme Court as being overly broad, but the Section 230 provision remains. It explicitly gives internet firms immunity for any kind of sort of common law tort action like defamation or libel for material that is published on those platforms. So in other words, if the New York Times publishes an article that is defamatory towards Tom DiLorenzo, I mean, I know that's shocking to imagine, Tom DiLorenzo could potentially sue, he could sue for defamation, he could sue for libel or whatever. And the argument would be, well, the New York Times is a curated platform. I mean, some, you know, maybe Patrick Newman wrote the article, but it was published in the New York Times, edited by the New York Times, so the New York Times is legally liable for the content of its publication. But Section 230 says that Facebook and Twitter and YouTube and so forth are not legally responsible for content that is on their platforms. So some people have interpreted this as a kind of a subsidy that allows social media firms to, made their business model more viable, allowed them to attract investment in other firms of capital that maybe they wouldn't have been able to attract if investors were concerned that they could be subject to big losses in litigation. And so the argument always was, well, the New York Times is, you know, sort of constructed from the top down. We're just an open platform where anybody can post anything, so you can't hold us responsible for what people post. Well, if that's the case, then those companies cannot now be going through and removing fake news and banning certain authors and so forth. Well, now you're like the New York Times. Now you're curating, you can't simultaneously curate and be immune from responsibility for what is published, but that's what this legislation imposes. One more thing, too, that might also be relevant is the famous antitrust case against Microsoft in the mid-1990s. Before that time, U.S. tech companies were pretty apolitical. They didn't donate to Congresspeople that didn't have lobbying offices in D.C. and so forth. After the antitrust case against Microsoft, they all stepped up and started donating money to politicians. They all set up big lobbying branches in D.C. So you could look at the antitrust trial as a kind of a shakedown. Antitrust is kind of an extortion racket, so the government lets it be known that, hey, if you don't play ball, we're going to come down on you, and after that, they play ball. So what do we do about this? I certainly don't support the calls you hear from some conservatives. Well, the government needs to regulate content and force them to include conservative views on, force Facebook and Twitter, don't let them ban conservatives, force them to have a balanced kind of opinion, treat these platforms like so-called common carriers, where anybody has to be allowed to use it. I think that's a cure worse than the disease. I think there are two solutions. In the short run, those of us who are not satisfied with the ideological goods and services being provided by tech companies have a simple option. Don't use them, right? Don't use the platforms that you find objectionable. Don't buy from the providers and don't buy the products that run by people whose opinions you dislike or find harmful. Use alternative products and services of which there are many to choose from. But of course, the long run, as it won't surprise you to hear, is to shrink the state so that there are fewer benefits accruing to entrepreneurs from partnering with and cozying up to the state. So thank you very much.