I keep hearing that phrase. We need to break up big tech. Today Robert Reich released a video about it.
It is easy to say “break up big tech”, But how do you do it? We don’t want a bunch of balkanized Facebooks that don’t share a common user base. What would be the point of that? Should Whatsapp and Instagram be peeled off of Facebook? Without a doubt. Those purchases should never have been allowed in the first place, and Facebook should be required to open up its API so that outside contributors can get access to Facebook’s user base. But is that breaking up Facebook?
The same is true of Amazon. You could break storage and delivery services up, but then you increase the cost to the purchaser. Is Amazon proving its worth during the crisis? Without a doubt. What people who talk about Bezos’ wealth always leave out is how much he pays himself for his time. $81,840 is his actual salary (h/t to BusinessInsider.com) There are far, far worse CEOs in the world. Truly deplorable people who not only shouldn’t be wealthy, but should also probably be in prison (yes, I am looking at you Donald Trump and all you little Trumps and Kushners, too) The fact that Amazon has increased in value during the pandemic is an economic affirmation of Amazon’s real worth, as opposed to the imaginary value of stocks on the stock market as a whole.
How many CEOs get paid hundreds of millions to run companies that haven’t increased in value by billions of dollars? Maybe we should be looking at taking away their lavish compensation packages. Clearly they don’t deserve the kind of money that they are being paid.
In the same vein with Amazon and are the co-owners of Google. They too don’t get paid lavish salaries. Like Facebook, Google’s parent company, Alphabet, should have its investments put under a microscope, and some of their shadier advertising practices should be subject to fines, because they are already illegal. But how do you break up a search engine and not render it useless for conducting searches?
Breaking up monopolies only works if those monopolies are artificial monopolies. We established this with the breakups that were forced on Standard Oil and AT&T in previous decades. Rockefeller still made out just fine after Standard Oil was broken up, and most of those companies have merged again into the behemoth known as Exxonmobil. Why aren’t they charging usurious prices now that they’ve re-established their near-monopoly status? Because they aren’t the only players on the block when it comes to energy production, and they know they could be broken up again.
AT&T also reformed itself, and few people seem to care or even notice that it happened. Why? Because the problem, the cost of long-distance phone calls, went away with the creation of mobile phone technology.
So what is the solution? Regulation. We need to be writing regulations to guide these internet companies going forward. That means we need a government that functions at the legislative level, and we need a government that can’t be bribed by industry. In short, the average American needs to stand up and make government pay attention to them and not pay attention to the companies waving dollars in their faces. Replace the representatives that have been shown to be too easy on businesses, that can be shown to be too comfortable taking large sums of money from corporate donors.
We need to institute a standard of employee ownership of every publicly held corporation, ensuring that workers in any company will be paid what the workers think is a fair wage. Completely change the nature of worker/employer relations by giving the employees a seat at the management table. That will help address the problems of homeless working poor.
But we need more than that, too. Rental costs in cities are too high. Property valuations are completely out of whack. As I’ve heard a number of times in my podcasts this week, macroeconomics is broken. We can’t explain what it is we are experiencing as we go through this pandemic, from an economic perspective.
We need to focus on the here and now. How do we keep people in their homes when they have no income and no job prospects on the horizon? How do we keep people fed? Those are the most important questions right now. We’ll get to Bezos and his billions later, he can be assured of that. Let’s deal with the crisis in front of us first. We might need his help with that.