International technology policy expert, Stanford University academic, and former European parliamentarian Marietje Schaake writes in her new book that a “Tech Coup” is happening in democratic societies and fast approaching the point of no return. Both Big Tech and smaller companies are participating in it, through the provision of spyware, microchips, facial recognition, and other technologies that erode privacy, speech, and other human rights. These technologies shift power to the tech companies at the expense of the public and democratic institutions, Schaake writes. Schaake joins Bethany and Luigi to discuss proposals for reversing this shift of power and maintaining the balance between innovation and regulation in the digital age. If a "tech coup" is really underway, how did we get here? And if so, how can we safeguard democracy and individual rights in an era of algorithmic governance and surveillance capitalism? Marietje Schaake’s new book, “The Tech Coup: Saving Democracy From Silicon Valley,” is available here. Read an excerpt from the book on ProMarket here.
International technology policy expert, Stanford University academic, and former European parliamentarian Marietje Schaake writes in her new book that a “Tech Coup” is happening in democratic societies and fast approaching the point of no return. Both Big Tech and smaller companies are participating in it, through the provision of spyware, microchips, facial recognition, and other technologies that erode privacy, speech, and other human rights. These technologies shift power to the tech companies at the expense of the public and democratic institutions, Schaake writes.
Schaake joins Bethany and Luigi to discuss proposals for reversing this shift of power and maintaining the balance between innovation and regulation in the digital age. If a "tech coup" is really underway, how did we get here? And if so, how can we safeguard democracy and individual rights in an era of algorithmic governance and surveillance capitalism?
Marietje Schaake’s new book, “The Tech Coup: Saving Democracy From Silicon Valley,” is available here. Read an excerpt from the book on ProMarket here.
Is innovation the highest goal? In other words, if innovation suffers but democracy wins, is that so bad? I'm Bethany McLean.
Did you ever have a moment of doubt about capitalism and whether greed's a good idea? And I'm Luigi Zingales. We have socialism for the very rich, rugged individualism for the poor.
And Mrs. Capital isn't a podcast about what is working in capitalism. First of all, tell me is there some society you know that doesn't run on greed? And most importantly, what isn't?
We ought to do better by the people that get left behind. I don't think we should have killed the capital system in the process. I think we all know intuitively that big tech is not benign. From the Cambridge Analytica Facebook scandal of 2016 to the growing evidence per episode with Jonathan Haid that tech companies are deliberately and knowingly hurting our children so they can increase their profits.
Well, everyone can cite an example of where big tech has gone wrong. And that's even before they really unleash AI on us. In a new book, The Tech Coup, How to Save Democracy from Silicon Valley,
Dutch politician turned international policy director and fellow at several Stanford institutions, Maritza Schacher tells the story of how Silicon Valley has cultivated a hands -off approach to regulation,
relying on a combination of idealists, which was perhaps at one point genuine, libertarian beliefs, which always ignore the role that government money is playing, fostering the growth of new technologies,
and ignorance on the part of the politician. Now, she argues, that's what are fasting approaching a point of no return. She writes that the gradual erosion of democracy in our time is being accelerated by the growing and accountable power of technology companies.
New technologies like AI and cryptocurrencies are emerging in a regulatory vacuum and as such, she says, could be fatal to democracies. Part of Shaka's argument is that both technology companies and governments play a game of wink wink,
nod, nod, in which when something like the Microsoft and CrowdStrike outed shut down airlines, hospitals, and more, it's somehow the fault of neither one. She writes, "We are facing an inescapable and terrifying reality.
The digitization of everything has enabled the weaponization of everything. Companies build digital infrastructure, scan for risks on it, and offer services to protect it. Yet when probed about breaches or things that go wrong,
they assert that governments are responsible for ensuring national security. Everyone seems to look to others to own the security question. She writes, "American presidents and public officials from both parties chose to play a shockingly weak role in regulating technology companies." Ultimately,
from Clinton to Biden, the legacy of the 30 years of America technology policy is one of differential treatment and abdication of responsibility. The story, too, is a mixture of idealism and cynicism,
the white -eyed belief about the good and the glory of technology, but also the ways in which technology could serve political power, like by helping governments spy on their citizens, and perhaps,
in the current incarnation, the total corruption of any process due to Silicon Valley lobbying power and the revolving door between companies and government agencies. Shaka paints a pretty dismal picture,
but she does try to offer solutions, or at least a possible path forward, for how we can update our laws and adapt our regulations to match the growing power of technology companies.
She writes, "This is not a book against technology, "but rather in favor of democracy." She argues that in many cases, such as the auto industry, regulation has fostered innovation rather than preventing it.
So Big Tech's well -known lobbying cry that regulation will destroy everything is just an attempt to evade responsibility. She said this at Stanford, "We're seeing governance by tech companies. The question is with what oversight and legitimacy?" But we both had some questions about the book as well.
The country that has done the most to regulate the internet is China. Is China then the model? Should all of what Big Tech does be lumped into the same group? Is it as clear as she pauses that regulation doesn't stem innovation?
And why precisely is Big Tech so dangerous to democracy? Here to discuss the evolution of our own thinking in a new book is Maritza Schacher herself. You obviously spent 10 years as a politician in Europe,
and you write in your book, the entire democratic world has been slow to build a democratic governance model for technologies. Why do you think Europe has approached technology differently than the US?
And is there approach a roadmap? I guess as a follow -up to that question, you write about how the Chinese Communist Party has approached technology. Is that a roadmap too? Or does that approach come fraught with problems as well?
You know, I served in the European Parliament with people who had lived in the Soviet Union who had their own experiences with states using technology to keep people under control.
So we're not talking about people who need to imagine what might happen in some dystopian scenario with technology. So that is, I think, at the core of why Europeans are prone to make sure that technology is also bound by the rule of law,
which I think is very sensible and is a good model, but it is is not rolled out to perfection yet. There are still a lot of flaws, and there are still too many dependencies on tech companies in the EU as well,
despite its role as a so -called super regulator that I think need to be corrected. So the second part of your question about China, to me, the reasons why the Communist Party is using technology as an instrument to keep its control on the society is not at all a model.
What I do think we can learn from the Chinese is that states remain very powerful if they wish to exert that power and My criticism that you'll read in the book is that democratic governments first and foremost the United States have refrained from taking on that role and have not put sufficient checks on the You know unbridled market that has allowed technology companies to amass incredible amounts of power,
whether it's big tech that we've heard a lot about, which I think we can read, you know, examples of excesses in the news every day. But it may also be smaller companies that are producing highly invasive,
dangerous, anti -democratic technologies like spyware, for example, that I also think should have been controlled and regulated much more stringently and much faster with the aim of protecting democracy.
And I think too often the few measures that have been taken in the US have been economic measures, like antitrust. But I don't think we can rely on antitrust rules to directly target the harms to democracy sufficiently.
It's almost like we hope that there'll be a side effect for better protection of democracy coming from these economic tools. And I think more direct addressing of the harms to democracy is necessary.
Obviously, your central and compelling thesis is that technology writ large poses a threat to democracy. Why? Is it that these companies are so powerful and they are non -state actors and they don't have any state loyalty?
Is it that we don't understand all of what they're doing? What in the end makes big tech or just all of technology more dangerous than say big finance or any other big industry that sits outside of a national border these days.
Let's think about infrastructure. It's anything from the data to the assessing of whether there's risk on the infrastructure to protecting the infrastructure, protecting the data that is all given to companies.
So it's a stack of different functions, different technologies, different companies that are all in charge of crucial parts of our lives, touching on national security.
For example, when we think about undersea cables or data centers or microchips, touching on our privacy and our civil liberties when it comes to the question of who has access to this data and what can be done with it. Look at the United States now where data of visits to abortion centers has been used to prosecute women.
We see with artificial intelligence as well that data that has been gathered in one context or that hasn't even explicitly been gathered but just put on the internet, can be scraped, can be trained for facial recognition and these are de facto decisions that companies make about our privacy and the combination of the power that these companies have through the data they possess,
the compute power that they possess, the capital that they possess, the talent that they can hire, the lobbyists that they can hire, sort of creates an accelerator that can keep them sort of ahead of the curve.
This is the case for big tech, for small tech sometimes. It's the nature of the product that they produce or being part of that ecosystem that I sketched that I think gives technology a specific character that requires the necessary checks and balances that are often missing these days.
- So I would like to distinguish a bit between the private sector in the public sector because I do agree with you that we fear concentration of power, but concentration of power is different in the true situation.
For example, in the diffusion of Pegasus that is the software for our listeners who are not familiar, is the software that allows people to spy what you're doing on your phone. This is done by public sector who has the power to incarcerate you and do all sort of terrible things that the private sector does not have.
And by the way, Pegasus is not an example of big tech, an example of small tech, but very dangerous. And so I'm 100 % with you that we want to regulate the sale of this,
especially to dictatorial regimes. You seem to suggest that the solution to deal with big tech is to have the government regulate that. But at some level, and the Chinese example shows it,
is the moment the governments intervene becomes even more powerful. So if you give the government control over BTEC, they give the government control over a bunch of data that the government,
especially if it's not benign, can use in a sort of terrible ways. And even if the government is allegedly democratic, we know that in democratic government,
we have a lot of people behaving in against the rules and abusing their power. And And so if you're concerned about power corrupts and absolute power corrupts Absolutely putting all your eggs in the government basket can be very dangerous Well,
of course, that's not the hope that I have for solutions that governments become more powerful to abuse technology to repress people The idea is to make sure that technologies are Ultimately accountable the companies that operate them But also the governments that use the commercial tech like the spyware that you used in your example.
Actually if you look at data protection rules, they are also there to protect people from abuse of power or negligence by governments. Regulation does not necessarily empower a government more.
In fact, regulations can put checks on the role of governments as they put checks on the role of companies. Of course correction that I think we need is something completely different and swinging the pendulum all the way to the other side and saying,
oh, you know, just give all the power to any government and trust that the outcome will be good. A solution, regulation is a process that can lead to better solutions. And there may well be bad regulation, there may well be good regulation.
But what I'm saying is we need democratic leaders and governments to step up to reclaim their role before they lose insight into how these technologies work,
before they lose agency and by proxy citizens lose agency to decide how they would like this technology to play a role in their lives and in their societies. Maybe this is an economist bias or a US bias,
but when I think of regulation, I like to distinguish between regulation and liability, which I don't see as regulation. I see it simply as a rule of law, defining property rights.
And I think a But in my view, can be accomplished in a less intrusive way through a more aggressive definition of property rights. So one of the big issue, for example,
when you mentioned about fake news, et cetera, is the famous section 230 of the Decency Act in 1996 that exempt the big platforms from liability.
And we saw with the case of Fox News and Dominion, if you are not a platform and you lie and you defuse fake news, you are liable, you're liable with an enormous amount of money,
and that liability actually works. I would like to discuss more why you don't make that a centerpiece of your book. And as you do talk about Section 230, but it's not at the center of your proposal.
It's a good question. I think that the discussion about Section 230 and a lot of the analysis and discussion about disinformation / freedom of expression in the US have gotten very much stuck.
It's on the one hand because of the power and the interpretation of the First Amendment, but it's also because taking the direction of looking at speech and liability is one of many. And what I'm trying to do is to say,
look also at non -discrimination. Look also at the way in which governments procure technology and create dependencies that way that they could use to leverage towards values that matter.
But when I look at the disinformation, freedom of expression context, especially in the United States, which is critical because some of these platforms are located there, I feel like it's an avenue that hasn't been very fruitful,
unfortunately. One of the things you do in the book that's really compelling is chart the hands -off process of US politicians and presidents toward technology. That reversed in some ways with the Biden administration,
with the appointments of Tim Wu and Lena Khan. And yet on the outside, that doesn't appear to have changed much. So what tale does that tell? - Lena Khan,
Tim Wu, Jonathan Cantor, they're really trying to do what they can to course correct in a context that is politically We see, we see President Biden writing op -eds about what he would like to see change through legislation,
because Congress cannot come together and form majorities to do it. When I listen to both believers in regulation or those who, who despise it, no one has high expectations of what Washington might do to change the balance of power between tech companies and democratic authorities.
I mean, some people think that's great. Some people think it's a disaster, but I don't know anyone who's like, oh, let's go to Washington and create change through there, which is the context in which they have to work. So I think it's more a product of the lack of governance of this sector previously that they have to wrestle with than any lack of their own capabilities or vision,
because I think they have plenty. But actually, going back to the freedom of speech, that's exactly why I I'm concerned about moving a lot more power in the hands of the government. Even democratic governments,
they don't necessarily protect minorities, right? If you allow the government to decide what is acceptable speech and what is not acceptable speech, we might have a situation in which defending free Palestine could be considered an unacceptable speech.
We have seen governments interfering massively in this. That's the reason why I prefer the liability because the liability is much more protective of individual rights than a democracy,
even a perfect democracy, the majority will overrule the minority. And so we don't have protection of minority rights in this system. - Well, at the moment, it's tech companies that decide what can or cannot be said about any given political situation,
whether it's Gaza or something else. So that power already rests somewhere and is used in ways that are very intransparent, sometimes hard to know. Sometimes we learn anecdotally,
but the terms that companies use to regulate their platforms, look at Twitter slash X, change all the time. And so the question is, where can we find more accountability? I'm happy to explore the path of liability,
which you've thought about more, But the parameters of when a company or a government or any other actor is liable still need to be shaped through rulemaking, I presume.
It's not going to be done in any other way. So it's about what goals do we have? Can we make sure that decisions that are made about such crucial freedoms are actually anchored in accountable processes?
And if you think the best path is to hold companies to account through liability, that would be a part of the solution. I think ultimately there will be public rules, democratic rules needed to create that accountability and they can go either way.
I mean, the next administration may say, oh, we're going to have even less accountability or liability of the platforms. I think that would be the wrong direction, but it's conceivable. My aim is to ensure that democratic institutions are powered and take their responsibility in making sure that there are guardrails.
And that can be done through regulation. It can also be done through more investments in public infrastructure, public technologies. It can be done through better enforcement, something we don't talk about enough.
Laws are presented, take the EU as an example, big press conferences, big expectations. The GDPR, General Data Protection Regulation is celebrated as a landmark data protection law. But if you look at the enforcement side,
it's actually deeply disappointing. Unfortunately, I don't think there's a magic wand. I don't think there's one single thing that can be done that will solve this problem. Also, because we're talking about multifaceted different types of technology at different parts of our lives.
Social media being one very visible one, but others like cybersecurity contracts that governments have or infrastructure that spans the world is a very different angle to take and I think one we don't look at enough.
So stepping back again the rallying cry of big tech or technology from the beginning has been if you regulate us innovation will suffer and that's part of a broader theme of American business and you make a pretty convincing case in the book that in many industries that's proven to be untrue such as the auto industry.
I on some level have come to believe it And maybe that's just because I've grown up in this environment, and it's sort of seeped into the water, that regulation must stymie innovation. And how do you think about that when it comes to technology,
and especially where you sit now at Stanford, where you must hear that all the time, that this is going to destroy the technology industry? How do you think about that in a nuanced way? First of all,
as you mentioned, I don't believe it's always true. I think many regulations have led to innovation, and I think they can, the question is what kind of innovation? Is it the innovation that serves the VCs and the big tech companies in Silicon Valley?
Well, maybe not. Is it the kind of innovation that serves our planet, serves balance between different people in our society, between larger and smaller companies? What I also touch upon in the book,
and I think this is more of a principled question that we have to ask ourselves, is innovation the highest goal? In other words, if innovation suffers, but democracy wins,
is that so bad? You know, I don't buy into the notion that innovation is always the most important goal to achieve. I agree with you that this mantra that we need to preserve innovation has been abused by lobbyists.
My concern is that the way you describe it, at least the way I read it, is you have this ideal of democracy is perfect and dealing with all the problems of technology that is imperfect.
And so the perfect will always win against imperfect, but we know in reality that democracy is far from perfect. So we know to go to a different field, stem cell research in the United States has been in pair seriously by restrictions that have been put democratically by democratically elected Republican presidents.
I don't think that if we do an analysis of society that society is necessarily better off as a result of those restrictions. So what guarantee do we have that actually the intervention will make us better off?
The democratic intervention. We don't. We never have guarantees that regulation will turn out the right way. What I do think we can say is that if a rule is made by a publicly mandated an accountable institution,
whether it's Congress or any government agency that has that mandate, then we know through the democratic process how to reverse it. It means it can be adjusted through democratic means.
When big companies make decisions that impact our lives a certain way, we don't have those kinds of accountability mechanisms. We can each, I'm sure, list examples of where regulation has led to better outcomes in our personal point of view or to worse outcomes from our personal point of view.
I'm looking at the question at the level of how can the rule of law be empowered vis -a -vis it being disempowered and even sort of pushed aside with the status quo that we have.
And so we need to also critically assess that reality if you ask me. One of the arguments you make is that new technologies like AI and crypto are essentially in game. They might be the thing that actually fundamentally does destroy democracy.
Why? Why are they worse than what else is out there? Why are they more dangerous than everything that's come before? Well, let's take the case of AI where there are still a lot of question marks of what it will ultimately result in.
What we see is that the companies who are in the lead when it comes to developing AI are building on a power position that they were able to build without having had many guardrails to,
you know, keep them in check. So it's the companies that already have a lot of data, that have already hired a lot of talent, that already have a lot of compute, that already have big lobbying budgets that have now built the next product on top of that kind of,
you know, capital or assets. On the other hand, we can talk about the nature of AI, you know, that has a lot of data that can be used in many, many, many contexts and lead to unexpected outcomes,
unexpected for the engineers that built the models and unanticipated for society. So there's a huge risk that has been taken by putting some of these products into the market and by continuing to develop it without that knowledge about the models being assessed more critically.
So one of the examples that I mentioned that could be applied to AI and other emerging technologies is that of the precautionary principle. It's an idea that exists in the European context where if there is an innovation about which there are a lot of unknowns,
then there's merit in doing more research before releasing it into the wild. And I think those are the kinds of pause buttons, processes of learning about the technology in the public interest,
not in the interests of the shareholders of the company, that are, of course, motivated to move fast, be faster than their competitor, have people engage when it comes to AI, because the systems learn from our engagement with them.
So the incentives are different, and I think we need to understand who benefits and who takes the risk. And I think in the case of AI, it's pretty clear look at the AI companies that are getting investment after investment and look at the societal question marks that are still very much unanswered.
I agree that there are a lot of externalities but if you take seriously the precautionary principle think about the GMOs what are the consequences for the GMOs 20 or 30 years from now think about the vaccine we don't know the long -term effect of the new vaccines so do do you wanna wait 20 or 30 years to lower the lower effect?
If you compare on this ground, Europe and the United States, actually the United States use the system of liability is that you introduce and then you're liable if there is a problem.
Europe tends to use the principle of precautionary and the result is that Europe has innovated much less in the last 20 or 30 years and is falling behind.
So I think that that would be the biggest case in favor of the lobbyists of say, we do want to use liability, not the precautionary principle. - Well, but the examples that you mentioned about the release of vaccines,
for example, the question is who gets to decide when they get released? And here I think we need a more public interest driven process of who decides that. With a lot of tech companies,
the reality is changed de facto before any kind of research has been done, can even be done. We need processes where the acceptance of risk is more of a public decision than a private decision.
And I worry that with tech companies like Clearview AI have scraped the internet for billions of faces, they put out a product out there that can violate all of our privacy. Companies like Facebook from which the faces have been scraped and others say,
well, that was against the rules that we have on our platform. But of course, those rules are not binding. And so ClearHue is like, oh, well, okay, sorry about that. But here's our product. The decisions about whether that's okay to do are all taken by companies,
right? This whole new reality is sort of de facto reality about what is and is not acceptable is created without any check or assessment from the public interest. And I'm making the case to do more of those assessments from the public interest perspective.
- If I can go back to what you said, because I think you said something very important is the fact that we don't have the knowledge even to think about what the consequences are. And I think that if I am a chemical company and I do something unique,
I don't have a monopoly over the chemical elements and people can try to reproduce what I'm doing. But if I am a social media company or a large data company, I have a monopoly over the data,
and so nobody can see what I'm doing except myself. And so nobody understands the impact except myself. So one of the solution for this will be to mandate a sharing of the data with the public agency that allows various researchers to do experiments in a way that they can check what these guys are doing.
But in a sense, this goes a bit against overarching protection of privacy because you are gonna have data from Google, you go to a government agency, data from Facebook, you go to a government agency.
Where do you see this trade off? First of all, do you agree that this could be a good direction? And number two, how do you reconcile this tension? - Well, sometimes companies are really good at using the privacy arguments in their own favor,
even though there's no merit there. So we have to be very careful. I mean, it's a funny kind of argument to say we, company A, B or C, are better capable of handling this data.
And if we release it to academics, then the privacy issue emerges. Well, why isn't there a privacy issue to begin with then? So again, talking about framing, this is really important. Just because a company says there's a privacy issue doesn't necessarily mean there is one.
And indeed, to have much more independent research to also verify the claims of companies. You know, when companies say, we are able to moderate our large language models so that they are less discriminatory,
okay, well, show us how and let us verify. You know, we don't trust a car company to say, hey, our airbags are safe, we want to independently check them. Now,
in the book, you cite a speech by the director of the University of Amsterdam in which she highlights the risk to academic freedom from technology companies outside power in the academic world.
So can you speak more about this because it seems to me that you left the European Parliament and you really went to the wolves then because Stanford is the place probably most dominated by big tech.
Number one, why did you pick Stanford? And number two, was there any instance in which your freedom of speech at Stanford was somewhat limited or jeopardized by pressure above that you were hurting the big deadies?
I love those questions. I went to Stanford because I wanted to understand the politics of Silicon Valley. I think it must be understood as a political hub as much as it's understood as a technology hub,
or VC hub, or an economic activities hub. I have not experienced direct challenges to what I had to say, because I think people knew what they were getting.
I've always been very transparent about what I stand for, but I do know that people disagree with me or want to make sure that there's a balance between the views that I represent and other views.
So for example, there may have been events where There would be another speaker to make sure that it was clear that I represent one view and another speaker represents another But I think that's all very healthy and very normal in academic debates.
I haven't felt Isolated, but I do know I represent in many ways a minority perspective at the university where I work. That's right Have your five years there shaped your perspective in any way?
Have you gotten what you wanted in terms of understanding the politics of of of Silicon Valley as well. - It's been very informative to see the extent to which Silicon Valley is a bubble and essentially is a really small group of people.
What has surprised me over the past five years and I think is a phenomenon we'll see more is that actually people who are in national security, not so much civil liberties activists from whom I knew they were worried about the outsize power of big tech,
but Increasingly, people in national security are looking at the incredible dependence on tech companies and wonder, "Wow, have we given away too much agency?
Are we capable to perform our core tasks? Is there a national security risk in over -reliance on tech?" Of course, there are those who say, "Tech is going to save us in the competition vis -à -vis China," so there's different voices out there.
But I would not be surprised if it was people in national security who are going to speak out Decisively for more checks and balances and guardrails around tech companies That's something that I didn't expect going in five years ago But that I see more and more of and that will create different kinds of coalitions or different kinds of Voices that will challenge the status quo from a variety of perspectives that I think
is interesting and I'm curious to see where it will lead. Much will depend on the elections in November, of course. - It's a funny word if democracy is saved by the new accounts. - In the way I think about this,
there's a third player here. We're talking about the government in a democratic process and we're talking about big tech and companies, but the third player is the market. And that's an incredibly powerful player and it makes me feel a little bit hopeless about all of this because the market serves a lot of powerful interests in terms of the global investment community.
And that pressure is for more now and whatever might aid the bottom line now. And how do you, and you're thinking about this account for the power of that third player of the market,
which again is totally unbound by any kind of democratic process and doesn't have that as part of its consideration at all. So if you mean market forces or do you mean VCs and investors in tech companies?
I mean all of it in the way that that in the way that creates incredible pressure for the bottom line. Right. Well, I think the whole book is a critique of the fact that this is the bottom line. So in your book you're very honest and say I make a series of proposals but I don't discuss feasibility because that will basically dies much of what we hope for.
But I actually try to think about this in a paper and I think that the hope for a better future is actually on an international alliance between Europe and India.
Why Europe and India? Because together they represent the largest mass of population and the largest amount of GDP that is not completely captured by the big tech,
either the American or the Chinese big tech. And so they can do what we call a consumer union. And as a consumer union, they can impose restriction and conditions on the producers.
How feasible do you see this union? Number one, there are questions about how democratic the Indian regime is. But number two, does Europe really exist as an Actually my fear is that the United States plays a very strategic role in picking one guy against the other because there are so many parts of Europe that it's very easy to get two of them on your side and those two of them will stop any action going on.
So is it feasible to have a European or Indo -European solution or is this just dreamland? I think it's a very interesting direction to explore. It sounds to me like your idea is based on consumers,
on the size of the markets, and on leveraging that, which is of course not necessarily as you touched upon leveraging democratic values, because unfortunately,
both in India and I must say in Europe too, there are those who have very different agendas. But if these two could be the motor block of a democratic coalition where it's clear that those values are leading and that they can leverage those values vis a vis the outsized power of tech whether it's coming from the east or the west so to say.
I think that would be very useful indeed and these kinds of steps can also be initiated by smaller countries. The same way that a veto can paralyze the whole EU a good idea idea of one or two members can push ahead and when it comes to the market,
the EU is still one. I don't think I have to tell you. It's more about new regulations or foreign policy where there's veto power of member states that it's challenging.
But I do think that when it comes to the single market and even tech policy, the EU is pretty much aligned. If you're In this podcast,
there's another University of Chicago podcast network show to check out. It's called Nine Questions with Eric Oliver. Have you ever wondered who you are, but you don't know who to ask? Then join Professor Eric Oliver as he poses the nine most essential questions for knowing yourself to some of humanity's wisest and most interesting people.
Listen to Nine Questions, part of the University of Chicago podcast network. I really,
really liked her point about innovation and about thinking about it through the lens of who does the innovation serve. And there is this framing that we all have in life, "Well, innovation is good." We think of innovation as just an inescapably or a completely positive word.
And the reality is when you think about a lot of innovation, there's innovation that serves people and there's innovation that serves companies and they are not always the same thing. And I guess because of her point on the importance of innovation serving the population,
I thought of that as a broader view of democracy as well. The two things got linked in my mind. Does that make sense? You're absolutely right that it is the fundamental question of these years certainly is should you manage innovation?
Some people say you shouldn't manage innovation at all, should you manage innovation? And if so, how? The problem is that there are a lot of redistributional effect of innovation. And more often than not,
if you have a fully democratic system, you can block innovation or delay innovation, which maybe you're saying, I don't care, because there is something valuable into that.
But we need to make sure who makes those decision in the process. It's a bit tricky to have a few technocrats making that decision because, as we see, they're not done very well.
They'll also be subject to an enormous amount of lobbying. I think it's a very tricky question to which I don't think she has very compelling answers, to be honest. And so she waves the flag,
democracy, democracy. But if you think the democracy is perfect, then fine. I am a little bit more cynical. I fear the democracy is distorted. And then the question is, how do you deal with that?
And in the process, do you really want to give all that power to stop things to a system that is very imperfect? Now, of course, there is also the issue, which is very prominent of international competition.
In a sense, think about the old China, the ancient China, not the recent China, but the ancient China was a system where they manage innovation, right? And they managed the point that it didn't really progress very fast.
And so is that the model we want to copy? On the other hand, I am with you and with her, I don't want free for all, and there are enormous side effect of innovation.
So I think that the question she asked is really, really On that front, I think she has a good answer at the front, but on that front, her answers were not overwhelming to me.
I really do appreciate her framing of things, and I really do like trying to think through the lens that not all innovation is good innovation, and we should pause and think about it first.
But I think that it is hopeless in the sense that I think that the idea that innovation is good and that the risk of not enough innovation is far worse than the risk of too much innovation is just so deeply bred into the fabric of everything that is American and technology,
the technology industry has successfully played into that and adopted that. And I think the idea that as a country, we're ever going to change our minds and have any skepticism about innovation is,
I think it's too big a historical concept for us to, for us to ever overcome. And I'm not sure, and I'm not sure we should either by the way, I could make the argument that the risk of too much,
of too much innovation is better than the risk of too little innovation. I did think the point she made about some of the doubts coming out of people who are in positions of power and national security was a really interesting one.
One of the things that was incredibly compelling to me about her book, was this idea that so much of the world's infrastructure, like undersea cables, was in the hands of private companies that nobody really understood or had accountability for,
and that our world could be just completely demolished by a glitch in one of these things that has no government accountability or oversight. And I have been thinking about that a lot since the CrowdStrike issue,
the CrowdStrike Microsoft issue this summer, that it was something just deep in the bowels of a technological update that nobody understood that managed to disrupt life globally for people.
And that whole aspect of things is a really interesting and frightening and important part of this. And I think the idea that it might be people in national security who start to wrestle with this in a profound way is really interesting to me.
Yeah, and I think she's absolutely right there because it's not just the risk of accident like the one we've seen with the update is the power that you give to some people and it says the power that Elon Musk had over the Ukrainian war is unprecedented.
The other thing that she mentioned in a book and I should have known but I didn't realize is that there is still another investor in Twitter, and that other investor is a Saudi prince.
- I had forgotten about that too. - That's pretty revealing because clearly he did not invest for the return, or at least if he did, it would be very peace at this point. I think he invests for something else,
and that's what we need to be careful about. - I'm not so sure that's true. The Middle East had all of these big conferences for global investors during the very time that the whole Israel -Palestine issue was kicking into high gear.
And it's almost as if the two things went on parallel tracks. There was no interaction in the world of money to the world of politics and what that could mean because the world of money is on its own path to make more money for itself.
And that gets to the answer of hers that I didn't like when I asked her about the power of the market. And she said the whole book is a critique of the fact that this is the bottom line.
Well, yes, but how do you change that when you have an actor as powerful as the market and the incentives to make money, which I actually do on the part of those with money,
transcend for the most part, global politics, governments, anything else. And I'm not sure that there's a way to fix that. - I disagree here.
I think that the highest level, power transcend money. When it comes to the Prince of Saudi Arabia, I think he cares about maintaining control of the country over making more money.
Investing in a losing enterprise, but that gives a lot of control over its citizens, is they worthwhile? Maybe. I think the two are intimately bound up with each other,
and maintaining control of power means making money, and making money means maintaining control of power. So I don't think they're two separate things at all. So the two are bound up with each other,
but that's a little bit of a digression from the conversation. There is also attention in her argument about democratic governments needing to take responsibility and step up in a sense,
but also her points about how so many good proposals have come from the small and on the margins and these unexpected coalitions can form.
And there's an interesting tension there. And it did make me think about our episode with Jonathan Haidt. And in the end, what changes things the most might be parents refusing,
broad coalitions of parents refusing to put smartphones in the hands of their children, and parents refusing to allow children access to social media or states taking action that make it more difficult for children to have access to social media,
and that might do more to start changing things than any sort of big government action aimed at social media and speech. But you said it perfectly, money, because that's exactly the part that she does not have of democratic spirit.
Because the approach of Jonathan Hayd is bottom up, is in the sense very democratic with a small D in front. She doesn't seem to rely on it, she doesn't seem to trust in this.
She trusts more like the expert, the agency, the top. That's where I disagree with her, because I think that the agency can easily be captured, but the angry parents who see the impact of social media on kids,
those cannot easily be captured. - Except I think that her book in our conversation with her reveal attention in her two, or two different points of view, because I think in our conversation,
she was much more pro the idea that change does come from the bottom up and from unexpected places and unexpected coalitions and far less top down than she comes then she comes across in the book and maybe the greatest the greatest gift of her book is just this this this increased awareness about how we all think of this because maybe in the end that's true that the change is going to have to come from us and how
and how and and from people perhaps in national security who understand the ramifications of all of this but it is going to have to be a bottoms up groundswell across all these various different components of tech power that end up that end up changing things.
And so a coalition of parents and a coalition of national security experts might might work to change things more effectively than any than the election of a of a new president. Capitalism is a podcast from the University of Chicago podcast network and the Stiegler Center in collaboration with the Chicago Booth Review.
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