Markets don't solve all our problems, but they sometimes produce remarkably efficient systems for producing and distributing goods, and the internet traded on that promise with marketplaces like Ebay (anyone can sell, anyone can buy); Google (anyone can publish, anyone can read), and Amazon (one marketplace where all goods are transparently priced and ranked).
But over time, the platforms rigged their marketplaces. Ebay started selling top-ranking slots on its search results; Google went to war against search-spammers and made its algorithms totally opaque to all but the best-funded companies; Amazon starting listing its own-brand (and most profitable) items at the top of its rankings. App stores chose which business models could flourish and then picked the winners.
Anil Dash documents this progression: wide open markets beget rigged markets. Rigged markets, in turn, beget fake markets, like Uber, where prices are fixed, where drivers and passengers aren't allowed to choose one another (or even know how one is assigned to the other), and the long-term costs to society are fully externalized. Uber's not the only fake market: Facebook and Google instant articles force publishers to abandon their own ad brokers in favor of the platforms, who set prices and count clicks without any transparency.
The long game is fully-automated monopolies: Uber is currently spending billions subsidizing an otherwise unprofitable business (their drivers also spend billions subsidizing it!), but it's betting on replacing drivers with robotic fleet vehicles that will self-pilot through streets that have been purged of all competitors thanks to its investors' subsidy of ride prices, which made it unprofitable to compete with it.
Most of the people building these features at these companies don’t mean to undermine markets. The coders and designers at companies like Uber and Facebook and all the others are usually well-intentioned and genuinely see their work as benefiting users. In the immediate term, they’re not even wrong; being able to easily hail a cab or quickly read a story is a real benefit. But most tech workers, including at the biggest tech companies, are blind to the radical political and social agendas of their companies’ owners and investors.
Worse, we’ve lost the ability to discern that a short-term benefit for some users that’s subsidized by an unsustainable investment model will lead to terrible long-term consequences for society. We’re hooked on the temporary infusion of venture capital dollars into vulnerable markets that we know are about to be remade by technological transformation and automation. The only social force empowered to anticipate or prevent these disruptions are policymakers who are often too illiterate to understand how these technologies work, and who too desperately want the halo of appearing to be associated with “high tech”, the secular religion of America.
Tech and the Fake Market tactic
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(Image: Penn and Teller)