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Intelligence Squared
How Tech Platforms Threaten Our Future, With Former White House Advisor Tim Wu (Part One)
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Plus, join the Nordy Club to shop new arrivals first. Unlock exclusive discounts and more. Great brands, great prices. That's why you Rack. Welcome to Intelligence Squared, where great minds meet. I'm producer Mia Sorrenti. Today's episode is part one of our recent live event with Tim Wu. Recorded live at Conway Hall. Wu is one of America's most influential thinkers on technology, monopoly power and the public good. A professor of law at Columbia University and former special assistant to President Joe Biden for technology and competition policy, he is known for coining the term net neutrality and for his landmark books the Attention Merchants and the Curse of Bigness. In this conversation, Wu joined Alex Kraso Domoski, Program Director of the Digital Society Program at Chatham House, to reveal the dangers of the emerging AI economy. Drawing on his new book, the Age of Extraction, Wu argued that without meaningful intervention, tech platforms will consolidate unprecedented power and that breaking up monopolies may be the only way to unleash creativity, innovation and prosperity for society as a whole. Let's join the conversation now live at Conway hall in London.
- [02:04]
B
Thanks, folks. Welcome. I'm thrilled to be here and thrilled to be joined by you and also by Professor Tim Wu, professor at Columbia Law School, former advisor to President Joe Biden on questions of tech and competition, and author of many books on contemporary technology, including the one, the who we are here to discuss today, the Age of Extraction. Now, before we get stuck in, we have taken the temperature of the room on this question. Do you as an audience think that tech platforms threaten our future? And Tim, I think the results prior to hearing from you are in. And I can report that 7 in 10 we're up to 71% are skeptical of the role that tech platforms are going to play portraying our future. What's your estimate? Do you Think this is going to go up or down by the time the hours are.
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C
Well, you know, that puts a little pressure when you've already won. But I hope I can persuade you to think about it in new ways and then feeling even darker than you began.
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B
Well, we'll come back. Listen, let's start with the fundamentals. As you write in your book, everything has to happen somewhere. And that somewhere could be a platform. What is a platform?
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C
Yeah, that's a great. I'm so impressed that you grabbed that particular line. Because the way I began writing this book and sort of the way I write books sometimes is I just have one sentence and I try to follow that sentence and see where it takes me. And so my idea at first was that one sentence was going to be the lead sentence of the book. I moved it somewhere to chapter two, but anyway, it's still in there. And it reflects this idea that the platform, the idea that everything has to happen somewhere reflects the fact that civilization, our society, is not just a full abstraction. It has to. Our transactions, our relationships, our buying and selling, our speaking, democracy, it has to happen somewhere, even though these are abstract ideas. And it is my view that the places where these things happen profoundly shape the kind of society you live in and frankly, what kind of civilization you inhabit. I was thinking of this. I was in Rome two weeks ago with my family on a before book tour and walking around the Roman forum. You know, it's a beautiful, amazing place, but it's also where it all happened in the sense they had their markets there for buying and selling goods. There was the space that gave people gave political speeches, they had the temples, religion. It was all sort of combined in one physical space. And the Greeks, ancient Greeks are so famous for democracy. It wasn't just like democracy was a thing. Democracy was also a place. And so part of what I'm trying to get at in this book is that the stakes are very large when we're talking about our spaces that civilization happens. And the platforms are those spaces. Platforms are spaces that bring together groups. Now, those groups can be buyers and sellers, and that's a commercial platform, a market. They can be places where people speak and are heard. So, you know, speech platforms, they can be religious, but they can also be places where people meet and make new friends or something like that. Speaking of the freezing cold, I was impressed how many people were outdoors in London. I was amazed by how many pubs I went by where people. I was like, there's another space that has a lot of significance, particularly in my experience in the uk, the pub seems like a pretty important space. So the point of this is that I wanted to first understand the space in our history and then I wanted to understand what has happened in our time. And if you compare ourselves with ancient Greece, we once again have spaces where everything happens, where speech and commerce takes place. But there's a few differences. One, these spaces are online mainly. They're still obviously physical spaces, but some of the most important spaces are online spaces, social media platforms, online marketplaces and so forth. The other is that they are almost, with very few exceptions, private spaces, privately owned, and spaces that have a business model, one that I talk about in the book, whose idea is to try to extract as much profit and as much information and data and so forth out of these spaces. So that's a very big shift, I think. And we're still relatively new into the world of online spaces, but I think that is our future. And it is, to me, the vital debate of our time is can we tolerate having so much that is essential to our civilization, so much that was once public, now private and extractive and profit seeking?
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B
I want to dive into the pub a little bit more because I think the pub is actually quite an interesting starting point here. Right. Not only is pub short for public house, but also it's sort of emblematic of a space that I think most people in the audience would think of that's quite good. Platforms seem the story of the space, the platform is actually sounds like the story of human history, of progression. And actually the book is a history book in many respects. It charts from the Agora through to the market square to the public house to where we find ourselves today. What are the characteristics of a good space as defined in these ways?
- [08:02]
C
That is a great question. In some earlier draft of the book, I had shopping malls in there. But then, anyway, too much. But you are absolutely right. In fact, the pub is important enough to the story that I have In a later chapter, there's a famous case that centers on a pub that is actually maybe jumping ahead a little bit important to my conclusions as to how a public space that is owned by private parties needs to. To operate itself. And I'll tell you about the characteristics in a second, but maybe I'll tell the story first. It was in the. I think it was in the 16th, maybe the 15th century, and there was a guest, a woman who was thrown out of a pub or an inn, and she sued. And out of that case came a legal tradition. She sued and she won. And the basic right is not to be thrown out of an inn without reason, that an inn has to treat people, everyone. And there's this important concept in there, which is this idea that certain private businesses have public duties. The word for it or the phrase in the British common law is a public calling. So you are offering yourself out to the public. And maybe this answers some of your question. It's a space that offers itself to the public to deliver some kind of essential function and whose characteristics like reliability and openness are particularly important to the functioning of civilization or society. And I think it's those things you're talking about, places for people to meet, places to buy things, places to speak. I think those are some of the essential purposes and also how they hold themselves out. I mean, if you hold yourself out as open to the public, a public house, a pub, the idea is, comes with certain duties. And so that case, the woman who sued, Ms. Clatton, I think was her name, she won. And out of that evolved the idea that innkeepers and public houses have to charge everyone the same prices. You know, they can't charge you, especially for rooms, you can't charge. You can't throw people out without some kind of reason. Because I think in those times, throwing people out, that could be bandits or something dangerous, and they have to treat everyone neutrally, the same, not discriminate and so forth, and offer a quality of a certain product of a certain quality. And I think there was a real genius in that legal tradition and that recognition. I guess I'll repeat it again, that some private businesses really are of a public character and matter so much for who we are as a civilization that you can't just say, well, because the owner feels that way, that's fine. Kind of jumping way ahead to the present. I mean, if you think of something like Twitter or X or, you know, some of the major platforms, I mean, it's very clear that what goes on there, you know, matters and shapes our society. And, you know, newspapers, so many other things, but these online platforms. So, you know, I guess I'm coming back to the. There was a lot of wisdom in the common law in 16th century that we could use today.
- [11:28]
B
These platforms clearly position themselves as open to the public in much the same way. While we might hold up the pub as an example of a good space, you know, this is not a book about pubs. And if we are like Dante crawling our way through the circles of Economist hell, we end up somewhere in the seventh circle. We meet the platform monopoly, the private sort of monopoly platform that I think this book really centers on the sort of the main actor here. What is it that's so pernicious, so risky, or even just so powerful about this specific new incarnation of the platform, the one that we might recognize every day, the Google, the Amazon, the Facebook, this monopoly platform.
- [12:15]
C
Yeah, I think it's a different form of power than we are used to. If you talk about the long cycle of political theory and philosophy, the first concern, going back to the Greeks again, is tyranny. And it's obviously still pretty legit, an important concern. Much later, around the 19th century, maybe 18th in some countries, you start to have private firms that have the power approximating government. Maybe the British East India Company is a good example in the United States, Standard Oil, the big giant trust monopolies. So that's a new kind of power. The idea of a monopoly, a company that. That completely dominates its industry, sells something essential like oil, and has all that kind of power, was something new and nothing but not to be ignored. But I think in our time, it is almost as if that city square has become alive, the essential intermediary of everything that everybody depends upon coming alive and having its own ability to extract from both sides of the market. It's a little technical, but the marketplace, both taking money from the sellers in the marketplace and from the buyers so that it wins in every single transaction. That is a form of power that I don't think we completely understand how to reckon with. Now, I mentioned the common law, and I think that's a hint, but I think those were actual physical pubs and we had certain ways of thinking about them. But a technologically advanced, artificially intelligent intermediary that is in the middle of every single transaction and takes from every transaction almost in a way like a private government with a private tax. That kind of power, I think is new to our time and is in some ways what I'm trying to capture in this book.
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B
Yeah, let's go back to the idea of good, because this wasn't what I signed up for. Let's go from Dante to Milton. Let's go do Paradise Lost. Because when I was a kid in the 90s growing up on the Internet, it felt different. And reading in the book, it felt different to a lot of people that felt that there was a sort of. There was a change coming, that the Internet would act as this open, enabling, exciting, creative platform that would allow anybody to thrive as a business person, as an artist, as a creative and so on. This is what I was promised, and that's not what we've got. What Happened, Yes.
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C
So I wrote this book, among other things. It's kind of a personal reckoning with my own experiences in this world. I worked in Silicon Valley myself in the 90s and early thousands, I'd say was bought in the Internet felt, as you said, like it was going to make everyone rich. It was going to give every creative soul a chance to reach their audience. There was a sense that it was the technological instantiation of the human potential movement from the 60s and 70s, all these kind of sort of ideals of breaking from a very restrictive society and being, you know, you could be whoever you wanted online before everyone starts spying on you. But in the original vision there was this like no one knows you're a dog. I don't know if anyone. Does anyone remember that joke on the Internet? No one knows you're a dog? Well, maybe some of you do. You should have a poll about that. So there was this sense, I think that it was the liberation which everyone had been waiting for, insantiated in technology and run by these sort of idealistic people that the Google founders seem kind of like idealists. Jimmy Wales at Wikipedia, Tim Berners Lee, who was the great web inventor and the emotions of that period were. Tim Berners Lee I think said, the web is an act of love. It's like this collaborative sharing experience that we're all going to make a better society together. I kind of bought into it. And one of the reasons I think that we tolerated, you know, when I think about myself and government, why we were so easygoing in the early days is even though these platforms are holding themselves out to the public, we believed, a lot of people believed that they were beneficent kind of charitably minded people and institutions, almost like the Red Cross or something like that. So I think there was not a lot of the, you know, be different if it was an old school train monopoly run by some evil guy in a top hat. But these were like nice California kids, young people trying to make the world a better place. A lot of my good friends went to work particularly for Google, with the sense that this would be the way to make a contribution to the world. So that was how it started. There's a few points where I think that vision really started to change and there may be people who think that vision was always a sales job. What's the phrase? Sediments for suckers, just like a bait and switch. I think they were sincere, particularly the Google people who I knew better. But I think many of those early idealists were sincere, but they had this, I Guess I guess they had a flaw or a tendency which is they really wanted to have it all. This might be the original sin of Silicon Valley and maybe of humanity, is they wanted to spread knowledge, they wanted to create a better world, but they also had to be extremely rich. The founders themselves, it almost felt like embarrassing if they weren't going to become billionaires. So I think there's a couple turning points. But if I can just speak of one, there's a key moment in the early thousands when most of the big US tech platforms became went public in a form that was completely normal for profit corporation with duties to shareholders and kind of an understanding that increased their profits every year, every quarter. I think that was a really big moment. Google knew it was a big moment. The founders of Google wrote a letter to their shareholders, which I went and got for this purpose of this book. And they said, dear potential shareholders, they wrote, we are not a normal company and we do not intend to be one. We're going to undertake risky projects that might lose a lot of money. We first and foremost believe that we should serve humanity instead of shareholders. They started it with our motto is do no evil. So they did that stuff. I think they have now broken every single promise in that letter and I raised it because they may have been well intentioned. I think of this as myself when I look back at it. But over time, structure beats out good intentions. And they set themselves up to be under a constant money pressure to make more and more and more and more money. And you know, it wasn't the first year, it wasn't the second, it wasn't the fifth. But by the 10th year, I think that constant gravity, almost like a waterfall eroding rock, you know, whatever they had thought they needed to deliver for advertisers, create more revenue. And you know, I think that choice of structure was a big moment. And I'll say one thing before we get back to this. You know, some people would say, well, it's inevitable. They're businesses, they have to make money. There was one company or one organization that did go a different path. Wikipedia as of 2002 was about the same with Google in terms of traffic and Facebook. Facebook hadn't been invented yet. It always had traffic in the top 5 of worldwide websites. And in some ways Jimmy Wales, who was older than the rest of them, I've never asked him about this, but I think I want to. He could have in a way. He figuratively had a big button which would have made him a billionaire, you know, so he could have any time from the year 2000, let's say, to 2010. He could have said, listen, I'm still sort of in charge. I'm going to move us to advertising model every year. Of course they do ask for donations, but they make a lot. They make a ton of money from donations. So it shows to me that a different way is possible. It shows to me that those initial stages of setting the structure are very important. And in some ways, while we're very far down the road, it shows that there's still a possibility of taking a different way.
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B
I think we'll touch on what that different way is. It is, you know, this is not a choice between an extractive advertising driven monopoly platform on the one hand and as you know, a donation based charitable, philanthropic structure on the other. There are, there's a huge space between those positions. But you know, we've, we've given Google a kicking. I'd like we can give a couple of others. I because I think these stories about what happened or what these platforms chose to do, how that business model evolved is a really important story to tell, particularly because you call this the age of extraction. And I think that idea of extraction I think actually is quite a complicated one to get our heads around. So I listen I've been renovating my house and so I confess the originals my own sin. I've also been using Amazon and I sort of checked this afternoon to see.
- [25:41]
C
Like you have to say it was a sort of shameful looking.
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B
Well it is, it is. Especially an audience like this. So I'm going to read you the names of the brands that I have recently purchased on Amazon. I'm sure all of which will be familiar to the audience today. Landot, Bonejoy, which I think was nails by the way, before anyone asks, Plovalexin, Banky, Kiwi Bird Global Tech and Sharper Image, Spar Haven, which I think was also a box of nails. I have memories of Amazon not looking like this. I remember Amazon when I was a kid. The prices were cheaper, that I didn't have to spend, scroll through a thousand sponsored product placements that Amazon didn't sell its own products. These are all innovations. Are they also innovations when it comes to extraction?
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C
I mean absolutely. I think that the, if I can speak, I'll speak on Amazon for a second. But I would tend to suggest that over the last 10 years most of the innovation in the tech world, with the exception of artificial intelligence has been development of ever better technologies of extraction such that I think we live in an age of the by far the most advanced extraction technologies and they're not only from, I mean most people here are, we are all consumers and users but some of the most effective operate on the, on the other side, on the sellers, you know, the people. And Amazon's a good case study if you give me a minute on it. Amazon does present some of that narrative of Paradise Lost that you were talking about, or the original dream of the Internet and what it became. And this is the American story, but I'll tell it anyway. So Amazon used to be a bookstore, maybe you'll remember that. And its idea was sell books and it had a lot of books. But somewhere in the early thousands they realized it was more profitable to be a marketplace. They started with books, they moved some other stuff. What I mean by a marketplace is they would become like the city square or the town market, you know, a host for sellers to come and sell their stuff to other people. So that became their business model. It spread, it became popular, they beat out ebay. They realized a few things. Among other things, Amazon mastered the fulfillment side, which means they boxed everything. Everyone's familiar with this, sent it to people's houses. They did that for sellers. Ebay didn't figure that out. So they started taking off and becoming more and more successful. And there's a point probably about 2010, 2012, where they had basically done the most of their innovation, core innovation in the marketplace and they had actually developed a very attractive product. This book, obviously it's not an anti platform book in the sense that I already said how much I like pubs and city squares and stuff. It's just about the right kind of platform. And in 2010, Amazon was that kind of platform. The main thing I'd point to is its margins were less than 20%. So between sellers were paying between 15 and 20% of their sales price. At that rate, people made a lot of money. There's all kinds of people who this was, especially in the 2012, there was a recession in the United States. A lot of people leave their old jobs, they start becoming Amazon sellers. I have a story in the book about this barber in Indiana whose sideline is selling pomades. You know, that's kind of stuff that men put in their hair. Some men anyway selling pomades. It blows up as a business gets really successful. He's starting to make a lot of money. I saw all kinds of people and at that point it's sort of delivering on that original dream, which is to say people could independents, people not working for a giant firm, artisans, craftsmen, all kinds of people could go on Amazon and actually make quite a bit of money and therefore in some ways start to alter class dynamics. I was thinking, I worry that more generally we begin slipping to a two class society. Here's a middle class builder, but not only through good Salaries through businesses where you were able to make quite a bit of money through the Amazon marketplace. And so that was good. The problem is that once Amazon had captured and sensed that it had a monopoly in sellers and a monopoly in buyers, once they'd locked people in with prime and everything like that, they started to turn the screws one by one, steadily turn all the little dials on fees. And as I described in the book, I think by far the most pernicious are the sponsored advertisements. Now it seems like a small, what they call advertising. Do you ever do an Amazon search and then all kinds of. You were talking about all kinds of stuff comes up. You don't know who they are and what's going on. Those little sponsored ads which make it harder to find what you want, frankly, are a cash cow. In fact, I think they are by far Amazon's most lucrative product. They cost Amazon virtually nothing. A little bit of nothing to operate, a little bit of computer code they make the sellers bid against each other. They were first 10 billion, 20 billion 2023. After Covid it really took off. More aggressive sellers felt they had to do it in 2024. So last year they made over $56 billion from this one little trick. US$56 billion is more than double the revenue of every single newspaper in the world. So in a way you could have a choice. You have, you could triple the number of newspapers in the world and reporting and so forth, or you can have these sponsored links, which to me are one of the purest examples of valueless extraction that I think we've seen in our time. And I don't know what the number is now, but it keeps growing. It's by far their most lucrative product. And the reason I bring this up is I feel bad for the sellers. The guy who was selling pomade went bankrupt and had to fire all his employees. The only firms in the US that really have been able to survive are companies that make the products in China and import them than have some random name. And that's why you're buying all those weird names.
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B
Maybe Kiwi Bird Global Tech.
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C
So those are mainly like someone maybe using AI to come up with random names because they at some point Amazon. So those are sort of shell companies that are selling Chinese products and you know, the cheap stuff. But it's not creating this sort of class wealthening effect that you might have had from Amazon. And that's what I think is sad about it. I mean this is crowd, it's a smart crowd. I think that going back to that ancient Greek marketplace and other platforms, what they offered was a place for independent sellers to make money. And I think the mark of a successful society is opportunities basically for the middle class to be strong and make money. And that requires open marketplaces. So that is the story of what Amazon could have been and unfortunately what it has become.
- [33:24]
B
And presumably you see similar patterns in search results on Google or the kinds of content that will be fed to me on Facebook or on YouTube.
- [33:32]
C
Well, I think Facebook, I think the story there is slightly different and relates somewhat to my second book, the Attention Merchants, which is to say that those companies had a. The same pattern is you sort of bring everyone in. And the early days of Facebook, the early days of Google were very appealing. They ran a bare minimum of ads. It was mainly about actually very noble ideas like Facebook, finding your friends, human relationships, Google search, organizing the world's information. And they were amazing products, 2010 and so forth. But then they increasingly, I guess turned to the dark side of extraction of human time and attention. And there you have. You know, it's interesting to think about how I spoke earlier about how the early Internet was about cooperation and sharing and love. I feel that the last 10 years have been a more cynical bet on things like the power of addiction. Maybe I'll talk a little about convenience and laziness more recently with AI, emotional reliance, definitely targeting of these things. But just to get back to Facebook and Google, what they realize and what they increasingly do is take humanity itself as the resource that needs to be mined. So you on the platform are the resource. It's a little different than Amazon is like the sellers and the other ones, it's us. And I'll just say when you see it, have you ever gone to your computer and then you're trying to do one thing? I think it was my friend o' Neill's here somewhere and he was like trying to look up Ding tai Fung the meaning of it. And he said, oh, I ended up doing something else or something. If you ever spend like three hours go by, that is. That is the extraction. Yeah.
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A
Thanks for listening to Intelligence Squared. This episode was produced by Connor Boyle and it was edited by Mark Roberts. For ad free episodes and full length recordings you can become a member@intelligencesquared.com membership and to join us at future live events, just head over to intelligencesquared.com attend to see our full events program. You've been listening to Intelligence Squared. Thanks for joining us. Did you know you can opt out of winter with VRBO? Save up to $1,500 for booking a month long stay. When thousands of sunny homes are waiting for you, why subject yourself to the cold? Put the snow shovel down, put the parka back in the closet, and don't you dare scrape another windshield. Slip into some flip flops, consider a sunless tan, and use the monthly stays filter to save up to $1,500. Book your warm getaway at vrbo.com worried.
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C
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