The Free Market and Big Tech

The Free Market and Big Tech January 13, 2021

…the right still lays claim to America’s most-watched cable-news network, highest-rated political talk-radio shows, and most-read Facebook articles. The algorithmic programming of Facebook and Twitter — which directs readers away from dry reporting on local corruption and toward lurid conspiracy theories — has been a boon to the right in this country and many others. [source]

Let me further preface this piece with some information about tech companies funding Republicans and political campaigns:

Amazon

Amazon late Monday announced it will pause donations from its PAC to lawmakers who voted against the certification of the presidential election results.

“We intend to discuss our concerns directly with those Members we have previously supported and will evaluate their responses as we consider future PAC contributions,” an Amazon spokeswoman said in a statement.

Federal Election Commission data shows that Amazon’s PAC also contributed to Cruz’s senate campaign in 2017 and 2018. Some legislators that Amazon backs voted against the certification of the presidential election result, according to records from the FEC and the Center for Responsive Politics’ OpenSecrets website.

Facebook

“Following last week’s awful violence in D.C., we are pausing all of our PAC contributions for at least the current quarter, while we review our policies,” a Facebook spokesman said in a statement. Facebook did not appear to donate to either candidate in the past few election cycles.

Axios first reported Facebook’s plans to halt political donations.

Google

Google also said it would halt contributions from its PAC in light of the recent events. “We have frozen all NetPAC political contributions while we review and reassess its policies following last week’s deeply troubling events,” a Google spokesperson said.

Google’s PAC donated to Cruz’s Senate campaign in 2017 and 2018.

Microsoft

Microsoft said it had decided last Friday to assess “the implications of last week’s events” before making additional contributions from its PAC. “The PAC regularly pauses its donations in the first quarter of a new Congress, but it will take additional steps this year to consider these recent events and consult with employees,” Microsoft said in a statement.

Federal Election Commission data shows Microsoft’s PAC donated in 2018 to the senate campaign of Sen. Ted Cruz, R-Texas, one of the lawmakers who sought to object to President-elect Joe Biden’s Electoral votes, and the 2016 Missouri attorney general campaign for Sen. Josh Hawley, R-Mo., who joined Cruz in the effort.

Airbnb

While Microsoft, Google and Facebook are taking a broad approach to halting contributions, others have been more targeted. Airbnb said on Monday its PAC will “withhold support from those who voted against the certification of the presidential election results.” Airbnb did not appear to donate to either candidate in the past few election cycles.

AT&T

An AT&T spokesperson similarly the company’s PAC will “suspend contributions to members of Congress who voted to object to the certification of Electoral College votes last week.” AT&T’s PAC gave to Cruz and Hawley’s Senate campaigns as recently as last year.

Verizon

“We will be suspending contributions to any member of Congress who voted in favor of objecting to the election results.,” Verizon said on Monday. Verizon’s PAC donated to Cruz’s Senate campaign as recently as last year.

T-Mobile

T-Mobile hasn’t said it will pause giving yet but said would “reevaluate” its PAC contributions. T-Mobile’s PAC gave to Cruz and Hawley’s Senate campaigns as recently as last year.

Comcast

The cable and media giant is suspending contributions to elected officials who voted against certifying the presidential election results. Comcast’s PAC contributed to Cruz’s Senate campaign in 2017 and 2018.

“The peaceful transition of power is a foundation of America’s democracy,” the company wrote in a statement. “Consistent with this view, we will suspend all of our political contributions to those elected officials who voted against certification of the electoral college votes, which will give us the opportunity to review our political giving policies and practices.”

Republicans are throwing their toys out of the pram because private companies, not covered by the Consitution (with corporations seen as individual “citizens” in terms of many aspects of the law), deciding not to provide services to entities who break their terms and conditions – in this case and in particular, Trump – has really ticked them off.

“Free market, free market, free market! U S A, U S A, U S A!”

The First Amendment right to freedom of speech is not a right of a private company to be obliged or forced to provide a service to a consumer who violates their terms and conditions.

Actions have consequences. Republicans are learning this lesson the hard way.

The same goes for John Matze and the hate-pit that is Parler.

Big tech companies are well within their rights to do what they are doing. They are free to do so because, you know, the free market. Indeed, the usually libertarian-inclined Republicans (always faux-libertarians in my book, libertarians until it is not expedient to be so) so often claim that corporations and businesses should be able to do what they want, serve whom they want (or not). Remember bakeries and gays? (Let’s not get onto that debate – the differences being that Trump and his acolytes were spreading hate and inciting insurrection, and the bakery was violating human rights and so on. See here and here.) That said:

(Who then went on to say: “For the record, I oppose LGBTQ discrimination. I’m calling out the hypocrisy of republicans who say religion triumphs civil rights, but demand private media companies host purveyors of violence, hate and disinformation…. Some say the comparison is apples and oranges, but the two issues are intimately entwined under the common theme “Denial of Service”. The difference is that a gay couple just wants to buy what the bakery sells, not foment insurrection leading to the ransacking of the Capitol.”)

Well, here, the Republicans want their cake and to eat it, too.

(Then again, what else are you to do with cake? I digress…)

Laura Ingraham, FOX’s resident co-wingnut-in-chief (with our friend Tucker) seems to be having a hard time railing against them, here complaining about their free-market derived corporate power. It’s all a confused mess.

The rank hypocrisy on show is spelled out in “As ‘Woke Capital’ Turns on Trump, the GOP Turns On ‘Small Government’” in Intelligencer, another superb article worth reading:

The economic power of multinational corporations has become a threat to the political freedom of American citizens. There is no hard border between private and public authority; how CEOs choose to govern their firms influences how voters choose to govern themselves. When Americans lack the material power to assert their liberties, the Bill of Rights becomes a bill of goods; there can be no true “right to free speech” when every megaphone is owned by unaccountable elites. Therefore, to strengthen our democracy, the federal government must curb the prerogatives of private property.

Or so conservatives have taken to arguing lately.

Disaffection with capitalism has been growing on the right for years now. But Twitter’s decision to ban the insurrectionist-in-chief — and subsequent moves by Google, Amazon, and Apple to effectively shutdown Parler, a far-right-friendly Twitter competitor — has swelled the ranks of “conservatives against free enterprise.” Now, it is only the right’s self-styled populists who are decrying the tyranny of woke capital. Even self-described libertarian Ben Shapiro suggested Sunday that Big Tech needs to be regulated since “the technological instruments necessary for speech are located in essentially three companies, all of which are moving toward like-minded censorship.” Other Republican lawmakers and commentators have argued that — unless the U.S. government stops private companies from running their businesses as they see fit — America will become indistinguishable from communist China.

The right’s anti-Twitter tantrum is hysterical, hypocritical, and partly cynical: As one Republican strategist told Politico, decrying Big Tech’s censorship helps to shift “the narrative of the moment” away from Trumpist terrorists’ ongoing efforts to disrupt the peaceful transfer of power and toward “a larger, more existential threat for the future of the country.” Meanwhile, it is hard to square Shapiro’s claim that three companies own “the technological instruments necessary for speech” with his dogmatic denunciations of positive liberty in other contexts; apparently, the podcast host believes that citizens are silenced when private tech firms deny them micro-blog accounts for being fascists — but not when private hospitals deny them life-saving medical treatments for being poor. And, of course, had a sitting Democratic president just sicced a terroristic mob on Congress to block the certification of a Republican’s election victory, there’s no doubt that conservatives would deem the suppression of an insurgency more pressing than the restoration of antifa-aligned Twitter accounts.

This is not to say that there aren’t problems with big tech, in this context, as the article explains.

In more unionised times, though, rich elites voted “far to the right of those without diplomas”, and yet now, the coastal liberal elites supposedly spread their cultural, socialist liberalism far and wide. It’s interesting that Josh Hawley, the young Senator who opposed the election counts and decries elites, is very much one himself:

Hawley shies from no level of hypocrisy; the son of a banker, educated at Stanford University and Yale Law School, he denounces elites.

It’s the consistent level of hypocrisy we have seen from the GOP over the last four years, in particular, that is galling. They have no principle anymore; it’s just whatever is useful to gain and retain power. That said, rich elites are, in a meaningful way, more Democratic than they used to be in the New Deal era.

Where the Intelligencer article gets particularly interesting is that it is precisely for free-market reasons that the big tech companies are making the decisions they have done:

As already indicated, today’s political economy looks quite different. U.S. college graduates are now far more Democratic than the public as a whole. And the urban-dwelling, professional elites who staff America’s tech and finance industries are even more liberal than the average university grad: According to Democratic pollster David Shor, less than 5 percent of Harvard’s student body voted for Donald Trump in 2016, while college Democrats outnumber college Republicans on the Stanford Law School campus by a ratio of (roughly) 20-to-one. For these reasons, among others, the most economically prosperous and productive regions of the U.S. are now also among its most Democratic: Joe Biden only won only 509 of America’s 3,056 counties, but those 509 encompass 71 percent of all U.S. economic activity.

What’s more, Democrats aren’t just overrepresented among corporate America’s elite workers; they also predominate among its most-coveted patrons. Consumer-facing companies have long focused on courting the young, since they are 1) more likely to try new brands and products than the old and 2) less likely to die soon, making their brand loyalty more valuable. At a time of historic generational polarization, which has rendered supermajorities of millennials and Gen-Zers hostile to conservatism, America’s marquee brands have taken to performing their allegiance to the “woke” side of America’s culture wars.

Most of the consumers with clout that concern the marketeers and product management teams of these companies are arguably modern Democratic-leaning elites or middle-classed consumers with a lot of disposable income, and so they are making market decisions based on these demographics. Conservatives, though, have still “secured wildly disproportionate influence over public policy” even though they have lost cultural capital and economic clout.

This is just like Nike’s decision to “defend” Colin Kaepernick back when kneeling was way more controversial than it is now. Even though a bunch of white people burned Nike shoes on Twitter, the economic decision was cynical but well-thought-out. History, marketing and economics would always be on their side.

This has all been compounded by the recent consolidation of GOP support in rural, less-educated regions of the US. Indeed, the GOP and Republicans, in general, can be forgiven for thinking society more generally reflects their views when it doesn’t because:

Under Donald Trump’s leadership, the GOP has swelled its margins among rural, non-college-educated voters — who are overrepresented in state legislatures, the House, the Senate, and the Electoral College. The median U.S. state is now roughly 6.6 percent more Republican than the nation as a whole, which gives the GOP a massive advantage in the battle for Senate control. Meanwhile, the “tipping point” state in the Electoral College was four points more Republican than America writ large in 2020; which is to say, had Joe Biden won the popular vote by “only” 3.9 percent last November, Donald Trump would have likely won reelection. Finally, conservatives now dominate the federal judiciary, atop which a 6-3 conservative majority reigns supreme.

The problem is that the free market struggles to arbitrate morality, as I have set out before many times. And the right-wing only ever seem to get antsy about this when they perceive themselves as being on the receiving end. As such, right-wing populists struggle to make coherent arguments when trying to square the circle that only concerns their interests and not, say, redistribution of income or equality of opportunities for people of colour:

Some on the right resolve this contradiction through cognitive dissonance. Others, like Ben Shapiro, generate facile arguments for why regulating conspicuously anti-Trump corporate sectors is consistent with free-market conservatism, even as virtually all other forms of regulation are not. A few on the “populist” wing of the movement, however, are imploring their co-partisans to grapple with their betrayal by “woke capital.”

The problem for the GOP going forward is that seeking to regulate big tech and punish them for actions such as those of recent weeks will work against them in regaining power within the halls of corporate America, jeopardising future support and campaign contributions. It seems that tax-cutting is the only attraction for such corporations.

The article concludes:

Thus, for now, the fact that the movement for “small government” enjoys more influence over the state than it does over the corporate sector is having little influence on its policy agenda. But if the right continues in the direction it has long been trending — away from corporate conservatism and toward white Christian revanchism — the contradiction between the movement’s outsize power over the state and its learned opposition to state power will only grow more conspicuous.

Conservatives can’t secure the cultural dominance they long for within the confines of 21st-century capitalist democracy. If they can find the will to replace that system with one more statist and authoritarian, however, their overrepresentation at every level of government may offer them a way.

Republicans don’t really have a leg to stand on when the reality here is free-market corporations who are…

  1. exhibiting their legal freedoms
  2. taking action against entities who are violating their terms and conditions
  3. making financial and marketing decisions in their long-term best interests also given 1. and 2.

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