A Brief Book Review of The Curse of Bigness by Tim Wu
“Over the years, AT&T had not been content to be merely the neighborhood telephone monopolist. No, AT&T was the jealous God of telecommunications, brooking no rivals, accepting no share, and swallowing any children with even the most remote chance of unseating Kronos.” — Tim Wu
“[Rockefeller] was like a general who, besieging a city surrounded by fortified hills, views from a balloon the whole great field, and sees how, this point taken, that must fall; this hill reached, that fort is commanded. And nothing was too small: the corner grocery in Browntown, the humble refining still on Oil Creek, the shortest private pipe line. Nothing, for little things grow.” — Ida Tarbell
“Yo, I, I feel big. Not, not big in the sense of, weight. You know what I mean? Like gainin' weight or nothin' like that. Like colossal. Like, you know what I mean, like… [sighs]. I heard you were lookin' for me.” — Lil Wayne on “Mr. Carter” (2008)
In The Curse of Bigness (2018), policy advocate and Columbia Law School professor Tim Wu does a brilliant job on several fronts. He does well describing the history of economic concentration in the United States, Europe, and Japan. He describes swiftly and clearly how the “centralization of private power” can, and often does, lead to the stifling of liberties democratic societies claim to hold dear. These liberties include equality of opportunity, humane work conditions, sufficient leisure hours and space, economic security, environmental cleanliness, and a sense of individual autonomy.
Wu does good work describing how the lobbying efforts of a few large, wealthy companies are often sadly far more effective than the diffuse power of millions of middle-class and everyday citizens. Paraphrasing the scholar Mancur Olson of Harvard, Wu writes, “the small and organized will dominate the large and disorganized.” This point called to mind for me Yuval Noah Harari’s great book Homo Deus (2015), which I reviewed last year. It has great passages in it about how the most distinguishing aspect of the human species in relation to every other organism on Earth is our ability to organize ourselves through creating, believing, and sharing stories. To this end, storytelling is easier for a small, coordinated group than a large, disparate one. Relatedly, the cultural anthropologist Margaret Mead once famously said, “Never doubt that a small, thoughtful, committed group of citizens can change the world. Indeed, it is the only thing that ever has.” That quote is filled with hope, and I have long loved it. When I played lacrosse in high school, I often practiced in a shirt with that quote on the back. Years later, I see now that the hidden power of that quote is that it portends both good and bad changes, good actors and bad. Wu, here, is focused on the bad.
Wu splits the playing field into two camps. On one side are monopolists, industry titans, and laissez-faire economists, folks like John D. Rockefeller, J.P. Morgan, and Robert Bork. They marshal ideas such as “economies of scale” and “consumer welfare” for their arguments. They contend they are not hampering democracy or civil liberties but rationalizing markets in need of rationalization. On the other side, there are anti-trust politicians and jurists, people like Supreme Court Justice Louis Brandeis, President Theodore Roosevelt, President William Howard Taft, and Robert Pitofsky. To some of these trust-busters, the only trusts allowed should be owned by the government on behalf of the people. To other anti-trust advocates, if there are to be private trusts, the bad ones should be broken up or fined heavily, as happened to Standard Oil, AT&T, and Microsoft.
Wu marshals a multi-decade history of facts about the steel, railroad, telecom, and oil refining industries, to make clear his underlying thesis: Where monopolists tread, fascists soon follow. For this,The Curse of Bigness is valuable. Wu tells us of how it was German monopolists in various industries in the 1930s who were crucial in allowing the Nazi regime and Hitler to gain power. This is clearly a path no sensible, ethical reader would want their society to follow.
Where the book starts to fall apart is when Wu tries to port his history and cure for the monopolies of the 19th and 20th centuries into the 21st. Namely, it feels light in its assessment of how to counteract the worst aspects of the big four tech firms, those being Apple, Google, Facebook, and Amazon. Wu is correct that these companies have often used buying rivals or “cloning” products as means to stifle competition. But this is as old as capitalism itself. Yes, the Internet has enabled new strategies and tactics for would-be monopolists, some of which I reviewed after reading Reid Hoffman’s book Blitzscaling (2018). Given this, it is likely Wu is correct that “consumer welfare” principles (i.e., are prices rising or falling), which are popular for defending large enterprises in American courtrooms, are a poor barometer for whether modern markets are overly consolidated.
However, the other approach for gauging over-consolidation, i.e., whether sizable competitors exist or are emerging, is also wanting. More importantly, a negative answer to that question does not necessitate solutions the Roosevelts and Tafts would’ve preferred. Breaking companies apart doesn’t seem to work here as well as it did then. How do you strip Google’s ability to serve ads next to its almost ubiquitously popular search engine when serving ads is 99% of its revenue? How do you tell advertisers to spend ad dollars on nascent social networks when the broader Facebook ad network has the best ROI for them in addition to the most users? How—as strategist and writer Ben Thompson posits in a great, detailed essay on Senator Elizabeth Warren’s recent anti-trust policy proposals (which to me read very similarly to Wu’s)—do you prevent Apple from bundling a browser with its phones and computers? How do you download a browser without a browser? Does this even matter to consumers or competitors? Where Wu’s brilliance in this book seems to crumble, I think Thompson’s begins to take shape. I would hope in the 2020 election cycle some candidates bring thoughtful, constructive attitudes to these complex questions.