The Hedgehog Review

The Hedgehog Review: Vol. 20 No. 1 (Spring 2018)

Who’s Afraid of the Frightful Five? Monopoly and Culture in the Digital Age

Edward Tenner

The Hedgehog Review

The Hedgehog Review: Spring 2018

(Volume 20 | Issue 1)

In October 2017, the Wall Street Journal editorial pages featured an op-ed by Luther Lowe, vice president for public policy at the review site Yelp, bearing the unequivocal headline “It’s Time to Bust the Online Trusts.” The essay, in which Lowe argued that Google, Facebook, and other giants of the Web are abusing their dominance to promote their own services over third-party competitors, was accompanied by a cartoon depicting Google, Facebook, and Twitter as bloated, top-hatted, Gilded Age plutocrats being confronted on the witness stand in a congressional hearing. It recalled a famous 1889 drawing published in Puck, “The Bosses of the Senate,” except that there the “Steel Beam Trust,” “Standard Oil,” and a dozen other corporate giants were the ones glowering at the intimidated legislators.

The Wall Street Journal is normally skeptical of antitrust zeal. But in it and other mainstream publications previously well disposed toward Silicon Valley, concerns about the power of Google (formally Alphabet), Facebook, Apple, Amazon, and Microsoft—sometimes collectively called the Frightful Five—plus Twitter, Uber, and others, have been growing. (To judge from their purchases of products and services, no equivalent distrust among consumers is yet in the making.) As the online magazine Politico put it in the headline of one of its reports, “Conservatives, Liberals Unite against Silicon Valley.”1

A scan of notable books on the subject yields Zeynep Tufecki’s Twitter and Tear Gas (a critique of the revolutionary potential of social media), Noam Cohen’s The Know-It-Alls: The Rise of Silicon Valley as a Political Powerhouse and Social Wrecking Ball, Scott Timberg’s Culture Crash: The Killing of the Creative Class, Jonathan Taplin’s Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy, and Franklin Foer’s World without Mind: The Existential Threat of Big Tech, its title echoing that of Simon Head’s earlier Mindless: Why Smarter Machines Are Making Dumber Humans. All raise suspicions about the digital giants and their effects on our culture. All hold the Big Tech companies and their beguiling products responsible, in varying degrees, for everything from growing incivility and political polarization to a declining faith in facts and truth, from the addictive manipulations of our attention to the secretive exploitation of our user data. If all that were not bad enough, some of these critics suggest, the growing monopolistic power of the largest tech companies threatens to limit the creativity, autonomy, and earnings of artists, writers, and intellectuals, thus diminishing the mind and soul of our larger culture.

But for all their timely warnings about the harms Big Tech may be visiting upon us, the larger antimonopoly case being advanced by Taplin, Foer, Cohen, and others suffers from a certain historical myopia. Monopoly and oligopoly have consequences, particularly in the domain of the media, but the world of analog culture was never as stable as it now appears. Nor was it ever as free of its Darwinian, even Hobbesian, struggles as some might imagine.

One might begin a more nuanced appraisal by recognizing that, for all their billions, the Silicon Valley moguls still have a comparatively fragile political base. In 1881, one of the earliest muckrakers, Henry Demarest Lloyd, declared in The Atlantic Monthly that John D. Rockefeller’s Standard Oil Company had “done everything with the Pennsylvania legislature, except refine it.”2 So the difference between the Puck and Wall Street Journal cartoons is telling. In the 1880s, the monopolies were dominating legislators. In 2017, the giants appear to be fighting to retain their influence. Google and Facebook, in particular, seem to have allowed domestic and foreign trolls to shape online conversations contrary to their executives’ positions on immigration, church and state, climate change, and other issues. So who, really, is in charge here?

The Scientific Tracking of Taste

While Tufecki and Cohen come from a new cohort of media critics, Jonathan Taplin and Franklin Foer are established cultural authorities of an older school who have had to find new roles. A movie producer with a strong interest in digital media, Taplin declares at the beginning of his book that in a new environment that has benefited a small group of artists and “cast almost all others into shadow,” he himself has not produced a film since 1995. Foer was forced from the editorship of the New Republic by Facebook cofounder Chris Hughes, who acquired a majority stake in the magazine in 2012 and whose Silicon Valley-inspired business staff had been pressuring Foer and his editors to abandon the magazine’s mandarin traditions in pursuit of maximum clicks.

Thanks to these similar backgrounds of forced displacement, Taplin and Foer share many immediate concerns. Both are alarmed by the impact of social media on the 2016 US election—and what they see as the subversion of electoral politics. But they see culture from different sides.

For Taplin, creators’ and artists’ livelihoods are a bigger concern, and he focuses on their diminution by Google programs such as book digitization and YouTube. Recounting his years as a manager of The Band, he recalls how in the 1960s and early 1970s record companies were willing to invest in promising artists’ careers. Royalty checks could provide a middle-class lifestyle for performers like the great drummer Levon Helm—until the rise of piracy by Napster and YouTube cut off his recording income in the early 2000s and forced him to go on the road again, even though he had throat cancer.

But the online piracy that contributed to the reduced circumstances of musicians like Levon Helm was not, as Taplin himself recognizes, initiated by the giants. And Taplin’s solutions don’t entirely acknowledge this. He proposes reform of copyright laws to make it easier for musicians and filmmakers to take down illegally posted content, increased protection of user data and privacy, and antitrust enforcement, including compulsory patent licensing, that would spread the benefits of the giant companies’ innovations to competitors. But while the first of these might have helped Helm, it’s not clear how the other measures could have.

In fact, it was recorded music itself that began the decline of what Taplin calls “middle-class” musicians. Opinion about recordings was divided from the start. John Philip Sousa, the legendary military bandleader who composed “The Stars and Stripes Forever,” was outspoken in his warnings about “canned music.” The rise of radio broadcasting in the 1920s, the onset of the Great Depression, and the introduction of talking films all helped deplete the ranks of musicians who had prospered during the so-called silent era, when their powerful union could dictate terms to motion picture theater owners and the sound effects as well as the chords created by organists at Mighty Wurlitzer consoles filled ornate auditoriums inspired by the Austrian baroque.

The rise of 45 rpm singles, jukeboxes, and long-playing records helped separate a new elite from the mass of downwardly mobile performers. It was the challenge of optimizing jukebox revenue that prompted Billboard to publish the first hit parade lists in the 1930s, a practice that began the scientific tracking of taste that eventually led to services like Nielsen BookScan (the first subscription service for tracking book sales by title, launched in 2001) and Chartbeat (the leader in measuring the popularity of articles on publishers’ websites).

The inherent problem for composers and performers is the cumulative advantage Web-based media give to small early differences. The sociologists Duncan Watts, Matthew Salganik, and Peter Dodds have shown experimentally that the influence of online reviews can snowball.3 Quality (as measured by participants’ initial ratings) matters. But among well-rated performances, those that finally emerge as the top hits depend most of all on the cumulative advantage of a small initial lead. This means that even with performers’ cooperatives—another solution proposed by Taplin—the rich will get richer, powered by greater resources for early promotion and search engine optimization.

The Paramount Decision

Much like Taplin, Foer advocates “treating Facebook, Google, and Amazon with the same firm hand that led government to wage war on AT&T, IBM, and Microsoft,” and, if necessary, dismembering the new digital monopolies. He sees hope in his own disenchantment with Amazon’s Kindle reader and notes that consumers also have been turning away from e-books in a “paper rebellion.”4 Where Taplin finds the root of Silicon Valley’s menace in libertarian ideology, Foer regards the real threat to be the dominance of human judgment by Chartbeat and similar data analytic tools.

Ironically, antitrust initiatives, like technological innovation, can accelerate the careers of some creators while limiting work for others. The consent decrees following the Supreme Court decision in The United States v. Paramount Pictures, Inc. (1948) forced the major studios to spin off their theaters and discontinue booking practices through which they controlled the exhibition of films. Independent theater owners no longer had to accept unwanted films in order to secure the most popular ones.

Thus began a new golden age for some top stars and their agents, and for a small number of elite cinematographers, costume designers, and other professionals. But most of the craftworkers and actors who had enjoyed the relative security of studio contracts, and the professional development the studios offered to newcomers, were now on their own. The Paramount decision unintentionally helped launch the project (or gig) economy and what the economists Robert H. Frank and Philip Cook have called the “winner-take-all society.”5 And after the spectacular sucess of Steven Spielberg’s Jaws in 1975, big-budget films gave the studios new, if far riskier, lives.

While Foer is correct that Google and Facebook have been able to capture advertising revenue from newspapers and magazines, and that the future of these media depends on their ability to attract paid subscriptions, he fails to see that what appears to be a unique crisis is only the latest in a succession of upheavals.

The Rise of the Freelancers

The initial assault on monopoly was tied to the growth of advertising in the 1890s. The undercapitalized immigrant Scots-Irish entrepreneur S.S. McClure disrupted the genteel magazine world in 1893 by launching his namesake illustrated monthly with a cover price of ten cents, less than $2.50 in today’s money. With the growth of cities, education, and leisure time, the circulation of McClure’s increased to a half million at one point in the early twentieth century. One of a half dozen or so inexpensive magazines at that time, it distinguished itself by featuring more compelling writers than the others.

Just as the quarter century from the 1890s to 1914 benefited musicians, it opened unprecedented possibilities for journeyman freelance writers to support at least a lower-middle-class existence. And it was a great time to be a public intellectual. In 1895 Woodrow Wilson, an Ivy League professor at the time, was able to build a substantial Tudor Gothic house on one of Princeton’s most fashionable streets, Library Place, on the proceeds of serialization of his history of the United States in Harper’s Weekly and its later publication in book form.

One of the reportorial stars of the 1890s was the feminist writer Ida Tarbell, who considered herself (as Taplin and Foer do today) a victim of monopolist abuses. Her father, a western Pennsylvania farmer and container maker who became a petroleum producer during the post–Civil War boom, was forced out of business by the South Improvement Company, which John D. Rockefeller secretly dominated. This arrangement let Rockefeller and his associates covertly negotiate highly preferential terms with railroads. Investigating and exposing these deals made Tarbell a star of the publishing world. Opportunities were open not only to Ivy League professors but to crusading freelancers.

The golden age of the long print serial was all too brief, a casualty of the faster-paced society of the 1920s. DeWitt Wallace, who had read many American magazines while recovering from wounds in a hospital in France after World War I, convinced himself that their articles were too long and practiced condensing them. Reader’s Digest, which he launched with his wife in 1922, reflected the shortened attention spans of the decade. Liberty, a joint venture of two newspaper dynasties begun in 1924, offered an estimated reading time for each article, as some digital magazines do today. Later in the 1920s national radio networks were born, creating even more competition for attention, and by 1936 the critic Gilbert Seldes wrote that the new medium had become the chief enemy of children’s reading.6

At the Mercy of Algorithms

Foer sees intellectual life as zombified by the twenty-first-century monopolists’ algorithms, but it would be more accurate to say that the present technological environment has raised a new cohort of creators even as it has displaced the old. The Producers Guild of America now claims 7,500 members, compared to 1,500 in 2001. Streaming, a technology that Jonathan Taplin actually helped develop (and from which he says he still derives patent licensing income), has created an international audience for high-quality scripted serials. In 2017, an Italian-born former program commissioner of British television, Walter Iuzzolino, launched a streaming site, Walter Presents, featuring some of the best of these programs, subtitled in English for international audiences.

Because the new reality for creators is so segmented, such developments are little consolation to journalists and feature writers affected by the decline of the advertising model pioneered by S.S. McClure 125 years ago, just as producers and writers of documentary television may not have new opportunities in reality shows. While some American coal miners are retraining to be wind turbine technicians, it may be more difficult for short story writers to learn to create music videos.

Relieved of the dictates of mandarin critics, philistine Hollywood bosses, and exploitive recording companies, more and more creators are now at the mercy of inscrutable algorithms aggregating the behavior of anonymized multitudes. The scale of the giants enables them to recruit some of the most brilliant specialists in data analysis and machine learning, just as the old-style moguls hired brilliant advisers and journalists. But far from advancing political or social agendas in the way the Rockefeller and Carnegies—and, indeed, the Hearsts and Luces—did a century ago, the new moguls are themselves in thrall to their electronic creations. More competition among search engines and social media sites will not end the creators’ predicament.

Subordinating Cultural Leadership

Books and articles by writers such as Taplin, Foer, and Cohen will prod legislators and others to investigate the operation of platform company algorithms. Those efforts are already being supported by the research of the Nobel laureate economist Joseph Stiglitz, who has called attention to the risks of companies knowing far more about consumers than customers can understand about the companies.

More information should lead to reforms, perhaps even to tax laws that will help newspapers and magazines recoup some of the advertising revenue generated by their content. Taplin has high hopes for artists’ cooperatives that will capture most streaming income from hardcore fans before licensing it to the giant websites. But these will likely be of most benefit to established performers—further increasing inequality. Would the compulsory licensing of patents for use by other companies lead to a renaissance of technological diversity, as Taplin suggests? Possibly. But it is likely to benefit other big would-be monopolists rather than struggling startups. In a major intellectual property lawsuit filed in late 2017, Google/Alphabet accused the ride-sharing giant Uber of stealing trade secrets as well as infringing on patents. Those secrets may be at least as important for platform companies as their patent portfolios, and at least one securities analyst has called Uber the next Amazon.

Even if the grip of the largest companies is weakened, the long-term increase in inequality among creators is likely to persist. Nor should we necessarily mourn the decline of the kind of all-powerful critics who issued their judgments in publications like the New Republic of old. They had their troubles too: When the commercially neglected novelist Wright Morris assailed literary opinion makers in his essay “Reflections on the Death of the Reader” fifty years ago, he made today’s crowdsourced Amazon reviews look benign by comparison.

The power of the dominant companies, Facebook and Google above all, is in their design to retain users’ attention, especially on the mobile Web. This is the outcome of a decades-old process of subordinating cultural leadership (of the kind practiced by generations of New Republic editors before the Chris Hughes regime). Algorithms may not have destroyed cultural authority, but they have subverted it in a way that television, in all its variations, never did. As early as 1990, interviewed in The Atlantic by Charles C. Mann, the MIT economist Lester Thurow professed alarm at a QUESTION AUTHORITY bumper sticker he had observed from his office window. The Vietnam era, Thurow said, had challenged and badly undercut the guiding authority of scientists as well as elected officials. He suggested that while people were right to suspect the elite, they were unintentionally opening the way for a worse ruling class—possibly an oligarchy—that would not have the nation’s long-term well-being at heart.7

Astroturfing and Trolling

What is alarming about Silicon Valley is not the abuse of power, but the power vacuum the Web has helped create. It is not a complete vacuum, of course; cable news and the sites of national newspapers and network television stations still have millions of followers. Talk radio still has immense influence. But the giants have introduced something new, in two ways. First, their position is more asymmetric than that of older media. Their vast troves of data give them insights into public behavior that are unavailable to the public and all but a handful of cooperative researchers. Joseph Stiglitz has warned that this imbalance is distorting financial markets and endangering innovation.8 And this asymmetry compounds a second challenge to democracy: The online giants have provided autocrats and others with a set of tools that can be used to exploit our deepest ties to friends and family members in order to advance political and commercial agendas. While it is not clear that covert online campaigns decided either Brexit or the 2016 US election, as many critics of social media claim, the scale of attempts to stir up discord or sow confusion has alarmed the monopolists themselves. For example, Amazon faces the challenge of distinguishing authentic book and product reviews from those resulting from organized campaigns. Even on government sites, bot-generated comments on pending regulations have contaminated citizenship. “Astroturfing,” that is, manufacturing synthetic grass roots, is the name of this technique.

If the online moguls had truly sinister designs, it would be far easier to reform their enterprises or to break them up. Part of the problem is that they don’t know how to control the new world they have created, one that opens so many vistas to the cynical. In October 2017, months after the publication of Taplin’s and Foer’s books, Facebook acknowledged that an organization linked to the Russian government had planted 80,000 divisive posts on its site, ultimately seen by 126 million people.9 While it now has a site to help users to determine whether they were affected by the Russian campaign, it is clear the company’s vaunted antispam algorithms were easily circumvented.

Yet remedies are not so simple. When social media try to establish standards, they find it difficult to satisfy critics. Automated safeguards may unintentionally censor content—for example, an article reporting on the activity of racists or terrorists who use taboo words, even if the report condemns their actions. And trolls have succeeded in posting disturbing videos aimed at children to YouTube by exploiting loopholes in Google’s screening algorithms. Human censors, however, may have biases of their own, and many kinds of innuendo are difficult to screen.

The result is a social world of weakened trust, in which a longtime friend may turn out to be the unwitting accomplice of some unseen manipulator or a shill for some commercial interest. It is this unease that is feeding the wave of misgivings about Silicon Valley, and yet its services remain as popular as ever—and as attractive for ambitious people who know how to manipulate the system.

Yet just as some manufacturers and retailers have been able to thrive by working with Amazon’s strategies and algorithms while many others have fallen by the wayside, so in the new media world some creators can accommodate themselves to the new monopolists, just as their predecessors adapted (or didn’t) to the emergence of new technologies, corporate powers, and consumer tastes.

Franklin Foer singles out the Oxford-educated journalist Nick Denton, “evil genius” founder of Gawker Media, for declaring that in the age of metrics “the numbers (i.e., the audience) won’t support any worthiness [i.e., serious journalism such as Denton once practiced].”10 Gawker’s nemesis was Peter Thiel, the PayPal founder and Facebook investor, who supported the wrestler Hulk Hogan’s invasion-of-privacy lawsuit, thus helping bankrupt Gawker.

Thiel has many detractors. In Move Fast and Break Things, Taplin portrays him as the sinister mastermind of the monopolists. While Thiel has only a fraction of the billions of net worth of Mark Zuckerberg or the departing executive chairman of Alphabet, Eric Schmidt, he is not only an influential networker among the Frightful Five but also the most forthrightly libertarian of the influential Silicon Valley billionaires (especially in his advocacy of government-free zones in the oceans and in space), as well as the most openly elitist. In 2009, for example, he dismissed social democracy as the result of an “unthinking demos.”11

But close examination suggests that the new world of digital monopolies is less a united oligarchy than a turbulent matrix of competing interests. Far from being omniscient, let alone omnipotent, the tech moguls are unable to control the use and abuse of their innovations by good and bad actors alike. Meanwhile, creators fight among themselves, and sometimes with the oligarchs, for inherently limited attention in the tournament society.

The prophet of the digital media era was not, as Taplin would have it, the libertarian novelist and philosopher Ayn Rand, but the swashbuckling superlawyer of post–World War I Britain, F.E. Smith, Lord Birkenhead, the youngest Lord Chancellor in British history. In 1923, as newly appointed rector of the University of Glasgow, he exhorted its undergraduates to recognize self-interest as the mainstream of human life. “The world continues to offer glittering prizes to those who have stout hearts and sharp swords,” he declared to his appreciative audience.12

Peter Thiel could not have put it better.

Endnotes

  1. Nancy Scola, “Conservatives, Liberals Unite against Silicon Valley,” Politico, September 12, 2017, https://www.politico.com/story/2017/09/12/conservatives-liberals-silicon-valley-242631.
  2. Cited in “A Great Monopoly,” The Atlantic, November 9, 1999, https://www.theatlantic.com/magazine/archive/1999/11/a-great-monopoly/306018/.
  3. Findings summarized in Duncan J. Watts, “Is Justin Timberlake a Product of Cumulative Advantage?,” April 15, 2007, http://www.nytimes.com/2007/04/15/magazine/15wwlnidealab.t.html, and expanded on in Matthew J. Salganik, Peter S. Dodds, and Duncan J. Watts, “Experimental Study of Inequality and Unpredictability in an Artificial Cultural Market,” Science, 311 (2006), 854–56, DOI: 10.1126/science.1121066.
  4. Franklin Foer, World without Mind: The Existential Threat of Big Tech (New York, NY: Penguin Press, 2017), 202, 222.
  5. Robert H. Frank and Philip J. Cook, The Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us (New York, NY: Free Press, 1995).
  6. Michael Kammen, The Lively Arts: Gilbert Seldes and the Transformation of Cultural Criticism in the United States (New York, NY: Oxford University Press, 1996), 172.
  7. Charles C. Mann, “The Man with All the Answers,” The Atlantic, January 1990, 62.
  8. Stiglitz cited in Izabella Kaminska, “Imperfect Information Dims the Vision of a Digital Utopia,” Financial Times, September 26, 2017, https://www.ft.com/content/2b8bb73e-a1fa-11e7-b797-b61809486fe2.
  9. Mike Isaac and Daisuke Wakabayashi, “Broad Reach of Campaign by Russians Is Disclosed,” New York Times, October 31, 2017.
  10. Foer, World without Mind, 146.
  11. Peter Thiel, “The Education of a Libertarian,” Cato Unbound, April 13, 2009, https://www.cato-unbound.org/2009/04/13/peter-thiel/education-libertarian.
  12. Paul Johnson, “The Age of Stout Hearts, Sharp Swords—and Fun,” The Spectator, April 15, 2006, https://www.spectator.co.uk/2006/04/the-age-of-stout-hearts-sharp-swords-and-fun/.

Edward Tenner is author of The Efficiency Paradox: What Big Data Can’t Do, Our Own Devices: How Technology Remakes Humanity, and Why Things Bite Back: Technology and the Revenge of Unintended Consequences. He is a distinguished scholar of the Smithsonian’s Lemelson Center, a visiting scholar in the Rutgers University department of history, and a research affiliate of the Princeton University Center for Arts and Cultural Policy Studies.

Reprinted from The Hedgehog Review 20.1 (Spring 2018). This essay may not be resold, reprinted, or redistributed for compensation of any kind without prior written permission. Please contact The Hedgehog Review for further details.

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