Introduction
In "Move Fast and Break Things," Jonathan Taplin takes readers on a journey through the dark side of Silicon Valley. The book challenges the popular narrative of tech giants as benevolent innovators, instead revealing how companies like Facebook, Google, and Amazon have amassed unprecedented power and influence at the expense of artists, content creators, and society at large.
Taplin, a veteran of the entertainment industry and former tour manager for Bob Dylan, brings a unique perspective to the table. He combines personal anecdotes with in-depth research to paint a compelling picture of how the digital revolution has reshaped our cultural and economic landscape – often not for the better.
The book's title, "Move Fast and Break Things," is borrowed from Facebook's former motto, which encapsulates the reckless approach many tech companies have taken in their pursuit of growth and dominance. Through this lens, Taplin explores how these companies have disrupted traditional industries, evaded regulations, and prioritized profits over societal well-being.
As we dive into the key ideas of the book, we'll uncover the origins of the internet, the rise of libertarian ideology in Silicon Valley, the formation of digital monopolies, and the devastating impact on artists and creators. We'll also examine the privacy concerns surrounding data collection and explore potential solutions for a more equitable digital future.
The Government's Role in Technological Innovation
One of the central myths that Taplin debunks is the idea that all major technological innovations come from profit-driven entrepreneurs working in their garages. In reality, many of our most significant technological advances, including the internet itself, were born out of government-funded programs and public sector initiatives.
The Birth of the Internet
The story of the internet's creation is a prime example of how government funding can drive innovation. In 1968, an American engineer named Doug Engelbart unveiled the NLS (oN-Line System), which incorporated groundbreaking features such as windows, graphics, video conferencing, the mouse, word processing, and a collaborative real-time editor. This revolutionary system wasn't developed in a Silicon Valley startup, but with funding from DARPA (Defense Advanced Research Projects Agency), a government organization established to develop innovative projects with potential military applications.
Engelbart's NLS became the foundation for ARPANET, the first online network for sending and receiving data – essentially an early version of the internet. ARPANET was also the first to use the TCP/IP protocol suite, another DARPA-funded innovation that remains the standard for packaging and sending data across networks today.
Bell Labs and Regulated Innovation
Another example of government-supported innovation comes from Bell Labs, founded in 1925. In the early 20th century, the United States faced a chaotic telecommunications landscape, with competing companies stringing their own cables along city streets. To address this, the Federal Communications Commission (FCC) allowed Bell System and Western Union to consolidate smaller companies into a unified system.
However, this consolidation came with a crucial stipulation: communication rates would be regulated, and a portion of profits had to be reinvested in research and innovation that would benefit society. This led to the creation of Bell Labs, which went on to invent the transistor, the microchip, cell phones, and countless other technologies we use every day.
These examples highlight how government programs, funded by tax dollars, have played a crucial role in developing the technologies that form the backbone of our modern digital world. This reality stands in stark contrast to the narrative pushed by many tech industry leaders, who often portray government intervention as an impediment to innovation.
The Rise of Libertarianism in Silicon Valley
To understand how we arrived at a point where tech giants wield so much power with little oversight, Taplin traces the rise of libertarian ideology in Silicon Valley. This philosophy, which champions minimal government intervention and maximum individual freedom, has profoundly shaped the ethos of many tech companies.
Peter Thiel and the PayPal Mafia
One of the most influential figures in spreading libertarian ideas throughout Silicon Valley is Peter Thiel, the founder of PayPal. Inspired by the works of Ayn Rand and her philosophy of objectivism, Thiel embraced the idea that selfishness and a "survival of the fittest" mentality could benefit society.
When Thiel founded PayPal in 1998, his goal was to disrupt the established financial system, avoiding government regulations and escaping taxes in the process. This approach proved successful, and when eBay purchased PayPal for $1 billion in 2002, it set the stage for what became known as the "PayPal Mafia" – a group of former PayPal employees who went on to found or lead other influential tech companies like YouTube, LinkedIn, and Yelp.
Tax Avoidance and the Amazon Effect
Jeff Bezos, the founder and CEO of Amazon, has also benefited greatly from libertarian principles, particularly when it comes to tax avoidance. Bezos has taken advantage of a 1992 Supreme Court ruling that states companies don't have to pay state taxes if they don't have a physical presence in that state.
This loophole has allowed Amazon to undercut local competition by avoiding state taxes in many areas where it operates. As a result, Amazon has contributed to the closure of thousands of local bookstores and record shops across the United States. Between 1992 and 2015, an estimated 5,400 such businesses shut down, unable to compete with Amazon's prices.
It's not just Amazon exploiting these tax loopholes. Companies like Facebook and Google also use their lack of physical presence in many jurisdictions to avoid paying taxes. The result is an estimated $60 billion in lost tax revenue for the United States each year.
This widespread tax avoidance not only gives these tech giants an unfair advantage over local businesses but also deprives governments of funds that could be used for public services and infrastructure – including the very technological research that gave birth to the internet in the first place.
The Threat of Digital Monopolies
As tech companies have grown in size and influence, they've increasingly come to dominate their respective markets. This concentration of power raises serious concerns about monopolies and their impact on fair competition, innovation, and consumer choice.
Historical Context of Monopolies
The danger of monopolies is not a new concern. In fact, it dates back to the founding of the United States. Thomas Jefferson, while serving as a diplomat in Europe, witnessed firsthand the devastating effects of the East India Trading Company's monopoly on British trade. The company's pursuit of profits at all costs led to catastrophic events like the Great Bengal Famine of 1770, which resulted in millions of deaths.
Despite Jefferson's concerns, protections against monopolies were not included in the Bill of Rights. Alexander Hamilton, who believed that capital should control politics rather than the other way around, championed the creation of a National Bank, with the majority of shares owned by private interests.
It wasn't until 1890 that the Sherman Act was passed, making it illegal to monopolize any area of trade. President Theodore Roosevelt used this law to break up proposed mergers between powerful companies like Standard Oil and Northern Securities, arguing that the concentration of wealth and power in the hands of a few rich individuals was harmful to the nation and free enterprise.
The Bork Effect
However, the interpretation and enforcement of antitrust laws took a significant turn in the 1960s with the rise of Judge Robert Bork's economic theories. Bork, a influential legal scholar, argued that consumer welfare should be the ultimate measure of an economy's health. In his view, monopolies could be beneficial to consumers, and therefore, antitrust laws were potentially harmful.
Bork's ideas gained traction in both academia and government, leading to a significant drop in Sherman Act filings during the Nixon and Ford administrations. Today, Bork's theories still heavily influence the antitrust division of the Justice Department, the federal branch responsible for ensuring fair play in the marketplace.
Modern Tech Monopolies
In the digital age, we're seeing the emergence of new monopolies that wield unprecedented power. As of 2017, Google controlled 88 percent of the search and advertising market, while Facebook dominated 77 percent of social media traffic. These companies use their market dominance to engage in rent-seeking behavior – charging high rates for access to their platforms, which have become essential for businesses and advertisers.
Moreover, these tech giants use their size and influence to shape public policy in their favor. Google, for instance, spends $15 million annually on lobbying efforts in Washington. The company has also leveraged its massive user base to influence public opinion on legislation that could affect its business model, such as the Stop Online Piracy Act (SOPA) in 2012.
The revolving door between tech companies and government further complicates matters. At one point, 53 people had worked for both Google and the White House, raising questions about potential conflicts of interest in regulating the tech industry.
The Piracy Problem and Its Impact on Artists
One of the most contentious issues in the digital age has been online piracy and its devastating impact on artists and content creators. Taplin argues that tech companies have often turned a blind eye to – or even profited from – the illegal distribution of copyrighted material.
The Rise of Digital Piracy
The scale of online piracy is staggering. In 2005, a website called Megaupload was launched, allowing users to upload and share large files, including pirated movies and music. Within two years, Megaupload had collected around 12 billion unique files and was generating $174 million in revenue. At its peak, Megaupload users accounted for 4 percent of global internet traffic, primarily due to the sharing of pirated content.
By 2015, the International Chamber of Commerce estimated the value of counterfeit goods shared around the world at $1.7 trillion – over 2 percent of the world's total economic output. This massive industry has profited everyone except the actual creators of the content being shared.
The Human Cost of Piracy
The rise of digital piracy has had a profound impact on artists who once made a comfortable living from royalties. Taplin shares the story of Levon Helm, drummer and singer for The Band, to illustrate this point.
Before the advent of widespread file-sharing platforms like Napster in 2000, members of The Band were able to live comfortably off the royalties from their albums. However, almost overnight, Helm and other band members who didn't have songwriting credits saw their royalties plummet from around $100,000 per year to almost nothing.
Helm, who had been diagnosed with throat cancer in 1990, was forced to return to performing live shows despite the pain it caused him, simply to cover his medical expenses. This story is far from unique – countless artists have seen their livelihoods threatened by the rise of digital piracy.
The Irony of Increased Consumption
What makes this situation particularly frustrating is that people are consuming more music and watching more movies than ever before. The Interactive Advertising Bureau estimates that pirated content costs each entertainment industry around $2 billion per year. If piracy were eliminated, an additional $456 million would be generated annually just through the advertising of legitimate content.
Yet, despite this increased consumption, many artists are making less money than ever before. This paradox highlights the need for a more equitable system that ensures creators are fairly compensated for their work in the digital age.
The Privacy Price of Free Services
While many internet users enjoy "free" services provided by companies like Google and Facebook, Taplin argues that these services come at a significant cost to personal privacy. The business model of these tech giants relies heavily on collecting and monetizing user data, often in ways that users don't fully understand or consent to.
Google's Data Harvesting
Google, which many still view as a friendly company offering a free search service, is actually in the business of collecting as much data from its users as possible. This data is then sold to advertisers and other interested parties.
For example, when Google launched Gmail, it was an instant success due to its offer of free email with unlimited storage. What many users didn't realize was that Google was scanning every email to customize the ads shown to users. This practice raises serious privacy concerns, especially considering that many people use their email for sensitive personal and professional communications.
Google's approach to data collection is often to act first and ask for forgiveness later. This is evident in how they implemented features like Street View in Google Maps, where they photographed people's properties without permission and matched the images to addresses.
Facebook's Data Dilemma
Facebook, with its 1.23 billion regular users, is another major player in the data collection game. The platform's popularity stems from allowing people to present idealized versions of themselves while tapping into the basic human desire to be "liked."
In 2014 alone, Facebook users generated what amounts to about 15 million years' worth of data. This massive trove of personal information is incredibly valuable to advertisers and other entities interested in understanding and influencing human behavior.
However, Facebook's track record on user privacy is concerning. In 2007, they launched Beacon, an app that notified a user's friends about their purchases on partner sites. Beacon was an opt-out service, meaning users had to actively turn it off if they didn't want their shopping habits shared. Despite widespread user outrage, Facebook refused to disable Beacon until they had collected several weeks' worth of data.
The True Cost of "Free" Services
The saying "If you're not the customer, you're the product" has become increasingly relevant in today's digital landscape. While users may not be paying for services with money, they're paying with their personal data and privacy.
This arrangement raises ethical questions about informed consent and the extent to which users understand the implications of using these services. It also highlights the need for stronger regulations to protect user privacy and ensure that individuals have more control over their personal information.
The Importance of Art and Community in Shaping Our Future
Despite the challenges posed by tech monopolies and the erosion of privacy, Taplin argues that there is hope for a better future. He emphasizes the crucial role that art, literature, and community cooperation can play in resisting the negative impacts of unchecked technological growth.
The Power of Cooperation
Throughout human history, cooperation has been key to our success as a species. From our earliest ancestors who divided tasks like hunting and maintaining shelter, to modern communities facing challenges, working together has always been a powerful tool for progress.
Taplin shares the story of Chattanooga, Tennessee, as an example of how community cooperation can stand up to corporate interests. When the town established a smart grid and high-speed fiber optic network for its residents, media giant Comcast tried to sue the city to protect its monopoly. However, the community banded together and successfully fought off the corporate threat, preserving their right to better internet infrastructure.
Art as a Tool for Awareness and Change
Another powerful weapon in the fight against tech dominance is art and literature. Creative works have the ability to shed light on societal issues and inspire people to take action. Taplin points to Aldous Huxley's 1932 novel "Brave New World" as an example of how fiction can predict and warn against potential futures.
Huxley's novel describes a world overwhelmed by readily available information, treated as irrelevant noise. In this future, people no longer read, and facts are considered trivial pieces of instant gratification. This dystopian vision bears a striking resemblance to our current information landscape, where the sheer volume of data can be overwhelming and the line between fact and fiction is increasingly blurred.
By creating works that highlight these issues, artists and writers can sound the alarm, reminding us of where we're heading if we don't take action to resist harmful trends in technology and society.
A Path Forward: Artist Cooperatives and Content Control
While the internet has posed significant challenges for many artists, Taplin suggests that it may also offer a solution. By banding together and taking control of their content distribution, artists may be able to push back against the dominance of tech giants and streaming services.
The Problem with Current Streaming Models
Streaming services like Netflix and Spotify have attracted large numbers of customers through small membership fees. However, these services have been notoriously bad at generating income for artists. Despite making significant profits – such as Netflix's $558.9 million in 2017 – these companies have been secretive about their deals with content creators, maintaining an advantage in negotiations.
The Potential of Artist Cooperatives
Taplin points to the success of cooperatives like Magnum Photos as a model for how artists can retain control of their work. Founded after World War II by a group of twelve photographers, Magnum Photos allows its members to retain the rights to their works rather than signing them over to publishers. This arrangement has enabled photographers to continue making money from their art by selling the same photos to different publications around the world.
A New Model for Music Distribution
Taplin proposes a similar model for musicians. He suggests a tiered release strategy where artists could debut their albums on platforms like Bandcamp, which takes a smaller percentage of revenue. After a month, they could release the album on premium streaming services like Spotify Premium, and finally, a month later, allow it to play on free versions of Spotify and YouTube.
This approach would allow eager fans to pay more for early access, while more casual listeners would wait for the streaming release. By controlling the distribution timeline, artists could potentially see better paydays while still reaching a wide audience.
The Power of Collective Action
The key to making this model work is collective action. If enough artists band together to form cooperatives and demand better terms from streaming services and tech platforms, they could shift the balance of power back in favor of content creators.
While this approach would require significant coordination and cooperation among artists, it offers a potential path forward in an industry that has been dominated by tech giants and streaming services.
Conclusion: A Call for a Fairer Digital Future
In "Move Fast and Break Things," Jonathan Taplin paints a sobering picture of how tech giants have reshaped our cultural and economic landscape, often at the expense of artists, privacy, and fair competition. However, he also offers hope for a more equitable digital future.
The book serves as a wake-up call, urging readers to look beyond the sleek interfaces and convenient services offered by companies like Google, Facebook, and Amazon. It challenges us to consider the hidden costs of these "free" services and the long-term implications of allowing a handful of corporations to control so much of our digital lives.
Taplin's key messages include:
The importance of recognizing the role of government funding in technological innovation, countering the narrative that all progress comes from profit-driven entrepreneurs.
The need to be aware of the libertarian ideology that has shaped Silicon Valley, leading to tax avoidance and a disregard for societal impacts.
The dangers of digital monopolies and their ability to influence not just markets, but also politics and public opinion.
The devastating impact of digital piracy on artists and content creators, and the need for better systems to ensure fair compensation.
The privacy concerns surrounding data collection by tech companies and the true cost of "free" services.
The potential for art, community cooperation, and artist-controlled distribution models to push back against tech dominance.
While the challenges are significant, Taplin's work suggests that there is still hope for a fairer future. By joining forces, taking control of their digital destinies, and demanding more ethical practices from tech companies, individuals and communities can work towards a more balanced and equitable digital landscape.
The book ultimately calls for a reevaluation of our relationship with technology and the companies that provide it. It challenges readers to become more conscious consumers and active citizens, advocating for policies that protect privacy, fair competition, and the rights of content creators.
As we move forward in an increasingly digital world, the lessons and warnings in "Move Fast and Break Things" serve as a crucial guide. They remind us that the internet and the technologies built upon it should serve the many, not just the few, and that it's up to all of us to shape the digital future we want to see.