48 The innovation issue

Companies on the internet

The Great Depression offers lessons for how to give ordinary can collect data about people’s
people a say in the economic recovery from covid-19. behavior in ways old phone com-
By Nathan Schneider / Illustration by Sophy Hollington
panies and mail carriers never
could: a telecom can’t listen to
your phone conversations and

A CRISIS IS
send you relevant robocalls.
Ride-sharing apps got their start
in part by bypassing regulations
their taxicab competitors had

NO EXCUSE NOT TO
to follow. Gig-economy plat-
forms routinely claim the right
to ignore hard-won labor protec-
tions on the grounds that they

REGULATE TECH
offer part-time freelance work,
even though in many cases this
work involves the kind of control
over workers that is tantamount
to standard employment.
There has long been a pre-
sumption in some quarters that
the old rules don’t apply to new
tech. Earlier this year, before the
virus set in, Michael O’Rielly, a
The “techlash,” allegedly, is over. commissioner at the US Federal
An April op-ed in the San Jose Mercury News, Silicon Valley’s Communications Commission,
local paper, put it most directly: “Covid-19 response will end all the spoke at the university where I
Big Tech bashing.” An article published by the Brookings Institution teach. He expressed his hope
later that month echoed the new received wisdom: “Prior concerns that with the days of “circuit-
Nathan Schneider
about the industry’s market power, privacy practices, and content is a professor of switched copper networks”
moderation policies—all of which posed a major challenge just media studies at behind us, the FCC’s role would
the University
months ago—no longer enjoy the same political salience.” of Colorado,
“diminish exponentially,” like
The argument is that covid-19 has taught us to stop worrying and Boulder, where he “a puff of smoke on a windy
directs the Media day.” But we find ourselves in a
love Silicon Valley—to simply embrace the connections it brings to Enterprise Design
our quarantine and the surveillance it can apply to contact tracing. Lab. moment when the companies
But as people find themselves relying on the tech economy in fuller, the FCC regulates mediate more
of our lives than ever before.
more intimate ways, they are finding new reasons to be concerned.
Indeed, many of the US’s
An Amazon vice president stepped down in May in support of
major antitrust laws were cre-
workers who were fired for organizing for better workplace safety
ated for crises not so unlike the
measures against the coronavirus. Low-wage workers from other one we face today—times of
companies, including Instacart, Target, and Walmart, have gone super-powerful magnates and
on strike for similar reasons. Airbnb hosts are disgruntled that the widespread economic upheaval.
platform they work for and lobby for is giving customers who cancel These laws, crafted for the
bookings full refunds, leaving hosts with no income and all the costs. railroads and Standard Oil,
In moments of crisis, when new technology seems to offer quick empower regulators to, among
and easy answers, it might appear difficult to devise an imaginative other things, break up any com-
COURTESY OF THE AUTHOR

response to the large tech firms’ growing power. But even though the pany abusing its market dom-
litany of things that tech platforms get away with is quite remark- inance. Regulators have not
able, tools for fixing some of tech’s deepest problems are closer at recently exercised these pow-
hand than one might think. ers against Big Tech because
for decades they have narrowly

JA20_Schneider_new_deal.indd 48 6/5/20 12:57 PM


fixated on consumer prices as
the measure of whether a market
is being monopolized—a mea-
sure that doesn’t work for ser-
vices, like Facebook and Google,
that are free. This would change
if regulators allowed themselves
to see how far-reaching the old
antitrust mandate against mar-
ket manipulation really is. With
many smaller businesses now on
the brink of collapse, the dan-
ger of consolidation has never
been greater. A moratorium on
mergers is probably a necessary
stopgap.
There’s a similar story of
amnesia in labor law. The
gig-economy platforms have
all but admitted that their
business depends on system-
atically violating labor protec-
tions. California recently woke
up to that fact, passing a law
reclassifying many gig workers
as employees. Especially now,
when people with precarious
incomes are risking their health
by providing essential services
JA20_Schneider_new_deal.indd 49
Essay
from grocery delivery to elder
care, they deserve every protec-
tion society can reasonably offer.
Regulations alone, however,
are not enough. Policy should
enable more than it prevents.
In the 1920s and 1930s, US leg-
islators put this principle into
practice. Following the 1929
stock market crash, it was clear
that banks were not account-
able to their clients, and there
were huge swaths of the coun-
try that banks didn’t serve. In
addition to new regulations
that constrained the banks, the
1934 Federal Credit Union Act
turned a few local experiments
in community finance into a
government-insured system.
Member-owned, member-
governed credit unions prolifer-
ated. They held banks to higher
standards and brought financial
services to places where there
had been none.
In similar fashion, two years
later, the Rural Electrification
Act helped bring electricity to
farm country, where investor-
owned utilities hadn’t bothered
to string lines. Low-interest
loans through the Department of
Agriculture enabled communi-
ties to organize cooperatives—
nearly 900 of which still operate
today. The loan program now
earns more than it costs. Like the
housing policies of the time that
gave us the 30-year mortgage, it
was a public policy that enabled
widespread private ownership.
These were some of the most
powerful economic develop-
ment programs in US history.
They introduced dynamism and
decentralization to markets in
danger of being held in thrall
to monopoly and exploitation. If
we want a more inclusive tech
economy, the New Deal legacy
would be a good place to start.
Internet users need the
capacity to form cooperative
alternatives to the dominant
platforms and infrastructure.
For instance, much the same
model as that of the cooperative
49
electric companies could be
used to bring customer-owned
broadband to underserved com-
munities. Some old rural electric
co-ops are offering fiber-to-the-
home already.
Furthermore, gig workers
and customers who rely on
them currently have to use
investor-owned platforms. But
one proposed bill in California,
the Cooperative Economy Act,
would enable platform workers
to organize co-ops that could
collectively negotiate with plat-
forms—and perhaps even build
platforms of their own. This
would enable these workers,
many of whom are now essen-
tial as drivers and delivery peo-
ple, to obtain better wages and
working conditions.
Quarantine and remote work
also leave many people more
dependent than ever on com-
munication platforms, which
typically collect personal data
for uncertain purposes. This
shouldn’t be a necessary trade-
off. Using free, open-source tools
like NextCloud for file-sharing
and Jitsi for videoconferencing,
groups can manage their own
privacy-protecting systems and
decide for themselves how their
data is used. Public investment
in projects like this could ensure
that, as with credit unions, peo-
ple have the means to organize
alternatives when the big plat-
forms aren’t meeting their needs
or respecting their values.
The internet may have
near-magical powers that can
help us get through the coro-
navirus crisis, but making tech-
nology firms accountable can
begin with lessons learned from
the last depression. Good tech
policy requires recognizing that
tech is just another way of wield-
ing power.
6/4/20 1:56 PM
Copyright of MIT Technology Review is the property of MIT Technology Review and its
content may not be copied or emailed to multiple sites or posted to a listserv without the
copyright holder's express written permission. However, users may print, download, or email
articles for individual use.