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Tech Monopolists

What would happen if Facebook was turned off?

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Imagine a world without the social network

THERE HAS never been such an agglomeration of humanity as Facebook. Some 2.3bn people, 30% of the world’s population, engage with the network each month. Economists reckon it may yield trillions of dollars’ worth of value for its users. But Facebook is also blamed for all sorts of social horrors: from addiction and bullying to the erosion of fact-based political discourse and the enabling of genocide. New research—and there is more all the time—suggests such accusations are not entirely without merit. It may be time to consider what life without Facebook would be like.

To begin to imagine such a world, suppose that researchers could kick a sample of people off Facebook and observe the results. In fact, several teams of scholars have done just that. In January Hunt Allcott, of New York University, and Luca Braghieri, Sarah Eichmeyer and Matthew Gentzkow, of Stanford University, published results of the largest such experiment yet. They recruited several thousand Facebookers and sorted them into control and treatment groups. Members of the treatment group were asked to deactivate their Facebook profiles for four weeks in late 2018. The researchers checked up on their volunteers to make sure they stayed off the social network, and then studied what happened to people cast into the digital wilderness.

Facebook is also blamed for all sorts of social horrors: from addiction and bullying to the erosion of fact-based political discourse and the enabling of genocide. New research—and there is more all the time—suggests such accusations are not entirely without merit. It may be time to consider what life without Facebook would be like.

 

THERE HAS never been such an agglomeration of humanity as Facebook. Some 2.3bn people, 30% of the world’s population, engage with the network each month. Economists reckon it may yield trillions of dollars’ worth of value for its users. But Facebook is also blamed for all sorts of social horrors: from addiction and bullying to the erosion of fact-based political discourse and the enabling of genocide. New research—and there is more all the time—suggests such accusations are not entirely without merit. It may be time to consider what life without Facebook would be like.

To begin to imagine such a world, suppose that researchers could kick a sample of people off Facebook and observe the results. In fact, several teams of scholars have done just that. In January Hunt Allcott, of New York University, and Luca Braghieri, Sarah Eichmeyer and Matthew Gentzkow, of Stanford University, published results of the largest such experiment yet. They recruited several thousand Facebookers and sorted them into control and treatment groups. Members of the treatment group were asked to deactivate their Facebook profiles for four weeks in late 2018. The researchers checked up on their volunteers to make sure they stayed off the social network, and then studied what happened to people cast into the digital wilderness.

Meanwhile back at the ranch – Alexa,Google Home, etc. are flying off the shelves.

Retail Arbitrage – Not everything on Amazon, eBay is a good deal

…And here is why

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The Herberts were on the hunt for all of the Contigo water bottles the store had in stock, and kept the camera rolling for their 6,400 YouTube subscribers. Within minutes, an employee pulled out 32 two-packs — sold on clearance for $5 each — from a back storage room. For two people who recently left their jobs in finance, the blue-and-black plastic bottles might as well have been made of gold. The Herberts would resell the two-packs on Amazon for $19.95. Subtracting some taxes and fees, they’d clear $6.16 in profit. All told, the Herbert’s 10-minute Target run earned them $198.

Juston, 30, and Kristen, 28, estimate they can reel in $150,000 this year from their newest gig: retail arbitrage. The basic idea is to buy up a bunch of the same item — from water bottles to vacuums to Monopoly boards — and then resell them online for a handsome profit.

Chris Green wrote one of the go-to how-to books on the topic, titled “Retail Arbitrage.” And he’s helped popularize the moniker.

…..

The term seems to be having a moment. In December, according to Google Trends, searches for “retail arbitrage” spiked on YouTube, where aficionados post videos of their shopping and reselling sprees. (One reseller, who has more than 52,000 YouTube subscribers, filmed his 22-hour buying binge through 17 Walmarts. He filled his trunk with 182 Monopoly games and flipped most of them in one night for $2,500.)

In the early 2000s, resellers started flipping products on eBay. But Green’s guide focused on the engine behind many of these small businesses: Fulfillment By Amazon, or FBA.

Chris Green wrote one of the go-to how-to books on the topic, titled “Retail Arbitrage.” And he’s helped popularize the moniker.

The term seems to be having a moment. In December, according to Google Trends, searches for “retail arbitrage” spiked on YouTube, where aficionados post videos of their shopping and reselling sprees. (One reseller, who has more than 52,000 YouTube subscribers, filmed his 22-hour buying binge through 17 Walmarts. He filled his trunk with 182 Monopoly games and flipped most of them in one night for $2,500.)

In the early 2000s, resellers started flipping products on eBay. But Green’s guide focused on the engine behind many of these small businesses: Fulfillment By Amazon, or FBA.


Amazon “needs people like me to fill all the holes in the marketplace,” he said.

“We’re literally flesh-and-blood robots for Amazon,” Rezendes said.

The retail giant hasn’t shied away from promoting its small businesses: In 2018, the number of small and medium-size businesses that passed $1 million in sales in Amazon stores worldwide grew by 20 percent. Third-party sales are growing at a faster rate than first-party sales online, the company said last month.

You’ll find Shane Myers on YouTube as the “Rise N Grind Picker” — with 15,000 YouTube subscribers.

Three years ago, with $20 in his savings account, Myers started reselling thrift store merchandise on eBay. He turned to Amazon in August. By September, Myers had churned out more than $2,000 selling used books alone. In his first three months back on retail arbitrage, he’d paid off all his credit card debt and car payments.

Myers, 31, pays $30 a month for an app called BrickSeek, which helps him find markdowns at big-box stores like Walmart and Target. A few weeks ago, Myers hit multiple Walmarts within a 150-mile radius and came home with 218 packages of lightbulbs. He found them on clearance for $2 each. He marked up the price and netted $4 to $5 on each package.

The grand total: more than $1,100 in profit.

Myers hopes that within the next year and a half he can move to retail arbitrage full time and will have paid off his house. And he hopes he’ll never miss his daughter’s birthday again for work, like when he was clocking in at his old day job in retail.

“I see money everywhere,” Myers said. “If I walk into a store, it’s just like a dollar sign sitting on the shelf.”

While one might conclude retail arbitrage hurts only the big box stores, it is untrue. It hurts the smaller retailers & shops much much more. The monopolist Amazon enables and encourages this as it helps them do further damage to the brick and mortar retailers.

Economics 101
A company wanting to monopolize a market may engage in various types of deliberate action to exclude competitors or eliminate competition. Such actions include collusion, lobbying governmental authorities, and force (see anti-competitive practices).” https://en.wikipedia.org/wiki/Monopoly

Sounds like modus operandi of big tech these days

Zucked: Waking Up to the Facebook Catastrophe -Book Review

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An important investor explains how his enthusiasm has turned to shame

As the so-called Techlash gains pace and polemics on the downsides of the internet flood the book market, one omission seems to recur time and again. Facebook, Google, Amazon and the rest are too often written about as if their arrival in our lives started a new phase of history, rather than as corporations that have prospered thanks to an economic and cultural environment established in the days when platforms were things used by trains. To truly understand the revolutions in politics, culture and human behaviour these giants have accelerated, you need to start not some time in the last 15 or so years, but in the 1980s.

Early in that decade, the first arrival of digital technology in everyday life was marked by the brief microcomputer boom, which was followed by the marketing of more powerful personal computers. Meanwhile, Margaret Thatcher and Ronald Reagan were embedding the idea that government should keep its interference in industry and the economy to a minimum. In the US, a new way of thinking replaced the bipartisan belief that monopolies should always be resisted: concentrations of economic power were not a problem as long as they led to lower prices for consumers. And at the same time as old-school class politics was overshadowed, the lingering influence of the 60s counterculture gave the wealthy a new means of smoothing over their power and privilege: talking in vague terms about healing the world, and enthusiastically participating in acts of spectacular philanthropy.

If there was one period when all this cohered, it was between 1984 to 1985: the time of Band Aid and Live Aid, the launch of both Bill Gates’s Microsoft Windows operating system and the Apple Macintosh, and the advent of Reagan’s second term as president. And in 1984 Mark Zuckerberg, who would grow up in a country and culture defined by these events and forces, was born; he invented Facebook while he was at Harvard, and made his fortune via an intrusive, seemingly uncontrollable kind of capitalism, sold with the promise of “bringing the world closer together”.

Roger McNamee is a little longer in the tooth. Aged 62, he is old enough to know that the US beat the depression and won the second world war when “we subordinated the individual to the collective good, and it worked really well”. He knows that the anti-state, libertarian mores that define what we now know as Big Tech were born in the 1980s, and that by the early 21st century, “hardly anyone in Silicon Valley knew there had once been a different way of doing things”. Laissez-faire ideas, he says, joined with a bombastic arrogance in the minds of the “bros” who flocked to northern California to make their fortune from the mid 1990s onwards. What they did was founded on cutting-edge technology – but in terms of its underlying economic ideas, their business represented recently established nostrums being taken to their logical conclusion.


Should political will and public alarm eventually combine to finally break Silicon Valley’s remarkable power, McNamee knows roughly what ought to happen. He points to giving people control and ownership of their data, and the need to push through years of free-market dogma and convince the US authorities to reinvent anti-monopoly rules, and to take some action. What exactly this might entail remains frustratingly unclear, but he wants his readers to know he has made the ideological leap required. “Normally, I would approach regulation with extreme reluctance, but the ongoing damage to democracy, public health, privacy and competition justifies extraordinary measures,” he says. Unwittingly, the way he frames his point speaks volumes about how much we lost in the laissez-faire revolutions of the 1980s: what, after all, is so extraordinary about democratically elected governments taking action against corporations that are out of control?


 
This may suggest the perspective of an outsider, but McNamee does not quite fit that description. As a high-profile investor in tech businesses, he was co-founder of Elevation Partners, a private equity firm established with U2 frontman Paul “Bono” Hewson, the very embodiment of the 80s’ uneasy mixture of profit and philanthropy. In 2010, the firm acquired 1% of Facebook for $90m, but McNamee had already put money into the company, become a source of occasional advice for its founder, and been key in the appointment as chief operating officer of Sheryl Sandberg, the former Bill Clinton administration insider who brought business acumen and political connections to Zuckerberg’s inner circle. But now McNamee has come to the conclusion that what he helped bring about is a blend of hubris and dysfunction: Zucked is partly the story of his early enthusiasm giving way to mounting alarm at Facebook’s failure to match its power with responsibility, and what he has tried to do about it.

It is an unevenly told tale. McNamee wants readers to think of him as a player in the events he describes, but the text regularly has a sense of things viewed from too great a distance. That said, he knows enough about Facebook and its contexts to get to the heart of what its presence in our lives means for the world, and is bracingly blunt about the company’s threat to the basic tenets of democracy, and his own awakening to its dangers. In early passages about the initial occasions when he met Zuckerberg, he writes of a man then aged 22 appearing “consistently mature and responsible”, and “remarkably grown-up for his age”. He goes on: “I liked Zuck. I liked his team. I liked Facebook.” But by the time of the 2016 presidential election, everything had changed. In a memo to Zuckerberg and Sandberg, McNamee was blunt: “I am disappointed. I am embarrassed. I am ashamed.” And he had a keen sense of what had gone wrong, summarised here in the kind of aphoristic phrase for which he clearly has a talent: “Facebook has managed to connect 2.2 billion people and drive them apart at the same time.”

The account of how this played out is now familiar, and ends with the election and subsequent revelation that 126 million Facebook users were exposed to messages authored in Russia. McNamee deals with the Cambridge Analytica scandal, and how it highlighted Facebook’s blithe attitude to its users’ personal data (though he really should have mentioned the Observer journalist Carole Cadwalladr, whose curiosity and resilience ensured that the story broke, and Facebook was called to account). But some of his best material is about the elements of Facebook’s organisation and culture that created the mess, and the work he has done trying to alert powerful people to the need for action.

Once Zuckerberg realised his creation was eating the world, he and his colleagues did what “bros” do, and embraced a mindset known as “growth hacking”, whereby what mattered was “increasing user count, time on site, and revenue”: unrestrained capitalism, in other words. And as all these things endlessly increased, the company simply sped on. “In the world of growth hacking, users are a metric, not people,” McNamee writes. As Facebook expanded, he says, “it is highly unlikely that civic responsibility ever came up.”
Roger McNamee, founder of Elevation Partners.

If Facebook looks like a borderline autocracy (Zuckerberg controls around 60% of the company’s voting shares, because his stock has a “class B” status that gives him unchallengeable power), that is partly because it is different from comparable companies in one crucial sense: the simplicity of its business model. “The core platform consists of a product and a monetisation scheme,” McNamee points out, which “enables Facebook to centralise its decision making. There is a core team of roughly ten people who manage the company, but two people – Zuck and Sheryl Sandberg – are the arbiters of everything.” In the final analysis, Zuckerberg “is the undisputed boss”, both “rock star and cult leader”. It was always going to be a dangerous combination: global reach, a vast influence on events across the world, and a command structure too often reducible to the strengths and weaknesses of one man.

McNamee has worked hard to hold Facebook to account. His key ally is Tristan Harris, a former Google insider who is now an expert critic of Big Tech and its apparent ethical vacuum. As the most compelling passages here recount, while anxiety about the company began to spread, the pair lobbied members of Congress, and were not surprised to find that Washington “remained comfortably in the embrace of the major tech platforms” – but did their best to educate them on a subject many US legislators still seem to barely understand. Their efforts led to two hearings in late 2017, attended only by the big tech companies’ lawyers. Six months later, Zuckerberg finally went to Capitol Hill to testify over two days, but was initially confronted with some of the moronic questions imaginable (“How do you sustain a business model in which users don’t pay for your service?” asked Utah’s 84 year-old Senator, Orrin Hatch). His second session, in front of the House Of Representatives’ Committee on Energy And Commerce, was much better, full of biting criticism. But, as McNamee sighingly acknowledges, his former friend “caught a break”: TV news was suddenly consumed by fallout from the FBI raiding the home and office of Donald Trump’s attorney Michael Cohen, and Zuckerberg went back to northern California looking remarkably untroubled.

Should political will and public alarm eventually combine to finally break Silicon Valley’s remarkable power, McNamee knows roughly what ought to happen. He points to giving people control and ownership of their data, and the need to push through years of free-market dogma and convince the US authorities to reinvent anti-monopoly rules, and to take some action. What exactly this might entail remains frustratingly unclear, but he wants his readers to know he has made the ideological leap required. “Normally, I would approach regulation with extreme reluctance, but the ongoing damage to democracy, public health, privacy and competition justifies extraordinary measures,” he says. Unwittingly, the way he frames his point speaks volumes about how much we lost in the laissez-faire revolutions of the 1980s: what, after all, is so extraordinary about democratically elected governments taking action against corporations that are out of control?

Zucked! Why We Keep Forgiving Facebook

Here is an excellent Pod cast from the NPR 1A show on Facebook. Joshua Johnsonm is interviewing Roger McNamee, the author of ‘Zucked: Waking up to the Facebook Catastrophe’

You may have lots of friends on Facebook. But are you friends with Facebook?

It’s been 15 years since a Harvard student named Mark Zuckerberg co-created the social network in his dorm room. But like many teenagers, it’s prone to misbehave and worry the grown-ups. Some expect Facebook to implode before it turns sweet sixteen.

No one intended Facebook to cause the problems that it has: not Zuckerberg, its engineers, its early investors or advisors.

We spoke with Roger McNamee, former advisor and early investor, about how the company changed the world in unexpected ways and — in his view — refused to do right by its users in times of trouble.

Monopolists – Adding New Category

I am adding the new category of Monopolists and the sub-category Tech Monopolists. With the current state of things in high tech these days, what with kill zones, rampant bad corporate behavior, rampant tracking, black box user data sharing and daily new intentional breaches of privacy, industrial concentration especially in the tech sector and lax regulatory oversight  (to name a few), I hope to encourage discussion and eventually a change to a more equitable and more competitive environment.