I’m going to go a little off piste today with this Note, and opine on a comment made recently by Britain’s science and technology secretary Peter Kyle. While Swamp Notes is mostly about power and politics in the US, Kyle’s comment has lessons for America too.
According to Kyle, global technology companies are so large and powerful that countries like the UK must interact with them the same way that they would a nation state. Governments should show a “sense of humility” and use “statecraft” when dealing with the likes of Google, Microsoft, and Meta.
Now, on one hand, Kyle has a point that these companies are more powerful than many nation states. Certainly, they outspend the British government in areas like innovation. They control the information ecosystem; indeed, they often have more data about citizenry than the government itself does. In the case of someone like tech titan Elon Musk, who has just been named the co-head of America’s Orwellian sounding Department of Government Efficiency, they can shut off communication systems of entire countries at will.
That’s a lot of power, yes. But does it mean we should be humble in dealing with them? I’d argue absolutely not. Imagine if someone argued this about banks (actually they did in the run-up to 2008, which is one of the many reasons why they weren’t regulated well enough). Or oil companies. It’s just a stunning statement which says so much about the incredibly low expectations that this minister, and seemingly this government, has about actually governing on behalf of the British people. Sorry, I know it’s early days of this Labour government, but that kind of comment needs to be really looked at for what it is: cowardice and capitulation.
Of course, the US under Trump looks very much like a bank that is about to be robbed by a bunch of oligarchs; the president-elect has seemingly unlocked the door to the vault and told them to take what they like. And that’s of course how people such as Trump get elected in the first place. A sense among a broad swath of the public is that the system isn’t working for them, which makes them more vulnerable to anger, apathy, loneliness and ultimately, fascism (this isn’t any big revelation, it’s Hannah Arendt 101).
The solution to this isn’t ministers — or presidents — that hand over more power to companies, or somehow act as if they need to be handled with kid gloves. It’s public sector leaders who make clear statements about what they are there to do — which is protect the public — and then take council with business, academics, civic society and the public at large about the best way to do that. We’ve seen some amazing examples of this recently in the US, like Lina Khan at the Federal Trade Commission, or Rohit Chopra at the Consumer Financial Protection Bureau.
That’s NOT to say that government ministers shouldn’t work with business and, in the case of the UK, actively lobby for investment. Britain has a strong case to make for itself at the moment as an intellectual property and human-capital rich, English-speaking nation with a robust financial sector that feels a lot safer than the US. It should be selling itself, yes, but it should not feel that it has to capitulate to the massive tech lobbying campaign that is clearly under way.
This reminds me so, so much of how Big Tech firms lobbied on the Hill and in the White House during the Obama administration, watering down any effort to try and restrain them. The success they had with that is one of the reasons that so many working class voters ended up feeling that the Democratic party was more aligned with the infamous “coastal elites” than with average voters.
So, basically, the answer to the headline on this piece is pretty obvious — no, companies aren’t nation states. They have shareholders, not voters.
Peter, what are your thoughts on the Kyle comment? Does it dovetail with the approach that Trump is taking with Musk?
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Peter Spiegel responds
Rana, with all due respect to our friends and colleagues in the UK, I’m not sure we should be looking to Britain for cutting-edge policy recommendations on how to deal with Big Tech. There was a time in the immediate post-Brexit period that the UK had fantasies of becoming Singapore-on-Thames, with light-tough regulation attracting all sorts of new finance and tech investments.
But that was always something of a pipe dream — and, if you actually talked to pro-Brexit voters, a light regulation, pro-Big Tech sandbox was the last thing they wanted in a post-Brexit Britain. If the new Labour government has signalled anything it is that Britain must now grapple with the realities of its post-Brexit economic troubles. I don’t think Kyle’s comments reflect the larger Labour policy agenda.
Regardless, Britain is quickly becoming an afterthought when it comes to tech regulation, with the EU and the US straddling the Atlantic as the true regulatory behemoths. What we know about the EU is that there is no sign of them approaching Big Tech diplomatically. This summer, Brussels took on both Microsoft and Apple with new powers granted to the European Commission under the Digital Services Act. The EU also recently issued its first regulations on artificial intelligence, cementing its place as the tech regulation superpower.
The question you rightfully raise, though, is where this leaves the US under Trump. Although Trump’s man crush on Musk might signal a new love-in for tech, I’m not sure it’s going to be that simple.
Trump seems most motivated by two occasionally conflicting motives: grift and retribution. If he sticks to his pro-grift tendencies, then tech could indeed be in for a regulatory-free future. We can already see that in cryptocurrencies, where Trump has climbed into bed with some questionable crypto bros and become an overnight true believer, largely because it appears he can cash in on the sector.
On the other hand, Trump has long complained that Big Tech is one of his “enemies within” that needs to be brought to heel. We’ve also heard his vice-president, JD Vance, talk about the fact he agrees with many actions taken by Biden’s competition authorities when it comes to investigating Big Tech.
In short, I don’t think Kyle’s remarks signal anything other than his own musing about the role of government in regulating technology. The real action is in Brussels and Washington, and I’m not sure a “sense of humility” is enveloping either capital any time soon.
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And now a word from our Swampians . . .
In response to “Trump’s climate fix: colonise Mars”:
“Fortunately for the US the failed campaign is not ending in Brexit or the fall of the Chinese Empire. Instead it begins the public debate for the next election in two years and the next most important election of our time in four years. In the interim, thousands of public servants will have the opportunity to be great leaders in difficult and trying times. For the country and the global community I support them and pray that they may find strength to uphold the Constitution and to continue the great legacy of democratic ideas from the Romans to the British to today.” — Tim Stoll
Read the full article here
