Better Offline - Zephyr Teachout On Corruption

Episode Date: October 16, 2024

In this episode, Ed is joined in the iHeartRadio studios in New York City by Zephyr Teachout, Fordham Law Professor and Author of "Break 'Em Up: Recovering Our Freedom from Big Ag, Big Tech, and Big Money" to talk about corruption, the ways in which we can curb the power of corporations - and why there's renewed hope for a better world. Zephyr on X: https://x.com/ZephyrTeachout Zephyr's book: https://www.amazon.com/Break-Em-Up-Recovering-Freedom/dp/125020089X  --- LINKS: https://www.tinyurl.com/betterofflinelinks Newsletter: https://www.wheresyoured.at/ Reddit: https://www.reddit.com/r/BetterOffline/  Discord: chat.wheresyoured.at Ed's Socials: https://twitter.com/edzitron https://www.instagram.com/edzitron https://bsky.app/profile/zitron.bsky.social https://www.threads.net/@edzitronSee omnystudio.com/listener for privacy information.

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Also Media. Hello and welcome to Better Offline. We are live in beautiful New York City. I am your host, Ed Zittron, of course. And I'm joined today by Zephyr Teachout. She's a professor of law at Fordham Law School and the author of Break Em Up, recovering our freedom from big ag, big tech, and big money. Zephyah, thank you so much for being here. Thanks for having me on, Ed.

So, let's talk corruption. So you've talked a great deal about corruption. but what does it mean in the business and economic sense? Yeah. I mean, corruption is this idea that comes from the Latin, you know, the rupt. Right. Rupure break apart. And a co-ruption is breaking apart from within.

So it's internal disintegration. That's this. I mention that because, and the deep roots of the language, because questions of corruption have been central to. economic and political thinking for thousands of years. Right. So one way to start thinking about corruption, if you don't mind, is to think about Aristotle. Okay.

Okay, right. Because I actually am quite drawn to Aristotle's understanding of corruption. And I think it's a kind of man on the street understanding of corruption as well. What is it? Yeah, it's the idea that those with governing power use that governing power to serve the themselves instead of the public. So in Aristotle's classic formulation, he talked about the difference between a monarch and a tyrant, you know, is both are rule by a single entity.

Right. The difference is the monarch serves the public and the tyrant serves himself. Aristotle's other two formulations were then the rule by an elite few. Right? So a rule by an elite few is either an aristocracy. Right. An elite few governing for the public or an oligarchy, elite few governing for themselves. And then finally, the mass version of this, a little more controversial, especially in modern translation, was the idea of a polity or mass rule. And often it was described as democracy. In other words, people using the public power for themselves.

Right. But the key there is that he saw the corrupted version as being about how you use your power. Right. Right. It's sort of core internal motivation, frankly. And so I'm going to guess that that's how you're looking at tech at the moment. Because to be clear, I fully agree. It feels like, and talked with Matt Stola a few episodes back.

And he kind of said this thing around authoritarianism. It's a new authoritarianism. And you've made this point too. So do you think. And I think just before we get into this, it's important to just then in very, you know, Shakespeare in 30 seconds way, say this fight about what is corruption and what isn't then has become a 2,000-year fight. Right. So Hobbes, for instance, thought that Aristotle was crazy on this. He's like, yeah, people are always going to be selfish, right?

I mean, yes. That's a flat version of Hobbs. But it's actually a fight about human nature and what's possible with human nature on the one hand. But it's also a fight about ways. public power is versus your private life. Because Aristotle isn't not saying in that formulation or understanding of corruption that in your private life, you can't seek out yourself. He's saying there's something uniquely dangerous and destructive to a public when the governing power is self-serving. So when this, as applied to the modern, the modern big tech, big ag,

questions. The underlying philosophical question then is, is this a governing power? And if it's governing, that's really problematic because it's set up to be selfish, right? That's, that's, you know, that's the nature of modern business. So the selfishness isn't the problem, the governingness is. Does that make sense? Yes, because that, and that's kind of, and that's kind of the bothersome thing about this, because you've got so many monopolies, oligoplies, whatever. So one I like to choose that most people are not, people are kind of dancing around this one. is the cloud empires. You've got Google, Amazon, Microsoft, Oracle to an extent, though, for different reasons.

And they are the ones that set the terms of how the internet is built out. Akamai and CDNs to an extent. But you can't, what can you even do about something like that? Is that cloud empire bad or good? It's kind of hard to tell, but the thing they definitely have is power unchecked. Yeah, yeah. I love your language of term setting. Yeah.

And it's not always obvious, right? but that if you think of a government, you know, what a governing entity does, if you think of governing not in a flat formal sense, like are you elected or not, but who actually has the question for whether something is governing, I think one way to ask that question is does it have the power to set terms? Right. Right. Yeah. And which is effectively the tech industry now. Right. Every big player, Airbnb sets the terms for vacations.

the cloud empire set the terms for how cloud storage is monetized and indeed sold and how indeed our electric grid is built out or not as the case may be. I mean, even Musk with Tesla, and I have many thoughts about that man, kind of sets the terms of how charging works now. Like they have the standard now, even though he's a mess. And even then, when he fired most of the supercharger team, it's like, oh, this isn't just about Tesla. This is now the entirety of America is being let down.

Right. But what do you do about that? Like how do you, what can, I mean, what you and I can do might be somewhat limited, but what can society do with this kind of thing? Well, you know, let's start with where we did start on corruption, language of corruption. If we think about term setting by selfish actors as a problem in the political realm before we then apply it to the realm we may not think of as political, but it's clearly political too. there's a series of strategies for either removing that term setting power or having public regulations. So even if they're term setting, the terms are fundamentally set by the public. Right.

And so the classic American strategy was to have diverse sources of competing power in a presidency, Senate. and Congress. Right, yeah. So that's a break-em-up model, and, you know, if you would. It's not just elections, but it's actually about providing different sources of competitive power at the local and federal level, local state and federal. And when you say competitive power is that so local and federal government stuff, is that just, is that, is elections part of this? Are these, like, what are the different mechanisms there that help break them up in a governmental sense? Yeah.

it's all of the above. Oh, okay. So, right. So if you have, you know, we can be a little glib about just comparing, you know, presidential systems to parliamentary. That's one source of difference, but it's not the only source of difference. It's cantons versus not cantons, right? So what it is to say is not that there's an ideal vision. I don't think there is.

But that genuinely separating sources of power so there's some public contestation. I think of it both as a federal state and across federal and across state branches as being important. That's one mechanism. It's not the only mechanism, though. There are at least options and means in which people will be cycled out and ideas will be cycled in. Right. And then in the election sphere, we're very worried, as we should be, about arenas where there's no competitive elections. Yes.

Somewhat scary. Yeah. Very scary. And the lockout of the opportunity for new ideas or for leverage. on a grassroots level. You know, I think of it often if there's nobody you could turn to, if the water smells bad in the morning and your elected officials aren't doing anything, there's a problem. Like you want to, you know, it doesn't mean you're going to win, but at least you have some access to disrupt. Right, yeah, right.

So, so then when you apply that, that breakup or divestiture model to companies, you can see similar visions, right? So what I mean to say is that there's plural ways to do breakups. And that's one of the things that the electoral or political world can inform how that can inform thinking about breakups. But it's not the only way to break up power. Another podcast from some SNL late night comedy guide, not quite. Unhumor me with Robert Smygel and friends. Me and hilarious guests from Jim Gaffigan to Bob Odenkirk to David Letterman help make you funnier. This week, my guest, SNL's Mikey Day and headwriters, Streeter Seidel,

help an a cappella band with their between songs banter. There's that worst singer in the group? The worst? Yeah. Me. Is there anything to the idea that because you're from Harvard, uh, you only got in because your parents made a huge donation. The group, the yard birds, right?

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and I know you've talked to Matt before, but you think of anti-monopoly as anti-concentrated private governing power, you know, the tyranny of private governing power. And antitrust, is one part of that. Mm-hmm. In the United States, the first real 19th century anti-monopoly movement was actually around non-discrimination principles. Okay. So the Interstate Commerce Act, which came out of farmers coming together, saying, down with monopolies.

The first thing they asked for was open access, basically. What we might think of is open access. Yeah. You know, on the same terms, non-discrimination, right? You have the access to whether it's a grain elevator or a train to not have differential treatment. Right. And so it is a key way to break up power. We may not think non-discrimination equals breaking up power, but.

No, it makes sense. Yeah. Because I was just talking with Corey Doctoro about this. And he had suggested that one of the main things is the government forcing interoperability between platforms. Everyone has to have the same standard. So you can look at posts from Twitter X threads. And I'm not even talking about the Fed of us necessarily, just open standards. Why do you, well, I mean, is there a reason why these things just don't happen?

Is it that they're not being pushed through? Is that the lobbying is powerful? Like, is it all of the above, I guess? Right. Right. Is it the ability to discriminate between counterparties is extremely valuable. Right. As you know. Yes.

Right. And especially true if you have monopoly power. Right. Right. Right. So I'm laughing because I'm just trying to think of the right point of intervention. So maybe going to history again is useful. Sure. We see the 1890s and this first, the first effort is, and always claiming first is difficult. It's all jumbled together. Right.

History is a mess. Right. History is a mess. There's, because there's, I'm going to do my own little segue. Even within corporate charters, there were anti-monopoly provisions in the 19th century. Really? But basically, rules that said, you can only engage in this certain line of business. Right.

The government will only grant you a corporate charter and all the privileges that accompany that. In the event. In so long as you stay within the line of business for which you applied to the charter. Right. Does that make sense? Why don't they do that anymore? Well, in, I'm going to get my dates wrong, but the gesture right. Right.

Right. late 19th, early, 20th century. Actually, it was a little earlier. There was a real effort to engage in, I appreciate the question and I'm being the academic worried about sloppiness. Don't worry about it. People get mad at me for getting things right, so don't worry about it. Yeah, yeah, yeah. No, I just, I want to put the asterix there for the corporate law historians who are listening. But there were, you know, really interesting, there was a move towards free incorporation. Anybody should be able to incorporate as an anti-corruption move. Which kind of makes sense. I can understand the logic. Right. And then there's a, because the idea is, oh, if you can only get a

corporate charter if you're friends with somebody, that's a pretty corrupt system. Right. Does that make sense? Well, but now they've moved on to other ways. doing that. Exactly. And then the other part was an effort to expand what all corporate charters have since become, which is you get a charter to do whatever is legal in the state. Right. That's now what a corporate charter is. This is a long digression to say that anti-monopoly impulses have showed up in a lot of different areas of law, right? Not just in federal antitrust and railroad law. So interesting, because it almost feels like, because I mean, barely blaming Ronald Reagan.

I feel like we can all do it every day. But it feels as if it's just been a slow bleed for like hundreds of years, where we just, the ramifications of decisions at the time that probably made perfect sense because at the time of corporate charters were very limited, there wasn't much commerce, or at least more limited commerce. It almost feels like we need to bring that back. Because an episode, a thing I just wrote recently even,

I was thinking about Salesforce. Salesforce, one of my least favorite companies. And if you ask what sales is, Force does, that is a very long answer because they do CRM, they do data lakes, they do AI, they do chatbots, they do different kinds of chat, but they have all of these things and they do it by vacuuming up these companies, they eat them alive and then, and now they do it much like Microsoft as a means of making sure you don't buy another product because we've got everything here, like a buffet.

Can we stop that, like how do we stop these acquisitions? It almost feels as if acquisitions are the first place to start. Yeah, yeah. to make it much harder. Well, so stopping, we were talking about different elements of antitrust or anti-monopoly. So one element is non-discrimination rules. And that doesn't mean that every industry should be subject to radical non-discrimination rules in all cases. But that if there are industries that the ability to discriminate between counterparties

is going to allow for exploitation and extraction and shutting down of new entry, then non-discrimination is really important. Yes. Right. Antitrust then also very important. And the first step in antitrust is not allowing bad, as the American system has set up, is not allowing mergers. Now, I'm not as familiar with the Salesforce corporate structure, but I gather that one of the things you're talking about is the way in which, one, we've been quite lax until recently on merger policy. But we also haven't until very recently until Cantor and Kahn's recent merger proposals.

We've had this highly formal understanding of where threats lie. And where have we seen threats before? We see threats primarily with horizontal acquisitions. I'm a shoe company buying another shoe company. Secondarily, between vertical integration, I'm a shoe company buying a shoelace company. So entirely consumer choice, basically. Right. But the conglomerate merger, the merger in adjacent agencies, has sort of been assumed to be, well, that's not a threat because it's not about dominating that. Dominating either that vertical or that horizontal. And one of the interesting buried parts of the merger guidelines, which I think is really important, is a recognition that, and I forget the exact language, maybe Cantor just said this in a speech, but.

These don't fit anymore. Yeah. Right. Like when Amazon's buying Whole Foods, well, maybe they're using the data of the Whole Foods to create a moat somewhere else. Well, it's just, it almost feels like we need to start asking them, why do you need this so bad? Right. And make them justify it and not be totally open to it because I don't even know why they bought it.

Other than the data for sure, because whatever. but also it's another way of conquering another commerce vertical. No, I think there's so much, I mean, I think there is so much that we miss psychologically as well as economically when we think about mergers as if everybody's just rational. Yeah, yeah, yeah, yeah. There's also a lot of boys playing risk too. I know, I fully agree because there's a lot of students. One of my prevailing theories with tech right now is that everyone says, well, open AI, for example. Yeah.

Well, they're going to work it out because he's really. really smart. It's like, what if he isn't? What if they don't have any idea? What if they're just doing this Salesforce, great example, they just bought a digital storage company. And it's not really obvious why, but you know, they're going to work it out. I guess I saw a piece in the information saying, oh, Benioff's got it back. It's like, what is he got? What is going on? And it almost feels... The more capitalist lashing around, actually, the less likely that we should think that all these decisions are rational. Yes. And on top of that, we've got, there's a very irrational feeling to the economy. I've said a lot about this. Yeah, that's really interesting.

Well, because a lot of these companies will spend like $30 billion, okay, I'm being a little real, like $10 billion to make $300 million. And I guess that you can't really stop, like maybe you don't stop that. But at some point, you have to wonder if that's a symptom of these big, ungainly monstrous companies, that they just, the companies that do everything and thus do nothing. Well, there's this interesting, it reminds me of this research. I wish I could find it around the urge to merge. Have you heard about this? No, no, no. I think this is older research, but somebody put together a bunch of grad students

and compared them to CEOs like, would you do this merger? And those who already had power just get really... They just get grabby? They get grabby, right. And denying that there's a power hungriness. Yes. It's just denying, like, do we not learn anything from thousands of years of literature and history? They want to own more.

And I think that Elon Musk is one to choose as well, because as we speak, we're just on the day after the robotaxy event. I thought it was illegal to make stuff up when you're a public company, but I guess Elon Musk has special rules. But that actually kind of brings me to a point. What do you do with people like Musk who they're evil and they're very clearly corrupt in some way, but they're not really breaking a law? How do you moderate the power of someone like Elon Musk outside of antitrust? Because antitrust has done nothing. Like, SEC could barely touch him. How do we start bringing these people back down to worth?

Wow. Well, antitrust is part of it. Campaign finance is part of it. And there are... Maybe I'm answering too glibly. But there isn't a single answer. There isn't. Yeah.

I know that there isn't one if there was. I assume someone would have done it. I mean, there is, but that's not legal. And then there are industry-specific abuses and challenges that it's not, you know, just because you and I are interested in anti-monopoly law or, you know, what the FTC could do tomorrow. Yeah. Doesn't mean that there aren't real challenges with specific industries that are unique, you know, unique foreign policy challenges with Starlink. Right. Right.

unique policy levers too that could be used with some areas of maybe he shouldn't have national security clearance that's a good start right but it's it I think it comes back to that thing you were saying though it's the it almost feels as if the media kind of but definitely the government doesn't look at these things and say oh they're accumulating power they're like oh they're just accumulating markets and you know that's okay yeah it's still bad but like they're fine with it and it feels like we actually really have to start getting, like there must be new legislation to stop that. Or maybe just it's as simple

as what if we stopped companies getting so big? Yeah. What if we just started pinning them down a bit and disincentivizing that specifically? Well, there is clearly a problem of gross power. Yes. Right. And there have been various efforts in the past to say, well, we should just limit gross power, not simply, I think this is what you're getting at, abuse of such gross power, right? And the senator who has a famous Senate office building, is it Hart named after him, was actually an advocate of this in the 70s, you know, really concerned about mere accumulation of power. I don't want to poo-poo that, but I also don't want to suggest that we've reached the limit of what we can do with existing tools. I mean, we still have an

underfunded FTC, an underfunded DOJ, and we have a whole series of other agencies that just aren't using their power right now. Another podcast from some SNL, late-night comedy guide, not quite. Unhumor me with Robert Smygel and friends, me and hilarious guests from Jim Gaffigan to Bob Odenkirk to David Letterman, help make you funnier. This week, my guest, SNL's Mikey Day and head writer Streeter Seidel, help an Acapella band with their between songs banter. There's the worst singer in the group.

The worst? Yeah. Me. Is there anything to the idea that because you're from Harvard, you only got in because your parents made a huge donation. The group. The yard birds, right? That's the name. The Harvard yard, but they're open to change.

Do you have a name suggestion? We're open. Since you guys are middle aged. One erection. Listen to humor me with Robert Smy. and friends on the IHeart radio app, Apple Podcasts, or wherever you get your podcast. Huber me. I need some jokes to make me seem funny. Run a business and not thinking about podcasting, think again.

More Americans listen to podcasts than ads supported streaming music from Spotify and Pandora. And as the number one podcaster, IHart's twice as large as the next two combined. So whatever your customers listen to, they'll hear your message. Plus, only IHart can extend your message to audiences across broadcast radio. Think podcasting can help your business. Think IHeart. Streaming, radio, and podcasting. Let us show you at IHeartadvertising.com. That's IHeartadvertising.com. Jacob Kingston grew up in an isolated polygamous sect. We were God's chosen kingdom on earth. He felt destined for greatness. So when a swaggering Armenian businessman catapults Jacob

into an extraordinary world, he doesn't look back. Ferraris and Lamborghinis, private jet. meeting the president of Turkey. I'm Michelle McPhee, and this is one of the most shocking criminal conspiracies I've ever come across. When Jacob met Levant, this went to a billion dollar fraud. But with two kings from entirely different worlds, just how long can their empire survive?

The largest tax investigation in American history. You need to tell me what you know. Is somebody coming after me? Jacob told Levan, you're ruining. my life. Listen to Kingdom of Fraud on the IHeart Radio app, Apple Podcasts, or wherever you get your podcast. Life throws hurdles big and small.

The question is, how do you conquer them? On Hurtle with Emily Abadi, we sit down with the most inspiring women in sports and wellness, professional athletes, coaches, and Olympic champions to talk about the challenges that shaped them and the mindset that keeps them going. From the WMBA standout, Kate Martin, and rising hockey star, Layla Edwards. If a boy can do it, I don't see why a girl can't. Like, I've never understood that. Like, it didn't make sense in my brain.

It's hard to be in spaces that no one looks like you, but don't ever feel like you don't belong. Don't let that be the reason you don't do it. An Olympic champs Gabby Thomas and Katie Ledecky. The ability to show a gold medal to someone and have their face light up and smile, that means the world to me. And that's what motivates me to win more gold medals.

At our level, at this scale, like being able to fail in front of the entire world, Like, I can do anything. I can do anything. Because resilience isn't just about winning. It's about showing up, even when it's hard. Listen to Hurtle with Emily Abadi on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts. Presented by Capital One, founding partner of IHart Women's Sports. Hey, I'm Jared Adano.

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Actually, that's a good, like the EPA and the FDA, I'm not an expert in either. But it feels like they are a, they are potentially avenues in which we could start going off to data. We could start making standards of consumer data, or I don't know, standards of care for the cloud companies. But also, I think that we have, when you talk about the governing systems, we have a real problem with Silicon Valley, for example, that isn't discussed much. And it's the old boys' network. It's the fact that if you are to grow beyond a certain scale, it must come from Sequoia, Coatou, Andreson, Tyga, and past a certain point. Right, right. That's the club.

And everybody knows that, is that? And they fund based on accumulation of power. Character.A.I. was funded by Andresen Horowitz. That company doesn't make much money at all. And on top of that, they got reacquired by Google. They were made to be acquired. They weren't made to be real companies. And it almost feels as if we need to reevaluate how finance happens at the private stage as well.

Because I would love to know more about that. Because I only have an impressionistic sense of that being true. but when you say that Well, what it is is so character to AI So it was founded by a guy called Known Shazir, I'm going to mess up his name, someone

and he was one of the original people who wrote the Transformer paper that underpins most generative AI He made this company which was a chatbot company You could talk to anime characters Or I think Hitler It's not a great company

At all It's a pretty bad one actually They got absorbed into Google The company still exists But all of the people work at Google now For like two and a half billion dollars And the problem is that I think there are a litany of problems with it.

It's that the limited partners who fund VCs don't really give a shit if they're good or not. They give a shit if there's a return, if they can get that. And as a result, the way that venture capital is allocated is predominantly not in... It's the biggest lie in Silicon Valley,

by far, is that startups get the majority of money. No, the majority of money in startups goes late stage. The minority goes to early stage. which is insane based on what most people assume. And it feels the, and I don't know how you start fixing this, but if you think about from how you're describing corruption, it really is these governing systems that are allowed to exist. And I think...

It's really interesting. And so when you're talking about the motivation of this club, you think it's about power, right? And what kind of power? So just give an example of a kind of power that you might seek that doesn't actually lead to great returns. I mean pretty much every investment in Open AI. Open AI is a company that bleeds more than $5 billion a year.

We'll in 2024, they'll bleed more next year. Investing in them for a theoretical return is what I think most of them are doing, but I think a lot of them are doing this so that they have a piece, they have something stuck into what they believe a power center is. It's to show off to everyone that they've still got it, that they're able to get into big deals as a means of getting into other big deals. Oh, we were good enough to get a quarter billion. dollars into Open AI now we can get into other deals.

We're still seen as the hot thing. Perhaps that is actually a return of sorts in that it's a marketing effort. But I just, I refuse to believe all of that money is just there just for returns. I think a lot of it might be there. And to be fair, I mean, power eventually leads to returns. Yes. Right? It's not necessarily the short-term return.

But it also gets back to what we're talking about, about illogical thinking. Right. Because these people, like the other thing, and I get in a lot of arguments about this, Open AI episode went out this week, and people have really pissed at me because they're saying, well, they'll work it out. I want to find all those great examples of, you know, the armies that marched in the wrong direction for two weeks. I just think of the Schleafen plan.

It was the smartest thing at the time of World War I, but it went the wrong way and it curled two inward, and then they lost probably for the better, I think. I think we can all agree the Kaiser shouldn't have won. But nevertheless. But that those in power actually, I mean, there's a very deep point here. which is not only that a lot of people are just people will make stupid decisions because they're human, but that there are particular pathologies that actually come along with the accumulation of power. And speaking of psych research, there's some, I think they're Berkeley, California researchers

who argue that accumulation of power is as bad as getting a pole stuck through your head in terms of the impact it has on your ability to process certain kinds of information. I like that because it is funny watching people get super rich and look at Elon Musk. I'm not saying he was a great guy before. No, but there's a theory that pathological people gain power, and there may be some truth to that. But I think it's really important to recognize what accumulation of power actually does to somebody. It makes them less likely to be able to accurately guess the emotions of those who are speaking with them. Okay. Right.

Which you can imagine and you probably seem. It makes them less likely to observe personal boundaries, more likely to eat like cookie monster with the crumbs falling all over their chest. Right. So you actually are starting to miss out on a lot of subtle cues that are part of the gathering of information. And I don't know what impact it has on other cognitive functions. But I mean, I'm somewhat extrapolating here.

But if you look at Silicon Valley, which is now dominated by a few VCs, and Sequoia, used to be pretty good. They invested in FTCS. They invested in Open AI. They actually didn't go in the latest Open AI thing. But Mark Andresen's a great example. So from what I've heard, Mark Andresen, in like the 80s, was a decent enough guy.

He was like a regular fella. Now, as of two years ago, he reads comprehensive biographies of Hitler and claims that people like Nick Land are the patron saints of techno optimism. It's almost as if the more power he gets, the more brain damage he receives. Yeah.

And it's, but when you think of this in the realms of Silicon Valley and how harmful this is, if most of the big checks come from a certain few who have accumulated so much power and most of those big checks are going to late stage companies, it's going to reinforce the same thing. We are not going to innovate much further. Right. Because the money is going to the same guys from the same guys in the same way and the same. Sam Altman is great example. This man has been fired from three companies including Open AI. He has done like some of the stuff about. his sister is truly grisly as well. But on top of that, he's a liar. He lies regularly. And he's also not technical. He doesn't know what he's talking about. But I think as he, and this is actually kind of funny to think about. As you watch Sam Orton over the years, he gets even dumber.

I hate using that phrase in general, but it's Sam, I don't care. He's worth billions. But with him, he sounds sillier. The more stuff he says, the more out of whack it gets ridality. And the more just ridiculous. Yeah, right. And so that, you know, there's people are going to be ridiculous in the world. And our job as a society is to make sure that they don't accumulate governing power.

Right? That's our job. Yes. Right? Because the people who are going to be genuinely and who are being genuinely hurt are those who, I would just use the example from this week in New York, a great Bloomberg story investigating how Uber and Lyft drivers are now randomly locked out of Uber and Lyft. just locked out, you're going to work, you're an hour into your shift, you go to the bathroom, lock up. Yeah, you're locked out so you don't become a full-time, is it the classification in full-time employment? No, they just can't access the app.

Why is Uber locking them out then? Because they're trying to do a runaround around a New York City law that says if cabs are empty over a certain number of hours, then they have to increase their per mile rate. Does that make sense? Yes. And so they're saying, well, when they're saying, well, when they're. are locked out, they're not an empty cab. They're not a cab at all.

Right. They're no longer a car. They're no longer part. Why is it? This is a dumb question. And we can wrap off after this one. But why does no one ever think of these?

It feels like they make these very interesting and useful laws. And then they're like, eh, they won't work it out. But they always do. What is it just a limit of what one? You're a look, maybe you can speak to this. Is it just a limitation of what you can get past?

Or is it just, You can't think of everything, or is it just hard to get that down in paper when you're facing off against multimillion dollar law? Look, I think they're breaking the law. Oh, okay. But that doesn't mean it's a perfectly airtight law. And this is a – no, I actually think it's a big deal, so I'll say it. I think that there is a societal failure to date to recognize the risk to workers of how big data can be used to individually, exploit them. Yes, absolutely. And that this is a major deal for labor, not just for gig work,

although it's the clearest in gig work, and that we should more comprehensively think about this and get out ahead of it. Basically, you know, if you can ban fracking before it comes to New York, it's a lot easier than after it's already there. Yes. And it almost, well, we need to just start by classifying this stuff. We don't know what these companies have. We don't know how algorithms were. We don't know what they're doing to us. But this is a really important point, Because when we talk about power and we talk about governing power, we are in a new era of a kind of new governing power. Right. Right.

Like the mere friction that I just couldn't collect data on what baseball team you like and, you know, how long you sit on a – now that looks like some limit in what I used to be able to know about you. But there was just lots of informational, great freeing informational gaps. Yes. Right. And that meant that even if I had – had certain amount of market power, maybe non-monopolistic market power. There was only, there were limits in how much I could, as an employer or somebody interacting with you, exploit you.

There still are limits. But the need for antitrust, the need for non-discrimination laws, the need for stopping mergers, you know, so much greater now than it was 30 years ago because of big data. So it's a game changer in terms of how power can be used to exploit and then to build more power. So to wrap us up, I know that we have been quite negative and this show can at times be like a little bit of a downer perhaps. What should give people hope right now? Yeah, I think there's a lot. Basically, I think that we, you know, split the hemispheres of our brain apart in the 1970s.

and decided that politics was in one arena and economics was in another. Again, defying all of human history. Right. And we may not have all the solutions right now, but the spheres of the brain have rejoined. So you think that there's like a... I do think people... An awakening. I think there's a deep awakening and a deep...

I don't know that you need an awakening on the ground, but an elite... there's been a transformation in talking about how antitrust relates to politics. And there's a consciousness of the problem with this kind of power. Yeah. So instead of just sort of imagining it's possible to cabin economic power and not have it bleed into political power or vice versa, I don't think that's credible anymore. Right. And I think that the sort of the final blow to that way of thinking,

it'll still exist. They're still trying to come back. But was the, was COVID, the supply chain disruptions, and price hikes. Right. Because basically the promise from the 70s on was, let's just separate all economic and power thinking. Right. And we promise you low prices. And we have not had those. And we have not had those. So the, you know, that the internet media. You had one job. Yes. They had one job. And they'd already failed in the crash of 2008.

But after COVID, that failure is complete. So I just think there's a totally different way of thinking about power and economics. And that's exciting. What Chair Kahn and the FTC has been doing. I mean, they don't stop every day. Yeah. It rogues. It's real.

It's understanding that governing power held in a public entic. can be innovative and exciting and engaged and enforce the law and curious. So that's also changing a really deep paradigm we've had for 30 years, which is all innovation comes from, you know, the people that mark and recent funds. Right, right. And look, I really want a lot more innovation in the private sector as well. As to why.

I would love there to be more cool stuff and better things. I would love for AI not to be destructive and actually help people. Yeah. And I guess like maybe some things could change to actually make that possible. Well, but for AI in particular, I mean, a lot of these worldviews are sort of this epical struggle inside the AI fight. Right? It's we need to understand AI as a power problem. Sure.

Right? And not just as a business one. Zephyr, thank you so much for joining me. It's been such a pleasure to have you on. Likewise. Thanks for having me on. You've been listening to Better Offline. You can find me in the message that will play immediately after this. Thank you so much for listening.

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