Why is it that Google, a company once known for its distinctive “Do no evil” guideline, is now facing the same charges of “surveillance capitali

Rising Tide Rents and Robber Baron Rents

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2024-05-04 13:30:12

Why is it that Google, a company once known for its distinctive “Do no evil” guideline, is now facing the same charges of “surveillance capitalism” as Facebook, a company that never made such claims? Why is it now subject to the same kind of antitrust complaints once faced by Microsoft, the “evil empire” of the previous generation of computing? Why is it that Amazon, which has positioned itself as “the most customer-centric company on the planet,” now lards its search results with advertisements, placing them ahead of the customer-centric results chosen by the company’s organic search algorithms, which prioritize a combination of low price, high customer ratings, and other similar factors?

The answer can be found in the theory of economic rents, and in particular, in the kinds of rents that are collected by companies during different stages of the technology business cycle. There are many types of rents and an extensive economics literature discussing them, but for purposes of this article, they can be lumped into two broad categories—“rising tide rents” that benefit society as a whole, such as those that encourage innovation and the development of new markets, and “robber baron rents” that disproportionately benefit those with power.

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