THE AGE OF EXTRACTION: How Tech Platforms Conquered the Economy and Threaten Our Future Prosperity, by Tim Wu
Economic optimism is in short supply these days, but Tim Wu is optimistic — to a point. In “The Age of Extraction,” he rejects zero-sum doom-saying and declares that “enlightened self-interest” is real. “Prosperity, fairness and growth are not incompatible,” he writes.
But at a time when Big Tech platforms dominate our economic lives, we will have to work hard to re-establish a balance. In fact, Wu suggests, too much optimism is what got us into this predicament in the first place. He resurfaces all the sunny predictions of the decentralized, democratic world that the internet was to bring, and which allowed optimism to slide into complacency.
Information was supposed to flow, a healthy pluralism was supposed to flourish. Lumbering Goliaths were supposed to be felled by scrappy Davids. “Only rarely,” he writes, “have so confident a set of predictions been so wrong.”
Wu has been writing critically about information technologies and monopolies for some time now. “The Age of Extraction” can be read as part of a trilogy that began with “The Master Switch” (2010) and “The Attention Merchants” (2016). His little book “The Curse of Bigness” (2018) warned about the dangers of ballooning corporate power. (Wu helped the Biden administration craft its antitrust policies.) Reality has since caught up to a future he has long warned about. Where Wu’s previous books were once dazzlingly prescient, “The Age of Extraction” reads more like an intelligent and useful guide to a dispiriting present.
Wu shows how quickly we tend to forget that structural economic forces lead businesses to act in familiarly self-serving ways. Recall how effective tech companies were at fostering a belief that they somehow operated on a loftier, more benevolent plane. Wu gives the example of Google and its solemn pledge, in 2004, to be “an institution that makes the world a better place.”
But once the interests of Google’s advertisers and customers started to collide, it became just like any other publicly traded corporation in the business of making money for shareholders. There was something almost delusional about the presumption that Google would “hold on to its soul,” Wu says. “Over time, structure beats out good intentions.”
Structure matters because humans, though undeniably different from one another in significant ways, will often respond similarly to certain situations and incentives. Wu doesn’t assert that humans are good or bad. But he does make a convincing case that we are suckers for convenience. The tech industry has made billions by betting that people will often prefer the smooth predictability of online transactions to the friction and unpredictability of venturing out into meatspace. Platforms grow by making such transactions easy: buying stuff, getting a cab, ordering takeout. One of Wu’s chapters is titled “A Long Slow Bet on Laziness.”
And the lure of convenience applies to the people who run the tech platforms, too. Constantly having to innovate and fend off competitors at every turn gets tiresome and annoying. Aspiring tech overlords would rather buy up or destroy the competition. So Facebook buys Instagram, Google buys Waze and Amazon siphons off ideas from the sellers on its marketplace to make cheaper in-house versions of the same products. As the marketplace becomes more crowded, sellers who don’t want their products to be lost in the deluge of Amazon search results are told to pay up for “sponsored results.” These ads are enormously profitable for Amazon and helpful to no one else. Wu calls them “a pure example of valueless wealth extraction.”
Tech giants no longer have to put on a show of offering anything newly useful or innovative. The result is what Wu’s friend Cory Doctorow memorably calls “enshittification”: Platforms, hungry for more engagement, squeeze their users by making the platforms more attention-getting and addictive. Scrolling through social media algorithms is like feeding coins into a slot machine: mostly mindless, with the occasional payout. It’s this “variable reward schedule” that keeps users (and gamblers) hooked.
So when the owners of tech platforms try to own and control things like artificial intelligence and crypto technology, Wu urges us to stop them. Monopolists have an interest in ensuring that A.I. remains a “complement” to their moneymaking; they want to maintain their dominance.
As much as “The Age of Extraction” is a guide to our brave new world, the remedies Wu proposes are old-fashioned and straightforward. The key is policies that prevent wannabe monopolists from trying to kill the competition. The big platforms should be thought of as utilities; we depend on them, and so, he says, we should “expect more of them.” Wu counsels “a healthy skepticism of accumulated economic power” and a distrust of “unaccountable power no matter what form it takes.”
The (bad) alternative is to allow platforms to grow so big that they warp not just markets but also our politics. Economic inequality leads to social instability, which lays the conditions for a strongman, who promises to take a sledgehammer to the status quo. Instead of fixing the problem, the strongman just makes an ugly situation worse. As Wu notes with characteristic understatement, “The track record of authoritarian dictators leaves much to be desired.”
Sensible reforms and antitrust policies should stop the cycle from reaching that point. Which inevitably leads to the question of what we should do if we are already there. After all, strongmen have a lot in common with monopolists; the more goodies they have, the harder it gets to rein them in. Wu’s approach rests on a fundamental insight: “Once people have things, including money and power, they rarely want to give them up.”
THE AGE OF EXTRACTION: How Tech Platforms Conquered the Economy and Threaten Our Future Prosperity | By Tim Wu | Knopf | 206 pp. | $30
Jennifer Szalai is the nonfiction book critic for The Times.
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