Noah Kulwin
Noah is the technology editor at VICE News. He previously covered technology at Recode.
At the VICE office in Williamsburg, he talked to me about the relentless trend toward monopolism among big tech companies and what he sees as their eventual reckoning.
JACKIE
So do you want to tell me a little bit about yourself, how you started getting into covering tech?
NOAH
Sure. I'm twenty-four. I went to UC Berkeley, and it was around my sophomore year of college I started looking around and realizing I knew a lot of really smart people who were going to work in Silicon Valley. And I wasn't super familiar with the tech industry or anything, but it just struck me, "Why do I know so many people doing this when I don't know that much about it?" So I started reading technology news and paying attention to the trade publications, and I began reading Valleywag a lot, the now-shuttered Gawker blog that covered and lampooned Silicon Valley, and eventually decided this is a thing I'm interested in.
And so then—I guess it would have been my junior year of college—I applied for an internship at Recode, which had just launched. And I got it, so I started working for them in the spring of 2014, and I left last year, so I was there about two and a half years. And my interest really just stemmed out of, not any abiding love for gadgets or something, but just kind of because I was like, "This seems like a place where there's a lot of power." It's like, Silicon Valley's increasingly become dominant, and it seems relevant. I got into tech journalism at a pretty good time.
JACKIE
So one thing I'm curious about, then—what do you think of the relationship between tech as an industry and journalism? Because I feel like it is different from a lot of other industries, and there's a lot more intermingling.
NOAH
“Silicon Valley resists accountability journalism, and it resists a lot of straight news reporting. It resists all these traditional metrics or standards for accountability.”
Yeah, I would say that Silicon Valley resists—most big businesses, I don't think Silicon Valley is unique in this regard—resists accountability journalism, and they resist a lot of straight news reporting. It resists all these traditional metrics or standards for accountability. You know, a few years ago, there was this really big debate about, when Valleywag was still around—I'd say 2013, maybe, when this debate was happening—but it was this conversation about, "Should we really make fun of tech blogs for covering Silicon Valley in a really sympathetic kind of way? Maybe it's more useful to look at them as trade publications."
And I think that debate fell by the wayside, and that really intense interrogation—specific interrogation of tech and trade publications—because tech became so powerful and Silicon Valley became so powerful that at a certain point people—it just moved on. The conversation moved on because everyone started caring about what Silicon Valley was doing, especially as just a handful of companies emerged becoming seriously dominant. Like Uber, Airbnb, and so on. And you saw less of these plucky consumer-facing startups commanding your attention. Like, Clinkle ran out of money, the photo-sharing startup Color died, and all that kind of stuff. And you saw real big specific players emerge dominant.
JACKIE
Yeah. So what do you think the relationship now? For a lot of companies, like Uber and Airbnb, for instance, journalism has been a big part of acting as—
NOAH
I mean, this is what sucks about it, when you have really large companies like Airbnb and Uber staying private. You don't have to interrogate their financials—they don't have to be interrogated over their financials by investors. You know, the founders have tremendous power over their boards. All of the traditional ways that you hold a company accountable are—they're limited. Let me rephrase it. Journalism has not necessarily gotten better—it's not like there's qualitatively better journalism that is suddenly holding all these companies to account. It's just that it is the only measure of public accountability when these companies do not have to be as forthright as other large public companies.
“Journalism has not necessarily gotten better—it’s not like there’s qualitatively better journalism that is suddenly holding all these companies to account. It’s just that it is the only measure of public accountability when these companies do not have to be as forthright as other large public companies.”
And that is just when we're talking about the large, late-stage massively venture- and private equity-funded companies like Uber, Airbnb, Dropbox, whatever. I think the bigger issue is when you look at companies like Apple or Google or Amazon. Because they create so much shareholder value they have done a really good job of escaping the ways we talk about other really large companies with similar market share or dominance. Like Monsanto or something.
And so, instead of talking about, "Gee, Google and Facebook together basically have a stranglehold over digital advertising—what does that say about Google and Facebook?," you know, it's really hard to shape the idea that these are companies that have this kind of power and can have sometimes deleterious impacts on industries in which they operate, when we still think of Google as the company that said, "Don't be evil," or Facebook as the company that wants to supply internet from drones in rural areas. It's really hard to kind of square those things, and I think journalism as a whole in covering them has not really figured out a way to do that.
JACKIE
Do you think that that's something that will change or maybe is changing already? Because there is very much this sense of—even Google is still viewed as an underdog, despite the fact that it's one of the most valuable companies in the world.
NOAH
I mean, maybe. I think journalism is definitely, obviously changing. I don't know if it's for better or worse at this point. I don't know if it means that the coverage is going to get better or whatever. I think that the model of media and news media in general—the business models—do not work very well, and it's very obvious to anyone who pays attention for even a split second. So when you think about that—I think that journalism gets better when journalism is more stable, when there are ways to make money doing journalism. I think that it is a really tortured relationship between the fact that Google and Facebook make so much money as middlemen, as advertisers and platforms in ways that siphons some money out of media.
And that's their business, and it's fine that it is their business. I'm not so sure that it's fine and I really think it needs to be probed whether or not the scale at which they have achieved that is necessarily working out for everyone. Because I'm not suggesting that print ad revenues are magically going to be restored or that print subscriptions are going to come back and the money that those brought in are going to be magically restored if you took on Google and Facebook, but they account for so much of the growth in digital advertising that if you can't really grow journalism beyond these kinds of niche models—The Information or something, really premium paywalls—then I think we could be in a lot of trouble. The quality of journalism may improve in some publications, but as a whole, the thing could get really bad.
“Journalism gets better when journalism is more stable, when there are ways to make money doing journalism.”
JACKIE
Yeah. Do you have any thoughts on the convergence of media and tech? Because I feel like this is a more common thing, for media companies to be tech companies that are raising venture capital and stuff like that.
NOAH
I mean, we're sitting in the office of a place that has exactly pursued that model. I think tech investors have largely wised up. You don't hear as much as you did a few years about media companies like Mashables and Vices and BuzzFeeds or whatever, or smaller competitors, raising money from venture capital like that. The margins of media are not the same as the margins in software. It's just very simple.
And I think you see a lot of consolidation in media that kind of reflects that fact—you see a few dominant players who all have roughly the same business model, with somewhat different approaches, and yeah. Media companies pretending that they're tech companies is something that doesn't hold because the business doesn't make sense, and if the business doesn't make sense, you can only delude people for so long, and then investors realize it and stop giving money to media companies. And I think we've already seen that happen.
JACKIE
That makes sense. Another thing that I was kind of thinking about was—just for—we have seen sort of the rise of these really, really large tech companies have monopolies, kind of, in certain areas, but are not really being viewed that way. For instance, Amazon is—I don't know about universally loved, but at least by its customer base. I forget, there was that Economist article that was like, more than half of each new dollar spent online in the US—
NOAH
“At its core, that’s what the theory of disruption is. The idea that you kneecap all of your competitors with some sort of specific special sauce, whether it’s software, whether it’s, you know, eliminating their market and supplanting all of them at once, but it ends, the arc of that story, about a founder, ends in monopoly.”
53% of online commerce growth is Amazon. That's an e-marketer's numbers from very recently—you can check that. For sure, one of my areas of focus is antitrust and monopolism in tech. And I think the way that these tech companies will evolve—the next stage is that they're going to have to confront the fact that they're so powerful and so big and regulators did not intervene. And then it's also going to have to lead us to ask, "Why did regulators and why did the market not realize that this was monopolistic consolidation?"
And I think it's because of a couple of things. I think it's because the animating philosophy of disruption in Silicon Valley. I mean, if you go back to Clay Christensen and the guy who inspired him, his mentor Porter—those guys basically made it become kosher that monopolism was okay. At its core, that's what the theory of disruption is. The idea that you kneecap all of your competitors with some sort of specific special sauce, whether it's software, whether it's, you know, eliminating their market and supplanting all of them at once, but it ends, the arc of that story, about a founder, ends in monopoly. Peter Thiel's book, Zero to One, is, I think, a very good example of that. How he talks about Google—the drive of a startup should fundamentally be monopolistic in that view. And Silicon Valley doesn't use the word monopoly, though.
JACKIE
They use "scale."
NOAH
I think it's very obvious how they think of themselves as not monopolists. Nobody says, like, "Oh, we're Standard Oil." We all know how that ends. And they know it has bad effects. They know. But at the same time, you know, they don't view themselves that way. They view themselves as saviors of the world, and they view themselves as people doing work that governments can't do and that no one else can do. Nevermind the fact that it was DARPA that invented the internet, the basis of what they call their innovation of this regard. Or that, you know, it was incredibly regulated monopolies, like Ma Bell (AT&T) that were the companies that advanced a whole lot of innovation as well.
There's this idea and this delusion that only in the way that Silicon Valley is currently constructed, with no regulatory intervention and basically VCs playing casino odds on who might be the monopolist in a certain kind of market—although admittedly of course, there's more competition in some tech markets than others—but the idea that the platform-ism is, in itself, something that doesn't ultimately end in monopoly is deeply frustrating to me as a reporter because it's just so obvious.
And in Amazon's case, you know, I think history repeats itself a lot, and Amazon and Uber are really good examples when you compare them. Amazon spend years, years, years, years, years—I think Matt Yglesias at Vox had this line that was like, "Amazon is like a Wall Street-subsidized experiment in consumer welfare theory," the idea being that this classic Chicago school idea of consumer welfare, which is really price theory, meaning that something cannot be anticompetitive if it just results in lower prices for consumers. Because the thinking is that the consumers are the people who are affected negatively by anticompetition.
And I think what's essential to understand is that Amazon figured that out and then constructed market dominance by figuring out, "Alright, we can build power in all these different directions as long as the fundamental goal is to lower prices for consumers." And Uber's idea of consumer welfare isn't necessarily low prices, although it's supplanting taxi cabs, and the goal of the company is ultimately to augment, if not replace, mass transit, which is a way of conforming to low prices, but, you know, it's this idea of access and how quickly things come. They define these initially as luxuries, like they did with uberBlack cars or whatever, but when they expanded with uberX and uberPool, it became about access and convenience.
And that's a different kind of maximizing consumer welfare. Nevermind if it's anticompetitive behavior that they're engaged in to get there, to get to this point, which they may be. It's the same thing with Amazon; it doesn't matter because the consumer wins. And if the consumer wins, therefore, it has to be good. Like, if you get free email from Google, then it has to be good—nevermind if your private information is suddenly made available to everyone else or if Google takes liberties with who owns what information. You get free email... how can it be bad?
JACKIE
Do you think that there's a way to make those sorts of tradeoffs more apparent to the average user?
NOAH
I mean, I think it's twofold. I think that it shouldn't be the job of you, me, and my friends—not as professionals—to suddenly demand of Google or develop this really sophisticated awareness of the relationship between Gmail and advertisers or whatever. I think it's really incumbent upon people who should know better, like judges. So, to me, it has to be about changing what judges and regulators think—and, frankly, also changing what the industry thinks.
I think citizen activism is obviously going to be a big part of it, to make things change, but I think a similarly big part of it has to be in reorienting it and aggressively showing a lot of people at the FTC, FCC, DOJ, that this is the reality, and your forty years of Chicago school antitrust thinking that is dictating the way we view competition policy is failing us.
“I think citizen activism is obviously going to be a big part of it, to make things change, but I think a similarly big part of it has to be in reorienting it and aggressively showing a lot of people at the FTC, FCC, DOJ, that this is the reality, and your forty years of Chicago school antitrust thinking that is dictating the way we view competition policy is failing us.”
And it's not just in tech, by the way. I think that Silicon Valley's where it's very exaggerated—if you look at the top five companies in the world by market cap, they're tech companies. Facebook, Apple, Google. It's obvious that it's exaggerated there. But you can see it with airlines, you can see it with all sorts of companies. You see consolidation and sort of a trend toward monopolism. It's pervasive. It's everywhere. I think in Silicon Valley, though, because it's so exaggerated, that ups the obligation to do something about it. Talk about it, deal with it.
JACKIE
Okay, this is a total pivot, but another thing I've been thinking about is tech culture and how that's this weird cultlike thing, in the sense of—there are all of these sort of more niche—there are things like Soylent, for instance, which is niche, and then there are pseudoreligious practices. Like, there are people who got into that Zen fasting thing a while back, and then there's Burning Man—there are just all these sort of weird parts of tech culture and I don't know if you have any thoughts on why that manifests that way?
NOAH
The why I'm not so sure I have a good answer to. I think the how is that it's because when you get—Silicon Valley is a land of abundance in a lot of ways. For the fact that the two most important resources there are scarce—land and water—everything else is in abundance, money and all that. So I don't necessarily think of—I think of the Burning Man stuff as just similar to Bonfire of the Vanities. Any culture or time or historical moment, especially in recent years, when you have an ascendant industry with an enormous amount of cultural capital. We start paying attention to all of the rituals that are particular to them.
In Silicon Valley's case, these are pretty outlandish. They're also intimately wrapped up in culture. I think—and I don't just mean that in a one-to-one thing about, "Oh, wow, Silicon Valley is an HBO show," but I mean in that—it's like Youtube creators are popular with kids. The medium and the means through which we express a lot of culture now comes from these companies. And then it makes you think, "Oh, what's the culture like in the place that generated this thing?"
I don't think that it's some specific process by which people make that linear connection, but I think it sort of explains, "Why do people want to see Jesse Eisenberg play Mark Zuckerberg?" It plays into that. And then there was also a lot of mythmaking that happened in the 90s and 2000s, the early 2000s, that preceded all of this. Like the Steve Jobs as visionary thing. There was all these kinds of behaviors and norms that were calcified well before the Ubers and Facebooks and even Googles took flight. And I think that those were—
JACKIE
They definitely feed on each other.
NOAH
And it's also because we care so much because it is the one, outside of finance—tech is the best place you can be. There's a reason Google and Facebook are so admired, and it's because they pay well. They make money. You don't get the impression as a worker there that you're working for Monsanto, to go back to that as an example of a conventional evil conglomerate or whatever. You see those companies or these new Silicon Valley companies and the vanguard as being places where it's okay to go make a lot of money. And so it makes sense that the magnifying glass gets put on them. I think that the magnifying glass gets larger. I don't think that Silicon Valley culture is particularly special; I don't think that it's necessarily deserving of this kind of scrutiny.
JACKIE
Sure, yeah. I guess the thing that I felt was that it seems like the more people work in technology and use technology, the more they seek out this realness of experience, that's kind of related to Burning Man and kind of related to—everyone seems to always be going to do something that involves self-reliance in the wilderness and stuff.
NOAH
I think that that's just because they're experiences that you buy and pay for. It's all commoditized, you know? Commodified. You're not doing—the idea of self-improvement and all this stuff. I don't know, there's probably a more serious sociological theory of where that kind of behavior and school of thought comes from. I guess where I get wrapped up and what irritates me more than anything is the idea that there is any kind of authentic experience—that there is something authentic about going to Burning Man or something. It's not—all of it is rehashed.
I'm sorry. I work at Vice, and I think that most of the shit I enjoy—what many people would term authentic, edge millennial shit—is warmed-over interpretions of stuff that other people did. And that's fine. It's corporate America. It's kind of how it's supposed to be. What is just much more grating to me is this idea that, "Nah, man, we're really doing it."
Like, how many people do you think use Airbnb because they get a sense of community and authenticity and experience from it that aren't people who are just overwhelmed by the novelty of it or largely older folks? Most people do it because Airbnbs are cheaper than hotels and because there are a lot of people, especially our age and a few years older, who grew up in the heart of the Great Recession and very quickly got used to the idea of making compromises that previous generations wouldn't have, on things like hotel rooms or eating out and stuff like that. That's why you see the rise of all these other things like high-end fast food, like Shake Shack or whatever. Or Chipotle, whose business has admittedly been suffering lately because of the whole E. coli thing.
But you get what I mean. I think there is—it's all—everything looks the same. All the offices look the same. It's all aimed toward some idea—there's some weird arc toward authenticity that everyone wants to move along—it just doesn't make sense, and they're doing it because it's just what shiftless millennials do, I guess. When traditional norms and senses of community have been so totally torn asunder by the state of the world today and of the last few years.
JACKIE
Cool. Tragic, but cool.
NOAH
Yeah, sorry, I'm not the most happy-go-lucky guy.
JACKIE
Yeah, I think very few people I'm talking to are. It wouldn't be the most interesting conversation. So I guess another thing that I'm thinking about is the future impact of technology on society. And I don't know what the best way to think about that is necessarily, but sort of in between looking at the past two or three decades and then the next couple—what that might look like.
NOAH
“There are fewer new firms being created than ever before, and the firms that do created employ less people. We see these trends of consolidation in everything, and we’re going to have to unwind it.”
I mean, I would say that the most important things we're going to see is, you know, looking at the election of Trump, it's just very obvious that we have chasmic social inequality on so many other levels. And tech companies are going to have to reconcile that, at best, they barely move the needle on it, and at worst, they exacerbate it, if not cause it dramatically. Economic dynamism, new firms get started—you know, this is the greatest irony. For all the talk that we're in some startup—people recognize the power of the startup, whatever—there are fewer new firms being created than ever before, and the firms that do created employ less people.
We see these trends of consolidation in everything, and we're going to have to unwind it. That's how—if we want to talk about technology and society coexisting, I think that a lot of these conversations about stuff like the Singularity and the coming AI hordes in the Elon Musk kind of breathless way is a really nice way of circumventing what is fundamentally a political conversation.
JACKIE
Interesting.
NOAH
And the question of political economy. And how you divvy up resources. And I wouldn't say this in public or scream it on Twitter, but I think it's really fucking childish and irritating. It betrays a fundamental lack of curiosity in how the world actually works and is instead childish imagineering about the kind of world you want to make it, based upon the cool engineering work the people you pay do. It's not thinking about—what are the realities of who has power, how do they use it, and how is it entrenched? And a cabinet full of billionaires and how health outcomes for people are becoming worse and worse and worse and the failure of people on both center left and, of course, obviously, the Republicans to recognize these realities and contend with them in a serious way is—it's maddening.
And on the other hand, you have these Y Combinator people who say, "Oh, we want to do UBI [universal basic income]." And UBI is—think about this. The reason that UBI is acceptable to people like that is because it immediately accepts the premise that they've won. It immediately accepts the premise that the robots are coming, and they're going to replace everyone. And so it's not even a conversation about—how do we create, how do we implement a policy tool that best serves everyone at this stage and can accommodate for all of these structural inequalities that people face, whether it's a result of rampant corporatism or general class greed or racism or gender discrimination? Instead, the robots are coming, and that's it. There's no consideration of ideology or anything in this. It's all about boring technocratic—picking between the different solution levers you have in front of you without considering how you really create the best possible outcomes. Which is, in itself, an ideological thing. But it irritates me endlessly.
“The reason that UBI is acceptable to people like that is because it immediately accepts the premise that they’ve won. It immediately accepts the premise that the robots are coming, and they’re going to replace everyone.”
JACKIE
Yeah. Do you think there is room for thought around that? Thought around AI, Singularity, whatever stuff that is more—
NOAH
I mean, AI and all these forces are already, and have been for years, steadily affecting the workforce in dramatic ways. It's not novel. I think what's harder is, you know, Ray Kurzweil's half-baked bullshit—which is unacademic, unserious, and is just something that rhetorically carries a lot of weight in Silicon Valley because Silicon Valley is full of people who love to use the word "futurist." And it's a very easy way to lump that kind of stuff together without seriously considering either the science involved or the broader implications—I think not of the Singularity, but of what happens every step until there, and do you really think that we're going to have AI that overpowers humans before we overheat the planet, boil ourselves to death?
And that leads to my other thing—Elon Musk, for example. His grand vision, everything he imagines doing, is some conception of history that ends with Elon Musk getting on a space shuttle to Mars. This idea that we have to leave our world behind and go to Mars. And this is a guy with billions of dollars at his disposal, now has the ear of the president, and he's working with the Republican administration that has no interest in dealing with climate protections or reversing climate change or working to at least negate the damage and make this a livable place for as many people as possible. And instead he wants to build a first-come, first-serve service to ship people to Mars in twenty years. I call bullshit.
It's not a way forward. And that is what these Singularity AI people do. And of course we should be weirded about AI and have serious conversations about the ethics of this kind of thing. Of course I'm not saying that we shouldn't. It's just that—what they're not talking about is a serious conversation. What they're talking about is fantasy. And it's fantasy that is widely accepted because it's a very convenient fantasy for Silicon Valley. Convenient like Y Combinator's UBI experiment, convenient like—I don't know—drones that provide internet also gets Facebook a whole lot of new customers convenient.
JACKIE
I guess one last thing, then. What is the thing that concerns you most about technology?
NOAH
“When push comes to shove, how will society deal with the fact that rich people and wealth-holding classes, many of whom increasingly come from Silicon Valley, have to give something up to create a more just and equal and equitable society? How will society reconcile with that?”
It's not the technology itself, so much. Technology's malleable. Code can be rewritten. To me, what's harder is the questions of power. Let's say you accept the premise that Google and Facebook have a stranglehold in digital advertising, and you have to break them up in some way. That fundamentally means that you have to drain some zeroes from the bank accounts of the people who invest in Facebook, who control Facebook. Same deal with Google. And anything that results in those people losing money is going to face intense resistance. What does that look like?
And if that is the case—it's a zero-sum—are political institutions going to be comfortable with that? Are Silicon Valley leaders going to recognize that? Are all of the nonprofits and thinktanks and universities that have accepted their money as a means of surviving in an age in which public funding is declining—are they going to accept that? When push comes to shove, how will society deal with the fact that rich people and wealth-holding classes, many of whom increasingly come from Silicon Valley, have to give something up to create a more just and equal and equitable society? How will society reconcile with that?
It's the fundamental question of our time, in my opinion, and I can't imagine a world in which it happens without an enormous amount of friction. And I don't want to theorize about what that looks like—I don't know if it's violent or if it's just angry people writing op-eds at one another or whatever.
JACKIE
Medium posts.
NOAH
Yeah, exactly. Except I have a funny feeling it's going to look a little more like the first image, of violence, than it is Medium posts. Because things are already very violent. Evictions in Silicon Valley are violent. Homelessness is violent. I can't imagine that violence not continuing for a long time.
