I really don’t think he is. To exaggerate the point slightly, there is a huge market for smart people with a very specific kind of brain damage, that lets them believe specific things, be completely oblivious to actual counter-arguments (therefore only seeing straw men that are easily set ablaze), argue very specific points in a way that is convincing to folks who are unread on the subject. Many cynical people have picked up on this and write that way, with varying degrees of skill, but is it any wonder that some people who really do possess that specific form of brain damage have also become highly paid gurus of the technolibertarian set?
I think there’s a bit of to-may-to, to-mah-to happening here. Noah might be a cynical profiteer willing to sell his voice to the highest bidder, or he may just be a useful idiot. It nets out in the same place either way: relentless bad faith.
It usually does come out to the same thing, I agree, but that thing isn't 'bad faith', which implies that the person you're arguing with either doesn't actually believe their argument or is in some way misrepresenting yours intentionally for their own purposes. And I would argue that neither of those things are true for Noah, or for quite a number of other similarly-damaged technolibertarian True Believers.
It would normally come out to 'a waste of time', or possibly 'an exercise in futility', because there's no way you can change the mind of either a person who is arguing in bad faith OR a person who is unable to actually figure out what your actual argument is, but in this case the target audience isn't Noah, it's the person Noah might have convinced with his, uh, logic.
And honestly there is an actual real difference. I've seen a (very) few people like I believe Noah to be, true believers who look at everything through the lens in their head and truly can't comprehend counterarguments without incredible effort (usually in person), who eventually grow up and shatter that lens and become able to see the world in its actual complexity. Whereas the bad-faith actors will never become anything other than what they are. In Noah's case I don't think it's likely, since he seems so often to be personally offended by people daring to disagree with him, but it's still possible.
I've often seen him advocate for more left leaning policies, such as Medicare for all. But then he tacks to the right - in particular regarding his "techno-optimism". He's often talked about the influence of the sci-fi he read growing up. Thus, I think he's just a bit confused about the realities of rapid technological advancement being shoved down our collective throats.
Noah Smith has wedded himself to "Abundance" which is an idea supported by BigTech and investors. Just look at YouTube for proof of that. Noah is very much of the opinion that the "benefits" far outweigh any "costs", and the benefits require deregulation, so let that happen. "Abundance" through deregulation is pushed by BigTech, most recently by trying to force AI datacenter construction wherever they can, even overriding local objections with hardball tactics.
On other occasions, he has picked examples that are not dissimilar to the arguments climate denialists use, even in the face of evidence to the contrary; for example, datacenter water use is very low, and the used water is available for other irrigation and potable use.
As for "choice", it is very clear that Noah has not really paid any attention to how technology is sold and how competitors are stymied. Microsoft became very dominant in the 1990s to the point of facing possible antitrust actions to break the company up. Network effects became very important once digital connectivity and interoperability became widespread. Once a company became dominant, it was hard to leave, and competitors could be squeezed out or purchased. The industry is littered with examples.
Amazon was the digital culmination of big-box stores. When Barnes & Noble became the big-box bookstore, they stipulated that there could not be a competing bookstore in the same mall. That became the demise of smaller and independent bookstores. Amazon proved bigger than B&N, which has been supplanted as the bookstore of choice. "No-One Makes You Shop at Amazon", and the other online competitors are? (Walmart?). And let's not forget that Amazon ensures that any seller on the platform cannot sell at a lower price elsewhere. Amazon even asks customers to snitch on the seller if that constraint is violated.
Noah's rebuttal makes the argument that persuasion is not power, just a neutral "marketplace of ideas". Hasn't he heard how advertising and general repetition of the same message work?
As a commenter once noted, you must not take Noah's arguments seriously. And as for Elon Musk, his infantile denial of facts in his interview with Zanny Minton Beddoe of The Economist was an object lesson in his fragile ego. It is a pity that few interviews with TechBros ever seriously question their statements, assumptions, and opinions. But I suppose those are the rules to get access, which then becomes the power to shape opinion.
No. Noah Smith and others believed in and helped define abundance well before that became a word you knew about.
Not everything is a conspiracy. Some people legitimately think differently than you. Insinuating that he is in cahoots with Big Tech isn't required to make any of the points you try to make. Then you continue with this shitty cowardly trick of associating him with the bad guys without actually making a solid accusation.
Your strategy is not clever, and does not serve you. Taking every different opinion and attaching a bunch of bad associations with it so you can you discount it via association doesn't yield an accurate model of reality.
As they say, "Citations, please". You are using straw man arguments like "conspiracy," which I do not claim, and then making further unsubstantiated claims as an ad hominem attack. Seriously?
Frankly, my knee-jerk reactions against anti-data centers are usually motivated by an opposition to NIMBYism and the overbearing regulatory system here in Canada where we can't build crap.
I don't doubt that Smith's beliefs are sincere, and he obviously deserves to be engaged civilly and with the presumption of good faith. Fine.
However, I do not accept that sincerity is equivalent to morality; I don't think that we are morally entitled to our beliefs just because they are sincerely held. It cannot be so, because almost everyone holds their beliefs sincerely, even history's worst monsters.
Smith has said many silly things about political science, and also about history; but that is not because he lacks the *ability* to understand those fields; on the contrary, he is a very clever fellow. He just thinks they aren't real, and regards learning about them as a waste of time, much as I would regard learning the details of astrology or homeopathy, for example.
The trouble is that political science and history are *not* like astrology; they *are* real disciplines, and it is impossible to evaluate them usefully without learning a bit about them. And having learned just enough about these fields myself to understand that fact, I don't believe that anyone as talented as Smith can write them off without moral culpability; possibly from a narcissistic presumption of superiority, possibly from ordinary laziness. And that does place limits on the degree of cordiality that can be afforded by civility and the presumption of good faith.
Maybe Noah would preferthe word "influence" to "power"? I found his core argument that critics "resent" tech companies' sucess jarring, a purely emotional argumemt with little to support it.
The problem with claimimg consumers choose or even love Amazon (for example) is that it claims the tip of the iceberg is the entire iceberg. The part consumers see, a magical portal to every imaginable product at competitive prices delivered to your doorstep, is indeed insanely popular for obvious reasons. But there's a well-documemted ugly side of how they pull that magic trick off, and its very easy for consumers to ignore it.
This is a tech flip of "privatize profit, socialize risk". Amazon socialized the value and convenience while privafizing the cost on its staff and suppliers. Walmart follows a similar model. All you have to do is ignore the cost to society as a whole and enjoy the personal convenience. Too bad about Main Street but that's Progress.
And Amazon rigs the market by ensuring that it has the lowest price of a product sold by a vendor, by fiat. No other outlet can sell the product at a lower price and can be "persuaded" to raise prices to ensure that.
Indeed, that's how Amazon got started. While being propped up by Vulture Capital, Amazon consistently undercut Barnes and Noble by a wide margin, and at a perpetual loss. The Vultures were counting on the day the IPO would be released. Overnight, Bozo Bezos went from millionaire to billionaire, and his Vulture Investors went right along with him. It's all about the Wall Street shell game.
And now the desired win is a "Unicorn", an appropriate term for a mythical beast!
And yet, I read that VCs have been making annual net losses for years. Did they run out of big wins to compensate for the smaller losses, or just make huge bets that didn't pan out as hoped? My little violin plays.
Those annual net losses appear only after much creative accounting and money laundering to hide the massive profits - and avoid/evade paying their fair share in taxes. Andreessen Horowitz is making out like a bandit - literally.
Interesting, Chinese firms seem to be competing just fine. Also as a consumer isn’t the consequence that everything is as cheap as possible? And producer surplus is a tiny fraction of what it could be?
I'm with you on platforms not products. Both of the ones you mentioned have very sizable market share and are competing with amazon just fine.
My point about benefiting consumers still stands though, right? Platforms reducing the cost of products sold on their marketplace to at or below marginal cost means, as consumers, we stand to benefit.
E-commerce platforms are not necessarily offering the lowest prices. As I comment elsewhere in this thread, Amazon rigs teh market so it is the lowest-priced competitor, but not necessarily the lowest-priced products could be if they are not also sold on Amazon.
What E-commerce offers is convenience and "long tail" product offerings that can dwarf even the largest big-box retailers.
Trust me, it won't help things to shift the argument from "power" to "influence". Where those two things begin and end -- and even whether they are distinct -- has filled many books and articles. The issue is not that we do not have enough specificity, the issue is that things have already been defined down too much.
This is why I prefer the most simple, straightforward definition of power (modified from Susan Strange): power is the ability to have an effect upon outcomes.
Framed this way, Noah's consumers *do* have power, just a very small amount of it relative to the power of the people upstream who control investment, production, distribution, and access. And it's pretty easy to show how by simply asking who gets to decide what happens at each step in the production -> consumption process.
People like Noah who take the Econ 101 view assume that people upstream respond mechanically to the consumers downstream, who are able to sample from an infinite stream of options, priced as commodities, covering all feasible realities. I.e., a world in which scarcity doesn't it, a non-economic world. But they know that scarcity does exist, which is why they claim that efficiency-improving entrepreneurs are visionaries who deserve all of the money they receive, praise too, and anyone who disagrees is a "supervillain" (Tyler Cowen's word) or motivated by resentment (Noah, like most "libertarian" economists, slip into caricature of Marxism at the drop of a hat or flick of a nose).
Both things cannot be true, the capitalists are either actors exerting their will on the market or consumers are dictating outcomes that business is merely responding to dispassionately. If the market functions mechanistically, such that there is no power being expressed upon it, then the absurd profits are clearly rent and CEO salaries are functionally equivalent to fraud (if they rest on an information asymmetry) or theft (if they rest on supply manipulation). If the CEOs are worth their salaries it can only be because they express power in sufficient quantity to MOVE THE ENTIRE MARKET. In which case talking about market processes in some disembodied way is a non sequitur.
I stopped trying to convince Noah that power exists about 10 years ago. He's a very superficial thinker, perfect for the Bloomberg op-ed page. Give him a reduced-form model and he can play with it in front of MBAs, but ask him to explain how the assumptions of that model are violated and he shorts out immediately.
This produces weird results. I've made some very very bold claims in my time, but I cannot fathom trying to convince anyone that Daron Acemoglu, of all people, hates technological development in general. But like I said: I stopped trying to convince him to view the world with fewer imposed assumptions a long time ago.
I'm glad someone is finally putting flabbypinion in his place. Over the years he's gone from being a genuine economics writer to "let me dunk on the left and progressivism" to score points and hits online.
Even inside Noah’s own arguments, either he is ignorant about how marketing and advertising work, and how algorithms skew and filter the marketplace of ideas, or he is being willfully blind.
Marketing and advertising “arguments” are not organically persuasive. They are meticulously crafted in many cases by people who have studied human behavior and psychology. Then they are tested extensively, refined, and precisely targeted. In many cases it’s not recognizable as marketing, channeled through influencers and woven into content. It’s the definition of asymmetrical power.
The influence of algorithms is more explicit and less subtle.
Much of Noah Smith's writing over the last few years when it comes to these kinds of questions points very much to the desire to be invited to SF and SV house parties and to be invited to be the in-house guru of some tech-billionaire. Which I guess he kind of has. But his soft-pedal of Trump early on as well as his early optimism about Musk were at least in part driven by the desire to be liked and admired by those groups. The thinking right-wingers liberal.
"His personal copy of Acemoglu and Johnson’s book seems both to be unaccountably missing a lot of material that was in mine, and to have added a fair amount of material that I can’t find in my own".😂
"Instead, they suggest that popular products regularly come with strings attached..." Miles long EULA's written in dense legalese that only a good lawyer can get through. "Sign it or you don't get to use our service/product that you paid for.
"(the experimental evidence suggests that talent only moderately predicts success in culture markets)". One need look no further than Alex Jones or Steve Bannon as suitable examples demonstrating this.
"Similarly, it is difficult to disentangle the ways in which our greater or lesser eloquence makes us more or less persuasive". Who would accuse Trumpkopf of being eloquent? Or Dubya for that matter?
"If they want Google Search, they have little choice to accept the surveillance economy that goes along with it". Blessed is duckduckgo.
Noah's writing would be more accurate if replaced his prolific use of the word(s) "industrialist(s)" with "vulture capitalist(s)".
Noah is obviously smart enough to get a PhD in economics. Unfortunately, I think being a blogger has made him a bit intellectually lazy. Especially combined with his apparent determination to remain "centrist", not to mention a "techno-optimist".
Noa is not “naive”. At the beginning he was a closeted neoliberal, now he is an open one, cozying up to the tech elite. As simple as that. Let’s call a spade a spade and everything is clear. Do not waste time on him.
I wish you'd give more attention to the question of why you think that policymakers are going to do a good job regulating given their own limited understanding of tech and their own captured incentives. My fear is that you are 100% right about market failures and yet the cure is worse than the disease.
What is the contemporary track record on this kind of regulation? You've got some cases of the state building tech itself, like Brazil's Pix supercedeing private expensive forms of instant payments, or India's UPI. (state capacity, yay!). Then you've got narrow structural mandates that don't involve regulator discretion -- phone number portability, usb-c stuff like that. That kind of stuff seems like it can work. Enforcement mechanisms like Illinois's biometric information privacy act, restricting Clearview, a genuinely scary company.
On the other hand you've got cases like GDPR.. cool we got some banners, but seems worthless and just entrenched large companies that can pay the costs of compliance. Australia's under-16 ban seems like it's not doing much either.
What you seem to be suggesting is that there should be democratic input on the trajectory of technology, but how is that supposed to work in practice that doesn't turn into a NIMBY nightmare? If we ban datacenters in the US is that really going to help anything or just move them elsewhere?
I love your work, but my fear is that academia is really good at offering critique but really thin on actual viable solutions, leaving that to high agency abundance bros (like myself, heh).
«But popularizing economists tend very often to throw away these complications, in favor of crude MarketThink»
Because the purpose of Economics is "internal consistency" with J.B. Clark's (perhaps an earlier version of Noah Smith) three "parables", of which the most important is that the income of property and business owners is exactly proportional to their capital's productivity. In order to be consistent with this fantastical "parable" all those complications *must* be thrown away.
For example one of the "parables" is that there cannot be increasing returns to scale, because if there are this creates path dependency and there can be multiple level of income of property and business owners that cannot be all proportional to their capital's productivity. In particular if there are decreasing returns to scale then natural monopolies cannot exists, network effects cannot happen and Tom Slee's argument cannot hold because as Wal*Mart's shop's becomes bigger its unit costs increase and a smaller competitor can underprice it (oh really? :->).
I feel like the central argument around Google's search just kinda ignores the current market. If people want anti-surveilence search it exists! That people appear to express a strong opinion on surveilence and yet do not use DuckDuckGo suggests they do not, in fact, care much about surveilence. What people want and what people say they want are often totally disconnected, particularly when we talk about public policy. You can SAY that stated preference and political demands to support small business means that people like small business, but does it? Or does it just signal a general disaatisfaction with the economy that has memetically taken on a preference? The correlary here is rent control: the public has a fairly strong preference for it but it has never once made the public happy. They like it because they view it as a solution to a problem. This pattern seems to fit the UK and small business quite well - the public thinks they have a solution, the solution does not fix the problem, they keep demanding more and more of the solution.
I continue to be amazed that you give Noah the time of day. It's beyond obvious that he's a bad-faith interlocutor here.
I really don’t think he is. To exaggerate the point slightly, there is a huge market for smart people with a very specific kind of brain damage, that lets them believe specific things, be completely oblivious to actual counter-arguments (therefore only seeing straw men that are easily set ablaze), argue very specific points in a way that is convincing to folks who are unread on the subject. Many cynical people have picked up on this and write that way, with varying degrees of skill, but is it any wonder that some people who really do possess that specific form of brain damage have also become highly paid gurus of the technolibertarian set?
I think there’s a bit of to-may-to, to-mah-to happening here. Noah might be a cynical profiteer willing to sell his voice to the highest bidder, or he may just be a useful idiot. It nets out in the same place either way: relentless bad faith.
It usually does come out to the same thing, I agree, but that thing isn't 'bad faith', which implies that the person you're arguing with either doesn't actually believe their argument or is in some way misrepresenting yours intentionally for their own purposes. And I would argue that neither of those things are true for Noah, or for quite a number of other similarly-damaged technolibertarian True Believers.
It would normally come out to 'a waste of time', or possibly 'an exercise in futility', because there's no way you can change the mind of either a person who is arguing in bad faith OR a person who is unable to actually figure out what your actual argument is, but in this case the target audience isn't Noah, it's the person Noah might have convinced with his, uh, logic.
And honestly there is an actual real difference. I've seen a (very) few people like I believe Noah to be, true believers who look at everything through the lens in their head and truly can't comprehend counterarguments without incredible effort (usually in person), who eventually grow up and shatter that lens and become able to see the world in its actual complexity. Whereas the bad-faith actors will never become anything other than what they are. In Noah's case I don't think it's likely, since he seems so often to be personally offended by people daring to disagree with him, but it's still possible.
I fear that admitting how much I enjoyed watching this spanking might result in me getting kink-shamed.
Virtual high five.
Good post. Noah has veered off track the last couple of years and is carrying a lot of water.
No need for lengthy arguing over the meaning of words ...
At some point in time he will need to do a lot of backtracking, like with DOGE (Jesus).
In other words: right wing sympathist engages in sophistry. I'm shocked I tell you, shocked!
He’s of the left, my guy.
Then why is he bending over backwards for right wing bullshit?
He’s a techno optimist and a bit contrarian. He’s not right wing.
I have bad news for you about what "right wing" and "left wing" mean
I wouldn't exactly describe Noah as a right wing sympathist, but he does seem to bend over backwards to try being "balanced".
Potato, potato :)
Which surely makes him unbalanced…or a RW sympathist, no?
I've often seen him advocate for more left leaning policies, such as Medicare for all. But then he tacks to the right - in particular regarding his "techno-optimism". He's often talked about the influence of the sci-fi he read growing up. Thus, I think he's just a bit confused about the realities of rapid technological advancement being shoved down our collective throats.
Noah Smith has wedded himself to "Abundance" which is an idea supported by BigTech and investors. Just look at YouTube for proof of that. Noah is very much of the opinion that the "benefits" far outweigh any "costs", and the benefits require deregulation, so let that happen. "Abundance" through deregulation is pushed by BigTech, most recently by trying to force AI datacenter construction wherever they can, even overriding local objections with hardball tactics.
On other occasions, he has picked examples that are not dissimilar to the arguments climate denialists use, even in the face of evidence to the contrary; for example, datacenter water use is very low, and the used water is available for other irrigation and potable use.
As for "choice", it is very clear that Noah has not really paid any attention to how technology is sold and how competitors are stymied. Microsoft became very dominant in the 1990s to the point of facing possible antitrust actions to break the company up. Network effects became very important once digital connectivity and interoperability became widespread. Once a company became dominant, it was hard to leave, and competitors could be squeezed out or purchased. The industry is littered with examples.
Amazon was the digital culmination of big-box stores. When Barnes & Noble became the big-box bookstore, they stipulated that there could not be a competing bookstore in the same mall. That became the demise of smaller and independent bookstores. Amazon proved bigger than B&N, which has been supplanted as the bookstore of choice. "No-One Makes You Shop at Amazon", and the other online competitors are? (Walmart?). And let's not forget that Amazon ensures that any seller on the platform cannot sell at a lower price elsewhere. Amazon even asks customers to snitch on the seller if that constraint is violated.
Noah's rebuttal makes the argument that persuasion is not power, just a neutral "marketplace of ideas". Hasn't he heard how advertising and general repetition of the same message work?
As a commenter once noted, you must not take Noah's arguments seriously. And as for Elon Musk, his infantile denial of facts in his interview with Zanny Minton Beddoe of The Economist was an object lesson in his fragile ego. It is a pity that few interviews with TechBros ever seriously question their statements, assumptions, and opinions. But I suppose those are the rules to get access, which then becomes the power to shape opinion.
No. Noah Smith and others believed in and helped define abundance well before that became a word you knew about.
Not everything is a conspiracy. Some people legitimately think differently than you. Insinuating that he is in cahoots with Big Tech isn't required to make any of the points you try to make. Then you continue with this shitty cowardly trick of associating him with the bad guys without actually making a solid accusation.
Your strategy is not clever, and does not serve you. Taking every different opinion and attaching a bunch of bad associations with it so you can you discount it via association doesn't yield an accurate model of reality.
As they say, "Citations, please". You are using straw man arguments like "conspiracy," which I do not claim, and then making further unsubstantiated claims as an ad hominem attack. Seriously?
Frankly, my knee-jerk reactions against anti-data centers are usually motivated by an opposition to NIMBYism and the overbearing regulatory system here in Canada where we can't build crap.
I don't doubt that Smith's beliefs are sincere, and he obviously deserves to be engaged civilly and with the presumption of good faith. Fine.
However, I do not accept that sincerity is equivalent to morality; I don't think that we are morally entitled to our beliefs just because they are sincerely held. It cannot be so, because almost everyone holds their beliefs sincerely, even history's worst monsters.
Smith has said many silly things about political science, and also about history; but that is not because he lacks the *ability* to understand those fields; on the contrary, he is a very clever fellow. He just thinks they aren't real, and regards learning about them as a waste of time, much as I would regard learning the details of astrology or homeopathy, for example.
The trouble is that political science and history are *not* like astrology; they *are* real disciplines, and it is impossible to evaluate them usefully without learning a bit about them. And having learned just enough about these fields myself to understand that fact, I don't believe that anyone as talented as Smith can write them off without moral culpability; possibly from a narcissistic presumption of superiority, possibly from ordinary laziness. And that does place limits on the degree of cordiality that can be afforded by civility and the presumption of good faith.
Maybe Noah would preferthe word "influence" to "power"? I found his core argument that critics "resent" tech companies' sucess jarring, a purely emotional argumemt with little to support it.
The problem with claimimg consumers choose or even love Amazon (for example) is that it claims the tip of the iceberg is the entire iceberg. The part consumers see, a magical portal to every imaginable product at competitive prices delivered to your doorstep, is indeed insanely popular for obvious reasons. But there's a well-documemted ugly side of how they pull that magic trick off, and its very easy for consumers to ignore it.
This is a tech flip of "privatize profit, socialize risk". Amazon socialized the value and convenience while privafizing the cost on its staff and suppliers. Walmart follows a similar model. All you have to do is ignore the cost to society as a whole and enjoy the personal convenience. Too bad about Main Street but that's Progress.
And Amazon rigs the market by ensuring that it has the lowest price of a product sold by a vendor, by fiat. No other outlet can sell the product at a lower price and can be "persuaded" to raise prices to ensure that.
Indeed, that's how Amazon got started. While being propped up by Vulture Capital, Amazon consistently undercut Barnes and Noble by a wide margin, and at a perpetual loss. The Vultures were counting on the day the IPO would be released. Overnight, Bozo Bezos went from millionaire to billionaire, and his Vulture Investors went right along with him. It's all about the Wall Street shell game.
And now the desired win is a "Unicorn", an appropriate term for a mythical beast!
And yet, I read that VCs have been making annual net losses for years. Did they run out of big wins to compensate for the smaller losses, or just make huge bets that didn't pan out as hoped? My little violin plays.
Those annual net losses appear only after much creative accounting and money laundering to hide the massive profits - and avoid/evade paying their fair share in taxes. Andreessen Horowitz is making out like a bandit - literally.
Like Hollywood accounting?
Exactly.
Interesting, Chinese firms seem to be competing just fine. Also as a consumer isn’t the consequence that everything is as cheap as possible? And producer surplus is a tiny fraction of what it could be?
I'm talking about platforms, not products. Do you use Alibaba or Temu? Do either of them compete well against Amazon?
I'm with you on platforms not products. Both of the ones you mentioned have very sizable market share and are competing with amazon just fine.
My point about benefiting consumers still stands though, right? Platforms reducing the cost of products sold on their marketplace to at or below marginal cost means, as consumers, we stand to benefit.
Here is a current chart of the largest eCommerce retailers in the US. Temu is teh only Chinese one on teh list, and it hardly competes with Amazon.
https://www.statista.com/statistics/274255/market-share-of-the-leading-retailers-in-us-e-commerce/
E-commerce platforms are not necessarily offering the lowest prices. As I comment elsewhere in this thread, Amazon rigs teh market so it is the lowest-priced competitor, but not necessarily the lowest-priced products could be if they are not also sold on Amazon.
What E-commerce offers is convenience and "long tail" product offerings that can dwarf even the largest big-box retailers.
Trust me, it won't help things to shift the argument from "power" to "influence". Where those two things begin and end -- and even whether they are distinct -- has filled many books and articles. The issue is not that we do not have enough specificity, the issue is that things have already been defined down too much.
This is why I prefer the most simple, straightforward definition of power (modified from Susan Strange): power is the ability to have an effect upon outcomes.
Framed this way, Noah's consumers *do* have power, just a very small amount of it relative to the power of the people upstream who control investment, production, distribution, and access. And it's pretty easy to show how by simply asking who gets to decide what happens at each step in the production -> consumption process.
People like Noah who take the Econ 101 view assume that people upstream respond mechanically to the consumers downstream, who are able to sample from an infinite stream of options, priced as commodities, covering all feasible realities. I.e., a world in which scarcity doesn't it, a non-economic world. But they know that scarcity does exist, which is why they claim that efficiency-improving entrepreneurs are visionaries who deserve all of the money they receive, praise too, and anyone who disagrees is a "supervillain" (Tyler Cowen's word) or motivated by resentment (Noah, like most "libertarian" economists, slip into caricature of Marxism at the drop of a hat or flick of a nose).
Both things cannot be true, the capitalists are either actors exerting their will on the market or consumers are dictating outcomes that business is merely responding to dispassionately. If the market functions mechanistically, such that there is no power being expressed upon it, then the absurd profits are clearly rent and CEO salaries are functionally equivalent to fraud (if they rest on an information asymmetry) or theft (if they rest on supply manipulation). If the CEOs are worth their salaries it can only be because they express power in sufficient quantity to MOVE THE ENTIRE MARKET. In which case talking about market processes in some disembodied way is a non sequitur.
I stopped trying to convince Noah that power exists about 10 years ago. He's a very superficial thinker, perfect for the Bloomberg op-ed page. Give him a reduced-form model and he can play with it in front of MBAs, but ask him to explain how the assumptions of that model are violated and he shorts out immediately.
This produces weird results. I've made some very very bold claims in my time, but I cannot fathom trying to convince anyone that Daron Acemoglu, of all people, hates technological development in general. But like I said: I stopped trying to convince him to view the world with fewer imposed assumptions a long time ago.
I'm glad someone is finally putting flabbypinion in his place. Over the years he's gone from being a genuine economics writer to "let me dunk on the left and progressivism" to score points and hits online.
Even inside Noah’s own arguments, either he is ignorant about how marketing and advertising work, and how algorithms skew and filter the marketplace of ideas, or he is being willfully blind.
Marketing and advertising “arguments” are not organically persuasive. They are meticulously crafted in many cases by people who have studied human behavior and psychology. Then they are tested extensively, refined, and precisely targeted. In many cases it’s not recognizable as marketing, channeled through influencers and woven into content. It’s the definition of asymmetrical power.
The influence of algorithms is more explicit and less subtle.
Much of Noah Smith's writing over the last few years when it comes to these kinds of questions points very much to the desire to be invited to SF and SV house parties and to be invited to be the in-house guru of some tech-billionaire. Which I guess he kind of has. But his soft-pedal of Trump early on as well as his early optimism about Musk were at least in part driven by the desire to be liked and admired by those groups. The thinking right-wingers liberal.
"His personal copy of Acemoglu and Johnson’s book seems both to be unaccountably missing a lot of material that was in mine, and to have added a fair amount of material that I can’t find in my own".😂
"Instead, they suggest that popular products regularly come with strings attached..." Miles long EULA's written in dense legalese that only a good lawyer can get through. "Sign it or you don't get to use our service/product that you paid for.
"(the experimental evidence suggests that talent only moderately predicts success in culture markets)". One need look no further than Alex Jones or Steve Bannon as suitable examples demonstrating this.
"Similarly, it is difficult to disentangle the ways in which our greater or lesser eloquence makes us more or less persuasive". Who would accuse Trumpkopf of being eloquent? Or Dubya for that matter?
"If they want Google Search, they have little choice to accept the surveillance economy that goes along with it". Blessed is duckduckgo.
Noah's writing would be more accurate if replaced his prolific use of the word(s) "industrialist(s)" with "vulture capitalist(s)".
Noah is obviously smart enough to get a PhD in economics. Unfortunately, I think being a blogger has made him a bit intellectually lazy. Especially combined with his apparent determination to remain "centrist", not to mention a "techno-optimist".
Noa is not “naive”. At the beginning he was a closeted neoliberal, now he is an open one, cozying up to the tech elite. As simple as that. Let’s call a spade a spade and everything is clear. Do not waste time on him.
I wish you'd give more attention to the question of why you think that policymakers are going to do a good job regulating given their own limited understanding of tech and their own captured incentives. My fear is that you are 100% right about market failures and yet the cure is worse than the disease.
What is the contemporary track record on this kind of regulation? You've got some cases of the state building tech itself, like Brazil's Pix supercedeing private expensive forms of instant payments, or India's UPI. (state capacity, yay!). Then you've got narrow structural mandates that don't involve regulator discretion -- phone number portability, usb-c stuff like that. That kind of stuff seems like it can work. Enforcement mechanisms like Illinois's biometric information privacy act, restricting Clearview, a genuinely scary company.
On the other hand you've got cases like GDPR.. cool we got some banners, but seems worthless and just entrenched large companies that can pay the costs of compliance. Australia's under-16 ban seems like it's not doing much either.
What you seem to be suggesting is that there should be democratic input on the trajectory of technology, but how is that supposed to work in practice that doesn't turn into a NIMBY nightmare? If we ban datacenters in the US is that really going to help anything or just move them elsewhere?
I love your work, but my fear is that academia is really good at offering critique but really thin on actual viable solutions, leaving that to high agency abundance bros (like myself, heh).
Good clear arguments. Professor Farrell
«But popularizing economists tend very often to throw away these complications, in favor of crude MarketThink»
Because the purpose of Economics is "internal consistency" with J.B. Clark's (perhaps an earlier version of Noah Smith) three "parables", of which the most important is that the income of property and business owners is exactly proportional to their capital's productivity. In order to be consistent with this fantastical "parable" all those complications *must* be thrown away.
For example one of the "parables" is that there cannot be increasing returns to scale, because if there are this creates path dependency and there can be multiple level of income of property and business owners that cannot be all proportional to their capital's productivity. In particular if there are decreasing returns to scale then natural monopolies cannot exists, network effects cannot happen and Tom Slee's argument cannot hold because as Wal*Mart's shop's becomes bigger its unit costs increase and a smaller competitor can underprice it (oh really? :->).
I feel like the central argument around Google's search just kinda ignores the current market. If people want anti-surveilence search it exists! That people appear to express a strong opinion on surveilence and yet do not use DuckDuckGo suggests they do not, in fact, care much about surveilence. What people want and what people say they want are often totally disconnected, particularly when we talk about public policy. You can SAY that stated preference and political demands to support small business means that people like small business, but does it? Or does it just signal a general disaatisfaction with the economy that has memetically taken on a preference? The correlary here is rent control: the public has a fairly strong preference for it but it has never once made the public happy. They like it because they view it as a solution to a problem. This pattern seems to fit the UK and small business quite well - the public thinks they have a solution, the solution does not fix the problem, they keep demanding more and more of the solution.