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MIT Technology Review

What the 1930s can teach us about dealing with Big Tech today

The Great Depression offers lessons for how to give ordinary people a say in the economic recovery from covid-19.

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Sophy Hollington

The “techlash,” allegedly, is over.

An April op-ed in the San Jose Mercury News, Silicon Valley’s local paper, put it most directly: “Covid-19 response will end all the Big Tech bashing.” An article published by the Brookings Institution later that month echoed the new received wisdom: “Prior concerns about the industry’s market power, privacy practices, and content moderation policies—all of which posed a major challenge just months ago—no longer enjoy the same political salience.” 

The argument is that covid-19 has taught us to stop worrying and love Silicon Valley—to simply embrace the connections it brings to our quarantine and the surveillance it can apply to contact tracing.

But as people find themselves relying on the tech economy in fuller, more intimate ways, they are finding new reasons to be concerned. 

An Amazon vice president stepped down in May in support of workers who were fired for organizing for better workplace safety measures against the coronavirus. Low-wage workers from other companies, including Instacart, Target, and Walmart, have gone on strike for similar reasons. Airbnb hosts are disgruntled that the platform they work for and lobby for is giving customers who cancel bookings full refunds, leaving hosts with no income and all the costs. 

In moments of crisis, when new technology seems to offer quick and easy answers, it might appear difficult to devise an imaginative response to the large tech firms’ growing power. But even though the litany of things that tech platforms get away with is quite remarkable, tools for fixing some of tech’s deepest problems are closer at hand than one might think.

Companies on the internet can collect data about people’s behavior in ways old phone companies and mail carriers never could: a telecom can’t listen to your phone conversations and send you relevant robocalls. Ride-sharing apps got their start in part by bypassing regulations their taxicab competitors had to follow. Gig-economy platforms routinely claim the right to ignore hard-won labor protections on the grounds that they offer part-time freelance work, even though in many cases this work involves the kind of control over workers that is tantamount to standard employment. 

There has long been a presumption in some quarters that the old rules don’t apply to new tech. Earlier this year, before the virus set in, Michael O’Rielly, a commissioner at the US Federal Communications Commission, spoke at the university where I teach. He expressed his hope that with the days of “circuit--switched copper networks” behind us, the FCC’s role would “diminish exponentially,” like “a puff of smoke on a windy day.” But we find ourselves in a moment when the companies the FCC regulates mediate more of our lives than ever before.

Indeed, many of the US’s major antitrust laws were created for crises not so unlike the one we face today—times of super-powerful magnates and widespread economic upheaval.

These laws, crafted for the railroads and Standard Oil, empower regulators to, among other things, break up any company abusing its market dominance. Regulators have not recently exercised these powers against Big Tech because for decades they have narrowly fixated on consumer prices as the measure of whether a market is being monopolized—a measure that doesn’t work for services, like Facebook and Google, that are free. This would change if regulators allowed themselves to see how far--reaching the old antitrust mandate against market manipulation really is. With many smaller businesses now on the brink of collapse, the danger of consolidation has never been greater. A moratorium on mergers is probably a necessary stopgap.

There’s a similar story of amnesia in labor law. The gig-economy platforms have all but admitted that their business depends on systematically violating labor protections. California recently woke up to that fact, passing a law reclassifying many gig workers as employees. Especially now, when people with precarious incomes are risking their health by providing essential services from grocery delivery to elder care, they deserve every protection society can reasonably offer.

Regulations alone, however, are not enough. Policy should enable more than it prevents. In the 1920s and 1930s, US legislators put this principle into practice. Following the 1929 stock market crash, it was clear that banks were not accountable to their clients, and there were huge swaths of the country that banks didn’t serve. In addition to new regulations that constrained the banks, the 1934 Federal Credit Union Act turned a few local experiments in community finance into a government-insured system. Member-owned, member--governed credit unions proliferated. They held banks to higher standards and brought financial services to places where there had been none.

In similar fashion, two years later, the Rural Electrification Act helped bring electricity to farm country, where investor--owned utilities hadn’t bothered to string lines. Low-interest loans through the Department of Agriculture enabled communities to  organize  cooperatives—nearly 900 of which still operate today. The loan program now earns more than it costs. Like the housing policies of the time that gave us the 30-year mortgage, it was a public policy that enabled widespread private ownership.

These were some of the most powerful economic development programs in US history. They introduced dynamism and decentralization to markets in danger of being held in thrall to monopoly and exploitation. If we want a more inclusive tech economy, the New Deal legacy would be a good place to start.

Internet users need the capacity to form cooperative alternatives to the dominant platforms and infrastructure. For instance, much the same model as that of the cooperative electric companies could be used to bring customer-owned broadband to underserved communities. Some old rural electric co-ops are offering fiber-to-the-home already.

Furthermore, gig workers and customers who rely on them currently have to use investor-owned platforms. But one proposed bill in California, the Cooperative Economy Act, would enable platform workers to organize co-ops that could collectively negotiate with platforms—and perhaps even build platforms of their own. This would enable these workers, many of whom are now essential as drivers and delivery people, to obtain better wages and working conditions.

Quarantine and remote work also leave many people more dependent than ever on communication platforms, which typically collect personal data for uncertain purposes. This shouldn’t be a necessary trade-off. Using free, open-source tools like NextCloud for file-sharing and Jitsi for videoconferencing, groups can manage their own privacy-protecting systems and decide for themselves how their data is used. Public investment in projects like this could ensure that, as with credit unions, people have the means to organize alternatives when the big platforms aren’t meeting their needs or respecting their values. 

The internet may have near-magical powers that can help us get through the coronavirus crisis, but making technology firms accountable can begin with lessons learned from the last depression. Good tech policy requires recognizing that tech is just another way of wielding power.