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Matt Stoller on Useful Idiots: Tech Revenue Model and Taiwan

Published by marco on

This is a Useful Idiots interview with the always interesting and provactive Matt Stoller. It’s the second part of an interview with that began in New Useful Idiots: Ted Cruz, Penis Mishaps, and Matt Stoller on Big Tech Monopoly (Audio Also). I’ve highlighted and partially transcribed the bits I found interesting. The Substack page has more transcription (but it’s also only partial).

Substack Only Episode of Useful Idiots: Guest Matt Stoller asks, 'Is the Left Interested in National Defense?' Plus, Matt and Katie Discuss Mr. Biden's Wild Stair Ride by Useful Idiots (YouTube)

At 03:00, Stoller talks about how we need to turn our tech giants back into platforms instead of purveyors of opinion.

“Follow the money. There are really simple ways to fix this problem, but the basic dynamic is don’t make it profitable to distort the flow of information. Don’t make it a business model. That the basic deal. Take Facebook and Google and treat them like they’re communication networks. Morph them into Verizon or AT&T style networks, where they can’t discriminate.

“If you want to communicate with someone, they get you to communicate with them and then they get you off the network as quick [sic] as possible, and you pay them directly for that service. That’s the easiest way to do it.”

At 10:20, Stoller and Taibbi discuss the death of local journalism because of the rapacious and facially illegal business model of Facebook and Google.

Stoller: It’s really local publishers that are getting screwed here. It’s like if the Wall Street Journal broke into the New York Times’s headquarters and stole their subscriber list and stole their subscription information and stole all the traffic patterns on their web sites and then went and tried to pitch the New York Times’s advertisers to advertise on the Wall Street Journal instead […] we would all be like, wow, that’s outrageous, that’s crazy, that’s stealing. That is effectively what Facebook and Google are doing—every day—to millions of publishers. That is their business model. That’s just theft. That’s why they have 40, 50, 60% margins…because the costs are being borne by someone else.

Taibbi: Right, they don’t have to create the content, they don’t have to do anything. They don’t have to attract the audience. All they have to do is pilfer from it. This is why so many local newspapers have died since 2002. It’s something like 2½-thousand now. There are whole sections of the country that just don’t have a newspaper. And a lot of those newspapers were like the best examples of what journalism is. They covered town meetings. They were factual. They had beats. Really good work. They’re gone. Because they’re the first companies that can’t compete with this kind of system.

Stoller: That’s exactly right. They fulfilled important functions. They could be really shitty or they could be good. Like, we have problems with COVID because the first line for epidemiologists, local newspapers saying, we have an outbreak here. That’s something, that’s actually really useful information for epidemiologists. And there are so many places that just don’t even have a newspaper anymore. They had a much harder time tracking the pandemic because there were no local newspapers.”

At 25:00, Taibbi summarizes how Facebook and Google are unlikely to release power here and will most likely capitulate in smaller ways to let themselves be used by Congress as basically another arm of the NSA.

Taibbi: For me, the threat here is—you can kind of see this potential devil’s bargain that kind of already happened a little bit—which is, the platforms are going to want to keep that surveillance-advertising revenue-model that’s been so enormously successful for them. And they’re going to want that untouched. As a bargaining chip, they’re probably going to be willing to make all sorts of concessions on content moderation. They’re expressing a willingness to partner with Capitol Hill on all kinds of things. I worry that we’re going to leave these companies with their insane revenue model intact, but then also merge it with political considerations.”

At 40:30, Stoller makes the argument that China has its own agency, that it’s not just the good guy because the U.S. is the bad guy.

“China is an aggressive, authoritarian nation and they have specific aims on what they want to do. If nothing else, they want to grab Taiwan. And Taiwan produces 70-80% of our high-end semiconductors. And if they do that, then the U.S. economy goes poof. And how do your address that? I don’t know. But you have to start from the premise that these are important questions. […] the victimhood, like the sense that that’s not a problem because it’s all our fault, like, that’s not true. The Chinese government, they have agency, they have power, they have aims.”

It’s an interesting point, but he could have mentioned that where the so-called left seems bent on assuming that America is the bad guy—which would be a welcome addition to ameliorate the current unceasing belligerence—the current policy is one of America-first that has no notion of approaching other parties on equal footing, to say nothing of entering into negotiations as an underdog. America loves an underdog, but never sees itself as one.

The “left” he was talking about is a bit of a straw-man, I think. Sometimes it really is that the U.S. is 100% out of bounds and that’s just how it is. Stoller also kind of assumes—just like the State department—that U.S. interests are paramount. But how can that be, everywhere and in other countries, or on their borders? The U.S. nearly constantly assumes that it has the same privileges near and in other countries that it would never ever consider allowing near its own borders.

Take Taiwan, for example. The U.S. is highly dependent on its semiconductors. Instead of accepting this and treading lightly and perhaps trying to build up local industry to wean itself away, the U.S. sends military supplies to Taiwan to encourage it to go on a war footing against its neighbor China in alliance with the U.S., which is located around the world.

As far as the Chinese are concerned, they already have Taiwan. At the very least, the situation is very, very complex (Wikipedia).

“Since the ROC lost its United Nations seat as “China” in 1971 (replaced by the PRC), most sovereign states have switched their diplomatic recognition to the PRC, recognizing the PRC as the representative of all China, though the majority of countries avoid clarifying what territories are meant by “China” in order to associate with both the PRC and ROC.”
“The political solution that is accepted by many of the current groups is the perspective of the status quo: to unofficially treat Taiwan as a state and at a minimum, to officially declare no support for the government of this state making a formal declaration of independence.”
“The status quo is accepted in large part because it does not define the legal or future status of Taiwan, leaving each group to interpret the situation in a way that is politically acceptable to its members. […] The PRC seeks the end of Taiwan’s de facto independence through the process of reunification, and has not ruled out the use of force in pursuit of this goal.”

The U.S. has inserted itself into this mix to “defend its chips” instead of “paying for them” by helpfully badgering the PRC steer straight toward armed conflict with Taiwan. The U.S. simply cannot accept that it is not in charge of everything. It just sold weapons to Taiwan. Can you imagine the Chinese selling weapons to Canada?

The current situation suits everyone just fine—except the U.S.. And why do we have to give a fuck what America thinks? Because America is a moron with a gun and storms in everywhere, demanding shit. While China has “agency” and its own “aims”, it can’t hold a fucking candle to how out-of-line the U.S. is in its foreign policy.

If the U.S. forces the situation further, what is the likely outcome? A hot war with Taiwan as proxy? For what? The chip factories will be ruined anyway. Do you think the island of Taiwan has a chance against the PRC? WTF? And wanting to avoid that situation make the left naive? Unwilling to deal with foreign policy? I don’t agree with Stoller here: I think if you’re looking clear-eyed at the situation, the sanest question is to ask why the fuck are we there in the first place? Can we defend access to our chip supply without the military? Or do we just de-facto use the military for everything?

What if the PRC were to finally resolve the governmental uncertainty with the ROC in Taiwan and just agree that there is one government and it’s the PRC? That’s the most likely way it would go—I don’t think anyone’s stupid enough to think that Taiwan would somehow end up taking over the PRC, right? Unless you’re really high up in the State department of the U.S., in which case you’re expected to believe that and build policy on it. Time to bring democracy to the PRC and be greeted as liberators, once again.

It’s a mystery to me why the PRC would stop manufacturing and selling to the States if they were to unify Taiwan (eliminating the ROC once and for all). The situation is that Taiwan ostensibly has its own government, but it’s under the purview of China. What exactly is going to change if the U.S. Navy backs off? The problems come because the U.S. is trying to capture Taiwan on the doorstep of China.