National Review Online
Wednesday, April 06, 2022
Elon Musk’s transformation from obsessive Twitter
user to Twitter’s largest shareholder should remind Americans of the
fluidity and openness of markets. If it is true that there is significant
opposition to the capricious and intolerant way in which many Silicon Valley
giants conduct their affairs — and there certainly should be — then there’s
likely to be consumer demand for change. This may come in the form of competition,
it may come in the form of internal
cultural change, or it may come in the form of both. But come it will, if
the demand is indeed there. Musk’s surprise mass purchase of Twitter’s stock
may well represent the beginning of such a correction.
Some of Twitter’s most vocal critics do not trust
markets, and covet government regulations in their stead. But the presumption
that underlies this approach — that what is true now in the American tech
sector will always be true in the American tech sector, so the state must step
in to effect change — has no real evidence undergirding it. In 2007, when the
now-powerful Facebook was just three years old, MySpace was being described
by its detractors as a “natural monopoly” such that, “except in niche
markets,” it would be “too late for competitors to dislodge.” In 2001, when the
U.S. Court of Appeals for the District of Columbia heard the federal
government’s antitrust case against Microsoft, that company’s Internet Explorer
browser had a market share of 90 percent. Today, despite the DOJ’s suit having
been effectively dropped, Internet Explorer has been abandoned completely, and
its replacement, Microsoft Edge, has just 3 percent market share worldwide.
This should be no surprise. Things change fast in the marketplace — especially
in tech. A recent study by McKinsey discovered that, in 1958, the average age
of a company on the Standard & Poor’s 500 list was 61 years. Today, it is
less than 18.
The pace and scope of the Internet, along with the
intensity of the conversations it permits, often encourages its aristarchs to
believe that all of its shortcomings must be resolved immediately lest the
adverse consequences become too dire. But, ironically enough, their preferred
solutions — which invariably involve government superintendence — would be more
likely to slow, rather than to expedite, any remedies. The risk would be that a
Twitter subjected by law to close federal oversight would have been transmuted
from a temporary winner within a free market into a permanent part of the
political landscape. In 1952, when the Truman administration tried to
nationalize U.S. Steel, it was the largest corporation in the world. Today, it
is the 38th-largest steel producer. There is nothing special about
Twitter that inoculates it against this fate.
In a statement issued Tuesday morning, Twitter’s CEO,
Parag Agrawal, described Musk as the company’s most “passionate believer and
intense critic,” and confirmed that he would be joining the board. A few days
earlier, Musk had used the service to ask, “Free speech is essential to a functioning
democracy. Do you believe Twitter rigorously adheres to this principle?” before
noting that “the consequences of this poll will be important.” In other tweets,
Musk has wondered aloud if a “new service” is needed to replace Twitter. No
doubt, if Musk fails to transform the social-media platform from within, we’ll
find out soon enough.
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