Amazon’s acquisition of Whole Foods underscores the threat posed by ‘big data’

Traditional grocers and retailers are in a state of shock over what Amazon’s proposed acquisition of Whole Foods might portend for their businesses. The economist Joseph Schumpeter’s characterization of capitalism as “the perennial gale of creative destruction” seems to fit.

While this process may be thought inevitable by anyone who believes in the virtues of free markets, like I do, it is also true that the increasing economic power of big technology firms represent a new and serious threat to our civil liberties.

Constitutional government — or limited government  — is still government. It still relies on the state as the ultimate authority even as it permits most economic transactions to remain between private parties.

{mosads}Government’s real service is not in its regulation of economic activity, which is often counterproductive, but in its guarantee of rights as codified in the Bill of Rights, which are accorded every citizen regardless of economic status.

Like nothing else in human history, the Internet abets bigness and monopoly. The fantastic efficiencies of scale concentrate market share in a handful of technology companies, and creates vast wealth for their founders and executives.

Yes, ordinary people have participated in the bonanza by buying shares in public companies, but management remains in the hands of a small tribe of tech plutocrats, who view the world in much the same way.

In 2013, before he set sights on Whole Foods, Amazon founder Jeff Bezos bought the Washington Post for $250 million, such a pittance that he paid cash.

The Post can boast of its role in taking down Richard Nixon. Republicans claimed that the Post was out to get Nixon, and that was certainly true, but the reporting by Woodward and Bernstein adhered to the basic rules of responsible journalism.

Today, the Post’s thinly sourced stories resemble more what is found on the Internet. Bezos’ newspaper seeks nothing less than the destruction of Donald Trump’s presidency. 

Tech firms buying old media outlets is not, however, the real threat. It is instead the new media they created and control. Google, Facebook and Twitter claim they are neutral platforms, but they regularly censor conservative and libertarian expression.

To tech executives, Trump’s election is not an affirmation of the influence of the new media, but confirmation that they do not censor enough.

The emails hacked from Hillary Clinton campaign chairman John Podesta said it all. They included this advice, sent to Podesta by Google’s Eric Schmidt: “Key is the development of a single record for a voter that aggregates all that is known about them.”

And Amazon, Google, Facebook and the others know a lot.

When their allies are back in power, what is to stop them from aggregating all that is known about everyone to allow government the ability to reward friends and punish enemies?

This is not far-fetched. The Chinese government is already using electronic “social profiles” in dispensing (and denying) public services.

Bezos and the others seem to have some sense of their omnipotence that comes from possession of all this data, but no sense of the social responsibility that comes with it.

Filling the void is political ideology. Amazon is based in Seattle, but it may as well be in Silicon Valley. The ideology in Silicon Valley is what we can politely describe as “progressivism.” Free speech is routinely suppressed and the mockery and vilification of America’s history and values is institutionalized.

Amazon is trying to buy a supermarket, a low-margin business, but also a step in gobbling up entire supply chains. Google and Apple aspire to build cars. It is easy to see where this all goes.

Free market theory holds that new upstarts providing better products or services at a better price will sooner or later challenge old monopolies.

I worry that the economic and political power of “big data” will reach critical mass first, and that the interests of “big data” will be put first.

Unlike monopolists of the past, Silicon Valley harbors no deep-seated suspicion of government. Witness Google’s foray into the alternative energy business. Instead of seeking to compete with fossil fuels, it receives multibillion taxpayer subsidies while at the same time trying to limit or outlaw the use of oil and coal.

Silicon Valley will like government even more when it takes it over. Amazon’s acquisition of Whole Foods is a harbinger of a realignment of political power. The economic tentacles of big tech firms will reach into every corner of the economy, inserting its influence into the local politics of every community.

If that happens, get ready for a “progressive” assault on your civil liberties.

Peter Flaherty is president of the National Legal and Policy Center.

The views expressed by contributors are their own and are not the views of The Hill.