Why do so many politicians and ideologues suddenly dislike Google, Facebook, and Amazon? Are they too monopolistic, and are they using our data ethically? Also, how can we make broadband more accessible for rural America? And what policies should we put in place in order to fully benefit from the rise of artificial intelligence? Will Rinehart recently joined me to explore all of these questions on Political Economy.

Will is the director of Technology and Innovation Policy at the American Action Forum, where he specializes in telecommunication, Internet, and data policy. He is also a Frédéric Bastiat Fellow at the Mercatus Center, and was previously a research fellow at Tech Freedom.

What follows is a lightly edited transcript of our conversation. You can download the episode here, and don’t forget to subscribe to my podcast on iTunes or Stitcher. Tell your friends, leave a review.

Pethokoukis: Let’s start with the most obvious question: America’s largest technology companies — Apple, Microsoft, Amazon, Alphabet Google, Facebook — seem really unpopular in Washington and among political activists on both sides now. But whenever I look at consumer surveys, they still seem really popular among most Americans. What do you think is playing into that discrepancy?

Rinehart: That’s a super interesting question. I think what
you’re seeing especially in Washington is this thing that some are calling a
“techlash.” Personally, I don’t know, but there are some obvious reasons for
this.

There’s the relationship of Facebook with the 2016 election,
and this question of fake news, or whether or not democracy is being harmed by
the fact that we have Twitter, Google, and Facebook. Those things seem to be
driving this concern in Washington over big tech companies. There’s more of
that political concern.

There’s also the competition concern, at least in
Washington, that’s occurring as well. These are obviously large companies, and
they don’t seem to have natural competitors. You know, there doesn’t really
seem to be a major competitor to Facebook, even though Facebook is somewhat
competitive in all of these other spaces.

In the same way, Google doesn’t really have a natural
competitor in search, but it has competition with the Android system, and it’s
competitive against AWS and their cloud services. So this changing nature of
competition is one part of it as well, in addition to the other part I
mentioned which is that it’s clearly political.

It just doesn’t seem
like too long ago, to me, that these companies were not only held in really
high regard — they were sort of our national champion-style companies, the very
best of American capitalism.

Even their CEOs were
held up as great American businessmen and entrepreneurs, like the Google guys.
It may seem crazy to people now, but not that long ago Mark Zuckerberg was
thinking of running for president.

Yeah, he was in Iowa! It was kind of interesting — it was,
what, 2012? 2013?

That just seems like
such a long time ago now. So is it just the rise of Trump and more populism? Is
it because of the Russian interference in the use of American social media? Is
that really when it began to turn?

I think so, yeah.

But it doesn’t seem
to have really turned among everyday users. I keep wondering how much of this
is a weird, insular, activist and politician-based issue. When people rank
their biggest concerns, the power of Big Tech is not very high.

No, not at all.

It just doesn’t come
to peoples’ minds — they think about healthcare first, for instance. Yet, if
you just listen to the Washington debate, it would seem like this is by far the
most pressing problem facing America.

I think you’re exactly right with this. The other nuance
that I’d add is that it seems like Silicon Valley has turned inwards, and that
they don’t really like some of the products that they’ve created.

So, as much as you do see some of this action happening in
Washington where the Washington elite are turning against some of these tech
companies, you do have some of the rank-and-file people within Silicon Valley
itself step back and say, “What is this that we’ve created. What is this
system? Are the communication services that we’ve supported and helped to
develop stained by advertising and that whole ecosystem? Is that something we
think is good and should continue?” You’re seeing these changes within
Washington, but also these changes clearly happen within Silicon Valley.

But you’re right, to put it bluntly, that most consumers,
when they think about these large tech companies like Amazon, Google, and
Microsoft, still have pretty positive opinions about them. Again, when you ask
people to rank, “What are your biggest concerns?” reigning in tech companies is
really not the top concern.

You see this in rural communities as well — you know,
“What’s your biggest issue?” Anything related to tech doesn’t even happen to be
in the top 10. Most of those don’t even really get percentage numbers when
asked on these surveys. To me, what we’re seeing is this fall from grace. I
don’t know where that leaves us necessarily, which is what I think we’re all
going to be waiting for, especially when it comes to 2020.

You mentioned a few
different issues that people are concerned about. Maybe we’ll run through some
of them and get your thoughts: One of the biggest ones on the left is the issue
of corporate concentration and power.

These companies are
just too big and powerful, and they’re squashing competition. That’s how
they’re staying on top. Let’s just focus on the corporate concentration issue:
How much does that concern you? If we have capitalism, then we want
competition, right?

Right, but what do you mean by competition?

As an economist, you worry about concentration as a kind of
“first test” as to whether you should be concerned about an industry.
Anti-trust works in a very similar way — you have an initial test to see if you
need to look deeper into the industry itself. When it comes to concentration,
again, the numbers don’t necessarily evince the fact that these companies are
anti-competitive.

Google has about 90
percent of search. For some people, that should be the end of the discussion.
“Google has 90 percent of search, it seems like Amazon dominates online
commerce, Facebook and all of the big social media companies seem to be a
flavor of Facebook, but they call it Instagram or WhatsApp.”

I think most people
would look, at first glance, and say, “Wow, these companies seem to dominate
their markets, particularly in the case of Google, to a ridiculous level. How
could that not be a problem?”

I think what we’re struggling with is something you’re
hinting at here — what are the elements of competition?

When you look at, for example, Google, in any given day
they’ll have something like five hundred or-so changes to their algorithm. So
they’ll constantly change what their search results actually look like, because
of what they perceive as competitive forces. That could include Bing, which
they still do feel like they’re very competitive with. But at the same time,
they have this push and pull with spammers and others trying to game the
system.

I think you need to do this with every single industry, but
with search, you need to say, “Okay — what does the industry look like? What
are the potential alternatives to search? What is it that people are also using
Google for?” A lot of times when people actually go to Google and search for
something within the search bar, they’re really looking for whatever the “dot
com” address is for the people that they already know about. So I was recently
buying some stuff on Land’s End — I don’t know exactly what their dot com
address is, so I go to Google and I look for it.

That sort of competition is, at least for them, pretty
ever-present, because they’re constantly having to make sure that their search
results net the kind of results that users want.

But why do they care?
They already have 90 percent of the market. I mean, there are other search
engines, but they’re really an afterthought.

So why do they make
500 changes a day, other than to worry about spammers? It’s a finished product
— they should be pocketing all that cash, so why spend all this money? They
spend a lot on R&D, too. Why continue to invest in this highly successful
monopoly that seems unchallenged?

That’s the impression
I get, not to pick on Google, but it’s that they have such a dominant position that you cannot challenge them. They can
do whatever they want, and it’s an obvious case of a monopoly. I’m not sure if
the solution is supposed to be to highly regulate them, or to break them up
into Google North, South, East, and West. But that’s the idea — they have the
most obvious monopoly because everyone goes to Google for search.

What we’re hinting at here is the thing that economists care
about when it comes to competition, which is price-to-quality. What I’m trying
to highlight when it comes to these changes is that Google, regardless of the
fact that they are obviously a dominant player in search, they’re still
continuously their algorithm to have high quality search results. To me, that’s
a sign of competition — of a company that feels like it is under competitive
threat.

Again, when we normally talk about questions of competition,
it really has universally been related to price. So we’re looking for the
reason why you’d have fewer competitors: You can increase price. And when it
comes to Google’s search, that doesn’t really exist.

Now, all these other companies exist in slightly different
markets. Facebook does, in fact, have some pretty intense competitors — TikTok
is changing things pretty dramatically, and Fortnite is a big competitor. So a
lot of what we’re talking about with competition means a whole lot of different
things depending on the industry we mean, and where certain players fit in
within the industry. And as policymakers try to understand these markets, we
really do need to do a deep dive into each of these industries.

Who are their
competitors? What are the relevant markets? If we look back five years from
now, and we look particularly at Google, Facebook, Microsoft — which isn’t
often mentioned —

Even though it’s among the biggest, yeah.

—and Amazon. They
probably get mentioned the most as companies that need to get split up. Five
years from now, do you think that those companies will have been split up, or
that little pieces will have been chopped off from any of them?

Depending on what the politics of 2020 look like — I mean,
if we get a Democrat in the White House I think you will probably see far more
pressure by a new DOJ and FTC to do something to these companies. That, to me,
is somewhat worrying.

As far as competition and new entrances, we’re still
figuring out how this market will turn out. For example: When we talk about the
smartphone market, that market is really only a little over 10 years old now.
It’s very important to remember that the iPhone was only effectively released
in 2007. We’re still in a fairly early stage — we’re almost, like, in the
teenage years when it comes to competition in this space.

Amazon is getting more competitive with Facebook and Google
in advertising. Google, for example, has made huge inroads into cloud services.
So what you see are these larger companies getting involved in a whole bunch of
other markets and being competitive with each other in those markets.

That to me is the new, more nuanced competition that we’re
going towards rather than this single type of competition we’ve seen in the
past — like GM versus Ford.

Elizabeth Warren has
focused on this the most out of the Democratic candidates, where she has a
number of anti-trust proposals for splitting up companies in different ways.
But the history of anti-trust has been that it’s not easy.

These cases take a
long time, and the resolution could be not so clear, and maybe the companies
won’t be split up. Maybe they’ll just have to change their behavior. So, if
you’re asking for all of these major changes within companies, it seems
fanciful to me that you would get that splitting up into different pieces
within 10 years for even one of these
companies, let alone three, four, or five of them. To put these restrictions on
them just seems like a lot.

There’s actually a lot of research that suggests that doing
something along those lines would be quite detrimental to consumer welfare.
This is something that we talk a lot about, obviously, and the question is how
much are consumers impacted by potential anti-trust actions? What happens when
there are limitations on certain types of behavior or threats to break them up?

I’ve been quite critical of calls to break up tech companies
for a number of reasons. Among them, my biggest concern is that, technically
speaking, it’s very hard. And it’s in such a way where earlier examples such as
Standard Oil and AT&T were a little bit easier.

The case that I consistently cite, which I think needs to be
understood better, is the American tobacco case. That actually looked much more
like a multinational firm with integrated businesses and offices and all of
these sorts of things. And what we saw with that as well as a whole bunch of
other firms like Standard Oil and AT&T is that the immediate effect of
breaking up these companies isn’t really a huge change in the market itself.
Consumers don’t benefit all that much from it, and in fact, the big thing that
changed the oil market after Standard Oil was the discovery of West Texas
crude, and the market that happened in Spindletop.

Again, to me, when you look at the history of breaking up
these tech firms or companies, I think it shows that breaking up tech companies
is probably going to be very similar. You’re not really going to get a lot of
consumer benefits in the near term, and ultimately what we probably would want
to end up doing is figuring out other ways to incentivize competition in other
spaces.

I’ve written a lot about this as well — education is a
really important starter, with figuring out regulation. It’s often very costly
to start a new business in some regards so there’s a whole bunch of other
things we can do to ensure competition.

Do you think these
companies are quashing competition? Either they’re so big and powerful that
companies say, “We can’t compete in this space,” or maybe they buy up potential
competitors as part of their business?

Is there good
evidence that, even though they seem like very innovative companies, in the end
they’re bad for innovation?

Again, personally, I hope we’re very nuanced about the
industry we’re looking at. We’re looking, basically, at a buyout question,
where you’re basically buying out a competitor to quash competition. To me,
that doesn’t track well with what’s actually happening with these companies.

What you end up doing is buying a company for their tech
talent or some sort of knowledge that exists within the company, and then you
integrate that through a platform. In most cases, what you’re talking about is
having an idea that’s in a small lab setting that a smaller company may be
working on that then gets implemented through an entire network very quickly.
In those cases, you’re talking about a pro-consumer outcome. Those things are
clearly beneficial to consumers in society.

The problem I think we really need to separate out here is
that there’s a larger question about what’s happening, for example, in
pharmaceuticals. There’s a lot more interesting evidence of a company buying up
a competitor there in order to stop follow-on innovation, as it’s called. When
it comes to the bigger tech companies, that doesn’t seem to be happening all
that much. Again, to me there’s just a lot of nuance to these things that we
should actually be concerned about.

Another big concern
is just the basic business model of a lot of these companies. Many of them are
free services, but they use your data as part of a targeted-advertising
business model. Some people just don’t like that business model, and they think
it’s bad.

What are your
thoughts on that? I think the upside is that these services are free — I don’t
have to subscribe to Google. But what’s the downside? That they’re not paying
me for my data? That the data could be misused? What do you think peoples’
concerns are, and how you evaluate those concerns?

I think there are layered concerns. First off, we do know
that ad-supported businesses are hugely pro-consumer.

And they aren’t
novel, either.

No, not at all! Newspapers, radio, television — those are
obviously all ad-supported models. A couple of years back, some researchers
found that these ad-supported businesses benefit consumers to something like $7
trillion, or something like that. So we know that there’s huge consumer benefit
from these ad-supported businesses.

There is, however, a subset of very clear concerns where
there are questions about data collection, privacy, and generally, how the
information is being used to target specific kinds of ads. In a number of
interesting ways, the biggest players do often give you options to, for
example, limit the kind of advertising that is being targeted towards you. In a
number of cases, you’ve got “opt out.” There’s that little blue marker when it
comes to the ad choices model, which almost no one uses.

There are ways
that consumers are clearly limiting how much the biggest platforms and the
biggest social media companies are looking into them. We know, for example,
that people are using these ad-ghosting apps all the time that limit ad
collection and ad removal. So that’s pretty consistent. A lot of people use
these sorts of apps. There is obviously a clear concern when it comes to
privacy and data collection.

That’s a big thing in California: There will be a law that
is going to enactment in about a month and a half, I think, that’s going to try
to take a stab at giving consumers more options to know what’s being collected
from them and to give them the ability to opt out. There’s a whole bunch of
things happening.

Is it a transparency
issue? What is the consumer complaint — that their data is being misused, that
they simply don’t know how the data is being used, or that they don’t have
tools to adjust it?

Because it sounds
like there are tools, but people just don’t bother with them. That leads me to
wonder how serious the concerns actually are, if people are unwilling to take
any action with the tools that are available.

I think the problem is that when we talk about privacy,
we’re actually compressing at least two separate problems that most people
actually do care about.

One of them would be what you call data security: At the end
of the day, this is stuff like identity theft and fraud. Just blunt fraud,
where people are taking your credit card information and using it. When people
talk about privacy and ensuring that your information is private, that’s often
what’s included.

Right. The two modern privacy issues are, “Don’t look into bank accounts, and don’t look at browser history.”

Exactly, but
people care more about the bank account far more. In fact, we find that in a
whole bunch of surveys. Pew and the Census have done really good work on this.

So yes, breaking into the bank account is really the biggest
concern, but because we use these kind of amorphous terms for privacy, the
question of identity theft is often put into questions of data collection,
which is ultimately a concern about platforms and users. To me, there really
are two somewhat separate issues here.

What is surveillance
capitalism? [laughs]

[laughs] That’s a good question — I don’t really know.

Is that just a fancy
phrase that makes for a good book title? It just sounds like the current
business model — “We use the data you provide to serve you relevant,”
sometimes, at least, “advertising.” We seem very concerned about this.

Right, this is the Shoshana
Zuboff book on “surveillance capitalism.” I only got through so much of it,
to be very honest. Because that book in particular kind of bothers me. The
usage of terminology is pretty lax, and it really doesn’t do a very good job of
actually describing what the “surveillance capitalist” system actually looks
like. It spends a whole bunch of time trying to build it out.

Should we be worried
about the “surveillance” part, or the “capitalism” part?

That’s a good question. I don’t know. I mean, people are
worried that people are looking over their shoulders, and when we talk about
Facebook and Google, we often use these terms as though they are these things that are actually looking at you.
But again, Facebook and Google are not these monoliths.

One of my favorite examples of this: I recently learned that
the Google Adwords team was actually demoted by the Google Webmaster team
because they were incorrectly following guidelines. So the ad team was actually
being criticized. So you’re actually seeing conflict between these two company
divisions.

Very typical
monopolistic behavior, right?

Of course!

Should Google be
paying me for using my data? Should I be getting paid by any of these
companies? It’s obviously very valuable to them, so why am I not getting a
check?

You are getting an
implicit benefit. You’re not getting a check, no. But then the question is
whether you want to make a clearly implicit value exchange an explicit one.

But checks would be
great.

They would be, but you also then wouldn’t be getting the
benefit of the services. There’s really interesting work that Erik Brynjolfsson
has done on this. When he asks an individual, “How much would you be willing to
be paid to not use Google’s search anymore?” it’s typically around $1,800 a
year. I mean, that’s a potentially big check, or at least an implicit value
you’re placing on Google’s search.

Why do so many people
think we should be getting checks?

Because everyone wants free money. Right? I mean, I want free money. I don’t want to have
to do anything and still get free money.

Is it that the people
who say that we should be getting checks for our data just don’t believe that we’re
getting value for our time? Do they not believe those studies? I think at the
core they somehow think we’re being taken advantage of.

Yes.

And so one way to
compensate that would obviously be to get cash on the barrel.

I think this is a really interesting scenario that I’m
trying to do more work on within the next year. There’s a lot of complexity
here, and what you’re highlighting is this question: “Well, for example, would
people be willing to actually pay for Google or Facebook services?” Most people
would not, actually. They don’t want
to pay for these things.

Typically, about three-fourths of these individuals say,
“No, I will not pay for Facebook or Google,” but they clearly do get an
implicit value from the use of the services. It doesn’t seem to me that people
are really asking for these kind of value payments, except for people in
Silicon Valley, really, which has a very different relationship to Google and
Facebook. That’s obviously because these are large companies that have a large
industrial footprint there, and there are tax questions there as well.

So again, when you typically ask people, “Do you want to be
paid for your data?” and then you start asking follow-on questions — “Well,
would you be willing to pay Facebook for the use of its services?” they say,
“Well yes, I want to be paid for my
data being collected, but also I don’t want to have to pay for the service.” So
there’s a lot of conflict here, and it’s understandable — everyone wants free
money.

The case you’ll hear
is that, maybe these companies are so big and powerful and crucial, that we
should nationalize them. Or maybe there should be nationalized versions.

Oof. [laughs]

“How much better can
Google’s search get, you know?” Is it just three people on Twitter who actually
want to do that?

I think it is three
people on Twitter — and far more with the Brits. The Brits have a much more
okay relationship with that. Again, we’ve tried some of this stuff and it
really just hasn’t worked. Even the Brits tried this in the 80s, and whole
bunch of these services had to get deregulated.

I don’t know what you get with nationalization that you
don’t get with a private service. That’s the other thing I just don’t
understand — with nationalization you get a whole bunch of tough questions
about the First Amendment that we haven’t really gone into, but I don’t know
that in the United States you could sustain it through the courts. So there’s a
lot that’s embedded in that sort of a call, and to me, I just don’t think it’s
very practical to deal with the sorts of problems that consumers actually worry
about.

You’ve done some work
on broadband access in rural America. How big of a problem is this, and what
should we be doing about it?

It is an issue that some rural regions don’t have internet
access, but there are clearly downtown areas that do have internet. “Main
Street” typically has internet access.

I’m originally from Springfield, Illinois, but my
grandparents are from a place called Olney, Illinois, which is a small,
micropolitan area in southern Illinois. And like many other rural regions, they
have a kind of downtown core that very clearly does have internet access. In
fact, most of the businesses and retail shops downtown really do have quite
fast internet access and access to a couple of different providers.

But when you get, say, a mile away from the downtown core
which is where my grandparents lived, they don’t have internet access at all.
And you see this a lot: Micropolitan cores, which are where a lot of the jobs
are located in rural America, do in fact have internet access. But when you get
just outside of them, they don’t. And that kind of relationship between the
economics of broadband and this rural-density question is something that
policymakers are really trying to grapple with.

So, how do you get more broadband in these areas? Even if
you were able to get more broadband into where my grandparents were at, you’re
not necessarily going to get the immediate economic benefits that you want to
see, which clearly exist when it comes to new employment, new businesses, and
better economic outcomes. We’ve seen this writ-large in the United States, that
broadband subsidies and development isn’t as clearly and cleanly tied to
economic development as you would think it would be.

But there’s value to
someone living a mile away from the downtown core being able to jump on the
internet and watch YouTube, or whatever. There’s a value to that.

There clearly is.

If it’s purely a
money and engineering problem, well, America has a lot of money and smart
engineers. Why doesn’t the government just fix that problem?

States are trying to fix this right now. For one, let me say
that it’s a constantly evolving problem. So, the broadband that you needed,
perhaps, five years ago isn’t necessarily the broadband that you need today.
There’s a constant upgrade path question.

But states clearly are trying to solve this problem. You’ve
seen, really in the last five years, that cities and localities are trying to
figure out where there’s broadband — in their backyards, or which areas do and
don’t have it. They’re trying to do targeted grants and loans to get broadband
into these very core regions that really need it.

Again, the federal government is still doing a lot: The FCC
still spends something like $8 or $9 billion per year on various broadband
development programs. There’s a lot that’s being done — it’s just that it’s in
fits and starts, bits and pieces.

Do you think this
will be a public-led effort, or a private sector-led effort?

I think you’re going to have a little bit of both. The
private sector has clearly been leading on a lot of this.

You know, in downtown DC we have quite fast internet — it’s
some of the best in the world. But what you’re going to start seeing,
especially in some of these rural regions, is localities working with some of
these ISPs to figure out where broadband needs to be located, and to help with
it. There’s a whole range of options that localities are trying to pursue,
because, again, there’s a whole bunch of different ways to do this, I think.

Will, I’m really
worried that China’s going to have all of the good AI. They’re going to win the
AI race. Are you worried about that, and what should the federal government be
doing to help advance that technology, if anything?

The AI race is something I prefer to think about as a
question of leadership. Because with every previous technology, it hasn’t
necessarily been about the race to the quickest technology itself. It has
always been about applications, new business methods, and really, the
application of education to business.

What we’re seeing in the United States, unfortunately, is
that there has been some backwards sliding when it comes to questions of
education. When you talk to people that are concerned about the AI question,
generally speaking, the biggest absolute concern that almost everyone cites is
around education. The algorithms are there, the hardware is accessible and
cheap, and those are the two things that have occurred in the last few years
that make AI possible. But the other thing that really makes it possible that
we need to get right is education.

A lot of it includes figuring out immigration — some of the
best engineers that work in the United States have come from other countries
and they want to settle here because we have good jobs, and there are often
very nice places to work at if you’re working on AI applications. That, to me,
is what we really need to be focused on — education and immigration.

What about the idea
that the government should be investing more money in basic research, and maybe
in not-so-basic research? Or the idea that the government needs to take more of
a leading role — not just in AI, but also in technology hubs? That’s where
companies locate, with research centers and universities, where they can all
mix together information.

That could be where
they take the lead: More government investment, and more government-created
tech hubs.

What you’ve seen in the United States is actually
private-led hubs that have already been created: New York, Boston, Silicon
Valley, Chicago — where I spent many years. All of these are really our tech
hubs.

They weren’t necessarily “created” even though they were
supported by some government funding. Even though some of Silicon Valley’s
initial investments came from government contracts —

There wasn’t some
master-led takeover in Silicon Valley.

Of course.

But certainly there
are people today who love the phrase “industrial policy,” and they don’t shy
away from it. They think that we need a government-led effort — much like
China, but with our own spin. You know, “Industrial policy with American
characteristics.”

[laughs] I’m stealing that, by that way.

They worry that we
need a lot more government, or that we’re not just going to lose the AI race,
but races in robotics, advanced manufacturing, and 5G as well. “The government
needs to take a much more heavy-handed role in all of these technologies,
because China’s figured it out and we need to learn from them.”

I mean, China is still trailing us in a number of important
places when it comes to key technologies. But with R&D, which is a really
big conversation right now, I’m actually very supportive of R&D measures.

Government funding?

Of course — and to be very clear, government funding of
R&D for the last, goodness, 20 years is among the highest it’s ever been.
And over time, government funding on R&D has focused less on the
“development” part and more and more on the “research” part. But still, at the
end of the day, a lot of Chinese firms are not yet “frontier” firms as they’re
called.

There are obviously a couple of big ones that we talk about
a lot, but every firm, regardless to whether it’s Chinese or American, are
still going to suffer what’s called the “Valley of Death.” You’ve got the basic
research component, but you have to do a lot in order to take that basic
research and make it into an industrial product that can be brought to market.
United States’ firms for years have been the leader in this.

I think that’s what Silicon Valley does best:
commercializing technologies and not being complacent when it comes to
management techniques. Not to say that there’s nothing to learn abut Chinese
firms, but firms in the US in many areas like Texas, Arizona, California, and
Washington are still hubs of important companies that are able to take that
basic research which is clearly supported by government but also supported by
corporate dollars and they’re able to actually make that into products that
consumers want to use.

Should American tech
companies be building research centers in China?

Hm. In China? I would hope you’d be able to bring talent
over here.

How concerned are you
by that kind of thing? Because that national security aspect puts some of these
issues in a different light. Some people may just be concerned in general that
China’s going to take all of the technology and we won’t have it anymore, and
they’ll build the companies of the future.

But, if that
technology has a military application, then you worry about them having some
sort of a military edge. Is that a big concern of yours?

Personally, I don’t know that it’s a large concern. Because
one of the benefits with globalization is still that firms across the world are
able to learn from each other. So there’s still a lot of diffusion of learning.
We’re seeing in the United States that companies do in fact outsource their
research capabilities in many different areas.

You know, there’s also a lot in Asia, but it’s not just in
China, There’s a lot in South Korea and Japan where they have corporate
research firms. A lot of firms work together in research projects. So I’m not
necessarily worried a lot about the localization of research into one are or
another.

The question that I think we really do need to figure out —
what I think United States companies have done the best is that they’re able to
be competitive in a global market, which I still think that we need to spend a
lot of time on, and policymakers really do need to be concerned about that.
They’ve been good about commercializing products as well, and those two things
have really been the driving force of American capitalism for over 100 years
now. Those are the kind of characteristics that I want to keep.

The research part will still obviously occur in the United States
— we still have great schools and research parks. I’m not worried as much about
that. I do however worry that there are some changes afoot right now that would
limit our ability to trade on a global scale and to also remain globally
competitive. That to me is the most worrying part of politics right now.

Let me end with this:
If you were a policymaker, and you think that it’s important that America
remains the world’s leading military and economic power, and if you think
that’s driven by our technological expertise, so you want to make sure that
we’re constantly pushing that tech frontier forward, what is the biggest policy
that we should commit to, or avoid?

I’d probably go back to what I said earlier, which is that
we really need to get immigration right. We need to figure out how to keep and
retain the best talent the world has to offer. The United States was, and
really still is, a top destination for the smartest people in the world. They
want to come and work here, so I think we really do need to figure that out.

And secondly, we need to figure out education and do better
with it. I was reading recently about how some of the best schools in the
United States — Princeton, Harvard, and MIT — still have pretty small
undergraduate classes. There’s not a lot of people who actually go through
them. Figuring out how to do education well is really difficult. I’m not going to say it’s easy, but I really do
think that’s the area we need to be focusing on — education and immigration. I
think a lot of people in our space and the tech space are very much in line
with that.

Will, thanks for
coming on the podcast.

Thanks for having me.

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