Companies Write Their Own Rules and Make a Mockery of Democracy


Amazon awarded Philadelphia a 2018 merit-based competition worth nearly half a billion dollars. So, city leaders were probably not thrilled to discover in a new book how one of the company’s top executives frowned at the bid because that he couldn’t stand the Eagles football team.

Andy Jassy, since tapped to succeed Jeff Bezos as Amazon’s chief executive, “opined that he disliked the city, which was the bitter rival of his favorite football team, the New York Giants,” according to “Amazon Unbound,” by a longtime company chronicler, the journalist Brad Stone.

Amazon picked New York and Arlington, Va., instead.

The HQ2 process is an example of a growing feature in American life: large tech companies staging shows of government-style decision making about government-scale problems. Recent examples include Facebook’s reliance an ersatzjudicialy as a decision maker about whether Donald Trump may resume post, and Uber’s attempts to create distinct labor standards especially for Uber drivers.

Public outrage tends focus on the poor quality and ineptitude of these pantomimes. The real injustice runs deeper. In a representative democracy, the process confers legitimacy on the result. A piece of legislation or a court ruling commands compliance because the decision is made by duly empowered representatives acting under the law.

Corporations act as governments because it is their desire to have procedural legitimacy in their investment decisions. But they do it for the purpose of warding off the government.

The show is a sham and a mockery to democracy. Corporations might be people but they are not polities. Their executives are not representatives of us. These rules they choose to follow do not constitute laws. To justify actions against the public interest, legitimacy cannot be borrowed.

Amazon’s nationwide bake-off demonstrated how the company was able to use its economic power in a responsible manner. But it actually served as an instrument to subvert the public interest, by using local governments as incentives. After abandoning New York because of insufficient enthusiasm, Amazon has begun building in Arlington on a site that is directly across the Potomac River, from the heart and soul of the government.

Amazon is also a national leader for mandatory arbitration, which are contractual clauses that shift dispute settlement from the judicial system towards private courts. Amazon requires nearly 2.5 million third parties to sign up for arbitration in any disputes. Additionally, it prohibits them all from joining forces. The House Judiciary Committee concluded that the system “functions in a way for Amazon’s to keep disputes under its control with the scales heavily in its favor,” last year.

Facebook is deeply committed to writing its own rules. Mark Zuckerberg was the founder of the company and he created an oversight board, which he called “almost like the Supreme Court” in order to determine the limits to acceptable speech in private companies’ public spaces. The federal government has exempted online publishers from some of the legal responsibility assumed by those who print on paper and allows them to make their own rules. Mr. Zuckerberg noticed in The New Yorker last year that “maybe it’s just not right for the company make by itself.”

There are many other examples of technology companies regulating in the same way as governments. Bitcoin is an alternative system in monetary regulation. It is popular because it facilitates illegal activities. Uber’s stock price is a reflection of its contempt for taxicab laws, and its success in arguing it is creating better rules. YouTube has stated that its business would be unable to survive if its contributors violated copyrights. YouTube’s success relies on government support of an alternative standard under the rules which websites can only play Whac A Mole.

The government’s permissive attitude toward technology companies reflects the special place that frontiers have long held in American life and imagination.

The solution to old diseases was found in new places. As Greg Grandin writes in his acute 2019 book, “The End of the Myth,” the western frontier “allowed the United States to avoid a true reckoning with its social problems, such as economic inequality, racism, crime and punishment, and violence.” The sense of limitless possibility — and the absence of hierarchy — was an argument against the reallocation of existing resources.

However, frontier was also a place that allowed people to take liberties.

You don’t have to grab the fish and throw it at you. There are obvious parallels to the electronic frontier. Tech companies present themselves as pioneers empowering people to build communities, to obtain goods and services, to earn a living. But they also have a business of taking public liberties.

When companies are allowed to strike the balance, there may be some congruence with the public interest, but not enough. Corporations are part of a system and not its administrators. Regulating the pace and nature changes is one of the most important responsibilities of government. It’s a job the government needs to take more seriously.

Philadelphia Eagles fans can now boo Santa Claus and throw snowballs at him from their seats.

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