Amazon Acquisition of Whole Foods Underscores the Big Data Threat

(This piece was first published by The Hill, where I am an Opinion Contributor.)

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.

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 hacked Podesta emails included this advice from Google’s Eric Schmidt to the Clinton campaign that said it all:

“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, and their megawealth, but no sense of the social responsibility that comes with it.

Filling the void is political ideology. Amazon is based in Seattle, not Silicon Valley, but it might as well be. The ideology of Silicon Valley is what is politely called “progressivism,” but is actually the politics of the college campus, where many tech companies were born. It is also where 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 monopolies will sooner or later be challenged by upstarts that can provide better products or services, and/or at a better price.

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 ahead of the Bill of Rights.

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.

Get ready for the “progressive” assault on your civil liberties.