Private Company Argument

Hi everyone, this is Charles Hoskinson broadcasting live from warm, sunny Colorado. I want to make a quick video and talk about a particular argument that I've seen floating around certain libertarian circles, Eric Orhees made it, and some people over Twitter and the internet have been making it, about private companies being able to do whatever they want, deplatform people, and so forth. You see, I am a libertarian, but I'm also cognizant that over the last 200 years we've learned a few things about markets and economies, and the nature of companies and governments. So you see, there's a world of difference between a normal private company like mine, IOHK, and a situation where there's collusion amongst a collection of super companies that have monopolistic control over entire verticals of an economy. So in my case, IOHK, I have many competitors, ConsenSys, Polkadot, led by Parity Tech, BlockOne, and all these other guys, and they float around, and sometimes we get along, sometimes we don't get along, but none of my competitors are in a position where they have so much control over the market that they can unilaterally decide how the market operates and shut me out or do things in such a way that I have to operate my business according to their rules.

So let's look at Twitter and Parler as an example. So the libertarian free market argument is, oh, well, a private company, if you don't it, well, we can just compete with them. Okay, so that's exactly what happened. And Parler came in, they said, we're going to build our own product, and we're going to have a different way of doing community curation. Now if this was a truly free market, Parler and Twitter would coexist, and individuals would make decisions of which platforms they wanted to go to with their values.

But that's not what happened. Parler coexisted with Twitter, and then Apple and Google said, if you guys don't moderate like Twitter moderates, we're going to remove you from our markets. And that's 100%, nearly 100% of all mobile users, the predominant computation device, the predominant device that people use to access their news and do things every day. So what happened? Because of a collusion of a collection of entities that control all of the network effect, one company was not allowed to compete with another company.

They were basically de-platformed. And somehow people in the libertarian side are defending this thing, well, private companies can do whatever they do. So tell me, how far do you want to die on that hill? How far do you want to take this insane concept? Let's say that Apple, Microsoft, and Google get together, and they say, we're going to shut your business out of all of our services, advertising, and use of our platforms, unless you pay each of your employees $100,000 per year.

Why not? They're private companies, they can do whatever they want to do. So you lose market access. And all your competitors have market access. You don't have it.

And they can just make that decision for you, not your competitors. They can go to your competitors, say, pay them whatever you guys want. But your company must pay $100,000. You're de-platformed, unless you do that. Can't pay it?

Well, too bad, you're de-platformed now. Now you've just lost 99% of your customers. And you're honestly going to tell me that that's okay. Then these companies get so big that when they make mistakes, and their balance sheet doesn't look so good, and they're heading towards bankruptcy, we have too big to fail. We saw this with the banks.

So if they don't suffer negative consequences for poor business behavior, they have enormous control over the entire marketplace, and by their policies, can pick winners and losers. You want to give them absolute reign and absolute power to arbitrarily de-platform anyone they want and decide the entire competitive landscape. We saw this in the cryptocurrency industry. Where early on in the early days of Bitcoin, Apple made decisions to get rid of Bitcoin wallets. Tomorrow, the Treasury Department could collude with Apple and Google and make a deal that all cryptocurrency applications or cryptocurrency-related applications, including exchange wallets and other such things, all of those have to be delisted and taken down.

Why not? Private companies, they can do these things if they want to. Would you be okay with that? If you're a small business owner, and your entire livelihood relies upon these platforms, which have become public utilities because they have billions of users, and they decide who's legitimate, who's not legitimate. They control the flow of information to each and every American, and each and every person in the world.

And to say, well, they're private companies, they're completely unaccountable, they can do whatever the hell they want to do, they can de-platform anybody, and anyone who wants to compete with them, they can use their monopolistic powers to crush their competitors and aid each other. And the governments will collude with them because it's politically convenient to collude with them. It is an insane argument. It is a stupid argument, and it's one I just do not understand at any level. This is something we have already litigated.

We did it in the 19th and 20th century with the trusts, when all of these big, powerful businessmen got together and they structured markets in a way so that only a certain group of people could win, and in those cases, it was oil and energy. Standard Oil was started in 1870. By 1890, it was the largest company in the United States, had total dominion over the oil industry. By the time the Sherman Antitrust Act was passed, there was a small cabal of people so powerful, they could decide what the energy prices would be in the entire United States unilaterally. So powerful, they could influence any U.

S. policy. In fact, they created the Federal Reserve System. You do not, in a free society, with checks and balances, allow corporations to become so powerful that the government is a secondary consideration to them, and they can utilize their power by cooperation with other very powerful entities to sculpt markets in a way where they never lose, they suffer no consequences for their malfeasance. And now, apparently, they have total dominion over political dialogue.

They get to decide what's truth, what's not truth. They get to decide collectively what's legitimate, what's illegitimate. They get to decide collectively who is a real person, who's a crazy lunatic conspiracy theorist. And they're extending that decision from the domain of their own companies to independent businesses. What they've done is they say, if you want to use our marketplaces, which are now the only marketplaces in many cases, 100% of the market in many cases, you must adhere by our definitions and our view of things.

And that's still apparently a private business, and they have total right and dominion to do these things. I'm sorry if you believe that. You're either so hard up your own libertarian ass, or you're just not paying attention. You have no idea how destructive and dangerous monopolies can become. Now, never once did I advocate that the solution was turn it over to the government and have them control it.

Never once. I said there's a third option. You can take the things that these platforms have become and turn most of them over into protocols that are open and free and fair. That's what we did with Bitcoin and money. And I believe it's a very rational solution, and it's something that has to be done.

But I don't want to hear for a moment that because something is a private company, there's no accountability to the common good. There absolutely is. And I take great umbrage that a handful of companies, five, are so powerful, they control the flow of information, the oil of the 21st century. And by controlling the flow of information, they control what everybody around thinks, what they believe, what they think is real and not real. Just by controlling the flow of these things, that is a power that was never intended to be entrusted to unaccountable people, unelected people, and people that you've never met, never will meet, and have no control over.

And by the small group of people collaborating and colluding with each other, they can prevent anyone from being able to overcome them by delegitimizing their competitors. We saw that with Parler. I'm not a fan of Parler. I'm not here to say join Parler or what's going on in that platform is good. But the entire libertarian argument is that Parler will compete with Twitter and the market.

A free market will decide which model is better. What Apple and Google did is they said, we're not going to allow free competition of ideas. What instead we're going to do is say the Twitter approach is legitimate, the Parler approach is not, and we're going to de-platform this entire business model. And for libertarians to come around and say, that's perfectly fine. That's okay.

They're a private business. They can do that is, again, insane. Because how does Parler compete? They've just lost 100% of the mobile market. So you think it's a fair race if I take one of the people running and I put an 80-pound backpack on them and chain their legs with a chain and balls and say, okay, go ahead and run.

If it's a fair race, if you can outrun this guy, you can win the gold medal. Do you think it's fair if I give one person a billion dollars and the other person I put them in debt? Do you think it's fair? It's not. It's not fair at all.

It's not a fair and free market. And the whole point of governments are to rein in and restrain these types of things. And they can't do it because they've become corporatists and they've become co-opted. So only thing we can do in a free market sense is to restore the market by changing the dynamics of the market in general, by implementing protocols. We recognize there was a monopoly over money.

There was no way to create private money in the old model. Any person who tried to do that, they either got corrupted or arrested. So we created Bitcoin and then Bitcoin fundamentally changed everything. So my entire argument is we must now do the same for social media. We must now do the same for other pieces of critical infrastructure in society because it is simply too dangerous to allow a small group of companies to have unilateral, unrestricted, unregulated control over every dimension of American society and life.

We don't for a moment think that one day Apple and Google and Microsoft and these other guys are going to get together and start enforcing social policy upon people who use their platforms. What if they start making diversity quotas and mandates saying any company that joins our networks, uses our services, must have certain balances of races and genders and ideologies on their board and then eventually throughout their entire employee set? Or they decide how much people should make for their roles. Or they decide anything else, any arbitrary piece of information. And if you have people of a particular political persuasion, we'll no longer do business with your business.

The libertarian argument, oh, it's a private thing, it's okay. No. It is a restriction of commercial freedom. It is a restriction of freedom of expression. And it is a restriction of freedom of association.

Private companies of this nature are no longer private. They have transcended that. They have become public-private partnerships. They have become part of the public commons. And I don't want to for a moment hear that they're not because they are.

They run everything. The governments use them for anything from contact tracing to spy craft to making weapons. So I just wanted to make a quick video about this topic. It annoys the hell out of me. I do subscribe to libertarian philosophy most of the time, but I have enough common sense to know that there are exceptions to the rule.

When you have a well-formed free market with good balance, then you allow people to compete and you take your hands off. But when markets have been co-opted, corrupted, or penetrated by deep government interference, those are no longer free and fair markets. And now the rules of the game change because people cannot compete. And Parler was a watershed moment for that. We no longer by just simply building another social network can compete with a different set of curation ideas and demographics.

It's now the case that other providers have stepped up and decided that the entire commons of all social media must subscribe to a particular ideology. At what point do you take a step back and say that's bullshit, it's wrong, and it's going to destroy society if a small collection of people at the top who aren't elected and not accountable to people basically have total control over an entire market line of thought and they never have to give it back and anyone who tries to compete with that will be destroyed. It's not a free market anymore. There's no libertarian principles there anymore. And I'd love to see a rebuttal to this.

I really honestly would. And use facts and think it through. And you tell me how you build a competitor when somebody can shut you out of 100% of the marketplace on the mobile side and then go to your ISPs and put pressure on them and have them de-platform you there. It's the same with the US government when they went because they didn't like certain legal activities like pornography and selling of guns, went and convinced payment processors and banks to debank and remove their payment abilities so that they no longer had the ability to do commerce with their customers and they had to go to a cash economy. They made people unbanked.

It's the exact same concept. And then you say, oh, private companies, whatever, what are we ever going to do? I'm not defending hate speech or any of these things. I'm not making statements about particular people like Trump and so forth. I'm talking about the nature of competition and I'm talking about the nature of markets.

We live in a time where markets have consolidated on the IT side and on the information side to a point where a small group of companies have total control over the application deployment space, the flow of information, and the legitimacy of individuals. And because they have control, if they mandate that something has to be done or something should not be done, private companies that are independent of those companies must comply and if they do not, they go out of business. That is not a free market. And there is nothing from the government to step in and take them out. So that means we have to transcend the whole thing and we have to change the entire game and innovate our way out of it.

But in the meantime, we don't have to be tolerant or accept the consequences of these monopolies. I do not want to live in a world where the CEO of Apple, Microsoft, and Google can collectively get together and decide what political ideologies, religious ideologies, and other such are acceptable for the totality of my entire country with no checks and balances and accountability. And no matter who I vote for, for president, for Senate, for Congress, for governor, can't change that. They can even de-platform the leader of my country. Love them or hate them, they now have that power.

So no matter who I vote for, no matter what I do on the ballot box, I have no control over that entire market segment vertical. And now my company is held to that same standard. So we have no freedom of speech anymore. And if we want to reach customers, convince people to grow, convince people to come in and do things, unfortunately, it is what it is. And at any moment, I can be de-platformed.

At any moment, my company can be de-platformed and I can't sue my way out of it. There's no legislation to get out of it and it's over. So what happens when they compete with me? What happens when they create their state-sponsored cryptocurrency or these other things? What do I do?

And they de-platform me. Private company, they can just do that, right? Same argument, same argument. Get your heads out of your ideological asses and understand what's happening. We are losing rapidly our freedom and our liberty and we are being controlled.

We're being taken over. This is a coup against humanity where the few will rule the many. And they'll rule us for a long time if we don't work our way out of this now. This has nothing to do with the outrage of the day. This has nothing to do with fire in a theater.

This has nothing to do with the rise of Nazis. Get your ideological heads out of your asses. This has everything to do with a small group of actors who've gotten so powerful, they're using that collective power to basically decide how all markets, all companies, all thought should be conducted. And they're not accountable to anyone. That's where we're at.

This is why I take this matter so seriously, because I can do everything right. I can build the best technology. I can focus on the best principles, have the best philosophy, be the most rational, the most inclusive. And just by the nature that what we've done is better than what they have, they can collude together and shut us out completely. And if you support that, you're part of the problem.

So really think it through. This is a watershed moment for all of us. And really think about where this is going and what this is going to do to people. It's the single most dangerous thing to commercial society and to freedom in the 21st century. And you cannot vote your way out of it anymore.

It's now an economic concern.