The Powell Memorandum
In my quest to better understand the origins of big tech’s power I find myself reading a lot of history. The Thatcher / Reagan agenda of lower taxes and weaker regulation is an obvious point to examine, but the seeds for this were being sewn much earlier..
While reading a recent paper on declining antitrust enforcement in the US I became aware of the Powell Memorandum (1971), a report written by future Justice of the Supreme Court Jerome Powell on how Republican’s could attack the economics of the New Deal. Luigi Zingales, one of the papers authors, summersies the paper on his Capitalist podcast alongside Bethany McClean. He notes three significant strategies:
- Relaxing campaign financing
- Filling the courts with pro-business judges
- Increaing the volume of pro-busines academic output
This plan was surprisingly well executed given what we know about the next half-century of corporate power. And, if we consider big tech specifically we are able to see how much they benefitted from the memo. Consider: that tech is now biggest lobbyist in Washington; that consumer welfare focus (i.e. low prices) has slowed reaction to big tech’s growing power; that tech has pumped money into research organisations such as the ITIF in order to challenge research that threatens their business.
How far back you need to go to understand the origins of big tech’s power is not an easy question to answer, but the Powell Memorandum certainly offers one answer.