Mammoths Still Rule the Planet


Oregon State University

Never mind the disruption — giants run the world. Now more than ever, The Economist writes, colossus companies rule the global economy. Some, like GE, are old-line standbys that have reinvented themselves; others are upstarts like Samsung; others are the familiar kings of the Silicon Valley hills, like Apple, Google, and Facebook. All have become experts at giving customers what they want and improving their lives, often (particularly in the digital economy) for free. But there are two big problems with their ascendancy: First, they’re awfully good at squashing competition, and second, their scale gives them extra leverage to evade taxes and manipulate governments and global bureaucracies. Much of the populist noise you hear from different points around the world stems from resentment at these outsize advantages. If we want to keep such revolts from turning ugly, we need to devise a digital-age update for the principles of antitrust. “The world needs a healthy dose of competition to keep today’s giants on their toes and to give those in their shadow a chance to grow,” the Economist says. Amen.

That census report? It’s even better than you think. Last week’s economic report from the U.S. Census Bureau, with its news of rising household income and reduced inequality, gave cause for cheer. But if you really want to understand the numbers and why they may actually underreport the economic progress we’re beginning to make, read Matthew Yglesias’s analysis in Vox. Yglesias points out a number of flaws and problems with the census numbers: It measures inflation too harshly, it gauges income too strictly (missing out on increases in healthcare coverage), it fails to take into account changing norms in what makes up a “household,” and more. Yglesias’s conclusion: If we corrected for these issues, we’d have an even rosier picture of where the economy stands. In particular, we’d find that median household income has in fact surpassed its 1999 peak, meaning that “The American middle class is richer than it’s been at any previous point in history.” Something to ponder as you listen to the next election-season jeremiad.

The automotive economy is insanely inefficient. Most of our cars sit idle most of the time, taking up space and warping our cities. In the U.S. we spend more on our cars than on our food, and then we leave them parked and empty 96 percent of the time. That’s crazy — it’s the equivalent of “a failing transportation business,” as Lyft co-founder John Zimmer puts it (Medium). In the city of the self-driving-car future, Zimmer says, you won’t need or want to own your own car; companies like Lyft will provide self-driving rides on demand. You’ll save money and worry, they’ll make money, and everyone will be happy. We’ll get the chance to rebuild our cities around providing space for people to interact rather than for cars to park. With Zimmer’s “third transportation revolution” (after railroads and human-driven autos), he predicts, “by 2025, owning a car will go the way of the DVD.” This rosy vision is attractive in lots of ways — but also omits many of the tough transitional problems we’ll face. Most revolutions have casualties, and we’d better be thinking about them — or face the possibility of counter-revolution.

Tech is wiping out Silicon Valley eateries. Demand for downtown office space is driving mid-range restaurants out of Palo Alto, as tech-campus cafeterias hire away talent and reduce demand (The New York Times). Robots could alleviate the labor shortage, but they’re not going to eat the meals. In many ways, what’s happening to the dining scene in the Valley is similar to what’s happening to community-based nonprofits there (Fast Company), as competition for talent and rising rents make it harder for them to focus on their missions. Maybe all of this will get sorted out in the next downturn — but if this is a peek at the future, and we plan to keep eating out, we’ve got some recalibration to do.

China’s “urban villages” face extinction. Shenzhen is the birthplace of China’s industrial transformation, and the wealth that transition brought has also reshaped the city into a modern megalopolis. But there are still remnants of the old Shenzhen in a handful of neighborhoods — densely packed warrens of small businesses and crowded tenements (Foreign Policy). For example, Baishizhou is 150,000 people packed into a quarter of a square mile, and the government has slated it for demolition, to be replaced by malls and high-rises. Shenzhen has lots of these “urban villages” that sit like teeming labyrinths pocketed between modern developments. They’re poorly regulated hives of dangerous structures and borderline enterprises; but they also offer a vibrant welcome to poor newcomers in ways that the modern city can’t always replace. If Baishizhou and Shenzhen’s other urban villages vanish, observers fear, the whole chain of the region’s economic development — which depends on a steady influx of cheap labor from the countryside — could break. It’s a distinctly 21st-century problem that is also straight out of the writings of 20th-century urban theorist Jane Jacobs, who celebrated the value of organically emerging human-scale communities thriving at street level.

Featured in NewCo Shift: Here’s What Happens When You Give $1000 To Someone in Extreme Poverty. Andrew McDermott takes a look under the hood of Give Directly to find out exactly what your contributions pay for when people in Kenya get them.

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