Technology, markets, or business

Technology and commerce have evolved together: trade spreads knowledge and rewards invention; technology, in turn, expedites trade. But what if you had to pick one? In which are you more invested? To be more specific, what if you had to order your priorities, between technology, markets, and business? Which, to borrow from Tyler Cowen, is your most stubborn attachment?

I’ve come to think of this question as a helpful guide to intuitions on economic policy. Think of how different right-leaning groups might answer: more economics-focused libertarians would no doubt prioritize markets, as would those concerned by “crony capitalism.” Those most concerned with negative liberty and property rights might prioritize business. “Big-business Republicans” are easy. AEI would probably rank markets first, but with its commitment to “free enterprise” business probably would garner more attachment than technology per se.

Now think about business groups: The Chamber of Commerce would put business first. Finance types might be more likely to say markets — or at the very least traders would. Silicon Valley would put technology first, though with a particular form of business — the venture-backed startup — not far behind. They have much less interest in markets, and in fact often seek to disrupt or dominate them, as in Thiel’s Zero to One.

What about the center and left? None of the three is their most stubborn attachment, but the question is still revealing. Technocrats at Brookings would likely put markets first. Elizabeth Warren, in her attacks on market power, is likewise creating a “markets-first” position — with the caveat that markets need considerable oversight to be truly competitive.

To take a concrete policy issue, think about the minimum wage. Of course, the main reasons to raise the minimum wage have little to do with technology, business, or markets. The desire is to raise wages. However, the prioritization helps explain how different groups react to it. Those whose first allegiance is to business will be skeptical of it; it likely raises costs for businesses. Those whose allegiance is to markets will focus narrowly on the dis-employment effect; their opinion will probably hinge on their view of that literature. But if you prioritize technology, you’ll see something else to like with the minimum wage — as Rob Atkinson of ITIF, the tech think tank, does. Raising wages might actually be a feature for the economy, because it “it becomes more economical for him to adopt technology.”

To close, I’ll just say: think about how this prioritization explains different groups’ reaction to the big tech companies.

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