Political Economy Forum
February 7, 2021
Long and Menaldo on digital platforms & algorithmic amplification
In this piece, UW Political Economy co-founders James Long and Victor Menaldo think about this issue from first principles (in this case, market externalities) and consider potential solutions in light of tradeoffs and the quest to maximize social welfare, not score political points.
While in the piece they voice skepticism about whether algorithmic amplification is in fact behind social harms such as misinformation, disinformation, and conspiracy theories, even if it is partially responsible, they ask whether several benefits to AI selecting and recommending content on digital platforms offset these costs, and what the best policies are for addressing them: banning algorithms (not a good idea), imposing a cap and trade system (details in the piece), or taxing their use.
The bottom line: if regulating Big Tech is indeed in the offing, then it has to be a smart approach: evidence based, centered on cost-benefit analysis, and using tools rooted in economics and designed around the market failure one is trying to solve, yet cognizant of the political and regulatory dynamics as well…in other words, political economy!
