Elon Musk’s transformation from obsessive Twitter user to Twitter’s largest shareholder should remind Americans of the fluidity and openness of markets. If it is true that there is significant opposition to the capricious and intolerant way in which many Silicon Valley giants conduct their affairs — and there certainly should be — then there’s likely to be consumer demand for change. This may come in the form of competition, it may come in the form of internal cultural change, or it may come in the form of both. But come it will, if the demand is indeed there. Musk’s surprise mass purchase of Twitter’s stock may well represent the beginning of such a correction.
Some of Twitter’s most vocal critics do not trust markets, and covet government regulations in their stead. But the presumption that underlies this approach — that what is true now in the American tech sector will always be true in the American tech sector, so the state must step in to effect change — has no real evidence undergirding it. In 2007, when the now-powerful Facebook was just three years old, MySpace was being described by its detractors as a “natural monopoly” such that, “except in niche markets,” it would be “too late for competitors to dislodge.” In 2001, when the U.S. Court of Appeals for the District of Columbia heard the federal government’s antitrust case against Microsoft, that company’s Internet Explorer browser had a market share of 90 percent. Today, despite the DOJ’s suit having been effectively dropped, Internet Explorer has been abandoned completely, and its replacement, Microsoft Edge, has just 3 percent market share worldwide. This should be no surprise. Things change fast in the marketplace — especially in tech. A recent study by McKinsey discovered that, in 1958, the average age of a company on the Standard & Poor’s 500 list was 61 years. Today, it is less than 18.
The pace and scope of the Internet, along with the intensity of the conversations it permits, often encourages its aristarchs to believe that all of its shortcomings must be resolved immediately lest the adverse consequences become too dire. But, ironically enough, their preferred solutions — which invariably involve government superintendence — would be more likely to slow, rather than to expedite, any remedies. The risk would be that a Twitter subjected by law to close federal oversight would have been transmuted from a temporary winner within a free market into a permanent part of the political landscape. In 1952, when the Truman administration tried to nationalize U.S. Steel, it was the largest corporation in the world. Today, it is the 38th-largest steel producer. There is nothing special about Twitter that inoculates it against this fate.
In a statement issued Tuesday morning, Twitter’s CEO, Parag Agrawal, described Musk as the company’s most “passionate believer and intense critic,” and confirmed that he would be joining the board. A few days earlier, Musk had used the service to ask, “Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?” before noting that “the consequences of this poll will be important.” In other tweets, Musk has wondered aloud if a “new service” is needed to replace Twitter. No doubt, if Musk fails to transform the social-media platform from within, we’ll find out soon enough.