Google Is Destroying The Economy Because It Believes In Efficiency?
from the at&t-deserves-more-for-their-money dept
Ron Rezendes was the first of a whole bunch of you to send over PC World's coverage of Scott Cleland's latest attack on Google, though, bizarrely, Tony Bradley at PC World, fails to (a) fill in the details on Cleland's history and current job or (b) challenge any of the many false assumptions Cleland makes. He does question the overall conclusions, noting (accurately) that the tech world is littered with "monopolies" that were killed off by upstarts, but there's a lot more worth questioning in Cleland's piece. Cleland, as we've discussed in the past, is known throughout DC policy circles as the official attack dog of every anti-Google company out there. He's literally paid to make up attacks on Google, no matter how ridiculous. Now, I'll be the first to admit that there are many things Google does that deserve further scrutiny or complaints. The company has been getting especially sloppy when it comes to privacy lately, and that's a huge concern. However, if the companies paying Cleland actually want bang for their buck, you'd think that they'd hire someone who actually makes credible claims -- rather than the easily debunked claims and notoriously laughable math that Cleland is famous for.So what's this new report that Bradley insists is "seemingly well-researched"? It's one of the most laughable reports I've seen to date, claiming that Google isn't just a monopoly, but that it's destroying jobs and the economy (pdf). Get ready for Cleland's brand of ridiculously factless assertions combined with his notoriously bad math.
The report starts out by blaming the Justice Department for not blocking various Google acquisitions or filing antitrust charges against the company. Cleland seems to not realize that the purpose behind antitrust actions is to protect consumers, not just break up big companies for the hell of it (that's what Europe is for). The presentation then goes into all sorts of consultant-speak charts that don't say anything actually significant but scream "oh no, Google is evil," without actually providing anything to back that up.
There's an amusing slide where Cleland then takes a bunch of quotes out of context to actually suggest that efforts to make the web surfing experience better for users is somehow evil because it also benefits Google. In Cleland's world, apparently, all things are a zero sum game, and there's no way that something could be both good for users and Google at the same time. In fact, that seems to be the key to the entire presentation: what's good for Google must be bad for the world... because it's also good for Google. How else can you explain why Cleland highlights Hal Varian's comments about how a "fanatical" focus on customer service (along with scale, speed and data analysis) is somehow a bad thing?
Amusingly, Cleland then goes back to the debunked well by suggesting nefarious Google "human raters" push down links to competitors. This is one of Cleland's pet theories that he just discovered a couple months ago, and thought he was brilliant for it. The only problems is that it wasn't (as he claimed) a new admission from Google, nor was it what Cleland claimed it was. As Danny Sullivan pointed out all the way back in 2007, Google has been public about its "human raters" since 2004, and it's a standard QA job -- not some nefarious job of someone quashing the competition. If you run a search engine, wouldn't you have people on staff whose job it was to look at results and make sure they were actually good for users?
On the areas where Cleland is accurate -- that Google's real customers are advertisers and that the current workings of Google are something of a "black box," that just seems to me to be a huge opportunity for other companies to step in, rather than some dangerous situation that requires government intervention.
But where Cleland really goes off the deep end is his "economic" analysis of the situation, where he claims that Google is creating a deflationary spiral. It kicks off with an almost amusing font-based attack on the concept of "free" (highlighting each time the word is mentioned) as being some evil concept made up by those who seek to destroy the world. It's as if we're back in the ancient Greek civilization and Cleland has just come across the concept of "zero" and declared it to be heresy. And then there's this:
There's no net economic growth, job creation or property value creation in a "free" Internet sector model, only a deflationary price spiral; net negative growth, property devaluation, job losses, and monopolization.No, really. Stop laughing. The above statement is about as economically clueless as they come. It suggests absolutely no knowledge of basic economics, the economics of growth, the economics of innovation, the basic concepts of complementary goods and market equilibrium. It assumes, like many in the entertainment industry -- despite massive evidence to the contrary -- that when the price of an information good is pushed to zero, that it somehow leads to less overall economic output, rather than more. Tragically for those who believe this, there is no evidence to support such a claim. That's because they never seem to take into account the ancillary markets that are aided by information reaching its equilibrium point.
Cleland then goes on to claim that Google "reduces employment." How?
"because Google views people as inherently inefficient relative to Internet automation, and because Google views customer service personnel as unnecessary, and most sales and marketing personnel as redundant."Where to start? I think pretty much any company views automation as more efficient than people when that's the case. But, unlike what the Luddites predicted, automation actually resulted in more jobs. Perhaps Cleland should ask the telcos who pay him his salary about their views on automation. After all, AT&T used to employ tens of thousands of operators to physically connect lines when anyone wanted to make a phone call. And they automated that away -- obviously killing off so many jobs. Oh wait... actually, automated switching was so much more efficient that it created millions of new jobs, and entire new industries... including the internet.
As for Google's dislike of customer service, I've hit Google hard on that point multiple times, because I believe that it's a big Achilles' heel for Google, and a huge opportunity for others to woo folks away from Google. But just because Google doesn't like to hire customer service people, it seems like a massive stretch to suggest that this automatically means Google reduces employment. Furthermore, last I checked, Google's sales and marketing force is ridiculously large. It's hardly "redundant." In fact, I've often wondered why Google needed as large a sales force as it has. A year or so ago, I was on a panel discussion with some other bloggers in front of Google's sales and marketing team, and I'm pretty sure it's the largest audience I've spoken to -- and I've spoken to some pretty big audiences. Honestly, it feels like they could make a few more people "redundant."
And, um, why does Cleland ignore the tons of jobs that now exist in the world because of Google who are not actually employed by Google? There are entire industries who exist in large part because of Google. Cleland then accuses Google of "double and triple counting" its own economic impact, but this is especially laughable from the same guy who tried to count internet connections multiple times in one of his attacks on Google.
All in all, this "report" given away for free (oh wait, did Scott Cleland just devalue research and kill off jobs?!?) is just the latest in Cleland's self-debunking charade of ridiculous arguments. The thing is, there are plenty of legitimate complaints about Google, but wrapping them all up in such a ridiculous and easily debunked report actually does significantly more favors for Google than anything else. It suggests that the companies who pay Cleland can't come up with any serious arguments, so they have him come up with such laughable ones. This is really unfortunate. It would be good if more people actually held Google to account for its mistakes and problems with the way it's done business at times. But these exaggerations hide those real issues. Unfortunately, for whatever bizarre reason, Congress keeps calling on Cleland to present at various hearings -- and today, Cleland will be pitching this garbage to the House Judiciary Subcommittee on Courts and Competition Policy. DC politics as usual. You don't need facts, you just need to smear others louder and more ridiculously than anyone else.
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Filed Under: economics, jobs, monopolies, scott cleland
Companies: google
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Rather the point
That's all they need. It's not like the mainstream media is going to question any of his ridiculous assertions. He's giving the pols a fig leaf.
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Re:
The correct answer to any article with a question for a title is to consider the facts and make your own decision.
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/end joke mode
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Thats right Mike, Smear, louder and more ridiculously than Anyone else. Its what you do..
Classic Mike :)
Yes, Mike, All readers of this site will be fully aware of that technique, of which you are a master. As indicated by this article alone, but that is a classic Mike statement. Very telling.
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Re: Thats right Mike, Smear, louder and more ridiculously than Anyone else. Its what you do..
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Re: Thats right Mike, Smear, louder and more ridiculously than Anyone else. Its what you do..
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As a Brit this made me laugh my arse off.
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Smearing for profit
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"Efficiency" is no justification for a trust -- and never true.
First, I'll disclaim: I've no prior knowledge of Cleland, nor care about him now (for reason below). But I'll hold you forever to the implicit suspicion that a PAID "researcher" (or whatever: an advocate) is untrustworthy.
2nd, you still haven't caught on to how the PR / intelligence game is played. It's entirely possibly that Cleland is paid *by* Google (or an interested party) to make ridiculous claims. An "enemy" that you secretly control to is a handy tool against your real targets. Since I think that Google is in fact a part of US intelligence agencies, it's no surprise that they've an "official" critic -- in DC.
Since you present nothing more than a ramble of assertions, I must ask you to name three of the "entire industries who exist in large part because of Google." I can't think of any such fitting "a) any particular branch of productive, esp. manufacturing, enterprise [the paper industry] b) any large-scale business activity [the tourist industry]", but I'm prepared to be informed. Don't stretch it -- you chose the words.
More or less random points:
- "But, unlike what the Luddites predicted, automation actually resulted in more jobs." -- Er, no it hasn't, or the entire notion of the cotton gin "doing the work of ten men" must be thrown out. I'm not sure whether you mean "industrialization" or "automation", since the latter is well past the Luddite period, but in general, either only allowed the shifting of laborers from *essential* farm production to more varied *luxury* jobs. And it's observable fact that in any industrialized nation, many people are UNemployed (enjoyably so), even if not counted as such by gov't drones.
- Actually a good purpose of anti-trust IS to break up large companies. It creates a vital ferment, levels the playing field, allows start-ups, besides that companies should be prevented from getting "too big to fail". You note the benefit obliquely when you say M$ was hampered by anti-trust, allowing Google to enter, else it might have simply been bought up. You keep looking at an economy which *has* all those "socialist", anti-capitalist measures in place, and *mistakenly* attributing the benefits to a mythical "capitalism".
- Google visibly creates nothing, no more than any other advertising ever has. It's overhead, and largely unnecessary. As I've pointed out before, the whole field is based on the circularly iffy notion that it works, and promotes its alleged effects as genuine -- with paid "research" to prove that it does -- all possible because of the claim that it's worth the high amounts paid.
- Similarly to above, I question whether Google *actually* has the effect that it claims. There's no way to independently verify. For all we actually know, they're simulating clicks and page views. -- It's a literal "confidence" game.
- Google's "business model" could crash overnight if everyone took my advice and implemented blocking in the "hosts" file of Google's parasites such as doubleclick.com. There's no *value* to consumers in allowing that tracking, it's just imposed on ignorance, and an informed public might well object.
- Google has benefitted a huge amount from the mostly *unpaid* efforts of those who developed Linux. It's not possible to run it on M$ products (not reliable, not scaled to distributed processing, and can't be customized). Its Chrome and Android OSs are mere derivatives of Linux. Therefore, its not due any major credit for those products.
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Re: "Efficiency" is no justification for a trust -- and never true.
I would think the same thing except for the fact that there are a ton of stupid people making all kinds of dumb claims and demands. Take the RIAA.
http://www.techdirt.com/articles/20090811/0152565837.shtml
If it weren't for all the enormously costly and ridiculously silly lawsuits going around by people with this kind of mentality and all the stupid comments we see by TAM et al on techdirt coupled with so many absolutely ludicrous things the RIAA has said and done (and this link is only one small tiny example) then I would be more inclined to believe you.
Here is another example.
http://www.techdirt.com/articles/20100408/1003328938.shtml
Just look at how ridiculous our copyright laws are. 95+ years and the entire law is broken (accidental infringement damages vs damages for faking ownership of something in the public domain). These laws weren't put there as some publicity stunt to make copyright look bad, they were put here because some very evil people with no sense of moral aptitude or logic put them there. They were put there exactly because people with this kind of mentality, the same mentality of those that MM quotes, do in fact exist.
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Re: "Efficiency" is no justification for a trust -- and never true.
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Re: "Efficiency" is no justification for a trust -- and never true.
Besides the fact that most of your post is not even worth responding to, where has MM noted the benefits of MS being hampered by anti-trust laws. I'm sure that if I ask MM he would say he's against such a thing, in fact, I believe I remember him even saying so. and I (and I've seen many others who commented on the subject here on techdirt) agree with MM on this one. The govt should butt out.
It's amazing how people think the govt should go after Google for anti trust just for being big yet they don't think that Pfizer, who the govt agreed to allow it to have an irrelevant and fabricated subsidiary take the hit for its misdeeds with the FDA under the pretext that its too big to fail, should be busted for anti trust (not to mention the auto industry bail outs). The govt should help those who are too big to fail and go after those who aren't too big to fail for anti trust laws just for being big? How does that make sense? The govt is entirely inconsistent. The real reason it wants to go after Google is because it wants people who will charge monopoly prices to provide search engines because politicians want some of that monopoly money to go towards their campaigns. The true reason is because they want to control the information that we get because it makes it easier for them to get re - elected. BTW, a good book you should read, that will help you understand how the system black lists competing political candidates from the media, is called No Debate by George Farah. The fact of the matter is that this is about control, nothing more, it's about preventing us from having access to the viewpoints of competing politicians and about charging monopoly prices for things that should be cheap or free so as to optimize the amount of money that goes towards campaign contributions and special interest groups. It's not about free market capitalism, it's about promoting a tyrant plutocracy and giving us the appearance that this is in our best interest and we asked for it because this is who we voted for.
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No need to do that at all. Opt out of the cookies at Google's opt out page for doubleclick, and turn on your adblocker. What's the big deal - thousands already have done so. Google's still going.
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Joke about Europe? Oh please Mike don't
Please, Mike, don't get into this game.
Yes I'm a French and an European, and I support Europe hitting monopolistic American companies.
I do support Europe fining Microsoft for its nasty policies when it comes to OSes. I just can't stand such an anti-competitive attitude makes it impossible for me to buy a PC without having to pay a 20% extra on the price because manufacturers (under pressure from MS) insist on selling me a goddam mswindows license, although I don't use it and I have some through MSDNAA. But we still have to pay the Microsoft tax. The first winner if it were fixed would be Linux, the system which kernel is developped by... Linus Torvalds, who got the american nationality this week.
I do support the EU fining Intel, because I'm rather supportive of AMD (oh, another american company) and just can't find an AMD laptop because Intel is threatening manufacturers in words little different from "if you dare sell AMD-based laptops, you're dead".
I do support the EU fining Microsoft for including by default the nasty Internet Explorer in their system. The clear winners in there are Firefox (European), Chrome (American), Opera (Norwegian, so not in the EU), and Safari (American).
And I'd even go further with msoffice vs openoffice(Sun/Oracle, american), MSN/Hotmail vs Gmail (Google, American), and more.
So the EU policy isn't here to strike american companies, actually it helps american companies (the winners I mentioned above), and helps competition. If I were the EU, I would even fine them not fixed amounts (that are little more than a drop of water), but a percentage of their revenues, and I'd use that money to compensate for the damage dealt to their (often american) competitors.
Now I realize the money from the fines go into the EU pockets, but it such fines could wake those monopolistic companies up, that'd already be considered as a win.
So please Mike, I beg you, stop pretending false things about the EU policies, which are, actually, good for the market and for competition.
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Ahahahah haha haha ah...
Actually though you have got a point, my mate at work was saying he saw the browser ballot page doing a PC install. Since when should a company be forced to promote other companies products!?!? The Microsoft monopoly is (was?) a problem, but the EU solution was just dumb.
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1. ZERO is not the same as NULL (ie, nothing).
2. Exchange of value need not mean an exchange of money.
3. Pioneers create wealth, inventors do not.
Google is leading with these concepts, perhaps everyone needs to learn them.
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Lets forget about all the acquisitions and mergers that every other large company has participated in during the last decade (and there are a lot) and lets just focus on Google.
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Oh of course...
If inefficient businesses relying on obsolete business models are frightened of efficiency, then, government, with it's legions of useless bureaucrats watching porn while the economy burns are terrified of it. So, the alliance is a natural one.
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Mike's Wrong
Mike is the one who is wrong.
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INTERNET CAUSING A DEPRESSION
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INTERNET CAUSING A DEPRESSION
MORE PEOPLE ARE UNEMPLOYED TODAY THAN SINCE THE gREATdEPRESSIN. PEOPLE ON TV DO NOT WANT TO DISCUSS WITH THE EXCEPTION OF mARTIN fORD THAT THE INTERNET WILL CAUSE MASSIVE JOB DESTRUCTION THE WINNERSD PEOLE WORKING FOR IT THE LOSERS EVERYONE ELSE- I HAVE A SOLUTION IT ISD LIKE A HAIL MARY PASS IT IS CALLED THE AMERICAN gEEK cORPS -A FREE VOLUNTARY INTERNET CAFE AT 1,000 HIGH SCHOOLS THROUGHOUT AMERICA OBJECT TO GET GEEKS TEACH LUDITES HOW TO FUNCTION IN THE IT ECONOMY -I NEED BLOGERS AND PEOLE WHO KNOW TWITTER AND FACEBOOK AND CAN CREAT WEBSITE OBJECTIVE SAVING THE AMERICAN ECONMY- YOU CAN ALWAYS READ THE ENDOFG AMERICA-I HAVE A SOLUTION BUT I NEED GEEKS TO MAKE IT HAPPEN- 775-348-7990-FLASHOFAGENIUS@ATT.NET NEITHER A REPUBLICANOR DEMOCRAT CAN SAVE US FROM MASSIVE JOB DESTRUCTION
-348-7990
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INTERNET CAUSING A GLOBAL DEPRESSION
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INTERNET CAUSING A GLOBAL DEPRESSION
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