The March 25, 2024 episode of EconTalk and Episode 372 of Words & Numbers consider Googles recent (and flawed) rollout of their Gemini AI platform. Unsurprisingly, Googles software returned a lot of bugs and laughable flaws, like ambiguous its complex answers to questions like Is Elon Musk worse than Hitler? that have obvious and unambiguous answers (in case youre wondering, the unambiguous answer is no, Elon Musk is not worse than Hitler).
To their credit, they seem to have at least fixed it. A few queries about the economist W.H. Hutt gave a pretty fair summary of his big ideas and replied to Was Hutt worse than Hitler? with No, W.H. Hutt was not even close to being as bad as Adolf Hitler with a reasonable explanation and this conclusion: While some may disagree with Hutts economic views, he wasnt advocating for genocide or world war.
According to Gemini, one of Hutts Key Contributions explains why we shouldnt be too worried about Googles power. Heres Gemini:
Hutt is credited with coining the term consumer sovereignty in 1936. This concept emphasizes that consumers, through their spending choices, ultimately drive economic production.
Power is overrated in the short run. Power couldnt make fatally flawed products like the Microsoft Zune, New Coke, and the Ford Edsel succeed. Power couldnt make Skype the default web conferencing platform even though they had a decade-plus head start over Zoom at the beginning of the COVID-19 pandemic. Disneys power couldnt prevent Indiana Jones and the Dial of Destiny, The Marvels, Wish, and other recent offerings from hemorrhaging money. A new term has entered the cultural lexicon to describe these monumental failures to entertain the sovereign consumers: flopbuster.
One of Hutts key concepts, consumers sovereignty, explains why. Hutt defines consumers sovereignty as follows:
The consumer is sovereign when, in his role of citizen, he has not delegated to political institutions for authoritarian use the power which he can exercise socially through his power to demand (or to refrain from demanding).
Every commercial choicebuying, selling, abstaining, usingis not just a transaction but a significant vote for who should produce what, when, where, and how. Your decisions matter, and, importantly, our decisions matter. Hutts use of the plural possessive consumers sovereignty (emphasis added) is important. At any point in time, the structure of production reflects a social consensus that, to the extent markets are allowed to operate, even accounts for what future generations will want because todays prices represent todays expectations about future revenues and costs (discount rates mean present voices speak louder than future voices, but if we arent going to discount the future, then the relevant social problem isnt pollution or recycling but the eventual heat death of the universe).
Importantly, while a single individual in the upper class might have many more votes than his poorer neighbors, the lower and middle classes have many more votes than their richer neighbors in aggregateand while many critics are not likely to admit this, the problem is not that they have too little power but that they have too much. They vote with their pennies and dollars for stores like Dollar General and Walmart. Contenting themselves with the pleasant fiction that their hapless, poorer neighbors have been manipulated by sinister interests, the more cultured and cultivated ride to the political rescue with laws and regulations that take Dollar General and Walmart off the ballot, as it were.
As we learned on EconTalk and Words & Numbers, this is the first time Google has been playing catch-up with a major new technology and may someday join the many diminished or even vanished firms that were once so big and powerful no one could compete with them (like A&P, Sears, Kmart, and IBM). Will they suffer the same fate? Will discussions of Google someday consist of surveying the decay of that colossal Wreck? I dont know, but their recent struggles to catch up with their AI competitors suggest that Google doesnt have as much power as we might think.
