The Silent Coup

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President of the United States Donald Trump speaking at the 2018 Conservative Political Action Conference (CPAC) in National Harbor, Maryland. Photo by Gage Skidmore via Flickr. (CC BY-SA 2.0)

President Donald Trump’s seditious actions are exposing the political power that Twitter, Amazon, Google, Apple, and Facebook enjoy. Banning him from their platforms sets a dangerous precedent.


All authoritarian involutions need a pretext. Turkey’s Erdogan used the 2016 attempted coup, Mussolini the attempted assassination by a 15-year old student in 1926, Hitler the Reichstag Fire. In some cases the pretexts are clearly fabricated, as in the case of Hitler, others are clearly authentic, like Mussolini’s attempted assassination, but in all of these cases, the emotional reaction to a wrong is used to justify something that, at least in the long term, is much worse.

I feel this is what is happening in the United States right now. What Trump did was wrong. He should be impeached. This punishment might arrive too late to make a difference for him, but it creates the right precedent. The Senate should also ban him from running for public office in the future, as it is in its power to do. His acolytes should be held accountable for the crimes they committed, following due process. This is the proper constitutional way to deal with the problem.

His seditious actions, however, are exposing the political power that TAGAF (Twitter, Amazon, Google, Apple, and Facebook) enjoy. Facebook and Twitter have banned the President from their respective platforms. Apple and Google blocked the possibility of downloading Parler, the alternative social media app favored by conservatives, from their respective App Stores and Amazon expelled it from AWS. 

“Many people cheered these decisions, considering them necessary to stop Trump’s attempted coup. I find them a dangerous precedent, which concentrates power irreversibly in the hands of a few private firms.”

Many people cheered these decisions, considering them necessary to stop Trump’s attempted coup. I find them a dangerous precedent, which concentrates power irreversibly in the hands of a few private firms. Everybody, but especially people from the Left, should be worried: soon, this power will be used against them. 

If Trump violated the law with his tweets, he should be prosecuted according to the law. Why did Twitter and Facebook take the law into their own hands as self-appointed vigilantes? If his tweets did not violate the law, why did Twitter and Facebook kick him out?

Twitter and Facebook, many would object, are private companies, which can create their own rules of engagement. This is certainly true. But these rules should be consistently enforced and here they are not. According to Twitter’s own statement, Trump was permanently suspended because of the following two tweets, sent on January 8: 

 “The 75,000,000 great American Patriots who voted for me, AMERICA FIRST, and MAKE AMERICA GREAT AGAIN, will have a GIANT VOICE long into the future. They will not be disrespected or treated unfairly in any way, shape or form!!!”

“To all of those who have asked, I will not be going to the Inauguration on January 20th.”

“These two Tweets,” writes Twitter, “must be read in the context of broader events in the country and the ways in which the President’s statements can be mobilized by different audiences, including to incite violence.” The context Twitter is referring to are the potential plans for a secondary attack on January 17—even though Trump’s tweets did not mention such plans. 

If Twitter was to apply this extensive interpretation of its code to everybody, it would have had to suspend thousands of people more than it did. In fact, it would have had to suspend Trump himself numerous times before the election and it did not. 

It would have been different if Twitter and Facebook had stopped promoting Trump’s tweets and posts (as they have systematically done until now to attract more customers on their platforms). This is in their editorial discretion. But excluding somebody from accessing their platforms is tantamount to a telephone company preventing an individual from accessing the phone. It is an extraordinary limitation of his personal freedom, which can only be imposed by the legitimate political authority following due process, not by private firms. The telephone example is not accidental. Twitter and Facebook are not random private companies, they represent (as the telephone in the past) a basic infrastructure of communication. 

Surprisingly, most of the traditional media, which should hold power accountable, are cheering the TAGAF’s decisions, rather than opposing them. It is not clear whether they are blinded by their hate for Trump or they are already integral to the new world order. After all, some of them are owned by TAGAF (The Washington Post by Bezos, The Atlantic by Laurene Powell Jobs, Steve Jobs’s widow) and all of them depend upon TAGAF for their survival. This weekend’s events show that a coordinated action by TAGAF can put any business on its knees. Once the proof of concept has been shown, there is no need for further muscle flexing. As economists, we know the threat is enough to obtain obedience.      

“This weekend’s events show that a coordinated action by TAGAF can put any business on its knees.”

I do not dispute the right of corporations to take a moral or political stand. In fact, I advocated giving shareholders more voice on social issues. If ViacomCBS shareholders (who own Simon & Schuster) dislike the association with Sen. Josh Hawley so much as to prefer paying him damages rather than fulfilling their contractual obligation, it is in their right to do so. Their freedom does not infringe on Sen. Hawley’s freedom. In a competitive market, there are plenty of publishers willing to print Hawley’s book, especially after the free publicity it just received. In a monopoly, however, this freedom vanishes. In an oligopoly, it is greatly reduced, if not eliminated.   

This silent coup would not have been possible without the extreme concentration of the digital sector. Facebook alone accounts for nearly 70 percent of social media use in the US with Twitter dominating another 10 percent. Apple and Google control 90 percent of the app market, and Amazon controls 45 percent of cloud computing services. Concentration favors coordination and collusion.   

Most economists—see, for example, my discussion with Tyler Cowen– reject traditional measures of concentration as irrelevant, since it is the threat of entry that limits the power of incumbents. To Cowen’s credit, following the suspension of Trump many people dropped Twitter and tried to move to Parler. Apple, Google, and Amazon’s decisions made the possibility of such a switch all but impossible.

We should discuss what the right moderation policy of social platforms should be, but this cannot be decided by five private firms. Acting in coordination, TAGAF has the power to put an individual under what amounts to house arrest (in a raging pandemic, what is the difference between house arrest and exclusion from social media?). Thus, Cowen was right that the threat of entry could limit the power of digital platforms, but last weekend’s events show that the Stigler Center Report was right in being concerned that the concentration of the digital sector is such that it can defuse the threat of entry. TAGAF is a power trust. Even if it did not impinge on consumer welfare, it does clamp down on citizen freedom.

“By and large, the economic profession has ignored this risk: it has ignored the political consequences of the concentration of economic power in the digital platforms. I think the time has come to debate this issue.”

In many fledgling democracies, it is impossible to govern without the support of the army. While tanks rarely roll down the street, the threat is so present that elected representatives need to cater closely to the interest of the army in their decisions. The United States is finding itself in this situation, except that the power of the army rests in TAGAF. By and large, the economics profession has ignored this risk: it has ignored the political consequences of the concentration of economic power in the digital platforms. I think the time has come to debate this issue. With this article, I would like to open a debate on ProMarket on whether TAGAF is threatening our democracy. Any opinion is welcome. Unlike most outlets, we like dissenting opinions.

Editor’s Note: Those interested in participating in this debate should review our guidelines and email their submission to ProMarket@chicagobooth.edu.

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Luigi Zingales is the Robert C. Mc Cormack Distinguished Service Professor of Entrepreneurship and Finance at the University of Chicago - Booth School of Business. He is a Research Associate of the National Bureau of Economic Research, a Research Fellow of the Center for Economic Policy Research, and a Fellow of the European Corporate Governance Institute. His research interests span from corporate governance to financial development, from political economy to the economic effects of culture. He has published extensively in the major economics and financial journals. In 2003, Zingales received the Bernacer Prize for the best European young financial economist. In 2013 he has been named founding director of the Center for Economic Analysis of the PCAOB. In 2014 he served as President of the American Finance Association. He is co-author with Raghuram G. Rajan of “Saving Capitalism from the Capitalists” (2003) and author of “A Capitalism for the People: Recapturing the Lost Genius of American Prosperity” (2012). His latest book is “Europa o no” (2014).