How do dominant platforms use their #algorithms to shape markets & extract #rents from suppliers & users?
With applications to emerging #AI systems, here are key findings from 3 new papers & 2 years of research with @timoreilly, @MazzucatoM (PI), & @RufusRock2 at @IIPP_UCL 🧵1/
a ton of ppl in tech & in the broader power structures simply do not understand the tsunami that is coming from the democratic party, particularly as it relates to younger ppl who have been left out of the economic upsides due to power law outcomes & women who are now turning left at a rate that would baffle even the most liberal of peeps.
this will be a huge shift in american politics that is being dismissed right now by many ppl as simply a fad.
Honoured that my new book “The Common Good Economy: a new compass” has been selected by @MartinWolf as one of the @FT's best summer books of 2026. Links below.
I still find Hal Varian's writings on the essential economic concepts for digital markets still highly relevant. Wonderful resources.
High-Technology Industries and Market Structure
Hal R. Varian1
University of California, Berkeley
September 17, 2001
https://t.co/Lsqq4AxtmH
🦜 The Architecture of Participation
New in our newsletter:
- @AIdisclosures progress toward an architecture of participation for AI markets at Bellagio & globally
- @timoreilly writes on why open models, protocols, harnesses & portable memory are now core to AI sovereignty👇
1/ 🧵
What are the missing mechanisms needed to build a future human+AI economy that is participatory, generative, and distributed?
Last month we brought 20 leading economists, protocol builders, & AI system experts to the @RockefellerFdn Bellagio Center to work on it.
@juliarturc Tell me your product and I'll tell you your incentive.
Crudely put: with cloud and software tools you want value to accrue to third-party inventors along with the context and tooling layers that you control.
Commoditize your compliment?
Countervailing power is another, as Galbraith noted.
But I think another is architecture.
You can twist and turn but the nature of the road shapes competition enormously.
This is especially so in digital markets that are networks, where compliments and connectivity is key.
Competition is the only protection anyone has ever had against concentrated power.
Anthropic's valuation only works if open weights get banned by law. Their safety case and their business case are the same case.
We have four options:
-Anthropic ruling the world as a monopolist (or a duopolist) is catastrophic. We are having the first inklings of that with Fable release.
- The US government controlling the world by controlling the model releases (on the table right now): even worse. They will weaponize it and blackmail the hell out of everyone.
- The world government solution is cute, but not going to happen.
- So competition, with the open weights only a few months behind, is the only thing protecting us in the rest of the world. Models will need some regulation, like cars or planes do.
As a European, the first two options scare me more than the technology does. OpenAI has not been making these ridiculous Effective Altruist noises, they have quietly released models which are on the whole superior to Anthropic's in my view and there have been no risk to the world. I think Anthropic protests too much.