Overcoming "Too Big to Flourish": Making Money on the Cutting Edge—For Companies and Countries

Creative Ossification 

Companies start out small and rambunctious, and then, if they get big, they grow more cautious.  They become too big to flourish, or at least too big to maximize.  That means that big companies are leaving money on the table.  And come to think of it, if we extend the point to other institutions, that means that big governments, too, are leaving money on the table, as they stymie potential economic growth in their countries.  So shareholders and citizens, both, lose out. There are ways to fix this, but first, let’s take a closer look at this syndrome, too big to flourish. 

Y Combinator partner Jared Friedman points out that many of the hottest and/or trailblazing-est companies were, in his words, “between questionable and flat-out illegal in their early days.”  They were disruptors, living by the entrepreneurial-piratical dictum of hacking, of moving fast and breaking things.  (Plenty more companies, present as well as past, can be put into this category, including, in the view of many litigants, the hot AI companies.)  Others in Friedman’s tweet/X thread, such as Robert Scoble, reinforced his point, recalling the risk-aversion of big established companies.  For instance, Microsoft, founded in 1975, rocketed to prominence and controversy in the 1980s, and yet in the 90s, it had a fateful anti-trust collision with the U.S. Justice Department.  After that, bruising encounter, the company built up a giant legal department dedicated, seemingly, to “just saying no.”  In fact, most, if not all, big companies have had some sort of traumatic legal/regulatory experience that makes them less willing to take risks.  

So that seems to be the cycle: Companies get their start as swashbucklers, and perhaps corner-cutters, and then, after awhile, if they’re still in existence, they become “housebroken”—they no longer wish to fly, as it were, the corporate Jolly Roger.  That doesn’t mean that the company can’t still be successful, but it does suggest that it has reached the flatter upper part of the S-curve, as growth downshifts, from exponential to perhaps arithmetic.  To put this another way, once a company is big and established—including the instantiation of a big legal unit—it will likely miss out on opportunities.  (As well as, of course, liabilities—in ye olden days, plenty of actual pirates swung from yardarms, or went down to the vasty deep, unremembered; it’s the pirates who succeeded and survived, at least for a while, that we most remember, and that selective remembrance biases our understanding of the risk/reward ratio of buccaneering.)  

One manifestation of this risk-aversion has been the difficulty big tech companies have had developing AI.  As Bloomberg News reported in July, many of the smartest AI techies are Google alumni.  As in, they developed AI after they left Google. They had their AI ideas at Google, but were unable to get clearance from the company to proceed with their AI plans.  With enough lawyers on hand, there’s always a reason why something can’t go forward.  So these AI nerds quit Google and started their own companies, which now boast a cumulative value of $4 billion.  To be sure, a few billion is not much compared to parent company Alphabet's current market cap of $1.72 trillion.  And yet one might recall that a mere quarter-century ago, Google was just a tiny upstart against such big search engines as Altavista, Excite and Lycos.  In a fast-fluxing environment, valuations can change swiftly.  

Indeed, in another piece headlined, “Tech’s AI Armies Are Huge, Yet Struggling to Innovate,” Bloomberg further reports that Amazon has had the same problem as Google.  That is, more is actually less.  And that explains why Amazon has had so much trouble with Alexa, which debuted in 2014 as an early stab at AI, but which now is an also-ran.  The lesson seems to be that in this realm of cutting-edge technology, bigness and nimbleness just don’t go well together.  

We could say that this is a form of creative destruction, but it’s perhaps more accurate to say, with apologies to Joseph Schumpeter, it’s a form of creative ossification.  

So what can we conclude?  One thing’s for sure: There’s money in diversity.  Not, of course, the diversity of DEI (Diversity, Equity, and Inclusion)-type human resource programs.  Yes, DEI has been lucrative for a favored few, but it’s hard to see how it results in any sort of overall productivity increase—and it’s easier, in fact, to see how it subtracts wealth.  Instead, the fruitful diversity is the proliferation of institutions and systems.  It’s within that kind diversity that opportunities arise: opportunities for experimentation and arbitrage.  To be sure, there are risks, too, because let’s face it: Most new ideas are bad ideas.  So the challenge is tapping into the energetic upside while limiting the damaging downside.  

The Disruptor’s Dilemma

As we think of institutional structures and their strictures, we might recall the work of the British naturalist D’Arcy Wentworth Thompson (1860-1948), who observed of mollusks, crustaceans, and other shelled creatures, Form enables growth, but form limits growth. That is, the form of a shell enables the organism to survive and grow, but only up to a certain point—the largest shelled creature on earth, the sea turtle, maxes out at eight feet.  Beyond that size, the laws of physical biology stop growth and other forms of evolution.   

Indeed, as we move to the realm of Homo sapiens and the institutions mankind has created, we see variations on that theme, as bureaucratization sets in, limiting economic exuberance and thus expansion.  Many have written smartly about aspects of this syndrome, giving us important concepts such as Parkinson's Law and the Peter Principle.  More recently, in The Innovator's Dilemma, the late Clayton Christensen added another layer of understanding.  As Christensen observed, established companies don’t always utilize a good idea.  Why not?  Because they figure that the new idea could cannibalize an existing product.  Such reasoning can be persuasive on the margin, and yet it’s usually a losing hand in the end.  Classic example: Xerox and digital imaging.  Xerox pioneered the new technology, but didn’t want to market it, because doing so would undercut sales of its familiar Xerox machines.  Xerox’s reticence left it to other firms, such as Hewlett-Packard, not inhibited by affection for legacy products, to charge into the market for digital imaging, thereby demolishing Xerox.  So we could combine Friedman’s point on youthful risk-taking with Christensen’s point about mature risk-aversion and speak, overall, of the Disruptor's Dilemma.  That is, what starts out small and risk-taking becomes big and risk-avoiding.

Governments and Risk 

Now can apply this point to other organizations, such as the U.S. federal government, the largest (at least in dollar terms) bureaucratic organization in the world.  Does the USG allow for experimentation?  Sometimes it does.  That was the case with, for instance, the Manhattan Project, eight decades ago, or the Pentagon’s DARPA today.  Yet for the most part, the answer is, No, the USG does not encourage innovation—often, in fact, opposes it. 

One can even say that much of the time, this operational conservatism is somewhere between proper and inevitable.  That is, the government ought to be cautious and sober-minded, checked and balanced as it is, both by the Constitution (good) and by accumulated interests (not always so good).  Fair enough.  But there’s a tradeoff, then, in terms of the economic-unleashing power of disruption.  That is, the more stolidity, the less creativity.  Indeed, it does seem that today, the U.S. government is suffering from what Jonathan Rauch called “demosclerosis.” Government as a pitiful helpless giant.  

So what to do?  The most obvious answer is to get the government out of the way and let private-sector players take the risks.  And that, of course, is happening all around us, as Friedman reminds.  These capitalistic animal spirits are what give the U.S. economy the somewhat raffish fizz that distinguishes it from Europe’s, or even from that of next-door Canada.  (The outstanding contemporary exemplar of this American raffishness is Elon Musk: Born in South Africa, he first moved to Canada, and then to the U.S., where his “hardcore” energy has been on full display, as seen in this excerpt from a forthcoming Musk biography.) 

Indeed, it seems likely that American gray-area freedom will sharpen the economic contrast, as time goes by, between the U.S. and China.  Under Xi Jinping's increasingly Brezhnev-y rule, that country is not only scaring away tourists and investors, but also stultifying its day-to-day existence.  

But there’s still the issue of optimum governance here in the U.S.  Can and should the USG encourage/allow for more imagination?  Once again, there’s good reason for Uncle Sam to be careful.  And yet, at the same time, down that seemingly prudent path is the mire of stagnation.  

Laboratories of Destiny

Happily, even if the feds are choked, there’s still a possible solution,.   Namely, federalism, or, to be blunter about it, states' rights.  Let the states be the “laboratories of democracy,” as Justice Louis Brandeis wrote so electrically back in 1932. (And as I have written about, with less electricity, here).  If Uncle Sam can’t be the equivalent of Uber, or YouTube, or the other cutting-edge companies Friedman cites, maybe an American state could be the disruptor, or, more precisely, facilitate the disruption.  That is, a state could loosen the legal strings, letting entrepreneurs and perhaps other kinds of activists try something new.  Whether the “lab-experiment” works out for good or ill, the effect would be compartmentalized within the single U.S. state.  So if need be, the policy could be terminated without risking the national whole.  Or, of course, if the experiment works, it could be replicated.   

Such experimentation is what Nevada did on gambling; interestingly enough, the hinge-year, when the state legalized casinos, was 1931, almost the same time that Brandeis was extolling state-based experimentation.  As Nevada has since proved, states aren’t just laboratories of democracy, but also laboratories of prosperity.   To be sure, Nevada’s isn’t the only way, but it’s one way.  

Indeed, even as the federal government has grown larger and more intrusive, the states have never given up their role as experimenters.  For instance, two-third of the states have legalized marijuana in at least some form.  Yet interestingly, pot is still illegal under federal law.  So there's a profound contradiction, between the national government and state governments.  It's an unresolved issue, legally and constitutionally.  For its part, the liberal-minded Biden administration doesn't seem to be concerned about the prevalence of pot.  So it will be interesting to see what, if anything, a future Republican administration will seek to do about pot. 

And there’s more. One state, in particular, is pushing the drug envelope.   In 2020, by popular referendum, the voters of Oregon enacted Measure 110, which decriminalizes hard drugs, including meth, LSD, and heroin.  We should note that decriminalization is not the same thing as legalization, although close-up reporting from the streets of Portland suggests that now, pretty much anything goes.  Many observers, of course, will be horrified by what’s happening in Oregon.  In response, we can say that maybe we’re horrified, too, and yet Oregon’s right to set its own course is right there in the Tenth Amendment—amendments being, of course, just as much a part of the Constitution as the original document.

So what state could be the next Nevada?  Or Oregon?  That remains to be seen, but a good target for disruption, as I have argued here and here, would be the dead-handed U.S. Food and Drug Administration.  The state that disrupts the FDA—at least as the federal agency operates within that state’s own borders—would be doing itself, and the world, a favor.  Patients and investors alike would applaud, as healthcare choices and outcomes improved, and vast economic potential was unleashed.  That’s the theory, at least.  But would it work in practice?  There’s only way to know for sure: test it out. That’s what the states-as-laboratories are for.   If a state were to legalize medical freedom and it were to somehow boomerang, well, that would be good to know.   A failure would’t invalidate the concept of liberty, of course, but it might teach us something about implementation.   As they say, if at first you don’t succeed, try, try again.  

A Further Illustration 

We can add that edgy experimentation can even occur on a smaller level than the states.  On August 27, netizens were amazed to see video of a police vehicle plowing through a barrier set up by green activists along a highway in Nevada, thereby blocking traffic.  The barrier was illegal, of course, and yet by now we’re used to seeing the humans committing such crimes treated with deference, never mind that motorists are inconvenienced, commerce slowed—and perhaps even ambulances stopped.  

In general, authorities have learned the hard way that anything other than kid glove-treatment toward such lawbreakers leads to cries of “police brutality” and costly lawsuits.  Except in this case, the cops didn’t get that memo; they charged in.  A closer look at the cops in question explains why: The police that did the barrier-busting were rangers from the Pyramid Lake Paiute Tribe.  Which is to say, as members of an Indian reservation, the law enforcers have at least some autonomy and their own legal system—to which the ACLU might not have much standing.  No doubt the Nevada case will be litigated, and yet on such matters, Native Americans have plenty of law and precedent on their side.  In the meantime, many of us can admire the Nevada rangers for standing up for the rule of law—and for normalcy on their territory.  Indeed, it might make us wonder: What other useful functions can be managed from within a more conducive legal framework? 

The big takeaway is that if we want creativity and exuberance—including, yes, some envelope-pushing—we need a legal and political system that makes room for it.  Yes, form allows growth, but form then limits growth.  So what we need is a constantly evolving form.   And that suggests much greater latitude for the states.  Or, to put it more bluntly,  more freedom.  

The Virginia Resolution at 224: Still Very Much With Us, As Red Seeks to Block Blue, and Vice Versa

Madison’s Anniversary

Can the states interpose their power in opposition to what they deem to be noxious federal policies?  That’s a question that comes up a lot these days, even if the word “interpose” isn’t much used.  Yet by whatever name, the idea of using legal and political strategies to block unwanted federal policies is popular, both with the left and the right.  These days, as diversity muscles past uniformity, few federal policies are well regarded nationwide.  As a result, state leaders--governors and other officials--operating from their respective blue and red bastions, find themselves at odds with various federal policies.  It was never the case that one size fits all in this country, and the Founders understood that, which is they wired federalism into the Constitution. 

Yet in our time, it's all the more obvious that one size doesn't fit all 335 million of us, even as, of course, the federal edifice is vastly larger and more encroaching than it was three centuries ago.  Therefore, more state-federal feuds are inevitable.  And so, in their many legal, political, and ideological tussles with the central government, state leaders today, left as well as right, are recapitulating the periphery vs. core dynamic that preoccupied the Founders, albeit today we see it on a grander scale. 

So on this, the 224th anniversary of the use of the “i” word, interpose, by a major figure in American history, James Madison--the author of the U.S. Constitution and our Fourth President, as well as the author of the Virginia Resolution that we remember today—let’s consider how interposition has manifested itself, is manifesting itself, and will manifest itself in the future, as red states grow redder, and blue states become bluer. 

As we all know, the red-blue split is one of the most important trends of our time.  It’s not just the difference between Republicans and Democrats in Congress—who are veering further apart in their partisanship—but the difference between the political cultures of red states and blue states.  Indeed, if we consider the red-blue split in cultural, as well as political, terms, we can see its full depth.  Think rural vs. urban.  NASCAR vs. NPR.  Chick-fil-A vs. Patagonia. Diversity, in the fullness of the concept, is real.  Fortunately, we have a mechanism for managing--even, if you will, celebrating--that diversity: the U.S. Constitution.  

As recently as two years ago, blue states seized every opportunity to block the policies of Donald Trump.  For instance, then-California attorney general Xavier Becerra, a Democrat, sued the Trump administration more than 100 times, on matters ranging from immigration to the census to gun control.  In so litigating, Becerra became a hero to the left; in 2021, in recognition of his service to the blue cause, President Joe Biden appointed him secretary of the Department of Health and Human Services. 

Yet these days, the shoe is on the other foot.  Now it’s red states—most notably, Florida—opposing the Biden Administration.  Indeed, Florida Governor Ron DeSantis isn’t just opposing federal policies; he is actively seeking to investigate the federal government for "crimes and wrongdoing committed against Floridians related to the Covid-19 vaccine."  The idea that a U.S. state would investigate the feds is extraordinary.  But okay, these are extraordinary times, and so we shouldn’t be surprised that the national EQ—Extraordinary Quotient—keeps rising.  

To sum up, at different times, and on different issues, both blue and red states have sought to interpose their sovereign power against federal policies. (Some might say that they have sought to nullify.)  Once again, this is diversity on display: The Democrats have their vision of the good life, and good politics, and Republicans have theirs—and increasingly, with apologies to Rudyard Kipling, never the twain shall meet. 

So if the Democrats hold the White House in 2024, it’s a safe bet that Republican states will continue to oppose the blue administration, and if Republicans win, Democrats will immediately rediscover their Becerrra-esque legal-oppositional moves. 

But let’s go back to “interposition.”  In 1798, Virginia was reacting, negatively, to the policies of President John Adams, most notably, the Alien and Sedition Acts.  That legislation, enacted by the Federalists who controlled the Fifth Congress, made it a crime to publish “any false, scandalous and malicious writing” about the U.S. government or its officials.  Plainly, the new law was an urgent threat to personal liberty.  In response, members of the rival party to the Federalists, the Democratic-Republicans, flexed their muscles of opposition in the legislative bodies they controlled.  And so on December 21, 1798, the Virginia House of Delegates passed a resolution, written by Madison—a former Member of Congress from Virginia, now a private citizen living in Montpelier—and then, three days later, the Virginia Senate passed it, too. 

The language of the resolution was fully Madisonian in its measuredness:

That this assembly most solemnly declares a warm attachment to the Union of the States, to maintain which it pledges all its powers; and that for this end, it is their duty to watch over and oppose every infraction of those principles which constitute the only basis of that Union, because a faithful observance of them, can alone secure its existence and the public happiness.  [emphasis added] 

Precisely because we love the Union, Madison is saying, we must protest any encroachments on its integrity.  Madison continues, adding in the “i” word: 

…the states who are parties thereto, have the right, and are in duty bound, to interpose for arresting the progress of the evil, and for maintaining within their respective limits, the authorities, rights and liberties appertaining to them. [emphasis added] 

We can observe that the word “interpose” is studiedly soft and a bit vague, even if Madison's use of the word “evil” is, well, neither soft nor vague.  So the resolution was definitely a throw-down. 

Strikingly, a similar resolution had passed earlier that same year, on November 11, in Kentucky, another state controlled by the Democratic-Republicans.  Declaring the states’ ability to block federal legislation it deemed odious, the Kentucky Resolution used the word “nullification,” a much stronger word than “interpose”: 

the several states who formed that instrument [the Constitution], being sovereign and independent, have the unquestionable right to judge of its infraction; and that a nullification, by those [states], of all unauthorized acts . . . is the rightful remedy.

Interestingly, the secret author of this resolution was none other than Thomas Jefferson, then the sitting vice president (those were the days, of course, prior to the 12th Amendment, when presidents and vice presidents were not elected on the same ticket, so Vice President Jefferson never pretended to be an ally of President Adams).  

Yet because Virginia was by far the largest state in the Union—and the home of George Washington, then still living—the resolution coming out of close-in Richmond resonated much more with the nation than the one from distant Frankfort.  Still, it must be noted that the other 14 states were not in accord with either Virginia or Kentucky.  Asked to agree with the resolutions, four states had no response, and ten rejected them. 

Yet even so, the resolutions were impactful.  In the presidential election the following year, 1800, the Sedition Acts were a major issue.  And the Democratic-Republicans, the party of Madison and Jefferson, swept out the authors of the Sedition Acts, Adams and the Federalists.  In fact, the popular vote was a landslide, even if the electoral-vote counting was iffier.  

Having been elected to the presidency, Jefferson would serve two terms in the White House.  In his first year, 1801, the Sedition Acts expired; moreover, the Third President pardoned all those previously convicted under their provisions.  Then Madison followed Jefferson in the White House in 1809, serving two terms of his own.  (As a relevant aside, the electoral geography of the 1800 election foreshadows the red-blue landscape of today: The Democratic-Republicans carried the South and West, such as it was, while the Federalists carried New England.) 

The Resolutions Today

Political events thus mooted the immediate legal and constitutional questions about the Virginia and Kentucky Resolutions.  However, the underlying issues they raised are unresolved to this day.  Taken together, the resolutions made two arguments that continue to echo:

First, the Union is a compact among individual states; as Madison wrote, the Union was “resulting from the compact to which the states are parties.”  The idea that the Union is a compact among the states suggests, of course, that if the terms of the compact are broken, the compact itself—that is to say, the Union—can be broken.  We can realize immediately that this sort of thinking helped inspire the South to secede in 1861.  In other words, the idea of the United States as a compact is a deeply loaded proposition.  And while Madison and Jefferson were long dead by the time of the Civil War, their words in the resolutions were cited frequently by Southern champion John C. Calhoun, as well as by the fire-eating secessionists who followed him after his death in 1850.   

Second, the resolutions argued that states had delegated certain specific powers to the federal government, while reserving the remaining powers for themselves.  And among those powers was the right to interpose state sovereignty to protect citizens from the depredations of the federal government.  That is, it’s not so much that the states are rejecting the idea of the Union; they are just declaring that egregious (in their view) federal rules should not apply.  

It’s this second argument of course, that echoes into our time, epitomized by figures such as Becerra for the blue Democrats, and DeSantis for the red Republicans.  

Some will say, of course, that the Constitution’s Supremacy Clause settles this issue—that the states can’t interpose against the federal government.   Of course, the Supremacy Clause was written by the same Madison, who then argued, a decade later, that the states could, in fact, interpose.  Later in his long life, Madison had much more to say on the topic of interposition.  For instance, during the Nullification Crisis of the early 1830s, the then-80-something Madison asserted that the threat from the Sedition Acts was so serious that it justified interposition, whereas the imposing of a mere tariff did not.  Of course, the definition of a justifiable “trigger” for interposition will vary in the eye of the beholder.

Others will say that the Civil War, or the New Deal, or the Supreme Court, has settled the question about the supremacy of the federal government over the states.  

Yet even today, the mostly liberal legal establishment is torn on the issues raised by the resolutions.  On the one hand, the legal establishment mostly applauds the assertion of federal power over the states, that being a legacy of Abraham Lincoln’s victory in the Civil War, including his “new birth of freedom” at Gettysburg.  Yet on the other hand, the resolutions’ vigorous defense of free speech and civil liberties is deeply appealing to the left. 

This tension is illustrated in a 2009 essay by Douglas C. Dow, a professor of political theory, published by the Free Speech Center at Middle Tennessee State University: 

The complex legacy of the resolutions stems from lingering questions as to whether they are best understood as a defense of civil liberties or of states’ rights.  Rather than asserting the principles of free speech and civil protections for aliens not charged with crimes, Jefferson and Madison argued that the power to pass such acts was not properly delegated to the national government by the states.  The tone and language of the resolutions are not that of a newspaper editorial meant to shape public opinion, but rather are constitutional treatises designed to elaborate on essential structures of government. 

So that’s clear enough statement of opinion: If the resolutions defend free speech and civil liberties, they’re good.  But if they defend states’ rights, they’re not so good—and quite possibly bad. 

Yet 13 years after Dow’s essay, in the wake of wokeness, it can’t be said that the contemporary left completely champions free speech.  Why is this?  Because today’s left, including the American Civil Liberties Union, is often preoccupied with opposing what it deems to be hate speech. 

Yet still, most liberals will be stalwart in vindicating free speech.  And at the same time, the experience of the Trump presidency has convened many, if not most, on the left that diversity among the states is a good thing.  After all, it was Supreme Court Justice Louis Brandeis, a lion of liberalism, who back in 1932 championed the states as "laboratories of democracy."  By now, nine decades later, just about everyone has come to see that Alabama and California can't and won't be governed the same way, for the simple reason that Alabamans and Californians are so different.  And they aren't about to converge. 

So much of the left has now joined the right, albeit without quite admitting it, in wishing to use the power of the states to oppose—dare we say interpose?—unwanted federal policies.  Of course, left-leaning states oppose different federal policies than do right-leaning states, and yet as they say, sauce for the goose is sauce for the gander.  So if the left says it’s fine for a blue state to interpose against the federal government on behalf of, say, sanctuary cities, it’s hard to come up with anything more than a situationalist argument for saying that a red state can’t interpose on behalf of abortion restrictions.  

Thus we come to see why both blue and red are at peace with at least some of the ethos of the Virginia and Kentucky Resolutions.  At one time or another, folks everywhere in America have felt threatened by federal restrictions on speech or expression.  This goes for today’s red (Kentucky), today’s purple (Virginia), and today’s blue (John Adams’ home state of Massachusetts).  Indeed, the commonality of the feeling of dissonance goes beyond speech and expression.  Be they fans of Becerra or of DeSantis, they both accept that the states are so divergent that they have a right to affirmatively defend state policies that express those divergences.  

A Case in Point: One Size for Health Does Not Fit All

We might close on a particular issue that connects, in a sort of matter/anti-matter sense, Becerra and DeSantis.  As the federal secretary of health and human services, Becerra oversees the Food and Drug Administration.  During the Covid crisis, the FDA joined with an independent agency, the Centers for Disease Control and Prevention, to enforce the various rules concerning masks and vaccines.  As we have seen, it’s this cluster of rules that is the object of DeSantis’ new legal assault.  And while we can’t yet know the legal outcome of DeSantis’ actions, we can already see the political impact: the Florida governor has rallied the red-state right.  

That is, just as Madison and Jefferson rallied the Democratic- Republicans in 1798 with an eye to victory in 1800, so DeSantis is rallying the Republicans (in geographical terms, the obvious descendants of the Democratic-Republicans of yore) in 2022 hoping for a victory in 2024. 

Back in February, this author argued that healthcare was a natural issue in which the states could and should assert their sovereign rights.  Just this month, in the wake of DeSantis’ attacks on the federal health edifice, I re-upped the argument.  

It is, I believe, counterproductive for the FDA, joined by the CDC, to have a vise-grip on American healthcare.  That is, we shouldn’t allow these old-paradigm bureaucracies to oversee the $5 trillion national health expenditure, to say nothing of the health of all Americans.  Are we really to believe that the FDA/CDC know what’s best for us as individuals?   No doubt some Americans have that faith, but many of us do not.  And happily, this diversity of opinion can be expressed in the diversity inherent in federalism.  

In that spirit, many of us would love to see a state such as Florida interpose against the federal healthcrats.  At the moment, that might seem to be a right-wing position, but if Republicans win the White House in 2024 and start applying their views to, say, reproductive matters, the Democrats will quickly rediscover their own progressive enthusiasm for interposition. 

I am confident that I speak for many creative forward-lookers on the libertarian left when I say that the FDA/CDC being in charge of health is as if the Postal Service were in charge of all shipping and communication.  So sure, we want to liberate healthcare from this droopy duopoly of power, the FDA and CDC.  And if that's a legal and constitutional issue in 2022, it ought to be a political issue, a voting issue, in 2024. As in, sweeping out of power the stubborn of overweening federal power, just as Jefferson swept out Adams.  The states can't fulfill their optimum destiny--as the laboratories of democracy, prosperity, and technology--if the feds have put on top of them a wet, woke, blanket. 

Even in the 21st century, a wide spectrum of Americans draw no small degree of inspiration from arguments made in the 18th century.  Thanks again, James Madison.

Lucianne Goldberg’s Place in Internet History: Six Lessons for Today

Lucianne Goldberg, who died on October 27 at age 87, lived a great life.  Although she had a long career as a writer, ghostwriter, and literary agent, she will be best remembered for her advisory role in the Monica Lewinsky saga. Here’s one admiring obituary.

Yet there’s still another aspect of her life that’s worth recalling, because it echoes to this day: Her role as a digital activist, followed by her time as a startup entrepreneur.  

For Goldberg as a digital figure, the hinge period was the year 2000, when the internet was still young.  Indeed, if we look back to that formative period, we can see that many of the issues that she, and we, confronted then—toxicity, censorship, cancelling, scaling up, political activism—are still issues now.   As they say, the more things change, the more they stay the same.  

So at a time when the internet is changing yet again—as Elon Musk has taken over Twitter while Mark Zuckerberg’s Facebook, now Meta, has fallen on its face—it’s worth both recalling this moment in Goldberg’s life and pondering the parallels, then and now. 

In the beginning of the widespread internet, three decades ago, nobody knew what this new thing would be.  In 1993, Howard Rheingold published The Virtual Community, which put forth a sort of liberal Whole Foods-y utopian vision.  In the meantime, others thought that the net would be a series of “walled gardens,” proprietarily managed by corporations such as America Online and Compuserve.  Or perhaps it would be controlled by even larger corporations, such as AT&T and Time-Warner.  And of course, everyone wondered what the dreaded Microsoft would do.  

In 1996, the poet and rancher John Perry Barlow made an early stab at a libertarian vision for the net.  His “Declaration of Independence of Independence of Cyberspace,” includes this ringing preamble: 

Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind.  On behalf of the future, I ask you of the past to leave us alone.  You are not welcome among us.  You have no sovereignty where we gather.

That don’t-tread-on-me spirit seemed especially fitting for one early site, Free Republic.  Launched in 1996 by Jim Robinson in Fresno, CA, it was an unmoderated bulletin board for conservatives—free speech, away from liberal bias, was the goal.  For a while, Free Republic flourished; it had the eager participation of its users, known as Freepers, who felt unconstrained by the rules, taboos, and technological limitations of older media.  Freepers could post articles they had culled from other news sources and then comment on them endlessly, in a new phenomenon called “threads.” 

Then in 1998, the Monica Lewinsky story broke, and Free Republic, feasting on this and other Clinton scandals, took off.  It attracted an avid poster in “Trixie,” the user name of Lucianne Goldberg.  

Yet Free Republic had problems.  It was heavy on “flames,” another new phenomenon, and had some outright hate speech and invitations to violence.  Much of this was curated by an opponent, who published it in Salon.com in 1999.  

To be sure, flaming, hating, and threatening were hardly unique to Free Republic’s corner of the internet.  As far back as 1990, the American attorney and author Mike Godwin outlined what came to be known as Godwin’s Law, which holds, somewhat jokily, that online chats eventually degenerate into accusations about Hitler and Nazis.  Strictly speaking, that’s not fair or true.  And yet it does seem that online discussions, especially when cloaked in anonymity, have a way of ending up in hostility, nastiness, and yes, what’s been called the Reductio ad Hitlerum.  Like it or not, noxious speech is still—at least most of it—protected free speech.  And yet too much venom makes for an unattractive brew.  It’s especially repellent to advertisers, who are the mother’s milk of non-paywalled websites.  

Moreover, in 1998, The Los Angeles Times and The Washington Post sued Free Republic for copyright infringement—all those articles being lifted and posted.  The newspapers won.  

Sill, Free Republic had energy.  Indeed, founder Jim Robinson saw the site as a platform for more than just online gathering.  As that same Salon article noted, Robinson and his colleagues had a “desire to turn Free Republic from a mere Web site into a political organization.” 

That idea certainly made sense—if people could gather online, they could gather in person—and yet for Free Republic, the execution proved problematic.  

For instance, in December 2000, during the extended Bush-vs.-Gore recount drama, Freepers staged a protest in front of the New Haven, CT home of Gore’s vice presidential running mate, Sen. Joe Lieberman.  And that turned nasty.  The headline in The Hartford Courant on December, 13, 2000 read, “Anti-Semitism Reeks Outside Lieberman Home.” The article noted the presence of Nazi and Confederate flags and a sign that read “Judas Joe.”  The participants denied that they were anti-Semitic, saying that the most offensive material was placed by provocateurs.  

There’s no point, 22 years later, in trying to hash through these claims and counter-claims.  But we can say that the public face of Free Republic now appeared toxic, at least to many.  In fact, the Courant quoted Goldberg as saying that Free Republic had “let all the Y2K, gun-nut, Jew-baiting crazies take over and flame the plain old conservatives.”  The word wasn’t used then, but one might say that Free Republic was cancelled, at least in the minds of many. 

Whereupon Goldberg started her own site, Lucianne.com, with many of the same features as her old haunt, including posts, threads, and flames.  For awhile, Goldberg’s site was happening.  But then others began to see that this new thing could be the Next Big Thing.  And so came a rush of new sites, including Silicon Valley-backed newbies such as Friendster and MySpace.  These sites could see that attention was something that could be monetized—and they were infinitely more effective at doing it.  

So “social media” was born, and it was big.  Hardcore techies—-which Robinson and Goldberg were not—realized that the future of the medium would belong more sophisticated sites that allowed for posting pictures and video, as well as peer-to-peer messaging and e-commerce, all arranged by algorithms, supported by advertising, and frictionlessly transferred, as the tech became available to mobile.  So while both Free Republic and Lucianne still exist today, they are just small niche players.  

Needless to say, this sophistication of the new giants—now known as platforms—brought problems, most notably, the loss of privacy, and then, of course, the issue of censorship, or “de-platforming.”  But in their knowingness, even intrusiveness, the new sites—soon to be dominated by Facebook, followed by the smaller Twitter—offered a new kind of political tool, thus realizing at least part of Robinson’s activist vision. 

To a large extent, both Barack Obama and Donald Trump based their presidential campaigns on Facebook.  Why?  Because Facebook knew so much about its users, it could offer the most “granular” of targeted advertising; it was vastly “smarter” than cable TV or dead-tree paper.  To candidates, Facebook offers the features of an old-style political machine in new digital garb: Like the ward-heeler of yore, it knows all about you.   And so, like the machine of old, it could monitor your progress to ballot-casting. 

So what lessons can we draw as we compare the tech transitions of 2000 to the tech transitions of 2022?  Here are six: 

First, if content is king, content-moderation is queen.  How to allow free speech on a site without it becoming a sewer?   First Amendment absolutism doesn’t last long in the face of online cruelty, even depravity and criminality.  This is a problem that bedevils all sites today, from Facebook and Twitter to the newer social sites of the right, such as Caucus Room, Gab, Gettr, Parler, and Truth Social.  For sure, Elon Musk struck a blow for free speech when he fired the wokesters who had de-platformed, say, The Babylon Bee, but on that same day, October 27, he tweeted a statement entitled “Dear Twitter Advertisers,” in which he wrote, 

Twitter obviously cannot become a free-for-all hellscape, where anything can be said with no consequences!  In addition to adhering to our laws of the land, our platform must be warm and welcoming to all, where you can choose your desired experience according to your preferences.

Translation: Musk Twitter will be less censorious than Woke Twitter, but it will have plenty of rules.   Indeed, Musk is notably going slowly, consulting widely, as he ponders what changes he might—or might not—be making in Twitter’s content-moderation policies. 

Second, the stubborn vision of the founder can make an organization great, but the same stubbornness can later bring it down.  That was the story of Free Republic’s ill-starred foray into political activism two decades ago in Connecticut, and it’s the story of Mark Zuckerberg’s foray into the metaverse today. Earth to Mark: Nobody wants to wear virtual reality goggles all the time.  Today, Facebook’s—now Meta’s—stock is down by more than 70 percent since the beginning of 2022.

Third, users will always crave interactivity.  And that interactivity can be defined as everything from community to combat.  Does that seem complicated?  Even contradictory?  Welcome to human nature.  

Fourth, the world is still looking for a media that is both participatory and online.  The old model of simply grabbing content online has been suppressed by lawsuits, and yet people, working within the guidelines of “fair use,” will always want to work over the news: upvoting it, forwarding it, commenting on it, and mashing it up with music or special effects.  So any site benefits from what might be called “dimensionality”—that is, it’s not just flat on the screen, but instead reaches out to the viewer, who can then take action, or be called to action.  That’s the problem, for example, with cable news, relying as it does, on pre-internet technology: You can watch cable TV, but you can’t do anything with it.  To do something, you have to go to a different, interactive, screen.  It’s the inertness of cable that will doom it, thus bringing more hope to online news.  

Fifth, the dream of a hybrid political organization, both online and real-world, is still to be realized.  Free Republic and Lucianne never scaled, and Zuckerberg’s Facebook, which more than scaled, is no longer trusted.  For his part, Musk has said that he wants Twitter to be an “everything app,” that will let you do everything, including, one might presume, political things.  We’ll see. 

Sixth, it’s possible that the big sites are, well, too big. This is a diverse country, and an even more diverse world, and it might just be the case that a single site can’t encompass all the different points of view in a harmonious whole.  Just as everything-for-everybody department stores have faded, we might see that the big socials find themselves nibbled away by nimble sites that can better reflect the values and interests of their chunk of users. 

So could that spell a revival for niche legacies such as Free Republic or Lucianne?  Perhaps, but more likely, at least in the U.S, the division will be a duality, red vs. blue.  As we know, red vs. blue isn’t just about politics, it’s also about life and lifestyle.  There’s a Red America now, and a Blue America.  And so the internet successes of today and tomorrow will scaled to one or another half—and that’s hundreds of millions of people.  

Still, the smart players will know their history.  And Lucianne Goldberg provides an instructive case study.  Entertaining, too.