Stanford Economist Warns Big Tech Erodes Democracy, Calls for Humane Capitalism

Billionaires today are unusually aggressive in hoarding cultural and technological influence, according to Stanford economist Mordecai Kurz, whose research links monopoly power to political and economic inequality. In his forthcoming book, “Private Power and Democracy’s Decline,” publishing May 19, Kurz argues the United States is experiencing an extreme version of a pattern repeated since industrialization: technological power concentrating in the hands of a few, eroding democratic institutions.

Kurz said technological moguls historically view themselves as superior beings whose natural role is to shape society, making them unafraid to disrupt democracy. During the first Gilded Age in the late 19th century, wealthy industrialists such as Andrew Carnegie and John D. Rockefeller “invented all kinds of theories about human evolution,” twisting social Darwinism to justify their influence. Today, Anthropic CEO Dario Amodei has suggested his technology possesses mystical potential to become a transcendent good and has openly acknowledged it could lead to mass unemployment.

Voters turn toward fascist leaders when democracy no longer serves workers, Kurz said. He noted that New Deal reforms during the Great Depression limited monopoly power and provided benefits to the vulnerable, precipitating a “half-century of sustained innovations, rapid economic growth and stable income distribution.” Reagan-era reversals of those reforms led to what Kurz calls the “second Gilded Age,” when technology firms accumulated monopoly power while most Americans—especially blue-collar workers without college degrees—saw wages stagnate as living costs rose. Kurz argued this economic disenfranchisement, not cultural forces, drove the rise of the Make America Great Again movement.

The book describes how today’s tech giants diminish voter power through both economic and cultural influence. Small startups and bigger companies like Microsoft and OpenAI prefer collaboration over competition, Kurz said. New technology firms now form not to challenge incumbents but with the explicit goal of eventual acquisition by one. This reflects monopoly power so extreme that no innovator can survive without an established monopoly’s blessing. “David has no choice but to work with Goliath,” Kurz said. This monopoly status grants tech giants enormous lobbying influence, and politicians reliant on their money are unlikely to rein them in.

“When you use strategies designed to manipulate knowledge to create market power, you go way beyond what we should be willing to accept,” Kurz said.

Tech giants leverage largely unregulated social media networks to drive polarization for profit, Kurz said. “[Social media] activity is profitable, and sometimes you generate activity by creating falsehoods, which are not good for democracy,” he said, adding that tech companies should face legal liability for misinformation on their platforms. Unregulated artificial intelligence could further entrench disillusionment by displacing an even larger swath of workers, Kurz predicted—not just those without college degrees but also doctors, lawyers and engineers.

Still, Kurz expressed optimism that a better democracy will re-emerge, though the path may be difficult. “Trumpism will not go in a whimper,” he said. “There may be a big recession or a big depression or some other crisis before we can complete a new reform cycle.”

Kurz said extreme consolidation of technological power has historically led to reform, and conditions are ripe again. “If you talk to any normal, intelligent American, they will tell you something is wrong in America and something has to change,” he said. He described the MAGA coalition as a mix of old-fashioned Republicans, white supremacists and disenfranchised former blue-collar workers, held together by specific economic circumstances that will eventually dissolve.

When reform arrives, Kurz outlined in his book what it should look like: the government should tax and redistribute excess wealth accumulated by tech firms due to monopoly power. Workers displaced by AI should receive government-subsidized education for new skills, and subsidies should support companies that hire them. New policies should ensure AI assists workers rather than replaces them.

“We want capitalism to support democracy. Capitalism has to become more humane. It has to be more regulated. And in democracy, we don’t leave anybody behind,” he said.