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Wall Street JournalAmerica Has Become A 'Digital Narco-State': Nobel Prize Winner Warns As Tech Billionaires Now 'Dictate US Foreign Policy'
Nobel Prize-winning economist Paul Krugman is comparing the unchecked power of America's social media giants to drug lords, while accusing tech billionaires of distorting democracy and shaping foreign policy to protect their business models.
America Is A ‘Digital Narco-State’
In his newsletter on Tuesday, Krugman argued that the United States has “in practice, become a digital narco-state,” noting that social media platforms in the country were as dangerous as drugs, which “do considerable harm” while continuing to operate with minimal oversight.
He asked readers to imagine a U.S. where heroin is legalized, marketed freely, and becomes “a huge, multibillion-dollar industry.” That dystopian vision, he argued, isn't hypothetical, and it's already happening, just with “social media” in place of heroin.
According to Krugman, the power and influence of America’s social media billionaires extend beyond just domestic politics. “They have enough power to dictate U.S. foreign policy,” he said, accusing them of punishing American allies who attempt to regulate their platforms.
He criticized the U.S. government's resistance to Europe's Digital Services Act, claiming that “MAGA fury” is part of the motivation, along with tech executives' opposition to stricter oversight.
Meanwhile, attempts to pass online safety legislation in the U.S. have collapsed under pressure from Silicon Valley. “Mark Zuckerberg and his billions came to town, and the legislation died,” Krugman said.
He also flagged a recent Reuters report, according to which Meta Platforms Inc. (NASDAQ:META) made $16 billion in advertising revenue last year, from scams and banned products.
As for Elon Musk's X, Krugman slammed the platform's handling of user verification and ads, calling blue checks a “fraud” and Musk's reaction to EU fines “berserk,” referring to the Tesla Inc. (NASDAQ:TSLA) CEO’s recent offensive against the bloc, calling for its abolition.
Tech Giants Push Back Against Regulations
Tech companies have pushed back against Australia’s decision to ban children under the age of 16 from using social media accounts, but have nonetheless complied with the new rules, with Musk’s X being the last to fall in line, saying, “”It's not our choice – it's what the Australian law requires.”
Malaysia is set to enforce similar laws prohibiting children under the age of 16 from creating social media accounts, starting from next year.
Shares of Meta Platforms were down 1.48% on Tuesday, closing at $656.96, and are down 0.42% overnight. The stock scores high on Growth and Quality in Benzinga’s Edge Stock Rankings, but has an unfavorable price trend in the short, medium and long terms. Click here for deeper insights into the stock, its peers and competitors.
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