Tech’s Winner-Take-All Trap

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Interview with Simon Johnson by BRUCE EDWARDS, F&D Magazine, June 2025.
Central argument: When controlled by a select few, tech innovation can be self-serving and undermine the institutions that make it possible.
Johnson is the Ronald A. Kurtz Professor of Entrepreneurship at the MIT Sloan School of Management and 2024 Nobel Prize winner in economics; he served as IMF chief economist in 2007–08.

Technology does not automatically translate into improved living standards for everyone; gains can be concentrated among highly educated people.
Big Tech leadership tends to design technology that favors the needs and perspectives of "highly educated people, mostly white, and mostly men."
Historical evidence and economic theory suggest divergent paths: technologies that raise productivity of less educated workers promote convergence in outcomes; technologies that boost productivity of highly educated workers promote divergence.
Digital technology has begun to undermine deliberative democratic institutions by changing how public debate occurs (for example, "shouting at each other over social media" versus finding common ground).
Widening inequality, especially where less educated people feel left behind, fuels forms of populism; this contrasts with the U.S. experience through the first two-thirds of the 20th century when wages rose and the middle class expanded.
The concern: AI, enabled by institutions, could be pulled in directions that undermine democracy or tilt institutions toward being "relatively or even extremely extractive," concentrating value, income, and power among a few.

Historical pattern: a few places lead in inventing new machines while others are takers; countries can change position but "it doesn’t happen very often."
Examples of shifting positions: the U.S. in the 19th century (railroads, telegraph); China shifting from recipient in the 1980s to producer in consumer electronics, electric vehicles, and AI.
Current distribution of AI development spending (as reported by Johnson, excluding China because of unknown spending):
- "95 percent of the money being spent on AI development is in the US"
- "3 percent in Europe"
- "2 percent in the rest of the world"
Winner-take-all dynamic is "even more extreme at present than in previous modern technological revolutions."

Two roles of institutions highlighted:
- Good institutions are necessary to be a leading player in technology (example: why technology is being driven by the US).
- Institutions shape democratic deliberation; digital technologies can erode deliberative norms.
Comparisons with finance: parallels drawn to deference toward "the 'smartest guys in the room'" in the buildup to the 2008 crisis; need to avoid similar failures with tech.

Recognize the stakes and contest the "vision" for technology rather than leaving it to a "vision oligarchy" of a few people (Johnson’s phrasing: “1 or 2 or 10 people” driving the discussion versus broader engagement).
Push technology in a pro-worker direction; specifically, boost the productivity of people without a lot of education in the U.S. and globally.
Consider "guardrails around Big Tech’s activities" and be ready with "policies and safeguards" to prevent systemic harms.
Advocate broader public engagement and deliberation about technological vision and direction.

The interview has been edited for length and clarity.
A related podcast features Johnson discussing the interdependence of institutions and technology and the themes of his book Power and Progress.

Tech’s Winner-Take-All Trap — BRUCE EDWARDS, F&D Magazine, June 2025.

Tech’s Winner-Take-All Trap
- Tech’s Winner-Take-All Trap (Markdown version)
- Tech’s Winner-Take-All Trap (PDF)