Over recent decades, the technology sector has gained relative to other sectors of the economy.  This partly reflects public policy decisions in areas such as intellectual property rights and antitrust laws, but mostly reflects fundamental innovations that move economic activity from “brick and mortar” firms to internet companies.

The recent pandemic has accelerated this trend, as tech companies have done much better than more traditional sectors.  So why hasn’t there been more of a backlash?

Nationalists face a dilemma.  Many nationalists favor the brick and mortar sectors of the economy over tech, for a variety of reasons. Blue collar workers are an important part of the nationalist political movement.  Tech companies tend to be located in blue states, and are often owned by relatively liberal entrepreneurs.

But nationalists are also strong defenders of what they see (not always correctly) as America’s national interest.  This creates a dilemma, as  American tech firms are not just increasingly dominant at the national level, they are also increasingly dominant at the global level.  I don’t have the precise figures, but US tech companies comprise a rapidly growing share of global equity market capitalization.

I predict that nationalists will favor public policies that make it more difficult for US tech companies to extract wealth from average Americans, and oppose policies that make it more difficult to extract wealth from Chinese and European consumers.  But this is a difficult needle to thread, which leads me to believe that the tech backlash won’t begin until there is a political change in Washington.

And even if the Democrats take power, they will face the dilemma that tech firms are a key contributor to the budgets of blue state governments, and also donate money to liberal candidates.

PS.  Mark Zuckerberg should stand up to Facebook employees that are trying to pressure him to censor President Trump’s statements.  As a private firm, Facebook is free to censor Trump. But it would be unwise.