As a big fan of Matt's writing, I think this is worth the (not too too long) full read, which elucidates exactly how iRobot transformed from innovative DARPA-funded former-MIT professor-run tech...
As a big fan of Matt's writing, I think this is worth the (not too too long) full read, which elucidates exactly how iRobot transformed from innovative DARPA-funded former-MIT professor-run tech company to... a drop-shipper of Chinese hardware and software. But the last few paragraphs serve as a decent TL;DR:
In other words, the story here is Wall Street destroying a promising robotics enterprise through financial engineering, aiding the Chinese in the process, and then demanding a bailout via amnesty from antitrust laws so that shareholders wouldn’t lose any money, while refusing to acknowledge that a key Trump ally of Wall Street facilitated the transfer of the firm to China.
Of course, this bad faith is routine. None of the critics of antitrust enforcement, including Furman, care if U.S. technology flows to China or if companies fail. They in fact celebrated offshoring when it happened to 90,000 manufacturing plants from 2000 onward, and they often make the point that failure is part of capitalism. But when it comes to one specific company, where they can cherry pick information to make a case against antitrust, well then, all of a sudden iRobot’s bankruptcy is a disaster.
All that said, there is an important lesson here for anti-monopolists. Antitrust is a useful tool, but it cannot substitute for a broader national economic development strategy. Right now, America, through a whole set of policy choices, from bailouts to government contracts to pro-speculation regulations to attacks on the rights of labor and creators, ensures that financiers get an unfairly high return on capital. We can see the consequences in everything from the collapse of iRobot to the destruction of America’s cattle herd to the erosion of capacity in Hollywood to the financialized AI data center build-out. The business of America right now is extraction, not creation.
To reverse this strategy, a more assertive antitrust regime is necessary, but it’s not enough. We also have to reduce the many other public levers of support for elevated returns on capital. Only then will it make sense for companies like iRobot to invest in robots instead of share buybacks.
As a big fan of Matt's writing, I think this is worth the (not too too long) full read, which elucidates exactly how iRobot transformed from innovative DARPA-funded former-MIT professor-run tech company to... a drop-shipper of Chinese hardware and software. But the last few paragraphs serve as a decent TL;DR: