Profile of Paul Romer, once tech's favorite economist and now a critic, who has championed state taxes on the digital ads sold by Facebook and Google
Paul Romer's call for government activism, particularly toward the big tech companies, reflects “a profound change in my thinking.” Tweets: @ramaswmysridhar , @1br0wn , @staceynycdc , @hoofnagle , @anabmap , @charlesmok , @hobnobmobile , @jason_kint , @andrewdessler , @nytimestech , @stevesi , @claudferraz , @paulmromer , @jessefelder , @jomicheii , and @naomioreskes Tweets: Sridhar Ramaswamy / @ramaswmysridhar : I am glad for the new thinking sweeping academia, but my thinking is quite simple: Companies exist to enrich themselves & shareholders, by design. Our government is the only entity with the mandate to make life better all of us. Case closed. https://www.nytimes.com/... @1br0wn : Prominent economists now “see markets — search, social networks, online advertising, e-commerce — not behaving according to free-market theory. Monopoly or oligopoly seems to be the order of the day.” https://www.nytimes.com/... Stacey E. Singleton / @staceynycdc : He is hard on economists, including himself, for long supplying the intellectual cover for hands-off policies and court rulings... “Economists taught, 'It's the market. There's nothing we can do,'” Mr. Romer said. “That's really just so wrong.” https://www.nytimes.com/... Chris Hoofnagle / @hoofnagle : Interesting profile of Paul Romer's turnabout on tech in NYT. He favors taxing digital ad revenue https://www.nytimes.com/... Ana Brandusescu / @anabmap : “And he is hard on economists, including himself, for long supplying intellectual cover for hands-off policies and court rulings that led to what he calls the “collapse of competition” in tech and other industries.” Good, anything less would be insulting. https://www.nytimes.com/... @charlesmok : Once Tech's Favorite Economist, Now a Thorn in Its Side Paul Romer's call for government activism, particularly toward the big tech companies, reflects “a profound change in my thinking.” https://www.nytimes.com/... Hobnob / @hobnobmobile : “Economists taught, 'It's the market. There's nothing we can do,'” Mr. Romer said. “That's really just so wrong.” https://www.nytimes.com/... Jason Kint / @jason_kint : you had me until you got to the digital ad tax, @paulmromer. This is where Google and Facebook also have redirected their greatest threats (why? maybe it unites their industry opposition). My take: the focus needs to be on integration of data protection and competition policy. https://twitter.com/... Andrew Dessler / @andrewdessler : Economists are waking up to the problems with free markets. Once Tech's Favorite Economist, Now a Thorn in Its Side https://www.nytimes.com/... @nytimestech : Paul Romer, once Silicon Valley's favorite economist, remains a believer in science and technology as engines of progress. But he has also become a critic of the tech industry's largest companies, saying that they stifle the flow of new ideas. https://www.nytimes.com/... Steven Sinofsky / @stevesi : Doesn't every business want its products to be used more by existing customers and by more new customers? In the old days we measured our software on how much _less_ time people spent in it to get their work done, but that was viewed as weird relative to customers we supported. https://twitter.com/... Claudio Ferraz / @claudferraz : I could not agree more with @paulmromer on the need to regulate the big tech “much bigger issue we're facing is the preservation of democracy,” he said. “This goes way beyond efficiency.” https://www.nytimes.com/... Paul Romer / @paulmromer : How my perception of the tech industry and economics has evolved over the last couple of decades: https://www.nytimes.com/... Jesse Felder / @jessefelder : 'Mr. Romer's specific contribution is a proposal for a progressive tax on digital ads that would apply mainly to the largest internet cos supported by advertising. He would like to see the tax nudge them away from targeted ads toward a subscription model.' https://www.nytimes.com/... Jo Michell / @jomicheii : While it's tempting to snark, this kind of self-reflection is worthy of recognition. There's still a substantial contingent pushing the “hey, don't be silly, economics never had an anti-government bias” line. https://www.nytimes.com/... https://twitter.com/... @naomioreskes : Remember all that talk in the 1980s about the cost of regulation? Well, Thomas Philippon, economist at NYU's Stern School of Business, has estimated that monopolies cost American households $300 a month apiece. Hmmm... @ErikMConway https://www.nytimes.com/...
Context & Ripple Effects
Romer built his reputation as the economist of technology-driven growth — the figure the industry cited when arguing that scale and network effects were self-correcting features, not problems. The related coverage traces the collapse of that consensus from below: Foundem's case against Google had already exposed the flaw in the self-correcting-internet argument back in 2018, and that same year a wave of books argued big tech's power came from ducking regulation rather than software disruption.
What makes this profile a data point rather than an anomaly is who is moving: the man whose economics underwrote the industry's legitimacy now proposes taxing the ad revenues of Facebook and Google at the state level. It sits alongside the bipartisan question set from the House antitrust hearing as evidence that the critique has crossed ideological lines.
First-order effects
- Facebook and Google gain a new class of antagonist: state governments with a revenue-based lever that sidesteps the slow machinery of antitrust litigation and targets their core ad business directly.
- State legislators acquire a ready-made intellectual framework — a Nobel-caliber economist's endorsement lowers the credibility barrier for bills that would previously have been dismissed as protectionist shakedowns.
Second-order effects
- Ad-tax proposals collide with the adjacent debate over making platforms pay for news: as Stratechery warned about forced payments, revenue transfers to dependent industries risk buying softer scrutiny of the platforms themselves, so tax design determines whether the money funds accountability or pacifies it.
- If even one large state enacts a digital-ad levy, Facebook and Google face fragmented, jurisdiction-by-jurisdiction pricing pressure on their US ad business — and every other state's budget office gains a template to copy.
Third-order effects
- The deeper shift is in who supplies the arguments: for decades economists legitimized light-touch treatment of tech platforms, and if the discipline's center of gravity moves to intervention, regulators inherit both the tools and the intellectual cover for structural remedies rather than episodic enforcement.
- Romer's reversal pairs with figures like Marc Andreessen drifting rightward politically as part of the same realignment — the era when tech and its intellectual allies shared one policy worldview is ending, leaving platforms facing hostile critics on multiple fronts at once.
The trend: Silicon Valley's intellectual legitimacy is eroding among its own former academic champions, shifting the policy battleground from trust-busting toward direct taxation of platform ad revenue.