Anthropic and the right to say no
A free society is one where “no” doesn’t trigger state punishment.
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Mere hours after the Pentagon designated Anthropic a supply chain risk, the military used the company’s technology to facilitate its attack on Iran.
On Friday afternoon, Defense Secretary Pete Hegseth announced that “no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic.” The next day, in what appears to be a pattern of Saturday military actions, the government launched an air assault on Iran.
As The Wall Street Journal reported, U.S. Central Command “uses [Claude] for intelligence assessments, target identification and simulating battle scenarios,” though it’s not clear exactly how it was used this weekend.
The original purpose of allowing the Feds to designate certain companies supply chain risks was to “limit the Pentagon’s exposure to companies posing a potential security risk.” As The Argument’s Kelsey Piper pointed out last week, the government’s entire position vis-a-vis Anthropic is ridiculous. It is simultaneously claiming that Anthropic is “too dangerous to allow” and also “essential for national security.”
In reality, it’s clear that the government’s aim is to use whatever authority it can get its hands on to force companies to do whatever it wants. And sure enough, the far less scrupulous CEO of OpenAI, Sam Altman, signed a contract with the Pentagon Friday night seemingly acceding to the government’s demands.
Now, Anthropic has rejected the idea that all defense contractors have to stop doing business with his company, claiming that Hegseth “does not have the statutory authority to back up this statement.” Whoever is right, Anthropic is sure to face a series of costly legal battles and the loss of business of any companies worried it could impact their own contracts with the Pentagon.
Which seems like very much the point.
Many on the Left have responded to these developments by praising Anthropic for holding strong to the red lines that caused DOD to pull its contract. Namely, that it would not assist with the mass domestic surveillance of Americans nor the use of fully autonomous weapons. But, to be honest, the government’s actions should be concerning to us whether or not we agreed with Anthropic’s red lines.
Most liberals defending Anthropic believe the company happens to be right about autonomous weapons and domestic surveillance, and that’s why it deserves defense. But notice what that position concedes: If companies only deserve protection when their positions are “correct,” the only question is who decides what correct is. Right now, that’s the Trump administration and liberals need a principled objection, not just a policy disagreement over this specific case.
Free enterprise means the government can’t make you build Skynet
Of all the small-l liberal principles, freedom of enterprise probably has the fewest modern defenders. We’re in a populist moment, so growing factions on both the left and right are dispositionally hostile to corporations and seek to subdue them. Corporations can be quite powerful, so the incentive to control them is strong.
While corporations aren’t people, they are made up of people. And when I talk about the freedom of enterprise, I’m talking about individual people’s rights to spend their time how they want, to create new goods for sale, to provide services they think will be valuable as well as the rights of other individuals to buy things they want that they think will make them happy. Liberals have let their distrust of corporations erode their commitment to free enterprise, leaving them without the conceptual scaffolding to resist government overreach like what the Trump administration is doing to Anthropic.
The government’s argument is that Anthropic was seeking to dictate U.S. military policy by refusing to allow loophole terms in the contract that could allow for completely autonomous killer robots, not to mention mass domestic surveillance. The Pentagon was, of course, free to just refuse Anthropic’s contract terms and find another, less ethically cross-pressured company, but one cannot simply say no to the Trump administration and expect to get away with it.
Defending Anthropic puts modern liberals in a weird place. We’ve spent a lot of time criticizing the unfreedoms created by poorly regulated corporations, so our defense-of-free-enterprise muscle is remarkably weak. We have treated the freedom to engage in a fair marketplace — to hire, trade, produce, build, and compete as a second-class right — as something the government can suspend or override whenever it’s convenient.
Even working in the private sector can seem countercultural among parts of the Left. Sometimes it seems the only high-status jobs are: Lawyer, nonprofit employee, academic, or — if you must — consulting. In Gallup’s polling, the only industries that Democrats were significantly more positive on than Republicans were the legal field, education, publishing, and the TV, radio, and movie industries.
COVID-19 was perhaps the most spectacular modern example of the private market working productively with government to save lives. Yet, according to more Gallup polling, Democrats’ views of pharmaceutical companies barely budged from before the pandemic to after, I suspect because their fundamental pessimism about the industry is divorced from outcomes.
And in the housing space, where I’ve reported for years, it’s become bizarrely normal to act as if renting out your home is prima facie suspect. We don’t just debate the best ways to regulate landlords, instead there are calls to abolish them entirely.
Liberals generally understand that bad people doing bad things with their freedom is not a reason to turn against those freedoms altogether. The existence of Nazis is not a good argument against freedom of association, poorly written op-eds are not good arguments against freedom of the press, and the fact that some people do crimes is not an indictment of “innocent until proven guilty.”
Yet, the existence of bad companies has convinced large swaths of the Left to view all private market activity, and even the desire to make a lot of money, as inherently suspect. This is a real shift, under Presidents Clinton and Obama, Democrats openly defended “free enterprise.” Now, instead of expecting the government to proffer a reason why regulation is necessary, corporations and individual actors need to justify their existence to the state on an ongoing basis. This distrust has manifested in an entrepreneurship gap. In one paper, economists find that Republicans are 26% more likely to start a business than Democrats.
The problem isn’t that people distrust corporations, it’s that they’ve allowed that distrust to license a comfort with heavy-handed state power that is far more dangerous than any individual company. If one of the leading-edge tech companies — one potentially worth hundreds of billions of dollars — cannot require that its products aren’t used to undermine the Constitution, what, really, is corporate power in the face of that?
Believing in free enterprise doesn’t mean you can’t regulate companies
Having the presumption that people are allowed to form associations and sell things in order to make money does not require you to reject regulations, it just means those regulations should be well-justified and equally applied. After all, sometimes the right to free enterprise comes up against other rights liberals care about like life or health or freedom from coercion.
For example, prohibitions against polluting the air or water—or better yet, a carbon tax—do not single out specific industries arbitrarily and the government has to weigh the rights of companies to cheaply rid themselves of wasteful byproducts against the health and lives of humans. Easy decision.
There are many good arguments for increasing regulations on corporations like information asymmetries between employers and employees or producers and consumers, monopoly power, externalities that harm people who can’t combat a large company’s legal team. Bu none of these require arbitrary or capricious responses or a rejection of free enterprise entirely.
The alternative is what we’re watching unfold before us right now. Anthropic is just the most recent and high-profile example but look at how Apple won itself a tariff exemption by getting its CEO to suck up to the president or how the Trump administration refused to grant permits to wind projects without a lawful reason.
It really sucks to live in a country where your ability to earn money and be entrepreneurial is subject to shifting standards based on political tides. Where you can be designated a security threat because you disagree with the Dear Leader. Where your entire industry is suddenly at risk because, through no fault of your own, the president thinks wind turbines are ugly.
If you want to open your own hair salon but the rules for getting a permit change every year, why would you invest in your skills? If you have the idea for an innovative new biotech company, how will you raise money for your innovation if banks can’t trust that the government will treat you fairly?
The U.S. has benefited enormously from being a refuge from this type of state arbitrariness. Investors are more willing to lend their money at lower rates in a country where the rules are clear, fairly applied, and they are more wary with their investments when it seems that every election carries with it a 50% chance of doom. Regulatory predictability facilitates freedom by allowing people to plan.
But free enterprise isn’t just an instrumental good. We spend more time working than we do writing op-eds or attending protests or going to church. The freedom to use that time building what we want, offering up our talents to others, or trying out an idea has a massive impact on how free our lives feel.
The logic of arbitrary coercion won’t stop with Anthropic. Today, it’s an AI company, punished for refusing to enable mass surveillance. Tomorrow, it’s a pharmaceutical company that won’t provide drugs for executions, a logistics firm that won’t transport deportees, or hotels who refuse to host ICE agents. The question isn’t whether you agree with these red lines, it’s whether companies get to have red lines at all.
Liberals who cannot make that principled argument are left only with the hope that officials who agree with them will get to decide on which red lines are respected.
How’s that working out so far?
More on liberalism:
The fox in liberalism’s henhouse
There are many open, full-frontal assaults on liberalism. Conservatives, fascists, and communists have all attacked different aspects of liberal values to different ends — from free markets to individual rights to freedom of expression to democratic self-government. In the postwar era, liberalism came out on top. But there are no permanent victories.
Really great essay,
Governments should not pick "winners and losers" or favor one company over another. On Anthropic I think their decision to hold firm is admirable.
But I understand OpenAI's decision to take advantage.
Long term, Anthropic's decision will hold them in good stead with customers. OpenAi may need revenues more quickly to survive.
And if what the DoD proposes to do is against the constitution, that will be for the courts to decide. We might not like the decision but it's the recourse we have left.