INSUBCONTINENT EXCLUSIVE:
The tech industry has won at capitalism
From America to China, from Amazon to Alibaba, from Alphabet to Tencent, the most valuable and most dynamic companies in the world are
But what kind of capitalism? Because there are really two different modes, two ways to get rich.
One is to claim a share of the wealth that
This is the capitalism of Wall Street, of Russia1, of cronies and rent-seekers, of the infamous &resource curse.& Obviously the more wealth
there is around you, the more incentivized this approach becomes
Call it the siphon.
The other is to create new wealth; manufacture better goods, offer better services, design better hardware, write better
This is — or is supposed to be — the capitalism of Silicon Valley, of China2, of rocket ships and electric cars, of Moore Law
Obviously this is the purer, more idealistic form of capitalism
Call it the forge.
It seems apparent that public opinion has turned sharply against the tech industry of late:
There's been a steep drop
off in the share of Americans who say tech companies have a positive impact on the country & and this true among both Reps - Dems
NEW from
@pewresearch https://t.co/8PyowIvZeQ pic.twitter.com/Jw4KFWIk7D
mdash; Monica Anderson (@MonicaRAnders) July 31, 2019
Isn''t that
surprising? After all, Silicon Valley is building new and better things for us all, while Wall Street, having offered essentially no
generally beneficial financial innovations in decades, is greedily siphoning off roughly a quarter of all American profits; the
pharmaceutical industry is spending vastly more on marketing than on R-D; and the rest of the US health-care industry is basically a huge
kludge of a bloodsucking siphon.
So why has tech, the forge of the modern world, found itself in the crosshairs of a backlash?
I put it to
you that this is in part because while tech likes to portray itself as a forge, in many prominent cases, it is actually a siphon
Consider Facebook, Twitter, and Google
All are unquestionably forges, whose new products have done many good things
But that not their business model
Their business model, their original sin, is that siphon called advertising.
You could once have argued that advertising is a forge, in that
is makes consumers aware of desirable products, just as you could once have argued Wall Street was a forge, in that it makes capitalism more
Online display / social-media advertising has become the tech equivalent of high-frequency trading: a pure siphon
(You can, however, make a good case for Google AdWords as a forge.)
People know when they&re being siphoned
What more, the industry being siphoned from is the media, which is unsurprisingly now inclined to train its own guns on tech as a result.
It
A more nuanced view is that &siphon& and &forge& are two ends of a spectrum, and numerous notable tech companies are closer to the former
Every app aimed at the wealthy-urbanite target market is essentially a siphon aimed at the wallets of the rich
(Yes, forge technology is often only affordable by the rich at first, too; but that very different from servants-as-a-service.) WeWork was,
apparently, largely a siphon for SoftBank.
When people are angry at Amazon, Uber, and Lyft for how they treat warehouse workers, Whole Foods
clerks, and drivers, it in large part because it seems to them like the wealthiest industry in the world is acting like a siphon geared to
drain the minimal wealth of struggling workers, rather than a forge building new systems to empower and enrich us all.
Of course some of
And what almost every tech luminary really wants is to follow the Elon Musk model, wherein his stint at PayPal — which, like all payments
companies3, is at least half siphon, albeit one largely aimed at even less appealing rivals — funded the forges of SpaceX and Tesla.
But
all too often, the road to a siphon is paved with good intentions of a forge
Say what you want about Wall Street, at least they&re not hypocrites; high-frequency traders and hedge funds rarely pretend to be making the
world a better place for anyone but themselves and their clients
This perceived hypocrisy is especially acute for companies like Facebook and Twitter, which offer &free& products from their forges …
carefully engineered to optimize the siphons on which they survive.
In retrospect it surprising it took this long for the tension between
the siphon and the forge to erupt into the cultural dissonance in which social media, and gig-economy apps, and indeed much of the publicly
visible tech industry, now exists
While that tension continues, it hard to imagine this dissonance diminishing.
1 An oversimplification — again, it really more a spectrum
than a binary — but not an invalid one.2 An oversimplification — again, it really more a spectrum than a binary — but not an invalid
one.3 Excepting those which create whole new kinds of payments, such as M-Pesa.
