As the techlash continues to gather momentum, I wanted to share a perspective that seems to be being overlooked. It’s not tech itself that is the problem, it’s late-stage capitalism. Let me explain;
A young-ish person sits in a garage/dorm room/Starbucks and comes up with a cool idea.
Said young-ish person writes some code, finds some MVP funding, hires a small team, and sets out their shingle.
Through a completely mysterious and unpredictable set of circumstances, said young-ish person’s company/app – let’s call it Sunflower – starts getting traction.
Sunflower’s funders arrange the next stage of funding, bringing in other investors – typically large institutions.
Articles start appearing about the next great thing in tech – a small, stealthy start up called Sunflower.
Sunflower’s traction goes through the roof.
Said young-ish person appears on the cover of Wired. Then in articles in the Journal, the Pink ‘Un, the style pages of the Old Gray Lady.
The investors invite said young-ish person to a long week-end of “next steps brainstorming” at the Rosewood Bermuda. “Bring a friend” they say; “H-ll, bring a few friends. Or we’ll find some for you”.
On the third day of spit balling – after the cruise on the 100 foot yacht, the dinner with Michael Douglas, the full treatment at the SENSE Spa – the investors lay it all out. “You’ve hit the payload. You can be the next Zuck; the next Steve. We’re going to make you a gazillionaire”.
Gazillionairization begins. The process is simple. Harvest profile data from the usage of Sunflower and sell ads against those profiles.
Said young-ish person becomes unimaginably wealthy. The investors get wealthier yet.
Another great American success story.
Q by Q growth starts declining from 867% to 789% to 689%. The investors call said young-ish person. “Fix it FAST”.
Said young-ish person ideates new customer retention approaches, involving gamification, and behavioral nudges.
The head of data analytics from a Las Vegas casino is hired.
Cass Sunstein and Richard Thaler are retained for a consulting project.
AI systems are created to introduce sludge into customer experiences.
The head of sales from a Madison Avenue advertising company is hired.
Q by Q growth rebounds.
Sunflower goes past 500 million users.
Said young-ish person attends Davos.
Quarterly numbers disappoint. The investors scream at said young-ish person. “Fix it NOW”.
Algorithms are trained to flag and promote inflammatory posts – political, cultural, economic, sexual, violent, fantasy. “Making the Extreme Mainstream” becomes the whispered joke at Sunflower off-sites.
Next quarter numbers are through the roof.
Algorithms learn what drives user attention.
Ad rates are increased 33%.
Further gazillions flow.
Said young-ish person is still young but not quite so young.
Sunflower is the S in FAANGS.
Said young person spends $7m a year on personal protection.
Politicians in Europe and the US demand said young person answer questions about how Sunflower is destroying democracy.
Sunflower has more lobbyists in Washington, London, and Brussels than any other company.
Quarterly numbers disappoint. The investors plead, “You’re spending too much time on externalities”. Said young person, insulated by his gazillions and his dual class voting system, stares out of the window and wonders when did this all stop being fun?
Algorithms are tweaked, favoring political ranting. Rant well and your post is placed in front of other ranters. Ad rates for HRS (High Rant Score) posts are increased 33%.
Further gazillions flow.
Said young person signs the Giving Pledge.
Said young person creates a space exploration company.
Seed, Angel, Stage 1, 2, and 3 investors holiday at the Rosewood Bermuda. Said young person doesn’t show.
Said young person drives cross-country to his parent’s house thinking all the way that Sunflower is about fun and joy and lightness and brightness. It’s meant to be beautiful. Something to make your day better. Not worse. How did it become a force of darkness and misery? How did I become the whipping boy for all the problems in the world? Why is fake news my problem? Why do I have to make all the crazy people sane? How can I know everyone who’s advertising on the site? Whether they’re “real” or not? Honest or not? How I can adjudicate arguments between people. Sunflower’s a platform – what people do there isn’t my problem. Is AT&T responsible for the nonsense people say on a phone call?
HRS posts do even better than anticipated. Ad rates are increased a further 15%.
The investors extend their Rosewood vacation and decide to go straight to Davos.
Said person (really not young at all anymore) gives the WEF a miss, stays home, and posts a picture of his new baby on Sunflower.
And, a picture of the ground breaking ceremony of the house at Kukio.
The world is awash with capital. The intermediaries that manage this capital have never been larger in scale, more sophisticated, or more aggressive. To make this mountain – which estimates put at a multiple of quadrillions of dollars – grow (and thus justify their “carry”) these intermediaries have to find and nurture anything and everything that has the potential to get big quick. In a wealth fund of $100bn, only investments that can generate huge returns on accelerated timescales can be backed.
In short, tech has become the epicenter of a toxic brew. What other sector has the potential to generate “fast scale hits” from relatively small amounts of investment like tech? Infrastructure, healthcare, education, energy? Nope. Returns on investments in bridges, tunnels, pharmaceuticals, and windfarms come slowly over decades, require big up front amounts, and are lathered in regulation and oversight that can drive the average Randian libertarian (even more) insane. Only real estate comes close to tech, hence why London is now full of basement swimming pools and Manhattan is full of 360° view condos paid for in cash but empty 300 days of the year.
Tech is the wild west of regulatory free low-risk/high-return investing. The Vampire Squids long ago recognized that, and in an era of globalized, free-moving capital have funneled the world’s wealth into the hands of said young-ish people with the only requirement being that that capital is repaid in spades.
Is it any wonder then that ideas like Sunflower go from being cool and fun to odious in the blink of an eye? Is it any wonder that the beauty of a young person’s vision mutates into the ugliness of a machine that’s only purpose is to make as much money as quickly as possible? (“Maximize shareholder value” in the jargon). Is it any wonder that weird long term high-risk/low-return ideas (which have the potential to positively change the world) have no chance of getting funding? Is it any wonder that the financial intermediaries – that in aggregate act akin to a single ecosystem algorithm – have learnt the recipe of short-term success and nudge their algorithm to favor ideas that are already familiar? Is it any wonder that every new app/url looks and feels the same? Is it any wonder that harvesting user data to sell ads is now the business model of the future? (As an aside, does anyone remember that people left TV for the Internet to get away from advertising in the first place?)
As a futurist – someone whose passion and job it is to find the unevenly distributed future and share its glories – it pains me to say that the future is being ruined by money. The capital of past success and its insatiable demands, and the avarice of those that would claim to be able to satisfy it, are cheapening and debasing the technological innovation that many of us love and on which all of us depend. The success of yesterday (capital) is lowering the odds of meaningful success tomorrow. Every new Sunflower is going to go through the same scenario outlined above …
Unless the next generation of entrepreneurs and innovators reject the Faustian bargain of funding for growth at any cost. Unless more said young-ish people act like Tim Berners-Lee and Jimmy Wales. Unless more capitalists place long term bets that don’t rely on advertising based business models. Unless investors favor history making moon shots over instantly forgettable lowest common denominator slam dunks. Unless we customers spend our dollars with companies that don’t monetize our data in cavalier ways. Unless we customers recognize there’s nothing as expensive as a free lunch, and paying directly for things typically makes sense in the long run.
In other words, unless the world changes beyond all recognition …
In 1973 the actions of Lonrho CEO, Tiny Rowland, led British Prime Minister, Edward Heath, to describe Lonrho’s business activities as the “unpleasant and unacceptable face of capitalism”. In 2018 those actions (too legion to go into here but involving “corporate raiding” and financial reporting obfuscated by layers of offshore legal entities, spin doctors and lawyers etc.) would be seen as completely normal and unremarkable. Business as usual in fact, for the sharp of elbow and tongue pumped out of business schools by the bus load. The plot line for an episode of Billions …
In 2018, it is harder and harder to see an acceptable face of capitalism. Without countervailing forces in the world – the ethical brake of religion, the critique of Marxists backed by tanks and nuclear weapons – capitalism reigns supreme and year on year becomes more unfettered in its ability to create wealth, at greater scale, more quickly, at any cost, and in Piketty’s formula, in ways that deliver more and more of that wealth into the hands of the existing owners of wealth. In 2018, capitalism is an idea as powerful as Christianity was in 17th century Europe. In 2018, tech is the holy grail of that idea – the fulcrum of growth in a world grown stagnant under the weight of its wealth. Tech and late-stage capitalism are melded together in a way that Stewart Brand and Woz and the other members of the Homebrew Computer Club would have never have imagined. Apple was meant to stick it to the man. Now Apple is the Trillion Dollar Man.
What’s wrong with tech is that it has become a handmaiden to money rather than being a conjurer of new and better worlds. Tech has always been the wellspring of the “better”; better health, better food, better security, better education, better entertainment, better transport. But now tech can only disrupt if the disruption makes money – to hell with making anything better.
Tech – the tech I love, you love, the tech in the best Sci-Fi – is being spoiled (nay, soiled) by the greed of the past. Tech has kowtowed to capital in a way that can’t and won’t end well. After all, being a handmaiden never has a happy ending …
Lest this is all beginning to sound too d-mn Commie, let me say a couple of things. First I’m not. And secondly, I may be a dreamer – that the current modus operandi is unsustainable and needs to change - but I’m not the only one.
Martin Wolf is no Communist. https://www.ft.com/content/3aea8668-88e2-11e8-bf9e-8771d5404543 Michael Tomasky is no Communist. Gary Cohn is no Communist. Marc Benioff is no Communist.
Yet all of them – high priests of capitalism one and all – are amongst the many, many business leaders around the world who in differing ways and with different prisms are all saying variations of the same thing. That capital is out of control and that tech is making things worse not better.
In fact, to be uncritical of the current state of affairs is to be willfully blind or ignorant to what is really going on. Or maybe it’s just a sign that you’re spending too long in your counting house counting all your money.
Throughout my professional career I’ve been an evangelist for tech. Increasingly, I feel like I’m becoming an apologist for it.
“Yes, data is being abused”.
“Yes, the dark side of the Halo seems to have an upper hand”.
“Yes, there will be blood”.
“Yes, many jobs will disappear”.
“But things will be ok …”
I’ve long been a Marxist, of the Groucho variety – “these are my principles and if you don’t like them I have others … “– but never of the Karl school. I have no intention of becoming a member anytime soon. But carrying Adam Smith’s water is becoming increasingly hard – his invisible hand not being good with a bucket.
An overthrow of the defining economic system of our age seems unlikely anytime soon. Tech will probably continue down its current path for the rest of my working days. The fever dreams of moderate centrists will likely find no traction. But being a critic – an honorable profession itself sullied by the editorial needs of eyeball attraction – requires being critical. Tech has messed up. Is messing up. The tech finding funding and favor is not the tech I want. It’s far from being the tech that one can love.
What’s wrong with tech is what’s wrong with the world. Monetization rules. Said Young Person can’t be entirely blamed. He just wanted to make a fun, cool app. But when the money showed up everything else went out of the window. In the words of another manifestation of late stage capitalism … “sad”.
No, an overthrow of the defining economic system of our age does not seem imminent. My critique will likely end up where most critiques end up – in a trash can. But then again … the decline of Catholicism would have seemed unlikely to Pope Innocent X.
Perhaps the darkest hour comes just before dawn.
We will see.
Said Young People of the world unite. You have nothing to lose but your Blockchain. You have nothing to gain but your souls.