Is Humanity Dominated by the US and by Big Tech?

Society
#1

Silicon Valley is continually a decade ahead of the rest of the humanity in their opportunistic thinking, they know how to take advantage of us before we even realise it. If this were chess, they’re so far ahead of everyone that we have no choice but submitting to their power. By the time government figures out what’s going on, they’re already 2 decades too late. Silicon Valley has us outmanoeuvred, and by the time people figure it out we’re already their slaves.

What is the root cause of the problem with tech? Perhaps main problem is tech monopoly power in few mega corporations, and the concentration of power in the United States.

Entrepreneurship has actually been decreasing over the 3 or 4 decades as power has become more and more concentrated in fewer corporations, allowing hyper-capitalism to occur at an unprecedented scale.
The Big Small: Reversing the Decline in Entrepreneurship

Usually it’s the role of government to break up monopolies as they are considered illegal in the US for example, but for whatever reason that hasn’t happened.

The evidence of this concentration of power in mega tech corporations is everywhere. But maybe nowhere is it more striking than by looking at the stock markets.

For example the last 13 years or so has seen an overall negative return in almost all stock markets, such that if someone were to have invested way back then, they would now have less money than they stated with. This is true almost everywhere, but not for the United States. In the same period investing in US stocks would have at least doubled or tripled your money.

It has been happening for years in fact, Western Europe now has seen some 13 years of decline, and Japan almost 3 decades of decline.

And if you had invested just in the US tech industry for the same 13 year period, you would now have 5 times as much money.

If we add up all information technology companies including online interactive media (ie Google and Facebook), Amazon and telecomm, information tech alone is already at least 43 percent of the value of the US stock market. And that’s not even counting biotech, fintech and other high tech industries which if also added in would together be much more than half of the market.
USA Stock Market Sectors and Industies

In fact just Apple, Amazon, Alphabet, Microsoft and Facebook combined account for 20 percent of the US stock market’s value.

So most industries outside of tech and outside of the USA had low profit margins and were in poor financial shape even before the pandemic happened.

And now on top of insult and injury what we have now with the current deep recession or depression (as it will later be determined) is a situation where a large portion of the world’s business small and big are being vaporised before our very eyes.

For example in many industries it’s estimated that 40% of businesses will disappear. Many already have. This is the permanent end of many businesses, and I can see that by either looking at the numbers from the top, from the bottom, or simply by walking down the street and seeing the faces of some small business owners.

This economy is not going to bounce back because not just because US unemployment could already be higher than the worst point of the Great Depression, but because people fear for their safety and will not be going out and about for a long time.

It’s the perfect scenario for information tech to go from having taken over, to having control of maybe even most of the economy and of humanity (if it hasn’t already).

Though unthinkable it’s the biggest issue of the present, so we must think about it and think about it quickly.

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#2

That is a cause yes, but what causes those concentrations of power? Douglas Rushkoff’s ‘Throwing Rocks …’ book explains a lot of it I think, by pointing at the way venture capitalists use their funding to push startups towards an exist via acquisition or IPO. I haven’t looked into it in any details, but I suspect you’d find the same dynamic at work in other industries that have become mega-concentrated, such as media companies (although they’re kind of part of Big Tech now too).

As an alternative, Nathan Schneider proposes “exit to community” and is part of a project called ‘Zebras Unite’ that looks for sources of funding that can enable new tech companies to grow towards serving their users and becoming financially sustainable, rather than growing towards windfall profits for capitalist funders.

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#3

Interesting concept “exit to community”. Zebra’s Unite are a great initiative tool I posted a number of times about them, like here in response to @LeoSammallahti : Is shareholder model the root problem? Are platform cooperatives one of the key solutions?

#4

Arnold your suggestion of looking at alternative business models well, good idea but that’s decades too late to fix the existing big info tech companies. Like I said at the start of this thread, Silicon Valley is a decade ahead of the other businesses, and two decades ahead of government.

US big information tech has already taken over. They also control money since massive expected future profits are going in the their direction.

Very right. I think few people understand this even in the business. But I know about it. Of venture-funded companies, only maybe 10% have a chance of making a big return. maybe 40% will break even, and half will be a complete loss. Not bad, and if you’re a founder then even if the startup breaks even for the investor, you the founder are getting dirty rich since you didn’t have to invest much money yourself to start with. So unfortunately the model works. The problem as you said is the second investors get involved your startup is no longer free, you’re already kind of part of big tech in a way, because the idea is you sell out to become part of the big tech machine. This can be acquisition for “talent” or for parts which in my observation is sometimes big tech just buying out potential future competitors.

The issue I’m trying to address with this thread is the siphoning of profits into big info tech, away from other industries.

For example:

  • You can see just how much more profitable big info tech is then little tech, and other kinds of business.
  • Advertising is forcing merchants and people who offer services online to give their profit margins to big tech. So advertisers will pay Google or Facebook up to 100% of their profit for ads, so that they get an order and their competitor doesn’t.
  • Info tech is adding a layer onto other types of businesses. For example, if someone orders from a restaurant using a (cr)app, 30% of the money might go to the tech company. But say the restaurant’s profit margins were only 10% including their fixed costs. In this case if 1/3 of this restaurant’s orders are through those stupid (cr)apps, then 100% of that restaurant’s profit margin is transferred to big tech leaving absolutely nothing for the restaurant. In many cases the restaurant is actually losing money and the owner’s family is paying tech companies out of their life savings.
#5

I full agree, with your entire post. But does that mean that one should not look into alternative business models? There are alternatives, even though they are squeezed, or have a hard ramp up to go through. I know you don’t mean it like that, but the above sounds so defeatist to me. I’d say alternatives, more regulation and any kind of protest we can muster are all valuable routes.

In the broader tech scene the role of VC is I think indeed not well understood. But on e.g. Hacker News they understand very well. And I can feel a tiredness, dissatisfaction, and disillusionment even, growing against startup culture. The fact that there are so many failures is helping maybe, but these people are also at heart normal human beings and see quite well all the problems ahead, both in tech, for society and the environment.

Regarding your examples, I think @AndrewMackie’s aggregator analysis fits this bill well (see also the Technokleptocracy thread, or this page directly), and I love the way he removed the emotions involved that one usually hears when people speak about the subject on the web, and provided a clear-headed analysis of how the value extraction works. Quite refreshing.

#6

Value extraction. Yes that’s the perfect word for it.

Actually yes the insults of techoles and their crapps is meant to help build some understanding and resistance among ordinary people, especially since this is just a forum.

And yes all I meant was that the situation is desperate, so some kind of resistance might be a better solution. For example educating people about value and attention extraction, so they’ll stop using services where info tech makes a profit.

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#7

Hi, interesting thesis!

I was hoping for some explanations of what you might mean by it — some sort concrete explanation of what the problem is and how it should be fixed. Unfortunately, I didn’t see any of that. So I’m curious:

What does it mean for government to be “2 decades too late”? In particular, what is government doing now that Silicon Valley was doing in the year 2000? What is SV doing today that government won’t be doing before 2040?

If this is a problem, it sounds like a big problem, and we should fix it. But if it’s meaningless, then any solution will be meaningless as well.

I also found this set of responses interesting, but it sounds defeatist:

Are you trying to simply raise awareness of a perceived problem?

#8

HI Bryan,

Thanks for your comments. I was hoping people would fill in the details themselves and come to their own conclusions.

Most of us know what’s going on, but just say well that’s the way of the present and look at all the new technology. But along with useful new technologies there is the current reality of concentration of power into something not democratic, unethical and not equitable.

The concentration of power and money in Silicon Valley assholes and in the US that leaves little for normal people and for the businesses that actually provide physical services. That power is often monopolistic and is taking advantage of people.

People in the US (I’m from the US) are raised in a hyper-competitive survivalist environment along with hyper-capitalism and that isn’t the norm in other developed nations. That’s resulted in the current US domination over other countries.

I think the best solution is for people to fight back in peaceful manner and to resist.

We need a new political party to take over which understands technology and advocates for a balanced, safe and healthy life, and corporate reform, to tackle American hyper-consumerism, materialism, the work-focussed lifestyle and hyper-capitalism.

I think that the problem is that about 11% of the US population are from millionaire households and they’ve crated this sick system for their own benefit, taking advantage of the rest of the population simply for their own twisted financial interests.

Business and government of course have totally different functions. What I was referring to was the ability of government to understand what Silicon Valley is up and to react to it in time to make an actual difference. There are some historical examples, such as the old Microsoft case in the US and more recent ones in Western Europe, where by the time government tried to punish tech’s monopolistic or otherwise unethical behavior it was much too late. In all cases government actions were much too small to make any difference because by that time they were already fighting giants, and in many cases people were already moving on to new technologies anyway.

Good examples of past technology which government failed to protect us from are that creepy tech surveillance of all of humanity and the associated advertising technology which is able to manipulate minds. Propaganda powered by machine cognition and espionage, which most famously likely allowed the Russia’s dictator to cause both the UK to leave the EU and the election of Trump.

So imagine future technologies such as real AI (real AI doesn’t currently exist) and driverless cars. AI could be a utopia where humans don’t have to work very much or at all, and everyone on earth could be provided for. But instead it looks like it could be a hell where a few tech assholes will control most power and money and we could be poorer. With driverless cars, that could be a completely regulated industry with zero pollution, almost no traffic and highly taxed so that people will pay for the massive damage to society caused by vehicles instead of freeloading like now. Instead we have companies building closed systems. Yet those things like driverless car maps save lives and need to be collaborative and not owned by one company. Now do you really think our pants pooping corrupt government will even understand any of this yet alone do anything? Especially with tech assholes paying for their elections.