Tech companies are ripping society apart (and this is only the beginning)

in technology, politics

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We are in the grip of a technology revolution and, as many are quick to point out, we’ve been here before. The industrial revolution in the 1800s saw a fundamental shift in the way that society operated, but despite the disruption to traditional livelihoods broad ideas about capitalism and the economy remained true. This analogy is used to reassure anyone worried about robots taking jobs & technology companies running rampant. Society will adapt and things will return to some sort of equilibrium.

I believe that this view is misguided. There are elements of the current technology revolution that are leading us towards the most unequal dystopia imaginable. These aren’t unintended consequences that can be cleaned up later like the smog rising from industrial factories: these are paradigms embedded directly in the current technology revolution that, left unrestrained, will corrode the very fabric of society.

1. Today’s technology creates vast wealth for a tiny few

Technology’s aim is to reduce cost. A store front used to cost money; with the web it’s now free. A map used to cost money to print; now maps are available on your smartphone for free. This has two effects: creating more abundance for consumers, and more wealth for technology companies. An online shop is cheaper than a physical shop because an online shop employs no one and costs no rent. In addition to this, a physical shop can only service a few dozen customers whilst a digital shop can service millions. Essentially this means that for a lower cost a shop owner can generate many millions of times more revenue and profit - with very little associated costs.

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As more and more jobs are replaced this shop analogy will hold true for every industry we interact with: abundance for many, profit for few. This has started happening already: since 2003 the top 1% of wage earners have seen their annual household income rocket in comparison with other groups. If this wasn’t bad enough each year we will see greater increases for a smaller percentage. 1% will become 0.9, 0.8 and so on until the cost base of operating most industries is so low that just a handful of people will be profiting.

2. Today’s technology replaces good jobs and replaces them with terrible & insecure jobs

As technology companies there is job growth in some areas. Amazon is now one of the largest employers in the US. This is a problem, though, as the vast majority of Amazon’s (and most technology company’s) jobs involve low skilled, low paid work, in Amazon’s case inside fulfilment centres. In early 2017 their CFO said that “The headcount [we’re adding] is predominant[ly] still the headcount in our fulfillment area.” As artificial intelligence capabilities increase these jobs will be replaced (one of the key problems now is that robots can’t grip very well) with equally low skilled jobs like cleaning and delivering, and in the meantime there is no opportunity for employees to move up within Amazon. There is a clear divide between the engineering class and the lower skilled work done by the vast majority of employees.

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The fulfillment centre of the future

This is compounded by the fact that there is a clear divide among demographics: almost all of the high paid engineering work is done by white or asian middle and upper class men. Technology companies typically generate a tiny number of high skilled jobs that often go to well educated people from a privileged background. These high skilled jobs will stay but the low paid jobs will go. As low skilled worker’s wages stagnate because of an increase in supply due to automation more money will be freed up to pay high skilled engineers. Again, this is already happening: wage growth amongst the top 10% has increased substantially in recent years yet in the bottom 10% it has actually decreased.

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3. Today’s Technology is almost impossible to tax

One would hope that the societal damage that is being caused by technology companies would be offset by an increase in tax payments. Ironically though technology companies pay even less then their historical counterparts.

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Through a combination of tax loopholes (operating in the UK, based in Dublin, Luxembourg or similar) and writing off any profit as expansion cost whilst delivering the actual value through an increase in stock price, technology companies are simply not paying enough tax.

The disruption to society can be solved through retraining and reskilling but these initiatives cost vast amounts of money.

4. Workers can’t be protected from technology by traditional institutions

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It used to be trade unions that lobbied for workers and protected them, to some extent, against the excesses of capitalism. Unions today are becoming more and more irrelevant. Many jobs today are insecure and irregular: people have portfolio careers and so don’t neatly fit into the union mould. Collective bargaining works less well when there’s an oversupply of people ready to pick up where you left off, and the lobbying power of technology companies in government prevents genuinely progressive legislation from being written.

There are signs that the traditional union model is being replaced by something more flexible but we’re still a long way off. While unions organise, technology companies have taken the initiative and offered readily available work - as long as workers accept the insecurity (often called “freedom” by tech companies).

What next?

Society gives business a licence to operate. A genuine conversation needs to be had about the impact of today’s technology on the society of the future. There are real dangers that left unregulated technology will push society to a point of no return, increasing radical and potentially unsavoury political actors to take advantage of this dissatisfaction. There is a chance to avert this nightmarish future, but we need to act now.

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