Wall Street and the financial system it represents have long held sway over global economic prosperity. But this is being turned on its head due to the inherent distrust Silicon Valley entrepreneurs have for big banks. They have found innovative ways to use Wall Street’s resources without relinquishing control of their businesses.
As a rule, most leading US west coast companies — including Facebook, Google and LinkedIn — have made sure that though Wall Street may buy their shares, it lacks controlling votes. In many cases, the founders retain 10 times the voting rights of the ordinary shares they parcel out to Wall Street. The rise of Silicon Valley’s second industrial revolution has turned the financial order on its head.
In 2016, tech companies displaced traditional blue-chip companies such as Exxon Mobil and Walmart as the most valuable companies in the world. This was a watershed moment as it highlighted their comprehensive global might. But during the same year, it was troubling that Facebook bragged about increasing voter turnout in the last US election.
At its core, Facebook is a platform meant to connect users with people they already know and like, as opposed to fostering political discussion with those of differing opinions. The content displayed on a user’s page is intended to conform to their political interests, causing an unhealthily homogenous political debate, much like the oversimplification Twitter usage encourages. Social media created a scandal-driven election where Donald Trump’s tax returns and Hillary Clinton’s emails dominated discussion, as opposed to actual policy issues.
Despite the clear ability to influence debate via their various formats, tech giants wield a more troublesome power, that of big data. The extremely large data sets they are privy to can be analyzed computationally to reveal patterns, trends and associations, especially relating to human behavior and interactions. The traces left by credit card payments, web searches and now smartphone facial recognition give tech companies infinite power.
Unguided by hypotheses, large companies can establish patterns in consumer behavior that can arguably be used to help diagnose diseases, for example, but more conveniently allow Silicon Valley firms to entrench themselves in an economic system built to their specifications.
The extremely large data they are privy to is giving tech giants unfair influence over consumer behavior, and if left unregulated will support the establishment of a system that is driven by greed to an even greater degree than the present.
Zaid M. Belbagi
Entrepreneurs who set out to disrupt the existing global economic system via a democratic sense of empowering users, and creating income streams rivaling those of conventional companies, are increasingly behaving like oligarchs. Personal data is giving tech giants unfair influence over consumer behavior, and if left unregulated will support the establishment of a system that is driven by greed to an even greater degree than the present.
Software is no longer the cash cow it once was. Indeed, 97 percent of Facebook revenue comes from advertising. The reticence of tech giants to fully eradicate material inciting violence on their platforms is an indication of their irresponsibility and the failure of governments to keep them in check. The US government has been too keen to turn a blind eye to tech giants, since they are able to keep prices down and the economy ticking over.
In the early 20th century, the personal wealth of John D. Rockefeller and Andrew Carnegie were equivalent to 4-5 percent of US economic output. The tech giants of today are not dissimilar in the power they wield over the economy. Amazon controls 43 percent of online retail, and 30 percent of people worldwide use Facebook.
It is thus unsurprising that the bright, young entrepreneurs of Silicon Valley are now being viewed as increasingly monopolistic. Whereas the aforementioned businessmen donated huge swathes of their wealth to pioneering social projects and charitable trusts that have lasted a century, Silicon Valley’s behemoths are earning a reputation for rapacious tax dodging and unaccountability.
Tech companies represent a consolidation of power among a handful of globalists and social liberals. Their platforms allow for momentums to be formed without proper due diligence and regulation.
Perhaps the public are not really open to the idea of Amazon deliveries by drone, as they may not see the benefit of driverless cars. If consumers lose the ability to question such intrusive technologies, the decision-making ability of societies en masse will be ceded to a selective few in California.
In 2004, Zuckerberg argued that social media was too important to pollute with big business: “I mean, yeah, we can make a bunch of money — that’s not the goal.” How things change. The informal air of tech billionaires should not be confused with affability. The companies they represent are fast getting out of control.
• Zaid M. Belbagi is a political commentator, and an adviser to private clients between London and the Gulf Cooperation Council (GCC).