The Free-Market Fraud: Tech Innovation and Alternatives

Aug 5, 2018 · 13 min read

Introduction: Technological Nirvana

An ocean of ink has been spilled to describe how technology allows humanity to attend to its various needs and desires, which are summarized in Maslow’s Pyramid below. In such proclamations, technology is treated as an autonomous entity, an ethereal force that guides human beings who shouldn’t be bothered with higher-order social, economic and political questions. Interestingly, advancement in the natural sciences led to mounting challenges against, and often death of many superstitious beliefs — causes of plague or the structure of the solar system, for instance. However, this advancement has also bred another superstition — that relentless and thoughtless technological development can bring about the much sought after society of the future.

Maslow’s Pyramid

Cultural critic Neil Postman described a technopoly as “a culture that seeks its authorization in technology, finds its satisfactions in technology, and takes its orders from technology.” The solution to every problem is in waiting for the correct technology to come along. Climate change and ecological destruction? Buy more technologically advanced, raw material and energy churning cars that carpet highways around the world. Terrorism? Design and manufacture AI-based drones for autonomous murder. An international scandal of a healthcare system with skyrocketing costs and substandard outcomes? Create a home-based voice assistant that orders from an online pharmacy. The festering systemic issues that generate these problems in the first place are completely occluded in a technopoly, and if they ever gopher out from the underground, there is always VR to display a clean garden and help seduce the mind back into a dream-like state.

Excited venture capital markets, one of the key arms of the technology economy, with the cooperation of a largely uncritical and fawning media, continue to utilize the silver-bullet narrative to propagate expectations for imminent utopia in the public mind, where the Summer Mental Olympics actually run perennially. As described by Evgeny Morozov in a 2012 critique of technological solutionism,

“It is in the developing world where the limitations of TED’s techno-humanitarian mentality are most pronounced. In TED world, problems of aid and development are no longer seen as problems of weak and corrupt institutions; they are recast as problems of inadequate connectivity or an insufficiency of gadgets. Hence the latest urge to bombard Africa with tablets and Kindles — even when an average African kid would find it impossible to repair a damaged Kindle. And the gadgets do drop from the sky — Nicholas Negroponte, having spectacularly failed in his One Laptop Per Child quest, now wants to drop his own tablets from helicopters, which would make it harder for the African savages to say “no” to MIT’s (and TED’s) civilization. This is la mission civilatrice 2.0.”

Side note: The bones from the ongoing western technology feast often pile up in Africa as well.

Such ideology serves a few purposes:

1. It provides speculative venture capital markets an endless supply of diligent, idealistic and technophilic entrepreneurs to spin up companies and hire more diligent, idealistic and technophilic employees with the express goal of earning lavish profits at the exit of the tunnel. While profit remains the central measure, the prime directive, and the principal goal of the institutions involved, it is never publicly professed. Rather, attention is formulaically directed towards a broader vision; of how a water bottle will revolutionize sipping fluids for the betterment of mankind, or how autonomous vehicles will also autonomously, almost magically reconfigure our urban living centers to be more efficient. In any human endeavor, if the advertised goal is routinely different from the actual goal, it begs further analysis. While the companies do not explicitly and publicly recognize this, there are other institutions that openly declare it. For example, the loftily named Center for Democracy and Technology states that “busy entrepreneurs and start-up companies are so focused on growing a successful business that they often overlook the policy issues that can greatly affect their bottom line, which is why having a grasp on Internet law and policy has never been more important for innovators.” This is not a revelation, nor a controversy. These are the institutional roles that the companies have to play. The controversy is the dishonest and myopic tales of utopia.

2. The second purpose of such exuberant pronouncements is that it naturally lends itself well to public relations aims. A company requires a story to enlist customers and its own employees into its loyal army to consume its product/service and advocate for it. Publications and other media are critical in this mission to generate the “uninformed consumer making irrational choices.” (Chomsky, Manufacturing Consent). If the consumer is convinced that making a purchase is much more than trading their dollars to obtain some item manufactured in the millions; rather, a critical piece of their savior-identity for example, it can lubricate the movement of those dollars from pockets to registers.

3. Finally, this ideology is useful in not only shielding the institutions from scrutiny, but weaponizing any criticism and boomerang it back, for only monsters are against attending to human needs with the next technological breakthrough. For the sake of ‘growth’, or ‘jobs’ or ‘efficiency’, or ‘development’ (never ‘profits’), claims go unchallenged. It becomes a culturally accepted norm, a rule, that generates an unthinking and cheerleading public for profit-seeking endeavors.

The paradox here is that technology is indeed a necessary condition for advancement and attending to growing needs. It is true that many of our technological achievements can more than serve the most basic needs of humankind. Just the human technological capabilities of present-day can drastically change the planet if employed in correct directions. Many global problems can be eradicated with the technologies already developed and available. The irony here is that the ones that advertise their goals to be just that are suffocating, misdirecting and wasting limited time, energy and resources towards vanity projects and wasteful get-rich-quick schemes. These interests often add to the very problems they claim to be solving; a predictable outcome when the actual problem being solved for are bottom lines.

Even the most ardent critics of such a state of affairs must acknowledge the importance of mankind’s technical prowess in its attempt to scale Maslow’s Pyramid. Even Postman concedes as much. Indeed, philosopher and essayist Jose Ortega Gasset removed all nuance by asserting, “Man without technology, is not a man,” to convey the symbiotic relationship between mankind’s development and technological solutionism. To reconcile these contradictions, I first state three axioms:

Axiom 1: No analysis of technology is complete without accounting for the economic and political systems under which it is developed and deployed.

Axiom 2: No strategy to best use our technical capabilities is complete without such an analysis.

Axiom 3: Today, in the nexus of states and global markets, technology is developed and deployed under capitalist rules.

Origins: How is it made?

It is instinctively assumed that the heart of all technology development today is private Silicon Valley companies. As Dan Lyons writes in Disrupted, Silicon Valley now refers to not just the Bay Area anymore, but wherever the networks of capital and technology ideologies extend to (so, most of the world?). This can include Chicago, New York, Boston, London, Tel Aviv, Bangalore, Seoul, Tokyo and so on. However, such an assumption is flawed. The science and engineering of new inventions and discoveries are not so trivial that they can be spearheaded by a few capital cowboys in a Wild Wild West of technical orgy. The basis for all our high-tech economy lies in the state, with very long timeframes and large costs no venture capitalist with a requirement for a quick return can tolerate. These are R&D programs funded by various state agencies and its branches, including the Pentagon, NASA, EPA and so on. Examples are too numerous to state. Some include space technologies, GPS, self-driving cars, cameras, indeed the internet itself. A closer look reveals that the military and war is intrinsic to high-tech research. While a large section of the US Defense (doublespeak for Offense, or Invasion) budget includes Operations and Maintenance, contained within it lies a tiny slice ear-marked for research and development (~84B for 2018, out of ~700B with the most recent increase under Trump).

After the long and expensive road to discoveries and inventions has been paved by public funds, corporations and other private entities are invited to waltz down the road to productize and monetize. Intellectual property, belonging to the public and built off of years of research, engineering and test work, is pushed to private markets to be developed into products, often with little differentiation. Huge profits are reaped and transferred to a few hands from the commodification and sale of many scientific and engineering breakthroughs. For instance, nearly every component in the iPhone, including wireless services such as GPS, and various manufacturing processes can be traced back to publicly funded research and development largely for the purposes of technological warfare, and wartime manufacturing. In this sense, the risks and costs of such development are socialized, and profits are privatized. The public’s only interaction with this common good (namely, scientific and technical know-how) is through commodities. Demand for such goods is then synthesized by PR and advertisements. It is not controversial to claim that many products would never see the light of day were it not for the massive propaganda campaigns to generate demand.

It is perhaps gratuitous to claim that many modern-day technologies are born in blood. However, given that seed funding for not just engineering solutions, but also scientific research that form the first principles of our technologies is largely driven by military spending, it is not too unfair a claim. A commercial plane is essentially a modified bomber. An autonomous taxi by Google is a repurposed autonomous desert combat vehicle. A FLIR infrared camera used for many commercial applications also appears in many forms in military gear. Once this fact is grasped, it is not too difficult to trace the origins of commonly used devices or subcomponents thereof to military or wartime funding.

There are exceptions to this rule. One such instance is AT&T Bell Labs, a corporate-funded research laboratory with origins in the late 19th century. It was responsible for breakthroughs such as the transistor (and hence, indirectly computers), lasers and the development of information theory. However, AT&T was only able to sustain long and expensive technical projects, which often do not have a positive IRR, because it had a government guaranteed monopoly on the telephone market — a form of state intervention. In this case, the exception proves the aforementioned rule. The broader point remains: namely, private capital, despite its grandiose claims of pushing the human frontier forward and working hard to invent utopia, is too impatient and intellectually bankrupt to push fifteen or twenty-year research and engineering projects. After the hard, long and dirty work has been done, it swoops in to commodify, package and brand various products and services for a singular purpose — profit.

It is in this step that the positive impact of many technologies is diminished or eliminated, and negative aspects magnified. Much energy is spent debating whether a given technology is good or bad for society. This is a false dichotomy. Technology is inherently amoral. It is neutral clay. Economic and political forces act on this clay to either enhance, but more likely in our current system, ruin the potential good. The tables below look at four examples to illustrate this point and offer alternatives that transcend present day state-capitalist rules.

Social Media

While the Pentagon was a major funnel for industrial policy in the 1950–60s, this has changed over time. Many of these early investments made under the guise of ‘defense’ constructed a large part of the modern technology economy; for example, the interstate was birthed as the national defense highway system. As the cutting edge of the economy shifted from electronics to biology, funding shifted to health-related government institutions, and pretext for funding basic research shifted from defense to curing diseases. Critically, business models began to be introduced with more corporate funding, which, for the first time, shifted focus to short-term applications. This, however, maintained the trend of socializing costs/risks and privatizing profits into the hands of a few owners. As seen in the tables above, the owners wield these technologies for the primary purposes of profit and outcomes are often sub-par, and even destructive.

It should be noted that for the first time in the post-WWII era, as of 2013, the federal government no longer funds a majority of the basic research carried out in the United States. However, it still has the largest slice of the pie, further comprised of corporate, universities and private foundation funding. The federal share, which topped 70% throughout the 1960s and 1970s, stood at 61% as recently as 2004 before falling to 44% in 2013. U.S businesses contributed 31%, largely driven by a surge in pharmaceutical spending. Where US corporations concentrate their spending is on applications; namely, the conversion of basic research to meet a commercial objective. This can include productization and mass manufacture of iPhones, or packaging bandwidth available on publicly owned networks to enable access through monthly plans. Note how quickly this is accepted as a given in a country that hates toll booths.

Work: How democratic is a society when the work isn’t?

As described above, many products and services can take entirely new forms if society wields them communally. The basic research to enable these technologies is already largely communal, as taxpayer funding amalgamates with labor. However, the ownership of further development is then concentrated into a few hands, which breeds highly distorted and damaging versions of otherwise promising products and technologies. If the engineers, designers, planners, supply-chain managers and other employees collectively owned the outputs of their work through co-operatives, decision-making would reflect that accordingly. According to Democracy at Work Institute, there are two defining features of a worker co-operative:

a. Workers own the business and they participate in its financial success on the basis of their labor contribution to the cooperative.
b. Workers have representation on and vote for the board of directors, adhering to the principle of one worker, one vote.

In this context, it is not unlikely that workers would refuse to harness our various capabilities in counter-productive ways that harm the broader society, unlike the managerial class whose prime directive is profit. Sadly and predictably, while there isn’t much discussion around such alternatives in the mainstream tech media, strong profit-driven incentives are further ostracizing and alienating labor from the outputs of their own work in new and creative ways today. The ability of the gig economy to generate more precarious work has been well documented, and hence will be skipped here. Another manifestation of this trend is the fact that earlier in 2018, the number of contractors outnumbered direct employees at Google for the first time in its 20-year history. These contractors “serve meals and clean offices. They write code, handle sales calls, recruit staff, screen YouTube videos, test self-driving cars and even manage entire teams — a sea of skilled laborers that fuel the $795 billion company but reap few of the benefits and opportunities available to direct employees.” As noted further in the article, “Investors watch employee head count closely at these tech powerhouses, expecting that they keep posting impressive gains by maintaining skinnier workforces than older corporate titans. Hiring contractors keeps the official head count low, and frees up millions of dollars to retain superstars in fields like artificial intelligence.”

This further highlights the inherent contradiction between capital and labor. While capital loves consumers, it despises labor –as evidenced by the highly immoral and bloody labor history of the US, or simply by noting that ‘payroll’ appears under the liabilities section of any balance sheet. However, consumers and labor are one and the same. With increasing automation, various companies are looking to tap into basic and applied robotics and AI research to extricate themselves from this dependency on labor. With fewer consumers with jobs and disposable incomes, this contradiction becomes an economic conflagration, with additional causes of the fire to be covered in a future article. Various alternatives have been suggested to douse such a fire and maintain continuity of the inherently unjust system; such as universal basic income, increasing minimum wages and so on. There is no question that these will bring respite, and should be fully supported. However, the only permanent way to reconcile this is if the workers collectively own the robots so that automation is not controlled by concentrated capital.

There are various possibilities that can be explored with such models, including multi-stakeholder ownership, wherein customers of the business also double up as stakeholders. Such models allow for a wider distribution of wealth and benefits of technology. It also leads to the internalization of various externalities as the workers and other stakeholders are directly susceptible to the various failures of technology applications as described in the tables. Contrast this with status-quo: privately-owned tyrannies, also known as corporations, wherein a small handful of owners and executives define directions to be pursued, relying on the execution of tasks by wage labor. Herein, workers simply rent themselves and their labor for the purposes of wealth creation for a small number of people, without democratic decision-making. If we were tasked with constructing a system that morphs promising technologies into destructive tools, one which discards the very labor that it used to sustain itself, and one which takes two steps back for every one step forward, we could not have done better.

Questions or Comments? Please reach out at Follow on Twitter @ConsensusExiled.

Exiled Consensus

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Writing about politics, philosophy, technology and current affairs. Questioning ideologies of power and discussing alternatives. Twitter: @ConsensusExiled

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