Diary of an ex-banker: Will the tech giants become as hated as the bankers?
Don’t blame the bankers. It’s not their fault!
This week sees the 10th anniversary of the collapse of Lehman Brothers (how many of you can still picture news footage of employees scurrying from their offices onto the street, carrying cardboard boxes full of their possessions?). It’s hard to exaggerate the effects of the financial crisis yet very few people could have predicted that bankers going about their daily business (seeking to maximise profits and their bonuses) could’ve precipitated such a calamity. And we’re all still feeling the effects today. It doesn’t take much imagination to sketch a line from the financial crisis to austerity to Brexit and the election of Donald Trump.
It’s easy to blame and vilify greedy bankers for causing the crisis. But maybe, just maybe, it wasn’t entirely their fault. Or at least it shouldn’t have been totally unexpected.
I recently came across a study (The Psychological Consequences of Money) in which certain participants were primed with associations to money. The priming was indirect and could be playing monopoly, rearranging jumbled words linked to money or simply seeing a screensaver in the background with floating symbols of currencies. Remarkably, those primed with money associations were consistently less helpful and behaved more selfishly than other participants. So, if seeing reminders of money makes you behave selfishly, then we shouldn’t be too surprised by the behaviour of bankers. And, of course, bankers are not doctors or nurses or social workers. I’m yet to meet a banker who chose their career because they wanted to help other people or make the world a better place!
Amazon and Apple each worth $1,000,000,000,000!
As well as the anniversary of the demise of Lehmans, another landmark event this month was the announcement that Amazon had become the second $1 trillion public company (Apple achieved the same landmark in August). This means that Jeff Bezos is worth a staggering $168Bn.
Hearing of such large amounts of money, I can’t help seeing parallels with the aforementioned greedy bankers. The tech giants are a group of highly profitable companies, operating in many countries (making oversight difficult), working in fiercely competitive markets, and attracting the brightest and the best. They’re working in industries that didn’t exist a generation ago and creating and monetising products that they’ve invented. Pity the poor legislators trying to keep up!
As these gigantic companies seek to defend their positions as well as grow and expand into new areas, their products are becoming increasingly sophisticated and opaque and hard to understand. Just as regulators failed to see the risks with CDOs and sub-prime mortgages, do they really understand Google’s or Facebook’s algorithms or know the extent to which Alexa or an iPhone are actually eavesdropping on our conversations or tracking us?
Perhaps none of that matters if these companies are good corporate citizens and always have our best interests at heart. But do they?
I think most of the founders of the tech giants did genuinely want to make the world a better place when they started. Google famously had “Don’t be evil” in its Code of Conduct.
But I am reminded of the experiment I mentioned at the start of this blog. If seeing associations to money makes you less helpful and behave selfishly, it’s hard to believe that the employees of companies that make billions of dollars (Apple made $11.5Bn of profit in the last quarter) have not been somehow influenced.
The pitiful amount of tax paid by some of these companies certainly suggests they’re not putting the interests of the community before their shareholders. Recently, there was the whole Cambridge Analytica scandal and a reluctance from Facebook to testify before politicians. And when Google was fined Euro 4.3Bn in July this year by the EU, the Competition Commissioner said Google had used “every trick in its book to delay action”. And some of the working practices of Uber and Amazon have certainly been questionable. Perhaps it’s no coincidence that the acronym used to describe the best performing tech stocks is FAANG (Facebook, Apple, Amazon, Netflix, Google). The perfect name for a secret evil organisation from a James Bond or Austin Powers movie!
These companies have developed unprecedented influence over our daily lives and this influence and power will only grow. How long before we’re all sitting in their autonomous vehicles, communicating on their devices, every appliance in our homes is controlled remotely via their channels and all the news we see is brought to us by their networks?
I’m not suggesting that these companies do or will abuse their power. But should they ever choose to, they certainly have the tools.
I am reminded of the quote of Lord Acton:
“Power tends to corrupt; absolute power corrupts absolutely”
Are the rats deserting the sinking ship?
And what about the leadership? Elon Musk openly smoked a joint in a live podcast last week, has accused someone of being a paedophile on Twitter, and admitted to working 120 hours a week (that’s an average of over 17 hours a day, 7 days a week!). Whilst I have huge admiration for what he’s achieved, these are not the actions of someone I would generally trust with my wellbeing.
Whilst we’re on the subject of Elon Musk, he’s behind SpaceX and wants to colonise Mars. Jeff Bezos is bankrolling Blue Origin and hopes to establish an industrial base in space. Then, of course, there’s Richard Branson and Virgin Galactic and Paul Allen (Microsoft) with his Vulcan Aerospace.
Should we be worried? Do they know something we don’t? When the richest people on Earth are racing to develop ways to leave the planet it may be time for us all to be a little anxious!
Originally published at jsixq.com on September 11, 2018.
