Euan Semple asks whether we have reached The end of civilisation as we know it?
Euan’s take is that the Tech Bemehoths (Apple, Google, Facebook, Amazon) provide key parts of infrastructure globally. Our governments are out of their depth so therefore:
Are we transitioning from the nation state to some other way of maintaining and supporting our societies? How do we feel about this? Is it inevitable? Could we stop it even if we wanted?
My response to this is: Probably not.
Now where do I think positions like Euan’s have a point? Well, I agree that these companies are large and powerful. And they want to use this power to further their own ends. Google are engaged in an anti-trust battle with the EU. Facebook’s CEO seems to be contemplating running for office. However there are some things to consider.
How powerful are the Tech Behemoths really?
The 2017 Fortune 500 is headed up by retailer
Amazon Walmart (whose revenues are still less than the US Defense budget). The next three companies are all Chinese energy companies (utilities and oil). Two more car manufacturers and two more oil companies round it out. With Apple coming it at #9.
Silicon Valley companies (we’re including Amazon here although it’s based in Seattle) certainly get a lot of press. And Euan and I are more likely to interact with, say, Google, rather than Sinopec on a daily basis. But we shouldn’t mistake visibility for power.
Now there are two caveats here:
- The internet companies are still growing very quickly. Amazon, Google and Facebook may trouble the Top 10 in 5 years.
- All companies are now technology companies to some extent. Walmart invested heavily in supply chain technology to build its market dominance. The average new car has hundreds of microprocessors in it – and the focus on driving automation is only going to increase that.
Are governments floundering?
I’m not sure this accusation is fair. Governments do suck at a lot of stuff. But then they do a lot of stuff in the first place. Govt spending equates to over a third of GDP in the US, UK and Australia. Western governments suck at developing new consumer technologies (although the US government was instrumental in growth of Silicon Valley during the Cold War). But they still deliver many services to their populations. Although a sizeable contingent of Western politicians believe that they shouldn’t and are hacking away at those services. I am not comfortable with the wholesale privatization of healthcare or education. Government may be the least worst provider of these services.
Don’t be evil?
And for-profit businesses present their own set of problems in terms of service delivery. Businesses constantly seek to build monopolistic power over their customers in order to maximise profits. They are predators that need to be held in check by competitors and government regulation. What Adam Smith termed “animal spirits” can be harnessed for the common good but this harnessing won’t just happen.
The Tech Behemoths have limited interest in the common good. They structure their businesses to pay as little tax as legally feasible in the jurisdictions in which they operate. They show scant concern for the privacy rights of their user base
Too big to fail?
Companies can collapse. They can be mismanaged. They just fall prey to bad luck. And when that happens, it can have a negative impact on their employees, customers, suppliers and creditors. But life can go on. Of course, we have learned that some private enterprises (specifically banks) are too big to fail and we have not fully accepted the implications of that discovery (and we won’t until a crisis comes along that we cannot avoid).
Governments do not have this luxury of failure. When a government collapses, you end up with Congo not Kodak. The conflict and potential violence that government holds in check – or channels productively – then explodes into chaos. I simply do not see that function disappearing.
Exactly what governments do and how they do it will change. Their relationships with technology companies will get ever more complex – and doubtless ever more adversarial, co-dependent and interwoven.
Service delivery will change. Some of this change will be good. Governments will be able to target and measure services ever more precisely should we choose to do so. Citizens will find new ways of interacting with governments.
However these technologies also allow government to surveil their subjects to ever greater degrees. Remember the companies 2, 3 & 4 in the Fortune 500. The Chinese state has little interest in voice or people power. And Western technology companies have been happy to humour its demands if they lead to profit. Nor will alternatives to the nation state be necessarily more just or more open.
If we choose to forswear the comforts of the state, it may not be step forward.
This is part of the Into The Maelstrom series.