Sat, January 16, 2021, 5:00 AM
The article is in regular print. My comments are in bold italics.
What a Steaming Pile of Horseshit!
With all the attention on politics and COVID-19 right now, you may have missed this recent headline: “Elon Musk overtakes Jeff Bezos to become world’s richest person.”
Or maybe you did see it and thought, who cares?
Well you should.
(Before you continue reading, a trigger warning: This column is about staggering wealth. The numbers you are about to read will shock you.)
It’s not so much that Musk is now worth some $200 billion, according to the Bloomberg Billionaires Index, versus Bezos’ $182 billion, (of course Bezos could easily regain the crown at any point.) Nor is it a matter of the insane run-up in Tesla’s stock recently, (although it is insane—up some 800% over the past year.)
No, it doesn’t shock me. Tech Monopolies have been taking over the US and the World for about 40 years with the end of the IBM monopoly of computers in the 60-70s and the beginning of Microsoft and Apple in the 80s. Twenty years ago, Google, Twitter and Facebook did not exist. So literally in 2 generations, Tech Tyrants have taken over.
No, the bigger point is simply how much money and power Musk and Bezos and other tech billionaires have right now. And that power ties directly to one of the greatest conundrums of our time, which is the unprecedented command and control tech giants—Amazon (AMZN), Google (GOOG, GOOGL), Facebook (FB), Microsoft (MSFT), Apple (AAPL) and a few others—have over us. It’s a matter of contention that touches on everything from free speech to Donald Trump and our political divisions to national security to the very future of democracy. It’s an issue I predict that will loom very large over the next four years.
Yes. And way beyond the next four years. The question is who played a bigger part in making sure the Donald J Trump was removed from office – Tech Tyrants or Media Tyrants?
The question, according to tech investor Roger McNamee, author of “Zucked,” a book critical of Facebook, is “do you want to live in a country that’s not a democracy? And I do think that kind of soul searching is going on. I do think in time the country is going to make the right choices. And I do know that there’s lots of ways to have successful tech companies that are not harmful.”
Really not the point. With the recent wonky corrupt Presidential election and the de-platforming of Parler, the notion of Democracy has been totally undermined. Though the half of the country brainwashed to hate Trump and his so-called “white supremacist” supporters may cheer now, when the dust settles and the thought police of silicon valley controls all information and “disinformation”, I suspect even the most die-hard Democrat may have some second thoughts about putting radical socialists, media and tech tyrants in control with keys to the kingdom.
Before we explore McNamee’s point further, let’s return to the Bloomberg list because the top of it jumps out at you. Fact: currently eight of the 11 richest people on the planet are American tech billionaires. Can you imagine? In addition to Musk and Bezos, you have Bill Gates, Mark Zuckerberg, Larry Page, Sergey Brin, Larry Ellison and Steve Ballmer. Collectively these eight individuals are worth a stunning, staggering $923.7 billion.
“It’s an extraordinary concentration of wealth and power,” says Chuck Collins, a senior scholar at the Institute for Policy Studies and co-author with Bill Gates Sr. of “Wealth and Our Commonwealth.” “Maybe there were some parallels a hundred years ago during the robber baron, gilded age fortunes. A lot of those fortunes were people cornering some aspect of the natural resource world: coal, steel, oil, wood; in addition to finance. Here we are a hundred years later and you have what I would call democracy-distorting fortunes.”
Actually, the comparison is easy. JD Rockefeller’s wealth was equivalent to about $1 Trillion today. Google and Amazon exceed $1 Trillion in Market Cap. To put that in perspective, only 16 countries of about 180 or so on the planet have a Gross Domestic Product greater than $1 Trillion!
Consider that $923.7 billion and the rest of us. For instance, some 9.2% of the U.S. population—or 30 million people—live in poverty (a conservative number BTW.)
Poverty is a relative number. For those in first world countries with free access to Healthcare (Medicaid) and most important top tier Emergency Hospitals and in many cases free life saving drugs. That poverty is a lot different than poverty in MOST of the world – third world countries and those countries like Venezuela or North Korea where there is real hunger. To compare, according to Wisegeek.com –
“South Koreans are typically taller and weigh more than North Koreans, with the average North Korean adult being as much as 5 inches (about 12.7 cm) shorter and about 14 to 27 pounds (about 6 to 12.5 kg) lighter than their South Korean counterparts. This is thought to be because South Koreans are more likely to have good nutrition as children. They also generally are less poor than North Koreans, which means that they often have better access to healthcare.”
That $923.7 billion would be enough money to give each of those poor Americans more than $1,000 a year, every year for the next three decades. (Caveat: No one is suggesting that exact kind of redistribution of wealth could or should ever happen, it’s just a thought exercise.)
It’s not that we need to be a Marxist politician and lie that we will divide the pie, we simply need to bust up obvious Trusts – which are not, I repeat not Capitalistic – Oligarchs and Monopolists are the destroyers of free enterprise and the market system. Meaningful regulation and an active anti-Trust division is the only thing that saves Democracy from devolving into a corrupt Banana Republic run by a handful of Oligarchs.
To be clear that list of eight people is actually quite the mixed bag. Some like Gates are no longer CEOs. Ellison is chairman of Oracle (ORCL), a powerhouse company for sure, but not in the same league as Facebook or Google. And ditto for Musk’s Tesla, (though more on that company’s potential dominance later.) Also, not included are Tim Cook and Sundar Pichai, CEOs of Apple and Google’s parent Alphabet, respectively, who wield tremendous power and are very wealthy.
It’s also important to note there are a number of other tech billionaires on the Bloomberg list—including Michael Dell, Laurene Powell Jobs, Eric Schmidt, Jack Dorsey, Evan Spiegel, Marc Benioff, Peter Thiel, Reed Hastings and other familiar names—and it makes sense to add them to this posse of tech billionaires.
High up on this list too is MacKenzie Scott, the 23rd richest person in the world worth $56 billion, who is of course Jeff Bezos’ ex-wife. (If the couple were still together they would be worth around a quarter of $1 trillion, richer than Elon, but that’s another story.)
WASHINGTON DC, USA – MARCH 9: Elon Musk, Founder and Chief Engineer of SpaceX, speaks during the Satellite 2020 Conference in Washington, DC, United States on March 9, 2020. (Photo by Yasin Ozturk/Anadolu Agency via Getty Images)More
The point is these American tech billionaires form a cohort, a cohort worth well over $1 trillion, with commensurate economic and societal power. And as I noted in a story recently their fortunes have been growing much faster than the wealth of the rest of us. True I don’t adjust my figures for inflation, (i.e., what is $1 trillion today in say, 2016 dollars), but when your stock goes up 450% over the past five years, like Amazon’s has, and the annual inflation rate has been between 0.7% and 2.3% over the same time period, there’s really no need.
So where did this great wealth come from? Overwhelmingly it accrued from the increase in value of these individuals’ stock holdings—mostly as founders of tech companies such as Apple, Amazon, Facebook, Google, Microsoft, Netflix (NFLX), Oracle, Dell (DELL), Twitter (TWTR), Snap (SNAP) and Tesla. The value of their stakes in these companies has soared to unimaginable heights because the stock market assigned huge valuations to these companies. Why? Because these companies are massive money-making machines and are likely to continue to be so. Thus, the free market has spoken and designated these people to be the richest and most powerful people in the world.
‘Breaking these guys up’
MAGA, Antifa, liberals, conservatives and moderates, nearly everyone in America agrees that Big Tech is too powerful. But when it comes to exactly what “the problem” is, we diverge. Republicans, wrapping themselves in the flag of free speech (which really doesn’t apply to private companies) say Big Tech muzzles them, while Democrats say Big Tech is a national security threat by allowing foreign actors to manipulate elections and domestic terrorists to organize.
And yes, Congress has called Zuckerberg, Dorsey, Bezos et al to task and to testify numerous times. Myriad federal and local, nevermind international, investigations and legal actions are ongoing against Big Tech. And yet one thing is missing here, and that is to call into question the personal power and responsibility of this American-techno-billionaire oligarchy which holds sway over billions of lives.
C’mon Man – Congress is bought and paid for – and the Dems in particular have been major beneficiaries if it is indeed true that the Tech and Media Oligarchs have through censorship and control of the information flows influenced 2020 elections. Putin’s Russia and his puny efforts to supposedly influence 2016 are insignificant next to the in-kind contributions of Big Tech and Big Media.
Before we delve into that subject, a quick note about Musk is in order because Tesla seems like the odd company out here as it isn’t banning anyone nor is it enabling bad guys. Tesla’s rise has been so swift it seems farcical to consider the company as a threat to society. In fact until recently people were saying it would go bankrupt. (Some still have serious questions about the company.)
Musk is the odd man out because he is truly a Libertarian. Unlike the frauds – say that goofball Dorsey – he doesn’t need a Conspiracy of tech companies to make sure he doesn’t get competition. What has been done and IS being done to Parler is CRIMINAL. If we actually had a Justice Dept – all of the co-Conspirators would be facing huge fines and possible jail time. But as I said, they own this system.
JD Rockefeller had comparable individual worth – about $1 Trillion in today’s dollars, but he did not own the Washington Post or have other Robber Barons able to get away with the equivalent of “Interlocking Directorates” – to control a market. Today, they’re literally king makers. And why would they give the keys to the kingdom of a career politician like Biden with nearly 50 years of incompetence and in the years during and after he was VP used his name to enrich his family through corrupt deals with Ukraine, Communist China and others. It was not a coincidence that Trump was targeted for Impeachment because of a phone call to Ukraine. Anything the illiberal left accuse their opposition of doing, you can be sure they’re guilty of that very thing. Joe’s drug addict dishonorably discharged from the Navy son was making millions off his name. So the Media and Tech and China and Ukraine and others NOT average citizens of America – controlled this puppet. That’s why he’s got the keys to the kingdom.
And yet—and this is admittedly anticipatory at this point—imagine the power that Tesla could wield over the transportation industry in short order? And BTW, Tesla is already a force to be reckoned with. Just ask GM, Ford and Toyota about that. Even with GM stock hitting an all-time high this week, it still has a market cap less than one tenth of Tesla’s.
And let’s not forget Musk’s other endeavors. If SpaceX, SolarCity, Hyperloop, Starlink etc. (which have been created with an eye towards integration), pan out in a big way, Musk’s empire would become even more impactful. Bottom line: Given that Elon is the richest man in the world, the market is telling us all this could happen.
Back to the central issue at hand, which is the outsized power these individuals have. There is a course of action that addresses the problem head on, a solution not lost on Scott Galloway, professor of marketing at the New York University Stern School of Business and a keen observer of Big Tech.
“I think the place to start is with breaking these guys up,” Galloway says. “I think that it’s telling that we seem to be always begging the same one or two firms. I think increased competition would be good.”
This may be the ‘beginning of the end’ for big tech following Capitol siege: Scott Galloway
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We’ve broken up big companies in America before of course, typically for one of two reasons. In the first, management itself does the cleaving in an effort to maximize shareholder value. I lived through one of these when I worked for the biggest media company in history, AOL Time Warner, which sold off Warner Music, Time Life books, TimeWarner Cable, AOL, Time Inc. and finally itself to AT&T. Others in this category include GE, ITT, (two of its descendants are Starwood and Hartford Financial Services Group) and going back in time, Gulf and Western (known as “engulf and devour.”) The other group of companies were broken up by the government, most famously AT&T in 1984 and Standard Oil in 1911.
It is not simply breaking up these Monopolies. We must realize that the vast majority of the Big Media is one GIANT Oligarchy owned by 6 conglomerates: Newscorp/Fox, ABC-Disney, CBS/Paramount, NBC/MS/MSNBC, ATT/Time Warner/CNN, Sony…and then you throw in Verizon/Yahoo…NY Times, Amazon/Washington Post – you have a real collusion of Oligarchs.
It is probably beyond the capability of THIS govt to simply limit the reach of these Oligarchs.
Now let’s talk about today’s big tech companies. First understand, they were built for dominance. These notions of a “flywheel” (a favorite construct of Bezos) and an “ecosystem” implicitly and explicitly have as their goals global scale with both vertical and horizontal integration. What businesses do Amazon, Google or Tesla want to get into? The answer is any business that can be melded into what they are doing currently, in other words just about anything. One thing that was never considered though: What happens if these companies become too successful?
To be clear there is other work to be done here. Section 230 of the Communications Decency Act of 1996—an anachronistic piece of legal code that allows tech companies to disclaim responsibility for what appears on their platforms—has to go.
Absolutely, but Trump’s Rino GOP is in bed with Tech. So somehow, media and tech must be limited in what they can donate. Funny how the left was against Citizens United – that more or less said “campaign donations” from Companies is free speech. Now that they have power due to Big Tech and Big Media – they’re not so concerned with Corporations with the power to determine elections – as long as their guy is the beneficiary.
(The law was created to protect poor little tech startups from being quashed by litigation. Today, these giant companies employ thousands of lawyers who face down billions of litigation like it’s nothing more than swatting away a fly.) And there’s the profiting-off-of-poison business models (selling falsehoods and divisiveness) by the social media companies. But those problems apply mostly to Facebook, Google’s YouTube and Twitter, and not at all to Amazon or Apple. So we come back to the common denominator, which is size and power. Ultimately that is what must be addressed.
The notion of a government-mandated break up of Big Tech has been around for years now. There’s much that could be done: Facebook would spin off Instagram (love to see those two compete), WhatsApp and maybe even Messenger and Oculus. Amazon would split off AWS, Whole Foods and its devices (Kindle and Fire.) Google would shed YouTube, Waymo, as well as split off search from its other core products. In Musk’s case, his companies should end up as separate public companies. Apple could get rid of the App Store and its music business. Microsoft would sell Xbox, Skype, Azure, and LinkedIn (I know, I know, you guys just bought it!)
Good! Now find an honest elected representative who will actually go up against Big Tech and Big Media. Let’s see what has happened to Josh Hawley. He has been vilified as a “white supremacist” for inciting the Capitol riots and being a Trump supporter – and his upcoming book The Tyranny of Big Tech – was squashed. His publisher Simon and Schuster caved to the Big Tech Oligarchs and decided not to publish it. A brave independent publisher will be publishing it – in six months…maybe. But for the time being harassment has been accomplished and a message to Conservative representatives has been sent. Imagine the power. The power to pick the President. The power to make or break a Senator. Shut up and Obey! Censorship for the time being. No telling what they’ll do to Hawley between now and when the book is published. If the book is published. No irony here – the Tech Tyrants have censored a book by a Senator titled the The Tyranny of Big Tech. No one but a few brave souls have the audacity to question this. Certainly no one on Commie News Network or MSNBC. Hardly a peep out of Fox and when the host of the highest rated show on Fox Business allowed some criticism of one of the Voting software companies on his show – boom – fired. I’m guessing you won’t hear Tucker or Hannity mention this anytime soon. If they do, they’ll be looking for a new gig just like other Fox hosts who talked out of turn, Trish Regan and Lou Dobbs.
The snickers you hear come from the C-suites of these companies at the mere suggestion of this. As in “Serwer, you are so ignorant and naive. It’s impossible to do this! These businesses are intertwined!” To which I answer, I may be guilty of the first charge but it’s not impossible. Sure, some are more difficult to split than others, but it’s all doable. Hollywood movie studios made exactly the same claim when the U.S. government successfully sued to separate movie theaters from the studios, (United States v. Paramount Pictures, 1948.) Note that both studios and theaters thrived after that.
That was then. In 1948 Americans just won WWII and were still patriotic. Now we have generations of America hating socialists calling themselves democrats and greedy endless war Military Industrial Complex supporting Rinos calling themselves Republicans.
Shareholders would do very well by the stocks of newly severed tech companies. And I would bet more jobs would be created. But that wouldn’t be the real reason to break ‘em up. The real reason would be to put an end to this epidemic of bigness.
And here’s the critical part, I’m not suggesting the government do this, I’m suggesting the tech moguls do it themselves.
Not going to happen. Tech moguls like Zuckerberg, Dorsey or Gates are essentially nerds who feed off power now that they are King of the Prom rather than the four-eyed pocket protector wearing freak who couldn’t get a girl to go with them to the Prom – and have no doubt now that they are mighty Billionaires they know better than any average voting American. Musk might be on the side of Free Speech and breaking up companies, but ironically his synergy of technologies should be the one conglomerate that should not be broken up. That is, the core to much of what he is doing is based on batteries, not flashy cars or rockets. The batteries now and in the near future, will make not only cars go farther without a charge, but back up solar power from the home and from the newly evolved Utility market. Regional utilities like PG&E will essentially be displaced or reduced drastically as new Utilities will be able to compete with PG&E with Utility size batteries that store power from solar, wind and virtually any power source. And yes, folks would have the opportunity go off grid or at least have real backup power. This is all for the good, because the electric grid in most of the country is vulnerable to terrorist attacks or run by just plain incompetent political or governmental oversight as exemplified by the way California has let its forests become tinderboxes – destroying power lines with rolling black outs becoming the norm.
Crazy? But why not? These people think of themselves as business non-traditionalists. Are they really? If Bezos, Zuckerberg and Cook et al did it themselves it would usher in an era of growth and entrepreneurship in Silicon Valley, the U.S. and the world. It could be a happy, proactive creative process, as opposed to the current defensive stonewalling. But most importantly it would restore, shore up, protect and enhance our democracy. What could possibly be more important than that?
Mistake number one. Monopolists and Oligarchs don’t believe in democracy. They believe they are Philosopher Kings.
We often hear that we have moved beyond shareholder capitalism and are now in an era of stakeholder capitalism. It would be the ultimate expression of stakeholder capitalism for the richest men on planet earth to consider the ultimate stakeholder, America itself.
It is also unassailable that if the tech moguls don’t do this, their companies will eventually atrophy and fade, or more likely and much sooner, face an increasingly angry mob.
“There’s been a total inaction. [tech CEOs] have slow-rolled the whole thing effectively,” says Galloway. “But I think that’s about to change. The shadow being cast by the Biden-Harris administration has already resulted in more change at Facebook in the last 10 days than we’ve seen in the last 10 years.”
Like De-platforming Parler? That kind of change? The only meaningful change starts with getting rid of sec 230 protection to minimize censorship and the govt intervening to stop Monopolists and Oligarchs from eliminating competition…
Facebook changes? Like what – an international tribunal to determine who gets censored or not? It is still very much anti-Free speech – in Orwellian terms, they “control” speech. Who determines what is “hate speech”. The first amendment was not intended for “love speech”. It was meant to give people the right to speak their mind freely. Yes, there are limits, and our courts have spelled most of them out – “yelling fire in a crowded theater” for example. Today’s hate speech as exemplified by the Gong Show Theater of a second impeachment after he’s left office. Huh? Trump said protest peacefully at his rally at the Capitol. But with a bit of “Newspeak” the Dems and a few Trump hating Rinos hope to make that mean go to the Capitol and “riot”. Hate speech as a term is essentially “Newspeak” right out of 1984. Doublespeak. Change the language to mean anything you want. War is Peace. Love is hate. You get the idea. Thought Control.
Supreme Court Justice Louis Brandeis is said to have remarked: “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.” I’m sure the tech billionaires know Brandeis’ words. The question is, are the tech billionaires evolved enough to understand they have become part of the problem, and if so, can they sublimate their egos enough to do something about it.
Never thought I’d agree with a far left Commie in a black robe…of course, he did not consider his brand of socialism to be communism, just as the left has no problem with today’s brand of censorship and thought police as long as it benefits their High Morality – you know the morality of Free to Choose to kill babies in the womb even to the point of infanticide, the morality of allowing any biological boy call himself an girl and compete in women’s athletics or go into a girl’s locker room, or the kind of morality that will kill thousands of jobs in the name of saving the planet when there is no real science to back up their convoluted notion of “Climate”. Yes, Capitalism is dead. God is dead. America’s founding principles are dead. Long live the Tech and Media Tyrants!