Expect a Public Backlash Against the Uber-Rich Tech Elite

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You’ve almost certainly had your fill of tech-related predictions for the New Year, but one that you may not have come across might be quite thought-provoking. According to Adrian Wooldridge of The Economist, 2014 will see a shift in the way members of the self-indulgent, uber-rich, technology elite are perceived by the rest of us.

In an article titled, “The Coming Tech-lash,” Wooldridge is predicting a public backlash against the excesses of the newly rich in the technology sector, who so far have managed to elude the ill-will that has traditionally been directed at high rollers on Wall Street and in the oil business. I recently spoke with Wooldridge, and the first thing I asked him was what it is that so far has enabled the tech elite to remain protected from public outrage. He said it’s the simple fact that they make cool things:

People fixate on the beautiful iPad, or the iPod—they’re providing you with things that obviously benefit you, whereas bankers are largely not providing you with things that obviously benefit you. People like the technology that these tech people produce, and they like the solutions they provide, like mobile. And I think they’re right to like those things—these tech people are changing the world in many ways, in a very beneficial way.

So what has changed that has led Wooldridge to conclude that the tech elite will no longer be immune from the public’s resentment and distrust? He referred to “vulgar” extravagances, like the over-the-top wedding of Napster founder and Facebook founding President Sean Parker, which he wrote about in his article. But he said it goes deeper than that:

I talk in my piece about the Sean Parker party, which was an example of conspicuous consumption of a rather vulgar sort. I think that does encapsulate one of the reasons for the change. Tech people are very, very rich, and they’re beginning to use their wealth to express their status—they’re beginning to engage in conspicuous consumption. I think that, in itself generates a backlash. They’ve also been very good at flying under the radar, in political terms—they basically have not been very conspicuous as political players. They’re becoming more conspicuous as political players in ways that alienate certain people. They’re arguing very vigorously for immigration reform—legalizing people who have come to America illegally, and that annoys one constituency. They’re involved, in a complicated way, with the whole issue of surveillance, and I think that’s made them politically controversial. Recently, they have been pushing back against the government surveillance programs. But before that, they were rather integrated with it—they are gathering huge amounts of data on a commercial basis all the time. I think people will get more and more nervous about that. The whole issue of privacy is rising to the top of the agenda.

Wooldridge went on to cite the unprecedented nature of the wealth that the tech elite has accumulated, and will continue to accumulate over time:

The other aspect of this tech elite, which makes for a combustible situation, is the fact that they’re really, really rich, and they’re going to get richer, and richer, and richer. You’ve got people like [Facebook cofounder and CEO Mark] Zuckerberg owning more that 20 percent of their companies. This is the biggest concentration of wealth in capitalist America. These people are very young, so they’re going to get richer, and richer, and richer. They’re going to accumulate more wealth than anybody has in history, because they’re very good capitalists—they’re operating in the global economy, rather than the local economy, and that means the potential return on their wealth is going to be much greater than anything we’ve seen before. So in 30 or 40 years’ time, Mark Zuckerberg is going to be hugely more rich than he is at the moment, and he’s already extremely rich. I think there will always be more of an ambivalence, more of a complicated relationship, with the tech elite, than there has been with other elites, because on the one hand, people are going to be angry at their power, and at their wealth, and the way those two things reinforce each other. On the other hand, they’re going to be amazed at the great things that they do with some of that money, like having private space flights, or pioneering extraordinary medical innovations—3-D printing of organs, and things like that. It’s much easier to see the downside of the concentration of wealth in the hands of Wall Street, than in the hands of these people. It’s never going to be a simple sort of backlash. People are going to say that on the one hand, these people are robber barons, they’re rich, they’re exporting jobs abroad; on the other hand, they’re going to say, ‘God, look at the amazing things they’re providing us,’ and, ‘Look at the extraordinary, weird things they’re doing with their money, like blasting off to Mars,’ or whatever it is that they do. So it’s always going to be complicated—it’s never going to be a simple matter of admiration for these people, as it has been in the past.

I asked Wooldridge how the backlash will manifest itself—that is, what we’ll be able to point to and identify as part of the backlash. His response:

I think you’ll see much more antagonistic commentary in the blog world, much less of a willingness to take these people at their word, because they see hypocrisy in their actions. In San Francisco, you’re seeing a real sense that these people are becoming the enemy, a real antagonism—not just towards the titans of this world, but towards the army of workers who are pushing up the price of housing. You’re seeing a revival of the class struggle model in San Francisco. And I think if there is another iteration of the Occupy Wall Street movement, I would be very surprised if the tech wing of the plutocracy is exempt from it this time, in the way that they were last time.

Finally, I asked Wooldridge if he had any sense of whether people in the information technology profession will be any more or less accepting of the tech elite than the general population will be. He said IT professionals are already antsy:

I think there’s a great deal of nervousness, also within the tech elite, and in the technology profession, about the nature of modern inequality. Because what we’re seeing at the moment is machines are destroying a lot of knowledge-worker jobs. A great deal of money is being concentrated in the hands of really bright people. And an astonishing amount of money is also being concentrated in the hands of people who didn’t invent clever algorithms, or clever machines. So we’re seeing within the knowledge-worker community itself a huge split in wealth and fortunes. A lot of knowledge work is being automated, eliminating knowledge-worker jobs; the people who invent new machines, and who control these companies, are reaping huge rewards. And I think that’s creating a lot of nervousness among people whose jobs might be automated out of existence—like yours, and mine, probably. Wealth is being redistributed in a very radical, and I think unprecedented, sort of way that lots and lots of people, including the people who are in charge of all this, are very nervous about.

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Jan 8, 2014 4:12 AM jake_leone jake_leone  says:
Yes they will even automate the critics. And we will all live in a pretend society, where we exists for our organs, mineral value, and potential chemical energy. You know it's funny, I was awake last night thinking about what happens when robots can replace every human. And capitalism can no longer be a prevailing motivational force. What will happen will be eminent domain. But will the world be so automated that we doing nothing but living in a zoo? Probably our robots will be the first to make alien contact, they will make a deal with aliens to cage humans. It will be an ingenious trap, where humans are fooled into thinking they are still wild. The trick will be to pack millions of humans (excess population) into ships, in suspended animation of course, then nuke the ships up after about light year of travel. Then CGI the rest of the journey. Sound familiar, ever heard of Mars One. Of course the plot would be that one person survives, and the robots have to stop him from letting people know the awful truth. The tension between techies and locals has been around for a long time, ever heard of the movie "I want to blow up Silicon Valley"? Reply
Jan 8, 2014 4:29 PM jake_leone jake_leone  says:
The real problem is that companies are hoarding cash. Apple has a 150 billion in the bank, in all tech companies have a trillion or more in the bank. Banks are reticent to loan (hey we just had a financial crisis). Like most people I don't care about guys at the top being worth billions. But I do care about: Our politicians being influenced by that cash, the ability to keep stable prices (deflation is as bad or worse than inflation), productivity, and the ability to get a decent job. Cash hoarding interferes with the ability of people to get a job, and it can limit overall productivity of the economy. I have long said, when you include 2 billion people into your economy (such as India and China, via free trade), you must also increase the money supply. To some extent, the fed is doing this, by buying distressed assets from banks. But countries and businesses see the dollar as a reserve currency (a self full-filling prophecy, that creates an unstable bubble), and when the magnetic field switches (for any one of a thousand reasons, like for example a plateau (or drop) in the stock market), then an avalanche will occur. Reply

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