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CHAPTER 5

The Belief System of the New Oligarchy

In important ways, the tech moguls are quite different from both the industrialists of the late nineteenth century and the managerial elite of the twentieth. They are neither ambitious parvenus nor carefully bred products of the corporate organization. It is not raw ambition or managerial acumen but technical talent that has defined them and made them fabulously wealthy and influential.

As a group, they are far less diverse than the tinkerers and artisans who propelled the industrial revolution. Most come from the upper end of the middle class. Many have at least one parent, sometimes two, with a scientific background. They generally went to elite colleges (although not all of them graduated). Some were technical prodigies even in high school. Not for them the tedium of a newspaper route or a part-time job in a pizza joint or the mail room. The tech elites, wrote one observer, are typically “long on brilliance, but short on hardship.”¹

Despite their sheltered origins, the tech oligarchs tend to regard themselves as more enlightened and progressive than their industrial-era predecessors. In the 1970s and 1980s, the image they projected was the latest incarnation of the American hippie, a kind of “high-tech bandit” having “more in common with artists than with the inhabitants of the corridors of corporate power.”² The early tech executives—such as those running Hewlett-Packard and Intel—also tended to be paternalistic in their management practices and to consider themselves more forward-thinking than the corporate managers of an earlier time.³

The Meritocratic Ideology

The people running today’s IT firms do not see middle managers—much less assembly-line workers or skilled artisans—as peers. Their worldview is aligned with the upper echelon of the educated workforce. High numbers of science PhDs are found in their ranks, including CEOs, and a survey of forty-five tech executives found that the vast majority had degrees from elite universities in engineering, computer science, or business. Some of those with no degrees were dropouts from elite institutions.⁴ “Software is an IQ business,” said Bill Gates, himself a Harvard dropout. “Microsoft must win the IQ war, or we won’t have a future.”⁵

The tech oligarchs are creating something similar to what Aldous Huxley called “a scientific caste system.”⁶ It is unlike the industrial era, when corporations depended on people with a wide range of skills: managers and marketers, engineers and technicians, warehouse workers and salespeople. These jobs were often unionized, at least in the manufacturing and energy sectors, so that upper management was compelled at least to consider diverse views on how the business should operate. In contrast, tech firms are rarely unionized, and none of the largest internet-based firms are.⁷

Crucially, the tech giants employ relatively few people in proportion to their revenues. IT firms like Google and Facebook generate up to three hundred times the market value per employee as the likes of GM, Home Depot, and Kroger.⁸ (Only the energy sector, whose wealth is based on natural resources, is higher.) In addition, IT companies and the specialized contractors that service them depend heavily on thousands of lower-paid foreign workers, some of whom are close to being indentured servants.⁹

What Do Today’s Oligarchs Want?

The tech oligarchs have not produced a coherent political manifesto laying out their vision for the future. Yet it’s clear that the IT elite—in firms such as Amazon, Google, Facebook, Apple, and Microsoft—share some ideas that add up to a common agenda.

In the developing technocratic worldview, there’s little place for upward mobility, except within the charmed circle at the top. The middle and working classes are expected to become marginal. While the oligarchs might speak of a commitment to building what Mark Zuckerberg calls “meaningful community,” they rarely mention upward mobility.¹⁰ Having interviewed 147 digital company founders, Gregory Ferenstein notes that they generally don’t expect their workers or consumers to achieve more independence by starting their own companies or even owning houses. Most, Ferenstein adds, believe that an “increasingly greater share of economic wealth will be generated by a smaller slice of very talented or original people. Everyone else will come to subsist on some combination of part-time entrepreneurial ‘gig work’ and government aid.”¹¹

Ferenstein says that many tech titans, in contrast to business leaders of the past, favor a radically expanded welfare state.¹² Mark Zuckerberg, Elon Musk, Travis Kalanick (former head of Uber), and Sam Altman (founder of Y Combinator) all favor a guaranteed annual income, in part to allay fears of insurrection by a vulnerable and struggling workforce. Yet unlike the “Penthouse Bolsheviks” of the 1930s, they have no intention of allowing their own fortunes to be squeezed. Instead, the middle class would likely foot much of the bill for guaranteed wages, health care, free college, and housing assistance, along with subsidies for gig workers, who do not receive benefits from their employers.¹³

This model could best be described as oligarchical socialism. The redistribution of resources would meet the material needs of the working class and the declining middle class, but it would not promote upward mobility or threaten the dominance of the oligarchs. This represents a sea change from the old industrial economy. Rather than acquiring property and gaining a modicum of self-sufficiency, workers can now expect a serflike future of rented apartments and frozen prospects.¹⁴ Unable to grow into property-owning adults, they will depend on subsidies to meet their basic needs.

Thomas Piketty observed that the tech oligarchs, like some nineteenth-century industrialists, expect the growing influence of technically gifted people to “destroy artificial inequalities” while “highlighting natural inequalities.”¹⁵ But the new tech aristocracy also regard themselves as intrinsically more deserving of their wealth and power than the old managerial elites or the grubby corporate speculators.¹⁶ They believe that they are not just creating value, but building a better world.

While earlier technologies were disruptive of established ways, their purpose was generally to allow people to do things more cheaply and efficiently, to boost productivity and make life easier. Technology was “a traditional action made effective,” as the sociologist Marcel Mauss described it. On the whole, it was evolutionary, not revolutionary.¹⁷ But for many in the new elite, technology represents far more than efficiency or convenience. It is both the beginning and the end, the material equivalent of a spiritual journey to nirvana.

Google’s vision for the future is characterized by “immersive computing,” in which the real and virtual worlds blend together.¹⁸ Tech leaders like Ray Kurzweil, longtime head of engineering at Google, speak about creating a “posthuman” future, dominated by artificial intelligence and controlled by computers and those who program them. They look forward to having the capacity to reverse aging and to download their consciousness into computers. This vision rests on a faith in—or an obsession with—technological determinism, in which new technology is our evolutionary successor.¹⁹ But is this what most people want the future to be?

The Cultural Revolution

What the tech oligarchs are already doing to control the culture should raise alarm. The IT revolution once appeared to be launching a more democratic era in communications, with the “de-massified media” that Alvin Toffler optimistically predicted. But what looked like a more diverse and open media world, where anyone could be a reporter or reach an audience, is turning into one where a very few companies control the information pipelines.²⁰ Nearly two-thirds of U.S. adults now get their news through Facebook or Google.²¹ Millennials in both the United States and the UK are almost three times as likely to get their information from these platforms as from print, television, or radio.²²

The power of the tech oligarchy has grown at a time when print publishing and the firms that have dominated it are experiencing a secular and probably irreversible decline. Between 2001 and 2017, the publishing industry (books, newspapers, magazines) lost 290,000 jobs—a decrease of 40 percent. Any newspaper or magazine today will have an online presence, but with Facebook and Google dominating the growth in online advertising, it’s exceedingly difficult for new or smaller publications to survive. While Google alone made $4.7 billion from news publishers in 2018, the industry continues to shrink.²³ “When you look at what’s evolved, and the amount of revenue that’s going to the Googles and Facebooks of the world,” says Alan Fisco, president of the Seattle Times, “we are getting the crumbs off the table.”²⁴

Even as they devastate the old media, the oligarchs also have the means to purchase some of its most venerable survivors. Since 2010, tech moguls and their relatives have bought the New Republic, the Washington Post, the Atlantic, and the long-distressed Time magazine, purchased for $190 million.²⁵ In China, the estimable South China Morning Post was taken over by Alibaba, one of the country’s largest online retailers.²⁶ Owning publications appeals to the vanity of tech oligarchs, giving them enhanced entree to literary and journalistic circles.²⁷ The publications acquired in this way get an extra edge: they can enjoy the luxury of producing content without worrying much about money.²⁸

There are often ritual denials that the new owners of these publications will influence content, but this is in total contradiction with experience. When the equally rapacious moguls of the early twentieth century, like the McCormicks of Chicago or William Randolph Hearst, bought newspapers, they pushed an agenda of imperial expansion, anti-unionism, and resistance to those who would threaten their fortunes.²⁹ Today’s mass media already tend to favor the oligarchy’s progressive views—on gender, race, and environmental issues, for example, but with reservations about the concentration of power.³⁰ Financial dependency is likely to encourage more support for the interests of the tech industry.

News is only one area of the culture being seized by the tech oligarchy. Amazon has achieved enormous influence over the book industry; it is by far the largest seller of books, accounting for upwards of 50 percent of all paper sales and 90 percent of ebook sales, and it possesses the ability to allow knockoffs of published titles.³¹ Even well-established publishers like Hachette and Macmillan have found themselves held hostage if they don’t adhere to Amazon’s requests.³²

The entertainment industry is also being swallowed up by the tech giants. YouTube, acquired by Google in 2006, has become determinative in the music industry, although artists often do not get the compensation they traditionally received. Music streaming and music videos have become yet another way that firms like Google gain access to ever more personal data, which they can sell to advertisers.³³ Much the same is occurring in video broadly. Netflix, a company financed by Silicon Valley venture firms, is now estimated to be worth more than any of the film studios, and along with Amazon it produces much of the award-winning television programming. In 2018, Netflix spent more on programming than any of the major studios. Netflix and Amazon each have well over 100 million subscribers, far beyond the clientele achieved by the established cable firms.³⁴

Not satisfied with controlling information pipelines, the tech oligarchs have been moving to shape content as well. Controllers like those at Facebook and Twitter seek to “curate” content on their sites, or even eliminate views they find objectionable, which tend to be conservative views, according to former employees.³⁵ Algorithms intended to screen out “hate groups” often spread a wider net, notes one observer, since the programmers have trouble distinguishing between “hate groups” and those who might simply express views that conflict with the dominant culture of Silicon Valley.³⁶ That managers of social media platforms aim to control content is not merely the perception of conservatives. Over 70 percent of Americans believe that social media platforms “censor political views,” according to a recent Pew study.³⁷ With their quasi-monopoly status, Facebook and Google don’t have to worry about competing with anyone, as the tech entrepreneur Peter Thiel observes, so they can indulge their own prejudices to a greater extent than the businesses that might be concerned about alienating customers.³⁸

With their tightening control over media content, the tech elite are now situated to exert a cultural predominance that is unprecedented in the modern era.³⁹ It recalls the cultural influence of the Catholic Church in the Middle Ages, but with more advanced technology.

The Right of Surveillance

The medieval church may have exercised enormous sway over what people believed to be true and proper, but it had nothing like today’s tools for monitoring private actions and thoughts. The new technology that allows such erasure of privacy has become central to generating tech wealth: personal data is the raw material of the digital age. Jack Ma, the founder of Alibaba, sees the exploitation of personal data as the “electricity of the 21st century.”⁴⁰

Alibaba and other “super platforms” like Facebook, Google, and WeChat operate largely as gatekeepers for those who wish to navigate the digital economy, which means they control access to a considerable part of the overall economy.⁴¹ This position gives them enormous power to collect personal information on users. When Google and Facebook and other gatekeepers do this collecting, “our behaviour is transformed into a product,” writes one observer.⁴² This data now accounts for up to 20 percent of Europe’s GDP, and as it becomes more important, we become like serfs living under what the French analyst Gaspard Koenig describes as “digital feudalism.”⁴³ Our daily lives no longer belong to us alone but are relentlessly commodified. This is, of course, the natural goal of all the major tech firms, and as Jaron Lanier suggests, it all serves to “percolate creepiness and inspire justified paranoias.”⁴⁴

Surveillance might go on with little warning to customers. Facebook already admits to having patented technology that would enable snooping on their users by remotely turning on a smartphone’s microphone to start recording, although they deny using it.⁴⁵ In 2018, Amazon’s in-home device Alexa was found to be eavesdropping on people’s conversations.⁴⁶ Once exposed, such intrusions are often ended, at least temporarily, but there is reason to believe that privacy ranks low in tech company priorities.⁴⁷ Google’s former executive chairman, Eric Schmidt, once told CNBC: “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.”⁴⁸

The prospect of life under surveillance by technocratic oligarchs is a terrifying one. “If ExxonMobil attempted to insert itself into every element of our lives like this,” writes Ellie Mae O’Hagan in the Guardian, “there might be a concerted grassroots movement to curb its influence.”⁴⁹ Irrespective of personal politics, we must begin to recognize the threats to our freedom posed by today’s “benign plutocracy.”