tag:theconversation.com,2011:/ca-fr/topics/silicon-valley-4424/articlesSilicon Valley – La Conversation2024-03-05T12:46:21Ztag:theconversation.com,2011:article/2246652024-03-05T12:46:21Z2024-03-05T12:46:21ZEurope’s tech industry is lagging behind the US – but it gives the continent a chance to write the rules of the game<figure><img src="https://images.theconversation.com/files/579147/original/file-20240301-16-17taok.jpg?ixlib=rb-1.1.0&rect=0%2C24%2C8192%2C5432&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The US largely dominates the technology landscape.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/kazan-russia-oct-31-2021-facebook-2066815178">Sergei Elagin/Shutterstock</a></span></figcaption></figure><p>Europe invests a lot in research, and publishes and patents many ideas. But it <a href="https://www.science.org/content/article/european-rd-review-finds-lagging-high-tech-performance-despite-major-science-investment">fails to compete</a> with the US and China when it comes to translating its innovation effort into large, global technology firms. The seven largest US tech companies, Alphabet (Google), Amazon, Apple, Meta, Microsoft, Nvidia and Tesla, are <a href="https://www.euronews.com/business/2023/12/21/why-cant-european-tech-firms-compete-with-their-us-counterparts">20 times bigger</a> than the EU’s seven largest, and generate more than ten times more revenue.</p>
<p>That isn’t to say Europe has no tech <a href="https://www.forbes.com/sites/craigsmith/2023/02/14/europes-venture-capital-scene-is-narrowing-the-gap-with-the-us-despite-global-investment-slowdown/">success stories</a>. The world leader in music streaming is Spotify, a <a href="https://www.forbes.com/sites/eamonnforde/2022/01/19/spotify-comfortably-remains-the-biggest-streaming-service-despite-its-market-share-being-eaten-into/">Swedish company</a>. Dutch company ASML produces the <a href="https://www.theverge.com/23578430/chip-war-chris-miller-asml-intel-apple-samsung-us-china-decoder">world’s most advanced</a> computer chips, and Danish drugmaker Novo Nordisk is <a href="https://www.ft.com/content/184617f3-9a88-4d23-8e23-d1a08d5577dd">leading</a> the extremely profitable market for weight-loss drugs.</p>
<p>European start-ups are also actually a <a href="https://news.crunchbase.com/venture/europe-leads-us-startup-vc-gray-equidam/">better deal</a> for venture capitalists on average than US ones. But they rarely develop into major global players. The main reason for this is that Europe regulates more.</p>
<p>Research has found that Europeans are <a href="https://www.aeaweb.org/articles?id=10.1257/aer.20162015">less optimistic</a> than Americans about social mobility, want to <a href="https://www.journals.uchicago.edu/doi/full/10.1086/705551">redistribute income</a> more than they do in the US, and have a more cautious relationship to <a href="https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2270%7E9c72a27c18.en.pdf">owning risky assets</a>. This leads to some <a href="https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/securing-europes-competitiveness-addressing-its-technology-gap#/">very predictable outcomes</a>. Environmental, inequality and life expectancy metrics perform better in Europe, while the US does better on purely economic indicators.</p>
<p>This is not necessarily bad news. In the competition to define the rules of the technological game, combining the huge US tech ecosystem and the European obsession for regulation may be the best chance to protect consumers, freedom of expression, accountability and transparency around the world.</p>
<figure class="align-center ">
<img alt="EU flags in front of European Commission in Brussels on a sunny day." src="https://images.theconversation.com/files/578982/original/file-20240229-28-6si2fv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/578982/original/file-20240229-28-6si2fv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/578982/original/file-20240229-28-6si2fv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/578982/original/file-20240229-28-6si2fv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/578982/original/file-20240229-28-6si2fv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/578982/original/file-20240229-28-6si2fv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/578982/original/file-20240229-28-6si2fv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Europe has the chance to write the global rules for the tech industry according to its own values.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/eu-flags-front-european-commission-brussels-162128453">symbiot/Shutterstock</a></span>
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<h2>The world leader in regulation</h2>
<p>The US Food and Drug Administration (FDA) is <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6983504/">faster to expedite</a> its approval of new drugs than the European Medicine Agency. Pharmaceutical firms are also allowed a larger profit: drugs in the US are on average more than <a href="https://www.rand.org/pubs/research_reports/RR2956.html">three times more expensive</a> than in the rest of the OECD. </p>
<p>So it makes sense for pharmaceutical companies to develop their products in the US first. The same is true if you want to develop a new synthetic meat, a modified crop, or a product linked to Artificial Intelligence (AI). </p>
<p>Europe could grow faster by changing its model. But ask European leaders which precise regulation they are happy to relax, and you will hear a deafening silence. </p>
<p>Britain is perhaps the best illustration. A large part of the Brexit project was to simplify European rules that were perceived as excessive. However, the UK is yet to make any major regulatory change eight years after the referendum, and the government <a href="https://www.ft.com/content/07c98087-3914-4107-a6ee-56cc4086459e">shows no interest</a> in changing tack.</p>
<p>In the US, innovation has gone hand in hand with <a href="https://www.jstor.org/stable/j.ctv24w62m5">market concentration and market power</a>. When companies have high market power, they may have fewer incentives to innovate. They also start to gain <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4390776">political power</a>.</p>
<figure class="align-center ">
<img alt="Assorted app icons representing some of the major big tech companies in the US, including Meta, Amazon, Apple, Netflix, and Twitter, as seen on an iPhone screen." src="https://images.theconversation.com/files/578985/original/file-20240229-30-iujk0s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/578985/original/file-20240229-30-iujk0s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/578985/original/file-20240229-30-iujk0s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/578985/original/file-20240229-30-iujk0s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/578985/original/file-20240229-30-iujk0s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/578985/original/file-20240229-30-iujk0s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/578985/original/file-20240229-30-iujk0s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The US is home to tech giants including Alphabet, Amazon, Apple and Meta.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/portland-usa-apr-21-2022-assorted-2148379161">Tada Images/Shutterstock</a></span>
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<p>This is where the role of Europe as an independent regulator is very important. The largest companies <a href="https://newsroom.tiktok.com/en-eu/tiktoks-compliance-with-the-dma">tend to abide by EU law </a>because they want to keep access to the EU. They also have a tendency to offer the same products all over the world, which means European rules <a href="https://theconversation.com/new-usb-c-charger-rule-shows-how-eu-regulators-make-decisions-for-the-world-184763">apply to everyone</a>.</p>
<p>European rules have clear objectives. The EU’s <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3783436">Digital Markets Act</a>, which <a href="https://ec.europa.eu/commission/presscorner/detail/en/ip_22_6423">comes into force</a> in March 2024, establishes rights and rules for large online platforms – so-called <a href="https://ec.europa.eu/commission/presscorner/detail/en/ip_23_4328">“gatekeepers”</a> such as Google, Amazon or Meta – to prevent them from abusing their market power.</p>
<p>Europe is also credible when it comes to protecting consumers, citizens and transparency. It cannot be suspected of favouring European tech champions, because there are none. Europe can, for instance, <a href="https://www.reuters.com/technology/eu-opens-formal-proceedings-against-tiktok-under-digital-services-act-2024-02-19/">judge Tiktok</a> based on whether it breaches child protection rules, and not based on fears that a Chinese company is taking market share away from a European one. </p>
<h2>Technology and democracy</h2>
<p>Perhaps the best example of the benefits of old regulating Europe and unleashed America is the current race for AI. The US is positioned as the market leader in AI technology, which can power products and applications such as image generators, voice assistants and search engines. <a href="https://www.goldmansachs.com/intelligence/pages/ai-investment-forecast-to-approach-200-billion-globally-by-2025.html">Roughly half</a> of the world’s investment in AI currently happens in the US. </p>
<p>At the same time, Europe has already taken several steps to regulate. The EU’s <a href="https://www.politico.eu/article/eu-countries-strike-deal-ai-law-act-technology/">Artificial Intelligence Act</a>, for example, defines <a href="https://digital-strategy.ec.europa.eu/en/policies/regulatory-framework-ai">different levels</a> of transparency and the auditing of algorithms depending on how dangerous they could become.</p>
<p>Europe will certainly not win the global innovation race for AI. But it has the chance to <a href="https://www.ft.com/content/59b9ef36-771f-4f91-89d1-ef89f4a2ec4e">write the global rules</a> according to its own values. This means it can make companies liable for the actions of their AI tools and transparent on the data used for training them. It also means it can require a company’s AI algorithms to be audited.</p>
<figure class="align-center ">
<img alt="TikTok app logo on a smartphone screen and flags of China and United States." src="https://images.theconversation.com/files/578988/original/file-20240229-22-cklp59.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/578988/original/file-20240229-22-cklp59.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=358&fit=crop&dpr=1 600w, https://images.theconversation.com/files/578988/original/file-20240229-22-cklp59.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=358&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/578988/original/file-20240229-22-cklp59.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=358&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/578988/original/file-20240229-22-cklp59.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=450&fit=crop&dpr=1 754w, https://images.theconversation.com/files/578988/original/file-20240229-22-cklp59.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=450&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/578988/original/file-20240229-22-cklp59.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=450&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Short-form video hosting service TikTok is owned by the Chinese company ByteDance.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/stone-uk-october-25-2019-tiktok-1541597285">Ascannio/Shutterstock</a></span>
</figcaption>
</figure>
<p>But for the EU to write the new rules of AI, western companies must win the innovation race. The main competitor is China, where companies are given massive access to government data, including facial recognition. The Chinese government can largely <a href="https://academic.oup.com/restud/article/90/4/1701/6665906">choose its champions</a> by deciding who gets access to data. </p>
<p>China’s concerns about regulation could not be further away from those in Europe. China is not interested in improving transparency and fair political competition – it wants to use data to promote the policies of the <a href="https://www.economist.com/china/2023/04/18/can-xi-jinping-control-ai-without-crushing-it">Chinese Communist Party</a>, and discipline and foster the national economy.</p>
<p>Far from a competition between Europe and the US for tech dominance, western democracies should see their different approaches as a unique opportunity to promote their shared values. In that context, the lack of large, global European tech leaders might actually be a blessing.</p><img src="https://counter.theconversation.com/content/224665/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Renaud Foucart does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The lack of large, global European tech leaders might actually be a blessing.Renaud Foucart, Senior Lecturer in Economics, Lancaster University Management School, Lancaster UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2197952023-12-29T11:41:17Z2023-12-29T11:41:17ZHow the ‘visionaries’ of Silicon Valley mean profits are prioritised over true technological progress<figure><img src="https://images.theconversation.com/files/566638/original/file-20231219-27-jjf9ep.jpg?ixlib=rb-1.1.0&rect=15%2C31%2C3533%2C1963&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/xiengkhouang-laos-august-24-2023-elon-2351521525">Leefuji/Shutterstock</a></span></figcaption></figure><p>Technological innovation in the last couple of decades has brought fame and huge wealth to the likes of Elon Musk, Steve Jobs, Mark Zuckerberg and Jeff Bezos. Often feted as geniuses, they are the faces behind the gadgets and media that so many of us depend upon. </p>
<p>Sometimes they are <a href="https://news.sky.com/story/elon-musk-what-are-his-most-recent-controversial-moments-13019651">controversial</a>. Sometimes the level of their influence is <a href="https://www.hrw.org/news/2023/05/03/pandoras-box-generative-ai-companies-chatgpt-and-human-rights#:%7E:text=Since%20OpenAI%20released%20ChatGPT%20in,of%20its%20search%20engine%2C%20Bing.">criticised</a>. </p>
<p>But they also benefit from a common <a href="https://hbr.org/2022/11/the-myth-of-the-brilliant-charismatic-leader">mythology</a> which elevates their status. That myth is the belief that executive “visionaries” leading vast corporations are the engines which power essential breakthroughs too ambitious or futuristic for sluggish public institutions. </p>
<p>For there are many who consider the private sector to be far <a href="https://press.un.org/en/2018/gashc4239.doc.htm">better equipped</a> than the public sector to solve major challenges. We see such <a href="https://openai.com/our-structure">ideology</a> embodied in ventures like OpenAI. This successful company was founded on the premise that while artificial intelligence is too consequential to be left to corporations alone, the public sector is simply incapable of keeping up. </p>
<p>The approach is linked to a <a href="https://www.wired.com/story/political-education-silicon-valley/">political philosophy</a> which champions the idea of pioneering entrepreneurs as figureheads who advance civilisation through sheer individual brilliance and determination.</p>
<p>In reality, however, most modern technological building blocks – like <a href="https://qz.com/elon-musks-spacex-and-tesla-get-far-more-government-mon-1850332884">car batteries</a>, space rockets, the <a href="https://blogs.scientificamerican.com/observations/yes-government-researchers-really-did-invent-the-internet/">internet</a>, <a href="https://time.com/4092375/how-the-government-created-your-cell-phone/">smart phones</a>, and <a href="https://www.nasa.gov/directorates/somd/space-communications-navigation-program/gps/">GPS</a> – emerged from <a href="https://www.newscientist.com/article/mg21929310-200-state-of-innovation-busting-the-private-sector-myth/">publicly funded</a> research. They were not the inspired work of corporate masters of the universe.</p>
<p>And my work suggests <a href="https://www.bloomsbury.com/uk/ceo-society-9781786990754/">a further disconnect</a>: that the profit motive seen across Silicon Valley (and beyond) frequently impedes innovation rather than improving it. </p>
<p>For example, attempts to <a href="https://corporatewatch.org/vaccine-capitalism-a-run-down-of-the-huge-profits-being-made-from-covid-19-vaccines/">profit from</a> the COVID vaccine had a <a href="https://globalizationandhealth.biomedcentral.com/articles/10.1186/s12992-021-00763-8">detrimental impact</a> on global access to the medicine. Or consider how recent ventures into <a href="https://www.euronews.com/next/2022/10/13/elon-musk-spacex-signs-up-first-space-tourist-dennis-tito-starship-flight-around-the-moon">space tourism</a> seem to prioritise experiences for extremely wealthy people over less lucrative but more scientifically valuable missions. </p>
<p>More broadly, the thirst for profit means intellectual property restrictions <a href="https://www.wipo.int/edocs/mdocs/mdocs/en/wipo_ipr_ge_11/wipo_ipr_ge_11_topic6.pdf">tend to restrict</a> collaboration between (and even within) companies. There is also evidence that short-term <a href="https://www.csis.org/analysis/rethinking-shareholder-primacy-new-innovation-economy">shareholder demands</a> distort real innovation in favour of financial reward. </p>
<p>Allowing executives focused on profits to set technological agendas can incur public costs too. It’s expensive dealing with the hazardous low-earth orbit <a href="https://www.space.com/starlink-satellite-conjunction-increase-threatens-space-sustainability">debris</a> caused by space tourism, or the complex regulatory negotiations involved in <a href="https://www.eeas.europa.eu/delegations/australia/world%E2%80%99s-first-ai-law-eu-announces-provisional-agreement-ai-act_en">protecting human rights</a> around AI.</p>
<figure class="align-center ">
<img alt="Graphic of rubbish surrounding Earth." src="https://images.theconversation.com/files/566645/original/file-20231219-25-c7z0wq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/566645/original/file-20231219-25-c7z0wq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/566645/original/file-20231219-25-c7z0wq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/566645/original/file-20231219-25-c7z0wq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/566645/original/file-20231219-25-c7z0wq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/566645/original/file-20231219-25-c7z0wq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/566645/original/file-20231219-25-c7z0wq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Who pays for the clean up?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/3d-render-space-debris-around-planet-2075749981">Frame Stock Footage/Shutterstock</a></span>
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<p>So there is a clear tension between the demands of profit and long-term technological progress. And this partly explains why major historical innovations emerged from public sector institutions which are relatively insulated from short-term financial pressures. Market forces alone rarely achieve transformative breakthroughs like space programs or the creation of the internet. </p>
<p>Excessive corporate dominance has other dimming effects. Research scientists seem to dedicate <a href="https://www.vox.com/2016/7/14/12016710/science-challeges-research-funding-peer-review-process#1">valuable time</a> towards chasing funding <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8221522/#:%7E:text=We%20identified%20eight%20corporate%20sectors,increase%20reliance%20on%20industry%20evidence">influenced</a> by business interests. They are also increasingly <a href="https://www.macfound.org/media/files/a_future_of_failure_-_public_.pdf">incentivised</a> to go into the profitable private sector. </p>
<p>Here those scientists’ and engineers’ talents may be directed at helping advertisers to better keep hold of <a href="https://www.un.org/sites/un2.un.org/files/attention_economy_feb.pdf">our attention</a>. Or they may be tasked with finding ways for corporations to make more money from our <a href="https://www.theguardian.com/books/2019/oct/04/shoshana-zuboff-surveillance-capitalism-assault-human-automomy-digital-privacy">personal data</a>. </p>
<p>Projects which might address climate change, public health or global inequality are less likely to be the focus.</p>
<p>Likewise, research suggests that university laboratories are moving towards a <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8221522/">“science for profit”</a> model through industry partnerships. </p>
<h2>Digital destiny</h2>
<p>But true scientific innovation needs institutions and people guided by principles that go beyond financial incentives. And fortunately, there are places which support them. </p>
<p>“<a href="https://mitpress.mit.edu/9780262542432/open-knowledge-institutions/">Open knowledge institutions</a>” and <a href="https://www.oecd.org/cfe/empowering-communities-with-platform-cooperatives-c2ddfc9f-en.htm">platform cooperatives</a> are focused on innovation for the collective good rather than individual glory. Governments could do much more to support and invest in these kinds of organisations. </p>
<p>If they do, the coming decades could see the development of healthier innovation ecosystems which go beyond corporations and their executive rule. They would create an environment of cooperation rather than competition, for genuine social benefit.</p>
<p>There will still be a place for the quirky “genius” of Musk and Zuckerberg and their fellow Silicon Valley billionaires. But relying on their bloated corporations to design and dominate technological innovation is a mistake. </p>
<p>For real discovery and progress cannot rely on the minds and motives of a few famous men. It involves investing in institutions which are rooted in democracy and sustainability – not just because it is more ethical, but because in the the long term, it will be much more effective.</p><img src="https://counter.theconversation.com/content/219795/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Bloom does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>How corporate dominance holds us all back.Peter Bloom, Professor of Management, University of EssexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2187592023-12-01T17:49:44Z2023-12-01T17:49:44ZTurmoil at OpenAI shows we must address whether AI developers can regulate themselves<p>OpenAI, developer of ChatGPT and a leading innovator in the field of artificial intelligence (AI), was recently thrown into turmoil when its chief-executive and figurehead, Sam Altman, <a href="https://www.theverge.com/2023/11/17/23965982/openai-ceo-sam-altman-fired">was fired</a>. As it was revealed that he would be <a href="https://www.theverge.com/2023/11/20/23968829/microsoft-hires-sam-altman-greg-brockman-employees-openai">joining Microsoft’s advanced AI research team</a>, more than 730 OpenAI employees <a href="https://www.wired.com/story/openai-staff-walk-protest-sam-altman/">threatened to quit</a>. Finally, it was announced that most of the board who had terminated Altman’s employment were being replaced, and that he would be <a href="https://www.pbs.org/newshour/nation/sam-altman-reinstated-as-openai-ceo-with-new-board-replacing-the-one-which-fired-him">returning to the company</a>. </p>
<p>In the background, there have been reports of <a href="https://www.technologyreview.com/2023/11/27/1083886/unpacking-the-hype-around-openais-rumored-new-q-model/">vigorous debates within OpenAI regarding AI safety</a>. This not only highlights the complexities of managing a cutting-edge tech company, but also serves as a microcosm for broader debates surrounding the regulation and safe development of AI technologies.</p>
<p>Large language models (LLMs) are at the heart of these discussions. LLMs, the technology behind <a href="https://chat.openai.com/auth/login">AI chatbots such as ChatGPT</a>, are exposed to vast <a href="https://hbr.org/2023/07/how-to-train-generative-ai-using-your-companys-data">sets of data</a> that help them improve what they do – a process called training. However, the double-edged nature of this training process raises critical questions about fairness, privacy, and the potential misuse of AI. </p>
<p>Training data reflects both the richness and biases of the information available. The biases may <a href="https://www.science.org/doi/10.1126/science.aax2342">reflect unjust social concepts</a> and lead to serious discrimination, the marginalising of vulnerable groups, or the incitement of hatred or violence. </p>
<p>Training datasets can be <a href="https://www.brookings.edu/articles/algorithmic-bias-detection-and-mitigation-best-practices-and-policies-to-reduce-consumer-harms/">influenced by historical biases</a>. For example, in 2018 Amazon was reported to have <a href="https://www.bbc.co.uk/news/technology-45809919">scrapped a hiring algorithm</a> that penalised women – seemingly because its training data was composed largely of male candidates.</p>
<p>LLMs also tend to exhibit different performance for different social groups and different languages. There is more training data available in English than in other languages, so LLMs <a href="https://www.wired.com/story/chatgpt-non-english-languages-ai-revolution/">are more fluent in English</a>.</p>
<h2>Can companies be trusted?</h2>
<p>LLMs also pose a risk of <a href="https://www.reuters.com/technology/uk-regulator-issues-notice-snapchat-over-privacy-risks-posed-by-ai-chatbot-2023-10-06/">privacy breaches</a> since they are absorbing huge amounts of information and then reconstituting it. For example, if there is private data or sensitive information in the training data of LLMs, they may “remember” this data or make further inferences based on it, possibly leading to the <a href="https://mashable.com/article/samsung-chatgpt-leak-details">leakage of trade secrets</a>, the disclosure of health diagnoses, or the leakage of other types of private information.</p>
<p>LLMs might even enable <a href="https://www.ncsc.gov.uk/blog-post/chatgpt-and-large-language-models-whats-the-risk">attack by hackers or harmful software</a>. <a href="https://www.techopedia.com/definition/prompt-injection-attack#:%7E:text=A%20prompt%20injection%20attack%20is,user%20to%20perform%20unauthorized%20actions.">Prompt injection attacks</a> use carefully crafted instructions to make the AI system do something it wasn’t supposed to, potentially leading to unauthorised access to a machine, or to the leaking of private data. Understanding these risks necessitates a deeper look into how these models are trained, the inherent biases in their training data, and the societal factors that shape this data. </p>
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<img alt="OpenAI" src="https://images.theconversation.com/files/562642/original/file-20231130-25-u6r9en.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/562642/original/file-20231130-25-u6r9en.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/562642/original/file-20231130-25-u6r9en.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/562642/original/file-20231130-25-u6r9en.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/562642/original/file-20231130-25-u6r9en.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/562642/original/file-20231130-25-u6r9en.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/562642/original/file-20231130-25-u6r9en.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">OpenAI’s chatbot ChatGPT took the world by storm when it was released in 2022.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/october-7-2022-brazil-this-photo-2210705149">rafapress / Shutterstock</a></span>
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<p>The drama at OpenAI has raised concerns about the company’s future and sparked discussions about the regulation of AI. For example, can companies where senior staff hold very different approaches to AI development be trusted to regulate themselves?</p>
<p>The rapid pace at which AI research makes it into real-world applications highlights the need for more robust and wide-ranging frameworks for governing AI development, and ensuring the systems comply with ethical standards.</p>
<h2>When is an AI system ‘safe enough’?</h2>
<p>But there are challenges whatever approach is taken to regulation. For LLM research, the transition time from research and development to the deployment of an application may be short. This makes it more difficult for third-party regulators to effectively predict and mitigate the risks. Additionally, the high technical skill threshold and computational costs required to train models or adapt them to specific tasks further complicates oversight. </p>
<p>Targeting early LLM research and training may be more effective in addressing some risks. It would help address some of the harms that originate in training data. But it’s important also to establish benchmarks: for instance, when is an AI system considered “safe enough”? </p>
<p>The “safe enough” performance standard may depend on which area it’s being used in, with stricter requirements in <a href="https://www.europarl.europa.eu/news/en/headlines/society/20230601STO93804/eu-ai-act-first-regulation-on-artificial-intelligence">high-risk areas such as algorithms for the criminal justice system or hiring</a>.</p>
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Read more:
<a href="https://theconversation.com/ai-will-soon-become-impossible-for-humans-to-comprehend-the-story-of-neural-networks-tells-us-why-199456">AI will soon become impossible for humans to comprehend – the story of neural networks tells us why</a>
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<p>As AI technologies, particularly LLMs, become increasingly integrated into different aspects of society, the imperative to address their potential risks and biases grows. This involves a multifaceted strategy that includes enhancing the diversity and fairness of training data, implementing effective protections for privacy, and ensuring the responsible and ethical use of the technology across different sectors of society.</p>
<p>The next steps in this journey will likely involve collaboration between AI developers, regulatory bodies, and a diverse sample of the general public to establish standards and frameworks.</p>
<p>The situation at OpenAI, while challenging and not entirely edifying for the industry as a whole, also presents an opportunity for the AI research industry to take a long, hard look at itself, and innovate in ways that prioritise human values and societal wellbeing.</p><img src="https://counter.theconversation.com/content/218759/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The OpenAI sacking affair highlights ongoing debates over the safety and misuse of AI.Yali Du, Lecturer in Artificial Intelligence, King's College LondonMeng Fang, Assistant Professor in AI, University of LiverpoolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2181592023-11-21T16:54:05Z2023-11-21T16:54:05ZAI makes Silicon Valley’s philosophy of ‘move fast and break things’ untenable<figure><img src="https://images.theconversation.com/files/560768/original/file-20231121-21-x79tid.jpg?ixlib=rb-1.1.0&rect=20%2C10%2C6689%2C4456&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/silicon-valley-twilight-sierra-vista-open-1074439202">yhelfman / Shutterstock</a></span></figcaption></figure><p>The unofficial motto of Silicon Valley has long been <a href="https://www.wired.co.uk/article/move-fast-and-break-things-or-dont">“move fast and break things”</a>. It relies on the assumption that in order to create cutting edge technology and to be ahead of the competition, companies need to accept that things will get damaged in the process.</p>
<p>However, this approach can have implications beyond just economics. It can endanger people and be unethical. As we mark the first anniversary of the release of AI chatbot ChatGPT, it’s worth considering whether the big tech companies could do with moving slowly and taking care not to break anything. </p>
<p>ChatGPT’s <a href="https://www.zdnet.com/article/what-is-chatgpt-and-why-does-it-matter-heres-everything-you-need-to-know/">impressive capabilities caused a sensation</a>. But some commentators were quick to point to issues such as the potential it presented for <a href="https://www.businessinsider.com/school-is-back-chatgpt-mainly-tool-cheating-homework-2023-9?r=US&IR=T">students to cheat on assignments</a>. More widely, the chatbot intensified a debate over how to control AI, a transformative technology with huge potential benefits – and risks of comparable significance.</p>
<p>Let’s look at Silicon Valley’s record on other technology too. Social media was supposed to bring us together. Instead, it has <a href="https://demos-h2020.eu/en/populist-leaders-thrive-on-social-media">threatened democracy</a> and produced armies of trolls. Cryptocurrencies, touted as challenging the financial status quo have been an <a href="https://www.theguardian.com/technology/2023/apr/26/bitcoin-mining-climate-crisis-environmental-impact">environmental disaster</a> and have been <a href="https://www.ft.com/content/24d153b0-0c28-4946-acbe-2e93329bca52">vulnerable to fraud</a>. </p>
<p>The advent of the personal computer was supposed to make our work life easier. It did, but at the price of massive job losses which the job market took <a href="https://www.gspublishing.com/content/research/en/reports/2023/03/27/d64e052b-0f6e-45d7-967b-d7be35fabd16.html">more than a decade to recover from</a>.</p>
<p>It’s not that technologies in themselves are bad. However, the ideology within which they are developed can be a problem. And as technology permeates more and more of our daily lives, the “things” that break could potentially end up being human lives.</p>
<h2>Change of approach</h2>
<p>“Move fast and break things” could also prove to be economically wrong, making investors rush for novelty instead of value, as they did in the dot com bubble of the early 2000s. The idea assumes that although things might go wrong, we will be able to fix them quickly, and so the harms will be limited. Yet, looking at the history of Silicon Valley, this has been shown to be a problem on several counts.</p>
<p>Identifying that there is a problem is not the same as finding its cause. Once a technology has been deployed, the environment in which it is used may be so complex that it takes years to understand what exactly is going wrong. </p>
<p>The US justice system, for instance, has been using AI for more than a decade to assist bail decisions. These decide who should be released prior to trial against a cash bond. </p>
<p>AI was introduced not just as a way to reduce the flight risk, of defendants going on the run, but also to tackle racial bias, where white judges might be more likely to release white defendants. However, the algorithms <a href="https://www.wired.com/story/algorithms-supposed-fix-bail-system-they-havent/">produced the opposite result</a>, with fewer black defendants being released. </p>
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<img alt="Person using social media." src="https://images.theconversation.com/files/560771/original/file-20231121-4580-4owosj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/560771/original/file-20231121-4580-4owosj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=394&fit=crop&dpr=1 600w, https://images.theconversation.com/files/560771/original/file-20231121-4580-4owosj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=394&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/560771/original/file-20231121-4580-4owosj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=394&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/560771/original/file-20231121-4580-4owosj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=495&fit=crop&dpr=1 754w, https://images.theconversation.com/files/560771/original/file-20231121-4580-4owosj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=495&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/560771/original/file-20231121-4580-4owosj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=495&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Social media was supposed to bring us together, but it has also created challenges for everyone.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/young-man-using-smart-phonesocial-distancing-1704517792">13_Phunkod / Shutterstock</a></span>
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<p>Engineers kept on introducing new versions of the AI algorithms, hoping to reduce bias. Nothing worked. Then, in 2019 – 17 years after the system was first introduced – a researcher found that the problem was not the AI itself, but the <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3489440">way judges were using it</a>. </p>
<p>They were more likely to overrule decisions that didn’t fit with their stereotypes, and the problem was the interaction between the judges and the AI. Independently, each could take somewhat appropriate decisions. Together, it was a disaster.</p>
<h2>Delayed consequences</h2>
<p>Another reason why Silicon Valley’s approach is risky is that the consequences of new technologies can take a long time to appear. This means that by the time we realise the harm done, it is already too late. </p>
<p>The Dutch welfare system, for instance, has relied heavily on AI algorithms to detect fraud. It has been <a href="https://www.amnesty.org/en/latest/news/2021/10/xenophobic-machines-dutch-child-benefit-scandal/">problematic in many regards</a>, but in particular, it was found to use ethnic origin and nationality as an important risk factor. </p>
<p>It took years for the full-blown issue to become apparent. And by that time, some people had been so heavily affected by the AI assisted decisions –- asking them to return hundreds of thousands of euros for a simple mistake on a form -– that <a href="https://www.politico.eu/article/dutch-scandal-serves-as-a-warning-for-europe-over-risks-of-using-algorithms/">some took their own lives</a>.</p>
<h2>Cleaning up the mess</h2>
<p>To “move fast and break things” also means that someone else, somewhere, will be left to clean up the mess. For those who produce the technology, it’s a way of abrogating responsibility for its outcomes, whether the companies realise it or not. Social media is a damning example of this. </p>
<p>Social media’s “suggestion” algorithms – also powered by AI – have created a host of issues, from <a href="https://www.nbcnews.com/tech/tech-news/facebook-knew-radicalized-users-rcna3581">promoting misinformation and hate speech</a> just because those things <a href="https://www.socialmediatoday.com/news/new-study-shows-that-misinformation-sees-significantly-more-engagement-than/555286/">creates more engagement</a>, to facilitating harassment and negatively <a href="https://www.tandfonline.com/doi/full/10.1080/02673843.2019.1590851">affecting mental health</a>. Yet we still struggle to curb these issues, with social media platforms refusing to take responsibility for the content they promote and benefit from.</p>
<p>The first anniversary of ChatGPT provides us with an opportunity to look back on what lessons can be learned from previous technological advances. It helps us realise that mistakes are easier to avoid than to fix, especially where human lives are involved.</p><img src="https://counter.theconversation.com/content/218159/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>AI is one of many reasons the tech company mantra should be reconsidered, says an expert.Constance De Saint Laurent, Assistant Professor of Sociotechnical Systems, Department of Psychology, National University of Ireland MaynoothVlad Glăveanu, Professor of Psychology in the School of Psychology, Dublin City UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2181542023-11-21T03:18:43Z2023-11-21T03:18:43ZOpenAI’s board is facing backlash for firing CEO Sam Altman – but it’s good it had the power to<p>The sudden removal of OpenAI CEO Sam Altman on Friday was met with shock and disapproval by the company’s employees. More than 90% signed a letter <a href="https://www.theverge.com/2023/11/20/23968988/openai-employees-resignation-letter-microsoft-sam-altman">threatening to leave</a> OpenAI if the board didn’t resign and reinstate Altman – who has since <a href="https://www.theverge.com/2023/11/20/23969586/sam-altman-plotting-return-open-ai-microsoft">apparently been poached</a> by Microsoft, along with a number of other key former staff.</p>
<p>The OpenAI employees had faith in Altman. They believed in his vision and they did not like that the board could dismiss him so easily.</p>
<p>Is their upset justified? Did the board overstep its bounds? Or did it exercise a necessary check on power?</p>
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<a href="https://theconversation.com/who-is-sam-altman-openais-wunderkind-ex-ceo-and-why-was-he-fired-218111">Who is Sam Altman, OpenAI's wunderkind ex-CEO – and why was he fired?</a>
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<h2>Silicon Valley’s ‘genius founder’ mythology</h2>
<p>The idea of a “genius founder” lies at the heart of Silicon Valley culture.</p>
<p>Steve Jobs, Elon Musk, Mark Zuckerberg, Sergey Brin and Larry Page are not known as privileged men who managed to build successful businesses through a combination of hard work, smart decision-making and luck. </p>
<p>Rather, they are <a href="https://www.vox.com/2018/8/3/17644874/adam-fisher-book-silicon-valley-genius-oral-history">celebrated as geniuses</a>, wunderkinds, perhaps even maniacs – but always brilliant. Men who accomplished feats no one else could, because of their innate genius. </p>
<p>A captivating founder narrative has become almost a prerequisite for any tech startup in Silicon Valley. It makes a company easier to sell and also structures power within the organisation. </p>
<p>Throughout human history, founder mythologies have been used to explain, justify and sustain hierarchies of power. From heroes to deities to founding fathers, the founder myth provides a way to understand the current distribution of power and to unite around a figurehead. </p>
<p>What happened this week at OpenAI was a challenge to the natural order of things in Silicon Valley. </p>
<h2>What happened to Sam?</h2>
<p>It’s quite remarkable a superstar “genius founder” <a href="https://www.vox.com/2018/8/3/17644874/adam-fisher-book-silicon-valley-genius-oral-history">such as Sam Altman</a> wasn’t safeguarded by a company structure that could prevent his ousting. Tech company founders often create intricate structures to entrench themselves in their companies. </p>
<p>For instance, when Google <a href="https://www.cnbc.com/2022/02/01/google-parent-alphabet-announces-20-for-1-stock-split.html">restructured into Alphabet</a>, it created three share classes: one with standard voting rights, another with ten times the voting rights for the founders, and a third class without voting rights, mainly for employees.</p>
<p>This structure ensured founders Larry Page and Sergey Brin would remain in control of the company over the long term, while also providing them the financial benefit of owning shares in a highly profitable, publicly listed company. </p>
<p>OpenAI’s corporate structure, in contrast, made its CEO and co-founder more susceptible to losing control. Initially established as a non-profit, OpenAI has a unique structure. The main corporate entity is OpenAI Inc, a non-profit that is overseen by the board of directors. </p>
<p>To attract investors, OpenAI also has a for-profit subsidiary called OpenAI Global – which Microsoft has <a href="https://www.bloomberg.com/news/newsletters/2023-06-15/how-chatgpt-openai-made-microsoft-an-ai-tech-giant-big-take">famously invested</a> about US$13 billion (A$19.7 billion) into.</p>
<p>Although Altman had a seat on the OpenAI board, he held no equity in OpenAI Global under this structure. As CEO he was also accountable to the other board members. This type of corporate structure is highly unusual for a Silicon Valley venture.</p>
<p>The board voted Altman out from his position as CEO based on an internal investigation which, it claimed, indicated Altman had not been “consistently candid in his communications with the board” – causing them to lose trust in his leadership. </p>
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<h2>We need more accountability, not ‘geniuses’</h2>
<p>Whether the board of OpenAI was right to remove Altman remains to be seen. At the time of my writing this, the board hasn’t elaborated on its decision, nor has it released details about its internal investigation.</p>
<p>However, regardless of the specifics and the emotional impact Altman’s ousting has had on OpenAI’s employees, this move could represent a victory for corporate accountability.</p>
<p>For every revered founding genius, there are examples of founders who betrayed the trust of their employees and investors. Take the <a href="https://www.businessinsider.com/theranos-founder-ceo-elizabeth-holmes-life-story-bio-2018-4">disgraced Theranos founder</a> Elizabeth Holmes, or <a href="https://www.theguardian.com/business/2019/dec/20/why-wework-went-wrong">former WeWork CEO</a> Adam Neumann, or Nikola founder Trevor Milton who was <a href="https://www.reuters.com/legal/nikola-founder-trevor-milton-seeks-probation-after-fraud-conviction-2023-11-15/">convicted of fraud</a> last year, and Sam Bankman-Fried, the once-lauded FTX founder convicted of fraud more recently. </p>
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Read more:
<a href="https://theconversation.com/sam-bankman-fried-convicted-for-massive-ftx-fraud-in-stark-reminder-of-risks-of-crypto-trading-216991">Sam Bankman-Fried convicted for massive FTX fraud, in stark reminder of risks of crypto trading</a>
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<p>Silicon Valley urgently needs more accountability, because too many tech entrepreneurs work at an intersection of risk, hype and boundary-pushing.</p>
<p>Meanwhile, the technologies these companies are producing are <a href="https://theconversation.com/our-neurodata-can-reveal-our-most-private-selves-as-brain-implants-become-common-how-will-it-be-protected-197047">having profound impacts</a> on our societies. Silicon Valley tech companies control global communication systems, run private marketplaces and are increasingly offering advanced digital systems that seek to transform how we learn, work and socialise.</p>
<p>The power these companies wield has prompted <a href="https://www.bloomberg.com/news/newsletters/2023-11-16/ftc-chair-lina-khan-eying-risks-of-concentration-of-power-in-ai-market">regulator Lina Khan</a> to focus on addressing big tech’s market power during her tenure as chair of the United States Federal Trade Commission.</p>
<p>Khan and others have argued it’s problematic for these companies to have the capacity to globally transform societies with minimal transparency and accountability. Khan’s task is especially urgent since companies such as Microsoft, Meta (previously Facebook) and Amazon have a <a href="https://www.vox.com/recode/2020/10/6/21505027/congress-big-tech-antitrust-report-facebook-google-amazon-apple-mark-zuckerberg-jeff-bezos-tim-cook">track record of</a> <a href="https://www.microsoft.com/en-us/Investor/acquisition-history.aspx">buying out</a> other innovators who attempt to compete. </p>
<p>We can expect Khan will be paying close attention to the competitive effects of Microsoft potentially poaching some of OpenAI’s main talent. </p>
<p>In an age of AI and big tech, we need far less blind faith in leaders and far more public oversight. From this point of view, one could argue OpenAI’s somewhat odd company structure is something we ought to want more of if our priority is the collective good. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/our-neurodata-can-reveal-our-most-private-selves-as-brain-implants-become-common-how-will-it-be-protected-197047">Our neurodata can reveal our most private selves. As brain implants become common, how will it be protected?</a>
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<img src="https://counter.theconversation.com/content/218154/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joanne Gray currently receives funding from the Australian Research Council, see DP240102939 and LE230100069, and has previously received funding from companies Meta Platforms and ByteDance for research projects undertaken at The University of Sydney and Queensland University of Technology. </span></em></p>At the heart of Silicon Valley lies a powerful admiration for its ‘genius founders’ – but this comes at the cost of accountability.Joanne Gray, Lecturer in Digital Cultures at The University of Sydney, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2168942023-11-05T23:10:02Z2023-11-05T23:10:02ZA new Silicon Valley manifesto reveals the bleak, dangerous philosophy driving the tech industry<figure><img src="https://images.theconversation.com/files/557386/original/file-20231103-27-6s620e.jpg?ixlib=rb-1.1.0&rect=110%2C16%2C5402%2C3743&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/worms-eye-view-of-buildings-l5Tzv1alcps">Alex Wong/Unsplash</a></span></figcaption></figure><p>In 1993, Marc Andreessen was an undergraduate at the University of Illinois Urbana-Champaign, where he also worked at the US-government funded <a href="https://www.ncsa.illinois.edu/">National Center for Supercomputing Applications</a>. With a colleague, the young software engineer authored the <a href="https://www.ncsa.illinois.edu/research/project-highlights/ncsa-mosaic/">Mosaic web browser</a>, which set the standard for cruising the information superhighway in the 1990s. </p>
<p>Andreessen went on to cofound Netscape Communications, making a fortune in 1999 when the company was <a href="https://web.archive.org/web/20171107021707/http://news.morningstar.com/articlenet/article.aspx?id=741">acquired by AOL for US$4.3 billion</a>. </p>
<p>Since then, through his venture capital firm <a href="https://a16z.com/about/">Andreessen Horowitz</a>, the outspoken billionaire has become one of the most influential wallets in Silicon Valley. His investments – in companies including <a href="https://a16z.com/portfolio/">Facebook, Foursquare, Github, Lyft, Oculus and Twitter</a> – have definitively shaped tech over the past 15 years. (He once <a href="https://www.newyorker.com/magazine/2015/05/18/tomorrows-advance-man">described his approach</a> as “funding imperial, will-to-power people”.)</p>
<p>Because of all this, it’s worth paying attention to Andreessen’s recent “<a href="https://a16z.com/the-techno-optimist-manifesto/">techno-optimist manifesto</a>”. Opening with the claim that “we are being lied to”, the lengthy blog post takes in a section on “becoming technological supermen”, musings on the meaning of life, and a long list of enemies. It offers a revealing glimpse into the philosophy of Silicon Valley entrepreneurs, where more technology is the only way forward – and a warning about the kind of world they’re trying to build. </p>
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<h2>Tech utopia gone sour</h2>
<p>Since Silicon Valley’s birth in the 1960s, its promoters have held utopian ideas about technology, from the “<a href="https://press.uchicago.edu/Misc/Chicago/817415_chap4.html">new communalism</a>” of <a href="https://www.theguardian.com/books/2013/may/05/stewart-brand-whole-earth-catalog">Stewart Brand</a> to the <a href="https://techliberation.com/2009/08/12/cyber-libertarianism-the-case-for-real-internet-freedom/">cyber-libertarianism</a> of <a href="https://kk.org/">Kevin Kelly</a> and <a href="https://www.eff.org/cyberspace-independence">John Perry Barlow</a>. In the 1990s, supporters of this “<a href="https://www.metamute.org/editorial/articles/californian-ideology">Californian ideology</a>” saw the rise of the Internet as proof of the growing importance of technology (and the diminishing power of governments). </p>
<p>Andreessen’s essay shows what these ideals have become in 2023. The political and economic worldview beneath its ideas about technology is most visible towards the end of the manifesto, in a list of “enemies”. </p>
<p>Remarkably, these include “sustainability”, “trust and safety”, “tech ethics” and “social responsibility”. According to Andreessen, who describes himself as an “<a href="https://www.smh.com.au/technology/we-are-conquerors-why-silicon-valley-s-latest-fad-is-its-deadliest-20231027-p5efho.html">accelerationist</a>”, such ideas are holding back the advance of technology and therefore human progress.</p>
<p>Although the manifesto purports to believe in democracy, what Andreessen really argues for is a kind of technocracy based on “economic strength (financial power), cultural strength (soft power), and military strength”.</p>
<p>This is a vision of dominance. By proposing to abolish concern with ethics and the environment, for example, individuals like Andreessen can have free rein to develop, promote and profit from their inventions (including those <a href="https://www.washingtonpost.com/politics/2019/07/17/silicon-valley-portrays-itself-hotbed-free-market-enterprise-new-book-explains-how-government-helped-build-it/">funded by taxpayers</a>) without interference.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/557387/original/file-20231103-29-ca7aiz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A very large circular building with greenery around it viewed directly from above" src="https://images.theconversation.com/files/557387/original/file-20231103-29-ca7aiz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/557387/original/file-20231103-29-ca7aiz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=337&fit=crop&dpr=1 600w, https://images.theconversation.com/files/557387/original/file-20231103-29-ca7aiz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=337&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/557387/original/file-20231103-29-ca7aiz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=337&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/557387/original/file-20231103-29-ca7aiz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/557387/original/file-20231103-29-ca7aiz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/557387/original/file-20231103-29-ca7aiz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Bird’s-eye view of Apple Park in California’s Silicon Valley.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/silicon-valley-looking-down-aerial-view-2280061483">Faysal06/Shutterstock</a></span>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/silicon-valley-investors-want-to-create-a-new-city-is-california-forever-a-utopian-dream-or-just-smart-business-213062">Silicon Valley investors want to create a new city – is 'California Forever’ a utopian dream or just smart business?</a>
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<h2>A colonial vision</h2>
<p>We don’t have to look too deeply into history to find parallels to this kind of worldview. Simply put, it is the worldview of colonialism: it sees both nature and other people as domains to be conquered and exploited for “growth”. </p>
<p>Andreessen describes his mission in explicitly colonial terms: “mapping uncharted territory, conquering dragons, and bringing home the spoils for our community”. This is a worldview in which territories must be constantly expanded (“our descendants will live in the stars”) in a perpetual war for supremacy.</p>
<p>Technology has played an instrumental role in colonial conquest. Anthropologist Jared Diamond’s famous “<a href="http://www.jareddiamond.org/Jared_Diamond/Guns,_Germs,_and_Steel.html">guns, germs, and steel</a>” were all technologies vital to the European conquest of the Americas. We might add to this list ships (including slave ships), navigation instruments, telegraphs, and so on. </p>
<p>Even the technologies of the industrial revolution – so important to the narrative of technological progress imagined by Andreessen and his ilk – were enabled by the availability and exploitation of <a href="https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1752-5209.2009.00032.x">cheap labour and markets in the Global South</a>.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/colonialism-was-a-disaster-and-the-facts-prove-it-84496">Colonialism was a disaster and the facts prove it</a>
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<p>The mission of techno-optimists appears to be to pick up where the European and American empires of the 19th century left off, using technological, political and economic power to bully, coerce and bludgeon other societies into acquiescence.</p>
<p>For Andreessen, all this is supported, like colonialism, by a kind of <a href="https://www.princeton.edu/%7Etleonard/papers/myth.pdf">social Darwinism</a>. He sees an evolutionary war in which “smart people and smart societies outperform less smart ones on virtually every metric we can measure”. </p>
<p>Andreessen writes “technology doesn’t care about your ethnicity, race, religion, national origin, gender, sexuality, political views, height, weight, hair or lack thereof”. However, his talk of “America and her allies” and “our civilisation” suggests Andreessen himself cares quite a bit about these things. The West should, he implies, embrace its rightful place as the world’s technological (and civilisational) leader. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/557388/original/file-20231103-15-2sq5e0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Illustration of a fictional Mars colony of round domes on a red planet with mountains in the background" src="https://images.theconversation.com/files/557388/original/file-20231103-15-2sq5e0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/557388/original/file-20231103-15-2sq5e0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=320&fit=crop&dpr=1 600w, https://images.theconversation.com/files/557388/original/file-20231103-15-2sq5e0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=320&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/557388/original/file-20231103-15-2sq5e0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=320&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/557388/original/file-20231103-15-2sq5e0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=402&fit=crop&dpr=1 754w, https://images.theconversation.com/files/557388/original/file-20231103-15-2sq5e0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=402&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/557388/original/file-20231103-15-2sq5e0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=402&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Imaginary future colonies of people ‘living in the stars’ are reminiscent of a worldview where territories must constantly be expanded.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/colony-on-planet-mars-habitats-martian-2215202557">Dotted Yeti/Shutterstock</a></span>
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<h2>A warning</h2>
<p>All this reveals some of what Silicon Valley entrepreneurs really think of the rest of the world, and of us (non-techno-optimists). </p>
<p>We should take it as a warning about the kind of world that Silicon Valley technologists want. It will be a world built with technology, yes, but also a world that values power, force and wealth over all else.</p>
<p>Andreessen is right about one thing: we do need technology. We are unlikely to solve many of the problems facing our planet without it. </p>
<p>But the stripped-down, raw, blunt version of technology – a technology without ethics, without values, and without a conscience – is not the only way. Instead, we need to support technological innovation and at the same time support democratic participation, pluralism, ethics and our natural environment.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/is-it-wrong-to-steal-from-large-corporations-a-philosopher-debates-the-ethics-182193">Is it wrong to steal from large corporations? A philosopher debates the ethics</a>
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<img src="https://counter.theconversation.com/content/216894/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hallam Stevens has previously received funding from the Ministry for Education (Singapore) and the National Heritage Board (Singapore). </span></em></p>Venture capitalist billionaire Marc Andreessen dreams of ‘becoming technological supermen’ in a ‘techno-optimist’ manifesto built on a dark colonial vision.Hallam Stevens, Professor of Interdisciplinary Studies, James Cook UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2137272023-09-27T20:03:54Z2023-09-27T20:03:54ZCanadian media is far too reliant on U.S. tech. Here’s what the government can do about it<iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/canadian-media-is-far-too-reliant-on-us-tech-heres-what-the-government-can-do-about-it" width="100%" height="400"></iframe>
<p>American social media companies <a href="https://www.cp24.com/news/all-news-in-canada-will-be-removed-from-facebook-instagram-within-weeks-meta-1.6502474">blocking Canadian news</a> poses serious problems for Canadian media. Meta blocked Canadian news on its social media sites, Facebook and Instagram, in August in response to Canada’s Online News Act. Google has <a href="https://blog.google/intl/en-ca/company-news/outreach-initiatives/an-update-on-canadas-bill-c-18-and-our-search-and-news-products/">threatened to take similar action</a> when the law comes into effect at the end of the year. Outlets that rely on social media to reach their target audiences will likely struggle to get by. However, the problem also creates an opportunity to rethink communication funding in Canada.</p>
<p>Pablo Rodriguez, then Heritage Minister, was right when he said the <a href="https://laws-lois.justice.gc.ca/eng/acts/O-9.3/">Online News Act</a> is about correcting “<a href="https://www.theglobeandmail.com/politics/article-tech-companies-news-outlets-canada-google-facebook/">market imbalance</a>” between Canadian news outlets and Silicon Valley tech companies. Canadian news organizations should be compensated by the social media platforms for content.</p>
<p>Add this conundrum to the over-reliance on American telecommunications services, and the need to rethink funding Canadian communication is urgent.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/as-canadian-wildfires-rage-facebooks-news-ban-reveals-the-importance-of-radio-211966">As Canadian wildfires rage, Facebook's news ban reveals the importance of radio</a>
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</em>
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<p>However, there could be a silver lining in these dark clouds: public outrage may be enough to push the government to establish Canadian-centric media policies and a new funding model for emergency information and communication technology. A revolution in Canadian communication funding policy is not only possible, it is necessary.</p>
<h2>Trickle-down funding just doesn’t work</h2>
<p>U.S.-based companies like Google and Meta profit from Canadian content and Canadian audiences, while relatively small dollars trickle down into the pockets of a few Canadian businesses. The most obvious impacts of this dynamic are on <a href="https://montrealgazette.com/news/local-news/observers-worry-about-impact-of-metro-media-closure-on-local-democracy">local</a> media outlets that are forced to cut staff, or <a href="https://financialpost.com/telecom/bell-cutting-1300-positions-closing-selling-9-radio-stations">close altogether</a>, creating an <a href="https://www.thespec.com/opinion/contributors/news-deserts-why-the-decline-in-local-journalism-threatens-democracy/article_c5ab878b-7cd8-560f-83cb-0f0fb1fcaf2e.html">impoverished media landscape</a>.</p>
<p>Some outlets will no doubt suffer as a result of U.S. tech companies blocking Canadian news. Meanwhile, the few millions of dollars of ad revenue provided to Google and Facebook <a href="https://www.theglobeandmail.com/business/article-canadian-government-suspends-advertising-on-facebook-instagram/">withheld by Ottawa</a>, provincial governments and <a href="https://www.theglobeandmail.com/business/technology/article-telecom-and-media-firm-quebecor-to-pull-its-ads-from-facebook-and/">some Canadian media</a> will barely make a dent in the profits of the Silicon Valley behemoths.</p>
<p>This comes at a time when dwindling media revenues are posing risks to Canada’s emergency alert system, <a href="https://www.alertready.ca/">Alert Ready</a>. There has been a <a href="https://www.cbc.ca/news/canada/emergency-alerts-canada-extreme-weather-wildfires-evacuaiton-1.6943105">rise in the use of the system</a> due to floods, tornadoes and wildfires. Yet, Canadian authorities are sticking to a funding model that relies on dwindling cable TV subscribers.</p>
<p>Funding from commercial Canadian cable companies <a href="https://www.theglobeandmail.com/canada/article-emergency-alerts-crtc-funding/">trickles down</a> to fund the alert system. But customers are <a href="https://broadcastdialogue.com/one-in-five-english-speaking-canadians-has-cut-the-cord/">increasingly switching away</a> from cable TV for options like streaming.</p>
<p>According to the <a href="https://angusreid.org/netflix-streaming-canada-cord-cutting-tv-landlines/">Angus Reid Institute</a>, while a little over 88 per cent of Canadian households subscribed to cable in 2012, that number dropped to 61 per cent in 2022. </p>
<p>This fall could put funding for the emergency alert system in jeopardy. That is cause for concern, especially at a time when emergency situations like wildfires and floods are becoming more frequent and dangerous. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/549179/original/file-20230919-21-b7v0e3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A phone displaying an emergency alert message" src="https://images.theconversation.com/files/549179/original/file-20230919-21-b7v0e3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/549179/original/file-20230919-21-b7v0e3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/549179/original/file-20230919-21-b7v0e3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/549179/original/file-20230919-21-b7v0e3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/549179/original/file-20230919-21-b7v0e3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/549179/original/file-20230919-21-b7v0e3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/549179/original/file-20230919-21-b7v0e3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Funding for Canada’s emergency alert system comes from commercial Canadian cable companies, but viewers are increasingly switching away from cable.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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</figure>
<h2>Two lessons for Canadians</h2>
<p>In order to fix these problems, Canadians must bear in mind two lessons about how not to construct communication systems.</p>
<p><strong>Lesson one:</strong> Do not rely on American media and communication infrastructure to protect the interests of Canadians.</p>
<p>The first lesson should be obvious. Canada is far too reliant on communication infrastructure and media products from down south. I have written <a href="https://theconversation.com/canada-should-look-to-its-past-and-europe-for-guidance-on-media-policy-but-not-south-206251">previously</a> about the reliance on U.S. media. But, to be clear, the problem is not only the media content. </p>
<p><a href="https://ised-isde.canada.ca/site/ised/en/reliable-telecom-services/improving-reliability-and-resilience-canadas-digital-infrastructure">As Innovation, Science and Economic Development Canada reports</a>, “the bulk of Canadian consumer-to-consumer traffic and consumer-to-enterprise traffic is routed by Canada’s incumbents via the US (and US IXPs) rather than through Canada.”</p>
<p>Both Liberal and Conservative governments have not kept <a href="https://canadaehx.com/2022/06/04/the-birth-of-the-cbc-2/">former prime minister Richard Bennett’s 1932 promise</a> of “complete Canadian control of broadcasting from Canadian sources.”</p>
<p>Canada relies on U.S. private industry for routing Canadian traffic through the U.S. and <a href="https://news.microsoft.com/en-ca/2022/03/16/rogers-and-microsoft-announce-strategic-alliance-to-revolutionize-hybrid-workplace-communications-and-power-5g-innovation-across-canada-with-azure/">upgrading services</a>. That reliance on the U.S. is not difficult to understand: it’s cheaper. Ensuring safety and services to Canadians is not the priority. </p>
<p><strong>Lesson two:</strong> Do not rely on ever-changing elected leaders or ever-changing commercial communication services to provide stable support for media that serves the needs of all Canadians.</p>
<p>Funding for the CBC has <a href="https://frpc.net/broadcasting/forum-publishes-new-study-on-public-funding-of-cbcs-operations-from-1937-to-2019/">vacillated dramatically</a> over the years. A funding policy reliant on advertising dollars has left the CBC vulnerable to complaints about <a href="https://torontosun.com/news/cbc-for-free-an-ongoing-threat-to-the-canadian-media">competing unfairly</a> with commercial media and underfunded. </p>
<p>When it comes to funding, the CBC lags behind comparable media in other countries. A <a href="https://site-cbc.radio-canada.ca/documents/vision/strategy/latest-studies/Nordicity-analysis-of-government-support-for-public-service-broadcasting-april-2020.pdf">2018 report</a> prepared for the CBC comparing public funding for public service media showed that at $33 per capita, Canadian public service media funding ranked 17 out of 20 western countries. </p>
<p>Research by the <a href="https://www.ebu.ch/files/live/sites/ebu/files/Publications/EBU-Viewpoint-PSM-Funding_EN.pdf">European Broadcasting Union</a> suggests the single most important factor determining public service media audience share is adequate financing. And having <a href="https://www.mdif.org/">financial independence</a> is key to gaining public trust.</p>
<p>Trust in media is vital to get the public to respond effectively to emergencies. Statistics Canada <a href="https://www.statcan.gc.ca/o1/en/plus/3738-are-canadians-prepared-next-natural-disaster-or-weather-related-emergency">reports that Canadians are not prepared</a> for the next pandemic, flood or wildfire. The CBC is insufficiently funded to provide effective emergency communication, including providing trusted information and coordinating effectively with Alert Ready.</p>
<h2>An independent and well-funded media</h2>
<p>Canadian media and telecommunications services must not be dependent on either U.S. or Canadian commercial interests or Canadian politicians. Canada should establish a non-government trust funded (but not controlled) by both commercial operations and Canadian governments.</p>
<p>The trust could be funded, in part, by a <a href="https://www.gov.uk/find-licences/tv-licence">British-style licence fee</a>. In 2022, the BBC saw an <a href="https://www.statista.com/statistics/284705/the-bbc-s-licence-fee-income-in-the-united-kingdom-uk/">income</a> of around 3.8 billion British pounds from licence fees. In 2023, the licence fee was £159 per year (around $260).</p>
<p>Establishing a similar arrangement could potentially provide far more than the $1.2 billion the government <a href="https://site-cbc.radio-canada.ca/documents/impact-and-accountability/finances/2022/consolidated-financial-statements-2022-2022.pdf">spent</a> on the CBC in 2022.</p>
<p>Canadian public service media and telecommunications service could also derive revenue to invest in a communication trust from spectrum licence fees and fees generated by foreign use of Canadian content and data.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/549180/original/file-20230919-23-3v9y10.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A tablet displaying a news page placed on top of a stack of newspapers" src="https://images.theconversation.com/files/549180/original/file-20230919-23-3v9y10.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/549180/original/file-20230919-23-3v9y10.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/549180/original/file-20230919-23-3v9y10.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/549180/original/file-20230919-23-3v9y10.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/549180/original/file-20230919-23-3v9y10.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/549180/original/file-20230919-23-3v9y10.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/549180/original/file-20230919-23-3v9y10.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Canadian news must be well-funded and delivered in a variety of ways.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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</figure>
<p>A robust, reformed Canadian public service multi-platform communication service is more than feasible. Canadian public service media should be required to provide services beyond the broadcasting technology of the 20th century. Video, audio and text should be made available via a Canadian social media platform, local electronic billboards and other platforms. </p>
<p>An integrated, interactive emergency communications system with a focus on service to local communities would begin to address current needs with the latest technologies.</p>
<p>The old promises of the CBC have <a href="https://www.cbc.ca/news/canada/sudbury/metis-nation-ontario-land-rights-1.6224140">not been met</a>, and <a href="https://ised-isde.canada.ca/site/broadcasting-telecommunications-legislative-review/en/canadas-communications-future-time-act">warnings about reforming Canadian media</a> have been largely ignored. The damage to Canadian media caused by social media extortion and the loss of cable TV revenue makes it clear that the time for piecemeal reform has passed.</p><img src="https://counter.theconversation.com/content/213727/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark Lloyd does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Meta’s blocking of Canadian news reveals how reliant Canada’s media industry is on the U.S. The government must create a better funding model to provide support for Canadian media.Mark Lloyd, Associate Professor, Communication Studies, McGill UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2130622023-09-07T19:47:26Z2023-09-07T19:47:26ZSilicon Valley investors want to create a new city – is ‘California Forever’ a utopian dream or just smart business?<p>He was, said George Bernard Shaw, “one of those heroic simpletons who do big things whilst our prominent worldlings are explaining why they are Utopian and impossible”.</p>
<p>The celebrated playwright was referring to the ideas of Ebenezer Howard, the creative force behind the idea of “<a href="https://www.archdaily.com/961275/what-are-garden-cities">garden cities</a>” in the late 19th and early 20th centuries; new urban centres that Howard argued would have the best of town and country, but without the problems.</p>
<p>There’s a reminder of that somewhat backhanded compliment in the recent news of a Silicon Valley consortium named Flannery Associates buying land with a view to <a href="https://www.theguardian.com/technology/2023/sep/02/silicon-valley-elites-utopian-city-california">creating a new city</a> in northern California’s Solano County. The controversial project is named after the investment vehicle’s parent company, <a href="https://californiaforever.com/">California Forever</a>.</p>
<p>The parallels between contemporary utopian thinking and Howard’s ideas from more than a century ago are readily apparent. The notion of something like California Forever may appear cutting edge, but it is part of the historical foundations of current planning systems.</p>
<p>Indeed, the science-fiction writer <a href="https://campuspress.yale.edu/modernismlab/h-g-wells/">H.G. Wells</a> – a futurist whose own ideas would resonate with many in Silicon Valley – was so attracted to Howard’s ideas that he joined the Garden City Association to support their creation.</p>
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<h2>Garden city visions</h2>
<p>Any kind of new city model tends to reflect the politics of its founders. The vision and plans stretch beyond the built form to picture a preferred lifestyle, and interactions with nature and each other.</p>
<p>The artist’s renderings accompanying the California Forever project depict an attractive, harmonious landscape familiar to utopian thinking: plentiful parks, open spaces and sustainable energy.</p>
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Read more:
<a href="https://theconversation.com/what-is-a-garden-city-and-why-is-money-being-spent-on-building-them-44610">What is a garden city – and why is money being spent on building them?</a>
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<p>It encapsulates a politics of urban living that also emphasises the need to recast our relationships with nature. As such, these ideas also involve a large dose of social engineering. They are not just about creating a new built environment, they envision a new kind of society that’s better than the current one.</p>
<p>But the garden cities that were eventually developed were a far cry from Howard’s initial vision. In fact, his ideas from over a hundred years ago make those from Silicon Valley look distinctly dated.</p>
<p>For Howard, it was as much about social reform and organisation as city planning. He advocated for local production and relatively self-contained settlements to reduce the need to travel, as well as innovative ways of treating waste that echo current circular economy thinking.</p>
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<h2>Planning and profit</h2>
<p>Even less like the investment logic behind California Forever, Howard also imagined a city that could challenge some of the precepts of capitalism. </p>
<p>Given the significant deprivation and social divide between haves and have-nots, he advocated that land in garden cities could be organised cooperatively to share wealth and reduce poverty.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/how-should-we-design-cities-to-make-the-most-of-urban-ecosystems-47221">How should we design cities to make the most of urban ecosystems?</a>
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<p>The need to attract investors was one of the reasons Howard’s ambitious politics eroded. To purchase land on that scale requires significant capital, and the providers of that capital would no doubt be looking for a return.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/546792/original/file-20230907-15-p2s1z1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/546792/original/file-20230907-15-p2s1z1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/546792/original/file-20230907-15-p2s1z1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=775&fit=crop&dpr=1 600w, https://images.theconversation.com/files/546792/original/file-20230907-15-p2s1z1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=775&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/546792/original/file-20230907-15-p2s1z1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=775&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/546792/original/file-20230907-15-p2s1z1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=975&fit=crop&dpr=1 754w, https://images.theconversation.com/files/546792/original/file-20230907-15-p2s1z1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=975&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/546792/original/file-20230907-15-p2s1z1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=975&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Ebenezer Howard.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Ebenezer_Howard.jpg">Wikimedia Commons</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
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<p>Should California Forever materialise, history would caution us that there may be a similar gap between rhetoric and reality. While Howard’s ideas were partially implemented in places like <a href="https://www.letchworth.com/">Letchworth</a>, the focus was more on the built environment than social justice or sustainability. </p>
<p>Howard moved into the new city, but his influence was marginalised by the need to accommodate shareholder interests. </p>
<p>While we don’t know how California Forever has been pitched to investors, it’s a fair assumption it is also shaped by the profit motive: buying cheaper agricultural land, rezoning for housing and development, drawing in state funding for infrastructure, and seeing the land rise in value.</p>
<p>While the images appear sustainable, long-distance commuting may be a problem given the nature of the labour market in California, as might expectations of genuine community involvement in the project. Utopian schemes have long been critiqued for their tendency towards authoritarianism – a <a href="https://www.ineteconomics.org/perspectives/blog/is-silicon-valley-nudging-us-towards-an-authoritarian-future">charge not unfamiliar</a> to the tech sector in recent times.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/how-do-we-get-urban-density-just-right-the-goldilocks-quest-for-the-missing-middle-211208">How do we get urban density 'just right'? The Goldilocks quest for the 'missing middle'</a>
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<p>Howard’s ideas were also criticised as anti-urban. Shouldn’t we seek to improve existing cities rather than abandon and start anew, possibly to create a gentrified enclave?</p>
<p>For the tech sector, too, there is a recurring utopian trend that seeks to escape – whether to <a href="https://futurism.com/elon-musk-moon-base-spacex">moon colonies</a> or new cities – rather than use its vast wealth and influence to address current urban problems.</p>
<h2>Progress and planning</h2>
<p>But, ultimately, it’s encouraging to see groups like the Silicon Valley investors advocate for the benefits of good urban planning and what it can provide future generations. The bigger problem is that current planning systems aren’t anything like as progressive.</p>
<p>In many countries, similarly powerful investors routinely criticise urban planning as creating “red tape”, increasing the costs of development, or stopping markets from acting “efficiently”.</p>
<p>Yet the kind of city building represented by California Forever requires greater regulatory power and the kind of political ambition that was more common a century ago. And it raises the question of whether projects like this should be left to the private sector.</p>
<p>At the very least, perhaps, such initiatives provide an opportunity to reassess the potential of urban planning and cast a light on current societal problems. Howard’s utopian vision was designed to solve the problems of his time: exploitative landlords, slums, polluted cities and extreme disparities of wealth. </p>
<p>Whether or not California Forever is built, the reasons behind the idea demonstrate that while history may not repeat, it does sometimes rhyme.</p><img src="https://counter.theconversation.com/content/213062/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Iain White receives funding from the National Science Challenge: Resilience to Nature’s Challenges – Kia manawaroa – Ngā Ākina o Te Ao Tūroa. He also receives funding from the Ministry of Business, Innovation and Employment's Endeavour Fund to research issues connected to flood risk mapping and better decision making, and from Toka Tū Ake Natural Hazards Commission to research how to better incorporate risk into future settlement planning.</span></em></p>A controversial new city project in northern California has echoes of past utopian plans – but idealism and commercial reality have always been uneasy partners.Iain White, Professor of Environmental Planning, University of WaikatoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2038322023-08-07T12:40:44Z2023-08-07T12:40:44ZWhat’s the difference between a startup and any other business?<figure><img src="https://images.theconversation.com/files/536333/original/file-20230707-19-h3ttvo.jpg?ixlib=rb-1.1.0&rect=0%2C45%2C5089%2C2743&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Between 2012 and 2021, funding to U.S. tech startups jumped to $344 billion.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/diverse-team-of-professional-businesspeople-meeting-royalty-free-image/1363104989?phrase=start+ups&adppopup=true">gorodenkoff/iStock via Getty Images</a></span></figcaption></figure><figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/281719/original/file-20190628-76743-26slbc.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/281719/original/file-20190628-76743-26slbc.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=293&fit=crop&dpr=1 600w, https://images.theconversation.com/files/281719/original/file-20190628-76743-26slbc.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=293&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/281719/original/file-20190628-76743-26slbc.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=293&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/281719/original/file-20190628-76743-26slbc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=368&fit=crop&dpr=1 754w, https://images.theconversation.com/files/281719/original/file-20190628-76743-26slbc.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=368&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/281719/original/file-20190628-76743-26slbc.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=368&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><em><a href="https://theconversation.com/us/topics/curious-kids-us-74795">Curious Kids</a> is a series for children of all ages. If you have a question you’d like an expert to answer, send it to <a href="mailto:curiouskidsus@theconversation.com">curiouskidsus@theconversation.com</a>.</em></p>
<hr>
<blockquote>
<p><strong>What’s the difference between a startup and a business, and is one better than the other? – Aditya, age 16, Ranchi, Jharkhand, India</strong></p>
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<p>All startups are businesses, but not every business is a startup.</p>
<p>Nearly <a href="https://www.uschamber.com/small-business/new-business-applications-a-state-by-state-view">100,000 new businesses</a> were formed each week in the United States in 2022. But what sets a startup apart? </p>
<p>As a professor of marketing and innovation who has worked at several startups, including Netflix in its early days, I can share some of the differences between a startup and a more traditional business.</p>
<h2>Startups are inventing something new</h2>
<p>A traditional business generally has an established solution to a known problem and has not developed anything particularly new. </p>
<p>For example, a new sushi restaurant in your neighborhood may be a new business, but it is by no means a startup. However, if a new local company had developed a device that automated sushi-making and tried to get sushi restaurants to try it, that would be a startup. The restaurant is simply trying to satisfy the neighborhood’s needs for sushi, whereas the device company is trying to change all sushi restaurants with its new method.</p>
<p>A startup is centered on an innovation that has never been brought to market before. This could be a product or service, a technology, a process, a brand, or even a new business model. Generally, they have big industry-changing goals about disrupting the market leader or current customer behavior. </p>
<p>Think Uber, an inventive startup that originally operated in San Francisco. It built off the time-tested taxi model – a business – and created a unique ride-sharing app that had never existed previously.</p>
<h2>The goals of startups</h2>
<p>Regardless of their product and location, the main focus of a startup is to figure out if there is a need for their product. </p>
<p>Startups are trying to find and optimize a <a href="https://www.coursera.org/articles/target-market">target market</a> for their new solution. Who would value and buy what they have developed? Startups often think they have a good picture of who would like what they are building, but they’re not always right. </p>
<p>For example, I headed marketing nearly a decade ago at relationship-focused tech startup <a href="https://techcrunch.com/2019/02/27/compass-acquires-contactually-a-crm-provider-to-the-real-estate-industry/">Contactually</a>. When Contactually began to promote its services, it aimed for small businesses in several industries, thinking that the product met needs equally across all of them. But subsequently we found out that our offering worked particularly well for real estate agents and brokers, and we started to put all efforts into meeting this group’s needs exclusively.</p>
<p>Part of identifying a target market is establishing a <a href="https://en.wikipedia.org/wiki/Product/market_fit">product/market fit</a> – the degree to which the innovation satisfies a market need. Startups know they may be on to something when customers from the target market purchase the new solution and are willing to share their positive experiences with others. </p>
<p>Once a startup has passed those stages, it <a href="https://www.investopedia.com/terms/s/scalability.asp">will try to scale</a>. This means successfully growing the startup so that it’s not limited by funding or staff. For example, once <a href="https://backlinko.com/netflix-users">Netflix launched its streaming platform</a> in 2010, it was able to scale around the globe in an easier and faster manner than if it had stayed with its original DVD-by-mail business model.</p>
<p>Finally, to accomplish the things that would enable it to scale, startups are generally focused on <a href="https://doi.org/10.1007/s13162-021-00197-w">spending time with and learning from their customers</a>. Once they reach a specific size, most businesses focus less on customer learning and more on making the company more efficient. </p>
<figure class="align-center ">
<img alt="A team works together in an office." src="https://images.theconversation.com/files/536329/original/file-20230707-17-lxpvfg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/536329/original/file-20230707-17-lxpvfg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/536329/original/file-20230707-17-lxpvfg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/536329/original/file-20230707-17-lxpvfg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/536329/original/file-20230707-17-lxpvfg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/536329/original/file-20230707-17-lxpvfg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/536329/original/file-20230707-17-lxpvfg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Research shows around 90% of startups will fail, while thousands begin each week.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/team-of-professionals-work-on-a-project-royalty-free-image/586970675?phrase=start+ups&adppopup=true">Kelvin Murray/Stone via Getty Images</a></span>
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</figure>
<h2>Transitioning into an established business</h2>
<p>Amazon, Netflix, Uber and Airbnb are global powerhouses that began as startups. Successfully growing a startup into a prosperous company is extremely hard. Industry data suggests that <a href="https://www.forbes.com/sites/neilpatel/2015/01/16/90-of-startups-will-fail-heres-what-you-need-to-know-about-the-10/">90% of startups will fail</a>.</p>
<p>Once established within their market, traditional businesses find themselves with a different challenge: <a href="https://sloanreview.mit.edu/article/the-hard-truth-about-business-model-innovation/">running more efficiently</a>. </p>
<p>Startups may be able to rely on funding from different kinds of outside investors while they gain their footing. But an established business needs to run smoothly to make a profit from what it’s selling.</p>
<p>Non-startup companies need to figure out how to manage workers better and run the business in a way that solves the customers’ problems while enabling the company to meet all of its goals. </p>
<p>For a non-startup business, specific goals could be how much money or profit the firm makes, how and where to expand to grow more or faster, how much time it takes to create a product, or how to make more products with the same or fewer resources.</p>
<p>While the focus of a startup is to determine if there is a demand for a new and innovative product, the primary goal of a traditional business is to create an efficient operation that can last far into the future. </p>
<p>With luck, a successful startup, like Uber or Netflix, will scale and grow, eventually evolving into a traditional business – one that some future startup may try to disrupt with a brand-new idea.</p>
<hr>
<p><em>Hello, curious kids! Do you have a question you’d like an expert to answer? Ask an adult to send your question to <a href="mailto:curiouskidsus@theconversation.com">CuriousKidsUS@theconversation.com</a>. Please tell us your name, age and the city where you live.</em></p>
<p><em>And since curiosity has no age limit – adults, let us know what you’re wondering, too. We won’t be able to answer every question, but we will do our best.</em></p><img src="https://counter.theconversation.com/content/203832/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Daughter works for Maven Clinic after working for CNBC and Morning Brew</span></em></p>Traditional businesses operate with an established solution to a known problem. Startups focus on a product or service no one else provides.Joel Mier, Lecturer of Marketing, University of RichmondLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2088102023-07-05T20:43:15Z2023-07-05T20:43:15ZCanada’s new Tech Talent Strategy aims to attract workers from around the world<figure><img src="https://images.theconversation.com/files/535912/original/file-20230705-9428-vloj9y.JPG?ixlib=rb-1.1.0&rect=21%2C31%2C7077%2C4693&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">An attendee interacts with a stall at the Collision tech conference in Toronto on June 28, 2023. Immigration Minister Sean Fraser announced a new tech talent recruitment strategy at the conference.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Chris Young</span></span></figcaption></figure><p>The Canadian government <a href="https://www.canada.ca/en/immigration-refugees-citizenship/news/2023/06/minister-fraser-launches-canadas-first-ever-tech-talent-strategy-at-collision-2023.html">has announced a new strategy to entice tech workers</a> from around the globe to work in Canada. The Tech Talent Strategy was announced by Immigration Minister Sean Fraser at the Collision technology conference in Toronto on June 27.</p>
<p>The new strategy is embedded within the broader <a href="https://www.canada.ca/en/immigration-refugees-citizenship/services/work-canada/hire-temporary-foreign/global-skills-strategy.html">Global Skills Strategy</a> program that helps businesses hire skilled workers from around the world.</p>
<p>The Tech Talent Strategy is built on several key pillars, including creating a work permit stream for U.S. <a href="https://www.dol.gov/agencies/whd/immigration/h1b">H-1B visa holders</a> to work in Canada, expanding the <a href="https://www.canada.ca/en/immigration-refugees-citizenship/services/work-canada/hire-temporary-foreign/international-mobility-program.html">International Mobility Program</a>, promoting Canada as a destination for “<a href="https://www.cbc.ca/news/business/canada-digital-nomads-strategy-talent-economy-1.6893150">digital nomads</a>” and improving the <a href="https://www.canada.ca/en/immigration-refugees-citizenship/services/immigrate-canada/start-visa.html">Start-up Visa Program</a>. </p>
<p>These pillars are designed to ensure that Canada is not only filling in-demand jobs, but also attracting the talent necessary to create the jobs of tomorrow.</p>
<p>However, despite the commendable vision, it’s crucial to acknowledge the challenges that could impede the Tech Talent Strategy’s success.</p>
<h2>New visa work permit</h2>
<p>As part of the new strategy, the federal government will open a work permit stream for American H-1B visa holders to work in Canada. The H-1B visa program allows U.S. companies to employ foreign workers in specialized occupations. </p>
<p>The H-1B visa acts as a powerful magnet for tech professionals, who are enticed by the opportunities and salaries afforded by the U.S. tech industry.</p>
<p>This part of the strategy prompts a critical question: Can Canada really compete with the U.S. in the tech realm? </p>
<figure class="align-center ">
<img alt="People enter a doorway before a U.S. Citizen and Immigration Services sign" src="https://images.theconversation.com/files/535061/original/file-20230630-14361-hdqwzk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/535061/original/file-20230630-14361-hdqwzk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/535061/original/file-20230630-14361-hdqwzk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/535061/original/file-20230630-14361-hdqwzk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/535061/original/file-20230630-14361-hdqwzk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/535061/original/file-20230630-14361-hdqwzk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/535061/original/file-20230630-14361-hdqwzk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The H-1B visa program allows U.S. companies to employ foreign workers in specialized occupations.</span>
<span class="attribution"><span class="source">(AP Photo/Wilfredo Lee)</span></span>
</figcaption>
</figure>
<p>The U.S. tech industry is famed for its high salaries, making the financial aspect a significant consideration for H-1B recipients contemplating a move to Canada.</p>
<h2>Canada versus U.S. tech firms</h2>
<p><a href="https://www.levels.fyi/2022/">A 2022 tech industry salary report</a> found that entry-level engineers at top companies in New York and San Francisco earned around US$274,000 and US$266,000 respectively. While Canada’s tech industry is growing rapidly, it still has some way to go to match these salary levels.</p>
<p>Additionally, the disparity in scale between the tech industries in Canada and the U.S. presents another significant hurdle. The Canadian tech sector is still overshadowed by the size and influence of its American counterpart.</p>
<p>Shopify, one of the largest tech companies in Canada, is still significantly smaller than U.S. tech giants like <a href="https://www.macrotrends.net/stocks/charts/AAPL/apple/market-cap">Apple</a>, <a href="https://www.macrotrends.net/stocks/charts/MSFT/microsoft/market-cap">Microsoft</a> and <a href="https://www.macrotrends.net/stocks/charts/AMZN/amazon/market-cap">Amazon</a> that all have market caps surpassing US$1 trillion. In comparison, Shopify’s market cap is only C$193.6 billion.</p>
<p>Canadian tech firms also face challenges when it comes to scaling up their operations to compete with U.S. firms. These challenges include finding and retaining talent, managing cash flow, maintaining a consistent company culture and dealing with increased competition.</p>
<p>Because Canadian tech firms often face challenges in scaling up due to a lack of capital-rich markets, they <a href="https://narwhalproject.org/wp-content/uploads/2019/04/The-Class-of-2008.pdf">often move to the U.S. to access its tech sector infrastructure</a>.</p>
<p>The stark differences in scale between Canadian and U.S. tech firms could affect the effectiveness and appeal of Canada’s Tech Talent Strategy.</p>
<h2>Local impacts</h2>
<p>Another potential pitfall lies in the strategy’s local impacts. Encouraging an influx of foreign workers in a highly competitive industry like tech could inadvertently sideline local talent. Striking a balance between the interests of foreign tech professionals and local workers is paramount.</p>
<p>In addition, Canada’s <a href="https://theconversation.com/how-canada-plans-to-break-records-with-its-new-refugee-targets-193880">ambitious goal of admitting 500,000 immigrants a year by 2025</a> adds another layer of complexity to these challenges. </p>
<p>This immigration target could strain the local job market, especially in the tech sector. The Tech Talent Strategy must ensure it complements, rather than competes with, the development of local talent to create a harmonious tech ecosystem that benefits all.</p>
<p>Substantial infrastructure and resources are needed to sustain such an increase. Careful planning and investments are needed. </p>
<h2>Proceed with caution</h2>
<p>While Canada’s Tech Talent Strategy marks a promising development, it is far from a smooth ride. The success of this ambitious project hinges on numerous factors, including attracting H-1B visa holders, fulfilling immigration targets and balancing the needs of foreign and local workers. </p>
<p>This complex endeavour demands careful, strategic planning and execution. To ensure the strategy’s success, Canada needs to nurture more homegrown tech companies, restructure the industry’s scale, improve access to funding for tech firms and invest in local tech talent education.</p>
<p>With these strategies in place, Canada can genuinely foster a balanced tech ecosystem characterized by a diverse mix of small, medium and large companies, a network of tech-savvy investors and a system that balances immigration and local talent development.</p>
<p>It will be fascinating to see how the strategy evolves and the ensuing impact on Canada’s tech industry and the broader economy.</p><img src="https://counter.theconversation.com/content/208810/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Garros Gong does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Canada’s Tech Talent Strategy aims to draw global tech talent to the country, but faces hurdles like U.S. salary competition and high living costs.Garros Gong, Ph.D. Student in Management Science, University of WaterlooLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2019322023-03-16T20:36:02Z2023-03-16T20:36:02ZSilicon Valley Bank’s failure: Could something similar happen in Canada?<figure><img src="https://images.theconversation.com/files/515913/original/file-20230316-20-l7tgno.jpg?ixlib=rb-1.1.0&rect=155%2C133%2C4591%2C3117&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The U.S. Federal Deposit Insurance Corporation seized the assets of Silicon Valley Bank on March 10, 2023, marking the largest bank failure since Washington Mutual during the height of the 2008 financial crisis. </span> <span class="attribution"><span class="source">(AP Photo/Jeff Chiu)</span></span></figcaption></figure><p>American business magnate Warren Buffett <a href="https://buffett.cnbc.com/video/1994/04/25/1994-berkshire-hathaway-annual-meeting-highlights.html">once famously observed</a>: “You don’t find out who has been swimming naked until the tide goes out.” </p>
<p>Silicon Valley Bank was exposed last week by rising interest rates, leading to an old-fashioned bank run — where the bank’s customers rush to withdraw their money all at once.</p>
<p>The failure of the <a href="https://www.cbc.ca/news/business/silicon-valley-bank-failure-1.6775730">16th-largest bank in the U.S.</a> highlights the vulnerability of its niche business model in the digital age. </p>
<p>Could something similar happen in Canada? For the largest Canadian banks, the answer is no. But for smaller, niche financial service firms, recent history suggests they should not be complacent.</p>
<h2>A vulnerable business model</h2>
<p>The first step to assessing any vulnerability in Canada is understanding why Silicon Valley Bank failed. </p>
<p>Silicon Valley Bank ran a risky business. It used <a href="https://ir.svb.com/financials/annual-reports-and-proxies/default.aspx">short-term cash deposits from technology clients</a> to buy longer maturity U.S. mortgage bonds. This maturity mismatch may be profitable in good times, but can wipe out an investor in bad times. </p>
<p>The rise in interest rates over the past year <a href="https://www.nytimes.com/2023/03/10/business/silicon-valley-bank-stock.html">resulted in US$2 billion of losses</a> on Silicon Valley Bank’s bonds. Facing a potential credit downgrade, the bank tried but failed to raise equity to shore up its balance sheet. </p>
<p>When this news spread over social media, it led to <a href="https://www.wsj.com/video/series/wonder-land-henninger/wsj-opinion-was-svb-the-first-twitter-fueled-bank-run/76F43147-EE59-4969-9799-CD97BB8CDB88">rapid online withdrawals of deposits</a> that drained Silicon Valley Bank’s cash reserves. U.S. regulators seized the bank to stop the bank run. </p>
<h2>Short-term deposits fund long-term bonds</h2>
<p>Silicon Valley Bank’s vulnerability can be seen by comparing its balance sheet to its peers. At the end of 2022, Silicon Valley Bank depended on short-term customer deposits to finance more than 80 per cent of its US$212 billion in assets. </p>
<figure class="align-center ">
<img alt="A bar graph that compares Silicon Valley Bank's funding with the funding of its five closest peers, the biggest four U.S. banks and the biggest five Canadian banks.
" src="https://images.theconversation.com/files/515903/original/file-20230316-18-qj9ati.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/515903/original/file-20230316-18-qj9ati.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=436&fit=crop&dpr=1 600w, https://images.theconversation.com/files/515903/original/file-20230316-18-qj9ati.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=436&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/515903/original/file-20230316-18-qj9ati.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=436&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/515903/original/file-20230316-18-qj9ati.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=548&fit=crop&dpr=1 754w, https://images.theconversation.com/files/515903/original/file-20230316-18-qj9ati.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=548&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/515903/original/file-20230316-18-qj9ati.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=548&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Silicon Valley Bank funding compared to the funding of peers in the U.S. and Canada.</span>
<span class="attribution"><span class="source">(Michael R. King)</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The five closest regional banks — Capital One Financial, First Republic Bank, KeyCorp, M&T Bank and U.S. Bancorp — had a similar share of assets. But the <a href="https://www.statista.com/statistics/799197/largest-banks-by-assets-usa">Big Four U.S. banks</a> — JPMorgan Chase, Bank of America, Citigroup and Wells Fargo — had more diversified funding. </p>
<p>Silicon Valley Bank invested this cash in mortgage bonds and other securities, representing 60 per cent of its assets. Silicon Valley Bank’s figure was almost three times higher than its closest peers, and more than double the U.S. Big Four. </p>
<figure class="align-center ">
<img alt="A bar graph that compares Silicon Valley Bank's assets with the assets of its five closest peers, the biggest four U.S. banks and the biggest five Canadian banks.
" src="https://images.theconversation.com/files/515906/original/file-20230316-28-l4630k.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/515906/original/file-20230316-28-l4630k.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=436&fit=crop&dpr=1 600w, https://images.theconversation.com/files/515906/original/file-20230316-28-l4630k.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=436&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/515906/original/file-20230316-28-l4630k.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=436&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/515906/original/file-20230316-28-l4630k.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=548&fit=crop&dpr=1 754w, https://images.theconversation.com/files/515906/original/file-20230316-28-l4630k.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=548&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/515906/original/file-20230316-28-l4630k.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=548&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Silicon Valley Bank assets compared to the assets of peers in the U.S. and Canada.</span>
<span class="attribution"><span class="source">(Michael R. King)</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>To offset this risk, Silicon Valley Bank held more cash than its closest peers at six per cent of assets. But when the bank run started, the fire sale of bonds at a loss was not enough to offset the electronic withdrawal of deposits.</p>
<h2>How safe are Canadian banks?</h2>
<p>Could a similar bank run happen north of the border? The answer for Canada’s largest banks is no. </p>
<p><a href="https://www.investopedia.com/terms/b/bigfivebanks.asp">Canada’s Big Five banks</a> — Royal Bank, TD Bank, Scotiabank, the Bank of Montreal and CIBC — remain among the safest in the world. They are <a href="https://cba.ca/CBA-Statement-on-resiliency-of-Canadas-banking-system">large, diversified and well capitalized</a>. They have experienced leadership and are closely monitored by a respected banking supervisor.</p>
<p>Canada’s Big Five have nearly identical funding profiles to the Big Four U.S. banks. The Big Five’s larger share of loans makes them arguably safer, as <a href="https://www.cmhc-schl.gc.ca/en/consumers/home-buying/mortgage-loan-insurance-for-consumers/faqs-mortgage-loan-insurance">most Canadian mortgages are insured by the Canada Mortgage and Housing Corporation</a>.</p>
<p><a href="https://cdn.theconversation.com/static_files/files/2557/230315_SVB_vs_comps_Share_Prices.xlsx?1678994757">Financial markets agree with this assessment.</a> As of yesterday, the share prices of Canada’s Big Five were down 16 per cent on average over the past 52 weeks, similar to the 13 per cent drop for the Big Four U.S. banks. </p>
<p>By contrast, Silicon Valley Bank’s share price was down 80 per cent before trading halted last Friday. And Silicon Valley Bank’s five closest peers were down 40 per cent on average.</p>
<h2>Innovation increases risk</h2>
<p>This analysis does not imply there are no vulnerable players in Canada’s financial system. Silicon Valley Bank demonstrates that innovative, niche business models are more vulnerable. </p>
<figure class="align-center ">
<img alt="An FDIC sign that says 'Each depositor insured to at least $250,000' posted in a window" src="https://images.theconversation.com/files/515914/original/file-20230316-24-a53d3n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/515914/original/file-20230316-24-a53d3n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/515914/original/file-20230316-24-a53d3n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/515914/original/file-20230316-24-a53d3n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/515914/original/file-20230316-24-a53d3n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/515914/original/file-20230316-24-a53d3n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/515914/original/file-20230316-24-a53d3n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">An FDIC sign is posted on a window at a Silicon Valley Bank branch in Wellesley, Mass., on March 11, 2023.</span>
<span class="attribution"><span class="source">(AP Photo/Peter Morgan)</span></span>
</figcaption>
</figure>
<p>This pattern fits the history of bank runs. The U.K. had not experienced a bank run in 140 years until <a href="https://www.bis.org/publ/shin_2009.pdf">the 2007 demise of Northern Rock</a>. This niche lender relied on short-term funding from other banks to finance long-term mortgages. This mismatch brought down the lender when interbank markets froze at the start of the <a href="https://www.britannica.com/event/financial-crisis-of-2007-2008">2007-08 global financial crisis</a>.</p>
<p>Canada <a href="https://www.theglobeandmail.com/report-on-business/home-capital-saga-real-estate/article34972594/">had a partial bank run in 2017</a>. Home Capital Group was a niche lender that offered uninsured mortgages to less creditworthy Canadians. This risky business was funded by high interest savings accounts and other deposits. When Home Capital’s depositors lost confidence, the partial bank run was only halted when a group of Canadian institutional investors threw Home Capital a $2 billion lifeline. </p>
<h2>Three pillars underpin trust</h2>
<p>These bank runs are a reminder that trust in banking is built on three pillars: risk management, deposit insurance and banking supervision. </p>
<p>All banks use leverage, making risk management a key success factor. Canada’s largest banks have demonstrated this ability over many decades, most recently during the global financial crisis. </p>
<p>Eligible deposits in Canada are <a href="https://www.cdic.ca/your-coverage/how-deposit-insurance-works/">insured by the Canada Deposit Insurance Corporation</a>, a Crown corporation that insures up to $100,000 per account held at member institutions.</p>
<p>Federal financial institutions are <a href="https://www.osfi-bsif.gc.ca/Eng/osfi-bsif/Pages/default.aspx">supervised by the Office of the Superintendent of Financial Institutions</a>, which monitors capital levels and risk taking. </p>
<p>These three pillars are being tested <a href="https://theconversation.com/silicon-valley-bank-how-interest-rates-helped-trigger-its-collapse-and-what-central-bankers-should-do-next-201697">as rising interest rates expose weaknesses</a> in the global financial system. A decade of cheap money has fuelled many innovations and niche business models.</p>
<p>With an economic slowdown underway, more failures in the global financial system are bound to happen.</p><img src="https://counter.theconversation.com/content/201932/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael R. King has consulted for banks (RBC, TD), regulators (BCSC, OSC, CDIC, Bank of Canada, BIS), institutional investors (BCI), government bodies (BDC, ISED, ECCC), entrepreneurs, and industry associations. He owns shares in Canadian and US banks. He has received research funding from SSHRC, Scotiabank, BMO, Tangerine Bank, and the Pacific Institute for Climate Solutions (PICS). </span></em></p>Large Canadian banks are likely not at risk of bank failures, but history suggests smaller, more niche financial service firms could be.Michael R. King, Associate Professor, Gustavson School of Business and Lansdowne Chair in Finance, University of VictoriaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1886612022-10-03T19:03:10Z2022-10-03T19:03:10ZDoomsday bunkers, Mars and ‘The Mindset’: the tech bros trying to outsmart the end of the world<figure><img src="https://images.theconversation.com/files/487689/original/file-20221003-21-qpxfiq.jpg?ixlib=rb-1.1.0&rect=16%2C237%2C5447%2C3391&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Peter Thiel: his plan to build a bunker-type lodge in remote NZ was stymied.</span> <span class="attribution"><span class="source">Carolyn Kaster/AAP</span></span></figcaption></figure><p>Douglas Rushkoff’s newest book, <a href="https://scribepublications.com.au/books-authors/books/survival-of-the-richest-9781922585790">Survival of the Richest: Escape Fantasies of the Tech Billionaires</a>, grew out of a brilliant 2018 <a href="https://onezero.medium.com/survival-of-the-richest-9ef6cddd0cc1">Medium article</a> of the same name, which went viral and had people (aka his US editor) clamouring for a full-length treatment. </p>
<hr>
<p><em>Review: Survival of the Richest: Escape Fantasies of the Tech Billionaires – Douglas Rushkoff (Scribe Publications)</em></p>
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<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/485544/original/file-20220920-3608-9z7s5f.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/485544/original/file-20220920-3608-9z7s5f.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/485544/original/file-20220920-3608-9z7s5f.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=934&fit=crop&dpr=1 600w, https://images.theconversation.com/files/485544/original/file-20220920-3608-9z7s5f.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=934&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/485544/original/file-20220920-3608-9z7s5f.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=934&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/485544/original/file-20220920-3608-9z7s5f.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1173&fit=crop&dpr=1 754w, https://images.theconversation.com/files/485544/original/file-20220920-3608-9z7s5f.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1173&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/485544/original/file-20220920-3608-9z7s5f.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1173&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>In both pieces, Rushkoff recounts being invited to speak about “the future of technology”, only to find himself at a luxury desert resort in an undisclosed location, speaking to a select audience of five unnamed hedge fund billionaires. Within minutes, the conversation takes on a distinctly prepper-ish tone. One of the CEOs tells Rushkoff about his newly completed underground shelter, then asks, “How do I maintain authority over my security force after the event?” </p>
<p>Rushkoff is bemused, but also grimly amused by it all. “Here they were, asking a <a href="https://theconversation.com/karl-marx-his-philosophy-explained-164068">Marxist</a> media theorist for advice on where and how to configure their doomsday bunkers,” he writes. “That’s when it hit me: at least as far as these gentlemen were concerned, this was a talk about the future of technology.”</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/with-threats-of-nuclear-war-and-climate-disaster-growing-americas-bunker-fantasy-is-woefully-inadequate-179625">With threats of nuclear war and climate disaster growing, America's 'bunker fantasy' is woefully inadequate</a>
</strong>
</em>
</p>
<hr>
<h2>The Mindset</h2>
<p>So far, so head-spinningly good. Unfortunately, however, Rushkoff moves away from the billionaires and their intriguingly delusional self-preservation tactics, into a realm of high ideas. </p>
<p>Over the next 12 and a half chapters, Rushkoff offers a Grand Unified Theory of tech billionaire ideology. Inspired by a 1995 article, “<a href="https://www.metamute.org/editorial/articles/californian-ideology">The Californian Ideology</a>”, he chooses to call this “The Mindset” – a frustratingly vague term that doesn’t really clarify things. </p>
<p>At times, “The Mindset” is roughly synonymous with the ideology of libertarianism; at others, it is much more amorphous – referring to everything from growth-based capitalism, to <a href="https://theconversation.com/the-queen-has-left-her-mark-around-the-world-but-not-all-see-it-as-something-to-be-celebrated-190343">colonialism</a>, to <a href="https://theconversation.com/is-narcissism-a-mental-health-problem-and-can-you-really-diagnose-it-online-188360">narcissism</a>. And as Hugo Rifkind notes in <a href="https://www.thetimes.co.uk/article/survival-of-the-richest-escape-fantasies-of-the-tech-billionaires-by-douglas-rushkoff-review-how-the-elite-prep-for-the-end-of-the-world-38s2wlg7j">The Times</a>, “while the Mindset is interesting, it’s not nearly as interesting as the bonkers escape plans to which it leads”.</p>
<p>If you’re after a primer on the various ills of late capitalism, then strap yourself in and enjoy this wide-ranging, freewheeling romp by one of the US’s most entertaining digital culture raconteurs. </p>
<p>His subjects include – but not are not limited to – monopolies, financialisation, behavioural science, “scientism” (<a href="https://theconversation.com/our-selfish-genes-contain-the-seeds-of-our-destruction-but-there-might-be-a-fix-77927">Richard Dawkins</a>, <a href="https://theconversation.com/steven-pinker-lauds-reason-but-people-need-freedom-this-might-not-end-well-91928">Steven Pinker</a> et al.) and the sex crimes of <a href="https://theconversation.com/jeffrey-epsteins-arrest-is-the-tip-of-the-iceberg-human-trafficking-is-the-worlds-fastest-growing-crime-120225">Jeffrey Epstein</a>. There’s the 1980s business savvy of General Electric CEO Jack Welch and “the Western, linear drive towards progress”. Our estrangement from nature. The persistence of Aristotelian plot structures. And even “Western language systems, which tend to be more noun-based than many of their counterparts”.</p>
<h2>Relentless and breathless</h2>
<p>Rushkoff is an accessible, pithy writer, with no shortage of examples, analogies and anecdotes to string together. That said, his relentless synthesising and breathless proclamations also make the book feel a bit shambolic, a bit over-reachy. (For instance, “The Mindset prefers straight lines, linear progress and infinite expansion over the ebbs and flows in the real world.”) </p>
<p>This is especially so if you’re searching for the what-it-says-on-the-label bits – the tech bros and their bizarre survival plans. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/8bceePdFruU?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Inside seasteading – one of the ‘bonkers escape plans’ billiionaires are considering.</span></figcaption>
</figure>
<p>Case in point: Rushkoff tells a quite-long story about arguing with Richard Dawkins about morality at a Manhattan dinner party in the 1990s. Great. He then claims that Stephen Pinker and <a href="https://en.wikipedia.org/wiki/Daniel_Dennett">Daniel Dennett</a> believe “the brain is mere hardware” and “humans are just robots running programs”. Sure. Next, he points out that Dawkins, Pinker and Dennett were all photographed on Jeffrey Epstein’s private jet on their way to a TED talk. Guilt by association fallacy, but okay. As a finale, Epstein is described as “truly the model, self-sovereign, transhumanist billionaire prepper”. </p>
<p>Here’s the problem: while Jeffrey Epstein was a lot of terrible things, he wasn’t a prepper, in the proper sense of that word. There’s no record of him saying he thought society was about to collapse, or that he was making any just-in-case plans. More generally, none of the aforementioned four are Silicon Valley titans, or billionaires – they’re three scientists and one <a href="https://www.usatoday.com/story/money/2019/07/14/jeffrey-epstein-net-worth-is-he-billionaire-or-not/1708479001/">multimillionaire</a> Wall Street financier/paedophile. And they’re only tangentially relevant to the matter at hand. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/485546/original/file-20220920-3577-9pb278.jpg?ixlib=rb-1.1.0&rect=18%2C132%2C4173%2C2285&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/485546/original/file-20220920-3577-9pb278.jpg?ixlib=rb-1.1.0&rect=18%2C132%2C4173%2C2285&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/485546/original/file-20220920-3577-9pb278.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/485546/original/file-20220920-3577-9pb278.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/485546/original/file-20220920-3577-9pb278.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/485546/original/file-20220920-3577-9pb278.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/485546/original/file-20220920-3577-9pb278.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/485546/original/file-20220920-3577-9pb278.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Jeffrey Epstein’s stone mansion on Little St James Island, in the US Virgin Islands.</span>
<span class="attribution"><span class="source">Gabriel Lopez Albarran/AP</span></span>
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<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-to-survive-a-tactical-nuclear-bomb-defence-experts-explain-181340">How to survive a tactical nuclear bomb? Defence experts explain</a>
</strong>
</em>
</p>
<hr>
<h2>Libertarian tech bros</h2>
<p>Also, given how much other ground is covered, it is a little surprising that Rushkoff doesn’t name check that ur-text of cyber libertarianism, <a href="https://www.amazon.com/Sovereign-Individual-Survive-Collapse-Welfare/dp/0684810077">The Sovereign Individual: How to Survive and Thrive During the Collapse of the Welfare State</a> (1997), by James Dale Davidson and William Rees-Mogg. </p>
<p>Davidson and Rees-Mogg dream of a time when individuals will be freed from the shackles of government, <a href="https://www.investopedia.com/terms/f/fiatmoney.asp">fiat currency</a> (government-issued paper money, not backed by a commodity such as gold) and law in general. (William Rees-Mogg’s son, UK politician Jacob Rees-Mogg, was one of the most vocal cheerleaders for <a href="https://theconversation.com/boris-johnson-and-partygate-he-who-lives-by-the-brexit-sword-dies-by-the-brexit-sword-175323">Brexit</a>.) </p>
<p>In this thrilling new age, a “cognitive elite” will be able to rule – or ignore – the rest of the world, as they see fit. The Sovereign Individual is a hugely influential text in the start-up world; early Facebook backer, Paypal co-founder and conservative libertarian <a href="https://en.wikipedia.org/wiki/Peter_Thiel">Peter Thiel</a>, who is <a href="https://www.theguardian.com/technology/2022/aug/18/peter-thiel-refused-consent-for-sprawling-lodge-in-new-zealand-local-council">infamous in New Zealand</a> for buying his citizenship and attempting to build luxury bunkers in the wilderness wrote the foreword to the 2020 reprint. </p>
<p>Survival of the Richest contains an excellent anecdote about Rushkoff being in a Zoom meeting with some tech developers on 6 January 2021, which is derailed by the breaking news of an attempted coup at the Capitol building (if you think <em>that’s</em> bad, wait till you hear how the programmers react!). </p>
<p>There’s this jaw-dropping factoid: </p>
<blockquote>
<p>Jeff Bezos has a yacht with a helipad that serves as a companion yacht to his main yacht, which has large sails that would get in the way of his helicopter during takeoff and landing. </p>
</blockquote>
<p>There are some extremely sharp reflections on artificial intelligence: </p>
<blockquote>
<p>Whether AI will develop human and superhuman abilities in the next decade, century, millennium, if ever, may matter less right now than AI’s grip over the tech elite, and what this obsession tells us about The Mindset. </p>
</blockquote>
<p>Regarding the prospect of artificial intelligence putting millions of people out of work in the near future, entrepreneurs such as Reid Hoffmann (LinkedIn CEO) and Mark Cuban (startup dude, billionaire) are worried that unemployed humans might coalesce into vengeful, billionaire-resenting mobs and attack them. Though they’re not worried about ruining all those people’s lives in the first place. </p>
<p>But – and this is a little ironic – there’s precious little biographical detail about Mark Cuban, or Reid Hoffmann, or any of the other bros in the book. Their function is purely as symbols of rapacious greed: embodiments of The Mindset. They are not examined as deeply flawed, but nonetheless complex human beings. </p>
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<figcaption><span class="caption">Journalist Baz MacDonald searches for evidence of the survival bunkers being shipped to New Zealand.</span></figcaption>
</figure>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/what-do-we-owe-future-generations-and-what-can-we-do-to-make-their-world-a-better-place-189591">What do we owe future generations? And what can we do to make their world a better place?</a>
</strong>
</em>
</p>
<hr>
<h2>Dismissive rather than curious</h2>
<p>In some ways, this is a question of method, and access. While Rushkoff mixes in some pretty wild company on his global speaking gigs, and has serendipitous encounters with some outlandish figures, he’s not doing any journalistic or enthnographic legwork here. </p>
<p>In short: he hasn’t interviewed any of tech billionaires he writes about. He doesn’t really know what motivates them – or at least, not all of it. When it comes to these wealthy, selfish people’s strategies to survive “the event”, Rushkoff is dismissive rather than curious. He is adamant that a billionaire’s prepper scheme – any scheme – just won’t work. </p>
<p>In Chapter One, he contends that “the probability of a fortified bunker actually protecting its occupants from the reality of, well, reality, is very slim”, because “the closed ecosystems of underground facilities are preposterously brittle”. If your underground hydroponic garden is overrun by mould or bacteria, there’s no “do-over”; you’ll just die.</p>
<p>Similarly, </p>
<blockquote>
<p>small islands are utterly dependent on air and sea deliveries for basic staples […] the billionaires who reside in such locales are more, not less, dependent on complex supply chains than those of us embedded in industrial civilization. </p>
</blockquote>
<p><a href="https://theconversation.com/floating-cities-the-future-or-a-washed-up-idea-116511">Seasteading</a> – the libertarian idea of building autonomous, floating mini-states, which operate outside of state control – is mentioned, but not discussed in any detail. And the modest proposals of Elon Musk, Richard Branson, <a href="https://theconversation.com/the-solar-system-belongs-to-us-all-not-just-jeff-bezos-173610">Jeff Bezos</a> et al. to <a href="https://theconversation.com/want-to-become-a-space-tourist-you-finally-can-if-you-have-250-000-and-a-will-to-sign-your-life-away-160543">commercialise space travel</a> and colonise Mars are rejected with the observation “only trillionaires will actually make it to space to terraform planets, anyway”. </p>
<p>This might be true enough – but it’s also the ostensible subject of the book, and as such, perhaps worth spending a bit more time on. </p>
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<iframe width="440" height="260" src="https://www.youtube.com/embed/uEwSpQWnS-w?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">How Space X and NASA plan to colonise Mars.</span></figcaption>
</figure>
<h2>Billionaire bunkers as metaphors</h2>
<p>For Rushkoff, then, “the billionaire bunker strategy is less a viable strategy for apocalypse than a metaphor for this disconnected way of life” – a canny insight, to be sure. But those bunkers aren’t <em>only</em> metaphorical; they’re also very real, and large, and expensive, and fascinating in their logistic intricacies and (im)possibilities. </p>
<p>If Survival of the Richest had told us more about this insane infrastructure, and about the people who dreamed it up, we might be able to better understand the <a href="https://www.the-sun.com/lifestyle/tech-old/1638425/jeff-bezos-world-record-space-penis/">unmistakably phallic spaceships</a> as symbols, too. </p>
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<a href="https://images.theconversation.com/files/485550/original/file-20220920-26-ermdgr.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/485550/original/file-20220920-26-ermdgr.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/485550/original/file-20220920-26-ermdgr.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=925&fit=crop&dpr=1 600w, https://images.theconversation.com/files/485550/original/file-20220920-26-ermdgr.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=925&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/485550/original/file-20220920-26-ermdgr.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=925&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/485550/original/file-20220920-26-ermdgr.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1162&fit=crop&dpr=1 754w, https://images.theconversation.com/files/485550/original/file-20220920-26-ermdgr.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1162&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/485550/original/file-20220920-26-ermdgr.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1162&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>Readers with specific interest in doomsday bunkers, and what they might represent in ideological terms, should seek out Bradley Garrett’s <a href="https://www.penguin.com.au/books/bunker-9780141987552">Bunker: Building for the End Times</a> (2020). Mark O’Connell writes insightfully about Peter Thiel’s New Zealand boltholes as a symptom of extreme libertarian misanthropy in <a href="https://www.penguinrandomhouse.com/books/558414/notes-from-an-apocalypse-by-mark-oconnell/">Notes from an Apocalypse: A Personal Journey to the End of the World and Back</a> (2020).</p>
<p>Those wishing to learn more personal details about the computer nerds and venture captial bros who hold such outsized sway in contemporary life should read Max Chafkin’s 2021 biography <a href="https://www.penguinrandomhouse.com/books/609711/the-contrarian-by-max-chafkin/">The Contrarian: Peter Thiel and Silicon Valley’s Pursuit of Power</a>, or Ashlee Vance’s 2015 book <a href="https://www.harpercollins.com/products/elon-musk-ashlee-vance?variant=32161254965282">Elon Musk: How the Billionaire CEO of SpaceX and Tesla Is Shaping Our Future</a>, as well as David Runciman and John Lanchester’s incisive essays about <a href="https://www.lrb.co.uk/the-paper/v43/n18/david-runciman/competition-is-for-losers">Thiel</a> and <a href="https://www.lrb.co.uk/the-paper/v37/n17/john-lanchester/let-s-all-go-to-mars">Musk</a> respectively in the London Review of Books. </p>
<p>Or, what the hell, rewatch <a href="https://www.netflix.com/au/title/70132721">The Social Network</a>.</p><img src="https://counter.theconversation.com/content/188661/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tom Doig does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Douglas Rushkoff’s Survival of the Richest is less about tech billionaires and their ‘bonkers’ escape plans than it is an entertaining primer on the various ills of late capitalism.Tom Doig, Lecturer in Creative Writing, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1767782022-03-14T12:22:36Z2022-03-14T12:22:36ZAffordable housing in the US is increasingly scarce, making renters ask: Where do we go?<figure><img src="https://images.theconversation.com/files/451075/original/file-20220309-1737-4p8f7j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Community organizers speak in a vacant house in West Oakland, Calif., that they occupied in 2019 and 2020 to bring attention to affordable housing.</span> <span class="attribution"><a class="source" href="https://media.gettyimages.com/photos/moms-4-housing-founder-dominique-walker-and-others-talk-in-the-dining-picture-id1199390012?s=2048x2048">Jane Tyska/Digital First Media/East Bay Times via Getty Images</a></span></figcaption></figure><p>The United States is facing an expanding gap between how much workers earn and how much they have to pay for housing. </p>
<p>Workers have faced <a href="https://hbr.org/2017/10/why-wages-arent-growing-in-america">stagnant wages</a> for the past 40 years. Yet the cost of rent has steadily increased during that time, with <a href="https://www.redfin.com/news/redfin-rental-report-december-2021/">sharp increases of 14% to 40% </a> over the past two years. </p>
<p>Now, more than ever, workers are feeling the stress of the affordable housing crisis. </p>
<p>While I was conducting research in economically hard-hit communities from Appalachia to Oakland, California, for my recent <a href="https://www.politybooks.com/bookdetail?book_slug=living-on-the-edge-when-hard-times-become-a-way-of-life--9781509548231">book, published in November 2021</a>, nearly every person I met was experiencing the painful reality of being caught between <a href="https://www.cbpp.org/blog/rents-have-risen-more-than-incomes-in-nearly-every-state-since-2001">virtually stagnant wages and rising housing costs</a>. </p>
<p><a href="https://cmpascale.org/">As a sociologist,</a> I had expected that low-wage workers would struggle with the cost of housing. I did not expect to meet people who worked two jobs and lived with roommates and still struggled to pay their bills. </p>
<p>For perspective, a person making US$14 an hour would have to work 89 hours a week to cover the rent on a “modest” one-bedroom rental, estimated to cost $1,615 per month, according to a <a href="https://nlihc.org/sites/default/files/oor/2021/Out-of-Reach_2021.pdf">2021 study by the National Low-Income Housing Coalition</a>. </p>
<p>Millions of workers earn less than $14 an hour. Among U.S. employees, the average hourly earnings, adjusted for inflation, were only <a href="https://www.statista.com/statistics/216259/monthly-real-average-hourly-earnings-for-all-employees-in-the-us/#:%7E:text=In%20January%202022%2C%20the%20average,data%20have%20been%20seasonally%20adjusted">$11.22 in 2022</a>. </p>
<p>In January 2022, median rents in the U.S. reached their highest level yet. <a href="https://www.realtor.com/research/january-2022-rent/">The average median cost</a> of one-bedroom units in the 50 largest metro areas rose from $1,386 in 2020 to $1,652 in 2022.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/451084/original/file-20220309-15-8rxxu0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A man is shown outside of a moving truck, next to a row of new attached houses." src="https://images.theconversation.com/files/451084/original/file-20220309-15-8rxxu0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/451084/original/file-20220309-15-8rxxu0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=360&fit=crop&dpr=1 600w, https://images.theconversation.com/files/451084/original/file-20220309-15-8rxxu0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=360&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/451084/original/file-20220309-15-8rxxu0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=360&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/451084/original/file-20220309-15-8rxxu0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=453&fit=crop&dpr=1 754w, https://images.theconversation.com/files/451084/original/file-20220309-15-8rxxu0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=453&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/451084/original/file-20220309-15-8rxxu0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=453&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">New affordable housing units in Irvine, Calif., are shown on Jan. 26, 2022.</span>
<span class="attribution"><a class="source" href="https://media.gettyimages.com/photos/residents-start-to-move-into-sage-park-irvines-new-affordable-housing-picture-id1238006154?s=2048x2048">Mindy Schauer/Digital First Media/Orange County Register via Getty Images</a></span>
</figcaption>
</figure>
<h2>‘Now I’m having to scrounge’</h2>
<p>I interviewed PL (a pseudonym) for my recent book. He is <a href="https://www.jchs.harvard.edu/calendar/americas-rental-housing-2022">among the 44 million</a> people in the U.S. who rent their homes.</p>
<p>PL is a longtime Oakland, California, resident, who works full time in a professional career. Despite employment stability, his financial circumstances are worsening.</p>
<p>“Rent is raised dramatically from year to year. I work in a nonprofit organization, so I don’t get a raise every year,” PL told me during an interview in 2018. His monthly rent increased by $250 over the previous three years. Yet his salary remained static. </p>
<p>“That $250 was going toward the grocery bills, the gas bills. Now I’m having to scrounge,” PL said. </p>
<p>PL is not alone.</p>
<p>Households that spend more than 30% of their income on rent are referred to as “cost burdened,” according to the U.S. Department of Housing and Urban Development. In 2019, <a href="https://www.habitat.org/costofhome/2020-state-nations-housing-report-lack-affordable-housing">37.1 million households</a>, or 30.2% of all U.S. households, fit this category. The <a href="https://theconversation.com/affordable-housing-in-pandemic-times-what-works-and-what-doesnt-177699">situation has worsened</a> since the pandemic.</p>
<p>The financial burden of the increasing cost of rent falls hardest on the <a href="https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2019">half of workers in the U.S. who earn less than $35,000</a> each year. After paying rent, about 80% of renter households with incomes under $30,000 have between <a href="https://www.jchs.harvard.edu/calendar/americas-rental-housing-2022">$360 and $490 left to cover all other</a> expenses, including food, health care, transportation and child care. </p>
<h2>Where can you live?</h2>
<p>Oakland has been described by gentrification experts as the new center of the nationwide <a href="https://www.mercurynews.com/2020/03/03/we-are-fed-up-new-surge-of-housing-activism-spurs-change-in-oakland/">affordable housing crisis</a>. </p>
<p>A growing tech industry in San Francisco, a lack of affordable housing, weak rent control laws and a predominance of low-wage service industry jobs contribute to the shortage of affordable housing in Oakland. </p>
<p>Vanessa Torres is one of the more than 15,000 people who live in a low-income neighborhood in Oakland known as “the Deep East.” When I spoke with Torres in 2020, the worry in her voice was clear.</p>
<p>“This is the ‘hood. If low-income Latinos can’t afford it anymore, well where do we go? If we can no longer afford to live in low-income communities that are considered dangerous, that are considered poor, then where do we see ourselves?” Torres said. </p>
<p>In 2019, <a href="https://www.zumper.com/rent-research/oakland-ca/downtown-oakland">the midpoint</a> for monthly rent for a one-bedroom apartment in Oakland was $2,300. </p>
<p>Torres would need to earn almost $50 per hour, approximately $96,000 a year, to be able to afford $2,300 a month in rent, according to the <a href="https://www.sfgate.com/expensive-san-francisco/article/San-Francisco-rent-wages-median-Oakland-Alameda-12879211.php">nonprofit California Housing Partnership Corp.</a>. Torres earns roughly $50,000 a year as an educator. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/451149/original/file-20220309-15-1my4t3g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A man walks past a building with graffiti, in front of tents and boxes." src="https://images.theconversation.com/files/451149/original/file-20220309-15-1my4t3g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/451149/original/file-20220309-15-1my4t3g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=357&fit=crop&dpr=1 600w, https://images.theconversation.com/files/451149/original/file-20220309-15-1my4t3g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=357&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/451149/original/file-20220309-15-1my4t3g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=357&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/451149/original/file-20220309-15-1my4t3g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=449&fit=crop&dpr=1 754w, https://images.theconversation.com/files/451149/original/file-20220309-15-1my4t3g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=449&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/451149/original/file-20220309-15-1my4t3g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=449&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">California has one of the highest homeless rates in the country. Here, a man walks past tents in Los Angeles on April 26, 2021.</span>
<span class="attribution"><a class="source" href="https://media.gettyimages.com/photos/man-walks-past-tents-housing-the-homeless-on-the-streets-in-the-skid-picture-id1232545986?s=2048x2048">Frederic J. Brown/AFP via Getty Images</a></span>
</figcaption>
</figure>
<h2>Still seeking solutions</h2>
<p>Elected officials across the country have tried to address the affordable housing crisis through proposals to raise the <a href="https://edlabor.house.gov/imo/media/doc/2021-01-26%20Raise%20the%20Wage%20Act%20Fact%20Sheet.pdf">minimum wage</a> and to mandate more meaningful <a href="https://www.multihousingnews.com/a-deep-dive-into-growing-rent-control-laws-proposals/">rent control</a>. They have also proposed greater government investment in <a href="https://joebiden.com/housing/">affordable housing</a>, and pursued <a href="https://inclusionaryhousing.org/inclusionary-housing-explained/what-is-inclusionary-housing/#:%7E:text=Inclusionary%20housing%20programs%20are%20local,units%20to%20lower%2Dincome%20residents.">partnerships with developers</a>. As yet, none of these efforts has been successful to any significant extent. </p>
<p>Countries with more government control over the economy have taken a different approach to affordable housing. For example, <a href="https://static1.squarespace.com/static/5a99206bee17593d9ef5cceb/t/5f609207aed573278ae41bc4/1600164570274/NBO+%E2%80%93+Housing+Nordic_Housing+models+in+the+Nordic+Region.pdf">Nordic countries</a> treat the development of low- and medium-cost housing as a public utility. This <a href="https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.32.1.59">reduces and stabilizes</a> housing prices by removing the cost of land, construction, finance and management from the speculative market. They have succeeded in producing quality housing that is subsidized and permanently price restricted. </p>
<p>Known as <a href="https://static1.squarespace.com/static/5a99206bee17593d9ef5cceb/t/5f609207aed573278ae41bc4/1600164570274/NBO+%E2%80%93+Housing+Nordic_Housing+models+in+the+Nordic+Region.pdf">social housing</a> in Denmark, this strategy has produced 20% of the total available housing there. </p>
<p>Given the affordable housing problems in the U.S., taking stock of other options could provide some inspiration.</p>
<p>For PL, the Oakland renter feeling the squeeze of rising rents, as well as for many other full-time workers, the future doesn’t look any better. PL, who is in his mid-50s, told me he doesn’t see a way to retire. He would need to leave his community in order to retire, but he can’t imagine where he would go. The East Bay is his home. </p>
<p>[<em>More than 150,000 readers get one of The Conversation’s informative newsletters.</em> <a href="https://memberservices.theconversation.com/newsletters/?source=inline-140K">Join the list today</a>.]</p><img src="https://counter.theconversation.com/content/176778/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Celine-Marie Pascale does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It’s getting much harder in the US to find an affordable home, even for people who work multiple jobs.Celine-Marie Pascale, Professor of Sociology, American UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1711362021-11-04T17:14:58Z2021-11-04T17:14:58ZMetaverse: how Facebook rebrand reflects a dangerous trend in growing power of tech monopolies<figure><img src="https://images.theconversation.com/files/429957/original/file-20211103-25-16kegiy.jpg?ixlib=rb-1.1.0&rect=7%2C0%2C5168%2C3445&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/kumamoto-japan-oct-29-2021-us-2065985768">KoshiroK/Shutterstock</a></span></figcaption></figure><p>Facebook’s <a href="https://www.bbc.co.uk/news/technology-59083601">rebranding as Meta</a> has been seen by many as the company’s latest attempt at <a href="https://www.nytimes.com/2021/10/29/business/meta-fb.html">corporate crisis control</a>. The social media giant has been publicly attacked for creating an environment that <a href="https://www.npr.org/2021/03/06/974394783/far-right-misinformation-is-thriving-on-facebook-a-new-study-shows-just-how-much">fosters far-right extremism</a> and <a href="https://www.npr.org/2021/04/09/986005820/after-data-breach-exposes-530-million-facebook-says-it-will-not-notify-users">violating individuals’ data privacy</a>.</p>
<p>Yet it also represents an attempt to rebrand the growing power of tech monopolies to shape all areas of our lives through social expansion. It points to a troubling new era of “<a href="https://www.forbes.com/best/2000/0717/022.html">metacapitalism</a>” – or “capitalism on steroids” as Forbes called it in 2000. It reflects a disturbing trend of massively expanding tech conglomerates and the dangerous privatisation of technological knowledge.</p>
<h2>Rebranding tech monopolies</h2>
<p>Technology is rapidly transforming our world – from instantaneous digital communication to AI decision-making to <a href="https://www.pwc.co.uk/issues/intelligent-digital/virtual-reality-vr-augmented-reality-ar/four-ways-vr-will-change-how-we-experience-the-world.html">virtual</a> and <a href="https://www.fi.edu/what-is-augmented-reality">augmented reality</a>. The driving force behind these changes has been private technology firms, whether global start-ups or famous <a href="https://www.investopedia.com/articles/markets/103015/biggest-companies-silicon-valley.asp">Silicon Valley conglomerates</a>. But this combination of massive corporate profits and exciting technological innovation is the biggest myth of 21st-century progress. </p>
<p>The truth is much more complicated. Huge technology firms such as Google and Facebook are increasingly <a href="https://www.theguardian.com/technology/2016/aug/31/personal-data-corporate-use-google-amazon">criticised</a> for unethical data collection and the use of <a href="https://www.business-standard.com/article/technology/govt-seeks-facebook-algorithm-details-amid-hate-speech-allegations-report-121102801644_1.html">algorithms</a> which encourage hateful beliefs and viral misinformation.</p>
<p>Their technology has also encouraged unjust labour practices including hi-tech digital surveillance to <a href="https://www.independent.co.uk/news/world/americas/amazon-surveillance-unions-report-a9697861.html">monitor</a> workers, as happened in Amazon warehouses, and facilitated <a href="https://www.amnesty.org/en/latest/news/2021/03/uber-false-choice-between-workers-rights-and-flexibility/">digital platforms</a> such as Uber, which <a href="https://www.theguardian.com/technology/2021/feb/19/uber-drivers-workers-uk-supreme-court-rules-rights">refuse to provide basic worker rights</a>.</p>
<p>Longer term, the <a href="https://theconversation.com/demand-for-rare-earth-metals-is-skyrocketing-so-were-creating-a-safer-cleaner-way-to-recover-them-from-old-phones-and-laptops-141360">mining</a> of rare earth metals and the massive amounts of energy required for <a href="https://www.forbes.com/sites/forbestechcouncil/2021/05/03/renewable-energy-alone-cant-address-data-centers-adverse-environmental-impact/">data processing</a> are major contributors to climate change.</p>
<p>These problems point to the threat of capitalist <a href="https://www.penguinrandomhouse.com/books/132784/technopoly-by-neil-postman/">tech monopolies</a> where, according to theorist <a href="https://neilpostman.org/">Neil Postman</a>, the culture “seeks its authorisation in technology, finds its satisfactions in technology, and takes its orders from technology”. Microsoft and Google have already been <a href="https://time.com/3553242/microsoft-monopoly/">accused of monopolistic practices</a>. </p>
<p>These “<a href="https://www.haymarketbooks.org/books/1381-bit-tyrants">bit tyrants</a>” are troubling “technopolies” which actually use their power and influence to <a href="https://www.theguardian.com/business/2019/apr/03/imf-warns-that-tech-giants-stifle-innovation-and-threaten-stability">stifle innovation</a> and <a href="https://thehill.com/blogs/congress-blog/technology/578133-big-tech-platforms-stifle-innovation-through-anticompetitive">competition</a> using – ironically – traditional practices of the old economy.</p>
<p>Perhaps even more troubling is how these companies channel innovation away from its potential for social good. Beneath the myth of Silicon Valley prosperity are big tech’s seeming attempts to <a href="https://americanmind.org/salvo/triumph-of-the-oligarchs/">promote corporate oligarchies</a> and even <a href="https://www.brookings.edu/wp-content/uploads/2019/08/FP_20190826_digital_authoritarianism_polyakova_meserole.pdf">authoritarian regimes</a> to extend their economic reach and political power.</p>
<p>The highly publicised renaming of these conglomerates is part of a wider rebranding of this technopoly. As one <a href="https://www.vice.com/en/article/qjb485/zuckerberg-facebook-new-name-meta-metaverse-presentation">commentator</a> recently observed, “Facebook’s new name is ‘Meta’, and its new mission is to invent a ‘<a href="https://www.bbc.co.uk/news/technology-58749529">metaverse</a>’ that will make us all forget what it’s done to our existing reality.” It may be a different name, but it is the same economic, political and social corporate threat.</p>
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<h2>The spread of metacapitalism</h2>
<p>In his video announcement, Facebook founder Mark Zuckerberg proclaimed this dawning of the metaverse as signalling a new technological age, providing viewers with a glimpse of it in a <a href="https://www.theguardian.com/technology/video/2021/oct/29/facebook-gives-a-glimpse-of-metaverse-its-planned-virtual-reality-world-video?fbclid=IwAR3X8Yxp1bN3TvrXrc73DAcK8Pv2hVJiGDjPeBO3BJSHXh2Ti_5pE51X1m8">virtual world</a> where people could use avatars to live out their wildest imagination in real-time with others around the world.</p>
<p>The backlash has ranged from <a href="https://www.salon.com/2021/10/29/meta-and-the-facebook-papers-why-mark-zuckerberg-has-nothing-to-fear/">moral outrage</a> over Facebook itself, to <a href="https://www.pcgamer.com/the-metaverse-is-bullshit/">ridiculing</a> Zuckerberg’s new vision for technology. What is overlooked is how this represents the desire to create metacapitalism – which uses technology to shape, <a href="https://www.theguardian.com/commentisfree/2021/oct/27/big-techs-push-for-automation-hides-the-grim-reality-of-microwork?CMP=fb_a-technology_b-gdntech&fbclid=IwAR0AEJiEeUkKH9-1P2HJ2HOJxPe_YwhRHM-NIbsFmwGvMq2_zlAvA5ZttJ0">exploit</a> and profit from human interaction. It is a completely marketised virtual reality world fuelled by the unsustainable exploitation of natural resources, unjust global working conditions and the constant invasion of users’ data privacy for private financial gain.</p>
<p>Corporate and social rebranding are fundamental to the spread of metacapitalism. Google’s 2015 <a href="https://www.independent.co.uk/life-style/gadgets-and-tech/news/google-now-alphabet-search-giant-changes-name-avoid-becoming-conventional-company-10449227.html">name change</a> to “Alphabet” reflected its desire to be more than just a search engine and <a href="https://www.theguardian.com/technology/2015/aug/11/alphabet-google-rebranding-what-happens-next">expand</a> into other areas such as driverless cars, medical devices, smart home appliances and drone delivery. Introducing the metaverse, Zuckerberg <a href="https://about.fb.com/news/2021/10/founders-letter/">said</a>:</p>
<blockquote>
<p>Think about how many physical things you have today that could just be holograms in the future. Your TV, your perfect work set-up with multiple monitors, your board games and more – instead of physical things assembled in factories, they’ll be holograms designed by creators around the world.</p>
</blockquote>
<p>He insisted, once again, that “we don’t build services to make money; we make money to build better services”.</p>
<p>These moves play into a broader strategy to socially rebrand metacapitalism positively. The introduction of the metaverse is part of a new trend of what business ethics academic <a href="https://theconversation.com/profiles/carl-rhodes-153489">Carl Rhodes</a> has referred to it as “<a href="https://theconversation.com/prince-harrys-critics-have-a-point-woke-capitalism-is-no-solution-158132">woke capitalism</a>”, noting in a recent <a href="https://www.theguardian.com/environment/2021/oct/28/progressive-gestures-big-business-useless-dangerous">article</a> that “progressive gestures from big business aren’t just useless – they’re dangerous”.</p>
<p>Whether it is the Gates Foundation initially opposing the spread of global vaccines in order to <a href="https://www.wired.com/story/opinion-the-world-loses-under-bill-gates-vaccine-colonialism/">protect</a> patent rights, or Elon Musk promising to create an “<a href="https://aeon.co/essays/elon-musk-puts-his-case-for-a-multi-planet-civilisation">multi-planet civilisation</a>” – while avoiding paying much-needed taxes here on Earth – corporations are now increasingly using philanthropy and utopian visions to hide their present day misdeeds.</p>
<h2>A force for good</h2>
<p>The irony is that technology could actually become a real <a href="https://link.springer.com/book/10.1007/978-3-030-36181-5">force</a> for radical social and economic transformation if it was freed from the narrow limits imposed on it by metacapitalism.</p>
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<p>Digital platforms are already enabling greater <a href="https://platform.coop/">cooperative ownership</a> and <a href="https://unhabitat.org/innovation-and-digital-technology-to-re-imagine-participatory-budgeting-as-a-tool-for-building">direct democratic participation</a>. Big data could be deployed to allow for <a href="https://www.buildingsiot.com/blog/what-big-data-can-do-for-building-energy-management-bd">efficient energy use</a> through better tracking of energy consumption. It also allows for the community ownership of our information and the economy generally. 3D printers have the <a href="https://link.springer.com/article/10.1007/s43253-020-00014-3">potential</a> to revolutionise manufacturing so that we can easily and sustainably produce all that we require.</p>
<p>Crucially, <a href="https://www.wired.com/story/opinon-the-future-of-american-industry-depends-on-open-source-tech/">open-source technologies</a> which allow for their information to be freely available to use, modify and redistribute, could foster international collaboration and innovation on a scale previously unimaginable. They point to a realistic and utopian “<a href="https://www.versobooks.com/books/1847-four-futures">post-capitalist</a>” future that could <a href="https://www.versobooks.com/books/3156-fully-automated-luxury-communism">transcend</a> the need for exploitation based on principles of shared development and collective prosperity.</p>
<p>The rebranding of technology companies is not merely cosmetic, it represents a dangerous attempt to monopolise all forms of technology development linked to a metaverse and the spread of metacapitalism. What is needed instead is a real discussion about fostering open-source culture, data rights and ownership, and the use of technology for positive social transformation – not simply selling more products.</p><img src="https://counter.theconversation.com/content/171136/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Bloom does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Corporate rebranding is fundamental to the spread of metacapitalism which uses increasingly sophisticated technology to shape, exploit and profit from human interaction.Peter Bloom, Professor of Management, University of EssexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1666462021-10-07T19:19:48Z2021-10-07T19:19:48ZA study of entrepreneurs explains why we sometimes give without receiving<figure><img src="https://images.theconversation.com/files/425248/original/file-20211007-18680-12ij7ws.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C7744%2C5193&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Why do we give without expecting anything in return? Research into a Silicon Valley business accelerator program shows bonding rituals play a big role. </span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p>From someone <a href="https://www.wgbh.org/news/local-news/2020/03/18/want-to-help-out-your-neighbors-during-coronavirus-here-are-the-dos-and-donts">dropping off dinner at the doorstep of a neighbour with COVID-19</a> to <a href="https://www.independent.co.uk/asia/india/india-covid-hospital-bed-man-b1838879.html">an octogenarian in India giving up his oxygen bed for a middle-aged patient</a>, instances of people giving to those in need without expectations has made headlines during the COVID-19 pandemic. </p>
<p>People are often in direct competition for shared resources, so biologically, it would make sense that there would be an expectation that giving must be reciprocal. Yet even in situations characterized by intense competition, giving and sharing can take precedence over winning, whether it’s <a href="https://scroll.in/field/999581/pause-rewind-play-when-sailor-lawrence-lemieux-sacrificed-a-medal-to-save-lives-at-1988-olympics">Olympians giving up their medal positions to help peers in need</a> or <a href="https://time.com/5838289/coronavirus-business-support/">small businesses banding together to help fellow entrepreneurs hit by the pandemic</a>. </p>
<p>Why do people give without expecting anything in return? <a href="https://doi.org/10.1086/210400">This question continues to baffle sociologists</a> because, theoretically, unilateral giving and receiving within a community cannot be sustained as the desire to receive without any obligation to give back can give rise to more takers than givers. </p>
<p>As organizational theorists, we were interested in the dynamics surrounding unilateral giving when the combined motives of co-operation and competition co-exist. <a href="https://doi.org/10.1177%2F0001839220970936">Our research team published our findings in the <em>Administrative Science Quarterly</em></a>. We examined how acts of giving emerge and are sustained in a Silicon Valley business accelerator. </p>
<p>Early stage entrepreneurs increasingly gravitate towards start-up accelerators, which provide them access to investors, clients and the experiences of fellow entrepreneurs. </p>
<figure class="align-center ">
<img alt="people listen as a man speaks on a stages" src="https://images.theconversation.com/files/425252/original/file-20211007-17-scibbe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/425252/original/file-20211007-17-scibbe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=330&fit=crop&dpr=1 600w, https://images.theconversation.com/files/425252/original/file-20211007-17-scibbe.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=330&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/425252/original/file-20211007-17-scibbe.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=330&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/425252/original/file-20211007-17-scibbe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=415&fit=crop&dpr=1 754w, https://images.theconversation.com/files/425252/original/file-20211007-17-scibbe.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=415&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/425252/original/file-20211007-17-scibbe.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=415&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Start-up accelerators offer participants access to other successful entrepreneurs.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
</figcaption>
</figure>
<p>A typical accelerator brings together entrepreneurs who are unlikely to have known each other prior to entering the program. Besides providing participating entrepreneurs access to potential investors and clients, a key goal of accelerators is to create a supportive community of entrepreneurs.</p>
<p>In a typical start-up accelerator, entrepreneurs are expected to give to their fellow entrepreneurs without expectations, but those seeking help can find themselves competing for resources, including mentorship and funding. </p>
<h2>Creates a cycle of giving</h2>
<p>In our eight-month study of an accelerator in Silicon Valley, we followed three start-up camps. In the beginning, entrepreneurs across all camps actively sought help from fellow entrepreneurs. But the responses to these early requests differed across camps, setting in motion positive or negative dynamics. </p>
<p>We discovered that a single act of giving to a fellow entrepreneur in need spurs a cycle of gratitude and giving in the network. On the other hand, a single act of refusal to help triggers a cycle of shaming and avoidance. But what motivates these early acts of giving? </p>
<figure class="align-center ">
<img alt="People sit at a table around a laptop talking" src="https://images.theconversation.com/files/424449/original/file-20211004-25-piblea.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/424449/original/file-20211004-25-piblea.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/424449/original/file-20211004-25-piblea.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/424449/original/file-20211004-25-piblea.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/424449/original/file-20211004-25-piblea.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/424449/original/file-20211004-25-piblea.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/424449/original/file-20211004-25-piblea.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A single act of giving can lead to a cycle of gratitude and giving.</span>
<span class="attribution"><span class="source">(Andrea Piacquadio/Pexels)</span></span>
</figcaption>
</figure>
<p>At the heart of these dynamics are social interactions at events like formal onboarding events, weekly progress meetings, informal dinners, parties or outdoor activities. The accelerator program was structured so that one of the camps regularly engaged in weekly progress meetings, while others did not. </p>
<p>The accelerator’s weekly progress meetings, which we label “tournament rituals,” focused on entrepreneurs’ shows of strength as they discussed progress made on their products or services. In other camps, informal weekend get-togethers, which we label “bonding rituals,” organically emerged thanks to formal onboarding events that focused on building familiarity among entrepreneurs.</p>
<p>In these bonding rituals, entrepreneurs let their guards down and opened up about challenges they faced as entrepreneurs. This helped participants realize their common experiences as entrepreneurs and the need to help their peers.</p>
<p>Those who participated in these bonding rituals were not only comfortable asking other entrepreneurs for help, but also received help from their peers who gave without expecting anything in return. These early acts of giving generated a sense of gratitude among receivers who willingly paid it forward. This giving-gratitude cycle eventually resulted in a thriving community of giving and a dense network populated by positive relationships. </p>
<h2>Shows of strength don’t lead to giving</h2>
<p>On the other hand, those show-of-strength or tournament rituals generated an expectation among entrepreneurs to be strategic in exchanging resources with others in the accelerator program. Accordingly, when participants strategically approached knowledgeable entrepreneurs in their camp for help, they were rebuffed because their peers saw no value in lending a helping hand.</p>
<p>These early failed exchanges became shaming rituals — for example, entrepreneurs who felt undervalued and rejected by fellow entrepreneurs in their camp avoided interacting with them to steer clear of further negative experiences. This shaming-avoidance cycle resulted in a rapid dissolution of ties and what remained, in the end, was a sparsely connected network.</p>
<figure class="align-center ">
<img alt="People looking stern-faced gather around a laptop in an office setting." src="https://images.theconversation.com/files/424454/original/file-20211004-12705-1m0arur.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/424454/original/file-20211004-12705-1m0arur.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=404&fit=crop&dpr=1 600w, https://images.theconversation.com/files/424454/original/file-20211004-12705-1m0arur.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=404&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/424454/original/file-20211004-12705-1m0arur.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=404&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/424454/original/file-20211004-12705-1m0arur.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=508&fit=crop&dpr=1 754w, https://images.theconversation.com/files/424454/original/file-20211004-12705-1m0arur.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=508&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/424454/original/file-20211004-12705-1m0arur.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=508&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">When requests for help are refused, people will avoid future interactions.</span>
<span class="attribution"><span class="source">(Piqsels)</span></span>
</figcaption>
</figure>
<p>In short, organic bonding rituals helped competitors identify with each other, triggering and sustaining early acts of giving. But tournament rituals only encouraged entrepreneurs to further their own interests, which eventually gave rise to more takers than givers.</p>
<p>We believe our research offers valuable insights into human interactions. Beyond start-up accelerators, our research applies to other organizational contexts where both competitive and co-operative motives exist. For instance, our research offers critical lessons for organizations looking to build a more collaborative culture. </p>
<p>Although employees are expected to co-operate, they also compete with each other for promotions. Formal meetings are a regular feature in organizations, but they can foster collaboration by ensuring they focus on the camaraderie among members rather than celebrating their individual wins.</p>
<p>Avoiding shows of strength in formal meetings can also encourage employees to engage in bonding rituals outside the organization, which our study shows are essential for building bonds within the group.</p>
<p>Amid the pandemic era, which has left more people feeling lonely and distanced from their community — <a href="https://www.harvardmagazine.com/2021/01/feature-the-loneliness-pandemic">not willingly but reluctantly</a> — our research underscores the importance of bonding rituals for building healthy communities of giving.</p><img src="https://counter.theconversation.com/content/166646/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rekha Krishnan receives funding from SSHRC - Social Sciences and Humanities
Research Council of Canada. </span></em></p><p class="fine-print"><em><span>Rajiv Krishnan Kozhikode receives funding from The Social Sciences and Humanities Research Council of Canada. </span></em></p>New research on giving in a business setting could offer insights into human interactions and critical lessons for organizations looking to build a more collaborative culture.Rekha Krishnan, Associate Professor of International Business and Entrepreneurship, Simon Fraser UniversityRajiv Krishnan Kozhikode, Associate Professor, International Business/Management and Organization Studies, Simon Fraser UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1508302021-03-30T18:47:35Z2021-03-30T18:47:35ZAyn Rand-inspired ‘myth of the founder’ puts tremendous power in hands of Big Tech CEOs like Zuckerberg – posing real risks to democracy<figure><img src="https://images.theconversation.com/files/392144/original/file-20210329-19-1hredf9.jpg?ixlib=rb-1.1.0&rect=250%2C189%2C5380%2C3638&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Ayn Rand compares entrepreneurs to Atlas, the Greek god who holds up the world. </span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/RockefellerCenter/804aeaab821647b7992a59be5246aabd/photo?Query=Rockefeller%20center%20statue&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=68&currentItemNo=39">AP Photo/Richard Drew</a></span></figcaption></figure><p>Coinbase’s <a href="https://www.pymnts.com/news/ipo/2021/coinbase-ipo-pushed-april/">plan to go public in April</a> highlights a troubling trend among tech companies: Its founding team will maintain voting control, making it mostly immune to the wishes of outside investors. </p>
<p>The <a href="https://www.bloomberg.com/opinion/articles/2021-03-02/coinbase-ipo-coin-the-crypto-exchange-is-a-100-billion-cult?sref=Hjm5biAW">best-known U.S. cryptocurrency</a> exchange is doing this by <a href="https://www.sec.gov/Archives/edgar/data/0001679788/000162828021004939/coinbaseglobalincs-1a1.htm#i86a9d9b35e45447ea6eb369e5dcf1e6a">creating two classes of shares</a>. One class will be available to the public. The other is reserved for the founders, insiders and early investors, and will wield 20 times the voting power of regular shares. That will ensure that after all is said and done, the <a href="https://finance.yahoo.com/finance/news/coinbase-ipo-7-key-takeaways-154321846.html">insiders will control 53.5% of the votes</a>. </p>
<p>Coinbase <a href="https://www.cii.org/dualclass_stock">will join dozens of other publicly traded tech companies</a> – many with household names such as Google, Facebook, Doordash, Airbnb and Slack – that have <a href="https://www.bloomberg.com/quicktake/dual-class-shares?sref=Hjm5biAW">issued two types of shares</a> in an effort to retain control for founders and insiders. The reason this is becoming increasingly popular has a lot to do with <a href="https://www.nytimes.com/2017/07/13/business/ayn-rand-business-politics-uber-kalanick.html">Ayn Rand</a>, <a href="https://www.theguardian.com/books/2017/apr/10/new-age-ayn-rand-conquered-trump-white-house-silicon-valley">one of Silicon Valley’s favorite authors</a>, and the “myth of the founder” her writings have helped inspire. </p>
<p><a href="https://www.sec.gov/news/speech/fleming-dual-class-shares-recipe-disaster">Engaged investors</a> and governance experts <a href="https://digitalcommons.law.seattleu.edu/sulr/vol39/iss2/13/">like me</a> generally loathe dual-class shares because they undermine executive accountability by making it harder to rein in a wayward CEO. I first stumbled upon this method executives use to limit the influence of pesky outsiders while working on my <a href="https://doi.org/10.2307/2393275">doctoral dissertation on hostile takeovers</a> in the late 1980s.</p>
<p>But the risks of this trend are greater than simply entrenching bad management. Today, given the role tech companies play in <a href="https://knightfoundation.org/digitalcitizenship/technology/">virtually every corner of American life</a>, it poses a threat to democracy as well. </p>
<h2>All in the family</h2>
<p>Dual-class voting structures have been around for decades. </p>
<p>When Ford Motor Co. went public in 1956, its founding family used the arrangement to <a href="https://www.nasdaq.com/articles/63-years-later-what-can-investors-learn-fords-1956-ipo-2019-01-16">maintain 40% of the voting rights</a>. <a href="https://www.washingtonpost.com/business/why-dual-class-shares-catch-on-over-investor-worries/2021/03/04/38ac326a-7d14-11eb-8c5e-32e47b42b51b_story.html">Newspaper companies</a> like <a href="https://www.casehero.com/new-york-times-co/">The New York Times</a> and <a href="https://media.terry.uga.edu/documents/finance/howell_dual_class_share.pdf">The Washington Post</a> often use the arrangement to protect their journalistic independence from Wall Street’s insatiable demands for profitability.</p>
<p>In a typical dual-class structure, the company will sell one class of shares to the public, usually called class A shares, while founders, executives and others retain class B shares with enough voting power to maintain majority voting control. This allows the class B shareholders to determine the outcome of matters that come up for a shareholder vote, such as who is on the company’s board. </p>
<p>Advocates see a dual-class structure as a way to fend off short-term thinking. In principle, this insulation from investor pressure can allow the company to <a href="http://dx.doi.org/10.2139/ssrn.3183517">take a long-term perspective</a> and make tough strategic changes even at the expense of short-term share price declines. Family-controlled businesses often view it as a way to preserve their legacy, which is why Ford remains a family company after more than a century.</p>
<p>It also makes a company <a href="https://doi.org/10.2307/2393275">effectively immune from hostile takeovers</a> and the whims of activist investors.</p>
<p><iframe id="jBE9l" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/jBE9l/3/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>Checks and balances</h2>
<p>But this insulation comes at a cost for investors, who lose a crucial check on management. </p>
<p>Indeed, dual-class shares essentially short-circuit <a href="https://doi.org/10.1146/annurev.soc.31.041304.122249">almost all the other means that limit executive power</a>. The board of directors, elected by shareholder vote, is the ultimate authority within the corporation that oversees management. Voting for directors and proposals on the annual ballot are the main methods shareholders have to ensure management accountability, other than simply selling their shares.</p>
<p><a href="https://doi.org/10.1111/j.1540-6261.2009.01477.x">Recent research shows</a> that the value and stock returns of dual-class companies are lower than other businesses, and they’re more likely to overpay their CEO and waste money on expensive acquisitions.</p>
<p>Companies with dual-class shares <a href="https://site.warrington.ufl.edu/ritter/ipo-data/">rarely made up more than 10% of public listings</a> in a given year until the 2000s, when tech startups began using them more frequently, according to data collected by University of Florida business professor Jay Ritter. The dam began to break after Facebook went public in 2012 with a <a href="https://www.nytimes.com/2009/11/25/technology/internet/25facebook.html">dual-class stock structure</a> that kept founder Mark Zuckerberg firmly in control – <a href="https://www.vox.com/technology/2018/11/19/18099011/mark-zuckerberg-facebook-stock-nyt-wsj">he alone controls almost 60% of the company</a>. </p>
<p>In 2020, over 40% of tech companies that went public did so with two or more classes of shares with unequal voting rights. </p>
<p>This has alarmed <a href="https://corpgov.law.harvard.edu/2019/06/28/dual-class-shares-governance-risks-and-company-performance/">governance experts</a>, <a href="https://www.cii.org/dualclassenablers">some investors</a> and <a href="https://corpgov.law.harvard.edu/2017/04/24/the-untenable-case-for-perpetual-dual-class-stoc">legal scholars</a>. </p>
<figure class="align-center ">
<img alt="Facebook CEO Mark Zuckerberg speaks into a microphone at a House committee hearing in 2019" src="https://images.theconversation.com/files/392147/original/file-20210329-25-19izq9b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/392147/original/file-20210329-25-19izq9b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/392147/original/file-20210329-25-19izq9b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/392147/original/file-20210329-25-19izq9b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/392147/original/file-20210329-25-19izq9b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/392147/original/file-20210329-25-19izq9b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/392147/original/file-20210329-25-19izq9b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Zuckerberg controls almost 60% of Facebook through class B shares.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/FacebookAustraliaPowerPlay/007f1af98e314913aaf70e88a4b54a93/photo?Query=zuckerberg&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=2388&currentItemNo=4">AP Photo/Andrew Harnik</a></span>
</figcaption>
</figure>
<h2>Ayn Rand and the myth of the superhuman founder</h2>
<p>If the dual-class structure is bad for investors, then why are so many tech companies able to convince them to buy their shares when they go public?</p>
<p>I attribute it to Silicon Valley’s mythology of the founder –- what I would dub an “Ayn Rand theory of corporate governance” that credits founders with superhuman vision and competence that merit deference from lesser mortals. Rand’s novels, most notably “Atlas Shrugged,” portray an America in which <a href="https://www.businessinsider.com/atlas-shrugged-business-advice-2013-10">titans of business hold up the world</a> by creating innovation and value but are beset by moochers and looters who want to take or regulate what they have created.</p>
<p>Perhaps unsurprisingly, Rand has a strong following among <a href="https://www.theguardian.com/books/2017/apr/10/new-age-ayn-rand-conquered-trump-white-house-silicon-valley">tech founders</a>, whose <a href="https://onezero.medium.com/the-philosophy-that-explains-why-so-many-silicon-valley-ceos-are-always-playing-victim-8dafeccb71f7">creative genius may be “threatened”</a> by any form of outside regulation. <a href="https://www.maavens.com/m/elon-musk">Elon Musk</a>, Coinbase founder <a href="https://www.maavens.com/m/brian-armstrong">Brian Armstrong</a> and even the late <a href="https://www.maavens.com/m/steve-jobs">Steve Jobs</a> all have recommended “Atlas Shrugged.” </p>
<figure class="align-center ">
<img alt="Ayn Rand sits with her arms folded outside Grande Central Terminal in New York City" src="https://images.theconversation.com/files/392360/original/file-20210329-15-rcl59s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/392360/original/file-20210329-15-rcl59s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=470&fit=crop&dpr=1 600w, https://images.theconversation.com/files/392360/original/file-20210329-15-rcl59s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=470&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/392360/original/file-20210329-15-rcl59s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=470&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/392360/original/file-20210329-15-rcl59s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=590&fit=crop&dpr=1 754w, https://images.theconversation.com/files/392360/original/file-20210329-15-rcl59s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=590&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/392360/original/file-20210329-15-rcl59s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=590&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The writings of Ayn Rand are revered by many tech titans.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/BooksAynRand/533cbfabe6cc40b5913741a2f72034b5/photo?Query=ayn%20AND%20rand&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=6&currentItemNo=0">AP Photo</a></span>
</figcaption>
</figure>
<p>Her work is also celebrated by the venture capitalists who typically finance tech startups – <a href="https://www.cbinsights.com/research/founders-best-venture-capitalist-investors/">many of whom were founders themselves</a>. </p>
<p>The basic idea is simple: Only the founder has the vision, charisma and smarts to steer the company forward. </p>
<p>It begins with a powerful founding story. <a href="https://corporate.delltechnologies.com/en-us/about-us/who-we-are/timeline.htm">Michael Dell</a> and Zuckerberg created their multibillion-dollar companies <a href="https://www.insider.com/companies-started-by-teenagers-2019-10">in their dorm rooms</a>. Founding partner pairs Steve Jobs and Steve Wozniak and Bill Hewlett and David Packard built their first computer companies <a href="https://www.theguardian.com/technology/2014/dec/05/steve-wozniak-apple-starting-in-a-garage-is-a-myth">in the garage</a> – Apple and Hewlett-Packard, respectively. Often the stories are true, but sometimes, as in Apple’s case, less so. </p>
<p>And from there, founders face a gantlet of rigorous testing: recruiting collaborators, gathering customers and, perhaps most importantly, attracting multiple rounds of funding from venture capitalists. Each round serves to <a href="https://the-realignment.simplecast.com/episodes/ep-98-balaji-srinivasan-the-coming-decentralization-of-everything-V_zTV5Hk">further validate the founder’s leadership competence</a>. </p>
<p>The Founders Fund, a venture capital firm that has backed dozens of tech companies, including Airbnb, Palantir and Lyft, is one of the biggest proselytizers for this myth, as <a href="https://foundersfund.com/the-future/">it makes clear in its “manifesto.”</a> </p>
<p>“The entrepreneurs who make it have a near-messianic attitude and believe their company is essential to making the world a better place,” it asserts. True to its stated belief, the fund says it has “never removed a single founder,” which is why it has been a big supporter of dual-class share structures. </p>
<p>Another venture capitalist <a href="https://www.businessinsider.com/entrepreneurship-startup-founders-success-overconfidence-andreessen-horowitz-scott-kupor-2019-6">who seems to favor</a> giving founders extra power is Netscape founder <a href="https://a16z.com/portfolio/">Marc Andreessen</a>. His venture capital firm Andreessen Horowitz is Coinbase’s <a href="https://www.sec.gov/Archives/edgar/data/0001679788/000162828021005373/coinbaseglobalincs-1a2.htm">biggest investor</a>. And most of the <a href="https://a16z.com/portfolio/">companies in its portfolio</a> that have gone public also used a dual-class share structure, according to my own review of their securities filings.</p>
<h2>Bad for companies, bad for democracy</h2>
<p>Giving founders voting control disrupts the checks and balances needed to keep business accountable and can lead to big problems. </p>
<p><a href="https://www.newyorker.com/magazine/2020/11/30/how-venture-capitalists-are-deforming-capitalism">WeWork founder Adam Neumann</a>, for example, demanded “unambiguous authority to fire or overrule any director or employee.” As his behavior became increasingly erratic, the company hemorrhaged cash in the lead-up to its ultimately canceled initial public offering. </p>
<p>Investors forced out Uber’s Travis Kalanick in 2017, but <a href="https://www.nytimes.com/2017/06/21/technology/uber-ceo-travis-kalanick.html">not before he’s said to have created a workplace culture</a> that allegedly allowed sexual harassment and discrimination to fester. When Uber finally went public in 2019, <a href="https://www.sec.gov/Archives/edgar/data/1543151/000119312519103850/d647752ds1.htm">it shed its dual-class structure</a>. </p>
<p>There is <a href="https://www.nber.org/books-and-chapters/measuring-entrepreneurial-businesses-current-knowledge-and-challenges/are-founder-ceos-good-managers">some evidence</a> that founder-CEOs are less gifted at management than other kinds of leaders, and their companies’ performance can suffer as a consequence.</p>
<p>But investors who buy shares in these companies know the risks going in. There’s much more at stake than their money. </p>
<p>What happens when powerful, unconstrained founders control the <a href="https://theconversation.com/big-techs-swift-reaction-to-capitol-rioters-reveals-new-face-of-corporate-political-power-and-a-threat-to-american-democracy-153061">most powerful companies in the world</a>? </p>
<p>The tech sector is <a href="https://journals.sagepub.com/doi/10.1177/2631787721995198">increasingly laying claim</a> to central command posts of the U.S. economy. Americans’ access to news and information, financial services, social networks and even groceries is mediated by a handful of companies controlled by a handful of people. </p>
<p>Recall that in the wake of the Jan. 6 Capitol insurrection, the CEOs of Facebook and Twitter <a href="https://theconversation.com/big-techs-swift-reaction-to-capitol-rioters-reveals-new-face-of-corporate-political-power-and-a-threat-to-american-democracy-153061">were able to eject former President Donald Trump</a> from his favorite means of communication – <a href="https://www.washingtonpost.com/technology/2021/01/14/trump-twitter-megaphone/">virtually silencing him overnight</a>. And <a href="https://www.nytimes.com/2021/01/09/technology/apple-google-parler.html">Apple, Google and Amazon cut off Parler</a>, the right-wing social media platform used by some of the insurrectionists to plan their actions. Not all of these companies have dual-class shares, but this illustrates just how much power tech companies have over America’s political discourse.</p>
<p>One does not have to disagree with their decision to see that a form of political power is becoming increasingly concentrated in the hands of companies with limited outside oversight.</p>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p><img src="https://counter.theconversation.com/content/150830/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jerry Davis does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Tech companies’ use of dual-class share structures to keep control in the hands of founders and other insiders gives a handful of people power over enormous swaths of American life.Jerry Davis, Fellow at the Center for Advanced Study in the Behavioral Sciences at Stanford and Professor of Management and Sociology, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1459222020-09-14T19:50:17Z2020-09-14T19:50:17ZThe Inventor tells a story of a fraudulent female billionaire. Where are the films starring successful women entrepreneurs?<figure><img src="https://images.theconversation.com/files/357579/original/file-20200911-24-o10f4y.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C1920%2C1279&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">HBO</span></span></figcaption></figure><p><a href="https://www.hbo.com/documentaries/the-inventor-out-for-blood-in-silicon-valley">The Inventor: Out for Blood in Silicon Valley</a>, now streaming in Australia on Binge, depicts Theranos founder and former CEO Elizabeth Holmes as a bewitching sociopath. </p>
<p>Holmes wanted to revolutionise health care by providing a simple and cheap way to perform blood tests using only a finger prick. In 2003, she founded Theranos, with a vision of the company’s machines in every home in America. </p>
<p>But, as the Wall Street Journal’s John Carreyrou <a href="https://www.wsj.com/articles/theranos-has-struggled-with-blood-tests-1444881901">revealed</a> in 2015, Holmes created an intricate web of deception. Even as machines found their way into chemists and were being used by medical insurance companies, they never actually worked.</p>
<p>Holmes put patients’ lives at risk and cost investors millions of dollars.</p>
<p>The documentary is compelling viewing, but as it enters a very slim field of movies about female entrepreneurs it is worth questioning the impact of the stories we choose to tell.</p>
<h2>Fall from grace</h2>
<p>The journey Holmes took from young idol to spectacular failure is a story about systemic issues and the <a href="https://knowledge.wharton.upenn.edu/article/silicon-valley-work-culture/">sometimes toxic</a> culture of the world of start-ups. </p>
<p>Prior to the scandal breaking, Holmes was <a href="https://www.newyorker.com/magazine/2014/12/15/blood-simpler">celebrated in the media</a>. She was portrayed as a Stanford University dropout with a vision for changing the world. She raised hundreds of millions of dollars from powerful men in a start-up landscape known for its <a href="https://hbr.org/2020/01/how-the-vc-pitch-process-is-failing-female-entrepreneurs">discriminating funding practices</a>.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/wtDaP18OGfw?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>She made the <a href="https://www.forbes.com/profile/elizabeth-holmes/#338f337c47a7">cover</a> of Forbes magazine in 2014 as the world’s youngest self-made female billionaire. Holmes represented a heady mix of tech, science and business. She was the golden girl of the start-up world.</p>
<p>This made her fall from grace even more spectacular.</p>
<p>But compare Holmes’ portrayal with another well known example of a deceitful male entrepreneur: <a href="https://www.theguardian.com/film/2014/feb/28/wolf-of-wall-street-jordan-belfort-sex-drugs">Jordan Belfort</a>, the “wolf of Wall Street”.</p>
<p>Belfort ran an elaborate crime scheme linked to manipulating the stock market and was jailed for 22 months for securities fraud. Nonetheless,
his <a href="https://www.goodreads.com/book/show/522776.The_Wolf_of_Wall_Street">autobiography</a> and Martin Scorsese’s 2013 <a href="https://www.imdb.com/title/tt0993846/">film adaptation</a> depict Belfort’s story as celebration of wealth and power, rather than a critical review of his fraudulent behaviour.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/iszwuX1AK6A?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<h2>Where are all the good stories?</h2>
<p>Feature films about female entrepreneurs are few and far between.</p>
<p><a href="https://journals.aom.org/doi/abs/10.5465/AMBPP.2020.21276abstract">Research</a> from one of the authors examined English-language films from 1986 to 2016 with female entrepreneurs as the central character. Over the 30-year period, only 11 films about women entrepreneurs were identified – fewer than the number of <a href="https://www.macworld.co.uk/news/apple/steve-jobs-movies-documentaries-to-watch-3786148/">films about Apple co-founder Steve Jobs</a> alone.</p>
<figure class="align-center ">
<img alt="Movie still. Diane Keaton and a baby at a desk." src="https://images.theconversation.com/files/357786/original/file-20200914-20-1551xdm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/357786/original/file-20200914-20-1551xdm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=337&fit=crop&dpr=1 600w, https://images.theconversation.com/files/357786/original/file-20200914-20-1551xdm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=337&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/357786/original/file-20200914-20-1551xdm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=337&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/357786/original/file-20200914-20-1551xdm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=423&fit=crop&dpr=1 754w, https://images.theconversation.com/files/357786/original/file-20200914-20-1551xdm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=423&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/357786/original/file-20200914-20-1551xdm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=423&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">In Baby Boom, JC (Diane Keaton) goes from corporate executive to starting a baby food company.</span>
<span class="attribution"><span class="source">MGM</span></span>
</figcaption>
</figure>
<p>From <a href="https://www.imdb.com/title/tt0092605/">Baby Boom</a> (1987), where Diane Keaton’s character starts a baby food business, to Melissa McCarthy’s brownie empire in <a href="https://www.imdb.com/title/tt2702724">The Boss</a> (2016), these films overwhelmingly depicted female entrepreneurs as running small-scale kitchen table businesses in female-dominated industries.</p>
<p>These movies told stories of cleaning, as in <a href="https://www.imdb.com/title/tt2446980/">Joy</a> (2015) and <a href="https://www.imdb.com/title/tt0862846/">Sunshine Cleaning</a> (2008); fashion, as in <a href="https://www.imdb.com/title/tt2361509/">The Intern</a> (2015); and not-for-profit work, as in the <a href="https://www.imdb.com/title/tt0116313/">First Wives Club</a> (1996).</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/spoiler-alert-old-man-power-trumps-a-successful-young-woman-in-the-intern-49240">Spoiler alert: old-man-power trumps a successful young woman in The Intern</a>
</strong>
</em>
</p>
<hr>
<p>Businesses depicted typically had low numbers of paid employees. The entrepreneurs were resource-poor, and most often it was a supporting male character who helped the female entrepreneur succeed. </p>
<p>Additionally, the study found a woman starting her own business is seemingly not enough to hold audience attention: all films included a parallel romantic storyline.</p>
<h2>The female entrepreneur as role model</h2>
<p>Celebrating successful female role models <a href="https://www.sciencedirect.com/science/article/pii/S0167487011000353">encourages women</a> to dream big and succeed in male dominated arenas.</p>
<p>Role models provide a source of inspiration and contribute to self-belief. As the quantity of entrepreneurship related media increases, so does the amount of <a href="https://link.springer.com/content/pdf/10.1007/s11365-006-0018-8.pdf">entrepreneurial activity</a>. </p>
<p>However, negative portrayals of careers may <a href="https://psycnet.apa.org/record/1997-04591-001">prevent</a> people from considering a profession.</p>
<p>The case of Holmes and Theranos is damaging for the <a href="https://www.bloomberg.com/opinion/articles/2018-03-14/theranos-misled-investors-and-consumers-who-used-its-blood-test">betrayed</a> customers and investors, but also for the field of entrepreneurship, which only in recent decades has seen its reputation overhauled. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/elizabeth-holmes-theranos-scandal-has-more-to-it-than-just-toxic-silicon-valley-culture-114102">Elizabeth Holmes: Theranos scandal has more to it than just toxic Silicon Valley culture</a>
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<p>Entrepreneurship was once the <a href="http://cup.columbia.edu/book/a-brief-history-of-entrepreneurship/9780231173049">domain of racketeers</a>. Over time, it has evolved to be the domain of tech celebrities, socially conscious founders and a vehicle for upward social mobility – but still, too often, a domain of men.</p>
<p><a href="https://www.taylorfrancis.com/books/e/9780429279836/chapters/10.4324/9780429279836-26">One study</a> investigated how female entrepreneurs are featured on the cover of Entrepreneur magazine. Women were vastly outnumbered by men on the cover, and were often portrayed in a stereotypical female fashion. </p>
<figure class="align-center ">
<img alt="Karlie Kloss on the cover of Entrepreneur." src="https://images.theconversation.com/files/357787/original/file-20200914-16-e27i7r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/357787/original/file-20200914-16-e27i7r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=752&fit=crop&dpr=1 600w, https://images.theconversation.com/files/357787/original/file-20200914-16-e27i7r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=752&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/357787/original/file-20200914-16-e27i7r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=752&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/357787/original/file-20200914-16-e27i7r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=945&fit=crop&dpr=1 754w, https://images.theconversation.com/files/357787/original/file-20200914-16-e27i7r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=945&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/357787/original/file-20200914-16-e27i7r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=945&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Cover women on Entrepreneur are much more likely to get the glam treatment than their male colleagues.</span>
<span class="attribution"><span class="source">Entrepreneur</span></span>
</figcaption>
</figure>
<p>Words surrounding images of women tended to be about nurturing, health, beauty and fashion. Wording accompanying images of male entrepreneurs talked of power, innovation and risk taking.</p>
<p>Women were “glamified” in full make-up and focus given to their face, while men were more likely to be standing and set against a corporate colour palette.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/covid-19-may-turn-back-the-clock-on-womens-entrepreneurship-139961">COVID-19 may turn back the clock on women’s entrepreneurship</a>
</strong>
</em>
</p>
<hr>
<p>How we tell stories of female entrepreneurs matters. </p>
<p>In order to achieve equity in entrepreneurship, we need to acknowledge the role of the media in filling the entrepreneurship pipeline.</p>
<p>Positive depictions of innovative women act as a mirror, showing girls and women what they can achieve. We need more, and better, stories about female entrepreneurs so stories about female innovation aren’t limited to failure and fraud.</p><img src="https://counter.theconversation.com/content/145922/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Inventor: Out for Blood in Silicon Valley is compelling viewing – but why have there been more films about Steve Jobs alone in the past 30 years than about successful female entrepreneurs?Bronwyn Eager, Lecturer Entrepreneurship, University of TasmaniaLouise Grimmer, Senior Lecturer in Marketing, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1440162020-09-11T13:26:20Z2020-09-11T13:26:20ZHow tech billionaires’ visions of human nature shape our world<p>In the 20th century, politicians’ views of human nature shaped societies. But now, <a href="https://www.cato-unbound.org/2009/04/13/peter-thiel/education-libertarian">creators of new technologies</a> increasingly <a href="https://www.theguardian.com/technology/2020/jul/28/bezos-zuckerberg-us-tech-billions">drive societal change</a>. Their view of human nature may shape the 21st century. We must know what technologists see in humanity’s heart.</p>
<p>The economist <a href="https://www.basicbooks.com/titles/thomas-sowell/a-conflict-of-visions/9780465002054/">Thomas Sowell</a> proposed two visions of human nature. The <a href="https://www.penguinrandomhouse.com/books/290730/the-blank-slate-by-steven-pinker/">utopian vision</a> sees people as naturally good. The world corrupts us, but the wise can perfect us. </p>
<p>The tragic vision sees us as inherently flawed. Our sickness is selfishness. We cannot be trusted with power over others. There are no perfect solutions, only imperfect trade-offs.</p>
<p>Science <a href="https://www.penguinrandomhouse.com/books/290730/the-blank-slate-by-steven-pinker/">supports the tragic vision</a>. So does history. The <a href="https://www.littlebrown.co.uk/titles/david-andress/the-terror/9780349115887/">French</a>, <a href="https://www.basicbooks.com/titles/timothy-snyder/bloodlands/9780465032976/">Russian</a> and <a href="https://www.bloomsbury.com/us/maos-great-famine-9780802779281/">Chinese</a> revolutions were utopian visions. They paved their paths to paradise with 50 million dead.</p>
<p>The USA’s founding fathers held the tragic vision. They <a href="https://www.penguinrandomhouse.com/books/290730/the-blank-slate-by-steven-pinker/">created checks and balances</a> to constrain political leaders’ worst impulses.</p>
<h2>Technologists’ visions</h2>
<p>Yet when Americans founded online social networks, the tragic vision was forgotten. Founders were trusted to juggle their self-interest and the public interest when designing these networks and gaining vast data troves.</p>
<p>Users, <a href="https://www.tandfonline.com/doi/full/10.1080/23736992.2018.1477047">companies</a> and <a href="https://www.intelligence.senate.gov/sites/default/files/documents/Report_Volume2.pdf">countries</a> were trusted not to abuse their new social-networked power. Mobs were <a href="https://www.theatlantic.com/magazine/archive/2018/10/james-madison-mob-rule/568351/">not constrained</a>. This led to <a href="https://doi.org/10.1145/3292522.3326034">abuse</a> and <a href="https://doi.org/10.1080/23736992.2018.1477047">manipulation</a>.</p>
<p><a href="https://www.eubios.info/UNESCO/precprin.pdf">Belatedly</a>, social networks have adopted <a href="https://blog.twitter.com/en_us/topics/product/2018/Serving_Healthy_Conversation.html">tragic visions</a>. Facebook <a href="https://www.vox.com/2018/7/18/17575158/mark-zuckerberg-facebook-interview-full-transcript-kara-swisher">now acknowledges regulation</a> is needed to get the best from <a href="https://doi.org/10.1386/jdmp.10.1.33_1">social media</a>. </p>
<p>Tech billionaire Elon Musk dabbles in both the tragic and utopian visions. He thinks “<a href="https://sonix.ai/resources/full-transcript-joe-rogan-experience-elon-musk/">most people are actually pretty good</a>”. But he supports <a href="https://www.rev.com/blog/transcripts/joe-rogan-elon-musk-podcast-transcript-may-7-2020">market, not government control</a>, wants competition to <a href="https://surfcoderepeat.com/elon-on-governments">keep us honest</a>, and <a href="https://sonix.ai/resources/full-transcript-joe-rogan-experience-elon-musk/">sees evil in individuals</a>. </p>
<p>Musk’s tragic vision <a href="https://www.spacex.com/">propels us to Mars</a> in case short-sighted selfishness destroys Earth. Yet his utopian vision assumes people on Mars could be entrusted <a href="https://www.youtube.com/watch?v=lBfi2AcGrTY&list=PLKof9YSAshgyPqlK-UUYrHfIQaOzFPSL4&index=4">with the direct democracy</a> that America’s <a href="https://www.theatlantic.com/magazine/archive/2018/10/james-madison-mob-rule/568351/">founding fathers feared</a>. His utopian vision also assumes giving us tools to <a href="https://neuralink.com/">think better</a> won’t simply enhance our Machiavellianism.</p>
<p>Bill Gates leans to the tragic and tries to create a better world within humanity’s constraints. Gates <a href="https://news.microsoft.com/2008/01/24/bill-gates-world-economic-forum-2008/">recognises our self-interest</a> and supports market-based rewards to help us behave better. Yet he believes “creative capitalism” can tie self-interest to our inbuilt desire to help others, benefiting all. </p>
<figure class="align-center ">
<img alt="Peter Tiel stood in front of screen displaying computer code." src="https://images.theconversation.com/files/357446/original/file-20200910-25-174iq53.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/357446/original/file-20200910-25-174iq53.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/357446/original/file-20200910-25-174iq53.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/357446/original/file-20200910-25-174iq53.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/357446/original/file-20200910-25-174iq53.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/357446/original/file-20200910-25-174iq53.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/357446/original/file-20200910-25-174iq53.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Peter Thiel considers the code of human nature.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/heisenbergmedia/14051014116/">Heisenberg Media/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>A different tragic vision lies in the writings of Peter Thiel. This billionaire tech investor <a href="https://www.jstor.org/stable/10.14321/j.ctt7zt6qq?turn_away=true">was influenced by</a> philosophers <a href="https://plato.stanford.edu/entries/strauss-leo/">Leo Strauss</a> and <a href="https://theconversation.com/carl-schmitt-nazi-era-philosopher-who-wrote-blueprint-for-new-authoritarianism-59835">Carl Schmitt</a>. Both believed evil, in the form of a <a href="https://www.routledge.com/Cloaked-in-Virtue-Unveiling-Leo-Strauss-and-the-Rhetoric-of-American-Foreign/Xenos/p/book/9780415950893">drive for dominance</a>, is part of our nature.</p>
<p>Thiel dismisses the “<a href="https://www.jstor.org/stable/10.14321/j.ctt7zt6qq?turn_away=true">Enlightenment view of the natural goodness of humanity</a>”. Instead, he approvingly cites the view that humans are “<a href="https://www.jstor.org/stable/10.14321/j.ctt7zt6qq?turn_away=true">potentially evil or at least dangerous beings</a>”. </p>
<h2>The consequences of seeing evil</h2>
<p>The German philosopher <a href="https://www.cambridge.org/ie/academic/subjects/philosophy/philosophy-texts/nietzsche-beyond-good-and-evil-prelude-philosophy-future?format=PB">Friedrich Nietzsche warned</a> that those who fight monsters must beware of becoming monsters themselves. He was right.</p>
<p>People who believe in evil are more likely to <a href="https://doi.org/10.1016/j.paid.2017.09.037">demonise, dehumanise, and punish</a> wrongdoers. They are more likely to support violence <a href="https://doi.org/10.1177/0146167213496282">before</a> and <a href="https://doi.org/10.1177/0146167213500997">after</a> another’s transgression. They feel that <a href="https://doi.org/10.1177/0146167213500997">redemptive violence</a> can eradicate evil and save the world. Americans who believe in evil are <a href="https://doi.org/10.1177/0146167213500997">more likely to support</a> torture, killing terrorists and America’s possession of nuclear weapons.</p>
<p>Technologists who see evil risk creating coercive solutions. Those who believe in evil are <a href="https://doi.org/10.1177/0146167213496282">less likely to think deeply</a> about why people act as they do. They are also <a href="https://doi.org/10.1016/j.paid.2017.09.037">less likely to see</a> how situations influence people’s actions. </p>
<p>Two years after 9/11, Peter Thiel founded <a href="https://www.palantir.com/">Palantir</a>. This company creates software to analyse big data sets, helping businesses fight fraud and the US government combat crime.</p>
<p>Thiel is a Republican-supporting libertarian. Yet, he appointed a Democrat-supporting <a href="https://www.bloomberg.com/features/2018-palantir-peter-thiel/">neo-Marxist</a>, Alex Karp, as Palantir’s CEO. Beneath their differences lies a shared belief in the inherent dangerousness of humans. Karp’s PhD thesis argued that we have a fundamental aggressive drive towards <a href="https://www.boundary2.org/2020/07/moira-weigel-palantir-goes-to-the-frankfurt-school/">death and destruction</a>.</p>
<p>Just as believing in evil is associated with supporting pre-emptive aggression, Palantir doesn’t just wait for people to commit crimes. It <a href="https://patents.google.com/patent/US20170293847A1">has patented</a> a “crime risk forecasting system” to predict crimes and has <a href="https://harvardcrcl.org/minority-report-why-we-should-question-predictive-policing/#:%7E:text=The%20predictive%20policing%20system%20Palantir,'t%20completely%20new%2C%20either.&text=Predictive%20policing%20tries%20to%20make,take%20steps%20to%20prevent%20it.">trialled predictive policing</a>. This has <a href="https://harvardcrcl.org/minority-report-why-we-should-question-predictive-policing/#:%7E:text=The%20predictive%20policing%20system%20Palantir,'t%20completely%20new%2C%20either.&text=Predictive%20policing%20tries%20to%20make,take%20steps%20to%20prevent%20it.">raised concerns</a>.</p>
<p>Karp’s tragic vision acknowledges that Palantir needs constraints. He stresses the judiciary must put “<a href="https://www.youtube.com/watch?v=1zHUXGd4gJU">checks and balances on the implementation</a>” of Palantir’s technology. He says the use of Palantir’s software should be “<a href="https://www.youtube.com/watch?v=1zHUXGd4gJU">decided by society in an open debate</a>”, rather than by Silicon Valley engineers.</p>
<p>Yet, Thiel cites philosopher Leo Strauss’ suggestion that America <a href="https://www.jstor.org/stable/10.14321/j.ctt7zt6qq?turn_away=true">partly owes her greatness</a> “to her occasional deviation” from principles of freedom and justice. Strauss <a href="https://www.jstor.org/stable/10.14321/j.ctt7zt6qq?turn_away=true">recommended hiding</a> such deviations under a veil. </p>
<p>Thiel <a href="https://www.jstor.org/stable/10.14321/j.ctt7zt6qq?turn_away=true">introduces the Straussian argument that</a> only “the secret coordination of the world’s intelligence services” can support a US-led international peace. This recalls Colonel Jessop in the film, <a href="https://www.imdb.com/title/tt0104257/">A Few Good Men</a>, who felt he should deal with dangerous truths in darkness.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/9FnO3igOkOk?wmode=transparent&start=39" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Can we handle the truth?</span></figcaption>
</figure>
<p>Seeing evil after 9/11 led technologists and governments to overreach in their surveillance. This <a href="https://www.theguardian.com/world/2013/jul/31/nsa-top-secret-program-online-data">included using the formerly secret XKEYSCORE computer system</a> used by the US National Security Agency to colllect people’s internet data, which is <a href="https://theintercept.com/2017/02/22/how-peter-thiels-palantir-helped-the-nsa-spy-on-the-whole-world/">linked to Palantir</a>. The American people rejected this approach and <a href="https://www.hrw.org/news/2015/06/03/us-modest-step-curb-spy-excesses">democratic processes</a> increased oversight and limited surveillance.</p>
<h2>Facing the abyss</h2>
<p>Tragic visions pose risks. Freedom may be unnecessarily and coercively limited. External roots of violence, like <a href="https://doi.org/10.1016/j.jpubeco.2014.07.007">scarcity</a> and <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6309619/">exclusion</a>, may be overlooked. Yet if <a href="https://www.firstthings.com/article/2015/06/against-edenism">technology creates economic growth</a> it will address many external causes of conflict.</p>
<p>Utopian visions ignore the dangers within. Technology that only changes the world is insufficient to save us from our selfishness and, as I argue in a forthcoming book, <a href="https://oneworld-publications.com/spite-hb.html">our spite</a>.</p>
<p>Technology must change the world working within the constraints of human nature. Crucially, <a href="https://www.sec.gov/Archives/edgar/data/1321655/000119312520230013/d904406ds1.htm#rom904406_6">as Karp notes</a>, democratic institutions, not technologists, must ultimately decide society’s shape. Technology’s outputs must be democracy’s inputs.</p>
<p>This may involve us acknowledging hard truths about our nature. But what if society does not wish to face these? Those who cannot handle truth make others fear to speak it. </p>
<p>Straussian technologists, who believe but dare not speak dangerous truths, may feel compelled to protect society in undemocratic darkness. They overstep, yet are encouraged to by those who see more harm in speech than its suppression.</p>
<p>The ancient Greeks had a name for someone with <a href="https://www.palgrave.com/gp/book/9781403986689">the courage to tell truths that could put them in danger</a> - the parrhesiast. But the parrhesiast needed a listener who promised to not to react with anger. This <a href="https://www.palgrave.com/gp/book/9781403986689">parrhesiastic contract</a> allowed dangerous truth-telling.</p>
<p>We have shredded this contract. We must renew it. Armed with the truth, the Greeks felt they could <a href="https://www.palgrave.com/gp/book/9781403986689">take care of themselves and others</a>. Armed with both truth and technology we can move closer to fulfilling this promise.</p><img src="https://counter.theconversation.com/content/144016/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simon McCarthy-Jones receives funding from the US-based Brain and Behavior Research Foundation</span></em></p>What world will tech billionaires move us towards if they believe that humans are fundamentally dangerous?Simon McCarthy-Jones, Associate Professor in Clinical Psychology and Neuropsychology, Trinity College DublinLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1434082020-08-14T12:17:07Z2020-08-14T12:17:07ZDiversity pledges alone won’t change corporate workplaces – here’s what will<figure><img src="https://images.theconversation.com/files/352775/original/file-20200813-14-1oj7rc4.jpg?ixlib=rb-1.1.0&rect=0%2C172%2C5000%2C2694&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Words alone won't make corporate America more diverse. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/the-words-all-black-lives-matter-are-seen-painted-on-news-photo/1219964763">Robyn Beck/AFP via Getty Images</a></span></figcaption></figure><p>Dozen of companies, from <a href="https://www.apple.com/speaking-up-on-racism/">Apple</a> to <a href="https://www.zappos.com/e/black-lives-matter">Zappos</a>, have reacted to George Floyd’s killing and the protests that followed by <a href="https://www.nytimes.com/article/companies-racism-george-floyd-protests.html">pledging to make their workforces more diverse</a>. </p>
<p>While commendable, to me it feels a bit like deja vu. Back in 2014, a host of tech companies <a href="https://money.cnn.com/2015/06/19/technology/tech-diversity-roundup/index.html">made similar commitments</a> to diversify their ranks. Their latest reports – which they release annually – show <a href="https://www.vox.com/recode/2019/6/17/18678541/women-tech-photoshop-diversity">they’ve made little progress</a>.</p>
<p>Why have their efforts largely failed? Were they just empty promises? </p>
<p>As a gender diversity scholar, I explored these questions in <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3344751">my recent paper published</a> in the Stanford Technology Law Review. The problem is not a lack of commitment but what social scientists call “unconscious bias.”</p>
<h2>Big tech, little progress</h2>
<p>Today’s efforts to promote diversity are certainly more specific than the tech industry’s vague promises in 2014. </p>
<p>In 2020, sports apparel maker Adidas <a href="https://www.adidas-group.com/en/media/news-archive/press-releases/2020/message-adidas-board-creating-lasting-change-now/">pledged</a> to fill at least 30% of all open positions with Black or Latino candidates. Cosmetics company Estée Lauder <a href="https://www.elcompanies.com/en/news-and-media/newsroom/company-features/2020/elc-commits-to-racial-equity">promised</a> to make sure the share of Black people it employs mirrors their percentage of the U.S. population within five years. And Facebook <a href="https://about.fb.com/news/2020/06/supporting-black-and-diverse-communities/">vowed to double</a> its number of Black and Latino employees within three years. </p>
<p>Companies have also committed at least <a href="https://www.marketwatch.com/story/here-are-tech-companies-plans-for-increasing-diversity-amid-protests-over-racial-inequality-2020-06-25">US$1 billion</a> in money and resources to fight the broader societal scourge of racism and support Black Americans and people of color more broadly. </p>
<p>Unfortunately, if past experience is any indication, good intentions and public pledges will not be enough to tackle the problem of the underrepresentation of women and people of color in most companies.</p>
<p>In 2014, <a href="https://www.businessinsider.com/google-diversity-numbers-2014-5">Google</a>, <a href="https://www.theverge.com/2014/6/25/5843300/facebook-releases-first-diversity-report">Facebook</a>, <a href="https://www.theverge.com/2014/8/12/5949453/no-surprise-apple-is-very-white-very-male">Apple</a> and other tech companies began publishing diversity reports after software engineer <a href="https://qz.com/work/1175679/software-engineer-tracy-chous-mission-to-diversify-silicon-valley/">Tracy Chao</a>, investor <a href="https://www.thecut.com/2017/08/ellen-pao-silicon-valley-sexism-reset-excerpt.html">Ellen Pao</a> and others <a href="https://projectinclude.org">called attention</a> to <a href="https://www.vox.com/2018/2/5/16972096/emily-chang-brotopia-book-bloomberg-technology-culture-silicon-valley-kara-swisher-decode-podcast">Silicon Valley’s white male-dominated, misogynistic culture</a>. The numbers weren’t pretty, and so one by one, they all made <a href="https://www.wired.com/story/five-years-tech-diversity-reports-little-progress/">public commitments to diversity</a> with promises of money, partnerships, training and mentorship programs. </p>
<p>Yet, half a decade later, their latest reports reveal, in embarrassing detail, <a href="https://www.vox.com/recode/2019/6/17/18678541/women-tech-photoshop-diversity">how little things have changed</a>, especially for underrepresented minorities. For example, at Apple, the <a href="https://www.apple.com/diversity/">share of women in tech jobs rose</a> from 20% in 2014 to 23% in 2018, while the percentage of Black workers in those roles remained flat at 6%. <a href="https://kstatic.googleusercontent.com/files/25badfc6b6d1b33f3b87372ff7545d79261520d821e6ee9a82c4ab2de42a01216be2156bc5a60ae3337ffe7176d90b8b2b3000891ac6e516a650ecebf0e3f866">Google managed to increase the share</a> of women in such jobs to 24% in 2020 from 17% in 2014, yet only 2.4% of these tech roles are filled by Black workers, up from 1.5% in 2014. Even companies that <a href="https://blog.twitter.com/en_us/topics/company/2019/inclusion-and-diversity-report-december-2019.html">have made more progress</a>, such as Twitter, still have far to go to achieve meaningful representation. </p>
<p><iframe id="Kievt" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/Kievt/4/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>I believe one of the reasons for the lack of progress is that two of their main methods, <a href="https://theconversation.com/tech-companies-spend-big-money-on-bias-training-but-it-hasnt-improved-diversity-numbers-44411">diversity training</a> and mentoring, were flawed. Training can actually <a href="https://perma.cc/XD5D-XNS2">harm workplace relationships</a>, while mentoring <a href="https://wappp.hks.harvard.edu/files/wappp/files/social_incentives_for_gender_differences_in_the_propensity_to_initiate_negotiations-_sometimes_it_does_hurt_to_ask_0.pdf">places the burden</a> of changing the system on those disadvantaged by it and with the least influence over it.</p>
<p>More importantly, however, you can not solve the problem of diversity – no matter how much money you throw at it – without a thorough understanding of its source: <a href="https://www.theguardian.com/books/2015/jul/18/daniel-kahneman-books-interview">faulty human decision-making</a>. </p>
<h2>A problem of bias</h2>
<p>My research, which relies on the <a href="https://scholar.princeton.edu/kahneman/publications-0">behavioral work</a> of Nobel Prize winner Daniel Kahneman, explains that because humans are unaware of their unconscious biases, most underestimate their impact on the decisions they make. </p>
<p><a href="https://www.doi.org/10.1037/1089-2680.2.2.175">People tend to believe</a> they make hiring or other business decisions based on <a href="https://perma.cc/8EDF-6WDX">facts or merit alone</a>, despite loads of evidence showing that decisions tend to be <a href="https://perma.cc/EYQ5-W3DV">subjective</a>, <a href="https://medium.com/conversations-with-tyler/tyler-cowen-daniel-kahneman-economics-bias-noise-167275de691f">inconsistent</a> and subject to mental shortcuts, known to psychologists as <a href="https://www2.psych.ubc.ca/%7Eschaller/Psyc590Readings/TverskyKahneman1974.pdf">heuristics</a>. </p>
<p>Male-dominated industries, such as <a href="https://www.insider.com/male-jobs-women-underrepresented-numbers-2019-8#television-video-and-motion-picture-camera-operators-and-editors-are-predominantly-male-with-women-making-up-214-of-the-field-7">tech, finance and engineering</a>, tend to keep hiring the same types of employees and promoting the same types of workers due to their preference for applicants who match the stereotype of who belongs in these roles – a phenomenon known as <a href="https://perma.cc/8WL2-WL2S">representative bias</a>. This perpetuates the status quo that keeps men in prime positions and prevents women and underrepresented minorities from gaining a foothold. </p>
<p>This problem is amplified by <a href="https://pdfs.semanticscholar.org/70c9/3e5e38a8176590f69c0491fd63ab2a9e67c4.pdf">confirmation bias</a> and the <a href="https://www.semanticscholar.org/paper/On-the-Psychology-of-Prediction.-Kahneman-Tversky/85978718f87a0299b6b3fbbc3e8c40210d21942b">validity illusion</a>, which lead us to be overconfident in our predictions and decisions – despite <a href="https://scholar.google.com/scholar?q=kahneman+on+prediction&hl=en&as_sdt=0&as_vis=1&oi=scholart">ample research</a> demonstrating how poorly humans are at forecasting events. </p>
<p>By failing to make objective decisions in the hiring process, the system just repeats itself over and over.</p>
<h2>How AI can overcome bias</h2>
<p>Advances in artificial intelligence, however, offer a way to <a href="https://ideal.com/unconscious-bias/">overcome these biases</a> by making hiring decisions more objective and consistent. </p>
<p>One way is by anonymizing the interview process.</p>
<p>Studies have found that simply replacing female names with male names on resumes results in improving the odds of a woman being hired <a href="https://doi.org/10.1073/pnas.1211286109">by 61%</a>. AI could help ensure an applicant isn’t culled early in the vetting process due to gender or race in a number of ways. For example, code could be written that removes certain identifying features from resumes. Or a company could use <a href="https://perma.cc/JL3X-NYWE">neuroscience games</a> – which help match candidate skills and cognitive traits to the needs of jobs – as an unbiased gatekeeper. </p>
<p>Another roadblock is job descriptions, <a href="https://www.mya.com/blog/unconscious-bias-in-job-descriptions/">which can be worded</a> in a way that results in fewer applicants from diverse backgrounds. AI is able to identify and remove biased language before the ad is even posted.</p>
<p><a href="https://perma.cc/3XVC-4XY2">Some companies</a> have already made strides hiring women and underrepresented minorities this way. For example, <a href="https://www.unilever.com/brands/?category=408126">Unilever</a> has had fantastic success improving the diversity of its workforce by employing a number of AI technologies in the recruitment process, including using a <a href="https://perma.cc/QN6T-WZFZ">chatbot</a> to carry on automated “conversations” with applicants. Earlier this year, the maker of Ben & Jerry’s ice cream and Vaseline jelly <a href="https://www.unilever.com/news/press-releases/2020/unilever-achieves-gender-balance-across-management-globally.html">said it achieved</a> perfect parity between women and men in management positions, up from 38% a decade earlier. </p>
<p>Accenture, <a href="https://www.refinitiv.com/en/media-center/press-releases/2019/september/refinitiv-announces-the-2019-d-and-i-index-top-100-most-diverse-and-inclusive-organizations-globally">which ranked number one</a> in 2019 among more than 7,000 companies around the world on an index of diversity and inclusion, utilizes AI in its <a href="https://business.linkedin.com/talent-solutions/blog/recruiting-strategy/2018/the-new-way-companies-are-evaluating-candidates-soft-skills-and-discovering-high-potential-talent">online assessments</a> of job applicants. <a href="https://www.accenture.com/us-en/about/inclusion-diversity/us-workforce">Women now make up</a> 38% of its U.S. workforce, up from 36% in 2015, while African Americans rose to 9.3% from 7.6%.</p>
<h2>Garbage in, garbage out</h2>
<p>Of course, AI is only as good as the data and design that go into it.</p>
<p>We know that <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2477899">biases</a> can be introduced in the choices programmers make when creating an algorithm, how information is labeled and even in the very data sets that AI relies upon. A <a href="http://proceedings.mlr.press/v81/buolamwini18a/buolamwini18a.pdf">2018 study</a> found that a poorly designed facial recognition algorithm had an error rate as high as 34% for identifying darker-skinned women, compared with 1% for light-skinned men.</p>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p>
<p>Fortunately, bias in AI can be mitigated – and remedied when problems are discovered – through <a href="https://www.toptal.com/artificial-intelligence/mitigating-ai-bias">its responsible use</a>, which requires balanced and inclusive data sets, the ability to peer inside its “black box” and the recruitment of a diverse group of programmers to build these programs. Additionally, algorithmic outcomes can be <a href="https://clsbluesky.law.columbia.edu/2020/08/07/artificial-intelligence-in-hiring-problem-or-solution/">monitored</a> and audited for bias and accuracy.</p>
<p>But that really is the point. You can take the bias out of AI – but <a href="https://www.experfy.com/blog/don-t-fear-ai-fear-human-stupidity/">you can’t remove it from humans</a>.</p><img src="https://counter.theconversation.com/content/143408/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kimberly A. Houser does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Recent anti-racism protests have spurred dozens of companies to vow to diversify their workforces, yet big tech’s efforts to do so since 2014 show promises aren’t enough to overcome the real problem.Kimberly A. Houser, Assistant Clinical Professor, Business and Tech Law, University of North TexasLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1412522020-06-23T13:21:10Z2020-06-23T13:21:10ZUber, WeWork, Airbnb – how coronavirus is bursting the tech bubble<figure><img src="https://images.theconversation.com/files/343476/original/file-20200623-188886-1katr1v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Coronavirus losers.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/milan-italy-june-10-2016-close-443281492">easy camera / Shutterstock.com</a></span></figcaption></figure><p>A handful of technology companies have benefited from coronavirus. Amazon has profited handsomely, as have streaming and video conferencing platforms <a href="https://theconversation.com/coronavirus-your-guide-to-winners-and-losers-in-the-business-world-134205">like Netflix and Zoom</a>. But the pandemic has laid bare the shaky foundations of a number of other platforms that bill themselves as technology companies and have enjoyed the high valuations that come with this label. </p>
<p>Major losers from the pandemic include the ride hailing apps: <a href="https://www.wired.co.uk/article/uber-coronavirus-chaos">Uber</a>, <a href="https://www.cityam.com/ride-hailing-app-grab-cuts-300-jobs-amid-coronavirus-hit/">Grab</a> (in South East Asia), <a href="https://www.cnbc.com/2020/05/20/softbank-backed-ola-lays-off-1400-employees-due-to-coronavirus-crisis.html">Ola</a> (India) and <a href="https://www.ft.com/content/83a065e2-5ed5-11ea-8033-fa40a0d65a98">Didi Chuxing</a> (China). Quite simply, people are not taking taxis. Office sharing businesses such as WeWork (which was, of course, <a href="https://theconversation.com/wework-ipo-why-investors-are-beginning-to-question-the-office-rental-firms-value-121949">already struggling</a>) are also in trouble with <a href="https://www.theguardian.com/business/2020/apr/14/wework-coronavirus-impact-business-not-as-usual">virtually no occupancy</a>. A similar situation is occurring in the accommodation sector with <a href="https://www.wired.co.uk/article/airbnb-coronavirus-losses">Airbnb</a> and hotel bookings start-up <a href="https://uk.finance.yahoo.com/news/coronavirus-covid-19-oyo-hotels-uk-redundancies-exclusive-155109993.html">Oyo</a>. </p>
<p>As a result, investment in tech businesses is crumbling. But at the same time this is clearing the way for the few winners to buy bigger stakes in those that are struggling.</p>
<h2>Swimming naked</h2>
<p>Two decades on from the dot-com collapse there is the likelihood of another crash in the technology sector. As with the build up to the dot-com bubble, an abundance of venture capital funding <a href="https://www.ft.com/content/52a272dd-6575-4623-9ca4-18889bebad2d">has fuelled speculation</a> and encouraged investors to make bets on the next Google or Amazon. </p>
<p>As Warren Buffett <a href="https://money.com/swimming-naked-when-the-tide-goes-out/">once said</a>: “Only when the tide goes out will we see who has been swimming naked.” In effect, the tide has gone out and lots of start-ups that were billed as revolutionary technology companies are all in significant trouble. </p>
<p>The only redeeming feature at the moment is how much cash many start-ups have to withstand the collapse. How long they have will vary. WeWork will struggle to survive a year <a href="https://www.dailybeatny.com/2020/04/02/weworks-future-bleak/">without further investment</a>. The ride hailing apps meanwhile are <a href="https://www.bloomberg.com/news/articles/2020-03-19/uber-expects-4-billion-in-cash-reserve-in-worst-case-scenario">well funded</a> but may also find this to be a very difficult year. They are under pressure to cut their losses and break even but this goal is even further away now. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/343477/original/file-20200623-188911-1mgjbtv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/343477/original/file-20200623-188911-1mgjbtv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/343477/original/file-20200623-188911-1mgjbtv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/343477/original/file-20200623-188911-1mgjbtv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/343477/original/file-20200623-188911-1mgjbtv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/343477/original/file-20200623-188911-1mgjbtv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/343477/original/file-20200623-188911-1mgjbtv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">More of a property company than a technology company?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/san-mateo-causa-may-10-2020-1728168679">jejim / Shutterstock.com</a></span>
</figcaption>
</figure>
<p>The secretive Airbnb has recently been <a href="https://www.ft.com/content/bc26db3c-34dd-4ba9-bf0b-2ef422bfd3b6">raising money at high cost</a>. This suggests investors see a significant risk to the business and so cash is limited. The proposed listing this year is now <a href="https://techcrunch.com/2020/04/06/airbnb-turns-to-private-equity-to-raise-1-billion/">highly unlikely</a>. </p>
<p>A major problem with lots of the start-ups that are now struggling is that they look like technology businesses but they have merely used new technology to disrupt existing industries. Uber follows the dynamics of the taxi industry, WeWork the office rental industry, and Airbnb the accommodation booking industry.</p>
<h2>Winner takes all</h2>
<p>Facebook, Amazon and Google differ in that they all started new industries. They created network effects – where the more people that use the platform, the better it becomes – from which they benefited enormously.</p>
<p>Network effects can create a winner takes all situation. The more of your friends and colleagues who are on a particular social network the more likely you are to join and use it. Similarly the more suppliers who compete to sell on Amazon, the more choice and competitive prices is offered to customers. Having more customers attracts more sellers.</p>
<p>It is harder to see the network effects in businesses <a href="https://theconversation.com/wework-ipo-why-investors-are-beginning-to-question-the-office-rental-firms-value-121949">like WeWork</a> – there are few reasons to be loyal and the entry barriers to market for competitors are low. Even with taxi ride hailing apps, in which Uber was a first mover, all taxi firms now have an app and network effects are quite limited once a level of responsiveness has been achieved – it’s easy for customers and drivers to switch to competition apps. </p>
<p>Similarly, accommodation booking sites are all accessed in the same way now via an app, and it is very easy to compare accommodation availability and costs. Airbnb was a first mover in home rental but this sector has been beset by <a href="https://fortune.com/longform/airbnb-deaths-fraud-safety-experiences-ipo-2020/">issues relating to fraud and safety</a>. </p>
<p>Hence all these markets are going to remain very competitive in the longer term and this means low margins and low returns. It is no surprise the share prices of ride hailing businesses have halved. In these industries technology is no longer a competitive advantage as almost all the competitors now have similar technology. The technology is simply infrastructure.</p>
<h2>Cash flow and consolidation</h2>
<p>Stock markets <a href="https://edition.cnn.com/business/markets/coronavirus">are shaky</a> and Airbnb has <a href="https://www.valuethemarkets.com/2020/03/17/airbnb-ipo-could-be-the-biggest-casualty-of-the-2020-stock-market-collapse/">cancelled its initial public offering</a>. The appetite for new listings is weak and is likely to remain this way, suggesting it will be difficult for venture capital investors to exit their investments. If there is no exit route to make money, then why invest? </p>
<p>A consequence is that there is likely to be a reduction in investment in technology start-up businesses. Cash will be in much shorter supply and venture capital investors will have to choose more carefully where to invest. </p>
<p>Meanwhile, we are already seeing the real technology giants move in. Amazon, for example, was the biggest investor in distressed UK takeaway app Deliveroo’s <a href="https://www.bbc.co.uk/news/business-48306172">latest round of fundraising</a>. This month also saw the merger of two other food delivery services, with Europe-based Takeaway.com, fresh from buying Just Eat, now <a href="https://www.theguardian.com/business/2020/jun/11/just-eat-uber-grubhub-takeover-food-delivery-service">buying US-based Grubhub</a>. We can expect more consolidation in the months ahead.</p><img src="https://counter.theconversation.com/content/141252/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Colley does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Investment in tech businesses is crumbling but the winners are eyeing up the losers.John Colley, Professor of Practice, Associate Dean, Warwick Business School, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1288492020-01-23T13:51:45Z2020-01-23T13:51:45ZSilicon Valley’s latest fad is dopamine fasting – and that may not be as crazy as it sounds<figure><img src="https://images.theconversation.com/files/311445/original/file-20200122-117954-16q8a3g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Dopamine fasting, the newest fad to hit Silicon Valley, is being used as a way to get over addictive habits.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/editor/image/white-plate-spoon-fork-intermittent-fasting-1027820371">SewCream/Shutterstock.com</a></span></figcaption></figure><p>Silicon Valley’s <a href="https://www.vice.com/en_us/article/vb5qb9/dopamine-fasting-is-the-newest-sounds-fake-but-ok-wellness-trend">newest fad</a> is dopamine fasting, or <a href="https://www.youtube.com/watch?v=vl-44jDYDJQ">temporarily abstaining from</a> “addictive” activities such as social media, music, internet gaming – even food. </p>
<p>Twitter’s CEO, Jack Dorsey, for example, is known for his <a href="https://www.theatlantic.com/health/archive/2019/01/silicon-valley-extreme-diets-fasting/581566/">intermittent fasting</a> diet. Other celebrities such as Kourtney Kardashian and Chris Pratt have also lauded the benefits of <a href="https://www.usmagazine.com/celebrity-body/pictures/intermittent-fasting-diet-trend-celebrity-success-stories/">intermittent fasting</a>.</p>
<p>Dubbed “<a href="https://www.sciencealert.com/dopamine-fasting-is-silicon-valley-s-latest-trend-here-s-what-an-expert-has-to-say">dopamine fasting</a>” by San Francisco psychologist Cameron Sepah, the trend is getting increasing international attention as a potential “cure” for <a href="https://www.journals.elsevier.com/addictive-behaviors-reports/news/addiction-to-modern-technology-what-the-science-says-free-co">technology addiction</a>. </p>
<p>Dopamine is a brain neurotransmitter that helps control basic functions such as motor control, memory and excitement. It is also involved in anticipating the reward of a stimulating activity. Denying the brain the dopamine-derived pleasure of many modern day temptations, the theory goes, may help people regain control, <a href="https://www.nytimes.com/2019/11/07/style/dopamine-fasting.html">improving focus and productivity</a>. </p>
<p>This idea did not entirely originate in Silicon Valley. As a scholar who studies <a href="https://divinity.uchicago.edu/sightings/articles/all/a.-trevor-sutton">digital technology and religion</a>, I’d argue that the motivations and benefits of dopamine fasting resemble what many religions have been teaching since ancient times.</p>
<h2>Religious traditions and fasting</h2>
<p>Fasting can take multiple forms in different religious traditions. </p>
<p>Muslims observe nearly a month-long fast during <a href="http://www.oxfordislamicstudies.com/article/opr/t243/e278?_hi=3&_pos=42">Ramadan</a> when they abstain from food or drinks. They are allowed to break the fast only after the Sun goes down. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/311450/original/file-20200122-117943-1y7qpiy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/311450/original/file-20200122-117943-1y7qpiy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/311450/original/file-20200122-117943-1y7qpiy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/311450/original/file-20200122-117943-1y7qpiy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/311450/original/file-20200122-117943-1y7qpiy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/311450/original/file-20200122-117943-1y7qpiy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/311450/original/file-20200122-117943-1y7qpiy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A woman preparing the meal for breaking the Ramadan fast at sundown.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/woman-preparing-menu-break-fast-648524467">Isvara Pranidhana/Shutterstock.com</a></span>
</figcaption>
</figure>
<p>The Jewish holiday <a href="https://www.oxfordreference.com/view/10.1093/acref/9780199730049.001.0001/acref-9780199730049-e-3472">Yom Kippur</a>, also known as the Day of Atonement, includes a period of fasting. And many Christian traditions observe <a href="https://www.oxfordreference.com/view/10.1093/acref/9780192802903.001.0001/acref-9780192802903-e-2548?rskey=mE2G1s&result=20">fasting periods</a> throughout the year, particularly during the Lenten season leading up to Easter. Vipassana meditation, a practice with <a href="https://www.oxfordreference.com/view/10.1093/acref/9780192800947.001.0001/acref-9780192800947-e-7823">Buddhist</a> roots, involves abstaining from speaking for multiple days.</p>
<p>The reasons these ancient religions encourage fasting, in my assessment, are quite similar to the motivations of modern dopamine fasters.</p>
<p>Some religious traditions encourage fasting to <a href="https://oxfordindex.oup.com/view/10.1093/obo/9780195393361-0110">develop personal holiness and discipline</a>. For example, Orthodox Christians avoid animal products on Wednesdays and Fridays as a way to develop discipline and self-control. Others, including Christianity and Islam, use fasting as a way to develop <a href="http://www.oxfordislamicstudies.com/article/opr/t125/e635">appreciation and gratitude</a>. </p>
<p>The early fourth-century Christian theologian Augustine of Hippo <a href="https://www.taylorfrancis.com/books/9780203436691">recognized</a> that the practice of fasting could maximize pleasure for things that one gives up. For example, abstaining from meat during Lent heightens appreciation for it after the <a href="https://www.firstthings.com/web-exclusives/2009/03/keep-the-fast-keep-the-feast">fast is over</a>.</p>
<p>Scholars have drawn parallels between dopamine fasting and religious fasting. For example, <a href="http://www.imperial.ac.uk/people/d.nutt">David Nutt</a>, professor of brain science at Imperial College London, said in an November 2019 <a href="https://www.theguardian.com/science/shortcuts/2019/nov/19/dopamine-fasting-silicon-valley-avoid-stimulation">interview</a> with the British newspaper Guardian:</p>
<blockquote>
<p>“Retreating from life probably makes life more interesting when you come back to it…Monks have been doing it for thousands of years. Whether that has anything to do with dopamine is unclear.”</p>
</blockquote>
<p>Many individuals engage in dopamine fasting for much the same reasons as religious fasters. Some, for example, use it as a way to develop greater discipline. In a November 2019 <a href="https://www.insider.com/what-is-dopamine-fasting-according-to-neuroscientist-2019-11">interview</a>, psychologist at Stanford University <a href="https://profiles.stanford.edu/russell-poldrack?tab=research-and-scholarship">Russell Poldrack</a> noted that the practice at self-control in doing one of these fasts can be useful. It can give one a “feeling of mastery” over their own behaviors, he said. </p>
<p>Others such as Nellie Bowles, a journalist who covers the Silicon Valley, finds that dopamine fasting makes everyday tasks “<a href="https://www.nytimes.com/2019/11/07/style/dopamine-fasting.html">more exciting and fun</a>.” </p>
<h2>The benefits of fasting</h2>
<p>Research shows that fasting, whether religious or not, can have several health benefits.</p>
<p>For example, a <a href="https://www.ncbi.nlm.nih.gov/pubmed/24019714">study</a> published in the Journal of Research in Medical Science had 14 individuals undergo a 10-day silent Vipassana meditation retreat. The participants reported significant improvements in physical and psychological well-being after the fast. </p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/311452/original/file-20200122-117958-o1oy1o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/311452/original/file-20200122-117958-o1oy1o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/311452/original/file-20200122-117958-o1oy1o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/311452/original/file-20200122-117958-o1oy1o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/311452/original/file-20200122-117958-o1oy1o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/311452/original/file-20200122-117958-o1oy1o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/311452/original/file-20200122-117958-o1oy1o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/311452/original/file-20200122-117958-o1oy1o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Fasting, whether religious or not, can have many health benefits.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-vector/intermittent-fasting-timerestricted-eating-healthy-foods-1187975044">Rudie Strummer/Shutterstock.com</a></span>
</figcaption>
</figure>
<p>According to a <a href="https://nutritionj.biomedcentral.com/articles/10.1186/1475-2891-9-57">research review</a> by nutrition scientists <a href="https://econugenics.com/pages/our-research-team">John Trepanowski</a> and <a href="https://www.memphis.edu/shs/contact/faculty/richardbloomer.php">Richard Bloomer</a>, religious and nonreligious fasting can have similar health benefits. </p>
<p>Dopamine fasting is supposed to make ordinary tasks such as eating and listening to music more pleasurable. After temporarily abstaining from an activity, fasters have found it <a href="https://www.nytimes.com/2019/11/07/style/dopamine-fasting.html">more rewarding</a> to reengage in the activity.</p>
<p>There are those who disagree. <a href="https://theconversation.com/dopamine-fasting-an-expert-reviews-the-latest-craze-in-silicon-valley-127646">Neuroscientists</a> have argued that dopamine is essential to healthy brain functioning and have raised questions about the trend’s apparent goal of reducing dopamine.</p>
<p>While it is true that certain behaviors lead to the increase of dopamine, <a href="https://www.sfchronicle.com/culture/article/Dopamine-fasting-How-Silicon-Valley-is-trying-to-14811245.php">experts caution on the claims</a> regarding dopamine fasting. Joshua Berke, a neuroscientist, said that dopamine is not a “pleasure juice” with a certain level that gets depleted. Rather, the dynamic of dopamine changes from moment to moment. </p>
<p>Nonetheless, <a href="https://www.linkedin.com/pulse/dopamine-fasting-new-silicon-valley-trend-dr-cameron-sepah/?src=aff-lilpar&veh=aff_src.aff-lilpar_c.partners_pkw.10078_plc.Skimbit%20Ltd._pcrid.449670_learning&trk=aff_src.aff-lilpar_c.partners_pkw.10078_plc.Skimbit%20Ltd._pcrid.449670_learning&clickid=wk83uL0mnQLNSdNS0BTGSUF2UknRIJVds2XWyM0&irgwc=1">advocates of dopamine fasting</a> believe that it can curb addictive behaviors and make daily life more pleasurable, something that religious traditions have for millennia encouraged people to develop – patterns of fasting and feasting.</p>
<p>[ <em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/128849/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>A. Trevor Sutton does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Dopamine fasting has fast become a fad in the Silicon Valley, as a way to reset the brain’s feel-good chemical. Many religions have advocated fasting for some of the same reasons.A. Trevor Sutton, Ph.D. Student in Doctrinal Theology, Concordia SeminaryLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1276462019-11-29T12:15:52Z2019-11-29T12:15:52ZDopamine fasting: an expert reviews the latest craze in Silicon Valley<figure><img src="https://images.theconversation.com/files/304242/original/file-20191128-178135-19s227n.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C1799%2C1007&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Methamphetamine abuse (right) decreases dopamine transporter activity in the brain.</span> <span class="attribution"><span class="source">National Institute on Drug Abuse</span></span></figcaption></figure><p>It’s the latest fad in Silicon Valley. By reducing the brain’s feel-good chemical known as dopamine – cutting back on things like food, sex, alcohol, social media and technology – <a href="https://www.bbc.com/worklife/article/20191115-what-is-dopamine-fasting">followers believe</a> that they <a href="https://www.theguardian.com/science/shortcuts/2019/nov/19/dopamine-fasting-silicon-valley-avoid-stimulation">can “reset” the brain</a> to be more effective and appreciate simple things more easily. Some even go so far as avoiding all social activities, and even eye contact.</p>
<p>The exercise, dubbed “dopamine fasting” by San Francisco psychologist <a href="https://twitter.com/DrSepah?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor">Dr Cameron Sepah</a>, is now getting increasing international attention. But what exactly is it? And does it work? As someone who studies the brain’s reward system, I’d like to share my knowledge with you.</p>
<p>Dopamine is a neurotransmitter – a chemical messenger <a href="https://theconversation.com/explainer-what-is-dopamine-and-is-it-to-blame-for-our-addictions-51268">produced in the brain</a>. It is sent around the brain conveying signals related to functions such as motor control, memory, arousal and reward processing. For example, too little dopamine can result in disorders like <a href="https://theconversation.com/parkinsons-disease-scientists-find-the-earliest-roots-in-the-brain-119030">Parkinson’s Disease</a>, involving symptoms of muscle rigidity, tremors and changes in speech and gait. One of the treatments for Parkinson’s is <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5345651/">the drug L-DOPA</a>, which can cross the blood-brain barrier and be converted into dopamine to help ease the symptoms. </p>
<p>Dopamine is also important in the reward system in the brain. It is activated by primary rewards like food, sex and drugs. Importantly, the brain’s reward system can “learn” over time – cues in our environment that we associate with potential rewards can increase the activity of dopamine even in the absence of an actual reward. So just being in a sweet shop and thinking about sweets can activate our brain’s dopamine.</p>
<p>This expectation and anticipation of rewards is called the “wanting” in neuroscience language. As one of the main symptoms of depression is <a href="https://www.scientificamerican.com/article/can-talk-therapy-help-people-who-are-unable-to-experience-joy/">“anhedonia”</a> – the lack of wanting, interest and pleasure in normally rewarding experiences – dysfunctional dopamine regulation has also <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5716179/">been linked to this disorder</a>. Some treatments for depression, such as <a href="https://www.drugs.com/bupropion.html">the drug bupropion</a>, are designed to increase dopamine levels in the brain.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/304240/original/file-20191128-178083-19h8inc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/304240/original/file-20191128-178083-19h8inc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/304240/original/file-20191128-178083-19h8inc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/304240/original/file-20191128-178083-19h8inc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/304240/original/file-20191128-178083-19h8inc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/304240/original/file-20191128-178083-19h8inc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/304240/original/file-20191128-178083-19h8inc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Dopamine chemical formula.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/dopamine-cheimcal-formula-over-pink-background-1305983566?src=b83dce56-8ea5-4428-8ede-c1abad79fbd4-1-0">bogdandimages/Shutterstock</a></span>
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<p>So, given the important role of dopamine in vital functions in the human brain, why would we want to fast from it? The idea of dopamine fasting is based on the knowledge that dopamine <a href="https://www.health.harvard.edu/newsletter_article/how-addiction-hijacks-the-brain">is involved</a> in unhealthy addictive behaviours. </p>
<p>As described, dopamine underpins wanting. For instance, a drug addict may say they no longer want to take drugs. But when in certain places where drug-related cues are present, the brain’s wanting system kicks in and addicts are overcome with strong urges to take the drug. Dopamine fasters believe that they can reduce desires and craving for unhealthy and even unwanted behaviours by reducing dopamine. </p>
<h2>Does it work?</h2>
<p>First we need to be clear, it is certainly not advisable, even if we could, to reduce the amount of dopamine in the brain as <a href="https://www.ncbi.nlm.nih.gov/pubmed/30446950">we need it for everyday normal functions</a>. Further, simply banning a particular reward, like social media, isn’t going to reduce the levels of dopamine per se, but rather it can help reduce the stimulation of dopamine. </p>
<p>Therefore it is possible to reduce the amount of dopamine activity. But the key to doing this is to reduce our exposure to the triggers associated with the rewards that initiate the wanting for the rewards in the first place. After all, it is these cues that initiate the craving and the desires to engage in behaviours that help us get the rewards. Thus just cutting out rewards doesn’t necessarily stop the brain from making us crave them – activating dopamine. </p>
<p>However, that this would “reset the brain” is not really correct – there is no way of even knowing what the baseline is. So from a neuroscience perspective, this is nonsense for the time being.</p>
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<img alt="" src="https://images.theconversation.com/files/304243/original/file-20191128-178089-zf4jaj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/304243/original/file-20191128-178089-zf4jaj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=440&fit=crop&dpr=1 600w, https://images.theconversation.com/files/304243/original/file-20191128-178089-zf4jaj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=440&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/304243/original/file-20191128-178089-zf4jaj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=440&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/304243/original/file-20191128-178089-zf4jaj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=552&fit=crop&dpr=1 754w, https://images.theconversation.com/files/304243/original/file-20191128-178089-zf4jaj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=552&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/304243/original/file-20191128-178089-zf4jaj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=552&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Addicted? Dopamine fasting won’t help.</span>
<span class="attribution"><span class="source">Sam Wordley</span></span>
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<p>If you find that you want to cut down on what you feel are unhealthy behaviours, such as spending too much time on social media or overeating, then you could start by reducing your exposure to the environmental cues that trigger the desires to carry out the unhealthy behaviours. </p>
<p>For example, if you go on your phone too much in the evenings when you are alone, try turning off the notifications sounds. This way dopamine is not being activated by the cues and therefore not signalling the urges to pick up the phone. And if you think you drink too much alcohol – ending up in bars with work colleagues most nights of the week – try to go somewhere else in the evenings, such as the cinema.</p>
<p>The <a href="https://theconversation.com/how-to-tell-if-your-digital-addiction-is-ruining-your-life-127310">symptoms of unhealthy behaviours</a> are similar to the signs of substance abuse. These might include spending the majority of the time engaging in the behaviour, continuing the behaviour despite physical and/or mental harm, having trouble cutting back despite wanting to stop and neglecting work, school or family. You may even experience symptoms of withdrawal (for example, depression, irritability) when trying to stop. </p>
<p>In these instances, you may want to think about removing the cues that stimulate your dopamine neurons – a sort of dopamine fasting.</p><img src="https://counter.theconversation.com/content/127646/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ciara McCabe received past funding from The Medical Research Council and GWPharma. She is affiliated with The British Association of Psychopharmacology (BAP). </span></em></p>There are more efficient ways to stop addictions than fasting from rewards.Ciara McCabe, Associate Professor, University of ReadingLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1260522019-10-29T14:39:19Z2019-10-29T14:39:19ZSoftbank: why WeWork’s Japanese investors are doubling down after a failed IPO<p>Why is Japanese investment firm SoftBank investing a further US$8 billion into WeWork, even though the office rental company is now valued at just US$8 billion, and buying out founder Adam Neumann <a href="https://techcrunch.com/2019/10/22/softbank-reportedly-ends-wework-ownership-debacle-with-a-1-7-billion-payout-to-adam-neumann/">at a further cost of US$1.7 billion</a>? Forgetting SoftBank’s previous sunk investments in WeWork – which exceed US$10 billion – as a standalone deal this looks to be a bad one. Some question whether WeWork is <a href="https://www.businessinsider.com/wework-valuation-could-slip-below-8-billion-softbank-bailout-report-2019-10?r=US&IR=T">even worth US$8 billion</a>. </p>
<p>To many, this looks like throwing good money after bad. The prospects of an IPO in the next few years look remote, as confidence following the <a href="https://theconversation.com/fallout-from-weworks-failed-ipo-shows-the-folly-of-excessive-valuations-125014">recent botched IPO</a> has been destroyed. Indeed SoftBank is likely to have difficulty making subsequent IPOs in its portfolio of firms work after this blow to its valuation credibility. </p>
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<a href="https://theconversation.com/fallout-from-weworks-failed-ipo-shows-the-folly-of-excessive-valuations-125014">Fallout from WeWork's failed IPO shows the folly of excessive valuations</a>
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<p>So WeWork has become a long-term investment for SoftBank, with little prospect of any serious return. The real motive for saving it may well lie in the company’s plans to raise US$108 billion <a href="https://www.ft.com/content/a4eb31d6-afcc-11e9-8030-530adfa879c2">for its second Vision Fund</a>. As with its first US$97 billion Vision Fund, SoftBank is trying to attract investors to trust it with investing in early stage, high growth companies. This next fund is touted to have a <a href="https://www.forbes.com/sites/samshead/2019/07/26/softbank-launches-new-108-billion-vision-fund-to-invest-in-ai/">focus on artificial intelligence companies</a> but the catastrophic write down on its WeWork investment has shaken confidence in it.</p>
<p>The WeWork saga follows SoftBank pouring US$20 billion from its first Vision Fund into high-risk ride hailing businesses Uber, Didi Chuxing, Grab and Ola. Ride hailing was always likely to be a <a href="https://theconversation.com/how-uber-crashed-in-china-63343">low-margin business</a> with low switching costs for drivers and customers and low entry barriers for competition. Didi Chuxing is <a href="https://techcrunch.com/2019/02/14/didi-reported-1-6-billion-loss/">haemorrhaging money in China</a> and the path to profitability remains elusive <a href="https://www.businesstimes.com.sg/brunch/show-me-the-money-whats-wrong-with-the-startups-picture">for Grab in South-East Asia</a>. Uber had a successful IPO but its shares have <a href="https://theconversation.com/overpriced-tech-ipos-sell-grand-visions-but-arent-worth-their-valuations-117292">performed poorly since</a>. As a result, India’s Ola, which looks like it might soon turn a profit, <a href="https://www.livemint.com/companies/news/ola-may-have-turned-profitable-plans-to-list-in-india-in-2-yearsola-may-have-tu-11570126128068.html">is delaying its IPO</a>.</p>
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<a href="https://theconversation.com/overpriced-tech-ipos-sell-grand-visions-but-arent-worth-their-valuations-117292">Overpriced tech IPOs sell grand visions but aren't worth their valuations</a>
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<p>But with WeWork, SoftBank has managed to destroy its own reputation as a tech investor <a href="https://techcrunch.com/2019/10/26/startups-weekly-softbank-is-screwing-up/">in one fell swoop</a>. Three months ago it was attempting to sell WeWork to the IPO market <a href="https://theconversation.com/wework-ipo-why-investors-are-beginning-to-question-the-office-rental-firms-value-121949">at US$47 billion</a>, now they are rescuing the business with a total valuation of US$8 billion. The rescue has taken another US$9.5 billion, bringing Softbank’s investment to over US$18 billion in WeWork. </p>
<h2>No-win situation</h2>
<p>Softbank now controls the business and appears to be holding around 80% of the shares. Neumann <a href="https://techcrunch.com/2019/10/22/softbank-reportedly-ends-wework-ownership-debacle-with-a-1-7-billion-payout-to-adam-neumann/">has been bought out</a> of much of his equity and his super voting rights. Three months ago he was viewed as a major asset to the business, now he is a liability that needs a US$1.7 billion golden goodbye to remove. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/299257/original/file-20191029-183098-94pdbi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/299257/original/file-20191029-183098-94pdbi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/299257/original/file-20191029-183098-94pdbi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/299257/original/file-20191029-183098-94pdbi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/299257/original/file-20191029-183098-94pdbi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/299257/original/file-20191029-183098-94pdbi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/299257/original/file-20191029-183098-94pdbi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">WeWork founder, Adam Neumann.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/techcrunch/34679798345/in/photolist-bDWXTo-bDWXVm-scg1S5-Ufx5Kj-LjqG9H-UQx2PF-RDLNxp-scg1X5">TechCrunch/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
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<p>Softbank were in a no-win situation. If they walked away, which would’ve been by far the cheaper option, then WeWork would probably have folded and Softbank would’ve lost all their investment, around US$10 billion. It would not have been a good look. The approach they have chosen to take is to invest further substantial sums. There is little real prospect of return but it does defer the bad news of write downs surrounding WeWork until a later date.</p>
<p>Various measures are in place to make WeWork viable and actually worth the current US$8 billion valuation. Bear in mind that WeWork is running <a href="https://www.cnbc.com/2019/03/25/wework-says-sales-more-than-doubled-last-year-but-so-did-net-loss.html">losses of US$1.9 billion a year</a> so this will be no mean feat. But top SoftBank executives are now <a href="https://www.cnbc.com/2019/10/26/softbank-taking-masayoshi-sons-sprint-playbook-to-wework.html">calling the shots at WeWork</a>. Major cost-cutting is on the cards and the workforce will bear the brunt – 4,000 jobs are <a href="https://www.ft.com/content/ffa49378-f5b4-11e9-a79c-bc9acae3b654">already on the line</a>. </p>
<h2>Major strategic failings</h2>
<p>SoftBank made a very big bet that WeWork (and Uber) are “winner takes all” industries – <a href="https://theconversation.com/uber-cant-be-ethical-its-business-model-wont-allow-it-85015">like Amazon was for online shopping</a>. This gamble was based on the idea that they revolutionised their respective industries with their app design and technology. </p>
<p>But WeWork has major strategic failings in that it attempts to arbitrage long-term contracts with short-term rentals. Any recession or downturn is likely to put the model under strain. If the model is successful then competitors will follow, which will lower occupancy levels and push down profit margins. </p>
<p>It’s not clear that WeWork’s technology changes any of these traditional vulnerabilities of its business model. This argument over whether or not WeWork is primarily a tech company or a property company has been one that SoftBank has had with key Vision Fund backers <a href="https://www.ft.com/content/a4eb31d6-afcc-11e9-8030-530adfa879c2">from Saudi Arabia and Abu Dhabi</a> (together, they contributed 60% of the first Vision Fund). </p>
<p>It looks as though SoftBank is hoping to prove them wrong by refusing to cut its losses with WeWork. But investors will remain very cautious about further Softbank investments unless its focus changes significantly. Perhaps artificial intelligence will succeed as the next carrot, as Softbank’s current approach has clearly run its course.</p><img src="https://counter.theconversation.com/content/126052/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Colley does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>SoftBank is pouring another US$8 billion into WeWork, even though the office rental company is now valued at just US$8 billion.John Colley, Professor of Practice, Associate Dean, Warwick Business School, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1259912019-10-28T18:46:33Z2019-10-28T18:46:33ZHalf a billion on Halloween pet costumes is latest sign of America’s out-of-control consumerism<p>Halloween spending is out of control.</p>
<p>Americans <a href="https://nrf.com/insights/holiday-and-seasonal-trends/halloween">are expected to spend US$8.8 billion</a> on candy, costumes and decorations this year – or $86 for every person who plans to celebrate. That includes a <a href="https://www.marketwatch.com/story/americans-are-spending-almost-half-a-billion-on-halloween-costumes-for-their-pets-2019-10-22">half a billion dollars</a> on costumes that Americans are buying for their pets, which is double the amount they spent a decade ago. <a href="https://www.newsweek.com/pet-halloween-costumes-1175283">Pumpkins and hot dogs</a> are the favorites. </p>
<p>How did a holiday that began as a way to honor the dead morph into just another ritual of over-the-top American consumption? As a relatively frugal person who has reused the same Halloween costumes for years, <a href="http://businessmacroeconomics.com/about-the-author/">I found</a> the $86 figure shocking. But I’m hardly the first economist to moan about out-of-control consumerism. </p>
<h2>Day of the decadent</h2>
<p>Halloween <a href="http://acrwebsite.org/volumes/7058/volumes/v17/NA17">started as a Celtic holiday</a> honoring the dead. </p>
<p>It was then <a href="https://www.history.com/topics/halloween/history-of-halloween#section_3">adopted by the Catholic Church as a time to remember</a> saints. One research paper described Halloween as an “<a href="http://www.acrwebsite.org/volumes/7058/volumes/v17/NA-17">evolving American consumption ritual</a>,” but a better description might be an over-the-top spending ritual. </p>
<p>To put the $8.8 billion being spent on Halloween in context, the budget for the <a href="https://www.doi.gov/sites/doi.gov/files/fy2020-nps-justification.pdf">entire National Park Service</a> is only $4 billion. The U.S. spends <a href="https://www.cnbc.com/2015/10/19/the-16-billion-business-of-flu.html">less than $2 billion on flu vaccines</a>.</p>
<p>The $86 average may not give us an accurate look at per-person spending. Only about <a href="https://e.infogram.com/_/pEOFKlmH2iK8jWZik2sb?parent_url=https%3A%2F%2Fnrf.com%2Finsights%2Fholiday-and-seasonal-trends%2Fhalloween%2Fhalloween-data-center&src=embed">two-thirds of respondents</a> to the National Retail Federation’s <a href="https://nrf.com/insights/holiday-and-seasonal-trends/halloween">annual survey of Halloween spending</a> said they were celebrating the holiday. And while some spend nothing, others go overboard. </p>
<p>As just one example, the <a href="https://spectrum.ieee.org/view-from-the-valley/geek-life/tools-toys/tech-stars-open-their-doors-for-a-silicon-valley-halloween">Palo Alto neighborhood where Silicon Valley’s tech stars live</a> is a sight to behold as local moguls try to outdo each other on Halloween decorations, candy and bands. </p>
<p><div data-react-class="InstagramEmbed" data-react-props="{"url":"https://www.instagram.com/p/B4IlrewFE3_/?utm_source=ig_web_copy_link","accessToken":"127105130696839|b4b75090c9688d81dfd245afe6052f20"}"></div></p>
<h2>Why people spend like crazy</h2>
<p>In the late 1890s, an economist named <a href="https://www.econlib.org/library/Enc/bios/Veblen.html">Thorstein Veblen</a> looked at spending in society and wrote an influential book called “<a href="http://moglen.law.columbia.edu/LCS/theoryleisureclass.pdf">The Theory of the Leisure Class</a>,” which explained reasons why people spend. It laid out the idea that some goods and services are bought simply for conspicuous consumption.</p>
<p>Conspicuous consumption is designed to show others you are rich, smart or important. In Veblen’s mind, conspicuous consumption was spending more money on items than they are really worth. Veblen pointed out that people buy homes with rooms that are rarely used, just to show off the owner’s wealth. </p>
<p>If Veblen were writing about the world today, he would probably not focus on real estate. Instead, he might be using examples of people trying to attract attention on <a href="https://www.instagram.com/dogsofinstagram/?hl=en">Instagram by dressing their pets in expensive costumes</a>.</p>
<p>Understanding how much people spend on holidays like Halloween and other activities is important because this shows what society values. And apparently, we value what others can see us consume.</p>
<p>[ <em>Like what you’ve read? Want more?</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=likethis">Sign up for The Conversation’s daily newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/125991/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jay L. Zagorsky does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Halloween is yet another holiday that has become a mere ritual of America’s very conspicuous consumption.Jay L. Zagorsky, Senior Lecturer, Questrom School of Business, Boston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1251272019-10-15T18:59:07Z2019-10-15T18:59:07ZRevenge of the moderators: Facebook’s online workers are sick of being treated like bots<figure><img src="https://images.theconversation.com/files/296626/original/file-20191011-188783-vkutem.jpg?ixlib=rb-1.1.0&rect=8%2C0%2C5807%2C3903&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Mark Zuckerberg and other tech CEOs may have to take notice of their workers' complaints.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/washington-dc-usa-september-19-2019-1513442879">Aaron Schwarz / Shutterstock</a></span></figcaption></figure><p>Reports of Facebook moderators’ appalling working conditions have been making headlines worldwide. </p>
<p>Workers say they are <a href="https://sz-magazin.sueddeutsche.de/internet/three-months-in-hell-84381">burning out</a> as they moderate vast flows of violent content under pressure, with <a href="https://www.theguardian.com/commentisfree/2019/jan/06/proof-that-facebook-broken-obvious-from-modus-operand">vague, ever-changing guidelines</a>. They describe <a href="https://www.theverge.com/2019/6/19/18681845/facebook-moderator-interviews-video-trauma-ptsd-cognizant-tampa">unclean, dangerous contractor workplaces</a>. Moderators battle <a href="https://www.theguardian.com/technology/2019/sep/17/revealed-catastrophic-effects-working-facebook-moderator">depression, addiction</a>, and even <a href="https://www.cnet.com/news/facebook-faces-complaints-from-more-content-moderators-in-lawsuit/">post-traumatic stress disorder</a> from the endless parade of horrors they consume.</p>
<p>Yet in <a href="https://www.theverge.com/2019/10/1/20892354/mark-zuckerberg-full-transcript-leaked-facebook-meetings">leaked audio</a> recently published by The Verge, Facebook chief executive Mark Zuckerberg can reportedly be heard telling his staff that some of these reports “are, I think, a little over-dramatic”. </p>
<h2>Out of touch and dismissive</h2>
<p>While Zuckerberg acknowledges that Facebook moderators need to be treated humanely, overall he comes across in the recording as a person who sees human suffering as “a math problem”, as The Verge’s editor-in-chief <a href="https://twitter.com/reckless/status/1179052315136974849">Nilay Patel suggested on Twitter</a>.</p>
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<p>Zuckerberg’s response is troubling on several fronts, not least in minimising the impact of moderation on those who do it. It also works to discredit those who blow the whistle on poor working conditions. </p>
<p>In dismissing the real risks of <a href="https://www.theverge.com/2019/2/25/18229714/cognizant-facebook-content-moderator-interviews-trauma-working-conditions-arizona">poorly paid, relentless content moderation</a> and implying that moderators who call out issues are “over-dramatic”, Zuckerberg risks compounding moderators’ trauma. </p>
<p>This is a result of what American psychologists Carly Smith and Jennifer Freyd call “<a href="https://dynamic.uoregon.edu/jjf/institutionalbetrayal/">institutional betrayal</a>”, where the organisation we trust to support us, doesn’t. Worse still, this behaviour has also been shown to make people doubt their decision to report in the first place.</p>
<p>We also contacted Facebook about Zuckerberg’s comments and asked them to confirm or deny the working conditions of their moderators. They gave us the following statement:</p>
<blockquote>
<p>We are committed to providing support for our content reviewers as we recognize that reviewing certain types of content can be hard. That is why everyone who reviews content for Facebook goes through an in-depth, multi-week training program on our Community Standards and has access to extensive support to ensure their well-being, which can include on-site support with trained practitioners, an on-call service, and healthcare benefits from the first day of employment. We are also employing technical solutions to limit exposure to graphic material as much as possible. This is an important issue, and we are committed to getting this right.</p>
</blockquote>
<p>While Zuckerberg and Facebook acknowledge that moderators need access to psychological care, there are major structural issues that prevent many of them from getting it.</p>
<h2>Bottom of the heap</h2>
<p>If the internet has a class system, moderators sit at the bottom – they are modern day <a href="https://www.atlasobscura.com/articles/the-worst-paid-freelance-gig-in-history-was-being-the-village-sin-eater">sin-eaters</a> who absorb offensive and traumatic material so others don’t have to see it. </p>
<p>Most are subcontractors working on short-term or casual agreements with little chance of permanent employment and minimal agency or autonomy. As a result, they’re largely exiled from the shiny campuses of today’s big tech companies, even though many hold degrees from top-tier universities, as Sarah T. Roberts discusses in her book <a href="https://yalebooks.yale.edu/book/9780300235883/behind-screen">Behind The Screen</a>. </p>
<p>As members of the <a href="https://theconversation.com/the-precariat-is-recruiting-youth-please-apply-10550">precariat</a>, they are reluctant to take time off work to seek care, or indicate they are unable to cope, in case they lose shifts or have contracts terminated. Cost of care is also a significant inhibitor. As Sarah Roberts writes, contract workers are oftenoften not covered by employee health insurance plans or able to afford their own private ccover.</p>
<p>This structural powerlessness has <a href="https://www.annualreviews.org/doi/full/10.1146/annurev-publhealth-032013-182500">negative implications for workers’ mental health</a>, even before they start moderating violent content.</p>
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<a href="https://theconversation.com/facebook-is-all-for-community-but-what-kind-of-community-is-it-building-101254">Facebook is all for community, but what kind of community is it building?</a>
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<p>Most platform moderators are hired through outsourcing firms that are woefully unqualified to understand the nuances of the job. One such company, <a href="https://www.theverge.com/2019/2/25/18229714/cognizant-facebook-content-moderator-interviews-trauma-working-conditions-arizona">Cognizant</a>, reportedly allows moderators nine minutes each day of “wellness time” to “process” abhorrent content, with repercussions if the time is used instead for bathroom breaks or prayer. </p>
<p>Documentaries like <a href="https://www.youtube.com/watch?reload=9&v=k9m0axUDpro">The Moderators</a> and <a href="https://www.youtube.com/watch?v=SN8tzaVINEY">The Cleaners</a> reveal techno-colonialism in moderation centres in India, Bangladesh and the Philippines. As a whole, moderators are vulnerable humans in a deadly loop – Morlocks subject to the whims of Silicon Valley Eloi. </p>
<h2>Organising for change</h2>
<p>Despite moderators’ dismal conditions and the dismissiveness of Zuckerberg and others at the top of the tech hierarchy, there are signs that things are beginning to change.</p>
<p>In Australia, online community managers – professionals who are hired to help organisations build communities or audiences across a range of platforms, including Facebook, and who set rules for governance and moderation – have recently teamed up with a union, the <a href="https://www.meaa.org/">Media, Entertainment and Arts Alliance</a>, to negotiate labour protections. </p>
<p>This has been done through the <a href="https://www.australiancommunitymanagers.com.au/">Australian Community Managers</a> network (ACM), which also provides access to training and peer support. ACM is also working with like-minded organisations around the world, including <a href="https://www.bvcm.org/">Bundesverband Community Management</a> in Germany, Voorzitter Vereniging Community Management in the Netherlands, <a href="https://communityroundtable.com/">The Community Roundtable</a> in the United States, and nascent groups in India and Vietnam. </p>
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Read more:
<a href="https://theconversation.com/after-defamation-ruling-its-time-facebook-provided-better-moderation-tools-119526">After defamation ruling, it's time Facebook provided better moderation tools</a>
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<p>These groups are professional communities of practice and union-like surrogates who advocate for their people, and champion their insights and perspectives.</p>
<p>As this movement grows, it may challenge the tech industry’s reliance on cheap, unprotected labour – which extends beyond moderation to countless other areas, including contract game development and video production. </p>
<h2>The YouTubers’ union and beyond</h2>
<p>Workers in the gaming industry are also starting to push back against frameworks that exploit their time, talent and, invariably, well-being (as illuminated by Hasan Minaj on <a href="https://www.youtube.com/watch?v=pLAi_cmly6Q">Patriot Act</a>). In Australia <a href="https://www.gameworkers.com.au/">Gaming Workers Unite</a> is mobilising games workers around issues of precarious employment, harassment (online and off), exploitation and more. </p>
<p>And in Europe <a href="https://www.theverge.com/2019/8/26/20833315/youtube-union-youtubers-negotiate-germany-meeting">YouTubers are joining the country’s largest metalworkers’ union</a>, IG Metall, to pressure YouTube for greater transparency around moderation and monetisation.</p>
<p>Although Mark Zuckerberg doesn’t seem to understand the human challenges of internetworked creativity, or the labour that enables his machine to work, he may yet have to learn. His remarks compound the material violence experienced by moderators, dismiss the complexity of their work and – most crucially – dismiss their potential to organise. </p>
<p>Platform chief executives can expect a backlash from digital workers around the world. The physical and psychological effects of moderation are indeed dramatic; the changes they’re provoking in industrial relations are even more so.</p><img src="https://counter.theconversation.com/content/125127/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jennifer Beckett is a member of Australian Community Managers, having been a professional community manager in the past. </span></em></p><p class="fine-print"><em><span>Fiona R Martin has been the recipient of an Australian Research Council DECRA grant Mediating the Conversation DE130101267, studying the governance of online participation in news communities.</span></em></p><p class="fine-print"><em><span>Venessa Paech is the founder of Australian Community Managers, the national network for professional community managers, and has worked for over two decades in online communities.</span></em></p>Mark Zuckerberg may try to minimise their concerns, but Facebook moderators and other online workers are beginning to organise for their own protection.Jennifer Beckett, Lecturer in Media and Communications, The University of MelbourneFiona R Martin, Senior Lecturer in Convergent and Online Media, University of SydneyVenessa Paech, PhD Candidate, researching AI and online communities, University of SydneyLicensed as Creative Commons – attribution, no derivatives.