Musk, Bezos, Zuckerberg and other tech titans stand in the way of the common good

By Loretta Napoleoni

Technology could benefit us all - if tech companies would allow it

High-tech married high-finance - and the world would never be the same.

What better lesson in inequality is there today than that of the extraordinary rise of the tech titans, who have harnessed technology to accumulate unimaginable wealth and power and yet prevented it from benefitting the common good?

Consider the handful of individuals at the helm of high tech's "Magnificent Seven" companies. Take Elon Musk, CEO of Tesla (TSLA): in 2018, Tesla's board "gifted" him $55.8 billion of share options. When a Delaware court reversed the decision earlier this year, an irate Musk promised a Tesla shareholder vote to move the company's incorporation from Delaware to Texas, where Tesla is already based.

Less mercurial, but just as arrogantly conscious of being above rules and regulations, Meta Platforms (META) CEO Mark Zuckerberg apologized to parents for the harm that his company's products, especially social media, can impose on teens. This show of repentance took place during a recent U.S. Senate Judiciary Committee hearing in which Meta and other four tech companies - Discord, Snap, TikTok and X (formerly Twitter) - were grilled about the dangerous impact of their products on teen users. Yet only days after Zuckerberg's mea culpa and the Senate committee's evidence, the stock market rewarded Meta shareholders after the company issued an impressive quarterly earnings report.

Over the past 15 years, the extraordinary performance of Big Tech companies has been mistakenly attributed to the superhuman "genius" of their creators: for example, Musk for Tesla and Space X, Zuckerberg for Meta, Jeff Bezos for Amazon.com (AMZN). It is not only the market's herd mentality that has compounded this illusion, but also employees and boards of directors.

Far from being modern gods, these tech titans are modern robber barons who have stolen what is ours - innovation - while pretending to be our saviors. A monumental theft, carried out thanks to exceptional circumstances. The timing was right for investors who were deeply scarred by the 2008 financial meltdown and in search of higher returns in the new era of near-zero interest rates.

The financial sector had sufficient funds coming from the U.S. government's 2008 bailout to go after new high-earning ventures, and a handful of tech startups offered them the opportunities to invest. And the field of technological innovations was sufficiently wide - from machine learning and artificial intelligence to device miniaturization, from cryptocurrency to autonomous vehicles - for investors to be selective about where to place their money.

Data from Crunchbase, a platform of business information about private and public companies, confirms that after the 2008 crash, seed money for the tech industry was the least impacted of all early-stage rounds of financing in all sectors. While in other industries investment dried up due to the financial crisis, in the tech industry seed dollars grew year-on-year from then onward.

High tech married high finance - and the world would never be the same. From the end of 2008 and for several years after, the tech business cycle moved in the opposite direction from the financial cycle and from the economy as a whole, to the point where high-tech companies' share valuations climbed to the top of the U.S. stock indexes and led the stock market's astonishing recovery. By 2021, during the COVID-19 pandemic, Apple (AAPL), Meta, Alphabet (GOOGL), Amazon and Microsoft (MSFT) were among the top 10 companies in the S&P 500 SPX index.

The core of the tech-sector's activity is data mining - the harvesting of our thoughts.

Tech companies' domination of the top of the business food chain took place so quickly that the law dangerously lagged behind. Without proper regulation, especially on competition policy, and thanks to the transfer of professional talent from Wall Street, the Magnificent Seven shaped the high-tech sector as their personal global oligopoly. Awash with money, they offered astronomical compensation for each new technological innovation and acquired all competitors driving those who refused their rich offers out of the market. This strategy proved extremely profitable.

Far from making the world a better place, technological innovation has made possible the sale of the modern equivalent of the town square, our public space for news and community. Ironically, the core of the tech-sector's activity is data mining - the harvesting of our thoughts. This data gives its owners phenomenal leverage: the ability to alter democratic elections, to proliferate fake news, to harm fragile teenagers and to disseminate inequalities.

Hiding behind the masks of geniuses or modern gods, these modern robber barons are stealing not only our innovation, but our souls.

Loretta Napoleoni is an economist and author of "Technocapitalism: The Rise of the New Robber Barons and the Fight for the Common Good." (Seven Stories Press, 2024)

Also read: We're all paying a high price for letting corporations have free rein over us

More: Tesla shareholders shouldn't be fooled again on Elon Musk's pay package

-Loretta Napoleoni

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05-18-24 0905ET

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