The idea that tech destroys jobs is misleading. Innumerable studies show that it often creates more jobs than it destroys. These new jobs are often well paid, too, but the snag is that people who lose one type of job due to technology are often totally unqualified to do the new jobs that are created. Maybe then, technology really is fuelling populism.
The discussion is best illustrated by the debate over whether miners can be retrained to become coders or maybe, to put it more poetically, become data miners. On this theme, Michael Bloomberg recently said: “You’re not going to teach a coal miner to code.”
Others take an extreme positive argument, and say that not only will technology create jobs, it will make existing jobs less tedious.
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On the other hand, Carl Benedikt Frey, author of a new book, ‘The Technology Trap’ told Information Age, “It is true that automation has reduced the need for routinised chores and has primarily taken over repetitive and boring jobs. However, many of these jobs, especially those in manufacturing, were the ones that supported a broad and relatively prosperous middle class. As manufacturing jobs have dried up, industrial cities, and the people living there, have experienced a reversal of fortunes.”
So is technology the underlying driver of populism. Is technology the main reason for Trump and Brexit? Maybe the breakup of techs, is the inevitable result.
You could argue that globalisation and immigration have been factors, but you can’t divorce these factors from technology. Certainly, the internet has been a great driver of globalisation. And technology hubs, such as London and Silicon Valley are often driven by immigrants — one co-founder of Google is a Russian immigrant, Steve Jobs is the son of a migrant from Syria.
So actually, when Trump vents his fury on techs, he is pandering to his electorate.
It is just that you may have spotted an odd inconsistency. Trump seems happy to denigrate Google, Facebook and even the very hand that feeds his rhetoric — Twitter — but he hates it when other nations do it.
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The French want to slap a 3% sales tax on large digital companies, the British want to introduce a 2% tax. Trump responds by saying that if they were to do such a dastardly thing, he would respond with tariffs on French and British goods.
The US administration has even argued that European countries should not be able to fine US companies, which presumably means that the US government can’t fine European companies, which means BP, Volkswagen and European banks will soon be queuing up for rebates.
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Of course, the US has previous. Take the General Data Protection Regulation, or GDPR. It is curious, but the author has had discussions with people who simultaneously moan about GDPR and predict we are heading for an Orwellian surveillance state. They totally miss the point that GDPR, which starts with the statement that privacy is a human right, is designed to avoid this precise danger.
Yet the US has been massively critical of GDPR — the US Commerce Secretary, Wilbur Ross, has described GDPR as a form of protectionism. Even so, the US is slowly coming around — California is due to be imposing its own GDPR form of regulation, albeit much softer, next year.
As to whether the French and Brits are right to impose digital sales taxes, the debate is controversial.
Russ Shaw, from Tech London Advocates and Global Tech Advocates, put one particular case well, when he said: “The message from the UK tech community is clear — of course tech companies should pay their fair share of taxes. But this is not an opportunity for short-term cash-grabs designed to win public opinion. This should be a comprehensive re-imagining of taxation for digital companies that provides revenues for the changing needs of society in a digital era — reskilling and upskilling the population, reforming education and building a tech-literate workforce.
“When individual countries start playing politics and implementing unclear taxes, they risk prohibiting growth and by proxy the prosperity of their start-ups and scale-ups. The real fear is that unilateral action will only fuel a race to the bottom and act to damage domestic tech companies.”
It is odd. Corporate profits to GDPR are hovering around an all time high, meaning wages are close to an all time low, which to some is an argument for higher corporate taxes. Yet the trend is for the opposite. Of course, higher corporate taxes can only work if they are applied globally — yet global collaboration is hardly in vogue. Maybe the very thing we need to erode the power of tech is being thwarted by populism which in turn is caused by technology.
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Then there is Google and accusations made by tech billionaire, known for his quirky views, Peter Thiel, that the company has been infiltrated by Chinese spies. President Trump said he will take a look at investigating Google for treason.
Then there is Huawei, for what it’s worth, a lot experts are of the view that network security is in a horrendous mess, and that issues concerning Huawei using 5G to enable the Chinese to spy on us, are akin to one of those red herring things.
This all begs the question, will governments seek to regulate the techs so much that their profitability is greatly reduced? Will they seek to break some of the techs up, like they once did with Standard Oil? Will this finally satiate technology created populism?
Some techs are natural monopolies. Facebook for example. If there were two rival Facebooks and half your friends used one, the other half the other, it would be counter-productive.
Maybe, social media and search are the public utilities of tomorrow. In that case should they be state owned, or highly regulated like energy utilities, (but monopolies) or should we allow great gales of creative destruction to erode their monopoly power, as Joseph Schumpeter once argued?
Either way, the backlash against tech remains its biggest threat, but as technology changes, as the fourth industrial revolution unravels, what will the relationship be between technology and populism then?
