Despite Complaints, Tech Wealth Helps Society

The pace of entrepreneurial activity fueled by tech wealth isn’t slowing down… In fact it is accelerating at dare I say “Internet speed.” Just last week I discussed how Tech Leaders Brin, Zuckerberg and Bezos are changing everything as the seek to revolutionize newspapers, immigration and meat production.

The Financial Times seems to agree as they just published a piece yesterday which discusses many of the same issues I brought up with the addition of Elon Musk’s Hyperloop and asteroid mining.

The FT correctly discusses the pervasive pessimism about the lack of investment from just a few years back from people like PayPal’s Peter Thiel as well as Tyler Cowen.

Here is a salient excerpt:

The upshot, according to supporters of this billionaire-fuelled quest for the next big technological breakthroughs, will be an age of discovery that creates the industries of the future: private space exploration, new forms of transport, robotics, new medicines and advanced materials. Yet it could end up instead as an era defined by the hubris of a generation of the ultra-wealthy.

There are a few challenges ahead though. The first may seem silly but could become counterproductive… Google is giving away a tremendous amount of software and services – sometimes they monetize their efforts and sometimes they don’t. Products like Chromebooks and Android are just two examples of how they have helped the poor get access to computing.

Still, mega-philanthropists like Bill Gates are unmoved – he implied recently that Google’s Project Loon doesn’t help those with malaria – his way of saying – “hey look, I am trying to cure this disease and they are just trying to provide broadband.”

Here is the exact quote:

When you’re dying of malaria, I suppose you’ll look up and see that balloon, and I’m not sure how it’ll help you. When a kid gets diarrhea, no, there’s no website that relieves that. Certainly I’m a huge believer in the digital revolution. And connecting up primary-health-care centers, connecting up schools, those are good things. But no, those are not, for the really low-income countries, unless you directly say we’re going to do something about malaria.

This is certainly an odd thing to say – especially coming from someone so bright. I mention this this because  we all know Bill Gates, Warren Buffet and countless others have multibillion dollar war chests targeted at this disease. Is Google required to invest in the exact same manner as others in order to get their respect?

It is tough not to have the most utmost respect for Gates between his accomplishments in business and philanthropy and everyone is entitled to make occasional statements which aren’t as well thought-out as they could be… I believe this may be the situation here.

Then there is the average non-tech Sanfranciscan who is having a tough time living in the city because the local costs have skyrocketed thanks to all the wealthy tech workers. Imagine – there is even anti-Google graffiti! The Los Angeles Times article quotes San Francisco entrepreneur Chris Tacy who says:

If resentment of the growing wealth and power of the tech industry is building, we are bringing this on ourselves. A lot of people in the U.S. don’t have economic confidence in the future and at the same time you have a lot of tech wunderkind becoming billionaires,” he said. “It’s a volatile combination.

On the one hand tech wealth has gone to philanthropic causes galore and is being invested in ways which could revolutionize space exploration and food production. Sergey Brin’s laboratory beef growth experiment for example could provide food for the poor in a manner which is 85% more efficient. In other words the same amount of money could potentially feed 85% more people!

Of course no one can argue that the downside to wealthy people is their time is valuable and they will subsequently spend top dollar to reduce their commute times and this drives up the cost of real estate wherever they congregate.

Last year I touched on the issue of resentment related to tech success in a post titled Now it’s Occupy Apple? which discussed the silliness of an “Occupy” protester who suggested society should stop investing in Apple products and instead help the poor with the subsequent savings.

This resulted in a sarcastic rant from Yours Truly as follows:

After all, it isn’t like Apple hires anyone in the US or has retail stores where just about anyone who has the drive and ambition can sell products. Also, it’s not like tens of thousands of salespeople benefit from these device launches in companies like AT&T, Sprint, Verizon, Best Buy or T-Mobile.

It isn’t like these devices have spawned an app ecosystem with hundreds of thousands of choices where the poorest of the poor can go to a public library, learn how to program on free government computers and develop the next must-have app while becoming wealthy in the process.

It’s not like jobs allow low-income families a source of income or anything like that. Moreover, it’s not like taxes on income from the above-mentioned jobs reduce state entitlement costs on things like housing and food stamps, allowing them to increase education funding if they choose.

My point was and still is that wealth creates wealth. In fact it is the only way to create lasting wealth. When a bidding war erupts on a home because multiple wealthy buyers want to buy it, real estate brokers benefit. Moreover, the city benefits from higher taxes. The car salesperson benefits because the real estate agent can afford a new vehicle. The dry cleaner and clothing retailer benefit because the car salesperson can afford nicer clothes. Because time=money and techies get paid so well, they hire all sorts of people to walk their dogs, take care of their lawns and clean their homes. This in-turn creates new jobs for the people who provide products and services to these service people.

No industry is perfect but tech wealth is being used to help so many people – we need to look beyond the few skewed headlines and opinions and be proud of the industry we work in. Remember, despite complaints, tech wealth truly helps society.

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