Wealth vs. work - Page 3

The tech sector has created great wealth — and worse inequality. Is that San Francisco's future?

El Roto's 'Untitled (30 Cartoons)' is among the works on display at YBCA's 'Without Reality There Is No Utopia" exhibit


In many ways, the technology sector has played a cruel hoax on the American people. Computer technology promised to expand the economy, increase productivity, and democratize society. Instead, it has helped downsize the US workforce, made the average person work harder for stagnant wages, and accelerated the decline of the media, unions, and democratic institutions, replacing them with a cacophony of bloggers and often powerless voices drowning in a sea of idle chatter.

True, the Internet and related technologies did generate wealth and prosperity — but economic data since the dawn of the Worldwide Web clearly shows that prosperity has not been broadly shared. Instead, the Internet — along with the illusory ideals of libertarian individualism its biggest backers support — has helped usher in the biggest consolidation of wealth since the Gilded Age.

Robert McChesney is a communications professor at the University of Illinois who has written several books on the relationship between democracy and our increasingly corporate-controlled media. His new book, Digital Disconnect: How Capitalism is Turning the Internet against Democracy, examines how technological and political changes have consolidated wealth and power.

McChesney said that 20 years ago, the Internet was presented to the public as "the mightiest weapon ever against inequality, both political and economic inequality," a message still sounded by its biggest boosters. But instead, he noted that almost half of the largest corporations in the US got that way by monopolizing technology sectors and gobbling up smaller competitors.

"One of the great ironies of the Internet is it is one of the greatest creators of economic monopolies in history, bar none," he told the Guardian.

Whether it's Google, Facebook, Airbnb, or Twitter, he said the leaders in any realm of technological innovation become the de facto gathering spots for consumers — and the corporations then use that market power to kill off any would-be competitors, a reality that extends from the globalized virtual world into the localized real world.

"It has eliminated the ability to have local alternatives," he said.

McChesny is no fan of Mayor Lee's embrace of tech-centered economic development.

"It's tragic, it's pathetic, it's outrageous, it's obscene — but it's also what you'd expect," McChesney said. "This is they world we live in, one of extraordinary monopolies. These companies are so large that it's a new Gilded Age. And they have nothing to fear from the government, even when they blatantly rip people off."

The other great irony of the Information Age is how the investor class has appropriated for itself the worker productivity gains enabled by technology. Nowhere is that more true that with tech workers themselves, who tend to work longer than legal hours creating tools that increase productivity — which should allow us to work fewer hours.

The economic data clearly shows that the average American has been working steadily more hours for at best stagnant wages since the 1970s when the country's prosperity was last shared in an equitable way across classes. And technology companies themselves, and the tax laws that govern them, are some of the worst examples of the problem.

"They are produced largely by companies with intangible assets, and they produce intangible assets, so it's largely under the radar...People don't understand that intangible assets are often far greater than real assets," said Donohue, noting that everything from the venture capital funds that fuel Internet start-ups to the patents and intellectual property they produce largely escape taxation, particularly here in California (whereas Oregon, Florida, and other states do tax some intangible assets, such as the money tied up in investments). "California has a tax code that has gone out of its way to exempt intangible assets."