Feb 17th 2016

The urgent need for Silicon Valley to lead a smart and civil conversation on inequality

There are very few issues that Donald Trump, Bernie Sanders, Ted Cruz, and Hillary Clinton all agree on.  One of them is the growing problem of inequality in income and wealth.  From the extreme left to the extreme right, everyone is angry about the one percent who have the majority of the wealth.  There has always been an income and wealth gap, but the divide between average worker and the very wealthy has not been so great since the Roaring Twenties. This is fueling the rise of both the Tea Party and the socialists.

Income equality is not going to improve; technology is about to make things much worse.  It will, over the next decade, begin to disrupt almost every industry, wipe out millions of jobs, and make the rich even richer.  Even though everyone will be able to live better and healthier lives and benefit from the technology advances, the widening gap will cause greater resentment and create a larger cauldron of dissent.  This is something we need to be prepared for.

Already, in Silicon Valley, the Google bus has become a symbol of inequity.  These ultra-luxurious, Wi-Fi–connected buses take workers from the Mission district to the GooglePlex, in Mountain View.  The Google Bus is not atypical; most major tech companies offer such transport now.  But so divisive are they that in normally liberal San Francisco, activists scream angrily about the buses using city streets and bus stops, completely ignoring the fact that they take dozens of cars off the roads.  Teslas have also become symbols of the obnoxious technoelite—rather than being celebrated for being environmentally game-changing electric vehicles.  In short, there’s very little logic to the emotionally charged discussions.

Intellectuals are trying to build frameworks to understand why the divide, which first opened up in the 1990s, continues to worsen.  Thomas Piketty explained in his book Capital in the Twenty-First Century that the economic inequality gap widens if the rate of return on invested capital is superior to the rate at which the whole economy grows.  His proposed response is to redistribute income via progressive taxation.  A competing theory, by an MIT graduate student, holds that much of the wealth inequality can be attributed to real estate and scarcity.  Silicon Valley has both: an explosion in wealth for investors and company founders, and a real-estate market constrained by limits on development.

So far, the Valley’s moguls have largely been in denial that technology will wipe out millions of jobs and increase inequity.  They prefer to believe they are building a utopia that doesn’t have a dark side.  But one of the most influential people in Silicon Valley, Paul Graham, broke ranks and wrote an essay about the role of startups in income inequality.  It created a firestorm and started an important debate.

Graham explained that income inequality is an inevitable outcome of startups, and asked what choices we want to make.  He acknowledged that dire poverty co-exists alongside astounding wealth and that resentment is building.  He voiced concerns about the backlash and its potential to generate unwise government policies to more heavily tax startups.  He argued that this could smother growth and stifle innovation.

Almost every aspect of Graham’s essay was criticized by fellow venture capitalists, angry socialists, and the press.  But his concerns are valid.  There is a very good reason for which Silicon Valley remains home to the majority of the dynamic technology companies on the planet.  And, as Graham notes, many startups do produce enormous value for society.

The best of these disruptive startups create far more value than they capture, even as they disrupt or even destroy older, less efficient industries.  Uber may generate much controversy, but no one would disagree that the old ways of moving people around densely populated areas can be improved.  This goes beyond taxis and towards a future of weaving all transportation systems into a single intelligent, flexible service that makes it much easier to move around at a lower cost, with lesser environmental impact.  Twitter and Facebook may deserve criticism, but these social platforms were primary information-distribution mechanisms that fueled the Arab Spring, and they continue to power other democratic uprisings around the world.

Yes, the economy’s digital transition is amplifying globalization and affecting American workers.  Automation is already decimating the global manufacturing sector, transforming a reliable mass employer providing middle-class income into a much smaller employer of people possessing higher-level educations and skills.  The growth of the “Gig Economy” is shifting businesses towards the goal of part-time, on-demand employment, with aggressive avoidance of obligations for health insurance and longer-term benefits.  The winner-takes-all nature of the tech industry explains why only a few giant digital companies compete with each other to dominate the global economy.  A substantial part of the value they capture is concentrated at the center and mostly benefits a few shareholders, executives, and employees.  With technology advances and convergence, we are in the middle of a gold rush.  Tech is making amazing things possible, but it is also widening the economic gulf.

We need to have open discussions about the good and bad of technology and soften its negative impact.  With robots and artificial intelligence increasingly doing the jobs of human workers and multiple industries being simultaneously disrupted, we are heading into a jobless future and need to rethink the nature of capitalism itself.  This cannot be only about taxing the rich, because that is not what Americans want.  They have never demanded income equality and have always been fans of the entrepreneur, the Henry Fords and the Mark Zuckerbergs alike.  What Americans really want is economic security.  What makes us unequal is not so much the money we have at any given moment but our capacity to face critical adversarial events such as having cancer or falling behind on mortgage payments.  Advancing technologies can make it possible to provide for the basic needs of every human being—so that a job isn’t about survival or subsistence any more.

A more fruitful discussion would be about how we can ease the impact of technology and social change.  We need to discuss safety nets, the retraining of workers, and the concept of a universal basic income for everyone.  We need a nationwide dialog on how we can distribute the new prosperity we are creating.  Equally importantly, we need to create equity and fairness in our legal, justice, and economic systems—which are badly lacking.  Otherwise we will see even more anger, and unrest nation wide.

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Vivek Wadhwa is a Fellow at Arthur & Toni Rembe Rock Center for Corporate Governance, Stanford University; Director of Research at the Center for Entrepreneurship and Research Commercialization at the Pratt School of Engineering,  Duke University; and Distinguished Fellow at Singularity University. He is author of  “The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent”—which was named by The Economist as a Book of the Year of 2012, and ” Innovating Women: The Changing Face of Technology”—which documents the struggles and triumphs of women.  In 2012, the U.S. Government awarded Wadhwa distinguished recognition as an  “Outstanding American by Choice”— for his “commitment to this country and to the common civic values that unite us as Americans”. He was also named by Foreign Policy Magazine as Top 100 Global Thinker in 2012. In 2013, TIME Magazine listed him as one of The 40 Most Influential Minds in Tech.

Wadhwa oversees research at Singularity University, which educates a select group of leaders about the exponentially advancing technologies that are soon going to change our world.  These advances—in fields such as robotics, A.I., computing, synthetic biology, 3D printing, medicine, and nanomaterials—are making it possible for small teams to do what was once possible only for governments and large corporations to do: solve the grand challenges in education, water, food, shelter, health, and security.

In his roles at Stanford and  Duke, Wadhwa lectures in class on subjects such as entrepreneurship and public policy, helps prepare students for the real world, and leads groundbreaking research projects.  He is an advisor to several governments; mentors entrepreneurs; and is a regular columnist for The Washington Post, Wall Street Journal Accelerators, LinkedIn Influencers blog, Forbes, and the American Society of Engineering Education’s Prism magazine.  Prior to joining academia in 2005, Wadhwa founded two software companies.




  

Browse articles by author

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Apr 13th 2021
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Apr 8th 2021
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Apr 8th 2021
EXTRACT: "Many present day politicians appear to have psychopathic and narcissistic traits too. It’s easy to spot such leaders, because they are always authoritarian, following hardline policies. They try to subvert democracy, to reduce the freedom of the press and clamp down on dissent. They are obsessed with national prestige, and often persecute minority groups. And they are always corrupt and lacking in moral principles."
Apr 6th 2021
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Mar 30th 2021
EXTRACT: "The Father is an extraordinary film, from Florian Zeller’s 2012 play entitled Le Père and directed by Zeller. I’m here to tell you why it is a ‘must see’." EDITOR'S NOTE: The official trailer is attached to the review.
Mar 28th 2021
EXTRACT: "Picasso was 26 in 1907, when he completed the Demoiselles; de Kooning was 48 in 1952, when he finished Woman I.  The difference in their ages was not an accident, for studies of hundreds of painters have revealed a striking regularity - the conceptual painters who preconceive their paintings, from Raphael to Warhol, consistently make their greatest contributions earlier in their careers than experimental painters, from Rembrandt to Pollock, who paint directly, without preparatory studies."
Mar 26th 2021
EXTRACT: "Mental toughness levels are influenced by many different factors. While genetics are partly responsible, a person’s environment is also relevant. For example, both positive experiences while you’re young and mental toughness training programmes have been found to make people mentally tougher."
Mar 20th 2021

The city of Homs has been ravaged by war, leaving millions of people homeless an

Mar 20th 2021
EXTRACT: "There are two main rival models of ethics: one is based on rights, the other on duties. The rights-based model, which traces its philosophical origins to the work of John Locke in the 17th century, starts from the assumption that individuals have rights ....... According to this approach, duties are related to rights, but only in a subordinate role. My right to health implies a duty on my country to provide some healthcare services, to the best of its abilities. This is arguably the dominant interpretation when philosophers talk about rights, including human rights." ........ "Your right to get sick, or to risk getting sick, could imply a duty on others to look after you during your illness." ..... "The pre-eminence of rights in our moral compass has vindicated unacceptable levels of selfishness. It is imperative to undertake a fundamental duty not to get sick, and to do everything in our means to avoid causing others to get sick. Morally speaking, duties should come first and should not be subordinated to rights." ..... "Putting duties before rights is not a new, revolutionary idea. In fact it is one of the oldest rules in the book of ethics. Primum non nocere, or first do no harm, is the core principle in the Hippocratic Oath historically taken by doctors, widely attributed to the ancient Greek philosopher and physician Hippocrates. It is also a fundamental principle in the moral philosophy of the Roman statesman Marcus Tullius Cicero, who in De Officiis (On Duties) argues that the first task of justice is to prevent men and women from causing harm to others."
Mar 18th 2021
EXTRACT: "Several studies have recently compared the difference between antibodies produced straight after a coronavirus infection and those that can be detected six months later. The findings have been both impressive and reassuring. Although there are fewer coronavirus-specific antibodies detectable in the blood six months after infection, the antibodies that remain have undergone significant changes. …….. the “mature” antibodies were better at recognising the variants."
Mar 15th 2021
EXTRACT: "Like Shakespeare, Goya sees evil as something existing in itself – indeed, the horror of evil arises precisely from its excess. It overflows and refuses to be contained by or integrated into our categories of reason or comprehension. By its very nature, evil refuses to remain within prescribed bounds – to remain fixed, say, within an economy where evil is counterbalanced by good. Evil is always excess of evil." ....... "Nowhere is this more evident than in war. Goya offers us a profound and sustained meditation on the nature of war ........ The image of a Napoleonic soldier gazing indifferently on a man who has been summarily hanged, probably by his own belt, expresses the tragedy of war – its dehumanization of both war’s victims and victors."
Mar 14th 2021
EXTRACT: "A blockchain company has bought a piece of Banksy artwork and burnt it. But instead of destroying the value of the art, they claim to have made it more valuable, because it was sold as a piece of blockchain art. The company behind the stunt, called Injective Protocol, bought the screen print from a New York gallery. They then live-streamed its burning on the Twitter account BurntBanksy. But why would anyone buy a piece of art just to burn it? Understanding the answer requires us to delve into the tricky world of blockchain or “NFT” art."
Mar 14th 2021
EXTRACT: "Exercise is good for your health at every age – and you can reap the benefits no matter how late in life you start. But our latest research has shown another benefit of being physically active throughout life. We found that in the US, people who were more physically active as teenagers and throughout adulthood had lower healthcare costs."
Mar 10th 2021
EXTRACT: "Although around one in 14 people over 65 have Alzheimer’s disease, there’s still no cure, and no way to prevent the disease from progressing. But a recent study may bring us one step closer to preventing Alzheimer’s. The trial, which was conducted on animals, has found a specific molecule can prevent the buildup of a toxic protein known to cause Alzheimer’s in the brain."
Feb 24th 2021
EXTRACT: "The art historian George Kubler observed that scholars in the humanities “pretend to despise measurement because of its ‘scientific’ nature.” As if to illustrate his point Robert Storr, former dean of Yale’s School of Art, declared that artistic success is “completely unquantifiable.” In fact, however, artistic success can be quantified, in several ways. One of these is based on the analysis of texts produced by art scholars, and this measure can give us a systematic understanding of how changes in recent art have produced changes in the canon of art history."
Feb 24th 2021
EXTRACT: "The most politically sensitive option we looked at was the virus escaping from a laboratory. We concluded this was extremely unlikely."
Feb 16th 2021
EXTRACT: ".... these men were completely unaware that they had put their lives in the hands of doctors who not only had no intention of healing them but were committed to observing them until the final autopsy – since it was believed that an autopsy alone could scientifically confirm the study’s findings. As one researcher wrote in a 1933 letter to a colleague, “As I see, we have no further interest in these patients until they die.” ...... The unquestionable ethical failure of Tuskegee is one with which we must grapple, and of which we must never lose sight, lest we allow such moral disasters to repeat themselves. "