The Decline of Davos and the Rise of Tech

Technology will set us free. To do what exactly? It's time to take The Sniff Test.

Optimism among elites about their ability to solve problems has risen in the aftermath of the 2008 crisis. The same period has seen increasing social disquiet.

An Exponential View

Azeem Azhar advises governments and large companies on how to make sense of an exponential future. This week he is in Davos with the great and the good at the World Economic Forum planning our future. I know this from his newsletter in which he raised an important question recently. But it’s not the question that matters, it’s what lies beneath.

Azhar was commenting on the decline in people’s confidence in the economy since the 1970s. He quotes a survey that counts references to progress and future in books, compared to discussions of caution, worry and risk. Sentiment has fallen steadily for fifty years.

Increased optimism began with the Enlightenment and was a precursor to economic development in the West. Does increased pessimism foreshadow decline? Azhar suggests it means increased populism, more opposition to fossil fuels and continued NIMBYism. There is a layer of hell reserved for this last one, when people have the temerity to resist what outsiders want to do to their neighbourhoods.

The usual suspects for pessimism are that bad news sells and the Great Stagnation. The latter is Tyler Cowen’s phrase for sluggish economic growth and minimal improvement in living standards. Cowen believes this is because the low-hanging fruit of free land, immigrant labour and new technologies has been consumed. Azhar offers another suggestion.

This chart shows attitudes towards social liberalism. This means what people think about individualism, freedom of choice, democracy and personal autonomy. Say what you like about gender alignment, it checks three of those four boxes. Social liberalism is on the rise in places where it already exists, but not anywhere else.

Azhar suggests this trend means a greater burden of responsibility on individuals rather than society. As technology threatens to leave more of us behind, uncertainty rises. He equates liberalism with economic pessimism and asks readers how to address this.

The Exponential View newsletter is balanced. Azhar makes a living from the development of technology but asks important social questions. As such, he is apart from tech bros like Peter Diamandis for whom optimism is all. Azhar’s question has menace.

Was social liberalism useful to kickstart economic progress but is no longer necessary? Is this the point where the elite with their machines say “we’ll take it from here”? Or have the masses always been wrong, like Luddites against automation of the textile mills? Social liberalism was useful to buy them off. Now it’s gone too far.

Our technology leaders are not democrats. Most of their companies are owned through complicated arrangements where you may give them money but not take control. Shareholder democracy has been reimagined. The logic is that the people don’t know what’s good for them.

This is the thinking behind the World Economic Forum, where the world’s elite meet to determine what’s to be done with the rest of us.

A Sound Thrashing

People are not scared of technology but of being deceived by it. It’s the owners who deceive because the machines do as they are told. Given the twisting of shareholder rights, that means power lies with a handful of visionaries.

A majority of Silicon Valley leaders lean Democrat. The impending showdown between Biden and Trump is unlikely to change that. Right wing technologists have no time for culture wars, with an unnamed political adviser quoted in the Washington Post saying,

We don’t care about [transgender] kids going to bathrooms. We care about dismantling the regulatory state.

There will be less funding for Republicans from technologists, which means more from those who care about gender, abortion and religion. Trump will campaign on immigration, inflation, energy, America first and revenge, according to most media.

What about Trump’s possible exclusion from the ballot in states that he has no chance of winning? That only serves to rally the base in states he can win. Imagine the mess when the elected President has been declared unfit for office in several states. At least he’ll be able to pardon himself of any convictions suffered between now and then.

In a fiercely divided country power migrates to where there is stability and strength. Enter our technology overlords. Interest rates rose last year as investors sold government-backed issues. Where did the money go? Into the shares of the top seven technology stocks. It is these cast of characters that keep America great. Since 2010, US shares have given the rest of the world a sound thrashing.

There are numerous reasons for this. Technology is where the growth is and the US is the home of technology. Legal rules push pension funds into the shares of the largest companies. And the money creation that supports huge government deficits floods markets as well as funding the reindustrialisation of the US.

The US is serious about recapturing its manufacturing prowess. Company executives mentioning re-, near- and on shoring – corporate speak for deglobalisation – have risen tenfold since 2020. You can shove that up your Davos.

A Better Outcome

The message from Silicon Valley is that technology sets you free. Free to do what, you may ask. If the answer is watch YouTube videos and play games, you may question if it’s worth it. What else do the tech lords suggest?

How about the freedom to work from home. This is democratising the workforce, increasing female participation and saving hours of commuting. You have the tools to go freelance, to write code without coding and be your own boss.

Meanwhile you work gig roles without benefits, limiting social engagement and increasing distrust. A survey by Slack noted more than one in four desk jockeys does not feel trusted at work. The vast majority of them believe they meet or exceed manager’s requirements. Slack wasn’t polling slackers.

It would help if tech companies weren’t pushing “productivity apps” that spy on us to ensure we meet minimum screen time requirements. Here comes another email from Slack telling me I missed a message. Better check my screen time report to make sure I’ve logged in enough. (Editor’s note – other spyware is available.)

What about the gift of self diagnosis, health and longevity? You don’t have to wait for doctors to tell you what’s wrong when you can look it up on an app. Which is just as well as you no longer have health insurance. Do the apps ever tell you there’s nothing wrong?

Peter Diamandis wrote this week about an imagined day in 2030. It begins:

Your AI assistant goes through your calendar and talks to your other electronic devices to plan your day while you sleep. With an eye on your sleep cycles, it wakes you at a time when you will feel most refreshed—within a window of time you've previously approved. It monitors your health vitals to make sure you’re in top shape.

The day continues as your AI assistant briefs you on the news it considers relevant and orders you a self-driving car to transport you to a meeting. No working from home for this model citizen. The meeting is in Korean with seamless translation into your virtual boardroom.

Your assistant drafts all your emails for approval, writes five reports and a patent application. During the day you are served lunch and a snack appropriate for your current blood chemistry. Your favourite music plays on your walk home and dinner is ordered for 20 minutes after arrival, with a comedy routine selected to pass the time.

I admire Diamandis’ optimism and he puts his money where his mouth is. The XPRIZE represents ingenuity and achievement in important fields. But there is no indication that he sees any part of that future day as questionable.

The message is that everything is data driven. When you see a human physician they compare you to their knowledge of other cases. They see where you fit into the map of humanity. AI does this faster, using more data and with greater accuracy. Why would you not want a better outcome?

Dopamine Is Addiction

My beef with unbridled tech optimism is twofold. Technology reinforces the power of those who already have it. You cannot manage what you don’t measure, but digitise everything and you can measure it all. Technology runs on data and creates it, which is a near-perfect flywheel. This is a powerful reason why those big seven tech stocks dominate the stock market.

Source: Wall Street Journal

Artificial intelligence turns data into information. This enhances the power of those who are trusted to interpret it. Remember when the internet was going to kill the BBC and the New York Times? With so much information we need someone to tell us what to focus on. When Diamandis says our personal assistant will do that for us, how will it decide?

My second beef is our loss of autonomy. I love David Bowie but I don’t want to listen to him all the time. Occasionally, a long-forgotten tune comes into my head. It sparks a memory and I’ll listen a few times before it fades away again. Spotify makes this easy, but how will the machine know I want to do it?

Ask about happiness and before long you’ll hear about dopamine. Machines are good at giving us hits. But dopamine triggers the craving for another hit. It’s addiction not happiness and the hits have to get bigger.

There is satisfaction in a job well done. A hard day’s work can be it’s own reward. And there must be meaning to what we accomplish. In Diamandis’ day we are freed to write more emails and reports. Is this your dream job, creating data for the machines?

The idea that technology solves all our woes assumes a democratising role that does not exist. It is the opposite of democracy. If it allowed us a greater say in our lives then the establishment would ban it. Recall that underlying Azhar’s question is the idea that individuals don’t know what’s good for them.

Waiting in Vain

Davos week gets my goat. The great and the good assembled to decide what’s best for the plebes. Agreements on new rules and restrictions that won’t apply to the powerful.

Globalisation died when America didn’t want it any more. That was about a decade ago when it realised China wasn’t happy being number two. As for the Europeans, with their banking rules, privacy laws and sustainability regulations? Social liberalism run wild. Bro, do you even have a tech industry? How about an army?

If you want to know what’s best for the plebes, sell it to them. If they buy it they want it. Don’t dictate what’s good for them, or nudge them to buy something because it’s right for the world. That’s not how markets or politics works, and some politicians know it.

Trump’s campaign has started better than in 2016. There is little doubt that he will win the Republican nomination. Trump spoke twice as President at Davos. Both times he lectured the assembled dignitaries about the strength of the US economy. He held up the American system of free enterprise as an example to the world.

The people at Davos may discuss what to do with us. But it’s technology companies that make it happen. We wait and hope that together they come up with something that brings us satisfaction and meaning as individuals. To date the omens aren’t great.