WTF Is Wrong With Capitalism?
By: John Battelle
Tags: Culture, Economics, Tech, Finance, Politics

Shift Forum Reads

WTF Is Wrong With Capitalism?

In capitalism, we’ve built an artificial intelligence that’s badly in need of a reboot, argues longtime tech observer Tim O’Reilly.

Reading books is good for your head, at least that’s what my mother, a middle school English teacher, drilled into me as I was growing up. I was reminded of that maxim as I was finishing Tim O’Reilly’s WTF?: What’s the Future and Why It’s Up to Us — not because the content of the book dramatically changed my point of view (I tend to agree with O’Reilly on most topics, we were partners for years) but because the act of reading WTF clarified certain foggy notions with which I’ve been wrestling, distilling them into more concise reckonings.

WTF is not a straightforward book. It’s part memoir (Tim’s career spans four decade of tech and policy), part tech business book (a review of technological disruption and its impact on society), and part diatribe (a rant against a broken capitalist system). As you might expect, I liked the diatribe parts the best.

As I read, an idea emerged which runs through the work: When it comes to your work, you’re either making things, or you’re making money. You can certainly make money while you’re making things, and perhaps things get made if you focus on making money. But this essential choice is at the heart of the book. As a society, should we value creating products and services that make the world a bit better, or should we value creating money, and assume the rest follows? This question is particularly relevant when considering technology and its impact on our economy — as O’Reilly points out: “We are layering on new kinds of magic that are slowly fading into the ordinary….will we use it to make a better world? Or will we use it to amplify the worst features of today’s world?”

This is an idea I’d been thinking about for some time, but O’Reilly’s book has a way of nudging things into the light: He takes sincere offense with the way our tech-driven capitalistic system has developed, and spends a lot of his book laying out a case for why we have to change our approach to how we run our companies and our governments. “There is a profound failure of imagination and will in much of today’s economy,” he rails. “Policy makers seem helpless, assuming that the course of technology is inevitable, rather than something we must shape.”

Yes, yes, yes!

It’s this very approach to tech that’s created the budding “techlash” — the predictable externalities of fake news, Russian election meddling, digitally driven depression, and much much more. And why have these externalities been ignored for years? Because we framed our tech companies — and the system which created them — as heroes that could do no wrong.

O’Reilly isn’t buying it. “The magic of the market is not working…we are at a very dangerous moment in history,” he writes. “The question … became one of how to maximize value creation for society, rather than simply value capture by an individual or a company.”

Throughout the book O’Reilly weaves in personal anecdotes with reporting on companies such as Uber, Amazon, Twitter and Google. He returns to this core theme: That companies must reset their purpose to create more value than they extract. At times his solutions strain credulity — he suggests Facebook should implement a modal dialog that asks “Are you sure you want to share that link? You don’t appear to have read the story” — but at least he’s pushing our thinking, something far too few business books have done in the past decade.

More than halfway through WTF, O’Reilly finds his inner Mencken, identifying the rise of the American stock market as our “Skynet moment.” We all fear some future super artificial intelligence, he argues, but in fact, there’s already one at work in our world. Our most fearsome technological monster is the system of capitalism dominated by Wall Street. “The true effect of “trickle-down economics,” he writes, “is the way that the ideal of maximizing profit, not shared prosperity, has metastasized from financial markets and so shapes our entire society….It is this hybrid artificial intelligence of today, not some fabled future artificial superintelligence, that we must bring under control.”

Conservatives may dismiss O’Reilly as a fantastical socialist, but the facts on the ground increasingly support his arguments. When we imagine our future society decades from now, do we want more of what we’ve got now — rampant income inequality, unrestrained profit extraction, and an existential crisis of negative externalities like climate change and the erosion of truth? Or do we want to believe we found the vision and the courage to step back, reset the rules governing our economic and social engines, and point them toward a more sustainable future?

Buy this book here:

Tim O’Reilly will join Alexandra Suich, of the Economist, Laura Tyson, of UC Berkeley, and Nick Hanauer, of Second Ave Partners on stage at the Shift Forum next month. They’ll be discussing new policy solutions in the framework of the future of work, including Universal Basic Income, a mandated Federal minimum wage, and more.