For example, in late 2013 we saw the rise of “tech bus protests” in the San Francisco Bay area, where unhappy community-based activists threw eggs and other objects at the shuttle buses used to transport employees of local giant tech companies. These protests became widely publicized. The tech buses were called “Google buses,” although that term is pars pro toto (part of the whole), in that many other tech companies such as Apple, Facebook, Yahoo, and Genentech also have private shuttle services. The buses were used to ferry only tech company employees from their homes in San Francisco and Oakland to corporate campuses in Silicon Valley, about 40 miles (64 km) south.
The people involved in the protests viewed the buses as symbols of gentrification and displacement in a city where rapid growth in the tech sector and insufficient new housing construction led to increasing rent and housing prices, where natives and residents are getting pushed out.
I predict that soon we will see a larger metaphorical “egging” of big tech companies. It's obscene for one man to have $200 billion dollars while a single mom of three holds three jobs at $7.50 an hour, working for that same man as she attempts to make ends meet. It is also obscene that in 2019, the average top CEO's pay increased 14% from 2018 to $21.3 million. Sundar Pichai, the CEO of Google's parent company, Alphabet, earned $280,621,552 in total compensation—more than 1,000 times the income of a median company employee (As You Sow, 2021).
Some people would argue that the wealthy person worked hard and created the company, so they deserve all this reward. Also, if they hadn't created the company, this mom wouldn't have the job she has. The rich represent the “hard work” of years of sacrifice from themselves, their families, and others around them. Is it fair to say these people deserve their money because they worked hard for it? This is a fair argument, and is in fact one of the biggest incentives of capitalism.
However, I counter that argument with a question: is it possible for the wealthy person to get disproportionately large payouts for all their hard work without paying starvation wages to their employees? Or is it possible to have an equitable redistribution of that wealth among all parties involved in creating it? I think it's possible! I and many others would love to see more of this thinking put into practice.
But many people see the opposite. As of this writing, monopolies, acquisitions, and consolidations have seen Apple, Microsoft, Amazon, and Alphabet (Google) rise to what is now worth a combined net worth of $4 trillion. This is not sustainable. It's not a matter of if; it's a matter of when. Residents will become increasingly resentful of this type of company and their leaders' resource hoarding, leading to an “egging” of some form or another. This will lead to the breakup of big tech into smaller entities. It will not be sexy or cool to be that big anymore.
Some capitalists argue that it is a good thing for people to be able to earn more and more. However, this ignores the diminishing marginal utility of wealth. A billionaire who gets an extra million sees little increase in economic welfare, but that $1 million spent on healthcare would provide a much bigger increase in social welfare.
Perhaps this is the reason we do need to reform or replace the capitalistic market altogether. One thing is true—we need to rethink the incentive structures that align well with humanity and our planet. What if there was a cap on how much money one can make through capitalism? Let's say that number is $2 billion. Then we would name a dog park after you with a sign that says, “You Won Capitalism.” Any subsequent dollars you make past the cap, you spend it on lifting people out of poverty and taking care of the planet. The more you do of the latter, the more street cred you get in society.
Boom and Bust Cycles
Last but not least of the unintended consequences of capitalism are the boom-and-bust cycles. Bust cycles in particular are very debilitating to society. In 100 years, we've seen the 1929 stock market crash, the 1989 bust caused by the savings and loan crisis, the 2001 recession caused by stock market crash and high-interest rates, the 2008 mortgage housing crisis, and finally the economic fallout of the 2020 COVID-19 pandemic.
These cycles fall into four phrases: boom, which is the aggressive expansion; peak, an inflection point where the economy stops expanding; bust, the contraction season; and the end of the bust, which is the inflection point where the economy stops contracting and begins to expand again (Amadeo, 2020).
The boom and bust cycles are caused by three forces—the law of supply and demand, the availability of financial capital, and future expectations. Technology companies, just like any other business operating in a capitalist economy, have a tendency to fall into booms and busts, with painful recessions and mass unemployment. These bust cycles affect the people at the bottom the hardest because most of them survive on paycheck to paycheck, thus the unpredictability of earnings is the biggest problem.
HOW TO MITIGATE UCOTS AND REIMAGINE CAPITALISM
We just discussed the unintended consequences of capitalism. Anyone can scream and tell you the house is on fire, but what can we do about it? Besides bringing the fire hose and putting out the fire, what else can be done to make sure we prevent the fire from happening in the first place? The following sections are some thoughts and ideas about how we could reactively and proactively mitigate the UCOTs of capitalism.
Capitalism versus Carbon Emission Regulations
The free market can only take us where we need to go. Negative externalities such as carbon pollution must be properly priced and policed. The rules of the game need to be such that competition is free, fair, and respectful of the health of humanity and our planet. Only then do we have a chance at saving the planet.
Unfortunately, markets do not police themselves. They must be balanced by transparent, capable, democratically accountable governments. As you will see in Chapter 2, we need to strengthen the power of regulatory bodies, which are slowly diminishing. In tech companies, regulations are demonized and companies do all they can to keep them at the bare minimum. They couldn't care less if they existed at all. Meanwhile, these same companies care a great deal about their shareholder returns, leading to the rise of shareholder primacy. With more money in the hands of the shareholders and the leadership, in comes lobbying and an increasing role of money in politics. This weakening and systematic attack on government as a necessary or effective institution to regulate capitalism is largely absent.
As a result, one of the fastest routes to profitability is often to persuade politicians to write the rules in your favor. Firms feel free to dump greenhouse gases into the atmosphere, for example, while spending hundreds of millions of dollars to lobby against carbon regulation.
We can rebuild trust in the political system, and with it a government that is genuinely responsive to ordinary people, if we can get the money out of politics and stop tolerating business attacks on government. We need to enable government to regulate fossil fuel emissions and provide positive incentives to encourage corporations to embrace low-carbon solutions. That's why I believe getting money out of politics and enforcing carbon emission policing are both very vital in mitigating the UCOTs of capitalism.
Monopoly Power
The current wave of capitalism was designed around the fallacy of the “the lone hero” entrepreneur, the mindset of the unicorn (a privately held startup company valued at over $1 billion), and hockey stick–type of growth. This leads to monopolies, zero sum game, and winner take all. It's no surprise that there are going to be a few winners and many losers. We can all agree that the system I just described has been perfected and it's