Naked Capitalism has reprinted the article Notes From an Emergency: Tech Feudalism By Maciej Cegłowski, a painter and computer guy who lives in San Francisco.
It is always hard to find the best and tersest excerpt of an article to convey its value for why you should read the article. Here is my feeble attempt.
After Communism collapsed in Poland, I started visiting the country every eight months or so. Even in the darkest period of the 1990’s, it was striking to see people’s material standard of living improve. Suddenly people had cars, phones, appliances. These gains were uneven but broad. Even farmers and retirees, though they were the hardest hit, had access to consumer goods that weren’t available before. You could see the change in homes and in public spaces. It was no longer necessary for office workers in Kraków to change their shirts at lunchtime because of soot in the air. The tap water in Warsaw went from light brown to a pleasant pale yellow.
For all the looting, corruption, and inefficiency of privatization, enough of the new wealth got through that the overall standard of living went up. Living standards in Poland in 2010 had more than doubled from 1990.
In the same time period, in the United States, I’ve seen a whole lot of nothing. Despite fabulous technical progress, practically all of it pioneered in our country, there’s been a singular failure to connect our fabulous prosperity with the average person.
A study just out shows that for the median male worker in the United States, the highest lifetime wages came if you entered the workforce in 1967. That is astonishing. People born in 1942 had better lifetime earnings prospects than people entering the workforce today.
You can see this failure to connect with your own eyes even in a rich place like Silicon Valley. There are homeless encampments across the street from Facebook headquarters. California has a larger GDP than France, and at the same time has the highest poverty rate in America, adjusted for cost of living. Not only did the tech sector fail to build up the communities around it, but it’s left people worse off than before, by pricing them out of the places they grew up.
In rereading the above excerpt, I remember why it is that broad living standard improvement can occur in developing countries like Poland, India, and China, to name a few, but not in countries like the USA. When you start from a low enough base of economic development, it is possible for the oligarchs to reap obscenely huge rewards and still allow amazing improvements for vast numbers of ordinary citizens. In countries with large enough middle classes already in existence, there is too much wealth already in the hands of the middle class to allow the oligarchs ignore the need to plunder it. This does not bode well for the rest of the world if it fails to take up the challenge posed by Maciej Cegłowski.