In this way, the clerisy reinforce the pessimistic notion that upward mobility is a relic of the past, and that our primary tasks now are to redress social grievances and protect the environment, rather than seek ways to spread wealth and opportunity.32
The new feudalism won’t feature intrepid knights in armor or fortified castles, or raise soaring cathedrals filled with liturgical chants. Instead it will boast dazzling new technology, and be wrapped in a creed of globalism and environmental piety. Yet for all its modernity, the coming age looks set to replace liberal dynamism and intellectual pluralism with an orthodoxy that puts a premium on stasis and accepts social hierarchy as the natural order of things.
PART II
The Oligarchs
When there is a general change in conditions, it is as if the entire creation had changed, and the whole world altered.
—Ibn Khaldun (14th century)
CHAPTER 4
High-Tech Feudalism
Technological innovation has long been connected with the growth of capitalist economies. The capitalist revolution of the Early Modern period had far-reaching consequences, disrupting old rhythms of life, as Fernand Braudel explained.1 But capitalism and new technology together laid the basis for a broadly shared improvement in material well-being and for social mobility. By the same token, the recent tech revolution was once widely seen as not only transformative but generally beneficial. Some have envisioned a new civilization with great opportunities for human development and societal improvement. Yet today we see diminishing social mobility and little real material progress for most people, as economic power is increasingly dominated by fewer companies, particularly in the finance and technology sectors.2 Our future is coming to look like the “high-tech middle age” that the Japanese futurist Taichi Sakaiya predicted more than three decades ago.3
The pioneers of the modern tech industry were once celebrated as exemplars of capitalist competition, illustrating what Joseph Schumpeter called the “creative destruction” that breaks up monopolies and allows others to rise from below. But today’s tech leaders increasingly resemble an exclusive ruling class, controlling a few exceptionally powerful companies, and like aristocracies everywhere they are often resistant to any dispersion of their power. As they conquer ever more of the precious digital real estate, they are building a more stratified economic and social order, with widening class divisions, not only in the United States but around the world.4
The Birth of the New Oligarchy
California’s Santa Clara Valley seems an unlikely incubator for neo-feudalism. Half a century ago, it was just beginning to change from an agricultural region into a vast middle-class suburb. Wealthy people from San Francisco bought elegant estates in the South Bay and created an elite horse country alongside the farms, but most of the growth took the form of modest tracts inhabited by the middle and working classes, including many veterans. “The more people who saw the nicest place in the world to live with their own eyes, and realized it was no more expensive than back home,” observes one Bay Area native, “the more they concluded ‘I want to live here, too.’”5
By the 1950s and 1960s, these pleasant surroundings were attracting skilled but decidedly middle-class technicians and engineers, including Lee DeForest, inventor of the vacuum tube. An emerging tech economy was supercharged by massive defense and space contracts. UC Berkeley, the nation’s premier public university, was located not far to the north. Closer by was Stanford, which excelled in the physical sciences and established the Stanford Research Park in 1951. Stanford graduates had already founded Hewlett-Packard in 1939, and an engineering professor who became provost of the university, Frederick Terman, nurtured tech companies in the area.6
In the ensuing decades, the Bay Area, including San Francisco, became the world’s leading technology hub. This rapid technological growth resulted in a consolidation of wealth and power in a handful of companies. A relatively small cadre of engineers, data scientists, and marketers—a tiny sliver of humanity—began reshaping the world’s economy, and its culture as well.7
In the Middle Ages, the power of the nobility rested on the control of land and the right to bear arms; the power of today’s ascendant tech aristocracy comes mainly from exploiting “natural monopolies” in web-based business. The winners of the digital land grab are a few companies located mostly in Silicon Valley and in the Puget Sound region. Having seized the strategic digital territory, they are eclipsing and replacing the old industrial economy.8
By 2018, four tech firms—Apple, Amazon, Google, and Facebook—had a combined net worth amounting to nearly one-quarter of the S&P 500 Top 50, and equal to the GDP of France.9 Seven of the world’s ten most valuable companies are in this sector.10 The tech giants have also generated huge individual fortunes: eight of the twenty richest people on the planet acquired their wealth in the tech industry.11 Nine of the thirteen richest people under age 40 are in the tech industry, and all live in California.12 Only China, home to nine of the world’s twenty largest tech firms, presents any kind of challenge to California’s tech aristocracy.13
From Garages to Gargantua
Silicon Valley was once a center of grassroots innovation where tech companies were started in suburban garages, as epitomized by the remarkable story of Apple.14 Now the historic startup culture has been strangled by the largest companies with their fantastic resources. Many startups are soon acquired by established firms, rather than having a chance to grow large themselves.15
Antitrust actions in the United States have fallen by 61 percent since the early 1980s, leaving the tech oligarchy with almost unlimited power—under administrations of both parties—to acquire or crush competitors.16 In recent years, Facebook has swallowed potential competitors such as Instagram, WhatsApp, and Oculus, with little resistance from regulators.17 Google is among the most voracious in acquisitions, purchasing a new venture every other week in one year, and a total of 240 companies as of January 2020.18
Armed with massive war chests and the means to buy the best talent, a small number of companies have achieved monopolistic or duopolistic power over some of the world’s most lucrative markets. Google controls nearly 90 percent of search advertising, Facebook almost 80 percent of mobile social traffic, and Amazon nearly 40 percent of the world’s cloud business along with 75 percent of U.S. ebook sales. Google and Apple together provide over 95 percent of operating software for mobile devices. Microsoft still accounts for over 80 percent of the software that runs personal computers around the world.19
As a result, the once buoyant grassroots tech economy now suffers a seriously degraded condition. The entrepreneur not embraced by the big venture firms lives largely at the sufferance of the tech overlords.20 One online publisher uses a Star Trek analogy to describe his firm’s status with Google: “It’s a bit like being assimilated by the Borg. You get cool new powers. But having been assimilated, if your implants were ever removed, you’d certainly die. That basically captures our relationship to Google.”21 The rush into artificial intelligence is likely to strengthen the dominant position of those firms that already have enormous reservoirs of both money
