We need to break up big tech

[ygolo]

There's so much I've wanted to say about this topic for so long that I hope it comes out coherent with my post-stroke vertigo, etc.

I believe this is part of a much larger topic of the need for trust busting that has been an issue for a very long time. I tried a while back to start a discussion about it. It maybe more timely now. In addition, I want to focus this thread on "tech" in particular that I believe I have more insight into.

I think the impulse to decentralize technology is incredible strong. This impulse is ultimately where cryptocurrencies and "web 3" comes from. But read the sarcastic Web 3 is Going Just Great site to see how that's going. Also:

Side rant on "tech"

Also, "tech" is just a horrible way to describe a particular sector right now. Usually, people mean software or Software as a Service when they say "tech". Frankly IT is even worse. If you create a new algorithm on architecture that creates brand new capabilities, that is technology. Otherwise, it is just software, or just electronics.

Cases can be made for things like the attention mechanism, or diffusion mechanism in machine learning as being technology. But taking what already discovered and just using it in another way is just software.

I should say every new technology node on Moore's Law IS technology. The amount of invention and dissemination of that invention into production that goes into maintaining Moore's Law is definitely technology. That maybe the only thing that could justify its name, and is frankly the main source of the quality if life improvements people get from software and electronics.

For electronics, if you create a new circuit with some amazingly lower energy delay product that doesn't just rely on a new technology node for the semiconductors in use, that too is technology. But most new circuits people design are just circuits. Even new modulation techniques that rely on mixes of old things are just that. The bar needs to be higher to be considered technology. I am on some patents myself that I wouldn't consider technology. But there are some trade secrets I have signed over, that could border on that.

Technology understood as innovative means to improve productivity by multiples is vital to nation keeping its place in the world order.

But our ability to produce technology has been dwindling in no small part due to the consolidation of people trained to that sort of work to work on smaller and smaller aspects of what that training could deliver. I have a friend who was at one time a principal engineer at one of these top software companies that literally has his whole team just working on sending emails...and he seems happy about it. This is reminiscent of the ball bearings for papermills engineers of the Soviet Union.

This is a must watch for the software dependent culture we are in now.

It's a long video, but eye opening if you are not really a programmer and just work in thing adjacent to people who do that. One thing that pops up, which should be obvious in retrospect is that we have so much consolidation on the web that we now have increasingly more people working for a small set of websites. This ultimately means that the productivity of the whole sector is going down systematically. Part of the reason some of these companies pay very high salaries to people is to basically kill innovative companies pre conception.

For context, here is what a the average Software as a Service company makes in revenue per employee according to statistica. $150K/year is decent conservative estimate. According to a random estimate on costs I took from zipia (it's in line with my own estimates that I did for another particular project) is below $3000/yr/employee. Structurally, I believe this would be even more profitable for smaller companies (but still outsourcing their hosting) because startups wouldn't really be paying a salary but rather taking a revenue share. Bigger companies would also have the overhead of middle management, rework, and communication across and up oversized bureaucratic organizations. (see Bullshit Jobs and the classic Mythical Man-month). Note also that you can take the revenue multiple for SaaS businesses conservatively take a multiple of 10. So every employee would average about $1.5 M in equity. This wealth would also be spread out more if there were more but smaller companies. In contrast, Mark Zuckerberg, by himself, has large portion of Millennial wealth.

Now, of course, we know the fiasco that has happened recently with companies laying off tons of workers in this sector. If you are one of those people, I say to you, start your own thing. Compete against your former employer. If they come after you with legal action, the case for anti-trust just becomes even stronger. It's not like a website is patentable technology.

But when it comes to trade secrets about software technology...especially in the Machine Learning domain, this is where things get to be really scary. When you think about what Open AI promised, and how restrictive it is to make use of their latest GPT-3. When you think about Google and its ownership of LaMda, DeepMind, TensorFlow and others. Microsoft owns github and it co-pilot. It's good that some of it is open source, but ownership of possibly the most powerful technology stack in history by just a few corporations is scary...like SkyNet scary.

There are still some democratic influences like Andrew Ng in Machine Learning

Andrew Ng: How AI could empower any business

Expensive to build and often needing highly skilled engineers to maintain, artificial intelligence systems generally only pay off for large tech companies with vast amounts of data. But what if your local pizza shop could use AI to predict which flavor would sell best each day of the week...

www.ted.com

But I think government needs to step in, but not in a Military-Industrial complex way, but in a trust-busting way. Before it is too late.

 

[ygolo]

Perhaps the last post was too incoherent or too specialized for even an online forum.

People talk about the need for a middle class. In the past, perhaps that could happen with working a supervisory job in the warehouse, factory or government.

But there's criticism from the right about the middle class that the right(especially those who are VCs, private equity, etc.) dub the Professional-Managerial Class.

Similarly, people often also enter the middle class practicing their craft in way that allow themselves to take ownership of their time and means of production as small businesses owners. But often people on the left criticize these people as small businesses tyrants.

To be honest, neither of these criticisms are without merit. But taking specific anecdotes about the way people prefer to work, taking (usually) bad experiences and deciding things should be a particular size isn't the best way to know if firms have gotten too big or small.

Capitalist theories generally state that if a monopoly starts not serving its consumers as best as they can, new scrappy entrants will enter the market and drive prices down.

But here's the issue: The main barrier to entry is capital(money, equipment, human). With large firms taking outsized profits, competitors will have a hard time jumping in because those who know how to do the jobs don't have enough savings due to sustained low wages to accumulate capital. Those who can raise capital through loans, have to virtue signal to private equity that they have the same values as them, leading to a strange mechanism for collusion.

One possible exception is software technology. Although, my own health issues drained my finances, I had built quite some savings to strike out on my own before this. I provided the financial context in my previous post.

I say to all those fired tech employees (assuming you didn't get sucked into the maximum home you could buy on that outsized salary), there's a strong need for alternative employers--now, more than ever, with corporate profit driven inflation.

You do not have to be small business tyrants yourself, but instead build the type of corporate culture you want to see in the world.

Stay away from private equity. Bootstrap. Build something solving something for a community you really care about in a way that is sustainable financially, ecologically, and socially.

To governments, break up big technology companies. They've amassed so much power that they have to central plan their use of resources. They're no better at that than you are.

Yes. Some companies have and need the economies of scale. But plenty are hiring the best talent and using that talent to do almost nothing.

 

[ygolo]

Here's an article about how scary AI is:

AI experts are increasingly afraid of what they’re creating

AI gets smarter, more capable, and more world-transforming every day. Here’s why that might not be a good thing.

www.vox.com

Now think about how exclusive access to control of a technology dubbed more important than fire and electricity is right now?

Where do we see that ending up? We've already seen what consolidation leads to for electricity with the pg&e fiasco.

With corporate crony capitalism the way it is now, how much worse will it get once the cronies control machine learning algorithms that get closer and closer to Artificial General Intelligence?

 

[ygolo]

I'm actually a little surprised that there's as little interest in this as there seems to be. In my mind, it's in the same vein as housing and inflation.

I realize that "Silicon Valley" is used mainly as a synecdoche for science, technology, and engineering as a sector. I also realize that recently there's significant ill will from the mainstream media towards "Silicon Valley" with the likes of Peter Theil, Elon Musk, and SBF seen as some sort of representatives of the whole sector. I think that this ill will is another side-effect of overconsolidation and the general depiction of people in this sector by these outsided influences.

Remember that average isn't median. Some really rich people will skew that average significantly. My brother-in-law, a biologist, was making what many would consider poverty wages as an instructor for a while but working on critical aspects of genetics and neuroscience for quite some time. There are plenty of people who moved to Silicon Valley proper, and live in a hallway for several years while gaining experience. I, myself, well outside of Silicon Valley as a location, lived out of a single suit case for a small room. These things are much more the norm for young people than the likes of Mark Zuckerberg. That's the problem, and another reason for anti-trust in this sector.

You may see ridiculous salaries paid to some people, but this is just the compounding effect of the winner-take-most structure that the world is organized into. Prior wins based on luck, taking ridiculous risks(which most others lose on) leads to resources that tilt future wins in their favor fairly permanently. This is the ultimate reason for breaking up these monopoly companies.

On another point, there's a characterization of "Silicon Valley" as a bunch of people who have Messiah Complexes. But people wanting to make great positive differences using the skills, knowledge, and proclivities they have seems like a pretty low bar for that indictment.

Consider that the Washington post has the tag-line "Democracy dies in the darkness". I linked in the inflation thread one of Jon Stewart's videos on "Fixing the economy". Both these seem equally messianic to me as someone working on the next medical device with the hopes of helping people with the device.

Everything has unintended consequences. The belief that actions in the media, government, and finance are so much better understood than in science and engineering actually seems incredible to me.

The problem with technology comes when technical people participate in regulatory capture and rent seeking behavior in government, or builds that technology in the media and financial sectors(or any sector) with the belief that they have as much predictability as in science and the scientific aspects of engineering.

Still, all of us are human, and will have opinions about society. The "stay in your lane" impulse never sat well with me. No matter what lane we're in.

 

[The Cat]

I'm actually a little surprised that there's as little interest in this as there seems to be. In my mind, it's in the same vein as housing and inflation.

I realize that "Silicon Valley" is used mainly as a synecdoche for science, technology, and engineering as a sector. I also realize that recently there's significant ill will from the mainstream media towards "Silicon Valley" with the likes of Peter Theil, Elon Musk, and SBF seen as some sort of representatives of the whole sector. I think that this ill will is another side-effect of overconsolidation and the general depiction of people in this sector by these outsided influences.

Remember that average isn't median. Some really rich people will skew that average significantly. My brother-in-law, a biologist, was making what many would consider poverty wages as an instructor for a while but working on critical aspects of genetics and neuroscience for quite some time. There are plenty of people who moved to Silicon Valley proper, and live in a hallway for several years while gaining experience. I, myself, well outside of Silicon Valley as a location, lived out of a single suit case for a small room. These things are much more the norm for young people than the likes of Mark Zuckerberg. That's the problem, and another reason for anti-trust in this sector.

You may see ridiculous salaries paid to some people, but this is just the compounding effect of the winner-take-most structure that the world is organized into. Prior wins based on luck, taking ridiculous risks(which most others lose on) leads to resources that tilt future wins in their favor fairly permanently. This is the ultimate reason for breaking up these monopoly companies.

On another point, there's a characterization of "Silicon Valley" as a bunch of people who have Messiah Complexes. But people wanting to make great positive differences using the skills, knowledge, and proclivities they have seems like a pretty low bar for that indictment.

Consider that the Washington post has the tag-line "Democracy dies in the darkness". I linked in the inflation thread one of Jon Stewart's videos on "Fixing the economy". Both these seem equally messianic to me as someone working on the next medical device with the hopes of helping people with the device.

Everything has unintended consequences. The belief that actions in the media, government, and finance are so much better understood than in science and engineering actually seems incredible to me.

The problem with technology comes when technical people participate in regulatory capture and rent seeking behavior in government, or builds that technology in the media and financial sectors(or any sector) with the belief that they have as much predictability as in science and the scientific aspects of engineering.

Still, all of us are human, and will have opinions about society. The "stay in your lane" impulse never sat well with me. No matter what lane we're in.

As long as there has been magick and power to be attained by its application andor( )abuse there have been humans willing to sell their lives and souls for it; and if they're willing to do that...what are they willing to do with the lives and souls of others...

 

[ygolo]

As long as there has been magick and power to be attained by its application andor( )abuse there have been humans willing to sell their lives and souls for it; and if they're willing to do that...what are they willing to do with the lives and souls of others...

I have some points in response to this, and perhaps I didn't fully understand what you meant. I thank you for participating in this discussion.

1) Most people in science and technology are laborers building something rather than robber barons selling their soul for power and money.

The attraction of power is not the real reason why many of the people naturally drawn to science and technology go into their respective fields. Like those who love to build things of all sorts that many would not consider "technology", many of us are builders who enjoy the pure joy of making something. It could be a software program, an electronic circuit, or even a beautiful proof. The sheer feeling of craftsmanship is a major motivator for many. Others are just curious people who like to learn new things. Its not that different from people wanting to learn to paint (which, btw, could use toxic paints if they aren't careful). Some are learning how statistics can be use to infer things. Some people are learning how to make machines compute things more efficiently. Some want to understand why something does something. Machine learning, btw, is just computers applying statistics in increasingly sophisticated ways to do just that.

I did rant in the first post, that calling this sector "technology" is very much a misnomer (I put it in a spoiler thinking it was not relevant, but may it was). Yes some things in this sector should be considered technology. But most are just simple things on par with making a chair, or a nice vase. Occasionally, people will come up with ways to make things that nobody has ever made before. But that is not the norm. That little piece of software that lets people take your order at a restaurant. Movie clip editing software. The latest remote for your TV. This website's backbone (lol). The latest video game. That's much more typical.

Most people are laborers, just like someone putting together furniture would be. Some additional education may be needed, but there are "bootcamps" that will let you do this sort of work in 12 weeks. The amount of pay varies greatly. It's not that different from sweat shops where some people get paid non-living wages while others rake it in.

If there are people living in hallways in Silicon Valley so that they you can get the latest iPhone, how different is that from the sweat shops doing the assembly of the hardware in China under horrible conditions? It seems more like exploitation, perhaps to a lesser degree, so that crony capitalists can get their latest gadget for maximum profit. The workers are not people selling their souls for some magical power, but people desperate to make ends meet somehow using the skills they love to use.

There is more to science and engineering than software (and to a small degree electronics) despite software sucking the air out of that sector. See the similar dynamic in the UC system for academic workers right now.

*Full disclosure. I believe I am technically crossing the picket line. I didn't learn about this strike till today, and the stuff I do in the UC system isn't doing anything to further their progress. I am never on campus, and stroke symptoms have me incapacitated most of the time anyways.

2) There is no magic in technology. The fact that it may seem like magic to those who don't understand technology is one big source of friction. Remember when the Large Hadron Collider had people protest it because they thought it could destroy the world? The reality is that the types of collisions in the LHC are going all the time outside the LHC. What the machine provided was a way to make those collisions under conditions where a lot could be understood with analysis. If you believe things like the LHC could destroy the world, you are actually in the same category of people who believe that 5G is giving people COVID. When you believe technology is "magic" instead what it really is--something akin to fixing up a car, or making a part for an airplane, you are letting yourself believe in nonsense.

3) Wanting to do as much good in this world as possible should not be conflated with being power hungry.
When someone runs for political office, they could be doing it to make much needed change, or they can be doing it just because they want to be in charge of stuff. When people publish a book, write articles about something, or do a podcast, they could doing it to inform people, give voice to something that needs to be said or something similar...or they could be doing it to try to bend public opinion to their favor so that they can get what they want or have a following that can get people to do their bidding. Similarly, in the technology sector, when someone works on building something that they believe will genuinely make the world a better place, it could genuinely be for that purpose, or it could be so that they can grift people out of their money by promising something. When people characterize "silicon valley" based on the top people who are now genuinely out of touch with most people. It is similar to impugning the character of all Russians based on the character of Vladimir Putin.

4) "Silicon Valley" hate pours over into hate of Asian immigrants and people on the Autism Spectrum.
I'd imagine similarly spurred by success of the immigrant group of Jewish people leading to that group being falsely regarded as miserly in various countries they immigrated to, the stereotypical "Asian man in tech" is getting a similar reputation.

In addition, because of the type of attentional pattern that does well in fields where use of factual knowledge is high, there is an over-representation of people on the Autism Spectrum in tech (there is the absolute most in medicine, though engineering is high on that list too). It's actually kind of sickening to see people being denigrated for their Autistic traits instead of for the actual wrong things they are doing. I remind people once again of the double empathy problem.

 

[ygolo]

I've been posting videos from this course all over the forum. It's amazing that I wasn't aware of this before. Lectures 3 and 5 are most relevant (so far), I think, to the question of breaking up Big Tech. I am biased, of course, but here are those lectures.

 

[ygolo]

This is rather old but so relevant to today

One of OpenAI's founders and an Angellist moderator talking (rather casually) about the implications of AI. They touched on the implications for the current economic system fairly often. They even asked "Who gets the excess profits for the first time AI is queried successfully to build a Trillion dollar company" (I am paraphrasing).

Edit:
If you haven't played with ChatGPT, it's quite the experience (assuming the servers aren't overloaded--it happens very frequently)

https://chat.openai.com/chat

 

[ygolo]

It's amazing how long people have been thinking about the dangers of concentration of power when it comes to the latest AI techniques.

The steep cost of captureACM Interactions

This is a perilous moment. Private computational systems marketed as artificial intelligence (AI) are threading through our public life and institutions, concentrating industrial...

interactions.acm.org

 

[ygolo]

This data is intriguing:

Research and development (R&D) - Gross domestic spending on R&D - OECD Data

Find, compare and share OECD data by indicator.

data.oecd.org

You can switch between R&D intensity and number of researchers in 1000 people. In the U.S. we see the R&D intensity reaching the 4th highest in OECD, but the number of researchers is middle of the pack. My hypothesis is that this is due to concentration of research to a few big companies.

Compare this to Korea which has the the second highest in R&D intensity but the highest in researchers per capita. My hypothesis here is that if this trend continues, Korea will see more diverse break throughs over the next decade.

 

[ygolo]

In a total mindf*ck, I find myself agreeing with what these guys are saying, and what Sacks is saying in particular. My mind is even changed a bit on the "bigness" issue.

 

[ygolo]

This isn't about tech, but its the same idea in the media (and more broadly).

I also agree that the 'ticky-tacky' stuff that Lina Kahn is doing is ultimately meaningless. If she is going to be "surgical" she would need more insight into the businesses she is trying to tie up. But that requirement is a big part of the game the rich plays to keep its revolving door with regulators.

I think it is much better if she gets a "meat cleaver" and just kills the whole lot of big businesses. In order to do that, she will need the support of congress to by passing laws that let her do that. Since both sides of the political spectrum really want to see this, let's hope things get done.

 

[ygolo]

It's an old talk, but amazingly relevant still.

 

[ygolo]

This is what people are saying now:

Bill Ackman thinks the government should consider SVB bailout

Pershing Square Capital Management’s founder said a collapse of Silicon Valley Bank “could destroy a long-term driver of the economy.”

fortune.com

In my mind, if it's too big to fail, it's too big to exist.

Split them up a lot as contingency of getting the money or skip the middle and fund the startups directly.

Edit:
More information on Silicon Valley Bank:

Silicon Valley Bank is shut down by regulators in biggest bank failure since global financial crisis

The tech-focused bank was closed by regulators on Friday after attempts to raise more capital failed.

www.google.com

 

[DiscoBiscuit]

Zero interest debt was steroids for Tech funding. With that going away we are seeing the the industry that gorged itself most deeply feeling hunger pangs most keenly.

From a political perspective something must be done to corral these gigantic entities that in all but name are sovereign nations unto themselves, but economic matters will probably beat congress to the punch if not fully address the issue.

Apple's over investment in China is and will continue to bite it in the ass, and may allow for a more nimble competitor to arise, though I wont hold my breath given apples titanic amounts of cash on hand and the ability to gobble up anyone it sees as a threat.

In all likelihood a financial crash hard enough to weaken these companies is the only thing that will make them vulnerable to meaningful competition.

 

[Virtual ghost]

It is almost funny how pretty much everyone interested in these kinds of topics suddenly has a video on bank(s) going broke.

 

[DiscoBiscuit]

A lot of the San Fran banks investing in new tech startups hold a lot of capital in Bonds since bonds are historically a safe investment as a hedge against the inherent risk in investing in start ups. The safest of these bonds are longer term maturity ones, so they generally hold those. When the Fed Funds rate increases, the yield (return on investment) on newly issued bonds is higher than those older longer term bonds they're holding decreasing their value. That value basically represents the money they have to lend, and the money they have to cover withdrawals. Since that value has dropped they can't cover the withdrawals. When clients figure that out they rush to pull cash which starts a run on the bank which is what we've been seeing. That fear can then spread to other banks starting a run on the banking sector which is one of the ways to cause a crash.

 

[ygolo]

I kinda agree with this:

https://twitter.com/i/web/status/1634427092824629251

 

[ygolo]

Here's the seeking alpha article from months ago from people have been talking about:

SVB Financial: Blow Up Risk (SIVB)

SVB Financial's potential losses in its loan portfolio could severely impair its book equity. Find out why I think shorting SIVB stock makes sense.

seekingalpha.com

Once again the smaller businesses (who often can't do good risk management) dealing with larger business who didn't do good risk management are the ones paying.

Reduction of burn and being scrappy is the only thing people can do to try to survive, and that's not enough even.

I know people don't like these guys, but here's an investor's insider's take. It's very informative:

Here's the mark to market accounting that they talked about:

What is the Mark-to-Market Calculation Method and How Does it Work?

ibkr.info

Sack's explanation of what needs to happen makes the most sense to me. SVB loses everything, but all the depositors are made whole.

 

[DiscoBiscuit]

The industry built its house on the sand of assuming easy zero interest funding would exist forever.

That allowed for tons of projects with dubious aspirations of profitability to get funded.

It's like a forest with too many dead trees in it that has avoided fire for too long.

If we bail it out like we did last time ('08) we just ensure the next fire will be worse.

Hopefully the gov't can stand up to the pressure of all the tech bro's who donated to their campaigns screaming in pain.

I'm not confident that will happen. But maybe.