Tech has been hijacked by a select few, abandoning the common good for “Technocapitalism.”
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Has technology been permanently hijacked by a select few? Have profits, fear, and consumerism driven tech to abandon the common good and become a destroyer of societal values?
On this week’s WhoWhatWhy podcast, I talk with Loretta Napoleoni, the acclaimed Italian economist and author, to discuss her thought-provoking new book, Technocapitalism: The Rise of the New Robber Barons and the Fight for the Common Good.
Napoleoni argues that the rapid advancement of technology, once heralded as a democratizing force, has instead concentrated wealth and power in the hands of a select few. We examine the high barriers to entry in today’s tech industry, which have allowed mostly the early fortune-makers to dominate the landscape, perpetuating social inequality.
We explore why the EU has been more successful than the US in regulating tech giants and the surprising potential of cryptocurrencies to level the playing field.
Napoleoni also addresses the double-edged sword of technology in problem-solving, as market forces often dictate which issues receive attention. We examine the complex relationship between innovation, regulation, and the “greater good.”
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(As a service to our readers, we provide transcripts with our podcasts. We try to ensure that these transcripts do not include errors. However, due to a constraint of resources, we are not always able to proofread them as closely as we would like and hope that you will excuse any errors that slipped through.)
Jeff Schechtman: Welcome to the WhoWhatWhy podcast. I’m your host, Jeff Schechtman. My guest today is Loretta Napoleoni, an acclaimed economist, journalist, and international bestselling author. In her provocative new book, Technocapitalism, she argues that the rapid pace of technological transformation is threatening our future by concentrating wealth and power in the hands of a select group, she calls Tech Titans and Space Barons.
At a time when technology was supposed to be the great equalizer and a democratizing force, Napoleoni argues that tech pioneers like Google, Facebook, Apple, and Microsoft have instead stripped workers of rights, avoided regulation, and use technology to enrich themselves at the expense of the common good.
From AI and private space companies to cryptocurrencies in the war in Ukraine, she examines how she thinks unchecked Technocapitalism is reshaping the world. She issues an urgent call to arms for the public to take back control of technology and direct it towards what she sees as the common good. Loretta Napoleoni has a distinguished background serving as a Fulbright Scholar, consulting for governments on terrorism financing, and appearing as a commentator on the BBC, CNN, and other outlets.
Her books include Terror Incorporated, Rogue Economics, and Maonomics, and her work has been translated into over 21 languages. It is my pleasure to welcome Loretta Napoleoni to talk about her new work, Technocapitalism: The Rise of the New Robber Barons and the Fight for the Common Good. Loretta, thanks so much for joining us here on the WhoWhatWhy podcast.
Loretta Napoleoni: Thank you so much for inviting me.
Jeff: Well, it is a delight to have you here. When we look at the consequences of technology today, are we looking at it from the perspective of companies that have gotten so big and so voracious in terms of their appetites? Or is there something more fundamental about the way this has evolved that has driven some of the problems that you talk about?
Loretta: One of the problem is the speed of change of technological innovation. Governments and even people have not been able to catch up. We’re always a step behind to technology, and there is a very small group of people who actually understand technology and they control it at the moment, and these are the people that are called the Tech Titans. These are the people that benefited the most from technological innovation.
Now, mine is a criticism directly, primarily to the state, to the role of society. This is why I talk about the common good because in the end of the day, what the techno capitalist did the Tech Titans did was to take an opportunity and become extremely wealthy, so it’s the capitalist system. This is how it works, but it is the role of society. It is the role of the state to keep in check this kind of revolutionary events such as the technological innovation linked to the advent of our virtual life.
Jeff: Is part of the problem that the barriers to entry over time have grown higher and higher. That in things like space, for example, which you talk about, or right now with respect to AI, the cost to enter the business is so high that it’s only those that are willing to take significant risks that are able to be players in this.
Loretta: Oh, absolutely, absolutely. But this is the consequence of the fact that from the 1980s onwards, there’s been a time gap between technological innovation and legislation. So society and the states haven’t been able to control the way the technological innovation evolved. So, vast, vast fortunes have been accumulated, and this gave the opportunity to the people who actually were in the right place in the right time in the 1980s and 1990s to move on to another level. So we’re talking about space, for example.
So you have companies like SpaceX, you have companies that are managed by the early pioneers of technology who are now doing things that nobody else can do because as you say, the entry level is so high that the privatization of space is only accessible to a certain group of individual and who have deep, deep pockets or that they have the opportunity to be financed by venture capitalists who also have very deep, deep pockets.
So the gap, I would say between the Tech Titans or the Space Barons and a normal start-up has got so huge that there is no way [laughs] you are going to have a proper competition. So we see oligopolistic enclaves so you have it in one tech sector, you have in another tech sector, and then of course, now you evidence space for what concern telecommunications.
Jeff: Given how expensive it’s gotten as you were talking about, it doesn’t seem on the surface at least that there’s any way to dial that back.
Loretta: Well, I think it’s going to be very difficult. I tell you one of the consequences of this new oligopolistic, let’s call it oligopolistic capitalism, is the fact that there are certain sectors who are starved of funding. So if you look at the health sector, for example, the application of the new technology or technological innovation in the health sector is much, much lower than the application of technological innovation to the communication in space. So you also have this kind of deep, deep imbalances taking place.
And this is extremely negative for society because, of course, telecommunication is important, but more important for a society is to have a health system which can save as many life as possible. And that is the responsibility, of course, of the state and the society. So how can now a government, any government, I’m not only talking about the government of the United States, but how can now a government regulate the investment in the private space industry? Which instrument do they have to use?
So these are huge, huge questions that the legislator and the government are asking themselves. So I’ll give you an example. The EU has done quite a lot to protect the privacy of individuals when they use the internet, but has been a poor struggle. It has actually bear some fruits, but it’s very, very little in comparison to what they actually wanted to do. Now in the US, things are changing. I mean, there is now the tendency to follow along the path of the EU, but we are still very much behind.
So I think it is a big issue. I think also it’s an issue that is not discussed properly, and maybe the way forward in a positive way is that society start putting pressure upon politician for a regulation, but a regulation that, of course, has to take into consideration decision, such as, for example, nationalization of certain sector of technology, and these are very, very hard to take.
Jeff: Why do you think the EU has been more effective in addressing some of these issues?
Loretta: Well, I think the EU has been more effective because there was less cross-pollination between the financial sector and the technological sector in Europe. Of course, you know the big I-TECH revolutions taking place in the United States. There was also less contact between the political elite and the technological innovation industry. And not only talking about the Tech Titans I’m talking about also people like lawyers, for example, accountants, young professionals. So it was a different met. So I’m talking mostly about the late ‘90s, early 2000 up to now. So the EU has been more proactive because of that. Things are changing now in the US as we’re seeing, because after the FTX scandal, for example, it is clear that a regulation is really badly needed. But again, even if the EU has been very proactive, the results are still very little.
Jeff: Talk about crypto and Bitcoin and the role they’ve played as you see it.
Loretta: Yes, I must say I’m quite interested in crypto. I think the Bitcoin, as I say in the book, at the beginning of the book actually, where I discussed specifically the birth of the Bitcoin, the role of the cyberpunks, and also the role of the cyberpunk in pushing a vision of the internet, which was a democratic force. That was what they thought. They thought that the internet was going to [sound cut] opportunity to grow and to be independent, which in reality, this is not what has happened.
But Bitcoin, I find that it is truly the currency of the people because it’s the network who controls everything. And within whoever is part of the network actually regulates it. So, I think it’s a real serious threat to the monopoly of money in the hands of the nation-state. So because of that, I think it’s also a foundation of the nation-state. Now, this is not necessarily bad. It depends how we actually react to that. So at the moment, we have seen a proliferation of crypto. None of these crypto is like Bitcoin.
So they’re all structured in a different way. They’re all based upon fate, of course, but the Bitcoin has a technical infrastructure which reproduces the concept of money as a mean of exchange linked to a very valuable asset. So, gold. So I think Bitcoin is the one who is going to last forever, and it is the one who could threaten the monetary stability of the capitalist system as we know. It’d be interesting to see what’s happen at the end of this month, beginning of next month, because there is going to be the halving to when every four years the number of Bitcoins which is halved.
So we’ll see what’s happened because this is the first time that we are halving when within the Bitcoin network, we have big banks, we have big investors, we have pension funds. So there’s a new era of Bitcoin, as one of the many instrument of I-Finance. So it’d be interesting to see how the network of the Bitcoin owners reacts to the halving. But I think Bitcoin is here to stay. When the other crypto, I think they will come and go and people will lose a lot of money also.
Jeff: One of the things that spills out of crypto in general and even Bitcoin in particular, is the whole idea and issues surrounding digital rights and privacy. And there is the sense that that’s going to run headlong into some of what’s going on now with respect to AI. Talk a little bit about that.
Loretta: Well, yes. This is what the cyberpunk were worried about. The cyberpunk were worried about the fact that the government was going to control the internet and by controlling the internet was also going to control people. So people exchanges, it was going to spy on people. So the encryption was their way to avoid this control. So, I mean, the cyberpunk, many people consider them libertarians, but in reality, they were all mixed.
They were Marxists, they were libertarians, they were right-wingers, they were left winger. They were computer geeks and all this stuff. But overall, that was the fear. So the encryption came about because of that because through this and through this kind of vision of being out of reach of the state, we also had the birth of the dark net. So there is a positive, of course, or negative. The real problem that the crypto punks had was how can we have a system whereby people can exchange things?
So buy things, for example, without being traced by the financial system, monetary system, because of course, you can exchange money through the internet. So banks, transfers, or credit cards, all of that, is fully traceable by the state. And this is where the Bitcoin comes. So Bitcoin came about in 2008. And Bitcoin is 100 percent sent traceable, through the blockchain, but is not controlled by the state or the central bank. So that was the major, major breakthrough.
So you have a parallel universe, which is the internet to the normal universe. And in this parallel universe, you can exchange messages encrypted so that nobody can actually see the message apart from whoever is exchanging the message. And at the same time, you have the possibility to do a monetary exchange out of the traditional monetary and financial system. So here we are, we have the parallel universe, and in this parallel universe, the individual is free of the control of the state.
Now, all of this is all very good in words, but then, when you go and see the application, as in everything, of course, you have the good and the bad. So we had terrorist organization exchanging money for purchases of weapons. You have warlords, you have drugs, you have pedophiles, you name it. I think this is the big question. How do we deal with this new reality?
Jeff: And does this new reality do anything to address some of the other issues that you talk about in the book in Technocapitalism with respect to social inequality, economic inequality, and the concentration of power that has happened as a result of technology?
Loretta: This again, was the idea initially. The idea initially was that the internet and the technological innovation was going to be the great equalizer. So offering opportunities to everybody, but this is not what has happened. In reality, the advent of this alternative universe has created more inequality, more injustice in the previous universe, which is the one we have inhabited until the 1980s.
Now, why is that? And that’s the key question. The key question is, it’s not because of technology. I mean, technology is an instrument. It is because of human nature. And that goes back to the first question that we discuss, is the fact that the society and the state, which, of course, is the manifestation of society, the nation-state in a democratic society have been unable to catch up with technological innovation. And that is the key issue, the gaps.
So I talk in the book about concept, which is the present future. We live in the present, but we’re already in the future. And that of course, creates anxiety, that creates, many, many problems, which are all related to the fact that we feel we’re not in control of our life, we’re not in control of what is happening around us because of technological innovation moves so fast. So what do we do? In reality, I think we do is either we get depressed. So you have this anxiety, or we ignore the problem. We ignore the problem and we only looked at the elements of technological innovation, which are positive for us, which is the fact that I can communicate with everybody that I don’t have to spend a fortune to make a long-distance phone call, that I can go on Instagram and follow my favorite celebrities.
But all of this, all of this is actually also changing society and we don’t realize that. It’s changing society in a way that we have not seen before. And in particular, it’s actually compounding inequalities, not only within the same society, but also, a global level.
Jeff: Talk about this idea of technological sovereignty as something potentially in the future and what that means.
Loretta: Well, I believe that technology belongs to humanity. It’s a bit like saying, “Okay, we’re going to bottle air and we’re going to sell air to people. The good air.” [chuckles] It’s impossible because air is part of our world, the atmosphere. It’s just where we live. It’s property of the humanities, property of the earth. Well, I see technology in the same way because it is — Okay, it’s not a natural product, but it is to a certain extent a natural product because it’s produced by us.
So we have created technology and this technology has the power to better our world. And this is why I talk about the common good. Again, another concept that has gone out of the window in the last decade. Nobody talks about the common good anymore because society has become more and more individualistic, also, because of the use of technology. But the concept is that technology has the power to solve the climate problems, solve the problem of poverty. Really education.
Think about education. Because of technology, we can reach children that, otherwise, they have no possibilities to be educated. The potentials are enormous, are absolutely enormous. It is a blessing for humanity, but it’s not used in that way. If you look, for example, at the investment in AI at the moment related to the new weapon, there is a new warfare system being shaped as we talk at the moment because of AI, intelligence weapons that is going to change completely the way we actually fight wars.
So it’s not going to be any more people that it’s going to be machine mostly, and it’s not going to be against combatants, but it’s going to be against the civil population. So it’s massive, massive what is happening. Why are we investing in this field? And I can tell you why because of profit, because of money. And we’re not instead channeling AI more towards the health industry. There are now machine that can detect cancer.
For example, for mammography, there are machines that can detect the cancer before the human eye can actually see the cancer. And there have been a couple of cases in the UK recently. So why don’t we invest in that? And that’s the key question of society to address, but it seems that society seems uninterested in that.
Jeff: To what extent, though, is it driven by market forces? And we see that happening in biotech now where there is investment and there are market forces that are driving it, that a lot of this problem solving that you’re talking about really is driven by economic forces.
Loretta: Well, I think yes, you’re absolutely right. I think market forces have driven the development of certain kinds of technological innovation in fields such as, for example, the AI application to warfare. But I also think that at the very, very beginning, what drove the initial investment was actually entertainment and social connectivity. Because if you look at the very beginning, so you look at Facebook, for example. Facebook was born as a connectivity network.
So, the first step, I see it very much in line with what we are, with the human race has got, what it has got being very, very weak in comparison to other species for the simple reason that we actually have this social skill, so we connect to each other. And through this connectivity, we become stronger. So a very weak species has become very strong through connectivity. And technology at the very beginning was very much like that. It was following this pattern.
Then, of course, once this application of the technological application to this natural instinct of the individual starts to blossom, then the financial opportunities come about. And the financial opportunities was massive, absolutely massive, because here you are. Potentially through technology, you can connect to everybody. So you do not have a market which is limited to the tribe, to the village, to the town, to the nation. You have a market which is basically global. And that is where things actually changed.
Jeff: Loretta Napoleoni, her new book is Technocapitalism: The Rise of the New Robber Barons and the Fight for the Common Good. Loretta, I thank you so much for spending time with us today here on the WhoWhatWhy podcast.
Loretta: Thank you so much for inviting me.
Jeff: Thank you. And thank you for listening and joining us here on the WhoWhatWhy podcast. I hope you join us next week for another radio WhoWhatWhy podcast. I’m Jeff Schechtman. If you like this podcast, please feel free to share and help others find it by rating and reviewing it on iTunes. You can also support this podcast and all the work we do by going to whowhatwhy.org/donate.
