Technology Is Compounding Inequality and It's Okay
William Gibson once said, "The future is already here – it's just not evenly distributed." I wholeheartedly agree. Therein lies the problem - the future is never evenly distributed.
We believe technology to be ubiquitous only because we live in a first-world country. Technologies can take years, decades, and centuries to spread evenly. Come to think of it; I'm not sure there is any technology that has been truly distributed to every person on Earth. Even the most basic technologies many of us take for granted, like electricity, literacy, and clean water, are far from evenly distributed.
Only 87% of the world's population has access to electricity.
Only 86% of the world's adults are literate.
Only 71% of the world's population has access to clean water.
And as time passes, those who were given earlier access to a technology and those with greater skill in utilizing it create a compounding gap of inequality between themselves and those without the same access or skill.
Access also rarely equates with being able to adopt a technology. Technologies require a minimum level of skill even to begin using them. While it’s true that almost anyone who has access to a computer can be a programmer, the reality is that less than 0.4% of the world's population can code. And, even within the population who can code, there are significant discrepancies in skill.
But, while technology accelerates inequality, it isn’t the root cause of it. That would be us. Humans. Technology is merely a tool that augments and scales the natural abilities of humankind. Whatever we can do with technology, we can usually do on our own - just much slower, less efficiently, and less effective.
Some believe technology strips away our humanity, but I think this couldn’t be further from the truth. Technology accentuates our humanity. It allows us to chase our human desires with more ferocity and tenacity than ever before.
Technology is compounding inequality because it's in our nature as humans.
To create inequality is to be human
Humans crave status. There are many ways in which we can pursue status: wealth, celebrity, friendship, charity, in service of God. Everything we do ultimately serves to increase our status in some dimension or prevent or soften a drop in our status.
For status to exist, there must be inequality. And for this reason, humans are drawn to inequality like a moth to a flame. We are at the mercy of it. From the moment we're born, it becomes our life mission to cultivate and generate our own unique set of inequalities. This is neither good nor bad; it's just a fact of reality.
We love inequality so much we're continually finding new ways to create it, for example, by inventing and playing games. If you grew up with a sibling, as I did, you could probably remember the near-limitless creativity you’ve employed against one another to create games in which you have an edge. Why are we drawn to games? They provide new and exciting ways to make winners and losers. There must be losers because if we're all winning, none of us are winning.
Hereditary inequalities lead to social inequalities; growing up, we're distinctly aware of who is “out of our league.” There will always be the "cool kids", they just trade in their table at lunch for the latest fashion accessory, the latest iPhone, the luxury car, the latest programming language, membership to the airport lounge, early access to a new app, charitable donations, first to binge the latest Netflix show, etc. We're all looking to be the “cool kid” in some part of our lives.
We love capitalism because of its ruthless efficiency in rewarding and punishing inequalities. If you're just 1% better than your competition and can serve the entirety of demand, you will put every competitor out of business. In capitalism, small inequalities lead to winner-take-all results.
Ultimately, to crave inequality is to be human. Inequality is the spice of life. It gives us our individuality. It's what drives us.
So what does technology have to do with our desire for inequality? Technology represents the tools available to us to create and compound inequality.
Technology provides the leverage to compound inequality
Many people believe the Internet to be the great equalizer. But I believe it to be the primary factor in the inequality we see today. It has expanded tiny local markets to a global scale. If you live in a small town and create the best hand-crafted Peruvian Mirror, you likely have a monopoly on mirrors, and business is decent. While globalization allows you to sell to a vastly greater number of people, not only does your local monopoly now disappear, but you’re now in competition with every Peruvian Mirror maker in the world. On top of the enormous increase in competition, you also must learn and leverage all types of new technologies unrelated to your craft to compete. Setting up an online storefront, marketing, customer support, online payments, etc.
A single person with a computer and a connection to the Internet can now create products and services that could eliminate thousands or millions of jobs. Never before have differences in skill with certain technologies had the power to create such immense value disparities. For example, some of the highest-paid individual contributor (non-managing role) developers at Google earn $1-$2 million per year.
It allows a small startup like Instagram, with just 13 people, to be acquired for $1 billion (which today seems like a steal). Technology ultimately allows individuals to generate insane amounts of leverage for themselves and their employers.
This is possible because technology enables companies to generate greater returns with fewer employees. There's no reason to think that this trend won't continue. If extrapolated to a not-too distant future in which there is Artificial General Intelligence (an AI that can do any task a human can) available, we could have vast corporations run by a single person.
Technology may be providing “equal opportunity,” but it all but guarantees unequal outcome.
Technology matures unevenly
It takes time for a technology to be distributed, and during this time, it matures disproportionately faster around the wealthiest physical locations. In turn, these new levels of maturation re-open the doors for a new cycle of innovation and inequality to begin.
What does technological maturation look like? Increased capabilities, users, use cases, investments, ecosystem growth, and advancements in the underlying infrastructure.
As technology matures in any of these categories, the creative potential of the adjacent possible is unlocked. If you were to stand at the outer edge of what we know and face the pitch black of the unknown, the adjacent possible represents anything within your grasp. Once something from the adjacent possible has been pulled into the light, the outer edge of what we know expands into that space. This, in turn, unlocks a new set of possibilities into the adjacent possible.
Technological advancements beget technological advancements. But these advancements don’t happen all at once. Time is required for them to be distributed.
As a technology matures, we will predictably begin to run up against the constraints of a given technology's underlying infrastructure. You may have experienced your favorite service going down due to a surge in traffic. Or not using the latest version of an app or software because your phone or computer is too old. Infrastructure represents an entire world of enabling technologies that power the end-user technologies we interact with. Infrastructure can be power grids, satellites, fiber cables, communication networks, data centers, etc.
Infrastructure not only plays pivotal roles in the scale, speed, and efficiency of technology but, as a byproduct, will implicitly define the boundaries of what's possible with it. The transition from PC Era to Web 1.0, to Web 2.0, and Web 3.0 were driven as much by our imagination of how to use the web as by the advancements in the underlying infrastructure supporting the Internet. Social media giants like Twitter, Facebook, and Snapchat couldn’t exist during the Web 1.0 era.
We think of the Internet being this digital ether that has no tie to the physical world, but the Internet and the “Cloud” is firmly rooted in the material. With the rising trend towards remote work, developers often prioritize cities and neighborhoods to live in that have access to fast Internet. As advancements in infrastructure increase the speeds at which people can transfer data, websites and services come to expect and depend on these ever-increasing data rates. The result is that while some of us are continually served a cutting edge web experience, many with slow connections are being left behind. Slow Internet speeds can make the bulk of the web unusable.
For example, Taiwan has the highest average download speed of any country at 85.02 Mbps, while Yemen has the world's slowest average speed at just 0.38 Mbps. It would take over 30 hours to download a 5GB movie file in Yemen while someone in Taiwan could download it in eight minutes.
Why does Taiwan have 220x faster download speeds than Yemen? Since infrastructure is tied to the physical world, it not only takes longer to distribute, but it requires considerable investment. Infrastructure rollouts and upgrades are prioritized around the locations where it can be best utilized, which will always favor major cities in the wealthiest countries.
The wealthier the people and corporations of an area are, the faster they will receive modernized infrastructure; modernized infrastructure gives them new avenues to innovate; innovation leads to competitive advantages; competitive advantages grant increased market share; increased market share leads to greater wealth. This is a self-reinforcing technological feedback loop that increases inequality between the wealthy and the poor.
Ultimately, infrastructure and technology are distributed in ways that bring the most value back to the current technological incumbents. There’s a reason companies like Facebook have taken on ambitious projects like Internet.org. They’ve already connected more than 100M people to the Internet. Each new person with Internet access represents a potential new user for a Facebook property and additional views to sell to advertisers.
Technology gives rise to knowledge monopolies
The innovators and early adopters of technology purposefully or inadvertently create knowledge monopolies. What is a knowledge monopoly? The knowledgeable get to decide what information is disseminated and how it will be presented to those outside of the monopoly. Power is centralized to those within the knowledge monopoly, and they are the gatekeepers.
A new universe of information is born from any new technology. Information about how it works, how to use it, how to talk about it, how to fix it, how to teach others, etc. As the technology matures, those who work closest with it inevitably create new words and terminology to describe and talk about the technology: jargon.
Jargon acts as both the fortified walls preventing outsiders entrance into the knowledge monopoly and a verbal passport to identify co-conspirators quickly.
There is power, status, and wealth contained within any knowledge monopoly. This often perpetuates inequality as those who already have status within one monopoly are usually given welcomed access to adjacent monopolies.
This can be seen with many of the tech-related products being launched in the past five years. Products start as exclusive invite-only affairs, and these invitations are extended to the biggest names in similar communities.
Like many of society's wealthiest members being given exclusive and early access to the best investment opportunities, knowledge monopolies perpetuate this hierarchical status.
While those with the proper knowledge of a technology can use it to create inequality, the knowledge required must be shared. Those within the knowledge monopoly may choose to share freely or act as gatekeepers for their gain. No matter the intentions of the technology’s creator, there will always be those who profit from disseminating knowledge, e.g., universities, online course creators, YouTubers, bloggers, etc.
Despite compounding inequality, technology is good
Even as the levels of inequality in the world continue to accelerate, the general quality of life has been steadily rising. Progress has been made in many domains, each being propelled by technology.
Life: Life expectancy has more than doubled since the mid-18th century, with increases across all age groups and continents.
Health: Advancements in sanitization, sterilization, vaccination, antibiotics, and others have made an enormous impact by saving billions of lives.
Food: Mechanization of farming, synthetic fertilizer, better crop varieties, and genetic engineering have led to a decline in stunted growth and undernourishment in some of the world’s poorest regions.
Wealth: Achievement in science, the rule of law, property rights, enforceable contracts, and advancements in science have contributed to a Gross World Product that has grown nearly 200x since the 18th century. The portion of the world living in “extreme poverty” (defined as $1.90/day in 2011 international dollars) has fallen from nearly 90% in 1820 to just 10% today.
Safety: Workplaces are much safer, natural disasters kill fewer people, and deaths from all kinds of accidents have been dramatically reduced. Motor vehicle accident deaths alone are down 24x from 1921.
Democracy: Two-thirds of the world’s population lives in “free or relatively free societies” versus just 1% in 1816.
Knowledge: Literacy is on the rise, the education gap between men and women is falling as more cultures educate their girls, and IQ scores are increasing.
Quality of life has a bedrock of factors contributing to it, and inequality isn’t one of them. We can enjoy a greater life expectancy, suffer less from sickness, and become literate - just because others may have more in some of these dimensions doesn’t take away from our progress.
In this regard, inequality is a leading indicator of progress. Whenever progress is made, it must start somewhere, thereby creating inequality. Should we halt all progress to reduce inequality? Should we slow progress to ensure inequality remains within some bound even if it means a lower quality of life in the future for the entire world?
When it comes down to it, I'm okay with having greater short-term inequality, in exchange for a higher quality of life that's more broadly distributed across the globe. In fact, steep reductions in inequality are usually the result of some economic or humanitarian disaster.
There was a thought experiment brought up by the Planet Money podcast in 2010. They asked their listeners if they would rather be rich in 1900, or middle-class now:
Would you rather:
A. Live in 1900 and make $70,000 a year.
or
B. Live today and make $70,000 a year.
If you choose A., you get to be super rich; your income is roughly equal to $700,000 today. You get a mansion, servants, the whole deal.
Choice B. means you aren't rich, but you're not poor -- and you don't have to worry about being crippled by polio, or killed when a cut on your foot gets infected. You also get cable TV and air conditioning.
These respondents were NPR Planet Money listeners, which probably means they have an above-average level of education and have a propensity towards finance.
The result after 3,584 votes?
30.92% wanted to be rich in 1900, while 69.08% would rather live in the present as middle-class. The second option is obvious to me, but I find it interesting that a third of people would willingly sacrifice their life's absolute quality to have a better relative quality of life.
What would you choose?
Thanks Jackie, Jason, Julia, Abhishek, and Thomas for reading drafts and providing feedback.
