I read an article recently about how social media companies and similar new age technology companies are growth engines that are "powering America's growth." This made me think a bit about the truth of this position, which is accepted as a virtual truism among some niches of society.
I take the opposite position, at least as regards whether social media companies and so forth are "powering America's growth."
Facebook et al. may be growth companies in the sense of generating massive revenues and market capitalization. However, and it is a big however, the problem with them is not that they produce nothing. That is a false argument. They do produce something, and what they produce, they produce a lot of. What they produce is useful and serves a need.
However, it is what they produce that is also the problem.
Social media/"the Internet" makes people and business more efficient, and handy gadgets and smartphones only add to that efficiency. That is pretty much undeniable. That seems to be the basic premise of people who believe in the new economy, and I agree.
Where I part ways, though, is the overall effect this is having. Far from "powering American economic growth," in many ways it is doing the precise opposite.
The social media companies and these other new wave companies like Tesla are - or aim to be - cannibalizing other industries left and right. Competing industries may not be outright destroyed like buggy whip manufacturers, but they are being undermined.
Who? Just look around at what you do online. You read the news - no need for a daily newspaper. You watch movies - maybe you don't need that television after all (I don't use a tv, haven't needed one for years in fact). You pick your own stocks with the information provided - no need for a broker except to take orders. Need an appliance? No need for there to be an appliance store nearby when Amazon will take care of it. And, to heap insult onto injury, the manufacturing done by these paragons of America's growth send their manufacturing jobs overseas.
On and on. The economic malaise that has developed in the US is not in spite of these "powerhouses of growth." It is because of them. Is that a bad thing? Not for all the people who work at those social media companies. For them, it is glorious.
But for all the displaced workers who get such short shrift these days as simply being behind the times and viewed as being simply unable to keep up with the modern world, and thus deserving of their sad fates - maybe so.
You may have heard increasing murmurings in the political press about wealth inequality, which is sometimes called wage inequality and sometimes other things. This never really used to be a political cause in the United States. Back in the "bad old days," there were television factory workers and newspaper press handlers and music hall bands. Today, there's Apple.
In 1975, college graduates were paid 43 percent more than those without a degree; in 2008 that premium had soared to 92 percent for men and 70 percent for women. It is becoming an all-or-none job market, where either you are a king or a joker. The broad middle tier, the oft-derided "middle manager," who used to be able to support his or her family, is being wiped out with a few strokes of a keyboard.
I know, I'm a Luddite, I don't "understand" the new thinking, I'm stuck in the 1950s. Think as you wish. I'm actually at the forefront of all this, have been working with computers for a full 40 years now (remember dot matrix printers which could only be used to make pictures of dogs?), I understand them and their uses, and, well, here is the key point: understanding it all is what makes me empathize so much with those people who are consigned to oblivion because they never learned to code.