Author: Jonathan P. Allen
This book summarizes what we know about technology and inequality across disciplines, and seeks out new ways to analyze this relationship based on technology and business practices, with the objective of restoring digital technology as an engine of opportunity. Besides the unique focus on the role of technology in inequality, the book has a unifying theme of tracing wealth creation and wealth capture in the technology sector, and relating specific practices—what technology companies actually do—to larger shifts in wealth and power. A clear conceptual framework is used to analyze key industry case studies: search engines, social media, and the ‘sharing’ economy.
Key points from the book:
- The main question: Why would digital technology increase inequality? Will more coding skills, or better regulations, reverse this trend?
- To understand technology and inequality, focus on wealth. Wealth has shifted since the 1980s from real to financial assets, and away from the energy and commodities sectors towards technology and finance. These shifts have tended to increase wealth concentration.
- Digital technology changes not just products and services, but how markets and the economy operate. Digital markets are different from classical ‘perfect’ or ‘free’ markets.
- Digital technology offers unique opportunities to profit through taxation and regulatory avoidance. It’s no coincidence that tech companies have some of the largest overseas cash holdings.
- When we look at new digital industries, like search, social media, and the more recent sharing economy, we see highly profitable, highly concentrated industries making complex technological choices about who receives what information—how reality and relationships are mediated by digital technology.
- What’s the solution? More education and better regulation can help, but to make a real dent in wealth concentration, the business model for the basic ‘use cases’ of our digital world needs to change. For the three key information relationships we identify (connecting buyers to sellers, people to people, and people to external reality), non-transparent businesses that profit from maximizing ‘engagement’ and ‘conversion’ seem to concentrate wealth.
- The tech industry may be a little bit too successful at value creation, and especially value capture. While wealth concentration is not an inevitable outcome of digital technology, there are few economic, political, or cultural forces acting as a balance against it.
Allen, Jonathan P. (2017). Technology and Inequality: Concentrated Wealth in a Digital World. Palgrave Macmillan. https://doi.org/10.1007/978-3-319-56958-1, eBook ISBN: 978-3-319-56958-1, Hardcover ISBN 978-3-319-56957-4