Frankly, even at the height of the tech boom, the tech industry has never had significant capital available compared to the oil industry. I've worked in both... Folks in tech think 100 million in capital is a lot. In oil, that doesn't even qualify as a project that needs sign-off by upper management. (The last project I managed had a ~$200 million per year budget. I was a low-level peon 5 years out of grad school in charge of it because it wasn't considered a large enough project budget-wise to give to someone experienced. There are a few caveats around this -- the discretionary budget was on the order of 10 million and the rest was fixed through long-term contracts, but still...)
Significant investments in the energy industry are measured in tens of billions per project. Profits from each of those projects are in the trillions, but spread out over 20-100 years.
As a result, a big chunk of the finance industry is directly or indirectly tied to oil. There aren't many funds that don't have money somehow invested in or sourced from the energy industry.
I went into this article thinking "So what? The world runs on oil, and oil has a lot of money. Welcome to learning about the economy."
But yeah, it is concerning that private interests that don't share our same niceties about democracy and human rights have power over us.
In many respects, the American oil industry is the antithesis of "the global elite." It creates a product everyone uses, and provides well-paying jobs for people without college degrees. XOM's CEO, Darren Woods, isn't a billionaire Stanford grad. He's a Kansan that got his engineering degree at Texas A&M and worked his way up the ladder at the company. Exxon can't outsource production overseas, or transfer IP to Ireland, etc.
I do believe the internet and global communication does speed up the process, at least when people get near the tipping point. Knowing that you are not alone in your frustration does help steel people and enable connection and shared-effort. So yes, it's fucked right now, but I think it will improve measurably in the next 20 years. (It does indeed help that many of the most powerful people will die of old age within those 20 years).
You should get to work, there’s a lot of stuff to do. Of course we need to protect our precious peace and prosperity, but we also need public opinion to reflect on certain issues. And we need policy makers to implement solutions on said certain issues. We’ll get there but it’ll be really damn tiring and exhausting.
That's nonsensical. We all have the potential to do such things at some point in our lives, but that is not at all the same as having the means.
Just always saying ‘it’s the elite’ and then sitting it out seems really easy to me.
So there are some people trying to build an anti-elite social movement of the sort you just said anyone had the means to build, yet you're saying they don't crave justice badly enough. I'm getting the impression that you're just saying you don't want to get onboard with anything unless it's already at the threshold of success.
A lot of the competing companies have a large vertical integration in their field, and can refuse your supply for any of it
It can also in many ways to be literally impossible to compete for example due to some direct-or-not regulation.
I think it's not fair to roll the fault on the commenter either, even if it's easier to not think about it that way
So what has happened in the US is happening elsewhere, on a delay. Fortunately, what is not on a delay is the age of the people doing the self-serving, future-burning deeds. Those people will all die within 15 years of each other. Hopefully those who are left will have a bit more sanity.
One alternative is a French Revolution, part 2. Another alternative is a system of wealth, income, and inheritance taxes that helps prevent concentration of power in a few families. Another is more aggressive antitrust enforcement to reduce political power of any one company. Another is strengthening of unions. There are many others, and there are many combinations of them.
There are alternatives to another French Revolution, which no one wants. (Well, no one other than the tyrants waiting in the wings who want to be the global elite.)
Why are people too scared to challenge the global élites? Because they don't acknowledge those alternatives. In my experience, it boils down to being fearful of being ruled by the people who want to be the global élites. Which would be even worse. And, hey, if I'm being honest, they're probably right about that. Thing is, that fear is blinding them to the other completely reasonable alternatives that people are putting forth.
We just need to make more noise about these other, really very low risk options. Options like taxes. Options like strengthening unions. Even out of the box options like thinking about coop type business structures. Etc.
There's more than one way to skin a cat, but we're in the happy position of not even having to skin the cat to get what we want. We just have to get people past that fear of, "Woah! look at those looneys who want to replace the élites! Better the Devil we know!".
Incrementalism works great in periods of relative stability. In other contexts it can be dangerous and inhibit necessary action.
Where do you get the idea that most revolutions have been a a disaster? Your concept that only incremental improvement is valid seems counterfactual and naive. You are just dismissing anything that you do not understand out of hand without even considering it.
Add to all this the fact that they fail with alarming regularity, and America's collective lack of enthusiasm for that option is perfectly understandable. I mean, historically speaking, for the average person, revolutions either failed, and you were worse off. Or revolutions succeeded, and you were worse off.
It's so bad that, again, people are even a bit skeptical even of low risk options like tax reform and stronger unions. Right now, people seem to view anything that even appears to move away from the status quo as dangerous because of the admittedly horrid track record of revolutions, combined with the off the wall proclamations and actions of certain groups opposed to the élites. (Believe it or not, you don't allay peoples' fears of a reign of terror by shooting up churches and Walmarts for instance.)
Of course it is difficult to manage precisely because most people with $1B will kick and scream if their wealth is reduced to $900M. But in theory that is what voting can help accomplish, and social movements to help people realize what they are giving up by voting into office people who despise unions and who complain that their 15% tax burden while collecting millions is too much.
It's still possible to start a new company with just a laptop and free time in fringe markets like cryptocurrency, VR/AR, or many SaaS markets, but many of the exciting areas in tech today - AI, robotics, self-driving cars, gaming - require very large capital investments.
Aside, swiss watches tend to have a watch maker's four on them instead of the more correct IV... and apparently there are a bunch of other variations out there. Though MM is still quite stupid.
Not sure how someone got the idea to do that...
But the fact of the matter is that Google, Amazon, Apple, and Microsoft have double the market capitalization of the largest private oil companies. So yes, they're objectively better capitalized taken as a whole -- even if the typical tech project has less investment and consequently working on tech projects as a low- or mid- level employee feels smaller.
I should go be an oil boy.
There's a _lot_ of "process" to everything in oil. It's there for a good reason, but it can get out of hand.
I once spent three months getting approval to spend $20 to order some data from the US government. It was exactly the same process that you'd go through for a $10 million purchase. (Didn't help that we were re-buying our own data from 20 years ago because we'd lost it, but that's a different story.) I billed another wing of the company at $465/hr during the entire process... I billed around $50k to get approval to order a $20 DVD with a bunch of old scanned documents on it. Things can get very strange in the oil patch sometimes...
The largest blast furnace in the world is about 5 million tons of iron per year (and was upgraded to that capacity in 2013):
...so that means the biggest blast furnace in the world has a capital cost of approximately $1 billion.
More than likely the cost (in today's dollars) of that blast furnace you're referring to is $100 million, not $100 billion.
Side note: direct reduction furnaces furnaces are usually cheaper from a capital cost perspective and can use natural gas or even hydrogen for producing steel... We may use more of this tech in the future as we move away from coal for sustainability reasons....
The US now produces about 10% of its raw iron/steel using DRI and 90% by blast furnaces and the rate of DRI growth is fantastic (going from 2 million tons in 2017 to 3.4 million in 2018, pdf page 10): https://www.worldsteel.org/en/dam/jcr:96d7a585-e6b2-4d63-b94...
A few years ago, virtually no steel was made via DRI in the US. The fracking boom has changed a lot.
That seems like a very large number for the construction of any industrial installation. Just poking around the net the numbers I found were $220/ton of pig iron produced, and another source that claimed a $2.5b cost in 1980 and $5b today. If the $220/ton figure is accurate a $100b blast furnace would be producing 455m tons of pig iron a year. According to wikipedia a modern furnace can produce about 5-6m tons per year.
Imagine two startup ideas. One, could be profitable, and eventually turn into a $100million company that does something useful. The other, will never be profitable, but makes promises of being worth $40billion. Which one gets the (inexperienced VC) money? The second. Which one would be a long-term bonus for the U.S. economy? The first.
That is the problem; too much money from Softbank (much of that from S.A.) pushes all the developer and other resources into goofy ideas that will end up going bust, instead of more rational ideas that could be long-term useful.
So, we have to assume that for the last decade, not a single VC in the industry have been rational enough to pick up easy money everybody else is overlooking?
The sustainable project isnt providing liquidity for 20 years if it even gets enough capital to execute at all, whereas the Softbank FOMO project will in 5 years after they are involved.
You are betting on founders and their network, not their idea.
But the paradigm is shifting. Where will we end up? My money is on early 20th century style oligarchic capitalism, but that’s not a very appealing proposition for a lot of people.
I've been enjoying the historical context in this book. I'm not surprised to be liking the book, but i'm pleased to be getting a better understanding of what the early 20th century space was like.
In the early 20th century, the rich owned gold mines. Once we moved off the gold standard, they simply took that wealth and put it into the fiat system by owning companies. Even if we do end up on a nominally crypto-backed monetary system, I would expect any governance (even decentralized) to favor the incumbent wealthy as much if not more than our existing system.
With large buy in from lesser concentrations of wealth it could be a "peso" at best - something used by lesser wealths to trade to their localized advantage but lacking the power of big movers.
Because they can own all the GPUs/ASICs/whatever you'll use as proof of work / proof of stake for your cryptocurrency ?
do you then agree with only a centralized national economics?
what does that even look like?
As bad as MBS is, it's not like he has some secret plan to spread Saudi values throughout the world. In fact, he's actually a liberalizing force in SA (economically and socially at least, although not politically). And Saudi Arabia, unlike e.g. China, isn't attempting to remake the world order to revolve around itself (and its authoritarian rulers). So while I understand the sentiment "I don't want to accept money from Saudi Arabia for my start-up because of their human rights violations", I have a hard time understanding why one would fear Saudi Arabian board members would abuse their seats for geopolitical influence purely due to the fact that Saudi Arabia has little to gain in the geopolitics department from tech companies.
> They are - or were at one point - all backed by SoftBank’s Vision Fund, an enormous venture capital fund run by Softbank, a Japanese holding company.
If many of these startups might not have reached IPO without the investments by Softbank, then maybe they don't have such a good business model after all? At least, that's my first thought after thinking what Uber and WeWork have in common.
This idea doesn’t seem to go away. In the 90s it was the same. Whoever would sell dog food on the internet first would own the market and keep it forever. Reality turned out differently.
As soon as a company IPOs they enter into the portfolio of millions of passive investors, who unwittingly become bagholders for companies like Uber and WeWork that have no sound fundamentals or viable business model.
The market has become very distorted due to this and a myriad of other reasons. Everyone is gunning to find the next winning unicorn lotto ticket without any regard for fundamentals in a sort of collective pump-and-dump scheme. Thankfully there was a glimmer of rationale with Uber and Lyft's failed IPOs, and I expect WeWork's will be even more disappointing.
Imagine if the westboro Baptists accidentally struck oil and became billionaires and tried to export that version of Christianity and we see why maybe it’s not good that they are allowed to participate in the international community and invest their money that happens to come from oil into these startups. It’s like if Epstein gave money. It doesn’t matter where it came from but from whom.
Lemme tell a story bout a man named Fred...
I don't really disagree. America (e.g.) does some fairly disgusting things but at least we (most of us) recognize women as first-class human beings, don't throw people in dungeons and/or whip them in the public square for being critical of the government, and so on. These things are gimmes.
Assuming liberal democracy doesn't totally collapse in the near future, I wonder if a rising tide really does lift all boats—if accepting Saudi investment is the fastest and least bloody way to help those oppressed under their dogshit ass-backwards regime. Right now it almost seems like the reverse is happening.
I don't believe that's the actual problem. If it was Norway investing its oil money, this wouldn't be an issue. It's oil money from a state that is very much not aligned with the values SV companies claim.
If you follow the money, you'll likely find a questionable source. Americans benefit from US military raining drone strikes in other countries. By being an American citizen, are you tacitly approving drone strikes? No. By paying taxes that fund drone strikes, are you tacitly approving drone strikes? No. Taking Saudi investment is not tacit approval of their atrocities.
There's certainly a higher level of geopolitical tension there, though. I don't really know what the US could to answer (make more money?), but I don't think the tech companies themselves can do much about this, they're mostly pawns in a larger game of chess.
If the US wants to regulate these investments, then by all means. Lobby for that if you're really worried.
To me, the answer to those questions is not as clear cut as you are portraying. My gut reaction to those questions is to answer that, yes, those attributes in a vacuum imply tacit approval.
That is not to say of course anything about guilt or moral judgement. It is relatively easy to dissuade someone from assuming that approval by speaking against drone strikes.
For an American taxpayer, absent any opposition (private or public) the tacit approval is a default assumption. Not a strong one though.
Suppose you are a citizen of a country (through no choice of your own) that uses public taxes to <immoral action>. Further suppose that you have no ability to influence how your taxes are spent. You have to pay taxes, but it's not at all clear that you are morally complicit for the immoral actions taken with them. You could argue "well you shouldn't pay taxes". Well, then you lose your liberty via jail or worse. Is that better than being arguably morally complicit?
And, are you putting your actions where your words are? Are you not paying your taxes, or are you accepting blood on your hands?
The big ones bought market share by losing money?
Uber is not a "tech company". Uber is a taxi company with delusions of grandeur. WeWork is a landlord.
It’s laughable how delusional they are:
>In fact, several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces.
> So, what happens when 5% of any industry is controlled by parties that are not direct shareholders?
This seems like an odd comparison to force arrival at a number as high as "5%", not including the rounding. Why would you compare a single investment of $45B to annual revenue? Control would imply ownership, so I'd expect the comparison to be to the summed market cap of those companies, which is obviously higher than $1T.
Uber is an especially good example.