MAKERS AND TAKERS: The Rise of Finance and the Fall of American Business

This is a great perspective on how Big Tech is not so much Big ‘tech’ but more Big ‘fin’ (for finance)… Just shows how little they need to care about things like software and well… engineering at all… once they get to a certain size.

In the spring of 2013, Job’s successor as CEO of Apple Inc., Tim Cook, decided the company needed to borrow $17 billion. Yes, borrow. Never mind that Apple was the world’s most valuable corporation, that it had sold more than a billion devices so far, and that it already had $145 billion sitting in the bank, with another $3 billion in profits flowing in every month. So, why borrow?

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Big, public companies don’t get big or public without finance. There are literally rules against selling securities to the public without a financial handmaiden, or “underwriter”. More generally, they have to combine elements to fight and survive. And not just finance and tech, as broad as those are.

The same goes for public companies in finance, by the way. Goldman is way more than an investment bank, or even a “finance company”. Depending on how you see it, that’s the problem.

Tim Cook came up at IBM, as did his replacement as COO. Their GC came from Honeywell, and before that a Big Law firm, a Supreme Court clerkship, and the Justice Department appeals division. Their CFO came up in finance at GM. Most people think of the cars first, but dollars-wise, the auto-finance line of business long ago eclipsed the automaker.

Wonderful and terrible things happen when you bring people like this together. When half a dozen apex predators make a cross-functional executive team—not a given—and then you give them billions of dollars and thousands of employees, the earth shakes. There are aspects of what they do where the only really effective regulation is competition from other multinationals.

There are other aspects where I’m sure even Tim silently prays that the masses will keep moving his way.

As an aside, if you’re interested in the financialization of tech, Tim Hwang published an interesting little book, Subprime Attention Crisis, last year:

Sure… but what struck me about this story is how we seem to be teetering around a crisis caused by ‘ficticious capital’… subprime, then crypto and (more recently) GME are perhaps all exemplary cases? Finance has gone way beyond being another profit center for big tech to exploit to being structurally much more significant socially? I can’t see anything wonderful going on here, so you would have to point that out. They seem to work like cloud-based states… the territories are drawn not through physical geography, but electronically so the way to regulate that I think would be through the laws of thermodynanics rather than politics… about the book… the idea seems to be that human cognition perhaps isn’t as lucrative as first thought? That sounds right, but then this is really the story of another market correction in the making rather than anything more catastrophic. The financialization of tech I think interests me only as far as it suggests the way big tech monopolizes through things like proprietary software maybe isn’t as worrying as I believe… it’s made me realize how trivial software is for these companies… and that is both a relief from the POV of the urgency whipped up by FSF and so on in terms of advocating hard, copyleft alternatives and so on but also a worry in terms of the existential threat these orgainzations present to humanity more generally. My professional focus I think is shifting into reverse… ten years ago or more I set out to develop hard tech solutions for social/political gains and now it feels the urgency is more towards developing social and economic solutions to achieve technical gains… if I can put it like that… and I think that feels like a much better use of my time.


That feels like a really important observation to me.

The industry outgrew the way of seeing things that activists wanted to use to influence them. It’s not that they’re winning the battle free software people wanted to fight. More and more, that’s not even a fight the biggest players care to play.

That’s exactly right… mostly you see OSI evangelists and FSF zealots fiddling while Rome burns (so to speak).

In “Rethinking the Financialization of Nature”, Ouma, Johnson and Bigger survey the ‘dense linkages and new financing arrangements in mining, oil and gas extraction, farmland, and agricultural production’.

But crucially (IMO) ALSO on:

“…new instruments that involve substantial financial engineering for novel engagements with more-than-human natures, such as weather derivatives, catastrophe bonds and commodity index funds.”

There is no doubt that tech engineering became secondary to financial engineering at places like Apple, Google and so forth many years ago… it’s not necessary to discuss how bad that is for information science and human welfare…

In the last few days I’ve only just caught up with Elon Musk ruing the number of MBA’s getting in the way of product development… he looks back nostalgically when capitalism was all about manufacturing output.

The trouble for Musk though, is financialization is, quite literally eating capitalism… he knows that and that’s why he is hedging in ficticious capital like Bitcoin.

The man who has appointed himself to lead our capitalisms charge into space is already lost and without a map here on Earth, so what kind of outcome we can expect from the privatization of our the solar system? Time to belt up I think? It’s going to be a v. rocky ride.

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