On techno-optimism, markets, and reality outside of the tech bubble
Yes, technological progress is good. But how do we identify the problems worth solving?
I like Marc Andreessen’s techno-optimist manifesto and agree with many of the ideas. I'm optimistic about the future, and I know technology will have a large part to play in a good outcome. I’m excited for rockets, robots, and renewable energy.
But it is important that we combine this vigor with a firm understanding of the current reality in our society. Technology is an incredible tool for solving problems, but it’s often developed in a vacuum that does not consider broader political and socioeconomic implications. To be effective, we need to know what the real problems are.
The binary views of ‘all tech is good vs. all tech is bad’ or ‘tech vs government’ are unproductive. We have to introduce much-needed subtlety to the conversation. Solutions will come through collaboration, and both sides need to realize that the other has something to offer.
In this piece, I’ll focus on the tech side of the debate (where I spend my time). Marc’s influence on our space is significant. His ideas permeate the ecosystem, setting the ideological tone and shaping the perspectives of the next generation of investors and founders. This is why it is critical to look at the nuances that are left out of this manifesto and of mainstream tech discourse in general.
Note: I realize that manifestos rarely deal in nuance; that’s not their aim. This is not a critique of the piece, but more of a personal exploration of why I was simultaneously fired up and slightly uncomfortable when reading it. I am always learning and updating my ideas, so please take them lightly and feel free to debate, as long as you do so thoughtfully.
On Markets
Markets are excellent at resource allocation. The efficiency with which they orchestrate billions of people working in tandem is beautiful. But markets are a mechanism, and no mechanism is perfect. They do not accurately measure the externality costs of production and consumption (costs to the environment, etc.), and they favor short-term reward consumerism over complex long-term human flourishing. Hayek and the Austrian School’s responses to this critique (that these issues can be solved through stronger private property systems) fall apart when considering the issues on a global scale, but that’s a post for another time.
We don’t need to dive deep into economics to see that there is a clear dichotomy:
Markets have enabled the invention of modern wonders: computer chip fabrication machines, self-driving cars, and reusable space rockets (seriously, how?!).
Markets have also contributed to the inventions of brain-deadening addictive media (avg. 3 hours of TV per day), body-destroying addictive food, and a race to turn as much fossil fuel into shareholder value as possible before it runs out or we all die.
My simple point (which should not be controversial, but it is) is that markets are good for many things, but there is potential for negative side effects. This topic deserves nuance but rarely gets it. When discussed in my tech circles, it’s always framed in the same unimaginative binary of ‘free markets’ vs. ‘central planning’. Yes, we know, central planning is bad and doesn’t work. Obviously. But this is a straw man and a lazy technique; by arguing against the obvious faults of centralized economic planning, it makes the proposed alternative of free markets seem self-evidently good and unassailable.
Yes, markets, when combined with capital and technological innovation, have led to magic-like inventions. But if we are actually going to use technology to solve big problems, we need to understand that there are also side effects.
The problem is that we’ve been raised (myself included) to believe that markets are the only way of understanding what problems there are to solve. If someone pays for my product, then I can get rich by meeting that consumer demand, and the problem goes away. But markets aren’t always good at signaling complex problems that require long-term thinking and mass coordination. Those are the things that we should be inspiring our young founders to focus on.
Problems we face
What’s an example of a sticky, complex problem that we face? For one, we live in a dual economic reality. In the US, both things are true:
Statement 1: It is a time of extreme economic abundance.
GDP has risen significantly, and although it is an imperfect measure of progress, it has been concurrent with a huge rise in living standards measured in consumerist terms. Most people in the global north have had their basic needs met for decades. Their 'infinite' consumer needs are being met with abandon.
Statement 2: It is a time of extreme economic stagnation for the majority of US Americans.
Don’t take this from me. Here are some direct quotes from an essay by Ray Dalio (hedge fund billionaire) who has a top team of researchers looking deeply at this. TLDR: he's very worried about the US.
Important fact 1: "There has been little or no real income growth for most people for decades."
Important fact 2: "Most people in the bottom 60% are poor, and increasingly they are stuck poor. 40% of all Americans would struggle to raise $400 in the event of an emergency.” (that’s 130 million people, in the wealthiest country in the world).
Important fact 3: "Economic mobility in the US is one of the lowest levels for a developed country." (basically if you are rich in the US, you'll stay rich or get richer; if you are poor, you will most likely stay poor)
Important fact 4: "The income gap is as high as ever, and the wealth gap is the highest since the late 1930s."
This is not good
These come from Dalio's essay 'Why and How Capitalism Needs to Be Reformed' in the Harvard Law Review. I suggest you read it. When we have folks like Dalio writing pieces like this, we should at least consider that something isn't 100% right with the system.
If you don't read the full piece, at least consider his conclusion:
“Contrary to what populists of the left and populists of the right are saying, these unacceptable outcomes are not due to either a) evil rich people doing bad things to poor people or b) lazy poor people and bureaucratic inefficiencies, as much as they are due to how the capitalist system is now working.”
“While the pursuit of profit is usually an effective motivator and resource allocator for creating productivity and for providing those who are productive with buying power, it is now producing a self-reinforcing feedback loop that widens the income/wealth/opportunity gap to the point that capitalism and the American Dream are in jeopardy.”
I’ll repeat this because it is so important for both sides to understand:
These are unacceptable outcomes, and they are not because rich people are evil or poor people are lazy. They are structural elements of the system.
The counterargument to this, as the manifesto points out, is that at least there is equality of consumption as consumer goods get cheaper; it doesn’t matter how rich you are, everyone drinks the same Diet Coke, and everyone uses the same iPhone. That’s a genuinely interesting aspect of markets, actually. But I’d posit that there is much more to living a fulfilled flourishing life than using the same consumer items as Bezos.
Social mobility, the ability to access quality healthcare and education, the freedom to pursue passions without the looming shadow of financial ruin, the dignity that comes from meaningful work and community involvement, and the psychological well-being that arises from a sense of security and purpose — these are some of the building blocks of a fulfilled life that are increasingly out of reach for the economically disadvantaged.
To motivate this further: if you are not driven by the sheer inequity and unfairness of the information above, just think about how many more interesting things we’d have invented if people didn’t have to work two full-time jobs just to survive on a minimum wage that hasn’t risen since 2009, and could instead be doing creative fulfilling work.
To be clear, tech has an important role to play in the solution here. These big societal meta-problems are structural and pernicious. Contrary to what some people in government believe, public policy cannot solve these issues alone. New technology like AI and blockchain will help immensely (I will write about this in more detail in future). Solutions will have to be multidisciplinary, combining the talents of leading startup builders, policy-makers, and scientists. This is exciting and worth inspiring young founders to focus on. We need to stop incentivizing people to build incremental widgets and b2b SaaS tools, and start thinking about how to solve the above.
Economic issues aside, there is another important example that illustrates the problem with no-holds-barred progress-at-all-costs ideology.
Psychological Health
You’ve seen the statistics. Depression, anxiety, and suicide, all rising to never-before-seen levels. Unlike some critics, I do not think this is entirely due to social media, but we need to be honest with ourselves that technology has had a big role to play here.
This is a clear example of the problem with the maxim that defines the techno-optimist manifesto: “Technological progress is always good, and we need more”. Again, I mostly agree with this, but it is so obviously not 100% true, it discredits us when we say it.
There are clear cases of unintended consequences. Social media is a good example. By any measure, it is a tech success darling. Meta (fka Facebook) is roughly a trillion in market cap and has driven some sweet sweet value to shareholders. It is a generation-defining company. But it also has pretty clear causal links to a growing global mental health crisis.
Again, don’t take it from me. Sam Harris sums it up clearly:
"I think social media has been the technology that has deranged us ... We have effectively been enrolled in a psychological experiment to which no one gave consent ... It's just been terrible. I just think it's been bad for society in almost every respect."
Tristan Harris has also thought about this deeply (the Harrises have a monopoly on thoughtful critique in this field):
“This system (social media algorithms) is better at hijacking your instincts than you are at controlling them. You’d have to exert an enormous amount of energy to control whether these things are manipulating you all the time. And so we have to ask: How do we reform this attention economy and the mass hijacking of our mind?”
To fully break this down is beyond the scope of this essay. I personally have a complicated relationship with social media; it has brought me immeasurable joy through connections with friends, but it has definitely affected my mental health in subtle ways I find difficult to properly understand.
Why is this important? Because we are teaching the next generation of founders that all they have to worry about is building something that will get them rich, and that anything they do to make themselves money will have a positive impact on the world. This ideology fits neatly into the Silicon Valley narrative. It just has the one annoying characteristic of not being true.
The Bubble
Most of us who work in tech inhabit a bubble. It’s a very nice, comfortable bubble, where people are smart, driven, and passionate. We’re ‘changing the world’ and we’re stacking our paper. It’s pretty great.
Occasionally, we’ll peek outside of the bubble, and notice that people don’t like us very much. “Wtf?! We’re literally saving you ungrateful people, how could you dislike us?” we think. We are the engine of progress. They must just be jealous.
But whenever there is this kind of animosity, it's worth considering the reasons. One reason is that people perceive us to be detached from the real-world consequences of our technologies. When algorithms perpetuate systemic inequalities or when startups prioritize growth over ethical considerations, it leaves people skeptical of our intentions.
Another is the economic disparity: while we in the tech industry reap the rewards of high-paying jobs and transformative solutions, those outside this sphere may see their livelihoods disrupted or made obsolete by our innovations. Additionally, the communities directly impacted by our products—whether through mental health concerns or environmental effects—often feel that they don't have a say in the decisions we make.
By dismissing legitimate concerns, we're missing out on valuable perspectives that could actually make technology better and its impact more equitable.
Tech can (actually) save the world
But those who criticize tech also need to realize that this bubble is a crucible for human advancement. There is something very powerful and important about this industry. The ecosystem they decry has given rise to technologies that have saved lives, revolutionized industries, and broken down barriers to communication and knowledge.
I’m certain that tech is a large part of how we will solve big global issues like climate, global health, and global inequality.
I just hope that we can add nuance to the conversation and start to collaborate properly.
Final thoughts
Halfway through a recent trip to San Fransisco, I realized how much fun I was having. I love being around founders and investors who deeply understand technology. We share a context that allows us to instantly reach depth in discussion. It is fun and brings me joy.
But I was surprised by the points of view I heard when it came to questions of politics or societal change. All of the young entrepreneurs I spoke with talked about wanting to “change the world” or “have a positive impact”, but were largely unsure of what that meant. When discussions got more specific, their takes seemed to be mostly formed by an amalgamation of Joe Rogan podcasts and EA think pieces.
To repeat myself for the last time, it didn’t feel like a rounded, nuanced understanding of how the world works. I wouldn’t say I’m an expert, and I have plenty of reading to do, but it does feel like there’s something missing. Especially since these founders will likely be some of the most impactful people of our generation.
So to end, maybe I’ll offer my own reading list, just as Marc did. I’m not as well-read as him, and I love many of the authors he mentioned. Here are the ones I’d add, that I think folks in tech should read. Or just stay in touch with me, and I’ll summarize their thoughts in a nice, nuanced way in due time 🙂
Reading list:
Thomas Piketty
Kim Stanley Robinson
Noam Chomsky
David Graeber
Jaron Lanier
Yuval Noah Harari
Shoshana Zuboff
Tim O'Reilly
Niall Ferguson
Zeynep Tufekci
Note: this quick post was very US-centric; I will endeavor to explore these ideas in a more global context in the future.