The Gravitational Force of Tech Money

The main story of the post-techlash years has been too few people with too much capital

Neal Stephenson begins Seveneves, his 880-page space opus, with the spontaneous demolition of the moon. That’s the starting premise of the book: The moon breaks apart, and the tides change, and the surface of planet Earth is rendered uninhabitable in the space of just a few months. Stephenson’s book isn’t about the moon blowing up. That’s just the instigating event.

Because when you add or subtract gravitational force on that scale, shit goes sideways.

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I’ve been thinking recently about the parallels between gravity and money.

All objects with mass exert gravitational force on one another. You and I exert gravitational force. So does my chair and my laptop. But our mass is so small, the gravitational force so insignificant, that for all practical purposes we don’t have to consider it. Only very particular types of scientist or engineer, in very particular settings, need to adjust their calculations to account for the gravitational pull between everyday objects.

By contrast, the moon, the sun, and the planets have so much mass that their gravitational force is one of their main features. High tide and low tide here on Earth are caused by the gravitational pull of the moon, 238,900 miles away.

Differences of scale are differences in kind. Gravity becomes interesting and important once mass gets really big.

You and I have money. But it isn’t tidal-force money. There are meaningful gradations of money among normal human beings — the poverty line, food insecurity, a living wage, the cost of housing, student debt, retirement planning, etc. These are all vitally important, and/but they can all be grouped under a heading that we might term “normal-people shit.” Public policy and government funding, if well-administered, can have measurable, predictable impacts on normal-people-shit. That’s important, but a separate topic than what I’m aiming at with this essay. (Because differences of scale are differences in kind.)

Elon Musk was a double-digit billionaire at the start of 2020. In January 2020, his net worth was around $27 billion. That is absurd money. Fantastical money. It’s a number so large that I cannot imagine how one would possibly spend it.

(I can imagine spending, like, $50 million or so. Someone with $50 million would own multiple, fancy homes. They’d have a personal staff that gets their groceries and cooks their meals and cleans their house and manages their schedule. Their vacations would be ridiculously nice. But that’s the ceiling on my imagination. I can’t actually fathom what the next $50 million would be for.)

January 2020 was, crucially, the before-times. COVID was coming, and it looked bad, but (at least in the U.S.) it looked bad in much the same way that SARS had looked bad. We collectively lacked the catastrophic imagination to really grok how the social rhythm of our daily lives was about to be fractured. And, already, in January 2020, Elon Musk and his peers among Silicon Valley’s financial elite were absurdly wealthy. The sums of money they were accumulating were unreal. The next billion dollars is just a tally. It’s a means of keeping score.

What’s fascinating to me is that in 2020, as the global economy cratered and pandemic fractured everyone’s psyche in slightly unique ways, the billionaire-class — which is just a few thousand people — accrued exponentially more money. Musk himself ended 2020 as a triple-digit billionaire. That’s not normal-people money. It isn’t even normal(ish)-billionaire money. It is planetary-scale money — a mass of capital so large that we have to care about its industry-warping impact.

This, I think, is the simplest version of the Elon-buys-and-ruins-Twitter saga. The Elon Musk of 2019 could not just buy Twitter outright. The version of Elon Musk who has $27 billion in mostly-illiquid assets can do a lot of good or cause a lot of trouble. But he still faces at least a few constraints. The Elon Musk of 2022, flush with billions in cash after unloading some of his Tesla stock, could buy Twitter on a whim. His net worth was somewhere between $250-300 billion at that point. Twitter was his favorite toy. Sure, why not buy it? What’s the worst that can happen? He ends up with only $200-250 billion? The sheer scale of his fortune was exerting measurable gravitational force. Shit went sideways.

(Now that I think of it, I suppose I can imagine being a triple-digit billionaire. I would stage a hostile takeover and buy Fox News. Then I would pay Weird Al Yankovic an ungodly sum of money to turn it into UHF. It would be ridiculous and pointless and such a waste. But I would find it funny, and I would have too much money not to follow through on the bit.)

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What I’m working towards here — the reason why I’ve found myself ruminating on the tech billionaires and their astronomical sums of money — is that I’ve been working on a broader characterization of Silicon Valley in the post-techlash years. And, more than blockchain-mania or the false start of the metaverse or A.I./Clippy 2.0, it seems to me that the central theme of these past few years has been the astronomical concentration of capital among a handful of people.

We can date the techlash to approximately 2017-2021. (Nirit Weiss-Blatt has the dates nailed down more clearly than that, with data.) And its basic dynamics were as follows:

(1) (To quote Marc Andreessen,) software had eaten the world. Or, at least, the economy. Digital platforms had become major intermediaries for every facet of our lives.

(2) The trajectory of the future didn’t look great. Social media in the early ‘10s seemed like a democratizing, empowering force. (Remember the Arab Spring? Occupy Wall Street? The post-Obama halo?) Silicon Valley basked in those good vibes. After 2016, the vibes turned rotten. Social media looked like an engine of hate speech, disinformation, and authoritarianism. Big Tech had amassed great power, so it was apportioned great responsibility.

(3) But the impact of the techlash was limited. Tech journalism turned critical. Companies like Google, Amazon, and Facebook became less popular. But you wouldn’t notice it based on their growth or revenues. Those material figures — the ones that most directly matter — kept pointing up and to the right. So, as a practical matter, the techlash was just a correction. It was when “Big Tech” stopped being treated like it was special. Amazon and Facebook’s reputations became akin to Comcast or Bank of America’s — huge companies that people complain about but can’t really ever abandon.

The techlash only sort of ended during the pandemic. If you were a tech billionaire who was salty about all the mean things journalists were saying about you in 2019, you weren’t any less salty about it in 2021. But there were two major changes:

(1) Trump entered his, uh, post-Presidency. Biden ran on a platform of “things can be normal again.” Media coverage was no longer shaped by the daily rhythm of a President with main-Twitter-character syndrome. And his post-presidency began with the January 6th insurrection, which resulted in Facebook and Twitter banning Trump. The politics of platforms has revolved around the aftermath of those events ever since. Trust and Safety has been transformed from a worthy effort to improve the user experience and respond to criticism into a political lightning rod that conservatives decry and attempt to defund.

(2) All of the Big Tech companies skyrocketed in value. The global economy shut down in 2020, and the two places where capital flowed were big tech and real estate. The tech companies — and the tech billionaire-class in general — went from ridiculously rich to astronomically rich. (And, again, they did this in the midst of a global pandemic that psychically shattered just about everyone.)

I’ve come to believe that this second point is the one that matters most. Elon Musk and Bill Ackman and Peter Thiel (et al) became much-filthier-rich. They were already rich-beyond-normal-people levels. They were already rich enough that the mass of their money exerted enough gravitational force to matter. And then the scale of their money increased exponentially. The pandemic broke their brains while magnifying their wealth.

And shit went sideways.

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This reminds me of a story I wrote about in Bullet Points last in August:

I found myself thinking about Sam Bankman-Fried’s plan to buy the island nation of Nauru. […] what stands out to me is that he could have done it. If SBF had just kept his mouth shut and not pissed off CZ in November 2022, his ponzi scheme could easily have kept chugging along for another few months. What if he had managed to purchase a whole country before the bottom dropped out of his scheme? I imagine it would've posed some extradition problems, right? Like, instead of the U.S. asking the Bahamas to turn SBF over for trial, they might have been asking Nauru to hand over their self-annointed philosopher-king. And I don’t know how that works, because it probably isn’t the sort of problem that has come up very often. People — even extremely rich people — aren’t normally in a position to buy nations. The rules have never applied equally to rich and poor, but this is something else entirely.

SBF had astronomical money for awhile. Money so big to exert significant gravitational force. If he had followed through on buying a whole island nation, then… I dunno what happens, but there is certainly a whole extra layer of considerations that would apply to him and don’t apply to anyone else! The legal system is designed around the assumption of equality under the law. That assumption is never entirely true, of course. But the larger the wealth disparity, the more the legal system gets warped as a result. If the guy who defrauded investors is also kinda-sorta a nation-state, then you’re on some strange, untried legal terrain.

The same is glaringly true of Musk. But it also applies to the rest of the tech billionaire set. They possess such extraordinary money that it alters the trajectory of other institutions. The future of any given technology bends toward money. Astronomical masses of money are now concentrated among so few people that they can attend the same parties and participate in the same WhatsApp groups.

And these aren’t inherently better/smarter/more talented people than the rest of us. They certainly aren’t better, smarter, or more talented than themselves five years ago. Elon Musk with $270 billion isn’t ten times the businessman that Elon Musk with $27 billion was. He’s just has ten times the gravitational force. That’s enough for his every whim to create tidal impacts within every industry he touches. (Cue Matt Levine’s Elon Markets Hypothesis . But also cue Ronan Farrow’s reporting on the Department of Defense having to genuflect to Musk. His business holdings are so immense that he is less like a government contractor than like a nation-state himself.)

Ryan Mac and David Fahrenthold have a new NYT piece this week on Musk’s foundation. The TL;DR version is that a few years ago, Musk created one of the largest foundations in the world in order to take a tax write-off. He hasn’t hired any staff, fails to distribute the legally-required minimum amount of money, and the money that does get spent as all related to his existing companies. All of this is appalling and none of it is surprising. It’s basic, gross rich-people-shit, magnified a hundredfold because of the sheer quantities of money involved.

…It doesn’t help, of course, that these guys (and their almost always guys) all seem to be on Ketamine. And that they are all fueled by resentments, convinced that they are Masters of the Universe, committed to open war against anyone who doubts their righteous glory. That is all extraordinarily not-great.

But I’ve come to think its the sheer scale of the money that matters most. There’s nothing new about rich capitalists adopting conservative orthodoxy and supporting the Republican party. There’s nothing new about finance guys pulling shenanigans that leave a trail of misery in their wake. But the sheer amount of capital at their disposal exerts market-warping force. They can ruin industries that they didn’t even intend to ruin, just by being the only source of significant capital while being full of lousy ideas (*cough* allofjournalismrightnow *cough*).

We can only solve this through the tax system. We rigged the tax code to reward "job-creators.” We gave massive tax cuts to the billionaire class in the Bush era and the Trump era. Now we’re left with flawed individuals with astronomical bank accounts. And shit is going sideways.

Elon Musk with $2.7 billion isn’t the same sort of problem as Elon Musk with $270 billion. He’s the same guy, but we wouldn’t need to care about his antics.

The primary story of the post-techlash years hasn’t been driven by new technologies or old companies. The primary story has just been the accumulation of astronomical capital in too few hands, and the comical, catastrophic ineptitude that has followed.

No one ought to have so much money that we have to worry about its gravitational impact. When you accumulate such massive amounts of money, it creates problems that we are not societally equipped to solve.