The markets no longer mirror the underlying real economy but it reflects the mindset and the prevailing sentiments of the investors. So increasingly markets are seen as becoming detached from the economy or what’s happening inside that economy. Take for example, the market rallies during the COVID-19 pandemic.
A time when most businesses are having to quickly adapt and learn while some are simply falling apart, and in the effort to support the economy governments borrowing across the world are now at all time high, to the extent that it’s becoming unsustainably dangerous especially if the growth expectations fall short. But in all this, the markets somehow have found themselves more buoyant about the prospects.
Parts of the economy is undergoing, what can only be described as a permanent change, that will lead to the transformation of the larger economic landscape over time. And these changes are already underway, even if we are unable to map them out fully yet. Also, the society is changing, and with it the expectations of what the society wants from the economy as well as the larger businesses is also changing. So large companies especially the technology giants will be under severe scrutiny for some time. And as some would say, probably rightly so.
Going forward, business leaders and investors alike will have to start looking at a much larger canvas to them help navigate their way through the changing landscape. Technology companies that rely on a plethora complex persuasive tech tools to buy people’s attention so it can make more advertising revenue may continue to face strong backlash from the society and the government at large, probably right so. Therefore, to stay relevant these companies will need to quickly adapt to the changes that is coming.
In my view companies like Facebook, Google and Twitter among others could transform themselves into the next generation of fintech, HealthTECH and utility businesses. Moving away from the current model of relying heavily on persuasive technology to seek people’s attention and then monetising it through advertising revenue. While the current business model is quite profitable, it is clearly causing a lot of disruption in the society. So for the greater good of the company as well as the society, the leadership of these tech companies will need to quickly adapt to what’s coming or else they may struggle to stay relevant.
I won’t be surprised if governments across the world decide to start taxing the digital data collection of firms like Facebook, Google or Twitter etc, and also levy a tax on every transaction that involves the companies selling the mined data on individuals gathered through the persuasive tech tools to an advertising firm for a profit. As the governments struggle to generate additional income to pay for their unsustainable debt burden, the temptation will be greater than ever before.
Also there is a valid case for capturing the economic value created by the firms like the Facebook, Google, LinkedIn and Twitter among others in the overall economic output of a country and the world at large. For example, according to Deloitte estimates, in the year 2014 Facebook enabled $ 227 billion of economic impact and 4.5m jobs globally. A 2019 MIT study estimates that Facebook services are worth between $ 40-50 per month for US consumers. So there is clear economic value in the services provided by these tech companies, and therefore, there is a need to revisit how we calculate the real GDP of an economy.
The markets or the GDP numbers won’t be able to capture the true picture of an economy, but in the current design, somehow the economic well-being of a society is intrinsically linked to how the markets are performing, and where the GDP number is at. Most governments across the world have prioritised their economic interest because they are conceived that’s in the interest of the general well-being of the society.
So the economic interests of the leadership of a country is also what drives it’s geopolitical ambitions. And the governments have to deploy an entire machinery towards their struggle to fight for its economic and geopolitical interests. The ongoing tensions between the United States and China is a prime example of what can transpire if a country decides to exert or maintain its influence.
Over time every society goes through a transformation as nothing is permanent. And the governments use whatever tool at their disposal to govern a society. In my view, the government in Beijing has found ways to utilise internet and the social media to serve its goals and ambitions that it has for the society.
Not all societies are the same, and not all leaders have the same aspirations for their respective societies. A system of governance that works for one society may or may not works for others. So we can’t really export our own ways of thinking on others. Also, our own thinking can change over time. The self discipline and the sacrifices that the seniors citizens in the west had to make post Second World War was key to building a prosperous and free modern society of today. But the society of today in the west isn’t willing to make the same type of sacrifices even if it’s for the greater good.
Today people tend to have very little faith in the system, the governments, media or the society for that matter. Also the greater good of the society is increasingly becoming an unattractive idea. And the governments ability to win people’s confidence is in decline. The advent of social media gets blamed for the disruption caused to the society, but the fact remains, individuals sense of consciousness and responsibility towards themselves and the society at large has been in continuous decline for some time now before social media came on to the scene.
Governments can’t fix the society, also the ability of governments to govern a free society is getting eroded by the day. But people as individuals will have to make a choice, whether to continue with the status quo of decline, or find ways to make their society better. People in London, Paris, New York or Washington DC will have a different perspective of their societies and the world at large. And so will the people and leaders in Beijing. I can’t blame someone if they were to utilise my weaknesses to outdo me, yes I can, but I also know, it is my own weaknesses that undermined me. I am quite capable of undermining myself and also the society.
It is a naive thinking to expect that those who live in an open and free society won’t develop a liking for a society that contradicts the foundation of an open society. Also those who benefited from the free society, in terms of education and knowledge etc, could very well monetise their learning in a society that offers them higher monetary gain, even if it comprises the interests and principles of a free society. So it should not come as a surprise.
Also the idea that a leader of one country should have consolidated power and influence over setting the global agenda will always lead to conflicts. Because, it is unwise to expect that leader to deliver not just what’s in their interest of the country but also the world at large. The idea of super powers therefore, will lead to continuous conflicts. And the disruption in the status quo will be chaotic.
In my imagination, I do imagine a human society where a religion or a country for that matter isn’t competing for individuals attention and asking for an unquestionable allegiance. It is not that different to social media companies that are continuously competing for people’s engagement and attention, so it can be monetised through advertisers. It is people that are a product for a country, religion as well as social media firms. This is the oldest business model. Whether it’s a free democratic or an autocratic society, it is all based on monetising people, so therefore, people have always been a product.
A business, economy, religion or a nation state will always find itself struggle if it starts getting misaligned with people’s expectations and interest. So it is imperative that we create people centric ideas and system of governance, or else we will be the author of our own undoing.