Tech Companies are Saints Compared to Financial Companies.Everyday a fresh story appears on the blogs about the injustices of some tech company. These stories usually involve Facebook and privacy issues or Google and the Panda update. But how immoral and unethical are tech companies? I would argue that they are not very unethical at all compared with the financial industry.
Yesterday I finally got round to watching ‘Inside Job’, which won the Oscar for best documentary in 2010. The documentary talks in-depth about the financial crisis of 2009 and places the blame at the feet of certain investment banks. Charles Ferguson (the Director of Inside Job) does a great job of getting right inside the world of investment bankers, academic economists and politicians. I highly recommend this to anyone who fully wants to understand about the financial crisis and get their heads around those confusing terms like ‘subprime loans’ and ‘derivatives’.
How We Got Here
In part 1, titled ‘how we got here’, the movie is dedicated to the exploring the levels of criminality in the financial sector, from the low level drug abuse to the defrauding of millions of people. The levels of criminality in the financial sector are abnormal compared to other industries; Charles Ferguson while talking with Eliot Spitzer (former New York State Attorney General and Governor of New York) touches on something very interesting related to tech. The conversation goes like this:
Charles Ferguson: The financial service industry seems to have a level of criminality that is, you know, somewhat distinctive. When was the last time that Cisco of Intel or Google or Apple of IBM, you know –
Eliot Spitzer: I totally agree with you about high tech versus financial services. But high tech.
Charles Ferguson: So how come? What, what’s –
Eliot Spitzer: Well, high tech is a fundamentally creative business, where the value generation and the income derives from actually creating something new and different.
This is an interesting point and something worth discussing further. I think the reason why Charles Ferguson chose the tech industry is because companies like Google and Apple are the new market leaders and have the potential to lead us in the right direction. The illegal activity of tech companies has actually been quite low and certainly not on the organised and endemic levels like that in the financial sector.
It would seem that the greatest threat faced by consumers from tech companies, are those related to the gathering of private data to build profiles to sell to advertisers, insurance companies and other organisations that might need them. Ultimately the tech companies do not hold enough political power to stop legislation working against them. Not only do tech companies lack the political power but the will to want to harness it. The ultimate goal of tech companies is to be creative by designing new and different technologies.
It would be nice to move forward into a world where the old ‘evil’ bankers of the past took a back seat (or no seat at all) and let the creative tech guys move us forward. We don’t need the bankers in our lives, all they simply do is gamble with our money to make themselves richer. Tech is giving us something really tangible, improves lives and creates jobs. Another quote from the inside job:
Narrator: As manufacturing declined, other industries rose. The United States leads the world information technology, where high-paying jobs are easy to find. But those jobs require an education. And for average Americans, college is increasingly out of reach.
College is out of reach for young Americans due to the immoral behaviour by the banks, it is the tech companies that are offering the life line. It is kind of distressing to think that, as stated in the documentary, “For the first time in history, average Americans have less education and are less prosperous than their parents.”
Andrew Sheng, former chairman of the Hong Kong Securities and Futures Commission, towards the end of the documentary rather poetically says “Why should a financial engineer, be paid four to a hundred time more than a real engineer? A real engineer builds bridges [and software]; a financial engineer builds dreams. When those dreams turn out to be nightmares, other people pay for it”. High tech engineering in a sense has been able to build dream-like technologies. The Internet gives us access to as much information as we could possibly want, sixth sense technology developed by Pranav Mistry has thrilling potential, computer games have allowed us to live out fantasy scenarios and the list goes on.