Tuesday, April 8, 2014

Controlling the Market - Disruptive Technology at Risk

The Supreme Court handed down a monumental decision last week on the relationship between money and politics. The ruling in  McCutcheon v. Federal Election Commission removed the overall limit on contributions from the wealthiest donors to candidates and political parties while setting a precedent of ridiculously specific conditions that have to be met before declaring an action “corruption.”


This move comes three years after Citizens United which opened the floodgates for a torrent of dark money to enter into the political arena. If you will recall the Supreme Court’s decision in Citizens United “effectively freed corporations and unions to spend money" both on "electioneering communications" and to directly advocate for the election or defeat of candidates.


In a world where money is representative of “Free Speech” and corporate entities or “citizen associations” have the same free speech rights as flesh and blood citizens, we are moving towards an Oligarchical Plutocracy - a society ruled by and for the wealthy. The more money I have, the more speech I have. This effectively removes any concept of equality from the American system. While I have covered this in the past and the media is very interested in the implications of this move, I am fearful of what is on the horizon for our technology and innovation.


While the Supreme Court has recently turned away an opportunity to further chip away at the campaign finance laws it may only be a matter of time before more actions are taken to allow for more direct input on the political system by agencies such as unions, PACs and Corporations. The problem with allowing companies with that much control and influence in the political game is that it destroys the safeguards for public citizens. In the end, traditionally corporations have only one interest, benefiting the future of the company and the return to their shareholders - the bottom line.  

But why is this dangerous for future innovation? Let's indulge in a thought experiment. Imagine that you have invented something that is literally going to change the world as we know it. This invention will not only make you a ton of money and build a company, but it will start a new boom of an entire industry, make like easier and better for humanity and possibly even destroying another industry. This is what is known as disruptive technology.


Just like the refrigerator replaced the icebox and the car replaced the horse and buggy, technologies will arise that will outmode a previous technology and the industry surrounding it. Industries rise and fall, but in some instances, the government will step in to try and salvage industry or even support it through subsidies and incentive programs. Those who have control over industry will seek any way to maintain that control over that industry. This is just a historical fact.


We are still seeing business interests and corporate entities try to stifle innovation and competition today. Everything from gaming the way our patent system works to car dealership groups pressing Texas and New Jersey governments to ban sales of Tesla and taxicab groups in D.C. trying to push out Uber. Each of these businesses are using whatever systems they can to maintain their dominant role. For those familiar with the Sacramento area, back in 2006 energy conglomerate PG&E spent $9 Million on a campaign to make sure that the public utility SMUD couldn't expand their coverage to some areas of Yolo County. The effort was to keep their monopoly hold on the area as the only energy provider. It was completely legal.

These types of efforts almost cost the world FM Radio and AC Power among other great innovations. Some say it through stifling practices that we currently don't have better electric vehicle technology in the world. Even with equalizing tools for innovation like Kickstarter or the Maker Movement, there is plenty of room to worry. 

My concern is that, the more corporations become political players and able to throw huge money around to protect their interests the harder it will be for new technologies and innovations to really shake things up. This is something that even those on more of a conservative side of the argument should be worried about. It is a scenario that will itch at the back of my mind while I pay close attention to the future of decisions like these.

No comments:

Post a Comment