Tag Archives: Robert Reich

Opinion: London’s ‘amoral’ tech elite is driving inequality

Written for Wired Magazine and first published here.

London’s tech elite resides uncomfortably among some of the poorest neighbourhoods in the UK. Technology is inherently political, whether we are looking at privacy issues, convoluted tax arrangements or immigration exemptions, but many entrepreneurs on both sides of the Atlantic seem to operate in an amoral space, where optimisation, investment and exit strategies trump humility, equality and — according to campaigner and journalist Kirsty Styles — even right and wrong

If you walk down any street in Shoreditch today, you’ll be met with the fashions and accents of people from many corners of the globe, most of whom have found their way here to make their fortune in East London’s very own Tech Klondike.

Tech City, as the area has come to be known, bills itself as the fastest growing tech cluster in Europe, with its heart in the once-derelict East End. More than 1,300 startups are working within the tech triangle, based around the Old Street ‘Silicon’ Roundabout, with the number of digital firms across London estimated to have grown from 50,000 in 2009 to 88,000 in 2012. Tech City’s residents now include some of the world’s most recognisable, and richest, brands — including Google, Microsoft, Barclays and Amazon.

Sure, like many of the 100,000 or so prospectors who trekked across North America to strike gold more than a century ago, not everyone who tries their luck here will come away with anything more than an (albeit trendy) shirt on their back and a few stories. But the temptation of high-tech fame, the hype around the potential rewards and the chance to just give it a go are all-too appealing for the young from recession-hit nations across the world.

Ask most people who’ve lived in East London for more than a hipster’s minute and you’ll get to understand just how much the area has changed in recent years. ‘Murder Mile’ in the Clapton area of Hackney, for example, has all but forgotten its grizzly past — save the live-tweeted disruption of a restaurant’s opening night last month by the presence of a young stabbing victim, which culminated in an anti-gentrification protest by locals.

But if you head just a few streets back in Hackney’s Shoreditch, beyond the edges of the film set of Capitalism: The Movie, you’ll come across some of the poorest neighbourhoods in the UK, with very high levels of child poverty and youth unemployment. In some wards those classed as NEET — not in education, employment or training — but no-doubt ad-saturated digital natives, is close to 40 per cent.

The tech sector, meanwhile, can be found almost weekly in the city’s Evening Standard newspaper shaking its fist at the dearth of talent. And there certainly seems to be a skills gap, with some 45 per cent of Tech City businesses saying that finding talent is their biggest challenge, according to GfK. Yes. The majority of Tech City businesses say they have vacancies they can’t fill, but unable or unwilling to look close to their new home, they often find the answer lies in relaxing visa rules and paying out eye-watering salaries without any guarantee of new hires sticking around.

In Hackney, just as in San Francisco, rents are soaring and life is getting trickier for ordinary people. One only needs to look over the Atlantic to our Silicon neighbours to understand the consequences of the creation of such divided communities. The influx of tech workers has obviously not gone unnoticed in East London but the majority of tech settlers are simply co-existing with the area’s established communities, living side-by-side with little knowledge of each other’s history or purpose. Who knew that Hackney as we know it was only created in 1965, hence the existence of the now-tech-hijacked Shoreditch Town Hall.


In a recent Radio 4 documentary, Justin Webb visited Silicon Valley to hear calls for large technology firms to be better regulated. Although the tech industry here was founded out of a desire to escape politics and get away from bureaucracy, with a rhetoric of increasing equality, that hasn’t materialised. He asked whether it’s time for society to take more of an informed interest in what tech people are doing and what they’re earning.

“It’s a vicious cycle in which the wealthy get much wealthier and because their political influence is growing they can essentially rig the rules of the game,” explained Robert Reich, formerly Bill Clinton’s labour secretary. “High tech CEOs are no different from other CEOs and not that much different from Wall Street except for the fact that high-technology is very popular… everybody loves these gadgets.” Whether investing in military robots, hoovering up rival services as quickly as they can be built or obliterating entire industries with their disruptive ways, there’s certainly a lot to look at.

Even California’s veteran state governor Jerry Brown, whose budgets have benefited from playing host to the world’s most successful tech cluster, believes tech people need to be reined in. “America and Europe together should be working against growing inequality — doing everything sensible to reverse it — because from 40 years ago when the top one percent in California took 12 percent of wealth, now the top one per cent is getting 21 or 22 percent. There is a pressure toward rewarding those at the top disproportionately and out of any kind of relation to their contribution. We are facing a global challenge here.” Far from operating outside of the elite, it appears tech has become the new establishment.

The most gauche among Silicon Valley’s big hitters are now calling for the state of California to be divided into six smaller ones. The call, led by third-generation VC Tim Draper, comes under the guise of ensuring freedom from far-flung bureaucrats in Sacramento, but the proposed change neatly separates the rich in the Valley from the poor outside, taking high-tech tax dollars with it. Questions too, albeit very tentatively, are starting to be asked about whether London could separate from the rest of the UK. It isn’t too great a leap to think that Tech City — which exists almost in a no man’s land spilling into four different boroughs — might make a play for its own extra-legislative status.


After the almost unbelievable Sopa win for internet activists in 2012, which was sadly followed by the death of one of its leading campaigners Aaron Swartz, it looked like the digital demos was finally awakening. The tech community has the ear of government, a lot cash and the skills to truly change the lives of people across the world. And while some do, like those building open software, along with proponents of the clean web and those trying to address human rights abuses in device manufacturing, the majority do not. US psychologist Paul Piff calls the growing detachment of the super-rich, simply, the “asshole effect”.

But some senior figures are now accepting the role they’ve played in creating an increasingly cartel-like and unequal system and are starting to discuss alternatives. Former senior intelligence official for the CIA Robert Steele recently launched The Open Source Manifesto for Everything, where he argues that we must reject: “concentrated illicitly aggregated and largely phantom wealth in favour of community wealth defined by community knowledge, community sharing of information, and community definition of truth derived in transparency and authenticity, the latter being the ultimate arbiter of shared wealth.

The very ubiquity of new web technologies, argues Channel 4’s culture and digital editor Paul Mason when analysing the OECD’s gloomy predictions for the world economy by 2060, means the status quo cannot continue. “Populations armed with smartphones, and an increased sense of their human rights, will not accept a future of high inequality and low growth,” he says. In a recent open memo to his “fellow zillionaires” entrepreneur Nick Hanauer said inequality must be addressed by those who have most benefited from it. “Or we could sit back, do nothing, enjoy our yachts. And wait for the pitchforks.”

As well as addressing issues of inequality, welcoming people from very different backgrounds into the tech community might actually offer companies the opportunity to explore truly innovative and life-changing ideas. Would FlatClub, a short-term leasing startup created in Tech City where travellers are verified based on having studied at an elite university, have so easily come into existence if more tech workers had skipped higher education? Could similar technology have instead been applied to transform the capital’s housing waiting list, which had some 344,294 people looking for permanent homes last year, had the development team had more experience of real precarity? Would Hackney have played host to some of the worst scenes of rioting back in 2011 if everyone in the borough felt they had an equal stake in its future?

Tech is inherently political, from privacy issues to wearables, to unconvincing tax arrangements and special immigration exemptions, but many entrepreneurs on both sides of the Atlantic seem to operate in an amoral space, where optimisation, investment and exit strategies trump humility, equality and frankly, even, right and wrong.

Steele, Mason and Hanauer all agree that the public will no longer stand for global inequality — something that is now being perpetuated by our new tech elite. So the question needs to be asked of these amoral tech bastards: whose side will you be on when the revolution comes?