I’m about to say some stuff that’s gonna get me in trouble. I’m a private citizen of the US who’s not even employed by anyone, and there will still be trouble.
Incidentally, I’ve decided to start my own talk show. I am so bursting full of rants that I’ll never be able to write them all. It’s going to be a tech-oriented show, since I’ve been in the Big Tech industry for 30 years, and I’ve already got a bunch of high-falutin’ guests lined up. I’m busy getting my game Wyvern launched to Steam (very very soon), and who knows whether it’ll take off, but after that, it’s all about the talk show. I will be ranting like a madman, probably a couple times a week. I hope you’ll come visit.
And now, on to today’s show!
Hurricane China is Coming
I suggest you find the most epic music you know, and play it while you read this.
Here in the US, everyone is largely ignoring China, and they are doing so at their peril. China is the biggest and most organized economic, political, and soon, military force in the world. China does things very, very differently from the US and Europe, and ideologically they are also very different. So it’s very easy to be dismissive about them. It’s even easier to hate on China because you don’t like their policies.
I can tell you right now: That’s dumb. It’s like hating a hurricane. It’s like hating tornadoes.
There’s absolutely ZERO point in hating a hurricane. It gets you nowhere. What you have to do is prepare for a hurricane. That’s literally all you can do. You can’t stop it from coming. You can’t pretend it away. You need to prepare.
China has been poor for a long, long time. For generations. And now they are rich beyond your wildest imagination. Their big cities make every single city in the US look like a dirty smelly armpit.
This recent success has produced a level of Nationalism in China that rivals that of the craziest flag-waving “patriotic” Americans. Chinese people are proud of what they have accomplished, and badmouthing them will do nothing but piss them off, and it will not help you in the slightest.
Instead, you need to try to understand them. I confess my understanding is nowhere near what it would be if I’d managed to live there for a while. But having worked closely for 30 years with mainland Chinese people (and also from HK, Singapore and other countries with lots of Chinese nationals), and having been married to a Chinese woman from Beijing for 5 years, and having many many Chinese engineer friends in the industry — and even though I, too, don’t care for some of their policies — at least I can spot a fucking hurricane when I see one.
To help you prepare, so you’re not totally blindsided in the very near future, I’m going to try to help you understand China little better. And then I’m going to make an argument that our US legislators, who of course always have their heads up their collective asses, are even more clueless about the global Big Tech landscape, and they’re pointing a gun directly at the only assets we have in this worldwide competition that’s unfolding before our eyes. And that’s Not Good. Read on!
China is playing a different game
I say this completely without judging: China’s moral compass is vastly different from the West’s. That doesn’t mean they’re immoral, or amoral. Their society and world-view is just different, in deeply fundamental ways.
To give one pertinent example, China is absolutely 100% OK with “stealing” other peoples’ intellectual property. But to them, it’s not stealing — or at least it’s not viewed there in the same light that we view theft. We view cheating, and IP theft, as a form of “cheating at life”, and being grossly unfair to others, and we have sayings like “cheaters never prosper”, which we all know is bullshit but we say it anyway because we want to discourage cheating. Western society looks down on cheaters, and we think of them (at least a little bit) as bad people because they are cheating.
But to the Chinese, and as you’ll see, also to most of the rest of the world, life is literally all a big game. If they succeed in hacking you and getting all your supposedly secure data, then They got you! Ha! You should have done a better job of protecting your damn data! It’s a victory to be celebrated, and although they may do it in private to maintain face, they celebrate just like you would if your team won a football game. Morality doesn’t even begin to factor into it for them.
I had a Venezuelan-Spanish friend explain this world view to me a few years back, in the context of “cheating” in my online multiplayer video game. I was frustrated that players who I knew personally, people I trusted, were using unintended game exploits to give their characters huge and (in my mind, and most players’ minds) unacceptable advantages, rather than reporting the exploits to me and getting a reward.
This friend, who spent his youth in Venezuela and moved with his family to Spain some decades back, explained to me why his younger brother was cheating. Cheating me, no less, even though he knew me, at least online. I was hurt! The big brother explained to me that in Spain (and also in Venezuela), you are raised essentially from birth with the philosophy that anything you can beg, borrow or steal from The Man is fair game. The world is fundamentally rigged against you, and you need to get what you can, however you can. If you need to break some rules, just don’t get caught.
Lest you think that some random Spanish gamer doesn’t speak for a broad enough audience, I’ll share that my wife Linh, who is Vietnamese, has told me many times that largely the same mentality exists in Vietnam. People in Vietnam are raised by their parents, by their friends, and by society at large, to get what you can from “The Man”.
By “The Man”, I’m not talking about the US government. The US has had extremely little influence or presence in Vietnam after they kicked our asses out in 1975. If you’re reading this and you’re thinking “SEEEEE? THE US IS BAD”, then you’re taking an overly parochial view of things. You’re ignoring the fact that most of the world honestly doesn’t give much of a shit about the US, and moreover our international reputation, such as it was, has completely tanked in the past year. More on this later, too. So take your US-centric hat off for a while, and let’s look at the rest of the world.
In Vietnam, “The Man” is Vietnamese. In Spain, “The Man” is Spanish. It’s whatever conglomerate of governmental and corporate overlords people happen to be subservient to locally. Although to be fair, “The Man” is always composed mostly of men, so at least we all have the Patriarchy as a common enemy, regardless of our nationality. But that’s a story for another rant. Come watch my show! I’ll have more to say about “The Man”; it’s a rich topic.
The point for now is that every country has their own version of sticking it to The Man. It’s absolutely OK to cheat The Man, because he’s cheating you!
It’s also important to understand that sometimes, through propaganda, The Man can become a foreign enemy. North Korea is infamous for directing much of the public anger over their poverty towards the US, rather than towards the NK regime. An uncomfortable truth is that this has also happened to an extent in China, and the more you badmouth them, the worse you are making it. You’re just making The Man that much more of a lucrative target, but this time, The Man is YOU.
So I’m not singling out China when I say they’re playing a different game. The core value system of the West, which is a combination of some shitty vestige of colonialist Jane-Austen-character “This is how a gentleman behaves” fairy-tale bullshit and equally shitty Puritanical religious moralizing, is predicated on “competing fairly”. By the West, I’m basically oversimplifying it to be the US, Canada, Australia, and Europe. Oh, and the “United” Kingdom. Whatever. You know what I mean by The West.
But pretty much everyone else, China included, has a completely different world view, which is that you compete to win. There is no fairness except what others force upon you.
And you know what? The system *is* rigged against you. More evidence of this appears every single fucking day. So who’s to say the traditional Western moral compass regarding “fair play” is the right one here?
China is proof that cheaters can prosper. I am making this claim, once again, 100% without judgement. I have made my peace with it, and now I just need to explain it to YOU, so that you can also re-think your life planning for the next 20–30 years.
Why am I harping on this uncomfortable subject? Well, it’s because China has “stolen” pretty much all the useful Intellectual Property and all the useful data from the US. And that has deep-seated, deep-rooted, super fucking important ramifications for US foreign and domestic policy. Ramifications which are largely being ignored because the rabbit hole goes very very deep, and it’s hard to untangle it all.
I’m going to remind you repeatedly that there is no point in hating a hurricane. But you do need to prepare.
China knows everything we know, and many things we do not
I’m going to tell you some colorful stories to help weave a narrative in your mind. That’s why I rant, and it’s why my rants are so long. I don’t want this to be a fire-and-forget for you. When you finish reading this rant (I daren’t call it an essay), I want it to stick in your mind, even if you don’t agree with all of it.
Back in 2005–2006-ish, after I’d left Amazon to join Google, Google was trying to enter China, to provide Chinese citizens with high-quality Search. It was as unpopular a move then as it is today, although social media was brand-new at the time, so it didn’t reverberate in the news the way it does now. But Google employees were angry enough about it that it came up at TGIF.
Sergey Brin explained to us that Google was a democratizing force, because the free flow of information led to more democratic outcomes. That’s why Google’s mission was “Organize the world’s information and make it available to everyone’. Governments hate it when people have access to information. Hell, corporations hate it too. Almost everyone on earth is a bad actor in some way or at some point in their life, and groups of people can be bad actors at a very large scale, and it becomes a real embarrassment if it gets out.
And here Google was trying to let all the cats out of all the bags. Remember how mad the Indian government was when Google Earth showed images of their super-secret military bases? And Google was like, yo, we didn’t make this data, we bought this data; it’s all 100% public. And then India was pissed that Google had made it so accessible, but they pretty much dropped it because what the fuck could they do about it?
Actually, they weren’t very clever, or maybe they are too virtuous for their own good. What they could have done, and in fact what other countries have done, is throw the local Google employees in prison and torture them until Google backs down. This happened in Thailand in 2006-ish as well. Eric Schmidt came up to visit us in the Kirkland office, and shared that some Thai Google employees were in prison in Thailand because some random non-Google Thai citizen had uploaded a YouTube video making fun of the King of Thailand. He had to fly out there to negotiate with their government to get the Google employees out of jail. (Edit, the frigging day after I published this post, the Indian government threatened to throw Facebook and Twitter employees in jail over the farmer protest issue.) You can’t make this shit up!
I’ve told this story many times, and inevitably people get really confused about it. It’s a pretty fucking cut-and-dried story, but for some reason it’s so alien to people that they refuse to believe that it happened, let alone that it happens literally all the time, even today. Or they go into full denial and say they didn’t read about it in the news, so it must not have happened.
I’ll talk about it more on my show, because it’s way too long even for this giant rant.
Anyway, the point here is that Google and every other globalized Big Tech company is perpetually embroiled in local politics around the world. They have to play by regional and local rules and laws, or their employees go to prison.
I can hear redditors screaming distantly, “Why don’t they grow a spine and STOP doing business there?”
But I can tell you — although yes, sure, of course they’re doing it because they can make money in other countries; money is always the driving factor — I can tell you that Google and many other Big Tech companies also pride themselves in having a social mission.
Google’s social mission, in trying to enter China in 2007-ish if I recall, according to Sergey, was to try to bring some amount of democracy to China. And I think they really believed they were going to be doing some good for the world, even if short-term it meant that they were going to have to set up a Great Firewall and censor a bunch of stuff. And of course make a bunch more money, but you can’t really blame any company for that, especially if they honestly think they are doing good in the world.
In hindsight, Democracy has blundered badly in the past year, with the “World’s Greatest Democracy” tearing itself apart from the inside. Fully a third of the US population believes batshit conspiracy theories, with another third of the population screaming to burn it all down and start over, and if this keeps up, as it seems it likely will, the US will be in a Civil War within a generation or two. So maybe Google’s social mission wasn’t the obvious no-brainer they thought it was. Democracy’s going to have to fucking fix itself, and right fast, or it’s not going to be the model for future generations.
But why did Google leave China, and all those lucrative dollars and that juicy social mission? They left in a huge hurry, not very long afterward — 2010, looks like — when Google pulled out of China overnight. They did a ton of work to time the actual technical exodus with the press release, so they could flip the switch and move all their servers to Hong Kong (hindsight: oops again!) at the exact instant that Reuters would pick up the story.
In an unprecedentedly honest press release, Google told the truth.
What really happened is that China deep-hacked Google, and it pissed Google off when they finally discovered it, many months later. This wasn’t some small intrusion or data breach. It was a systemic, coordinated, widespread, very deep hack, which among other things, gave China all of Google’s source code. It was very similar in scope and ambition to the Solar Winds hack recently out of Russia. It forced Google to completely rethink their security, which at the time was an Igloo model (hard on the outside, soft on the inside, a Gary Larson reference I think), and they had to migrate to where internal access was also limited, which took years.
I’ll share with you, confidentially wink wink, that most companies way overvalue their source code. It’s actually their engineers who are their biggest asset, because the engineers can reproduce the source code if it’s lost (quite quickly at that), whereas the source code can’t do fuck-all on its own. Moreover, most source code bases are so ugly that you couldn’t give them away. But Google had what they now call “HIP” (High-value Intellectual Property) scattered through their source code, which are the tuning parameters and constants for various algorithms and AI models which are the true Secret Sauce to Google’s Search and Ads dominance.
And China got that Secret Sauce from the hack.
I’ve shared this long-ass story with you not to show that there was some major one-off historical event there, but rather to prep you for the fact that this is going on every day, day in and day out, in every single company, organization, and yes, government, around the world. We are being hacked constantly, and everything is being stolen all the time. We’re being hacked by China, by Russia, by North Korea, and probably by our own allies, and the US is doing it too, although we absolutely suck at it, according to my friend who literally worked for the NSA.
I was for a brief time in charge of User Data at Grab, and during that tenure I learned the dark underbelly of Data Governance, which is that it is not working. While I was at Grab there was an article about how the world discovered that China had injected a hardware vulnerability into the supply chain for the entire world’s computers, and everyone was like, oh gosh, that sounds bad, and then the story just died, because YOU didn’t understand how serious it was. You, the general public, and by extension, our legislators.
I’m so fucking sick of talking to journalists who are cold-calling me to politely ask if I’d mind shitting on my ex-employer Amazon because that’s the popular thing to do these days, and I ask if they understand how this would open doors for China, and they’re like, China who? The entire US, from the government to the media to the general public, acts like nobody else in the world exists. This ostrich mentality is going to kill us, or more precisely, it’s going to let us kill ourselves. But I’ll get to my punchline in a bit.
Story after story, hack after hack. Everything is getting stolen. I remember a huge debate at Grab where data engineers pointed at Salesforce and said, those guys are doing it right. They’re using technology XYZ and they’ve never had a data breach. And literally 2 months later, Salesforce had their first major data breach. What about big companies like Microsoft? Breached! A breach for you, and a breach for YOU, and everybody gets a breach! It’s like Tim Burton directed an episode of Oprah, complete with a soundtrack by Danny Elfman.
Data and IP are just not secure on any arbitrary time interval, and apparently nobody knows how to fucking fix it.
How Cheaters Prosper
So here’s the thing: When you cheat on a test in high school, you’re really cheating yourself, because you’re not actually learning the material. You aren’t really getting ahead in life, unless it turns out you never needed to know that stuff, and how are you going to know that if you don’t learn it first? Spoiler Alert: You won’t know. All you’ve done is hurt yourself invisibly, and later in life you’ll wonder why your life sucks.
But China’s “cheating” is different. It is not really dishonest to them, for some reasons I’ve already explained, but also for another very important reason: China is actually making good use of that stolen IP for their own citizens. China’s got solid Search now, and amazing global payment/finance systems, and they are on their way to having an electric-car offering that is as good as Tesla’s, because they would have stolen it from Tesla too except Elon just gave it away like a madman, and so on, across the entire board, industry-wide. They have their own 5G and their own handsets and their own e-commerce and ride hailing and social networking and entertainment and literally every other industry on earth. And their versions are all really good. In many ways they are already way better than the US versions, and where they’re not, they are catching up frighteningly fast. It’s easy to catch up when you start the race with everyone’s secret sauce!
In fact, as far as I can tell, China seems to be building a bona-fide Utopia. Here in Seattle we’ve spent years and YEARS trying to get a shitty monorail built, and it’s far from done, while in China they have fucking bullet trains that go 250mph. China is spending a shit-ton on infrastructure, and not just in China. Here in the US we can’t get our fucking potholes repaired, and our bridges are rotted and rickety, and our buildings are crumbling, and I swear it looks apocalyptically bad when you bring visitors here from Asia.
I played chauffeur for a day with Grab’s CEO, Anthony Tan, who’s arguably the greatest guy on earth and we had all sorts of memorable adventures like almost dying in a 20-car pileup on the I-5. And I’d spent plenty of time in his stomping grounds in downtown Singapore by the Bay, and I was excited to bring him to our little Grab office in downtown Bellevue to visit the US Grabbers. And we got out of the car, and he stared at this ugly brown building next to the office in disbelief, and asked, “Is that a church?”
And I was deeply embarrassed, because we were standing four kilometers from Bill Gates’ and Jeff Bezos’ houses. We were standing at Ground Zero for the richest fucking people on Earth, and it was a goddamn dumpster fire. I was so relieved that they had recently finally torn down the abandoned Yuen Lui studio in the same parking lot, a Haunted Mansion that had remained there in downtown Bellevue since the owner was murdered in 1992. Fuck!
Yes, I know that if you go to China’s big cities you can find your share of slums and so on. But China just announced that they have eradicated extreme poverty. Yes, there is probably some extreme poverty left, and it’s no doubt more nuanced, but the fact that they are even trying to eliminate it puts them waaaaay ahead of the US, where kids have fucking bake sales to pay for their brain surgery.
China is building infrastructure all over the world, and their major cities are astonishing enough to be the backdrops for Bond movies; Singapore, amazing as it is, is often called “Little Shanghai”, because it is a goddamn runt in comparison. It’s fucking cool to be living in China right now. Does that sting? It should sting, a little.
In fact a lot of you just had aneurysms over that statement. China is Bad, is the refrain you hear over and over, because look what they are doing to these people and those people and those other people, and so on.
Look at all the damage that hurricane is doing!
I’m telling you, and I’ll keep telling you, ranting against the hurricane will not stop it. China’s world dominance is inevitable, and the US has completely fucking lost itself all in the space of one Presidential administration, so nothing on this Earth is going to stop China at this point. And you need to stop thinking of them as Evil, and you need to stop right fucking now, because forces of Nature are not Evil. They are just forces. 1.3 billion people is a Force of Nature, one that we can’t even begin to fully comprehend, let alone compare with.
All you can do is prepare. We can’t compare with them, and it’s sort of foolish to do so, but we can at least try to compete with them.
How do we prepare for the hurricane?
The world is changing irrevocably, and it’s specifically because of the Rise of Technology. Technology has enabled things that were never possible before, or more precisely, it has accelerated things that have always been happening, to a scale that is unprecedented.
I strongly recommend you find a way to read Sam Lessin’s Clubhouse and the Future of Cult-Driven Social Platforms, which is hands-down the most amazing essay I’ve read in years. And boy did it ruffle some feathers, on an unprecedented feather-ruffling scale! In fact it’s the best essay I’ve read since Rana Dasgupta’s brilliant and highly relevant The demise of the nation-state. Put it together, and we’re all headed towards being vassal states of the Empire of China for the next three hundred years.
And honestly I’m not sure anymore if that’s a bad thing. China tries to be a benevolent dictatorship, and a true benevolent dictatorship is really what everyone wants, because democracy is super messy. But China’s top-down model sometimes fails spectacularly, e.g. when they silenced the people shouting about the pandemic in the early months, and that’s precisely when China really needs a feedback loop of some sort. They’re missing the kind of data-driven feedback loop that AI models need in order to optimize themselves, because they don’t want anyone speaking out. But that’s exactly what they need, perhaps in some controlled manner, in order to avoid missteps like their early handling of the pandemic. I hope that China’s brilliant data scientists, which I’ll mention more in a bit, will eventually be able to explain this to their government in a way that induces change, just like I hope my little rants might help the US government to change.
This a complicated and nuanced issue, and there’s a lot more to be said (and learned) about it, but I hope I’ve at least managed to convince you that even if you are anti-China, you at least need to stop pretending they don’t exist, or that they aren’t going to outpace the US in the very near future.
The Punch Line, Part 1
China is on track to outpace the US in every conceivable way, and do so in the very near future. And it really comes down to one major difference: Focus on Education. The West has been drifting towards anti-intellectualism for generations, and the situation has taken a severe downturn in recent decades, with the cost of higher education spiraling out of control (controlled by a few billionaires and, sadly, the US military), but also with the desire to be educated disappearing as well.
The Chinese took everything from the West, public or private, and used it to springboard all their systems and institutions. They are leapfrogging everyone. Tsinghua University is probably the finest Computer Science school on the planet now. China caught up with the rest of the world technologically in the space of a few years, and then they started rocketing ahead, quite literally.
Did they cheat? Who cares! It doesn’t fucking matter at this point. They are cranking out tens of thousands, hundreds of thousands of engineers of all shapes and sizes. Huawei, whom one journalist I spoke with had never even fucking heard of, delivers most of the world’s 5G infrastructure and recently passed Samsung as the #2 handset manufacturer. Huawei has HarmonyOS, a viable and powerful competitor to Android and iOS. This will become important very shortly as I finish up my rant in the next hundred pages or so.
Tencent, Baidu, Alibaba, Ping An, the list goes on and ON and ON, a parade of massive, global, powerful companies who are right here in your backyard. China isn’t just coming; they’re already here. Does your kid play Fortnite? That’s Epic Games, of which Tencent has a 40% holding. China has deep, deep pockets, and they have deep, deep business ties with just about every company that you hold dear, plus all the ones you don’t, for good measure. Including our media.
Chinese engineers are really, really good. Their data scientists are really, really good. There is effectively no difference in quality these days between Chinese engineering teams and US-based engineering teams. Some promising countries (India, Vietnam, others) are starting to play catch-up with the US, but China has it nailed.
Meanwhile, back at the ranch in the US, fully one-third of our population is actively fighting against making college tuition cheaper. It’s a deep-seated anti-intellectual bent that you’ll find throughout the West. “My kids aren’t gonna go to colege[sic] and get all uppity and think they’re better than me and turn into libtards” is such a common refrain that it’s not even a joke anymore; it’s part of the fabric of our culture and our society.
My good buddy from Australia, a brilliant computer scientist and software engineer, told me that something similar happened to him when he went into his Ph.D. program. His old childhood friends all turned on him. They were offended that he was going to school, and they asked him point-blank, “Who do you think you are?” This problem isn’t unique to the US, but it’s sure as hell unique to the West. It’s like we want to lose!
I wish, I so wish I could find this article, but I read a few years back that the introduction of the State University program in the 1850s in the US was the beginning of their economic hegemony that lasted a century and a half. You could see the graphs taking off, accelerating ahead of Europe and the rest of the world, as educated Americans began building the industries that carried the US as the world tech leaders until, well, it all went to shit fairly recently.
So here you go, here’s the first half of my thesis today: Our ability to compete on the World Stage in the coming years and generations depends ENTIRELY on whether we can make higher education widely and cheaply available to all Americans.
You know the most famous stereotype about Asian parents, right? What is it? You know goddamn well what it is: You will get straight A’s or you have failed.
Where is that mentality in the US? It’s gone in roughly a third to half the population, completely vanished, and in the rest of the population, they want it but they can’t get access to it because, you guessed it, the fucking system is rigged against them.
So we have our “The Man” too. And overthrowing The Man is absolutely going to have to happen in order for us to not sink into UK levels of shitty mediocrity in the coming 20–30 years.
This subject just happens to come up at Bill Gates’ house every year. He’s due again pretty soon. There is a CEO Summit at Bill’s pad once a year in Spring, where 150+ of the top CEOs from around the world (yes, including Jeff Bezos) get together to discuss, well, Tech Billionaire Stuff.
How do I know this? Because Anthony Tan, my CEO and great good friend at Grab, has been invited there for the past 3 or 4 years, and they even found a way to get Hooi-Ling Tan (Grab’s co-founder, also a truly unique and amazing person) invited even though it’s supposed to be one CEO per company. And AT and HLT told us all about it.
Guess what the hot topic for tech billionaires is? Bear in mind that Tech Billionaires are generally a different breed from Regular Evil Fuckhead Billionaires, or whatever the technical term is for non-tech billionaires. Tech billionaires tend to be much more left-leaning, and they actually care about poverty, and eliminating it. Not true for all, but it’s definitely more prevalent than in non-Tech.
In any case, the Hot Topic at Bill’s House, or so AT told us at a corporate all-hands, so I assume this is quasi-public information, is that they are all going to be literally fucking crucified if they don’t figure out how to eliminate the rising disparity between Rich and Poor around the world.
You can see how this subject might be of interest to them.
AT told us that they’ve had their eyes on the Yellow Vests movement in France, a country known for its rather radical actions when the rich/poor disparity gets too great. And they’re watching similar movements unfold around the world. Because the gap is increasing, and the middle class is disappearing — except in China, where it’s growing! — as the rich get richer and the poor get poorer.
If this gap increase is allowed to continue unchecked, then there will be revolutions, and physical executions, and everything that comes attendant with actual revolutions in history. It is manifesting today as extremism. Anthony told us that one of the topics of conversation at Ol’ Bill’s house was the bombings that had just occurred in Surabaya, where religious extremists had strapped bombs to six-year-olds and blown up churches, police stations, etc. I had been following that story closely because I have a friend who lives in Surabaya, and she was relaying the chaos to me as it unfolded.
AT told us, and Bill’s summit concluded, that extremism happens because of poverty. It’s that simple. If the government, if the market, if life can’t put a bowl of rice on the table so you can feed your family, then extremism will slither in and offer a nice big bowl of rice for everyone.
The only way to eliminate extremism is to eliminate poverty. And yet, poverty is increasing worldwide. The Man is crushing the world everywhere… except maybe in China, which is both astonishing and, well, something that maybe, just maybe, we can learn from, as distasteful as that might seem to many of you.
And how do you eliminate poverty? With education! Education leads to jobs, jobs lead to innovation, innovation leads to progress, and the world accelerates towards the Utopia that we all want and we all need — and I say with zero bitterness, only amazement — which only China seems able to achieve at this point.
I don’t give one single shit what your political leanings are, because for this topic, they don’t matter at all. If you don’t get on board with educating Americans, IMMEDIATELY, and as cheaply as humanly possible, then you have given up on any hope that we might have of being a world leader in coming generations.
The Punch Line, Part 2
This is going to take a turn you probably didn’t expect.
Journalists keep reaching out to me. I’m talking about folks from the Wall Street Journal, from Vox, from MSNBC, from CNN. They all want sound bites from me, because I am one of the best-known early Amazon employees, primarily because I run my fucking mouth all the time. It’s really no other reason than that.
What do they want to hear? I’ll tell you: They want me to say that Amazon was anti-competitive. They want me to go on record saying they illegally crushed their competition, and that I was privy to it back in the early days.
And I’m not gonna play ball. Not, as you might suspect, because I’m trying to protect my stock, since hey-o, I sold it all when it was like $20/share, which at the time seemed like a real bargain. Yikes!
I’m not playing ball because Amazon never did any of that shit. It was strictly a no-no, for my entire tenure at Amazon. I have no fucking idea whether it happened after I left in 2005, but from 1998–2005, while I was there, Amazon was as pro-competition as you could possibly imagine.
This is in part because Jeff Bezos and his entire D.E. Shaw hedge-fund entourage that came with him to Amazon all know antitrust law better than the fucking regulators do. Jeff was hell-bent on being the biggest and greatest company on Earth, and he sure shit all over his employees and workers (except his inner circle, of course, which I was a member of briefly before I fled out of a confusing combination of cowardice and distaste — watch my show!) on his way there. But he was absolutely not going to break any antitrust laws.
We were all educated by Jeff, again and again, about how to think about our business and our competitors. Not just how to talk about them, but how to think about them. Competition is good. Competition makes us stronger. Competition makes us more creative. Lack of competition brings out regulators who honestly would rather be fucking golfing. We need competition. Our competitors can make money along with us. Everyone will be better off with competition. And so on. A litany. A ritual. A cult. But it was a cult of embracing and empowering our competition, except for Walmart, because Fuck Walmart. Every cult has to have someone to hate!
I know what anticompetitive behavior looks like. Microsoft did it rampantly and blatantly all through the 1990s, and I was on the eating end of that shit sandwich, working for and with brilliant, promising companies that Bill Gates relentlessly put out of business by leveraging his OEM channels and out-negotiating us with his shitty products and army of salespeople.
Bill was no fucking saint, I’ll tell you that. He is a Rockefeller. He basically stole all his money, and yes, he’s acting like a saint now, and doing charity and such, but make no mistake, it was blood money and he’d better keep on fucking paying it forward until the day he dies, at which point I might just forgive him.
THAT, folks, is what anticompetitive behavior looks like.
If you want a more modern example, Apple does it all the fucking time. They find apps that look like they’d be nice Apple features, or nice Apple money-makers, and they systematically ban the apps, steal the ideas, put the startups out of business, and have a nice fucking day.
I really love Apple’s products, but they need to be sanctioned. Apple is like China, like Spain and Venezuela, like Amazon honestly (at least when it comes to the subject of labor unions) — they are beholden to their Boards of Directors and their investors on Wall Street or Wherever Street, and they will cut every conceivable legal corner and cheat every conceivable cheat until they are forcibly stopped by regulation.
That’s the game! And they’re all in it to win.
However. There is is a big fucking However.
All the anti-Big Tech sentiment today is incredibly misguided, because it doesn’t take globalization into account.
Legislators like Elizabeth Warren are proposing that we break up the tech giants. This is 100% the wrong solution to the problem.
Remember when the US government sued Microsoft for Antitrust back in 2001? No? Well gosh, I remember like it was yesterday. It was like the Return of the Jedi; the Emperor was finally going down. The rest of the industry was celebrating! The witch might be dead!
The outcome of that suit was pretty interesting, because they chose not to break up Microsoft, even though the government won the suit because it’s not like Microsoft was covering their tracks or anything. Microsoft was like the rat I had in my house for six months before I finally discovered it because I was finding Rat Shit literally everywhere in my house, in every single concave surface, and at that point, yeah, we have a rat. That’s about how well Microsoft’s defense went.
But for some reason, the government stopped short of breaking them up, even though there was precedent: They had broken up Ma Bell in 1982, which wasn’t really that long ago.
So after the lawsuit, Microsoft went on to continue dominating the entire industry as an Evil Monopoly, and they launched Google Search and YouTube and Facebook and Android and Twitter and Netflix and Cloud Services and e-commerce and oh wait they didn’t fucking do ANY of that. In fact they never did a goddamn original thing again.
Sure, they’re flourishing under Satya’s leadership now, 15–20 years later — he’s truly a visionary, especially when contrasted with Sundar’s mundane administrative boringosity. And there’s a bit of a renaissance, which they really needed after that lawsuit, because all the old-timer Microsoft guys who fled to Google told me that the lawsuit made them all realize practically overnight that they’re the bad guys, and it was such a moral shock to every single one of them that they barely noticed that Bill had checked out and left the reins to his idiot golfing buddy.
The point here is that Microsoft basically died anyway, without needing to be broken up, and yes, now they’re stirring from the ashes, but it’s all fast-follow mode that leads to some decent competition but zero innovation. It’s healthy, but it’s no longer scary.
And guess what? It turns out that all companies eventually lose their market grip, unless they have a monopoly that is specifically protected by the government (hello, FCC and Comcast/Verizon), because of something called the Innovator’s Dilemma.
Google, too, has certainly lost their dominance and much of their relevance. The bloom is off the rose. Everything you use from Google is now officially at least 12 years old. Like Microsoft, they have been unable to innovate, and they continue to milk their golden geese (Search and Ads) just like Microsoft does (Windows and Office before, now Cloud and Gaming).
YouTube, Google’s very best acquisition (so, not innovation either) was considered completely unseatable for a decade because of their incredible head-start on both content and delivery technology. Basically, a monopoly. And hello, TikTok snuck in practically overnight with a market disruption that would have made Clayton Christensen proud.
Facebook is facing serious competitive threats from WeChat (and Clubhouse, and the list goes on), and Android is facing serious competitive threats from both Facebook and WeChat (because those apps have effectively become the OS, as far as users are concerned), and also from Huawei, who has ten thousand engineers and the backing of the Chinese government and an iron will to succeed that rivals anything Amazon ever experienced.
Our Western Big Tech companies are fucking barely holding on to their so-called “monopoly” market positions. There’s no Amazon in China, no Facebook in China, no Google in China, no Uber, no Netflix, no YouTube, effectively almost none of the Western Tech Giants are in China.
The Chinese Tech Giants are almost all here, though. Your kid’s playing Fortnite, your teen’s using TikTok, you’re reading Reddit, and you can probably use AliPay terminals with your credit card; there’s one on the first floor of the Grab Bellevue building, right in Bill and Jeff’s backyard.
This asymmetry is why we absolutely cannot break up our Tech Giants. It’s because they are literally the only “ammunition” we have in the global competition (some might call it a war) that’s unfolding across the industry and across the world. You should have seen the fucking fight that went down in India over FlipKart, between Amazon and Walmart. If Amazon was truly a dominant monopoly then they should have won that fight, right? Jeff flew to the Bangalore India office and told them point-blank (gossip moves fast in Asia) that he didn’t care how many billions it took; they needed to win in India. And haha, they lost! For now, anyway.
If you break up the Western Tech Giants, then they will be replaced with foreign companies that you cannot regulate. They won’t pay you tax, they won’t provide you with jobs, and they will control the entire narrative — social, political, economic, everything — instead of Western companies controlling, well, if not all, then at least part of it.
That, folks, is the punchline.
If you cripple the Western Tech Giants by breaking them up, they will immediately and irrevocably lose all their ground to the already just-as-powerful Foreign Tech Giants. Yes, China is at the forefront right now, but they need to be careful too; the Innovator’s Dilemma bites everyone in the end, and maybe India or Israel or someone else winds up disrupting them.
And Americans will 100% not give a shit, as the USS America sinks gently to the bottom of the ocean, because TikTok is a pretty good fucking app, and that’s all most Americans really care about: Good apps and services. They’ll take them from anywhere. Kill Android, and Huawei will gladly fill that void. Kill Google? Baidu is hungry to service American searches. Kill Apple? I mean yeah it’s pretty fucking tempting, but NO.
Breaking up tech companies is the wrong solution to the problem! You will make America lose their technology lead FOREVER.
…So, uh, what do we do?
The solution you really need is completely orthogonal to what all the goddamn journalists are talking about today: You need to tax the fuck out of the Tech Giants. And you need to force them to pay a living wage and benefits to their workers. This will absolutely not put them out of business, nor in fact (despite their arguments to the contrary) will it even hurt their ability to compete. They are amazing, driven, very clever companies, and we’ve seen time and again that regulating them — whether it’s GDPR, or paying for news, or the Right to Privacy, or any of the other legislative initiatives that made them kick and scream — does not hurt them in the long run.
Elizabeth, please stop talking about breaking them up. I hope it’s become clear from this post that I’m as left-leaning, left-wing, liberal (socially and fiscally) as they come, and this has nothing to do with political ideology, and everything to do with practical, real-world realpolitik and industrial inevitabilities. You are going to cripple our ability to compete with the Global Powers. Stop trying to kill your Golden Geese, and start milking them instead!
And for my readers, for those of you who are still with me, do you want America to be competitive? We sure as fuck are NOT going to be dominant anymore. America’s heyday is over, done, kaput. And honestly, with our track record, that’s probably for the best. Competition is good. Competition is inspiring. Competition makes us stronger. Competition is humbling. Competition will lead us to our Utopia.
That’s one thing Amazon got right.
If you want an American Utopia, then you need to get on board NOW with making college free, because it is literally our only hope for the next generation.
Now I’m in fucking trouble.
Watch my show! But I gotta get my game launched first; gimme a month or two.