On Non-Democratic Progress

There’s been a number of articles lately that critically examine a crop of tech companies arising out of Silicon Valley that are disrupting (in multiple senses of the word) the industries and communities in which they operate. A chief complaint is that these “Sharing Economy” companies — Uber and Airbnb being the exemplars — are flouting local laws and regulations.

The reason why these companies are moving so aggressively is simple. As savvy businesspeople and hungry investors well know, the key to success is not just profitability, but market dominance. As Peter Thiel succinctly put it: “Competition is for losers.” This is why Uber fights. Given the winner-takes-all dynamic, they will cross and even repeatedly violate the legal and ethical boundaries to gain market share. This means generating bad blood. You’ve probably seen headlines of protests against Uber in major cities around the world. I witnessed this opposition first hand when earlier this month I passed by what I later learnt was the Uber HQ in London, with the entire neighbourhood block brought to a standstill by protesting black cabs.

I am sympathetic to the critics of Sharing Economy companies. I am especially receptive to arguments that highlight the companies’ shoddy ethics and poor privacy practices. On the other hand, we need to look at the bigger picture. These companies are not (just) big bullies who are orchestrating a corporate takeover of modern day life. They are creating and meeting consumer demand. We want to use these companies! Their services are better on at least one vector, and often more: price, convenience, experience, delight, etc. Again, I experienced this first hand. On my European trip I stayed with Airbnb hosts in London and Paris, and both experiences were fantastic.

Now, you may nevertheless find it problematic that these companies are flouting the law. Perhaps on a deeper level you find it sad that people are so blithely allowing such things to happen, and also giving away their privacy, all for seemingly fleeting and trivial benefits. But you have to acknowledge that as a society we are all complicit in making Sharing Economy companies as influential as they are.

Thinking about all this has got me to reflect on another place I’ve been to recently, where progress is occurring at breakneck pace in a non-democratic fashion: China. I went on a short trip to Nanjing in late July to visit my extended family. On my last trip two years ago, there was a lot of construction going on as the city prepared itself for the 2014 Youth Olympic Games. This time around the big hole in the ground near my uncle’s apartment has turned into a gleaming (and mostly empty) underground shopping centre and above-ground leisure park. Three new subway lines have been completed, bringing the total to six since 2005.

On an epically grander scale, the Chinese Government is in the middle of a project to transform Beijing and its surrounding area into a supercity of 130 million people, with high-speed rail as the connective tissue that makes it all possible. This is probably the most gaudy example of progress barrelling ahead at a pace that is unthinkable in democratic countries.

Just as Uber fanatically expands its market in order to set a foundation for the future and justify its massive valuation, the Chinese Government is embarking on projects of unfathomable scale to increase the economic prosperity of its citizens and justify its own legitimacy. And just like Uber, the pace of progress in China has resulted in collateral damage — homes seized, environments despoiled, dissent crushed — even as we must acknowledge that hundreds of millions of lives have been lifted from poverty.

The pursuit of technological and material progress (and profits) is outpacing the machinery of democratic lawmaking. In the aftermath of the GFC, I see Western democratic countries  outperformed externally by more autocratic countries like China, and also disrupted internally by companies leveraging technologies that undermine existing laws. In many ways people are reaping the rewards, but I wonder what the long-term implications are of a disregard for the democratic process. Much to ponder about.