Is the Tech Bubble Bursting?

An Uber self-driving automobile ran down and killed a woman in Tempe, AZ. It apparently got confused by traffic patterns that had not been programmed into its artificial mind.

Also this week, the world discovered that Facebook, even if it does serve as something of a networking tool, is really a data mining operation that attempts to decipher your mind and sell the information to whomever. Or, at times, to give it away to politically sympathetic politicians.

As it happened, Facebook’s stock has been tanking. Yet, great tech geniuses Mark Zuckerberg and Sheryl Sandberg are nowhere to be found. One cannot help but feel a rush of Schadenfreude, especially in the case of Sandberg, a self-proclaimed feminist heroine who has made a second career out of handing out bad advice to women.

Spengler (aka David Goldman) reads the convergence and analyzes:

Now Americans have discovered that cars won’t drive themselves like magic and that the Facebook fishbowl is not a substitute for ordinary human interaction, but rather a vast commercial experiment in profiling their behavior. Only a handful of Facebook users will delete their accounts and cancel their broadband connections, to be sure, but the bloom is off the lily: The Internet giant no longer can sell the concept of community, and it is not clear what it will sell except the sort of connectivity that is provided by any number of competitors.

We can grant Facebook credit for selling the concept of community, but still, it merely masks the absence of same in today’s America.

Spengler adds the important point that Americans, especially the tech elites, got drunk on their own genius and failed to notice that their products required a real infrastructure.

The idea that Americans would be the designers and Asians would be the manufacturing worker-bees had an obvious and fatal flaw. At some point, the advancement of the technology requires real physical infrastructure, and research and development will come to grief without a working partnership with the factory floor. Without the sort of physical infrastructure that China is building into its new cities, computation can’t solve all the problems that arise in intersections like the corner of Mill Avenue and Curry St. in Tempe, Arizona.

The people of China have leapt from traditional life into the modern world, and their entire life experience is a sequence of innovations. They are far more eager than Americans or Europeans to adopt new technologies because they never made a habit of old ones. For example, E-commerce now accounts for 30% of retail sales in China, but less than 10% of retail sales in the United States.

He is making the obvious point, namely that our confidence in our genius and our brilliance has blinded us to the fact that other nations are catching up to us in technological innovation. But also that the world of bits and bytes will eventually come a cropper when everything around it is disintegrating. 

Doesn’t Spengler’s analysis bring to mind the picture of San Francisco, a city that was built by and for the tech oligarchs, but where their magnificent mansions and high priced life styles are surrounded by squalor and misery, by homeless encampments and rising poverty, and where environmentally friendly homes protect the oligarchs from having to deal with streets filled with every manner of filth.