In the United States, the fortunes and abuses of technology no longer make young people dream

The most prosperous Silicon Valley? Too disconnected? Robert Reich, an economics professor at Berkeley and Bill Clinton’s former labor secretary, has amassed millions of fans. thesis. According to him, the great American fortune, which has accumulated hundreds of billions of dollars, is participating in the social decay of America.

Throughout books, videos on social networks or on his site Inequality media, Reich denounces growing inequality, stigmatizing the super-rich who owe it to society. In the past, criticism was limited to the American left, such as Bernie Sanders, the eternal grandfather of extremists, or the Bronx’s young and most popular elected representative. Alexandria OCAsio Cortez. Today, the group of critics extends to journalists or technology intellectuals, such as Scott Galloway, a marketing professor at New York University. Atlantic, knock out”Fake idols“Technology, with their likes and dislikes.

The Mozarts of tax optimization

The behavior is annoying, but from the point of view of criticisms of general tax optimization, whether it is about individuals or companies. In his interrogation, Confidential IRS files “ (In Secrets of Tax Forms), information site ProPublica describes the tax engineering used by technology’s great fortunes to evade taxes. Their preferred technique is to borrow heavily, pledging billions of dollars in equity they have accumulated. Advantage: Although these loans are used to buy yachts, jets and condos, they are tax-free, meaning Elon Musks or Jeff Bezos and others practically pay no taxes.

More broadly, the question arises of the effects on the economy of the immense creation of wealth created by technology. If we take ten or more companies that have contributed to America’s technological dominance – from Microsoft to Netflix, from Intel or Nvidia with microprocessors – an update of the sums accumulated at the beginning of their existence (in one year). ) reveals.

From 1968 – the birth of Intel – to the early 2000s – the creation of Google – these start-ups collectively raised the equivalent of 1.5 billion discounted dollars. Later, they were able to multiply rounds of funding, go public or go into debt, but it was this initial investment that allowed them to take off.

This capital is at the origin of the greatest industrial leap in history, the invention of the personal computer, groundbreaking advances in countless scientific fields, not to mention the networking of planetary knowledge through the use of the Internet.

But these billion and a half dollars of historic Big Tech are almost insignificant from the point of view of current financing: in 2021 alone, American venture capital firms have invested 330 billion dollars, or 220 times more than the predecessors of the transistor!

This excess significantly increases regional disparities, which in turn reinforces inequalities, following a spiral in which companies find themselves in fierce competition to capture talent at any cost to their wealth. It offers lavish salaries similar to Facebook (average: 240,000 dollars per year) often associated with allocations of stock options, which can quickly turn a moderately skilled engineer into a millionaire. This is due to the rising cost of living in cities where landlords and restaurateurs took advantage of this insane extravagance, excluding the middle class.

The result is an ever-widening gap between the classes: in 1990, 1% of Americans owned 24% of the national wealth; Today, they hold 40% (versus 22% in France for the same group).

In 1968, the year Intel was founded, a CEO earned an average of 21 times more than an employee; At the start of the digital boom in 1993, the rate jumped 61 times; Today it’s 351 times that, recalls Robert Reich. The Berkeley economist is most popular among 25-30 year olds, which are subject to heightened environmental concern and the social shock wave of the Covid crisis. For them, these violations are no longer acceptable.

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