Imagine: a retailer that refuses to pay sales tax, treats its employees poorly, destroys hundred of thousands of jobs, and yet is celebrated as a paragon of business innovation.
A computer company that withholds information about a domestic act of terrorism from federal investigators, with the support of a fan following that views the firm similar to a religion.
A social media firm that analyzes thosands of images of your children, activates your phone as a listening device, and sells this information to Fortune 500 companies.
An ad platform that commands in some markets, a 90 percent share of the most lucrative sector in media, yet avoids anticompetitive regularion through aggressive litigation and lobbyists.
This narrative is also heard around the world, but in hushed tones. We know these companies aren’t benevolent beings, yet we invite them into the most intimate areas of our living. We willingly divulge personal updates, knowing they’ll be used for profit.
Scott Galloway’s debut The Four: The Hidden DNA of Amazon, Apple, Facebook and Google is a brisk analysis of these four technology driven companies. This is the man who week before the deal actually happened predicted that Amazon would buy Whole Foods. He argues in his book that these companies will be the first to break ( if they have not already done so) the trillion dollar barrier. The secret of their success is dependant not necessarily on their providing services such as being an effective online search engine (every one in six questions asked of Google has never been posed before), a massive marketplace ( Amazon’s online retail store purports to be the biggest shopping complex making it convenient for shoppers to buy from the comfort of their homes), connecting people across the world by preying on their psychological need to be loved and cared for as exemplified by the “like” button on Facebook or that the of the iconic design of Apple products creating a desire amongst people “permitting” the firm to price its commodities exorbitantly, earning irrational profits and yet, always have ready customers. According to the author, Apple controls 14.5 % of the smartphone market but captures 79% of global smartphone profits. In his TED Talk he says “the combined market capitalization of Amazon, Apple, Facebook and Google is now equivalent to the GDP of India. ”
The Four is narrated at a brisk pace, almost as if Galloway is lecturing to his students in the classroom. It is a sharp understanding of these four modern day business empires which together are worth $2.3 trillion. He focusses on the speed at which technological advancements permit people to buy, mine the Internet for information or even be connected to people across the globe in miliseconds whether using social media platforms or their smartphones. He recognises how these companies synonymous with the information age are focussed on delivering a product or a service for the prime objective of earning a profit — a fact often concealed niftily from the end consumer, i.e. you and I, but making these four no different to any other manufacturing firm. Oddly enough these companies such as Google “ages in reverse,becoming more valuable with use” which harnesses the power of 2 billion people every 24 hours. Facebook connects 1.2 b of the 7.5 people in the world. Apple’s cash on hand is nearly the GDP of Denmark. Amazon is growing at the rate of 20% plus each year. He acknowledges in the book that these companies have benefitted in a manner of speaking by governments which grant them special treatment regarding antitrust regulation, taxes, even labour laws. The financial worth of these companies is heavily dependant upon the sensitive personal and credit information shared willingly by millions and millions of humans around the globe.
The Four is very readable in its arguments except that by focussing primarily on the branding and market identity of these companies. Galloway prefers to focus on the consumerism of these services without ever really discussing the impact it has on humans, particularly in terms of the debt incurred by consuming these services offered. This is where Yanis Varoufakis preferance for calling this consumerism as a “a commodification of everything” and how the rise of profit as a major incentive for people to do things come hand in hand with a new role for debt. According to Varoufakis this commodification is the “unstoppable vicotry of exchange value over experiential value” — a characterstic trait of the market society which most modern economies have transformed into. Individuals now have to rely upon multinational companies that have technological capability to fulfil their every need. The companies in order to guarantee their profits, use patents to assert legal onwership of their produce. Usually this shift in produce and consumption patterns is done with the help of the state. “To put it simply, private wealth was built and then maintained on the back of state-sponsored violence.” This lucid historical analysis of modern economy or global capitalism is available in the former Greek Finance Minister’s brilliant Talking to My Daughter About the Economy. Or watch this fantastic lecture on the concept of money he gave at the Google HQ on 29 April 2016 called “And the Weak Suffer What They Must?”
These two illuminating books are significant publications of 2017 and very worth reading!
Scott Galloway is the founder of L2 Inc, teaches brand strategy and digital marketing and the NYU Stern School of Business. He was named “one of the world’s 50 best business school professors” by Poets & Quants in 2012. He is also the founder of Red Envelope and Prophet Brand Strategy. He was elected to the World Economic Forum’s Global Leaders of Tomorrow and has served on the boards of directors of Urban Outfitters, Eddie Bauer, The New York Times Company and UC Berkeley’s Haas School of Business.
Yanis Varoufakis is a former finance minister of Greece and a cofounder of an international grassroots movement, DiEM25, that is campaigning for the revival of democracy in Europe. He is the author of the international bestseller Adults in the Room, And the Weak Suffer What They Must?, and The Global Minotaur. After teaching for many years in the United States, Great Britain, and Australia, he is currently a professor of economics at the University of Athens.
6 December 2017