John Naughton is professor of the public understanding of technology at the Open University. If I were the Open University head of HR, I'd be wondering which clown hired him after reading his muddle-headed article on "digital capitalism":
These vast revenues [produced by the scaling of digital goods], however, are not being widely shared. Instead, they are mostly enriching the founders and shareholders of Apple, Amazon, Google, Facebook et al. Of course, those who work at the heart of these organisations – the engineers, developers and the executives who manage them, for example – are richly rewarded in salaries, stock options and lavish perks. But these gilded employees constitute only a minority of the workforces of the big tech companies and most of their colleagues have decidedly more mundane terms of employment – and remuneration.He starts off with Apple, complaining that 2/3 of Apple employees work in retail stores and have only regular retail wages. Well, John, yes they do. Of course they do. Their job has very little to do with the massively scaling digital distribution at which Apple excels (iOS, iTunes etc); why on earth would the profits from that business go to the Apple Stores which are all about selling physical hardware to real people in expensive-to-rent retail locations? They are entirely different businesses. For sure, selling an iPhone or MacBook to someone enables them to start spending money with Apple on iTunes purchases, but the Apple Store is competing for hardware sales with the likes of John Lewis, Apple's own online store, and phone retailers. The Apple employees there are pretty replaceable - more so these days as the previously excellent customer service has fallen off somewhat - so they get paid what they are worth. Let me add here that their store's Genius Bar is actually rather good in the main, and I hope that their Genii get paid quite a bit more than Naughton's quoted $25K. Still, Naughton's attempt to claim that the failure to pay retail store employees huge sums is a moral failing of digital capitalism is a dreadful stretch, and I'm sure that he knows this.
When he claims the same lack-of-sharing-of-wealth regarding Google and Facebook I really have to laugh. Those companies are packed with very good engineers, and boy do they get rewarded. Just look at the Facebook shares which are creating Facebook millionaires throughout the company. Bonnie Brown was Google's first masseuse, not even an engineer, and she made multiple millions of dollars from her share options. Has Naughton been to Silicon Valley, or even just checked the property prices around Cupertino (Apple) or Mountain View / Palo Alto (Google)? These prices aren't being pushed sky-high by an elite group - most of the engineers in those companies are paid extremely well, which is why the Bay Area economy is in a relatively healthy state while the rest of California is so far down economically that they have to pipe in the sunlight.
I think, though, that Google, Facebook and Apple are all side claims to try to bolster the core of his argument which relates to Amazon. He sees the elite core of Amazon (Jeff Bezos and his engineers) who benefit from profits from the Amazon store, and a vast network of distribution necessary to get the Amazon goods to the people who bought them. He focuses on the warehouse teams that pick the orders from the racks:
"You're sort of like a robot, but in human form," one manager told Ms O'Connor. "It's human automation, if you like."Well yes, John. Amazon is creating quite a lot of jobs, and most of them aren't high-paying engineering jobs. But they're still jobs which pay a living wage and are a sight better than being unemployed. Jobs don't have to pay double the median wage to be a benefit to society, you know. You may envy the engineer being paid huge sums and think it's not "fair" that she gets much more than you, perhaps because she was actually talented and worked hard at hard engineering rather than the "systems analysis" that you specialised in, but her work creates jobs for other people - that's something not to be sneezed at.
Still, it's a job. Until it's replaced by a robot.
One of the greatest benefits afforded to us by Amazon, and one not covered by Naughton for some reason, is to be able to find, compare and buy goods online at a substantial discount to those in High Street stores. This is a diffuse benefit - it has a small value to each individual - but benefits many millions of people. Google lets people find out where things are, what words mean, how to do something. Facebook puts people back in contact with friends and loved ones that distance or time previously separated. Apple put a usable Internet and access to movies and music in the pocket of millions of phone users. This, John Naughton, is the triumph of digital capitalism, and your whining about a few people making a lot of money from the phenomenon is just sour grapes.