Politics. Culture. Economics. Regulation. They all shape tech.

Many a times looking at a tech or economic issue from tech or economic lens may not give clarity. The reason for this is that the decision may have been taken purely from a political position, to prove a point or to bring the other party to the negotiating table. These are all pressurising tactics. You may look at something and say: How stupid! But it may be the politics, stupid!

The tariff war looks crazy at first glance. If every country slaps tariffs on every other country, especially at such high rates, then world trade will come to a standstill and there will be a global meltdown. In fact, the 245% tariffs on China sound like absolute madness.

But that’s not the real issue here. For years America’s largesse has been appreciated. They give huge donations and concessions to other countries to get them into the global trade order. But today America is no longer the power that it once was. While the annual GDP of America is touching $30 trillion, its debt crossed $35 trillion some time back. This is no longer tenable. While previous administrations have not bothered to handle this problem, the current one thinks that a total reset of global trade is the need of the day. They may be right. They may be wrong. The current President US Trump thinks the reset will be achieved after the conclusion of a tariff war. He may be right. He may be wrong. But the number of times Trump has been ridiculed for being wrong in the short term and right in the long term is not funny.

Silicon Valley

Interestingly Silicon Valley also became what it is today because of disruption. Till the 1960s the Republicans were firmly in control of politics, and they followed the straight, by the book traditional method. That does not work in the startup era. In the 1960s the cultural revolution, Woodstock, drug spree and anti-war protests led to a new counterculture. This was young, brash, break the rules, shed the old and think out of the box kind of crowd. This was perfect for the startup world, and they soon ruled the world. Now Silicon Valley and the Democratic Party has become Marxist and dogmatic in nature. Let’s see how that affects the Valley in the future.

Rest of the world

That’s why the European Union is nowhere when it comes to Big Tech. It has the legacy. It has the talent. It has the infrastructure. But the regulation is so bad that it stifles innovation and very few tech companies flourish and become global giants there.  

China was a Communist country till 1978. They banned millionaires as long as they could. When they lifted the regulation, they were flooded with billionaires. They pushed tech to the maximum and became world leaders. But now they re cracking down on Big Tech and the effects remain to be seen.

That’s also the case with crypto. Had governments banned this currency the moment it took off, it may have died. But today it is worth trillions. Any ban now would only push all that money underground. All white crypto would become black crypto.

Even India follows the same path. In 1977, the Janata Party threw IBM out and the gains of the 1960s and 1970s were undone. The 1980s were a starting point, but the Liberalization of 1991 and the government of 2014 gave a fillip to technology, and one hopes this resolve stays for some time.