Big tech gets derailed | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Monday
July 14, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
MONDAY, JULY 14, 2025
Big tech gets derailed

Panorama

Jonathan Levy; Project Syndicate
26 November, 2022, 11:40 am
Last modified: 26 November, 2022, 11:57 am

Related News

  • Meta, Microsoft lift AI spending, worrying Wall Street ahead of Amazon results
  • Cigarette labels were bad. Social media labels would be worse
  • The eerie silence of big business when it comes to Israel-Palestine
  • EU lawmakers back tough media law against Big Tech's content removal decisions
  • Nvidia close to becoming first trillion-dollar chip firm after stellar forecast

Big tech gets derailed

Much of what Big Tech values is praiseworthy, from fun (a good thing) to wondrous creativity. But, like similar episodes in the nineteenth century, the meltdown of FTX, and the turmoil engulfing Twitter and Meta, have exposed the costs of blindly worshipping enterprise and wealth

Jonathan Levy; Project Syndicate
26 November, 2022, 11:40 am
Last modified: 26 November, 2022, 11:57 am
Jonathan Levy. Illustration: TBS
Jonathan Levy. Illustration: TBS

The failure of the cryptocurrency exchange FTX, the latest in a long history of American financial shenanigans, was a doozy. "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here," said the corporate restructuring specialist John Ray III, who is now overseeing FTX's bankruptcy.

The FTX collapse is only the latest in a sector that has been pummelled since April 2021, when the value of crypto first dropped. But it's not just crypto. After markets sliced $89 billion off Meta's market capitalization, CEO Mark Zuckerberg announced he was shedding 13% of the company's workforce (11,000 people). Then, within days of Elon Musk's takeover of Twitter, which he purchased – apparently on a lark – for $44 billion, many began to fear for the platform's future.

Idiosyncratic individuals wielding billions of dollars, intent on building corporate empires (including philanthropic ones), are far from unknown in the United States. Reading about Sam Bankman-Fried, FTX's disgraced founder and former CEO, I recalled the "Erie Wars" of the late 1860s, when charismatic financiers, with easy access to gargantuan amounts of capital and credit, sought to build the first great US business corporations: the transcontinental railroads. The railways got built, but not without considerable financial waste and corporate intrigue.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Glittering Gould

At the centre of it all was Jay Gould, the greatest financial operator in US history. In 1868, Gould, a young man recently arrived on Wall Street, took on the ageing Commodore Cornelius Vanderbilt, who had made his fortune in steamboats. After the Civil War, Vanderbilt began to buy up shares of the New York Central Railroad, hoping to take control of it.

To conceal his intentions, Vanderbilt bought the stock by proxy. But Wall Street speculator Daniel Drew caught wind of it. Drew, a director of the competing Erie Railroad, loaned himself Erie stock, which he used as collateral to buy New York Central shares. Vanderbilt, angered that he now had to pay more to buy New York Central, cut a deal with Drew and worked in unison to bid up the stocks of both railways.

Drew, a former cattle-driver who fed salt to his herds so that they would drink more water and take on more weight, soon double-crossed Vanderbilt, joining with Gould and his partner, James Fisk, Jr. During the Erie Wars, Drew, Gould, and Fisk "watered" Erie stock by issuing stock certificates in excess of the plausible value of the railroad's existing assets. A New York judge in Vanderbilt's pocket ruled against them.

Drew, Gould, and Fisk fled New York with suitcases full of cash and Erie stock and bonds. I imagine the trio laughing and waving goodbye to Manhattan as they decamped to Jersey City, New Jersey – much like Bankman-Fried and his coterie of chums, who became millionaires and billionaires while working beyond the reach of regulators from a Bahamas resort.

The US monetary and financial system looked very different during the Erie Wars than it does today. The US was struggling to return to the gold standard, and the Federal Reserve did not exist. Still, during these years, given the recent centralization of US capital markets in New York City during the Civil War, Wall Street was overflowing with credit, which made possible the egregious manipulations and schemes of Gould, Drew, and their ilk.

In addition to financial manipulation, corporate access to easy credit fueled booming investment in the fledgling US railroad industry. But much of it was unproductive. Corporate officers like Gould grabbed the cash, bought up land, and built railroads across Native Americans' sovereign territories before competitors could arrive. When workers struck for higher wages and eight-hour days, they crushed them.

The spectre of corporate monopoly loomed. But so did the menace of corporate busts if confidence – and hence money – drained out of the financial system. In the railroad age, there were two particularly severe financial panics, in 1873 and 1893, followed by crippling economic depressions.

The digital land grab

The parallels to today seem clear. Taking advantage of the low interest rates of the 1990s and 2000s, and then the ultra-low rates that prevailed for more than a decade after the 2008 global financial crisis, Big Tech grabbed cheap money in order to gobble up rival companies, engineering talent, and personal data, stifling competition whenever possible. And now, with interest rates rising fast, there is less credit bidding up stocks and cryptocurrencies, and it turns out that for many companies that had been gorging on debt, offering a service to consumers at below cost may not be a viable long-term business strategy.

Abundant credit, it seems, inevitably taints animal spirits with greed, leading to excess and corporate malfeasance. It would be far better to tighten financial conditions, as central banks are now finally doing, and subject companies to the whip of scarce capital and market competition, right?

Not necessarily. What matters is not so much the sheer volume of credit as where it goes and what it funds relative to society's preferences and needs. So long as legitimate preferences and needs exist, there is no such thing as overinvestment. There are only bad investments.

Morally speaking, the right response is to recoil at reports of Bankman-Fried's shenanigans, financial and otherwise. But ethics – throwing out "bad apples" before they spoil the entire barrel – is not the central issue. The problem is not excess and greed, or even the merits of "effective altruism," but that something has gone awry at the nexus of political and economic power.


Disclaimer: This article first appeared on Project Syndicate, and is published by special syndication arrangement

Features / Top News

Big Tech / Big Tech Crackdown

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • File photo of Commerce Adviser Sheikh Bashir Uddin. Photo: BSS
    Bangladesh hopes for 'rational' US tariffs, confident of sustaining trade ties: Commerce adviser
  • BNP Secretary General Mirza Fakhrul Islam Alamgir spoke at a protest rally at the BNP’s central office in Nayapaltan today (14 July). Photo: TBS
    Elections must be held by February: Mirza Fakhrul
  • Hundreds of leaders and activists of BNP's Dhaka Metropolitan North and South units bring out processions in the capital this afternoon (14 July). Photo: Mehedi Hasan
    BNP, Chhatra Dal rally demands justice for Mitford murder, condemns propaganda against Tarique

MOST VIEWED

  • From Gulf to Southeast Asia, why Bangladeshis are facing visa denials
    From Gulf to Southeast Asia, why Bangladeshis are facing visa denials
  • Infographic: TBS
    Dollar price plummets by Tk2.9 in a week as demand wanes
  • Energy Adviser Fouzul Kabir Khan speaking about tariff negotiations with United States on 13 July 2025. Photo: TBS
    US wants a framework agreement with Bangladesh that includes their security concerns: Fouzul
  • CNG drivers blockaded a road in Banani demanding route allocation on 13 July 2025. Photo: TBS
    CNG drivers block road in Banani for hours, causing Mohakhali-Uttara gridlock 
  • BSEC directs 44 firms to transfer Tk1,000cr in unclaimed dividends to CMSF
    BSEC directs 44 firms to transfer Tk1,000cr in unclaimed dividends to CMSF
  • TBS Sketch
    Framework agreement: What experts say about US 'security concerns' regarding Bangladesh

Related News

  • Meta, Microsoft lift AI spending, worrying Wall Street ahead of Amazon results
  • Cigarette labels were bad. Social media labels would be worse
  • The eerie silence of big business when it comes to Israel-Palestine
  • EU lawmakers back tough media law against Big Tech's content removal decisions
  • Nvidia close to becoming first trillion-dollar chip firm after stellar forecast

Features

DU students at TSC around 12:45am on 15 July 2024, protesting Sheikh Hasina’s insulting remark. Photo: TBS

‘Razakar’: The butterfly effect of a word

4h | Panorama
Photo: Collected

Grooming gadgets: Where sleek tools meet effortless styles

1d | Brands
The 2020 Harrier's Porsche Cayenne coupe-like rear roofline, integrated LED lighting with the Modellista special bodykit all around, and a swanky front grille scream OEM Plus for the sophisticated enthusiast looking for a bigger family car that isn’t boring. PHOTO: Ahbaar Mohammad

2020 Toyota Harrier Hybrid: The Japanese Macan

2d | Wheels
The showroom was launched through a lavish event held there, and in attendance were DHS Motors’ Managing Director Nafees Khundker, CEO Imran Zaman Khan, and GMs Arman Rashid and Farhan Samad. PHOTO: Akif Hamid

GAC inaugurate flagship showroom in Dhaka

2d | Wheels

More Videos from TBS

Why is SMP necessary to make the telecom sector more customer-friendly?

Why is SMP necessary to make the telecom sector more customer-friendly?

3h | TBS Stories
How will the BNP manage the capital market if it comes to power?

How will the BNP manage the capital market if it comes to power?

18m | TBS Today
From fuels to fruits, imports slump on depressed demand

From fuels to fruits, imports slump on depressed demand

1h | TBS Insight
Is France increasing defense budget fear of Russia?

Is France increasing defense budget fear of Russia?

2h | TBS World
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net