Post corona

During the pandemic, the technology sector has seen remarkable resilience and growth, particularly among the "Big Four" tech giants: Amazon, Apple, Facebook, and Google, along with Microsoft. These companies now make up 21% of the total market value of publicly traded U.S. companies and are using the pandemic as an opportunity to further cement their dominance.

Each of these companies began with a significant innovation: Amazon revolutionized retail with faster, cheaper delivery methods; Apple set the standard with its iPhone; Google transformed search engine optimization with its focus on links; and Facebook redefined social media into a vast social network. As they grew from scrappy startups to industry leaders, they employed lobbyists and PR firms to polish their image, often obscuring their monopoly power and the substantial cash flows that enable them to enter and dominate other sectors.

The Big Four have exploited network effects and access to cheap capital to accelerate their growth. Amazon, for example, has turned its Prime delivery service into a key feature, reaching 82% of American households and generating $17 million in sales per minute, allowing it to outcompete traditional delivery services. Amazon Web Services has also benefited from the shift to remote work and online shopping. Founder Jeff Bezos's vision of selling everything online and his ability to convince investors to prioritize growth over short-term profits have been central to Amazon's strategy. The company has turned its expenses into revenue streams by offering its delivery and computing capabilities as services to other businesses.

Before the pandemic, many industries enjoyed unearned profit margins, with prices increasing dramatically without corresponding improvements in value or innovation. This situation has made these industries ripe for disruption, especially in the wake of the pandemic.

Industries become vulnerable to disruption when they fail to adopt technological changes that could enhance quality and value, as these changes may threaten their core business. Signs of vulnerability include pseudo innovation, such as adding features that provide no real value; membership clubs that offer no significant savings or convenience; inconvenient online ordering systems; and colleges investing more in luxury accommodations than in educational resources. These are akin to home remedies from management teams that are aware of the need for significant changes but wish to avoid the real costs and pain associated with them.

The pandemic has exposed weaknesses in sectors where the major innovation has been simply raising prices, with the inadequacies of the U.S. healthcare system being a notable example. The reliance on centralized facilities, especially emergency rooms, may spur innovations in remote medicine and telehealth.

Since 2000, there has been a significant influx of capital into venture capital funding in the United States, fueled by hot stock markets and investors eager to back founders who could become the next Steve Jobs, Elon Musk, or Bill Gates. This abundance of cheap capital for startups has led to more companies staying private longer and growing rather than going public quickly, resulting in many private companies with billion-dollar revenues. Additionally, many companies have deployed massive capital to achieve growth without demonstrating profitability.

Higher education is ripe for disruption, and the COVID-19 pandemic seems poised to catalyze lasting improvements. The $600 billion higher education industry is undergoing major reconfiguration, with many of the emergency changes imposed by the pandemic likely becoming permanent.

From 1980 to 2020, the cost of college tuition and fees rose 1,400%. Even healthcare spending, a frequent target of complaints, increased only 600% in that period. The education industry has successfully leveraged scarcity and brand power to drive revenue growth. But despite the flood of money, higher ed has delivered scant innovation: The model of professors lecturing to note-taking students who pay for the privilege persists.

Elite universities act more like luxury brands than public servants. Ivy League schools flaunt 4-10% acceptance rates as proof of exclusivity. Many other colleges capitalize on elite brands to offer quasi-Ivy experiences at lower prices. Easy access to government-backed student loans fuels the system. Student debt now tops $1.6 trillion, with the average graduate carrying over $30,000.

Today's college landscape cements socioeconomic strata. "Wealthy students are now more than twice as likely to attend college as poor students, and over five times as likely to go to an elite institution. At 38 of America's top 100 colleges, including five Ivies, more students come from the top 1% than the bottom 60%." The Ivies increasingly resemble hedge funds that educate investors' children.

Over the past four decades, there has been a shift towards individualism and a weakening of government institutions, marking societal trends. However, the recent pandemic has starkly highlighted the limitations and consequences of these choices. It has revealed the urgent need for a renewed sense of community and a reevaluation of the role of government as a fundamental and noble entity.

The pandemic has accelerated the visibility of the outcomes of generations' worth of decisions. It particularly emphasizes the widening economic gap, where the affluent continue to amass wealth at the expense of the middle class. This situation underscores the necessity to move beyond the glorification of innovation for its own sake and to confront the exploitation it can foster.

Capitalism, while unparalleled in driving economic productivity and offering opportunities based on merit and hard work, lacks a moral compass. This deficiency allows for environmental degradation and perpetuates inequality, with the wealthy gaining disproportionate advantages. The government's role, therefore, is crucial in providing checks and balances to the market's excesses. It ensures environmental protection and fosters competition by regulating monopolies.