by Alec Ross
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To my children Colton, Tehle, and Sawyer, whose adulthoods will be shaped by the choices we make during the raging 2020s
INTRODUCTION
The first thing I do this morning is make coffee. I roll out of bed, brew a pot, and make breakfast for the kids. I’m leaving for a business trip today, so I pack my overnight bag and book a rideshare to the airport. My wife, Felicity, and I wrangle the kids into the car and Felicity drops them off at school on her way to the elementary school where she teaches. As everyone starts their day, I’m passing through security. “Now boarding,” “fasten your seat belts,” and “prepare for takeoff.” By 9 a.m., I’m in the air.
It is an uneventful morning. But when you peel back its layers and examine the invention and ingenuity that power our daily lives, it can boggle the mind. In less than three hours, I went from sleeping in my bed to flying across the country—soaring thousands of feet in the air in an insulated metal tube. It is a feat of science, technology, engineering, and mathematics that humans in most previous eras would have considered something like sorcery. Yet I sit here unfazed, scrolling through emails.
We hardly notice it, but our lives are built atop a webwork of collaboration and exchange between individuals, governments, and businesses. When it all works in concert, we end up with a kind of everyday magic: life made easier by a thousand tricks just outside our vision.
Rewind to that coffeepot, for example. Or even to the water. The drinking water that pours out of my faucet and into my coffeepot is provided by a public water system built all the way back in the 1920s that ensures it is safe. The coffee I bought from Zeke’s, my local roastery, costs me less than thirty cents a cup to make. The fact that I can have what was once a luxury at a favorable price every day is the result of centuries of agricultural progress, topped by free trade agreements with the Central American countries that produce the beans.
Or consider all the factors that go into a simple commute. When my wife steps out the door, she drives our kids to school in a Honda designed in Japan and manufactured in Alabama, on roads built by government, using rules that have been refined over decades to keep everybody from driving into each other. If they do get in an accident, we can trust in the government-mandated airbags that Honda installed.
Meanwhile, as I use a rideshare app for the drive to the airport, the driver finds me and navigates us using government-created GPS. And at the airport, I am as cool as the other side of the pillow because I know the Transportation Safety Administration (TSA) will ensure that no guns or knives will be brought on the plane. The barcode technology used by the TSA on my boarding pass and driver’s license was developed by government-funded university research.
I board a plane that is Boeing’s state of the art, managed by one of America’s four remaining major airlines, and flown by a pilot who the Federal Aviation Administration ensures is rigorously trained. That pilot will fly through traffic-controlled skies monitored by government radar, navigating away from storms monitored by the US weather system.
Before we take off, I text Felicity using a mobile phone made by Apple over a network managed by AT&T over cellular frequencies administered by the Federal Communications Commission. The touch-screen technology that allows me to use LinkedIn, Instagram, Otter, and half a dozen other apps on my phone before we take off was developed thanks to the CIA and America’s National Science Foundation. And, when I check the time—now 9:15 a.m.—I know that it’s accurate due to time standards set by an international body with 164 country members.
This invisible, silent interplay between government, business, and citizens continues to take place all day, every day. It’s a quiet equilibrium. We do not consciously sit there and think of all that goes into the delicate balance by which the government builds systems and sets standards, which enable businesses to build and sell goods, and which allow everyday individuals to chart easier and better lives. At least, ideally that’s how it should work.
But in the last twenty years, the equilibrium has been thrown off.
Look closer at that coffeepot. The same free trade agreements that benefit me, my local coffee roaster, and billions of workers in the developing world have provided shocks to the working class in Western developed economies. The result has been political unrest on both ends of the political spectrum in the United States and Europe.
The water system built in the 1920s is crumbling. Somehow, we were able to commit to huge public works programs one hundred years ago, but we do not build bridges, rail lines, or new utility systems anymore. We work them until they crumble, and then we patch them up again. The number of new infrastructure projects in the US is at a historic low, not for lack of need but because the political process has ground to a halt.
Felicity’s car was built in Alabama because of the state’s tax giveaways and anti-union laws. The workers ended up losing out while the benefits accrue only to shareholders. Meanwhile, the car’s airbags had to be replaced after a defect was found to have led to at least sixteen deaths.
My children’s public schools are overcrowded and underresourced. My son wears a winter coat in class because the school’s heating system does not work. Racial tensions smolder and flare.
The rideshare app I used on the drive to the airport was founded on the crest of a glistening new wave of American innovation. But its founder proved to be the very caricature of the brotastic boy billionaire, kicked out of his own company for its misogynistic culture. And the driver is working on terms that seem more 19th century than 21st—she makes near minimum wage, with zero worker protections or benefits because her employment status classifies her as an independent contractor.
Boeing and the airline I’m flying recently received massive government bailouts despite the airlines having generated more than $49 billion in free cash flow during the previous decade. The reason they were not able to tap that $49 billion once trouble hit was not because they had been investing in new planes, better service, or better salaries for their workers. No, they had spent $47 billion of that $49 billion on stock buybacks. Boeing spent $43 billion of its $58 billion in free cash flow during that period on stock repurchases, despite the need for investment to make its planes safer. These stock repurchases did nothing for passengers or employees; they just fluffed up the stock for investors, and as soon as trouble hit, taxpayers bailed them out. This is corporate socialism for the 2020s: we socialize costs to taxpayers and privatize gains to shareholders.
This interplay goes on all day, every day. There is something fundamentally off, a disequilibrium in the relationships between business, the governing, and the governed.
Our social contract is broken and needs to be repaired.
WHAT MAKES SOCIETY WORK
The social contract is one of the most basic features of human civilization. In every society across the world, people have worked for thousands of years to balance the rights and responsibilities of individuals with those of lar
ger powers like states and corporations. The social contract is the accord that sets the balance. It defines the rights of citizens, governments, and businesses, as well as the duties they owe to one another.
The exact terms of the social contract are never set in stone, because it encompasses both the laws of a society and its unwritten rules. But the basic idea is simple: when humanity can come together and live and work as part of a society, we are vastly better than the sum of our parts.
The prospects of ancient humans skyrocketed when they learned to work together to hunt a mammoth or settle down to plant a field of grain. But when people gather en masse, it also presents an opening to our species’ crueler impulses. Those bands of early humans could only ever live and thrive in close quarters if they agreed that certain behaviors—like murder and theft—were unacceptable. They had to figure out a basic code of conduct and draw a line between what people could do and what they should do.
That moral code is the kernel of a social contract—and it is the glue for any functioning society, past or present. It is what summons up humanity at its best, while leaving our worst at the door.
With simple versions of that code in place, humanity developed. Scattered villages grew into city-states and modern nations. Governments emerged. Churches and academies put down roots. Guilds and businesses sprang up. These were entirely new and powerful ways of organizing humanity’s efforts—but they too could channel either our angels or our demons. So, as life grew more complex, the underlying code of conduct had to adapt. It had to enfold not just individuals but also all the newly established powers of society.
Every social contract is also constantly being tested and renegotiated by its various parties. Often, this change is slow and steady, nearly invisible and almost self-correcting. When a society-shaking technology emerges, governments and businesses adapt. But sometimes corrections are too few and far between. Sometimes there is a long pause, where the equilibrium tips and groans with nothing to right it. Until it topples, and the world flips upside down. That then produces rage—rage that can divide families, communities, and countries against each other; rage that can produce body counts until systems and governments change for those brought to rage by the disequilibrium. The absence or presence of rage is a product of a well-managed or a broken social contract.
The choices about what to do in moments of inflection and often revolution can take societies in totally different directions. This was the case in the 1930s when the United States rewrote its social contract with Franklin Roosevelt’s New Deal, while Germany and Italy were overtaken by fascism.
THE ORIGINS OF OUR OWN CONTRACT
Social contracts tend to be rewritten amid the moments of greatest change. During the 1800s, vast technological changes swept through much of the world, drastically altering the structure of society. It was this shift that sparked the social contract that still, in one form or another, predominates in the world’s developed nations.
In 1800, nearly 75 percent of Americans worked on farms, but then the Industrial Revolution hit. By 1900, this figure was cut in half. During that same period, the portion of American manufacturing workers increased more than sevenfold. In 1801, about 17 percent of the population in England and Wales lived in urban areas. By 1891, the figure had more than tripled. French and German cities also saw their populations explode during the 19th century. This period saw Western economies transform from predominantly agricultural to industrial, and labor moved from farm to factory.
It was a messy transition, particularly in the early years of industrialization, before the social contract had adapted at all. This period, known as Engels’ Pause (named after Marxist philosopher Friedrich Engels), introduced the industrialization, inequality, and squalor you see in Charles Dickens novels. It was a period of stagnant living standards in the face of rapid technological change. Its by-products included ideological movements like Marxism and the largest wave of revolutions in Europe’s history.
The only thing that made industrialization work was that, over a period of decades, industrial societies completely rewrote their social contracts. Ask anyone to name the great innovations in human history and the answers will likely be technologies like the wheel, clock, steam engine, or microprocessor. But just as significant as the technologies that reshaped the economy are the innovations that reshaped our humanity. These include worker pensions, free public education, and the minimum wage. All of these emerged from the tumult of industrialization in the 19th century. Workers and citizens mobilized to ensure that governments and rapidly expanding industrial businesses rewrote the social contract to allow industrialization to benefit more than just the owners of industry. As the 19th century ticked into the 20th, new checks and balances continued to emerge—antitrust protections, income tax, child-labor prevention, a social safety net, environmental standards. These revisions to the social contract allowed societies to harness rapid industrial innovation so that it could enable citizens to rise together.
A NEW SOCIAL CONTRACT
Out of the tumult of the Industrial Revolution, we developed a basic equilibrium among governments, people, and corporations. Companies now held the power to shape our daily lives in ways both positive and negative, while the state held the power to make them fall in line, and the people held the power to choose their leaders.
But in the 21st century, that balance has shaken loose through much of the Western world, and the damage is seeping into Asian and developing-world economies. A dizzying combination of factors has risen in recent decades to rattle the world—the digital revolution, globalization, deregulation, populism, the arrival of a global climate crisis. These have fundamentally reshaped the relationships between government, citizens, and business—within every country around the world and on the international playing field. But too many of our societies have not yet developed new social contracts to account for these massive changes.
The power of the state was the creeping concern of the original social contract theorists, but the chief power creep in our present day is the growing power of business. Today’s global companies are as big as countries, and they act the part. This trend has already disrupted geopolitics, and it is set to continue. Meanwhile, on the home front, we are governed more by companies than by governments on a wide range of issues—from privacy to sustainability to equity and workers’ rights.
Over the last fifty years, the United States and other developed governments have failed to make strides in these realms, and companies have filled the void. Meanwhile, anti-monopoly measures and checks on corporate power have fallen away. The results have been weaker labor movements, weaker democratic governments, and a cratering of economic prospects for hundreds of millions of workers. Over the last thirty years, just in the United States, the top 1 percent have grown $21 trillion richer, while the bottom 50 percent have grown $900 billion poorer and the middle class has stagnated. This trend is playing out across much of the Western world while the developing world is watching and taking notes.
If the level of inequality in the United States had stayed at a constant level over the last forty years instead of widening to its current Mad Max–like state, it would have meant that $50 trillion would have gone to workers earning below the 90th percentile. That is an additional $1,100 every single month for every single worker.
We are now in a sort of Engels’ Pause for the information age. The social contract that had been successfully revised and rebalanced has fallen out of balance. And the future of the world now hinges on how that contract between business, government, and citizens is redrawn during the 2020s.
The goal of this book is to map out what went wrong, and then work out how to fix it. We will look back at what happened over the last half century to companies, governments, labor, and citizens around the world. We will look at how these changes have affected the global landscape and outcomes for everyone, rich and poor, in developing and developed countries. And we will then look forward, pinpointing the shifts that a
re necessary to return to balance.
For the past twenty-five years, I have worked intensively at the intersection of business and geopolitics, moving between the US Department of State, political campaigns, academia, and entrepreneurship. Over those decades I have worked all over the map and from top to bottom of each of these overlapping spheres. For this book, I spoke with many of the world’s most prominent leaders in business and government, seeking to understand their unique perspectives on our past and future, and to compile them all into one larger story. The book will gallop from a board of directors in Arkansas that set environmental standards for the entire country to tax havens in the Caribbean, and from Zimbabwe’s implementation of a Chinese-designed surveillance apparatus to the hills of my native West Virginia, where people are dying because they can’t buy insulin. We will see how decisions in Beijing are roiling the political landscape in the heartlands of the Americas and Europe, and how all these issues that seem to have nothing to do with one another are inextricably linked, as are the solutions to make it all work better.
I’ll bring forward different perspectives from a range of public thinkers and figures; my hope is that you agree with some and disagree with others—but that they help you think beyond our current crisis. I think that when two people agree about everything, only one person is doing the thinking.
For the first three chapters, I will dig into what has happened over the last fifty years to each of the three key pillars of the social contract—government, business, and citizens.
The first chapter looks at the rise in corporate power since the 1970s. Since then, the most destructive aspects of capitalism have been given free rein, as businesses embraced the dogma that shareholder value was the only metric that mattered. Five decades have revealed the brutal cost of that trend: even as companies have risen in power, those gains have not been felt by the vast majority of employees, communities, or other stakeholders. This chapter maps out the past half century’s errors, examines their broader effects—both expected and unexpected—and suggests how we can change course. I’ll connect the dots to show how we can avoid the worst excesses of capitalism and allow the world’s largest companies to do what they are best at while actually benefiting the world.
