Dana Blankenhorn

Twilight of the Cloud Czars

In 2019 five companies dominate the global economy.

I call them the Cloud Czars.

They are Microsoft, Apple, Amazon, Google, and Facebook.

These companies have a combined market cap of over $4 trillion. The smallest of them, Facebook, is worth more than AT&T and the Walt Disney Co. combined.

The Cloud Czars dominate retailing. They dominate media. They dominate computing and communications. According to politicians of both the left and the right, this means they’re illegal monopolists and should be broken up.

This idea is dumber than anything Donald Trump ever said.

The Ghost of the Eternal Now

I’ve been a reporter for over 40 years, and I’m still angry at the same thing that upset me in journalism school. (That's me on my first journalism job, wondering why someone is taking my picture.)

This is the attitude of an eternal now. It’s driven by this old chestnut – a journalist is someone who works for someone who buys ink by the barrel. The key to that sentence is the phrase “who works for someone.” Journalists are supposed to leave their minds and hearts at the door of the newsroom.

Reporters are taught to have no sense of history, or of the future. Mainly we’re taught to pretend we know nothing, and everything we’re told is equally valid. As a result, most reporting has no context, and we can’t call out stupid when it’s right in front of us.

That’s how Trump gets away with it. Any reporter who likens what he’s doing to Jefferson Davis or Adolph Hitler is accused of malpractice by agents of stupid at The New York Times. We’re just supposed to print what he says and repeat what he does, like good little stenographers. Then let Bret Stephens or Ross Douthat tell us what it means. Everything’s fine.

It’s even worse in business, which is my beat. Because we are taught to ignore the broad sweep of business history, we send readers down blind alleys. We pretend that making cookies is as cutting edge as writing software.

The past and the future have always been there in front of us. It was clear in 1979 that oil was taking over from manufacturing, but people reported from Detroit then as if that city could be saved. It was also clear that oil was a boom-and-bust business, but I was told to report from Houston that the boom would go on forever.

The Twilight of Nationalism

If mankind still exists in 2119 their historians will write about this era as the Twilight of Nationalism.

Nationalism was essential when economies were based on resources, machines or muscle. In the era of clouds and devices it’s increasingly irrelevant. The global nature of our existential crisis makes nationalism an outright impediment to the survival of mankind.

Thus, it’s no coincidence that nationalism has been a rising force in the decade now ending. Just as it concentrates the mind to know you’re to be executed in the morning, so it is for leaders and political movements. Seeing sunset in the distance you do what you can and ignore the consequences you know are coming.

The Trump election acts as a midpoint and permission slip for all this. Nationalism was already on the march, in Europe, in the Middle East, and in Asia, through the agency of Russia, when Trump came to office. But Trump has given nationalistic impulses around the world permission to act. There is no American opposition to ultra-nationalism anywhere, no alliance worth protecting, no counter example to follow.

Thus, nations push their boundaries outward, fearing any force that might threaten their power, and ignoring the natural internationalism essential to economic growth and climate action.

That’s why Brazil is going after its rain forest. That’s why India is going after Kashmir. It is why China is going after Hong Kong. That’s why England wants to detach from Europe, why Eretz Israel is a thing, why Saudi Arabia seeks dominion over its whole peninsula. If you can afford it, nationalists think, seize the day. The window is closing.

One Nation. At War. With Itself

In August of 2019, the United States is a nation at war with itself.

We are at war with fundamental changes that must occur if the country, and the world, are to be saved from the Industrial Revolution.

We’re also at war with the essentials of economic growth in our time.

As I have written many times, the gating factor in technology is human capital. Trained, eager, free minds, willing to think the previously unthinkable, to model it and make it reality. This is where money is made today.

The more such people you have, the fewer of the other kind, the more money you make. The more freedom these people have, the greater their access to money, to new ideas, and to one another, the more your society prospers. This is Israel’s secret sauce.

Resources don’t matter. Machines don’t matter. Muscle doesn’t matter. Minds matter, more than anything.

The 2020 Game

The Tell on what will happen in 2020 came in late July of 2019.

Trump’s most loyal lieutenants, attorney general William Barr and Treasury Secretary Stephen Mnuchin (far right), issued existential threats against the Cloud Czars. Under Trump’s orders.

The Cloud Czars, for those unfamiliar with my current work at InvestorPlace, are Microsoft, Amazon.Com, Google, Apple and Facebook. As technology has come to dominate the economy, the Czars have come to dominate technology.

They’re the Cloud Czars because the tool which dominates technology is cloud computing. It combines parallel processing with virtual operating systems and open source techniques to hold down costs.