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 worshiping enterprise and wealth.
CHICAGO – 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 pummeled 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.