Tim O’Reilly: ‘Generosity is the thing that is at the beginning of prosperity’

The tech pioneer, CEO of publishing company O’Reilly Media, says his industry will fail unless the web giants start putting consumers ahead of shareholders

Tim O’Reilly believes we need to have a reset. This means more coming from him than it does from most people. The 63-year-old CEO, born in Ireland and raised in San Francisco, is one of the most influential pioneers and thinkers of the internet age. His publishing company, O’Reilly Media, began producing computer manuals in the late 1970s and he has been early to spot many influential tech trends ever since: open-source software, web 2.0, wifi, the maker movement and big data among them.

His new book, WTF: What’s the Future and Why It’s Up to Us, looks at work and how jobs will change in a world shaped by technology. It is sometimes hard not to be pessimistic about what’s coming over the hill, but he is convinced that our destiny remains in human hands.

How would you describe your new book?
It’s very complex. It’s an economic call to action wrapped in a business book wrapped in a memoir. Ha!

You studied classics at Harvard and have been involved in the tech revolution since the very beginning…
It could have been 10 books. But the start point was a talk at TED University on income inequality by Nick Hanauer in 2012. He made this point that is too often not appreciated, which is that the whole cycle of capitalism depends on people being able to buy things. And with the short-sighted approach to capitalism, in which the rich get richer and it doesn’t trickle down, we’re getting to an endgame of that.

That idea played into a set of observations I had been making my whole career. Namely, the rise and fall of technology platforms has lessons for the rise and fall of society. When those platforms create value for the participants, they flourish. When they start taking too much of the value for themselves, they fail.

What’s an example of that?
At the very beginning of my career, it was the battle between IBM and the tech industry. Then Microsoft and the tech industry. Microsoft was the liberator originally: the PC was part of the first revolution, a democratising force. Then Microsoft recreated the old monopoly of IBM, where they sucked all the air out of the room. And sure enough all of the customers went somewhere else.

And that continues to happen?
In the book, I write about how Google optimises for relevance and how that works. Facebook is trying to optimise for something slightly different: something that will be clicked on or that people will find engaging and spend more time with. And we’ve seen it with fake news and now ad targeting, how Facebook’s well-intentioned, incredibly idealistic algorithms have become increasingly divisive.

How does that connect to the wider economy?
I’m ultimately trying to get to this notion that technology is going to eliminate jobs and my response is: only if that’s what we tell it to do. And it is what we’re telling it to do. Because the goal, just like Google has relevance and Facebook has engagement, the massive goal that we tell every company to pursue is shareholder value. Value for shareholders, even if it means shedding employees, gutting communities, doing things that are bad in the long run, because we’ve created all these incentives and there are people who are gaming the system.

In the same way, fake news shows that Facebook didn’t get it quite right and had to fix the algorithm; we have to fix the algorithm that we’re using to manage our markets and our economy.

You mention the idealistic streak that some of these big tech companies have. Does that make you optimistic that change can happen?
Yes, but they need to step up and understand what it means to practise that ideal. For Google to say: “Don’t be evil” and then do some of the things that they do; well, guys, you’ve got to think a little harder about that. It’s funny because the company that I’ve ended up respecting the most in that regard is Amazon. There’s a lot of stuff that’s not great about Amazon, but they keep upping the ante in ways that are interesting and productive. And I’m a great admirer of Elon Musk. I’d say that he and Jeff Bezos are my two favourite entrepreneurs at the moment.

You’ve not always praised Amazon. What’s changed?
Well, it’s the fact that they are consistently bold in their reinvestment in the future. Again, if you look at Google, they go: “We’ve got all these big bets…” But a lot of them feel like rich people’s toys: “We’re going to work on having people live for ever” or whatever. It’s like, OK, great. But Amazon: think about how many companies exist and are supported by Amazon’s cloud computing platform. They invented this whole new category. And they are always pushing for lower prices, not for higher margins. I just feel that Jeff is committed to the future in a way that a lot of people aren’t.

One of the central themes of the book is AI and what impact it will have on the job market. Again, you suggest that Amazon is leading the way here…

Recently, Amazon introduced 50,000 robots but also added 200,000 people because they used them to pack more products into the warehouses. They used them to speed up delivery times. This is the narrative of the augmented worker, which again is a pattern from history. A steam shovel could do more than any human worker and, yes, it did mean that we put a lot of human workers out of business. But then we started doing more and that put people back to work.

Just in my neighbourhood, the US Post Office, which everyone thought was on its deathbed, is now showing up at 10pm. Crazy stuff! But that’s because Amazon upped the ante. Or Uber: it’s a revolution in urban transportation that, because of the augmentation of mapping and directions, has put millions of untrained people to work. That’s the equivalent of the steam shovel.

Looking back at your career, what are you proudest of?
I’m really proud of the role I played in reshaping the narrative about open-source software. It was seen as this business-hostile thing: free software. But I saw it as a huge flowering of opportunity that’s open to the world. I guess if you look at my entire career, I’m trying to talk about the value of generosity. And why generosity is not something you paste on at the end – generosity is something that is generative. Generosity is the thing that is at the beginning of prosperity, not at the end.

But is that human nature?
It’s all human nature, it’s interesting. I’ve just lately been reading a book I highly recommend: How Adam Smith Can Change Your Life by Russ Roberts. And it’s funny because I expected it to be a libertarian account of why free markets are so great. But it’s about Adam Smith’s other great work, The Theory of Moral Sentiments, and about the desire of people to be good and the desire of people to be seen as good by their peers. And how that’s the root thing in human behaviour. In a lot of ways, I’ve spent my career trying to talk about what is good – maybe that’s my classics training – in the realm of technology.

So what’s the role of the entrepreneur within this system?
Before steel girders, we couldn’t build skyscrapers. Before steel cables, we couldn’t build suspension bridges. We keep advancing, these new technologies make new things possible, and as a result we become richer. So, technology entrepreneurs, that’s your job! To find the things that were previously impossible.

• WTF: What’s the Future and Why It’s Up To Us by Tim O’Reilly is published by Random House (£14.99). To order a copy for £12.74 go to guardianbookshop.com or call 0330 333 6846. Free UK p&p over £10, online orders only. Phone orders min p&p of £1.99


Tim Lewis

The GuardianTramp

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