Explaining the bizarre world of non-fungible tokens

Image by Zachary Crockett/The Hustle

Collectors have long been willing to shell out huge sums of money on unique items such as fine art, classic cars, and antique books. Collectables are tangible assets which can be hung on a wall, stored in a garage, or displayed in a cabinet. Historically, the buying and selling of rare and desirable items has occurred at auction houses. Regardless, a new trend is emerging which enables investors to buy intangible, digital assets online.

Collectable items have moved into the virtual world using trendy new technology called non-fungible tokens (NFTs). An NFT (also called a crypto-collectable) is a one-of-a-kind asset which can be bought and sold like any piece of property even though it has no physical form of its own. Almost anything can be minted as an NFT including digital art, music videos, film clips, video games, luxury goods, and sports collectables such as football cards.

NFTs are changing how musicians and artists can earn a living. NFTs offer a way for “creators” of music and art to monetize their work via the sale of a token and get a slice (in the form of a royalty) of any resale value in the secondary market. Each token is unique, can’t be duplicated, and is basically a certificate of authenticity. While other people might have a copy of the artefact that you have purchased as an NFT, they don’t own the original item.

Think of Leonardo da Vinci’s painting, the Mona Lisa. It is the most famous portrait in the world and there are hundreds of thousands of reproductions of this masterpiece – but only one original. The same principle applies to NFTs – you can copy and paste an image, though only the original – digitally signed by the artist – holds value. Buying an NFT is like buying the original Mona Lisa, but instead of receiving an oil painting on wood, you get a JPG file.

Some people compare owning a crypto token to buying an autographed print. Each token contains computerised code that verifies it is the only asset with its specific digital identity. The tokens, as asset identifiers, are considered to be non-fungible since their uniqueness makes them irreplaceable and impossible to swap. As non-fungible tokens cannot be replicated, they are incapable of mutual substitution. An example will help here.

You and a friend are travelling together on a plane and have been issued with boarding passes. If the information on each pass was identical, they would be considered fungible – i.e., capable of being swapped for one another. However, each boarding pass contains unique information such as passenger name, seat number, and airline membership details. Consequently, they cannot be randomly exchanged with anyone else thereby making them non-fungible.

In contrast, a fungible asset is something that can be readily interchanged – like money. If I lend you $20, it doesn’t matter whether you pay me back with a different $20 banknote from the one that I gave you – any $20 bill will do. Equally, you can repay me with two $10 bills since the total equals $20. Items are considered fungible if exchanging them is meaningless, such as two people swapping $5 notes with each other.

Details of (non-fungible) digital tokens are recorded on an encrypted and publicly accessible ledger called a blockchain. Blockchain is the software architecture that underpins Bitcoin and other cryptocurrencies. Blockchain ledgers are not stored in one place but are distributed over thousands of computers around the world. These replicated ledgers are spread geographically across multiple sites, countries, and institutions.

Blockchains work by using a network of computers to create a shared digital ledger that no one computer can change. All computers must approve a transaction that has taken place before it is recorded in a “chain” of computer code. Every transaction is cryptographically chained to the previous transaction making blockchains perfect for creating unique digital identifiers which can be easily and securely exchanged — hence the creation of NFTs.

The idea of registering digital assets as NFTs on a blockchain began with CryptoPunks in June 2017. CryptoPunks are a set of unique collectable characters (10,000 to be precise) of randomly generated pixel-based avatars. However, NFTs did not come to prominence until October 2017 with the release of the blockchain based CryptoKitties game which enables players to buy and “breed” limited-edition virtual cats.

This past August, the global card payments processor, Visa, bought a CryptoPunk for nearly $150,000. Visa’s CryptoPunk is a pixelated digital image of a woman with a mohawk (see image below). Commenting on the purchase, Visa’s Head of Fintech, Terry Angelos, said: “We see an emerging new category of commerce that we’re calling NFT commerce”.

Visa’s NFT | Courtesy of Larva Labs

Cuy Sheffield, Head of Crypto at Visa, believes that NFTs will play an important role in the future of retail, social media, entertainment, and commerce. “To help our clients and partners participate, we need a first-hand understanding of the infrastructure requirements for a global brand to purchase, store, and leverage an NFT.”

Sheffield remarked that CryptoPunks have become a “cultural icon for the crypto community” and that Visa’s CryptoPunk purchase signalled that the company was “jumping in feet first”. He added: “This is just the beginning of our work in this space”.

According to online financial magazine, Barron’s, Bitcoin was predicted to take middlemen, like Visa, out of commerce entirely by allowing people to transact directly over the Internet, but that has not come to pass. That leaves an opening for incumbent players to maintain their importance. To quote Barron’s:

Visa sees an opportunity to be the rails for the new digital economy just as it has been the rails for the current one. It’s already connected to consumers and businesses, so people don’t need to use a completely new system. Visa’s interface with the public can be similar whether they pay through cryptocurrencies or dollars. The company already has helped crypto exchanges issue credit cards and other products.

Other companies to jump on the NFT bandwagon include Pizza Hut (pixelated pizza), Pringles (CryptoCrisp, the chips you can’t eat), Nike (Cryptokicks, limited edition sneakers), Vodaphone (augmented reality game), and McDonald’s (pixelated Big Mac). These brands have seized on NFTs as a way to engage with their audiences and promote their products. All want a seat at the NFT table because the crypto economy is expected to evolve rapidly.

Recently, the Australian Federal Government, along with the Reserve Bank of Australia, leading companies, and universities set up the Digital Finance Co-operative Research Centre (CRC). The CRC will undertake a decade-long research program examining the digitisation of real-world assets. The projected growth in this market is staggering, with tokenised assets expected to grow from almost nothing today to $US24 trillion ($A32 trillion) by 2027.

The government believes that the CRC’s work could add billions of dollars to Australia’s gross domestic product each year. The aim of the project is to unlock new assets and make them efficient to trade*. As reported in the Australian Financial Review, the CRC’s CEO predicts that the creation of digital versions of real-world assets “will have a profound impact on the rate of achievable economic growth and pave the way for new types of investable assets”.

As the craze of cryptocurrencies gains momentum, NFTs are emerging as a new investment option. New age collectors and investors are paying thousands and even millions of dollars to own digital collectables. Still, is this a bubble waiting to burst? Are NFTs highly speculative bets or do they offer value for money? The bottom line is that the NFT market is too immature to judge its long-term worth as an investment option.

So, it’s a case of buyer beware because the NFT market’s recent stratospheric rise is no guarantee of future returns. The harsh reality is that while some early investors have achieved insane windfalls, others will fork out inflated amounts for digital assets that may wind up being worthless. Another point to note is that the underlying technology is complicated for a layperson to understand, let alone use on their own.

Right now, NFTs are in the midst of a hype-cycle and trending upwards. Still, there is no assurance that demand for digital assets will continue at current levels. As with any new disruptive technology, there are pros and cons. So, take care to closely examine what could go wrong – the dark side of investing in NFTs is real, particularly as the value of art and other collectables is fundamentally subjective.

When it comes to NFTs, value (like beauty) lies in the eye of the beholder.

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*To be clear, the work of the CRC is not focussed on digital assets like virtual cats. Rather, its mandate is to ensure that Australia is in a position to exploit the coming universal digitalisation of all real-world assets (such as gold, real estate, fine art, and carbon credits) so they can be traded and exchanged directly and in real-time between any individual or organisation.


Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Why the free market economy is under attack

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It’s been called the greatest engine of material prosperity in human history. It’s lifted people out of poverty, raised living standards, funded research to cure diseases, given us better nutrition, driven mind-blowing innovations, revolutionised the way we live and work and provided us with access to goods from around the world.

Capitalism has done all these things and more, which is why I believe it’s a force for good. Capitalism has made the world a better place by alleviating human suffering. Today, we enjoy lives that are longer, healthier, and better. This is largely because of advances in science, medicine, agriculture, and technology. These advances have been driven by the foundation stone of a capitalist economy – private enterprise.

Central to a global capitalist system is international trade and this, according to the capitalist peace theory, offers a path to world peace. Free trade is built on voluntary interactions of buying and selling and this encourages nations to live in harmony. Free trade raises the cost of war by making nations more economically interdependent. The more that people rely on trade with others, the greater the cost to all parties of a conflict.

The essence of capitalism is economic freedom. Individuals and businesses are free, within the bounds of the law, to engage in commerce at their will and peril. The father of modern economics, Adam Smith, asserted that economic behaviour is driven by self-interest. The Global Financial Crisis (GFC) painfully revealed that the pursuit of self-interest does not always lead to outcomes that benefit society overall.

So yes, capitalism is not perfect, but that’s because human behaviour is not perfect. Economic theory is premised on the assumption that humans make rational choices. However, the GFC showed that we don’t always weigh facts objectively when making financial decisions. As to the ill-conceived subprime lending programs, borrowers, bankers, and brokers were united in the delusional belief that house prices never go south.

Another criticism of capitalism is that it leads to inequalities of wealth and income. Again, this is absolutely true and it’s an undeniable fact that the rich are getting richer. But the poor are not poor because the rich are rich – the two conditions are generally unrelated. The rich did not steal their wealth from the poor. While some do inherit their fortune, most people work very hard to make their money – it has little to do with luck.

No two people are exactly the same – and I say that as an identical twin! You have only to look around you to see that we are not equal in height, weight, looks, intelligence, or on a multitude of other dimensions. Everyone has a unique set of abilities which helps them achieve success. As pointed out by one writer:

Our inherent human inequality should not lead you to despair. On the contrary, imagine how dull life would be if things were otherwise. The fact that I am not equal to LeBron James is a good thing, and so is the fact that LeBron James is not equal to Albert Einstein and that Albert Einstein is not equal to Katharine Hepburn, inequalities are diversity, and diversity is the spice of life.

People will never be wholly equal. Still, those who advocate economic equality would view LeBron James’ basketball superiority as unfair. They would call for James to be handicapped in some way, perhaps by forcing him to give less skilled opponents credit for some of the baskets he scores. Of course, this would do nothing to improve the performance of his opponents nor provide them with any incentive to lift their game.

That’s why taxing the rich more is not the solution to inequality. Around the world, higher income workers already pay the overwhelming majority of taxes. In the words of Abraham Lincoln, “You can’t make the poor rich by making the rich poorer”. To paraphrase Warren Buffett, we all live far better lives because of Henry Ford, Steve Jobs, Bill Gates, and the founders of Google. These brave entrepreneurs helped expand the global economy and this assists the poor as much as the rich.

An open-market, capitalist economy is not designed to deliver equal economic status for everyone. People receive varying financial rewards for the jobs they do and the contribution they make to society. While excessive greed benefits no one, trying to make all of us financially equal is a recipe for disaster. Capitalism rewards productive achievement and provides the necessary incentive for entrepreneurs to take risks and innovate and this benefits society overall.

Even if we somehow managed to redistribute wealth so that every adult in Australia had exactly the same amount of money, it would be fleeting. The smart, the strong, and the devious would quickly acquire the wealth of the slow, the weak, and the gullible. Moreover, people would use their money in different ways. The prudent would save and invest their money while the irresponsible would squander it.

Given our differing attitudes to money, the equal distribution of wealth is clearly an unattainable goal. Even so, I believe that the widening gulf between workers and executives has become excessive. I find it hard to accept that any one individual is worth an annual salary of, say, $10 million. Equally, I don’t believe that sports stars and Rock ‘n’ Roll artists are worth the millions that they are paid.

Nonetheless, I accept that in a free-market economy based on supply and demand, captains of industry, the sporting elite and entertainment celebrities can command multi-million-dollar incomes. While excessive greed benefits no one, trying to make us financially equal is a recipe for disaster. As Winston Churchill observed:

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.

The world has seen a number of socio-economic systems including slavery, feudalism, socialism, communism, and capitalism. For all of its imperfections, it’s my contention that capitalism, like democracy, is better than the alternatives. This is certainly the view of economist, Ha-Joon Chang, who is a reader in economics at the University of Cambridge and the author of 15 books.

In his international bestseller, 23 Things They Don’t Tell You About Capitalism, Chang identifies some of the pitfalls of capitalism. In highlighting these shortcomings, Chang is careful to point out that his book is not an anti-capitalist manifesto. “Despite its problems and limitations, I believe that capitalism is still the best economic system that humanity has invented”, he underscores.

Notwithstanding his tough assault on capitalism, Chang acknowledges that there’s no real alternative to free-market capitalism describing it as “the worst economic system except for all the others”. He says that “being critical of free-market ideology is not the same as being against capitalism”. Rather, his aim is to tell “some essential truths about capitalism”.

I am the first to acknowledge that capitalism has failed to cover itself in glory over the past couple of decades and that public opinion has turned against it. Capitalism is not without its faults because economics is an imperfect social science. Still, humanity as a whole (as I outlined in my previous post) is doing better than it ever has thanks to capitalism. While we still have problems to solve, they are less severe than at any time in history.

As for those nations suffering severe poverty, they must be helped and encouraged to adopt capitalism. The uneven distribution of wealth in the world is due to the uneven distribution of capitalism. Swedish writer, Johan Norberg, makes this very point in his book, In Defense of Global Capitalism, wherein he states:

The poor countries that have liberalized their economies have shown impressive results, while those that have not are stuck in deep misery. Therefore, we need more capitalism and globalisation if we want a better world, not less.

Capitalism offers a practical way to nourish the hungry. Handouts are not the solution to poverty in places like Africa. As Bill Clinton explained: “No country can work itself out of poverty with aid alone”. Training and assistance must be provided to Africa’s private sector to help them drive economic growth and make Africa self-sufficient. Capitalism can do this and more.

Capitalism has changed the world for the better.


Paul J. Thomas
Chief Executive Officer
Ductus Consulting

The world is doing much better than the media would have us believe

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There’s no shortage of bad news – it dominates the headlines. The media concentrates on the negative aspects of life because bad news sells. As readers, viewers and listeners, we thrive on human drama, so the news is replete with stories about terrorism, murders, epidemics, and crashes.

News broadcasts begin with the most traumatic story of the day, in line with the media’s maxim – if it bleeds it leads. This relentless “death and destruction” focus triggers our innate negativity bias and causes us to believe that the world is descending into disaster and chaos.

Following our exposure to a negative event, we tend to overestimate its significance due to a phenomenon called the availability bias. If you have just watched a news report of a plane crash in Sydney and are then asked about aviation safety, you might think (as it’s top of mind) that plane crashes are a problem in Australia whereas they rarely happen here.

In reality, the world is not full of doom and gloom – lots of positive things do happen. However, good news unfolds over time and receives fleeting coverage whereas bad news – such as a rise in coronavirus cases – explodes daily and attracts rolling coverage. Steady progress – like a gradual fall in coronary disease – is not breaking news.

Most positive developments are not camera-friendly as they aren’t built in a day. So, a single act of brutality will capture the headlines while hundreds of acts of kindness over time are ignored. In the words of Harvard University Professor of Psychology, Steven Pinker:

News is about things that happen, not things that don’t happen. We never see a journalist saying to the camera, “I’m reporting live from a country where war has not broken out” – or a city that has not been bombed, or a school that has not been shot up.

In a time when so many things seem dire, it’s refreshing to learn how many important trends are improving. Providing a balanced view of humanity’s progress is the motivation behind a book which helps us see how the world is really faring.

In Ten Global Trends Every Smart Person Should Know, Ronald Bailey and Marian Tupy debunk the belief that the world is getting worse. In fact, for the most part, it’s getting better. The authors have assembled a superb collection of factual information which provides an uplifting report card on humanity’s progress.

Despite its title, the book actually presents 78 trends. The first chapter, Top 10 Trends, has a global focus. The remaining eight chapters identify other significant trends covering people, health, violence, work, natural resource, farm, technology, and US trends.

Ten Global Trends serves as a counter-argument to doomsayers and leaves the reader in no doubt that human progress over recent times has been nothing short of stunning. As the top ten trends reveal, the world is becoming richer, healthier, greener, safer, freer and a more pleasant place to live.


The size of the world’s economy has grown more than a hundredfold over the past two centuries. Economic growth leads to higher average incomes, enabling consumers to buy more goods and services and enjoy better standards of living. If global economic growth maintains its 2.8 per cent average rate since 2000, GDP will increase to a whopping $1.1 quadrillion by 2100.


Extreme poverty has plummeted from 84 per cent of the world’s population in 1820 to under 10 per cent today. Over the course of the last generation, more than a billion people left the most destitute living conditions behind. Extreme poverty (living on less than $1.90 per day) is expected to retreat further by 2030 with less than 5 per cent of the world’s population experiencing penury.


Despite claims to the contrary, humanity has not run out of a single supposedly non-renewable resource. Fossil fuels and most minerals are more abundant than in the past. Indeed, most resources are so plentiful they will last for centuries. There are compelling reasons to challenge the claims of resource depletion.


World population will peak lower (at 8.9 billion) and sooner (by 2060) than UN forecasts and will decline to 7.8 billion people by the end of the century. The significant decline in fertility rates in most nations means that global population will not continue forever on a runaway upward trajectory, but will ultimately drop below its current level. [NB: In a previous post, I explained in greater detail why global population is set to fall.]


Famines have all but disappeared outside of war zones. Adequate nutrition is a basic requirement for human survival, yet throughout history, food has always been scarce. Today, the world’s poorest region (Sub-Saharan Africa) enjoys access to food that is equivalent to that of the Portuguese in the early 1960s.


The global tree canopy increased by 2.24 million square kilometres between 1982 and 2016. This equates to seven-per-cent of the Earth’s surface covered by new trees. Mother nature is beating deforestation resulting in expanding woodlands. There are just over three trillion trees on our planet – that’s roughly 422 trees for every person on Earth.


The world’s urban population in 2018 was 4.2 billion people – more than the world’s total population in 1975. Cities are the centres of innovation and the engines of growth. No country has grown to middle income without industrialising and urbanising and none has grown to high income without vibrant cities. Urbanisation is also good for the environment – fewer humans habituating rural areas enables some land to revert to nature.


Since the collapse of the Berlin Wall in 1989, democracy has spread rapidly across the world, beating the communist and fascist regimes that had arisen since the 1920s. The supremacy of democracy is reflected in free elections, the rule of law and constraints on executive power. Autocrats reject these democratic norms in favour of ruthless behaviour which limits rights and liberties.


Over the past half-century, wars between countries have become rarer, and those which do occur kill fewer people. International trade offers a path to world peace as it encourages nations to live in harmony. Free trade raises the cost of war by making nations more economically interdependent. The more that people rely on trade with others, the greater the cost to all parties of a conflict.


The chances of a person dying in a natural catastrophe – earthquake, flood, drought, epidemic, etc. – has declined by nearly 99 per cent over the past century. Today, buildings are better constructed to survive earthquakes, weather satellites provide early storm warnings, and swift medical interventions limit the spread of diseases.

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Clearly, the world is not going to the dogs and these are not bleak times. Almost everywhere you turn, you can find evidence of some positive trend – if you are prepared to look. The remaining 68 trends outlined in Ten Global Trends show that on all key dimensions of human well-being, the world is in an extraordinarily better place today than just a few decades ago.

Most people are better educated, better fed, more literate, and have more life options than at any other time in human history. Incomes and life expectancy are rising while child mortality and cancer death rates are falling. Stocks of nuclear warheads have plummeted and digital technology has transformed how we live, work, and play.

The world isn’t as horrific as we have been led to believe. Indeed, there’s never been a better time to be alive. In bygone years, life was shorter, sicker, poorer, more dangerous, and less free. So, we need to stop bingeing on bad news and seek out the positives in the world as good news lifts our spirits. We should also follow the advice of the Monty Python song – Always Look on the Bright Side of Life.

And if you want to appreciate the simple things in daily life, just listen to the lyrics of Louis Armstrong’s song – What a Wonderful World.

Before you go …
The astounding ascent in living standards over the past 200 years has been driven largely by capitalism. Yet this innovative, free-market system – which has delivered untold benefits to humanity – is under attack by anti-capitalists. I’m a proud proponent of capitalism and in my post next fortnight I will mount a strident defence of capitalism and argue that it remains a force for good – despite its many imperfections.


Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Lessons learned from the coronavirus outbreak

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COVID-19 has left an indelible mark on the world. The pandemic has upended our lives and changed our daily routines. Billions of people have been forced into lockdown, unable to visit one another, or go to work, or attend school, or meet with friends in public places. With constraints put on our basic freedoms to reduce the spread of the virus, any sense of normalcy has been lost.

The once-in-a-lifetime health crisis brought with it wide-ranging consequences which have tested our resilience. As with anything in life, experience is the teacher, so it’s vital for humanity to come out of the pandemic as better individuals and a more tightly-knit community. The fundamental question is: What have we learned along the way?

As we reflect on the lives lost, the suffering experienced and the disruption inflicted by COVID, there are many takeaways for governments, businesses, and individuals. The fallout from COVID has ricocheted into all areas of life, so there are myriad lessons – some painful (exposing our weaknesses and limitations) and others uplifting (spotlighting our strengths and generosity).

COVID-19 has been a wake-up call and – as society looks to rebound from this seismic event – it’s not surprising that scholars, think tanks, consultants, and other experts are jumping on the coronavirus “lessons for the future” bandwagon. I have read many of these opinion pieces and, in the main, believe that these analyses contain sound advice.

[NOTE: If you type the keywords – “lessons learned from COVID-19” – into your Google search box, that query will return pages and pages of search results. You can read 15 Lessons the Coronavirus Pandemic Has Taught Us, or you might care to peruse 10 key lessons to be learned from fighting COVID-19, or maybe you would prefer to dive into COVID-19: 6 Meaningful Lessons.]

To provide a succinct summary of the various “lessons learned articles” would be challenging as each analysis comes from a different perspective. Regardless, the pandemic has revealed many underlying societal issues that we’ve long known existed. To fix these problems, we should set ourselves the overarching goal of building a healthier and fairer society which is inclusive and sustainable.

Achieving this goal will require collaboration between governments and citizens and this is something that the boss of the World Health Organisation knows only too well. Shortly after the COVID-19 outbreak, Tedros Adhanom Ghebreyesus warned the world that a “whole-of-government, whole-of-society” approach was necessary to crush the virus.

Predictably, many ignored his advice even though governments and citizens working together is a prerequisite to solving any global or national issue. This, I believe, is the most important lesson arising from the pandemic. Whether it’s defeating a deadly virus or tackling climate change, governments and citizens must listen to experts and work hand in hand.

The pandemic’s catchphrase, “we’re all in this together”, rings hollow as key stakeholders have not been joined at the hip. Around the world, collective action has been undermined by a lack of political trust (confidence in political institutions) and social trust (faith in other citizens). Waging a war against a disease has led to pandemic belligerence.

Ultimately, slowing the spread of the virus relies on people having faith in the policy prescriptions of governments. Citizens have been asked to adhere to a range of directives including stay-at-home orders and physical distancing practices. Even so, the call to make personal sacrifices for the collective good has been a bitter pill for many to swallow.

Governments everywhere have imposed emergency measures which limit the rights and freedoms of citizens and this has led to varying levels of civil disobedience. Mass protests around the world have seen anti-vaxxers, anti-maskers, and conspiracy theorists march shoulder-to-shoulder in defiance of lockdown laws thereby creating superspreading events.

The pandemic has exacerbated prevailing political discontent and resulted in citizens being quick to blame their leaders for not containing the virus. In some countries, this criticism is completely justified but in others, it is not. In fairness to governments, there is no rulebook for understanding how the pandemic will play out. We are all in unchartered waters, learning as we go.

Still, this does not excuse the “go-it-alone” attitude of many national governments which quickly retreated into populist nationalism in response to a global threat. As I opined in a previous post, Why COVID vaccines are being distributed unevenly and unfairly, wealthier nations have bought up enough doses to vaccinate their entire populations nearly three times over.

Rich nations remain focussed on national recovery, not global recovery, as they are prioritising country over planet. The WHO has labelled this behaviour as “vaccine nationalism” and blamed it for the lack of solidarity against a common enemy. Dr Ghebreyesus warned that the lopsided distribution of vaccines harms everyone and protects no one as inoculating certain populations to the detriment of others is medically self-defeating.

This fever of inequality is being fuelled by a chronic failure of national leaders to display true global leadership. The inward focus of most countries places the pursuit of domestic political goals above those beyond their borders. In fairness to national leaders, their beggar-thy-neighbour stance is being driven by citizens who expect their elected officials to look after them first and foremost.

So, the “my-country-first” approach to vaccines reflects the sentiments of citizens. Even though it shouldn’t be this way, Australian Prime Minister, Scott Morrison – like every other democratically elected world leader – knows that his party’s fortunes depend on giving the majority of Australians what they want – a jab in the arm and quickly!

Politics is nothing if not a mirror of the society it serves. As a society, we crave quick fixes and instant gratification and expect politicians to solve all of society’s ills at the snap of a finger. That’s why politicians who pander to the immediate demands and desires of voters (e.g., to be at the front of the vaccination queue) are invariably rewarded by the electorate.

Complex public policy problems typically involve changing the behaviour of groups of citizens or all citizens. With respect to the pandemic, we as citizens – as I stated in a previous blog – need to change our selfish ways because:

Not enough of us have shown grace under pressure. There has been a lack of camaraderie. Panic has prevailed over common sense. Many have behaved like a marauding swarm of locusts stripping supermarket shelves bare. We needed to be at our selfless best but have been at our selfish worst. The crisis has unmasked who we really are and proved beyond doubt that individual behavior has a profound impact on society. Many of us have failed the civic responsibility test.

Beyond national governments and citizens, a third actor in the COVID-19 saga is subnational governments – states, provinces, and municipalities. In most countries, governments at this sub level have been at the frontline of managing the COVID crisis. Many have recorded operational blunders which have resulted in them playing whack-a-mole with successive outbreaks.

To cover their mistakes, subnational governments have used a classic tactic – shift the blame on to others. When it comes to rising infection rates, some subnational governments have attempted to pin responsibility on citizens for breaking health directives while others have tried to scapegoat their national governments for health policy failures. Amid all the rancour, it’s clear that making a villain of other actors is counterproductive.

Despite this, the blame game – with its finger-pointing and mutual buck passing – is a familiar feature of politics in Australia. As I outlined in an earlier post, the pandemic has laid bare the inherent weaknesses of our three-tier governance structure. Australians have been treated to the unedifying spectacle of states being pitted against states and states slinging barbs at the federal government.

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The pandemic has been a learning curve for everyone and its continuance is stirring unrest. Pandemic fatigue is setting in and is eroding social cohesion. Our interdependence means that we are all in the same boat and need to work together. With that in mind, the territorial turf wars must cease, political leaders must present a bipartisan front and citizens must comply with health orders.

United we stand, divided we fall.


Paul J. Thomas
Chief Executive Officer
Ductus Consulting

How to make the world a better place

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The idea of changing the world can be daunting. With so many problems to tackle, where do you begin? The list of global challenges is long and includes the need to eradicate extreme poverty, improve health outcomes, foster world peace and build a sustainable planet.

Believe it or not, education can assist in solving these issues and more. Education broadens the mind and helps us see the world afresh, thereby enabling us to make more balanced and insightful judgments. By applying these judgments to societal problems, we can advance the cause of humanity.

You certainly don’t need to wave a placard or chain yourself to a tree to make a difference. To quote Nelson Mandela: “Education is the most powerful weapon which you can use to change the world”. It provides us with the knowledge to critically examine our response to all life situations.

We all need to take educated action in a range of areas if we are to genuinely improve life on this tiny planet which we call home. This belief accords with the oft-quoted advice of English sociologist and philosopher, Herbert Spencer: “The great aim of education is not knowledge, but action”.

There is a vast difference between knowing something and acting on it. Understanding alone does not solve problems which is why awareness must be backed up with specific measures. In the words of Dale Carnegie: “Knowledge isn’t power until it is applied”.

Periodically, we are exposed to awareness campaigns which are designed to mobilise us to take action on a particular cause or issue. The hope is that once we know that a problem exists, (which is the purpose of this post!), we will be motivated to behave in a way that mitigates the issue.

Citizens of all nations are surrounded by problems, many of which are not contained to national borders. Still, it’s understandable to see ourselves as inhabitants of a community or a country. Yet, we are also citizens of the world and must learn to broaden our focus to effectively tackle cross-border issues.

All of us need to act like global citizens as we are all part of one global village. But our knowledge of supranational issues is often superficial as many of us lack global competency. Even so, we cannot continue to see the world through a narrow, self-absorbed national lens.

The aid and development organisation, Oxfam, defines a global citizen as “… someone who is aware of and understands the wider world – and their place in it. They take an active role in their community and work with others to make our planet more peaceful, sustainable and fairer”.

We live in an interconnected world where our local actions can have global implications. Small acts add up – they initially drive change in a city, then a state, followed by a nation and ultimately the world. This is how people power shapes our planet and it can take many forms.

We can all become agents of positive change by improving our decision-making capabilities. To facilitate this, we must understand the cause-and-effect connections within and between the various roles we undertake in society. Changing our behaviour in the following three critical areas would be a good start.

  1. We need to be better educated as voters to make informed decisions at the ballot box.

Thomas Jefferson wrote that a well-informed electorate is a prerequisite to democracy. How well-informed and educated were the people who voted for Donald Trump in America? Or those who voted for Jair Bolsonaro in Brazil? Or Rodrigo Duterte in the Philippines and Viktor Orbán in Hungary?

The harsh reality is that right-wing populist politicians enjoy massive support from uneducated voters. Yet after seeing how unscrupulous and divisive these leaders have behaved, many have come to regret how they cast their vote. Around the world, voters have learned that populists make empty promises.

Populists exploit people’s discontent and raise expectations, but cannot deliver solutions. Unrealistic campaign promises are the trademark of populists and when these pledges are left unfilled, voters feel duped. The electoral gamble of millions of ordinary people has not paid off.

In my post, Why the problem with democracy is voters, I stated that:

Voters have a track record of choosing idiots, authoritarians and demagogues for elected office. These leaders invariably turn out to be incompetent and dishonest and thrive on emotion-driven discourse. They hoodwink people into supporting them by exploiting voters’ credulity and prejudices.

Voting is a choice with consequences. When the electorate gets it wrong, the repercussions can be devastating – not just for an individual nation, but the entire world. Populists shun globalisation and international co-operation and this poses a threat to world peace and stability. That’s why your domestic vote has global implications.

Educate yourself to make more intelligent political choices.

  1. We need to be better educated as consumers to make environmentally sustainable purchases.

Many people understandably jump up and down about humanity’s need to take climate change seriously. These same people typically look to governments and businesses to find eco-friendly solutions, when the real power for change is in our collective hands.

We support governments with votes and businesses with dollars, which means that we can choose who governs and where we spend our money. In my post, How households can create a new model of sustainable capitalism, I advised that:

If we don’t like what a company is doing, we can stop buying their products and services and force them to change. Consumers drive markets and sustainable consumer choices can change corporate behaviour. But we all need to take a stand and, for many of us, this will require a lifestyle overhaul, particularly with regard to saying “no” to unnecessary and/or environmentally unfriendly household items.

It’s incumbent on all of us to become responsible consumers. From the clothes we wear to the food we eat and everything in between, our choices matter. We can reduce our ecological footprint by shopping responsibly, buying less and recycling more. Adopt the mantra: reduce-reuse-recycle.

Educate yourself to live more sustainably.

  1. We need to be better educated as media readers, viewers and listeners to evaluate the credibility of mainstream and citizen journalism.

We should be able to trust and rely on the news. We look to the media to tell us what is happening in the world as many people don’t have the time or skills to sift through vast amounts of information themselves. The media sets the news agenda and political tone and this informs our decision-making as citizens.

So, the power of the media comes from its ability to influence and shape the perception of the public. In return for this privileged position, people expect journalism to be fair, balanced and accurate. But like every sector of society, the media has its own prejudices and biases.

In 2018, the Australian edition of The Guardian published an article: Why is populism suddenly all the rage? The article explained the reasons why “populism is sexy”. Instructively, the article identified the role of the media in the rise of populism by acknowledging that:

Because of dwindling subscription rates, traditional media increasingly focus on topics they expect to sell well, such as scandals and conflict, fuelling the sense of crisis that populists can draw on.

In fairness to the media, I acknowledged in my previous post – Why media standards have fallen – the claim made by media outlets that they simply produce (print/broadcast) what consumers want. I further conceded that:

As a society, we would rather read about the sordid private lives of celebrities than have a serious debate about the long-term benefits of public policy. So, just as we get the politicians (and businesses) we deserve, we also get the media we deserve.

Fake news and misinformation are problematic in democratic systems. One way we can combat this is by being aware of the natural human tendency to only seek information that aligns with our personal views. Academics refer to this inbred preference as “confirmation bias” and it impacts the judgments we make.

Online social media platforms – like Facebook, Twitter and YouTube – run on algorithms which “feed” us information based on our desire to hear only one side of every story – the side which confirms what we already believe. Algorithms capture what we “like”, “retweet” and “share” and then send us additional confirmatory content, thereby creating a reinforcing echo chamber.

According to Kristina Lerman, a University of Southern California professor whose research focuses on the structure of modern social networks:

… echo chambers strengthen polarization and the divisions in our society. It’s common to feel uneasy because of the disassociation between the warm blanket of a like-minded social media community and the cold reality of a real-world populated with challenging perspectives.

Educate yourself to become a savvy news consumer.

■      ■      ■

Contributing to the greater good does not require you to develop a vaccine or win a Nobel prize – you just need to be educated and informed about contemporary issues. Education is the key to better politicians, better companies, better media and ultimately, a better world.

Education helps us become better versions of ourselves.


Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Why media standards have fallen and what it says about us

Source: beconnected.esafety.gov.au

Sometimes I feel that I’ve lost the plot as I increasingly find myself at odds with where society is going. For instance, I rarely watch the programs that are served up on commercial television. Much of what is on “the box” is mind-numbing and/or unnecessarily sensational and I don’t find it entertaining.

Nightly current affairs programs used to be a no-nonsense world with broadcast journalists and reporters fearlessly tackling the serious issues of the day. Nowadays, these programs and their “news” presenters offer trivial stories about weight loss, toddler tantrums and back cures. No wonder Gerald Stone observed in his book, Who Killed Channel 9?, that commercial TV is pitching to the lowest common denominator.

Commenting on the “dumbing down” of the Channel 9 program, A Current Affair, Stone wrote:

Here was a program that once prided itself on a nightly menu filled with hard-hitting interviews, sensational crime investigations and the inside dope on the latest titillating celebrity scandal. More and more it had begun to dwell on diet fads and shopping tips, topped up with melodramatic ambushes of small-time con men, or the inevitable tear-jerkers about battling families who can’t pay the rent.

In fairness, I must acknowledge the media’s claim that they simply produce what viewers and readers want. As a society, we would rather hear about the sordid private lives of celebrities than have a serious debate about the long-term benefits of public policy. So, just as we get the politicians we deserve, we also get the media we deserve.

As citizens, we are complicit with falling standards and they have certainly plummeted. It still staggers me that the reality TV show, Big Brother, was a ratings winner, even though it demeaned contestants, promoted bullying and encouraged sexual behaviour and nudity. Big Brother was vulgar and the antics of its participants eroded the distinction between public and private.

Another reality TV show, The Apprentice, paved the way for Donald Trump to become the 45th president of the US. The show made a hero of Trump in the eyes of the show’s followers and this die-hard fan base supported him in his bid for the presidency. Even so, millions of gullible viewers were unaware that the show’s producers heavily edited the program to portray Trump as a successful, credible and coherent businessman.

Rather than aspiring to educate viewers, the reality television genre emphasises personal conflict and dramatic tension. The media’s appetite for never-ending drama and outrageous arguments finds a natural home in reality television. Media executives like these programs as they are cheap to make (few paid actors) and rate well with viewers. Nonetheless, many find them objectionable, dishonest and trashy.

According to Australian academic, Dr Soseh Yekanians, Aussies have wholeheartedly embraced reality television. In an article that Dr Yekanians penned for The Conversation, she wrote that Australians have an unhealthy appetite for watching people on reality shows psychologically tear one another apart. She cited the following three examples to anchor her assertion.

  • On Channel Ten’s, The Bachelor, two contestants’ merciless name-calling and bullying behaviour became so vicious that they were dubbed the “mean girls”.
  • On Channel Seven’s, My Kitchen Rules, the slurs by two competitors, which included likening one contestant to a “blowfish gasping for air”, eventually led to Seven asking them to leave the show.
  • On Channel Nine’s, The Block, two contestants walked off the show after being heavily criticised by the judges. One of the contestants claimed that the feedback “just became pure insults”.

Clearly, reality television gains ratings by deliberately pitting contestants against one another. As noted by Dr Yekanians, “there is little real about this form of TV, which is heavily scripted and showcases stereotyped characters”.

Regrettably, standards of taste and decency remain in decline as the quality of television programs continues to deteriorate. We seem to have become conditioned to a diet of explicit sex, coarse language and graphic violence with such content now considered the norm. Tabloid television has modelled itself on its close kin, the tabloid press.

Tabloid journalists – the tawdry cousins of broadcast journalists – are known for sensationalism in reporting. Sex, scandals and beat-ups are the order of the day. Journalists must fill column space for their editors by “finding” stories. Many embrace the mantra: “Never let the truth get in the way of a good story” in order to whip readers into a frenzy, and this was the case regarding Donald Trump’s playbook of deceits.

We should look harshly on the media ecosystem that amplified Trump’s lies. The former president rode to power thanks, in part, to support from Rupert Murdoch’s Fox News. While in office, Trump was aided and abetted by Fox and other right-wing US media in spreading false claims. Following his electoral defeat, the rioters who stormed the Capital building were “egged on by these US publishers” according to a Sydney Morning Herald editorial.

But as pointed out in an article published in The Atlantic in November 2018, it was not just right-wing media that promulgated Trumps lies. Mainstream journalists were also accused of becoming “complicit in spreading the president’s falsehoods and conspiracy theories”. The article was published under the deadline – Trump’s Lies Are a Virus, and News Organizations Are the Host – and went on to say that:

The traditional news media are thoroughly infected by the Trump virus. It is not only spreading the disease of the president’s lies, but also suffering from a demise in public trust – at least among one half of the electorate.

[Please allow me to insert a parenthetical note here. Shortly after the outbreak of COVID-19, the WHO accused the media of spreading its own virus. The WHO warned that humanity was not just fighting a viral pandemic but also a highly contagious “infodemic” transmitted by the media. As I opined in a previous post, the media’s penchant for sensationalism throughout the pandemic has resulted in inaccurate news dissemination including the reporting of unscientific cures and unverified medicines.]

There are, of course, many fine and ethical journalists who work outside of the irreverent tabloid world. These individuals fulfil a vital role in society. A true democracy requires the active participation of an informed public, which is only possible if citizens have unfettered access to information. Ironically, the phone hacking scandal in Britain only came to public attention due to the free press.

In response to the scandal, The Telegraph in London published the following editorial.

This newspaper cares passionately about maintaining the highest standards of journalism. We believe that journalism, when practised properly, protects the public from abuses of power by exposing those who are guilty of dishonesty, corruption or injustice. Journalism that harms the innocent – by telling lies or spreading falsehoods about them, or by unjustifiably invading their privacy – does the exact opposite of what good journalism aims to achieve.

Hear, hear! Unfortunately, not all journalists and/or media outlets ascribe to this level of professionalism. And that’s not just my opinion – many mainstream journalists also lament falling standards of truthfulness, accuracy, objectivity, impartiality and fairness. One senior Australian journalist put it this way:

I’ve spent my working life as a journalist …. But now, reading the newspapers and watching the news, I can’t help but wonder if this is a craft that is not only losing its centre of corporate gravity and support, but also some fundamental sense of its mission and responsibility … the major market tabloids … are the dominant organs of news in all our capital cities. They cry wolf, they cry terror, they fan the flames of disquiet and distrust. Because fear sells.

In his 2011 book, Sideshow: dumbing down democracy, former Australian federal government minister, Lindsay Tanner, was withering in his critique of the media. He cited a number of examples where the media created unnecessary panic including the Global Financial Crisis, the Year 2K computer bug and the swine flu epidemic. The media reporting of these events produced a public response out of proportion to the threat.

The power of the media comes from its ability to influence and shape the perception of the public. We look to the media to tell us what is happening in the world as we don’t have the time or skills to sift through vast amounts of information ourselves. The media sets the news agenda and political tone and this informs our decision-making as citizens.

The free press plays a vital role in society and can serve citizens by exposing wrongdoings and informing debates. Still, it is disappointing to note that some sections of the media do not operate to the highest ethical standards. No wonder that in Australia – and other parts of the world – journalists are among the least trusted professionals.

Strange how the media can scrutinise the behaviour of others but is incapable of serious self-examination.


Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Why we don’t recognise our own incompetence

Source: The Rock & Roll Shrink Radio Show

Imagine that you are hosting a dinner party for a group of friends. Throughout the meal, one guest is spouting off on a topic that he claims to know well. As those around the table listen to his opinions, it’s blindingly clear to everyone that he is grossly ill-informed. Yet, he arrogantly prattles on in the belief that he is the fount of all knowledge.

All humans have blind spots, which is why many of us are oblivious of our own ignorance. We can believe things about our ability that are just not true because – to be blunt – some of us are so dimwitted we don’t realise how dense we really are. A good example is Donald Trump whose confidence and bluster as president never wavered despite his woeful grasp of policy matters.

That we are lousy at accurately evaluating ourselves is not a surprise to social psychologists, David Dunning and Justin Kruger. Their research shows that people who are capable at a particular task or in a certain topic typically underestimate their ability while people who are incapable at a particular task or in a certain topic frequently overestimate their ability.

This disconnect is called the Dunning-Kruger effect and it reveals that while the competent are often plagued with doubt, the incompetent are habitually cocksure of their excellence. Put simply, the Dunning-Kruger effect is the tendency for people to misjudge their abilities, with the skilled putting themselves down and the inept hyping themselves up.

We have long known that fools are blind to their own foolishness. As renowned British naturalist, Charles Darwin, wrote in 1871 in The Descent of Man: “Ignorance more frequently begets confidence than does knowledge: it is those who know little, not those who know much, who so positively assert that this or that problem will never be solved by science.”

Another wise man (allegedly Aristotle) said that “the more you know, the more you know you don’t know”. Smart people are clever enough to know that they don’t know everything, so they read and study to fill the gaps in their intelligence. In contrast, asinine people don’t read or undertake continuous education because they are clueless to the fact that they have knowledge gaps.

The Dunning-Kruger effect stems from our ignorance of our own ignorance. It is a cognitive bias which causes unskilled individuals to suffer from illusory superiority. One way to avoid falling victim to this phenomenon is to inject a healthy dose of humility into your sense of self-regard. For many people, that is easier said than done.

As English philosopher, Bertrand Russell observed: “The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts”. We have seen both sides of this cognitive pitfall in action during the COVID-19 outbreak.

Highly qualified epidemiologists – and other scientists who have devoted their careers to studying infectious diseases – readily admitted the limits of their knowledge regarding the behaviour of the novel virus. As true experts, they know where their expertise ends. Fortunately, when the pandemic hit, they knew enough to urge the introduction of social distancing practices and lockdowns.

Still, many people, including political leaders like Trump (USA), Bolsonaro (Brazil) and Modi (India), were dismissive of – an even hostile towards – medical experts, and flouted health warnings. Unsurprisingly, coronavirus outbreaks in these countries spiralled out of control due to the incompetence of self-absorbed “Covidiots” as evidence by their Dunning-Kruger performances.

Around the world, many populist politicians masqueraded as health professionals yet refused to take even basic precautions to keep the public safe. In doing so, they displayed their absolute ignorance of science to the detriment of their citizens. By rejecting COVID-19 countermeasures and downplaying the threat, millions of innocent people died unnecessarily.

Defiant perspectives on COVID have come not just from ignorant people but also lawyers, engineers, accountants and other professionals. Otherwise astute members of society, including Elon Musk, rejected the assessment of medical experts. Musk – who many consider to be a genius – fell foul of the Dunning-Kruger effect. As noted in online magazine InsideHook:

… Elon Musk is not a medical genius. In this instance, he is no more than yet another unqualified mouthpiece in a growing list of blowhards regarded as armchair epidemiologists.

Similar to the coronavirus pandemic, many citizens and politicians show disdain for the science of climate change in the conceited belief that they know better than the experts. (No wonder disaster movies typically begin with the government ignoring a scientist – a case of art imitating life!). The world is full of climate change deniers who are blissfully ignorant of their ignorance.

The science has been settled to the highest degree that climate change is primarily due to human activity. Consequently, air and ocean temperatures are rising, arctic ice is melting, ecosystems are shifting and sea levels are rising. The signs are all around us – the Earth is patently warming which makes the endless debates questioning the truth of climate science gobsmacking.

While many governments agree with the science, politicians make cosmetic changes and largely adopt a business-as-usual philosophy. Meanwhile, climate activists continue to express their frustration and disbelief while climate deniers remain dogmatic in their opposition to climate action. Humanity is fiddling while Rome burns.

As one commentator observed, the Dunning-Kruger effect is:

… more noticeable in the denier set because most of them lack scientific or climate science credentials and training and yet they are challenging the collective views of thousands of trained scientists who do have the required training, credentials, knowledge and skills to discuss climate science.

Science-based arguments are rejected by citizens around the world. These same people voted for climate denying governments in places like America (under Trump) and Brazil. Deniers spend a lot of time on social media eagerly absorbing anything that supports their unscholarly position, even when it’s outrageously absurd and completely uncorroborated by evidence.

The political landscape is replete with evidence of the Dunning-Kruger effect. Take Trump’s rise to the presidency which can be largely attributed to ignorance – his popularity was highest among voters without a university degree. As described in a 2016 Politico Magazine article:

Their expertise about current affairs is too fractured and full of holes to spot that only 9 percent of Trump’s statements are “true” or “mostly” true, according to PolitiFact, whereas 57 percent are “false” or “mostly false” – the remainder being “pants on fire” untruths. Trump himself has memorably declared: “I love the poorly educated.”

Over the past decade or so, citizens who elected populist governments have been let down badly. Voters were lied to by politicians like Trump, but were not smart enough to know it. In democracies such as Turkey, Hungry, Poland and the Philippines, citizens unwittingly elected governments which normalised authoritarianism and diminished their democratic rights.

The “right” leaders were not elected as voters lacked the skills to assess the abilities and competencies of others. Votes were cast based on personal feelings or false information, which is why two eminent political scientists believe that the problem with democracy is voters. While many of us rate ourselves highly in political knowledgeability, the harsh reality is that most of us are ignorant as voters.

The Dunning-Kruger effect is real and permeates all aspects of life. It is evident in people’s viewpoints on education, vaccination, work, sports and even investing. In all walks of life, you will find people who think that they are much better and/or knowledgeable than they really are.

Overconfidence is the mother of all psychological biases and has been blamed for the sinking of the Titanic, the explosion of the space shuttle Challenger, the 2008 meltdown of the subprime mortgage market and the 2010 oil spill in the Gulf of Mexico. Overconfidence accounts for a wide range of poor outcomes – including war.

That a little knowledge can be a dangerous thing has been known by philosophers since Socrates. This perceptive ancient Greek thinker said that “the only true wisdom is knowing you know nothing”. As wise as this is, I’ll end with the words of Benjamin Franklin which resonate with me:

“Being ignorant is not so much a shame, as being unwilling to learn.”


Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Big technology companies thrive during coronavirus

Illustration: Trent Joaquin; Sources: Amazon, Apple, Microsoft, Google, Facebook

COVID-19 has wrought economic disruption on a monumental scale. Around the world, businesses of all shapes and sizes have fought a life-and-death battle for survival. Business owners have grappled with forced closures, plummeting revenues and surging losses. Despite drastic measures – including slashing jobs – many businesses have been unable to stay afloat.

The decision by policymakers to induce massive economic suffering to save lives was a brutal trade off – but not for the technology industry. While other industries were decimated by store, restaurant and office closures, the technology sector powered ahead. Government stay-at-home orders were a godsend for technology companies – demand for their just-a-click-away services skyrocketed.

Specifically, the COVID crisis turbo-charged the profits and share prices of the technology industry’s Titans – Alphabet (Google’s parent company), Amazon, Apple, Facebook and Microsoft. The quintet benefited enormously from a greater reliance on their services during the pandemic as the world moved almost entirely online for work, school and entertainment.

Each of these leading digital powers was able to capitalise on being viewed as an essential service for a public in lockdown with their shares enjoying a jaw-dropping bull run. As noted in a report in The Wall Street Journal, their combined revenue during 2020 surged by a fifth to a mammoth $1.1 trillion while their aggregate market capitalisation soared by half to a staggering $8 trillion.

Thanks to the pandemic, the technology conglomerates now make up five of the six largest companies in the world. During 2020, their stocks soared to dizzying heights and all are now valued at over $1 trillion. According to an analysis conducted in March this year by MacKeeper, these companies are worth more than most countries. MacKeeper noted that:

  • Apple’s gargantuan $2.2 trillion valuation makes it richer than 96 per cent of the world. Only seven countries have annual GDP figures that outrank Apple’s market capitalisation.
  • Microsoft’s colossal $1.8 trillion market cap puts its value on par with the GDP of Canada and makes it richer than many developed economies including Australia. Only nine countries are worth more than the developer of Windows.
  • Amazon’s $1.6 trillion valuation would make it the 14th richest “country”. Its revenue per employee is $351,531 annually, which exceeds the highest GDP per capita in the world.
  • Alphabet, Google’s parent company, is valued at $1.4 trillion, putting it ahead of all but 12 nations.
  • Facebook, while falling short of the trillion-dollar mark, is valued at a respectable $763 billion. (NB: Facebook’s cap passed $1 trillion on 28 June 2021.)

The economic effects of COVID have catapulted the tech Titans to heights that few would have imagined possible prior to the pandemic. They now account for nearly a quarter of the total value of companies in the S&P 500 index – the barometer of corporate America – and that is almost double the percentage of just five years ago. Never before has this level of market influence been seen from one sector.

These behemoths have phenomenal corporate power and have been dubbed the “Frightening Five”, which is why some believe that their wings need to be clipped. Together, they control much of the critical digital infrastructure which underpins global commerce. Over recent years, their digital services have played a greater role in our daily lives.

The imposition of social distancing and travel restrictions during the pandemic dramatically increased our dependence on digital platforms to service our basic needs, including staying connected with family, friends and colleagues. This reliance was tangibly demonstrated in the exponential rise in spending on computers, online retailing, cloud-computing services and digital advertising.

The pandemic has made a clutch of tech firms an even more integral part of work and personal life. Indeed, the coronavirus has created huge tailwinds for these juggernauts by driving behavioural shifts that will long outlive the health crisis. “Digital adoption curves aren’t slowing down – they’re accelerating”, said Microsoft Chief Executive, Satya Nadella.

Big tech is on a roll and their deep pockets will enable them to withstand almost any challenge to their market dominance. Investors have been astonished at their earnings growth and resilience in marching unscathed through the health chaos. In the words of one analyst, “the digital revolution is here to stay, and these businesses are embedded in our lives”.

One journalist who tried to live without the tech heavyweights claimed that it was impossible. Another journalist found that she could reduce but not eliminate the Frightening Five from her life. Despite her goal of wanting to “excise these companies from my life as completely as possible,” she discovered that “these tech giants dominate the Internet in so many invisible ways,” it’s not possible to avoid them.

According to an article in The New York Times, the Big Five’s platforms “are inescapable; you may opt out of one or two of them, but together, they form a gilded mesh blanketing the entire economy”. Many of these digital platforms generate what economists call “network effects” – they keep getting more indispensable as more people use them.

Millions of people find it hard to imagine going through a single day without using an Apple iPhone, conducting a Google search, reading a Facebook News Feed, receiving a package from Amazon or launching Microsoft Office. Nonetheless, these same people find it unsettling that a handful of unelected tech executives wield so much power.

Governments around the world also worry about the misuse of monopoly powers and the gobbling up of competitors. Government probes have been conducted into their business practices and have uncovered privacy concerns and data security breaches. Governments from Australia to the US are starting to crack down on big tech companies to rein in their power.

Over recent times, US tech companies have faced increased scrutiny in Washington over their size and power. Republican and Democratic lawmakers have banded together to introduce a package of bills which will change antitrust laws which regulate the conduct of business corporations. The legislation should level the playing field by ensuring that tech companies are held to the same rules as everyone else. As noted in one report:

The new laws would make it easier for the government to break up dominant companies. It could also prevent these companies from snuffing out competition through pre-emptive acquisitions. And it could curtail the tech giants from entering different businesses where they’d be able to use their market power to crush smaller competitors.

In any market, regulators like to see competition as this gives consumers choice. Having one dominant player lessens competition which typically leads to higher prices. But in the case of Google and Facebook, their services are free thereby making concerns over pricing irrelevant. The companies themselves say they are successful because of the quality of their offerings, so why punish success? To quote Bloomberg Technology:

Consumers appear to agree it’s hard to beat Google’s suite of free products or Amazon’s convenience. Their dominance may not be about predatory practices so much as the nature of competition in the digital marketplace, where tech platforms benefit from network effects: As more people use them, the more useful – and dominant – the platforms become.

So, the focus must be on whether there are other harmful political, economic or social effects. Some believe that the tech giants have become more like governments than companies given the staggering amount of money at their disposal and the enormous influence they have over democracy in society. Case in point, Facebook has become a global political force as the largest and most influential entity in the news business.

The digital economy knows no national borders and this is a threat to the jurisdiction of governments around the world. Given this, we will likely see increasing friction between the Big Five companies that rule the tech industry and the governments that rule the lands these companies are invading. The nation-state is fighting not to lose its grip.

Love them or hate them, there’s no escaping the tech superstars. They have become part of the fabric of our lives and will continue to cast a long shadow over the political, economic and social landscapes. They have created an Internet oligopoly which has changed the face of modern capitalism and made them indomitable.

The Big Five have only one question: What pandemic?


Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Why the future may not need us

Credit: BBC Future

Attempting to predict the future is always a roll of the dice. No one can see around corners, but that has not stopped think-tanks and other forecasters from trying to gaze a few years down the road. Every other week, another report or book is released telling us how tomorrow is going to unfold.

Yet the future has too many variables for anyone to say with certainty what will happen. Long-promised gizmos like flying cars, robot maids and personal jetpacks have failed to materialise for the masses. Similarly, bringing cryogenically frozen corpses back to life remains firmly in the realm of science fiction.

History shows that some innovations turn the world upside down while others flop spectacularly. Determining which discoveries will disrupt the status quo is fraught with danger. This is particularly the case with digital technologies which are taking us into uncharted waters.

I’m not a seer when it comes to the future, nor is Yuval Noah Harari. Professor Harari does not claim to know for certain what’s in store for humanity. Nonetheless, his book – Homo Deus: A Brief History of Tomorrow – provides a provocative and fascinating insight into what might lie ahead.

Harari is a professor of history at the Hebrew University of Jerusalem. His preceding book, the global bestseller – Sapiens: A Brief History of Humankindlaid out the last 70,000 years of human history. It examined how humanity managed to rein in famine, plague and war.

While Sapiens showed us where we have been, Homo Deus points to where we are going. Harari openly admits that predicting the future isn’t as easy as deconstructing the past. Even so, his future orientated sequel provides a glimpse of the forces that will shape the 21st century.

Harari’s central claim is that Homo sapiens (Latin for wise man) will become Homo deus (Latin for god man). We are on the cusp of an evolutionary transition in history that may witness the creation of a new species of superhumans – the man-gods of Harari’s title.

Harari is an atheist, so when he uses the word “god”, he is not referring to a supreme deity who is all-powerful (omnipotent), all-knowing (omniscient) and all-present (omnipresent). Rather, he means humans with life spans greatly extended by science and intelligence vastly enhanced by technology.

Harari believes that humans will increasingly focus on god-like pursuits such as chasing enduring happiness (wellbeing) and everlasting life (wellness). “In seeking bliss and immortality,” he writes, “humans are in fact trying to upgrade themselves into gods”.

Achieving this upgrade will take “divine powers” and will happen through new “techno-humanism” technologies such as genetic modification, artificial intelligence and cyborg engineering. We are approaching a crossroads in evolution where machines will become more human-like and humans will allegedly become more machine-like.

Biology and computing are coming together and could theoretically result in a human brain being directly connected to a computer. That “distant possibility”, says Harari, will be reserved for a tiny number of elites – a superclass of humans – given the significant cost of biotechnology.

There will also be a massive “useless class” who will be pushed to one side by intelligent machines which will do jobs better than people can. The list of occupations where people will be “unemployable” include bus drivers, bartenders, construction labourers, veterinary assistants and telemarketers.

One of the divides between the superclass and useless class will be biological, with the former having superior physical and cognitive capacity and living much longer. A second dividing line between the classes will be artificial intelligence which will give unprecedented power to the few who control the algorithms which run our lives.

To illustrate, at some stage in the future, all vehicles are predicted to be self-driving and one corporation may well control the algorithm that runs the entire transport market. In that scenario, all the economic power previously shared by thousands will be in the hands of a single corporation.

A second example can be found in the operation of the military. Armies – which once consisted of millions of men – are increasingly being dominated by small groups of super-warriors who control technologies like drones and fight cyber wars. The best armies today require a small number of highly professional soldiers using very high-tech equipment.

Across the board, human authority is shifting to algorithms and external data processing systems which, according to Harari, may “know us better than we know ourselves”. Harari envisages that “Dataism” – a universal faith in the power of algorithms – will become sacrosanct.

Our lives will be dominated by non-conscious but highly intelligent algorithms as we are sucked deeper into the online world and turned into faceless data. In this brave new digital world, Dataism will purportedly become our 21st century religion, replacing a homo-centric world with a data-centric world.

Billions of people around the world are regular users of social media and share intimate details of their lives on platforms such as Facebook, YouTube, WhatsApp and Twitter. But all that free browsing and connecting comes at a price – your entire life (which is why I’m not a user, albeit I do utilise Google).

Harari warns that when you get something for free, you are the product. He points out that “in the twenty-first century our personal data is probably the most valuable resource most humans still have to offer, and we are giving it to the tech giants in exchange for email services and funny cat videos”.

The dehumanisation of decision-making is being facilitated by everyday citizens. The algorithms that nowadays make automated decisions – which were formerly the exclusive remit of humans – are being fed a diet of data supplied by us. As noted in an online article by two mathematicians:

An algorithm is a digital recipe: a list of rules for achieving an outcome, using a set of ingredients. Usually, for tech companies, that outcome is to make money by convincing us to buy something or keeping us scrolling in order to show us more advertisements. The ingredients used are the data we provide through our actions online – knowingly or otherwise.

Harari believes that “humankind is poised to replace natural selection with intelligent design, and to extend life from the organic realm into the inorganic”. Still, he is not asserting that the future has to unfold this way. Harari is a great writer and thinker and his book maps the different possibilities that humankind is facing. Nonetheless, he states that our species:

… is likely to upgrade itself step by step, merging with robots and computers in the process, until our descendants will look back and realise that they are no longer the kind of animal that wrote the Bible, built the Great Wall of China and laughed at Charlie Chaplin’s antics.

Frankly, I find Harari’s predictions chilling and hope that they do not come to pass. I don’t want my great-grandchildren to be bio-engineered. I don’t want humans to be turned into flesh and silicon cyborgs. And I don’t want the techno super-rich to live forever by implanting their brains into robots.

My attitude to immortality was outlined in a recent post, The quest for healthy aging and longevity. Assuming I’m right and immortality is never achieved, the unequal availability of life extending procedures will nonetheless take a toll on society. For Harari this means that:

… we might see the emergence of the most unequal societies that ever existed … economic inequality will be translated into biological inequality.

I hope that the world is not spinning too fast to avoid this grim future.

Before you go…

Last year, I read a book by Roger McNamee called Zucked: Waking Up to the Facebook Catastrophe. McNamee was an early mentor to Mark Zuckerberg and a Facebook investor. Nowadays, he spends his time warning people of the dangers of social media platforms. In an article he wrote, McNamee warns that it’s time to wake up to the dark side of Internet technology if we are to avoid a dystopian nightmare. Well worth a read.

One last thing…

I have long believed that the discourse in the mainstream media about artificial intelligence (AI) is grossly exaggerated. This misrepresentation is reinforced by Hollywood which continues to feed the paranoia about AI with a diet of movies portraying robots as evil machines. Filmmakers, along with the media, know that people are predisposed to fear what they do not understand. I do not believe that robots will become human facsimiles and this article does a good job in explaining why our fears of AI are overblown. Also, well worth a read.


Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Understanding the left-right political spectrum

Source: Slideshare.net

We all understand the difference between up and down. We also know the distinction between north and south. But when it comes to left and right in a political sense, many of us are less clear. What does it really mean to be left-wing? How does this vary from those who lean to the right?

The terms “left-wing” and “right-wing” define opposite ends of the political spectrum, yet there is no firm consensus about their meaning. Over time, these labels have become blurred. Tony Blair once argued that the contrast between the two had melted away into meaninglessness.

The genesis of the political categories “left” and “right” date back to eighteenth century France and the French Revolution. Members of the National Assembly were seated according to their political orientation. Supporters of the king sat to the right of the Assembly president with supporters of the revolution to his left.

In line with this historic division, contemporary left-wingers are said to be anti-royalists who favour interventionist and regulated market economic policies. Right-wingers, on the other hand, are said to be monarchists who favour laissez-faire, free market economic policies.

While those on the left support higher taxes on the rich and welfare for the poor, the right favours lower taxes on businesses to help them grow. The left believes in an equal society and big government whereas the right argues that social inequality is unavoidable and that governments should play a limited role in people’s lives.

The Australian Labor Party has traditionally been seen as left-wing (socialist) with historic ties to the union movement. The Liberal Party of Australia has customarily been seen as right-wing (capitalist) with a long-standing pro-business posture. Many see this partisan profiling as outdated in describing Australia’s modern political landscape.

A case in point is the issue of Australia becoming a republic. Based on traditional ideology, you would expect this cause to be championed by the “anti-royalist” Labor Party. Yet the push for a republic has been spearheaded by a member of the “monarchist” Liberal Party.

Past prime minister, Malcolm Turnbull, is a Liberal blue-blood. (NB: Left-wing parties are typically associated with red, the colour of revolution, while right-wing parties are often associated with conservative blue.) He is a former investment banker who – uncharacteristically for a conservative politician – is also a staunch supporter of the Australian Republican Movement. Turnbull co-founded the movement.

In trying to discard the monarchy (via a referendum in 1999), Turnbull was seen to have taken a left-wing stance which caused some right-wing hardliners to label him a turncoat. Still, he is not the only Australian politician to be off course in a strict ideological sense. Former Labor treasurer, Paul Keating, lurched to the right economically.

Keating’s laudable economic reforms included deregulating the financial system, floating the Australian dollar, reducing import tariffs and introducing compulsory superannuation – sound initiatives that a Labor treasurer was not expected to do. It’s said tongue-in-cheek that Keating was Australia’s best “Liberal” treasurer and the architect of neo-liberalism in Australia.

Many of Keating’s reforms were based on the 1981 Campbell Inquiry Report into Australia’s financial system. John Howard instigated the inquiry when he was Liberal treasurer under prime minister, Malcolm Fraser. But Howard disappointed his traditional business supporters by implementing only one of Campbell’s 260 recommendations.

Ironically, it was Keating who introduced many of Campbell’s recommendations. He implemented a globalisation agenda which made Australia internationally competitive and opened our economy to the rest of the world. Unsurprisingly, big business embraced Keating – even though the Labor Party and corporate Australia are supposed to be adversaries.

So, how left-wing was Keating as a left-wing politician? In reality, he moved the Labor Party to the right of centre. So, the message is clear: While some may argue that ideological creeds are reflected in the policies of each party, this is often not the case.

If the truth be told, political viewpoints along the left-right scale do not fit neatly into one ideological camp. Within each camp, there are factional groups who believe that some things outweigh others. So, an individual may identify with left-wing ideals on one issue but consider themselves right-wing for everything else.

Those whose political outlook sits somewhere in the middle of the left-right divide are classified as taking a “centrist” stance. And to complicate things further, those who hold extreme political views belong to either the far-left or the far-right.

People on these outermost poles of the political spectrum often see themselves as aggrieved individuals. They are radicals who are deeply estranged from mainstream political mores. Their degree of alienation from contemporary society can be seen in their extreme ideologies.

Both the far-left and the far-right have a victim-like mentality and employ militant strategies. Their political engagement relies upon force, violation of civil liberties and disdain for democratic ideals and practices. They normalise violence in their attacks on governments, globalisation and social elites.

The far-left includes Islamic terrorists while the far-right boasts white supremacists and neo-Nazis among its ranks. These extremist hate groups engage in violent acts and display many parallels. As they have overlapping tactics and stances, some academics contend that it is misleading to classify the far-left and far-right as opposite poles.

It is suggested that a more realistic classification is provided by the Horseshoe theory. This theory asserts that the political spectrum is not a straight line with opposing ends. Rather, it is a horseshoe with its farthest outliers bending in toward each other and sharing a number of similar beliefs.

To illustrate, supporters of the extreme right and extreme left are more likely to believe in conspiracy theories even when they are contradicted by mainstream science or factual evidence. These theories include the belief that coronavirus vaccines are harmful, climate change is a hoax and the US government planned the 9/11 terrorist attacks.

One area where the far-left and far-right markedly differ is in their interpretation of the past. As noted in the US online newsletter, The Perspective, these interpretations dictate their political stances and calls to action.

The far-right expresses nostalgia for the past and actively works to preserve their history, regardless of what that might mean in today’s context. … Conversely, the far-left … associates the past with its ills – slavery, sexism, and other injustices. History and its institutions are not to be preserved and cherished, but rather, an embarking point from which to begin reform.

History is in the eye of the beholder and so too is populism. There is no agreed definition of populism – it means different things to different people. In political science, populism is seen as an approach that frames politics as a battle between two opposing groups. In his book, Populism: A Very Short Introduction, Cas Mudde labels these antagonistic groups as the “pure people” (ordinary masses) and the “corrupt elite”.

Populism is not sustained by a single political ideology. Rather, it describes a style and approach to politics. Populism can be deployed in the service of almost any ideology – left or right, moderate or extreme. Populists can come from all parts of the political spectrum and they have popped up all over the world.

Think Marine Le Pen in France, Viktor Orbán in Hungary, Rodrigo Duterte in the Philippines, Indian prime minister Narendra Modi and, of course, Donald Trump in the US. All of these populist leaders climbed to prominence by dividing people into good or bad. Populism defines our current political age. In the words of one US journalist:

Once in power, populist leaders represent “a threat to liberal democracy” … (such as) Trump calling the press the “enemy of the people,” criticizing judges, resisting congressional oversight, claiming that elections are “rigged,” flouting laws, and claiming that a “deep state” of bureaucratic actors is out to get him to deny the will of the people he represents. It happens with other populist leaders all over the world.

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It’s axiomatic that thinking in terms of a left-right spectrum is outdated. While these binary labels may be convenient shorthand descriptors, they are too generic. People hold a range of opinions on social and economic issues and these do not fit neatly in the traditional left-right continuum.

Also, citizens care about the matters that affect them and not the political ideology that supposedly underpins a given issue. Further, humans can hold seemingly contradictory beliefs. All of this makes the political spectrum largely meaningless, but we continue to use it due to laziness. As noted in the online magazine Quillette:

Putting people into one of two ideological boxes is far easier than understanding their unique point of view. Reducing politics to a simple contest between right and left is far easier than reasoning through hundreds of issues. Humans generally prefer simplicity to truth and would rather sign up for a “side” than do the hard work of thinking.

Whether you swing left, lean right or aim dead centre, it’s incumbent on all of us to stay politically informed.


Paul J. Thomas
Chief Executive Officer
Ductus Consulting