It was not so long ago when the tech sector was booming, including cottage industries that promised everybody a six-figure job, no matter how untalented they were. All it took was a six-week “boot camp”. Shockingly, this racket worked for many years. I will first look at how this could happen, before I describe the reality of tech in a near-post-Clown-World scenario, and close with some more practical considerations.

One of the pillars of clown world is fake money. In high-brow circles, this is referred to as “fiat currency”. There is the belief that money does not need to be based on anything in reality, and as long as productivity keeps rising, it is irrelevant how much money the government prints. If you have not been brainwashed at university, however, you realize that money necessarily relates to the number of goods and services that are available in an economy. If there is an economy in which only $100 are floating around, then printing another $100 means that everything just became twice as expensive. In reality, inflation is not quite as fast to catch up. One reason the powers that be love money printing is that the closer you are to the money printer, the more you can rob your fellow man. This is referred to as the Cantillon effect. In simple terms, if there are only $100 of goods and services floating around in the economy, and the government secretly prints another $100 and hands it to some crony, then this person is able to buy up everything at a significant discount.

Clown world is chasing infinite growth, and it seems that growth has a hard time catching up with the money-printing inclinations of our corrupt elite. Thus, if there is too much uninvested money sitting around, then the promise of gargantuan growth years down the line is often enough to make venture capitalists spend some money. It is not theirs, after all. As they normally are not particularly sophisticated, they happily follow the investor herd. Past and present buzz words include “the cloud”, “software as a service”, “Internet of things”, “blockchain”, or “generative AI”. On a side note, I have come across claims according to which venture-capital funding of tech companies is done in order to launder money. I have not looked too deeply into this, but this hypothesis does not strike me as immediately implausible. There is probably some aspect of this as well.

Tech companies normally do not promise profits. Instead, they use fantasy metrics and, like in Marxism, paradise is always just around the corner. Yes, they may never have made money and do not have a path to profitability but if they only spent more money, they would grow even more! Sometimes this bet works out somehow, but often it does not. A prominent example is Spotify, which posted its first annual profit last year, after fifteen years of losses. Of course, the company is a long way off from earning back all its losses.

The amount of money being pumped into tech was, and partly still is, unbelievable. People with unproven business plans may get initial funding to the tune of five to ten million dollars, and pocket a follow-up round that is a multiple of the initial funding. This can go on for years, essentially funding payroll with investor money. However, if there is no proven business model, there may be a bit of “pivoting” going on, i.e. trying out a few different approaches, one of which hopefully promises growth, not profits. What is worse, there is a nonsensical approach to valuing non-profitable companies. There are people out there, big shots in the finance world, who earnestly claim that a plausible approach is to look at the number of engineers a company has hired. It is beyond baffling.

As you can imagine, if the people with the money sacks tell you that you should hire a lot of people to demonstrate growth, you are going to hire people even if they have nothing to do or would not be able to work productively, as a million day-in-the-life-of-a-woman-in-tech videos have impressively demonstrated to the world. A cynical view is that it is better that these people spent their time drinking caffè lattes instead of “slinging code”, but that is a different topic. When Elon Musk bought Twitter, he fired 80% of its staff, i.e. about 6,000 people, which included a very high percentage of highly paid tech workers. Twitter is not an outlier. The same is true both at larger and smaller companies. There were big layoffs at Facebook, Amazon, Google, Microsoft, and other tech giants, whereas a lot of smaller companies shut down completely once the gravy train started to slow down.

The reality of work in the tech sector is that people are quite often just used in order to prop up a valuation, even if they do not do a lot of meaningful work. This is also true of people who do actual technical work. Google, for instance, is infamous for letting different teams develop virtually identical products, only to shut all of them down in the end. Not even big, publicly released products are safe, as websites like the Google Graveyard show.

As a consequence of this influx of people, in order to siphon off investor money, tech companies have set up highly inefficient structures. This was not necessarily done with an evil intention. Instead, people seem to often mistakenly believe that they add value, even though nothing could be further from the truth. For instance, the typical tech company seems to believe that engineers cannot think for themselves at all and instead need to have all tasks broken down by someone else in minute detail. Senior and staff engineers often do not write any code at all but instead produce 30-page reports on possible changes to the system, most of which will never be implemented. The amount of wasted time is beyond comprehension.

There is also the problem of all the tech-adjacent people who want to meddle with your productivity. “Product managers” dream up some nonsense and want you to build features nobody asked for, and these people then turn around, claiming they “lead Engineering” at their company. In contrast, Telegram has one billion monthly active users and only one product manager, the CEO. Somehow they can do this whereas a tech company with 70 engineers normally has enough product managers to field a soccer team. Of course, the damage a product manager does is nothing compared to the meddling of HR with their push for increased “diversity” in hiring, albeit this is slowly coming to an end.

Granted, the money the tech sector pays, or used to pay, is pretty good. The question, though, is for how much longer this will go on, as the reason behind the high salaries was not necessarily the enormous impact on the bottom line each tech worker had, albeit this is a very popular myth these people spread. Instead, salaries where high because of excess financial liquidity in the system and investor belief in enormous payoffs just around the corner. In the last one to two years we have seen a contraction of the market and also some downward pressure on salaries.

In practical terms, my advice for people in tech is to stay on the gravy train but ensure that they acquire or maintain at least one reasonably rare skill in order to remain competitive. If you are in a tech-adjacent role, count your blessings but think of a plan B. In fact, if you got in due to diversity mandates, and you lose your job, chances are that you will not get another job in tech in the foreseeable future. No, I am not a “hater”. These people got in not based on skills or experience, but by other factors, and these other factors are no longer in such high demand.

Lastly, in case you are a high school student wondering if you should go into tech: I have had conversations like that before. While it is true that tech can pay a lot when the times are good, the times are not always good. Perhaps a software engineer may even make more than a doctor during a boom. However, it is not at all clear that you can make these high salaries for decades as an engineer. In contrast, once your are a doctor, you will earn a top income for the rest of your life. If you can get into medical school, it is probably a better choice to do that instead of getting a computer science degree. I think that we will soon see that a degree in computer science will not entail noticeably better career prospects than any other engineering degree. Thus, if you are technically inclined, go into a STEM discipline that appeals to you. After all, there is a very high correlation between enjoyment and ability. You will likely not get rich as an engineer, but you will probably do quite well for yourself.