Technology Creates Pareto Improvements That Shift Power
New technologies often promise to make everyone better off, but their real impact is to break existing power equilibria by making previously impractical actions suddenly possible.
"Technology is inherently politically destabilizing; it breaks truces by changing what's possible." Byrne Hobart
Byrne Hobart introduces the concept of "Pareto Technology" a technology whose adoption makes some existing processes more efficient without expanding the scope of what is being done. Higher-mileage cars are a Pareto technology: same trips, less fuel. But most transformative technologies are not Pareto. They do not merely improve what exists; they make entirely new things feasible, which destabilizes the arrangements built around the old constraints.
Facial recognition illustrates this perfectly. Humans have always been able to recognize faces, and police have always been able to look at photos. But automating this at massive scale changes the game completely. In China, it becomes a tool of state surveillance. In democracies, it forces uncomfortable conversations about the truce between privacy and law enforcement a truce that existed partly because comprehensive surveillance was simply too expensive. "The impracticality of enforcing one side's agenda is what keeps things civil: you can sustain an indefinite stalemate between the unpleasant status quo and an alternative that is viewed by some people as utopian, by others as dystopian, and by every smart person as impossible." Once technology makes the impossible possible, the stalemate collapses.
This pattern recurs throughout history. The printing press did not just make books cheaper; it destroyed the Catholic Church's monopoly on scriptural interpretation. Social media did not just make communication faster; it atomized the media landscape and destabilized political gatekeeping. The semiconductor industry, as TSMC's story shows, did not just make chips cheaper; it made the fabless model possible, which restructured the entire tech industry's competitive dynamics. Each of these technologies offered genuine efficiency gains, but the real impact was redistributing power among actors who had previously been in equilibrium.
Takeaway: When evaluating a new technology, ask not just "what does it improve?" but "whose power does it increase, and whose truce does it break?"
See also: Skin In The Game Aligns Incentives | Moral Hazard Arises When Risk Is Separated From Consequence | Legibility Kills What It Tries to Measure