The old world of tech is dying and the new cannot be born

14 May 2026 – Baldur Bjarnason

When I was living in the UK, one of the more common responses people had to me being Icelandic – beyond the strangely common “I hate Björk” refrain – was some comment about Vikings or Norse mythology.

I’m guessing my name helped prompt those. We all have very traditional Icelandic names in my family.

If the comment caught me at the wrong time, I’d occasionally reply in my usual literal-minded way:

The Vikings were coastal raiders and Iceland is an island in the middle of bloody nowhere. Once Iceland was settled in 930, we were mostly a nation of farmers and substantially Celtic. We were probably the least ‘Viking’ of all the Nordic countries. Besides, we converted to Christianity in the year 1000, so we were only pagan for a few decades at most. The Icelandic Sagas are a bit like cowboy movies in that they’re the events of a few short years spun into a nation-building mythology that’s well out of proportion to their historical impact.

The idea of us being a “Viking nation” has a strong hold on people’s imagination. But we’ve been a Christian culture for a thousand years. Longer if you account for the few settlers like my ancestor Auður Djúpúðga who were Christian a century before the rest of the nation converted.

One of the pitfalls of growing up in a Christian culture, one that sticks with you even when, like me, you’ve been an atheist most of your life, is a tendency towards knee-jerk millenarianist thinking.

“This changes everything!”

No matter the flavour of Christianity, a core idea baked into every aspect of the religion is that singular revelatory events can fundamentally change the world. There’s the “before”. Then the “event”. Then an “after” that has been completely transformed. In Christianity itself this is usually associated with Christ’s chaotic transit schedule – “He is here! He has left! He is about to arrive again! Now he’s leaving again! But he’s also somehow always been here! And not.” – but the mode of thinking is common throughout literature, philosophy, and storytelling in the Christian west.

When we tell our stories and spout our opinions, we are very prone to statements along the lines of “this changes everything!”.

However, when you study comparative literature you quickly discover that cultures dominated by other religions tend not to have this tendency, at least not to the same extent.

This colours academic thinking as well. Thomas Kuhn’s paradigm shift, for example, on the face of it frames scientific progress as a series of singular revelatory events that each change an entire field of study in almost one go. But if you dig into the text itself, The Structure of Scientific Revolutions, the process it describes is one where the worldviews of scientists and academics change one by one, where many simply never adopt the new worldview – the one that more cohesively explains what they’ve been observing – and instead stick to preexisting models. Even the most sudden and dramatic paradigm shifts are processes of epistemic diffusion where the old and new models of truth coexist and interact. All of which is to say that Kuhn’s ideas lend themselves to a pluralistic interpretation provided you actually dig into the text itself, and it means that, if you squint, you could make the ideas work with theories of epistemic anarchism such as that of Paul Feyerabend.

Kuhn’s paradigm shift is less a revelation and more a cycle where the new contains elements of the old and the old attains elements of the new.

From an individual perspective, switching your worldview or mental model on a problem or topic can feel revelatory. “This changes everything!” But the world hasn’t changed. All that changed is how you understand it.

I say all this because I don’t want people to fall into the pitfall of expecting revolution. But I do want you to be open to the idea that events can change, transform even, our understanding of how things work.

There have been a few moments in my life where singular events changed my worldview without truly changing any of the facts I knew.

They simply triggered a new thought: “Oh, this explains what’s been happening.”

The simultaneous realisation that the core argument of my PhD thesis was simply incorrect but that it would also pass easily because I knew the people who were likely to judge it – the theory would play to their biases. I had the choice of continuing to work on what was incorrect and get a PhD or to deliver what I believed to be true and almost certainly not finish the PhD. I still don’t know if I made the right choice. I’m certainly not proud of it.

Walking through the ASDA superstore in Bristol and seeing it for the monument to destruction that it is. Civilisation-scale existential decay as aisles and aisles of branded consumer goods.

Sitting in on a talk on autism diagnoses, one of a series of scientific talks, watching an animation they used as a diagnostic aid, hearing everybody around me laugh as if the shapes on the screen made sense, only then truly understanding myself, and feeling more alone than I have ever felt before or since.

Nothing changed in these moments but in personal terms there was a “before”, the moment, followed by the “after” where everything had changed. The world was the same. But to me the world had transformed.

The US techopolistic hegemony #

Reading that Dmitry Sklyarov had been arrested for violating the US Digital Millennium Copyright Act was the moment I first truly understood how the technopoly of the US government and the tech industry worked.

There have been many definitions of Neil Postman’s term technopoly but mine is:

In a technopoly, the only ideas and thoughts that have social and cultural legitimacy are those that support, are supported by, and are mediated through technology.

New ideas in education or healthcare, for example, are evaluated through a technological lens and not whether they educate or heal.

The Sklyarov case was notable for a few reasons:

• He and ElcomSoft had been working within the preexisting paradigm where ideas were evaluated based on their quality and how well they stood up to discourse. Adobe had shipped ebook DRM software that was flawed as designed and trivially breakable. Exposing these failures was a legitimate research activity.
• But ideas in a technopoly aren’t evaluated based on how well they work but in terms of how well they support technology as a culture. That the systems were crap didn’t matter: they were sacrosanct.
• A technopoly is both cultural and political because “technology” is both a culture and a self-reinforcing socioeconomic system. Looking at the world through the lens of “technology” leads you to think about the world in terms of technology. Once you accept it as a frame of reference it becomes all-encompassing.
• By defending the technopoly the US government was signalling to its allies that, as a political and cultural paradigm, the technological mode of thought was not optional. They clearly saw this worldview as integral to the future of the US hegemony.

Despite Adobe withdrawing its complaint, the US persisted in pursuing the case because the point it was making was larger than a single company.

That the case ended in acquittal was neither here nor there – although it admittedly mattered to the defendants. What mattered to the rest of us was that it wasn’t enough for the United States that they effectively controlled tech and copyright policy worldwide – most of its allies had followed its example and implemented or were in the process of implementing their own version of the DMCA – they demanded that thought, debate, and meaning conformed as well. The economics and ideology of Technology were – always – intertwined.

Global tech policy and discourse was set and enforced by the US to favour US-based tech companies whether the companies involved wanted it or not.

The global tech economy #

Our current globalised tech industry can only exist because of the protectionism and policy uniformity imposed by the United States on its hegemony. That billions of people across dozens of countries work and interact on unified platforms whose laws and regulations are, for all practical purposes, basically that of the US – the policies of end-user nations tend to have a minimal effect on how any of these platforms are run – is an artifact of US dominance.

It’s not because these companies are so fantastic or that their products are so amazing that countries would face local uprisings if they tried to keep them in check. They are, more often than not, about as popular and respected as tobacco or pharmaceutical companies – some of them and their products are polling in terms of public sentiment in ranges similar to child molesters or authoritarian immigration enforcement entities – and their CEOs are some of the more despised public figures in recent history.

Countries can fine the tech industry, up to a point, as that just establishes the cost of doing business. “This is the price list for inflicting societal suffering. Pick the one that suits your business model.” But attempts to genuinely change the rules – beyond just enforcing bullshit compliance regulations that mostly serve to keep local upstart competitors in check – will be blocked, overtly or covertly, by the United States.

Before, when the US system of free-flowing trade was still in full force, much of the pressure was implicit or covert. US diplomats didn’t need to say anything. All that was needed was a tacit understanding that there were rules, that the US set those rules, and that those who followed the rules would benefit from the trade that came with being a part of the global hegemony.

The rules didn’t need to be enforced directly except in extreme cases. Even legislation such as the EU’s GDPR exists mostly to strengthen the existing system by establishing rules and boundaries that only incumbent – mostly US – tech companies have the resources to fully follow, and the system was packed with enough exceptions and loopholes to ensure that when it came to changing corporate behaviour it was more theatre than action.

Regulation that’s defined entirely in terms of the technology it regulates, as opposed to in terms of the effects it has on society or imposing boundaries and limits on the technology itself, is a core component of the technopolistic political and legislative environment.

The game of technology is defined and controlled by the United States of America. Local governments can impose rules that moderate the impact, but genuine limitations on technology are impossible.

Or, they used to be.

The decline #

In parallel with the rise of the technopoly over the past couple of decades the US’s global dominance has been declining. The 2007 crash effectively legalising financial fraud – you only get jail time if you defraud the rich – lead to both a decline in the rule of law in the US and an excessively financialised economy. When stock markets and the like are overrepresented they suck the air out of the rest of the economy and make it less competitive.

If you have two economies of equal size and productivity, one has a massive financial sector and billionaires while the other does not, the financialised economy will have less left over to invest in research, education, infrastructure, and healthcare. Over time, it will inevitably fall behind the country with a smaller financial sector because it’s the other things that drive the economy and productivity, not stock market growth.

The US has coasted on the fact that it’s economy is so big that it could afford all the finance and billionaire parasites sucking its blood. At least for a while.

The other force driving the decline is China.

The rise of China and the decline of the rule of law governing finance in the US has added tension to the relationships in the western hegemony. It’s difficult for the EU to negotiate its ongoing “equitable” surrender to US economic policy if that economic policy just amounts to “whatever our oligarchs want to steal this month, they get.”

Somewhat oversimplifying matters, for a while the bargain was that the EU could have protectionist policies for its industries and in exchange they’d mostly acquiesce to US dominance of tech. Escalating abuses, corrupt tech oligarchs, social media manipulation of politics and elections, attempts to directly co-opt education and healthcare industries, and – with “AI” – outright attacks on many of Europe’s biggest industries such as culture and media, have contributed to the fraying of this relationship.

The EU suffers from the double bind of being protectionist of its industries – that’s literally what it’s for – while at the same time explicitly allowing direct attacks on those industries and its single market because the US tech industry – protected by the US and their dominance over the global economy – has broadened the scope of its ambitions to include “everything, everywhere.” If the EU moves to protect their industries they are acting against the technopoly and US hegemony that frames their very understanding of the world. At the same time their very reason for existence is the protection of their local industries and market and allowing their destruction is unthinkable. Neither action is conceivable, hence the double bind. Psychologically, a double bind like this would feel as confusing as being told you have to bite your own arm because the arm misbehaving. Even if it’s correct, even if your arm is indeed misbehaving and biting it is indeed all you can do to stop it, the thought still has the flavour of madness.

Other countries and regions historically allied with the US are in a similar internal conflict.

Voters, labour, and industry increasingly demand checks on the US tech industry. Populist politicians speak out against social media platforms. Tech companies are compared directly to the tobacco industry. Right-wing nationalist calls for “sovereignty” are redefined to include technological autonomy.

But participation in the US-controlled global economy is contingent on putting as few limitations on the excesses of tech as possible, an implicit bargain that has repeatedly been made explicit by their current president.

That same president has, in a way, presented the world with a resolution to the double bind by unceremoniously ending the US hegemony. His trade war partially unravelled the status quo, but it’s his diplomacy or lack thereof that put a period to era of American dominance.

The moment this became obvious was the Iran crisis.

“This changes everything!” as they would say.

The hegemony ends #

The closing of the Hormuz strait is a bigger event than portrayed by most mainstream media.

Not only did the US fail to beat a much smaller nation – one that has been operating under crippling economic sanctions for years and plagued with internal turmoil – into submission, they effectively sabotaged the world market, destroyed all of their alliances in Asia, and destabilised the petrodollar bargain all at once.

It is triggering a monumental economic crisis – this much we’ve been told – but a longer-lasting change is how it has accelerated the unravelling of the old world order.

The impact of removing 20% of the world’s oil and gas supply isn’t distributed equally. It’s primarily, at least to begin with, born by countries in Asia, many of whom are historically some of the US’s strongest allies in the region. This is affecting their industries and agriculture and threatens both starvation and economic collapse.

What’s more, they know who’s to blame:

Nam Aoi, 58, said she can only afford to plant on 19 of her 32 hectares. Until now, she never left farmland barren before.

Some of her neighbors blame the Thai government for not helping enough. Others accuse fertilizer companies of profiteering during an emergency. But standing at her paddy field under the 102-degree heat, sweat beading on her forehead, Nam Aoi said she faults only two men: Trump and Israeli Prime Minister Benjamin Netanyahu.

“Those two held hands and created war,” Nam Aoi said, her voice rising. “Nothing is normal because of them.”

Iran war is crushing Asia’s farmers, threatening global food supply - The Washington Post

The petrodollar bargain where the world’s biggest oil producers agree to only sell oil for dollars – propping up the dollar and forcing countries to buy the currency in excess of what their direct economic relationship to the US would require – has been falling apart in slow motion over the past few years, but this latest crisis simultaneously takes much of the dollar-priced oil directly off the market and weakens the underlying relationship so that the bargain is less likely to hold whenever the strait opens again.

There’s a risk that US allies in Asia crash-transition to alternative energy sources because of the Hormuz crisis, increasing their reliance on China, decreasing their reliance on Gulf oil, reducing their investment in the US dollar, and begin the process of severing themselves from US in terms of trade and diplomacy.

If the crisis spreads to the EU, coming straight at the heels of the Greenland and tariff crises, the pressure within the EU to disentangle itself from the US increases substantially.

These processes now look pretty inevitable. The question is mostly how long it will take.

The US no longer has the power or influence it once did and that changes everything for US tech companies.

The old is dying #

We’re in a very odd place. We’ve clearly come to an end, of sorts, but it’s an ongoing end – a decline mixed with stepwise collapses – so we don’t get the release that comes with closure or the certainty of knowing your fate.

We’re in a crisis because, as Antonio Gramsci said, “the old is dying and the new cannot be born”.

I have spent much of my career pulling together thoughts on why the software industry behaves the way it behaves. Management is mostly motivated by stock prices, not by delivering valuable software at a profit, but that only explains their drive, not the mechanism they apply to reach for their ambitions.

The mechanism is the application of control. Instead of delivering services and software that unlocks value for their client industries, the software industry has spent the past decade or so trying to control their customers and their client industries. Why make software for hotels when you can control the hotel industry? Why make software for taxis when you can replace the entire industry with software? Instead of trying to entice customers to upgrade their software by making new versions more valuable to them, push them to a subscription service where you control what they get, when they get it, and what value they’re allowed to unlock from their own businesses. Why sell Word when you can sell an Office 365 Cloud Subscription?

The endpoint of this is to replace every industry that remains with generative models. Cut back on actual development of Photoshop, for example, lower development costs and programmer overhead even as you replace the industries that are your customers with automatic image and video generators.

But writing out a detailed analysis of the how, what, why, and where of the software industry’s grasp for control doesn’t really make that much sense when we don’t know how any of it’s going to pan out.

The software industry is built on the foundation provided by an unchallenged US global hegemony. Without it, without the economic force provided by the US dollar, the US having access to all of our data around the globe and their control over payment systems and networking would be less tenable. Today’s software industry would not exist. Without the weight of the US political empire behind it – if Airbnb or Uber had been local startups – much fewer countries in the world would have loosened their regulations and consumer protections to accommodate them to the point where they prospered as they did.

Even as the software industry achieves its ne plus ultra – the unprecedented achievement of controlling all language, media, and office work in the west by turning “AI” into the universal intermediary – the foundation they built on is crumbling.

A big chunk of my livelihood over the past few years has been in helping people understand the software industry on both a micro- and macro-level. Why do software companies behave the way they do? Where should you copy them, and where should you chart a different path? What works and doesn’t work in a software development project? What has worked for me? What has worked for those like me?

Even my writing on “AI” has centred on how things work, not on politics, social impact, education, or culture:

• How do LLMs affect productivity and quality? (Much like leaded petrol. There’s some potential benefit for individual users with literally decades of expertise, provided nobody else uses LLMs. The results are catastrophic when everybody is using them.)
• How do LLMs affect the thinking of those that use them? (Quite a bit, mostly for the worse, but the exact causes and effects are tough to assess.)
• Does it work for business or not? (Mostly not. The inherent variability of a generative model means that the benefits will always be mostly hypothetical while the harms are widespread and long-lasting and substantially outweigh the benefits that can be realised.)

But “AI”, even more so than any other tech, is contingent on political clout. It’s what forces through data centres, lets companies infringe on copyright and violate software licences, renders them at least temporarily immune to all kinds of consumer protections and wrongful death suits, and results in the political collaboration where “AI” systems provide authoritarian states with “accountability sinks” and algorithmic cover for institutional racism. It’s this political partnership more than anything inherent in the technology that has let the “AI” bubble get this far and change so much.

It’s also what makes analysis so fraught because the US is over as a global power. Getting beat by a cash-starved, under-resourced, extremist state struggling to quell internal unrest is not something that happens to global superpowers. Remember, this isn’t an instance of asymmetric warfare like the Vietnam War where the very strengths of an empire are turned into weaknesses. Iran has big obvious military targets and an organised military that’s still functioning after an all-out attack by the US. It’s state versus state where even a draw means the big state lost. It’s what happens to shit-heel nations who don’t know their time has come, like when the United Kingdom and France rushed headlong into the Suez Crisis.

But the Hormuz crisis also delivered a second mortal blow to the US-controlled globalised market. You can’t remove 20% of the world’s energy output, not to mention a number of other essential commodities, without disastrous consequences. Two weeks would have been bad enough. Two months are a catastrophe. A whole summer would be unimaginable.

Crises happen. As do strategic miscalculations. Even empires make mistakes. What sets the recent crises – Hormuz, tariffs, and Greenland – apart is how the US has used them as an opportunity to deliberately signal the end of its own empire. They first turned on their trading partners, then their allies in Europe, and then they delivered one of this century’s biggest economic and energy crises to their allies in Asia.

Countries that were firmly embedded in the US-controlled global market are now buying oil with yuan and paying Iran for passage with cryptocurrencies. As electricity and fuel rationing begins, everybody knows that the US is to blame: the voters, the media, the politicians, and the wealthy. When people die, their nearest and dearest will blame Americans.

The ground is shifting underneath every industry that was built on the assumption that the US would protect and preserve the globalised status quo. The software industry has shifted its entire value proposition from “we make tools that help you make or save money” to using political clout and the dollar hegemony to capture, control, and loot entire sectors of the various economies of the world. That strategy only works when you’re in charge.

It’s impossible to guess what exactly will happen next to software or tech. All I know is pretty much all of modern software is built on a premise that no longer holds. Even free and open source software is contingent on everybody agreeing to similar policies regarding copyright. Whether tech has enough clout on its own to continue its strategy of capture and control, whether it compromises with local governments to retain its power, whether we’re in for a period of collapse and fragmentation is anybody’s guess. The old world is dying and the new cannot be born.

My understanding of how the software industry works is now historical. It does not correspond to our present reality. That history is a legacy that’s useful to understand but only as an antecedent to the present, but if we take it to represent some sort of truth about the new world when it eventually comes into existence we will only be misguided and misled.

The tech industry is shaping up to be one of the most hated industries in our modern era.

It was built on the foundation of empire.

They’ve been taking enormous risks believing they were empires in their own right.

I suspect we’re about to find out whether that’s true or not.

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If you enjoy systemic-but-practical takes on software development, you might enjoy my book Out of the Software Crisis: Systems-Thinking For Software Projects.