Cultural Lag

The fourth key ethics principle that we will discuss is cultural lag, which is the idea that it takes time for culture to catch up with technological innovations and that social problems and conflicts are caused by this lag. 

Till now we have talked mostly about finance, but FinTech is not only about finance; there’s the Fin, but also the Tech. Cultural lag is considered the best way to ethically introduce new technologies into the marketplace.

Technological innovations are often characterized by one word: Disruption. If you pay attention to Silicon Valley, it seems like someone is talking about disruption every few minutes. “We’re going to disrupt this industry.” Or “This innovation is built for disruption.” 

While not everything out of Silicon Valley is really “disruptive,” many amazing innovative disruptions have propelled humankind. And the pace of disruption seems to be increasing. Humankind has progressed more technologically in the past 200 years than in the previous 20,000 years combined.

But is disruption always good? And even when the overall impact is positive, are there ethical issues that should be considered when introducing innovative disruptions? The answer obviously is yes, but we seldom talk or think about these ethical questions until after the tech has been introduced, which is often too late.

As human beings, we tend to overestimate the effect of technology in the short run and underestimate the effect in the long run. This seems obvious, right? For example, just think about the far-reaching impacts that smartphones have had since their introduction. Can you believe that smartphones were first introduced only around 10 years ago? I guess for some of you younger students, that might seem like a long time ago. But for a lot of us, that seems like only yesterday. 

Either way, the point is that it has only been 10 years, but think about how much of an impact they have had! Pretty much everyone has them, and that includes a lot of people in developing parts of the world. And many of the most amazing FinTech innovations have only been possible because of the smartphones that we carry around every day.

But here’s the thing: smartphones became popular so quickly that we, as a society, didn’t really have time to understand the implications of the technology on our broader culture. And every time we started to adapt and adjust to the technology, tech innovators would adjust and make some new features that stayed ahead of our adjustment period. These are all examples of cultural lag and show that technology can change more quickly than society can culturally adapt to such innovations.

There’s one important aspect of cultural lag theory that we need to understand: sociologists and economists believe that many of society’s most challenging problems are caused by cultural lag. Again, think about smartphones. Experts in many disciplines are now emphasizing that smartphones are actually creating or reinforcing serious social problems.

We have all heard reports that emphasize we spend too much time looking at our smartphones focusing on social media to the exclusion of our actual social circle. After a decade of not really understanding the implications of these habits, people are now working to reduce their screen time, and many technology firms like Apple and Google have introduced products to help track and even lessen screen time, encouraging users to spend less time on their phones.

There are many more serious examples highlighting the gap between changes in technology, which occur very quickly, and subsequent adaptations in our culture, which happen very slowly. And the smartphone example is only a very simple example. The reality is that some of the biggest problems society faces – things that are so big that we sometimes have trouble seeing or understanding them – are often tied to technological disruption and the cultural lag that stems from them. 

And while these massive innovations are rightfully celebrated for their positive impact, it’s worth considering some correlated points. For instance, what happens to all the people who work in industries that are made obsolete because of the new technology? Certainly a lot of people have benefited from technological innovations, but not everyone does. Or at least, people don’t benefit equally. Is it morally necessary for new technologies to benefit all of society? Even if that is impossible, should it be an overall goal? Should that be a normative aspiration of new technological innovations? 

Let’s consider another example: drones. Do you have one? Or do you know someone who does? They are now extremely popular, and became popular so quickly over the last few years that governments were caught off guard without regulations specifically covering private drone use. And there are some scary aspects of drone use that people may not have considered previously. For example, people have weaponized drones, with one drone even being used to attempt an assassination of a state leader. And while some companies are using drones in Africa to deliver blood for transfusions, there are also people using drones to drop contraband into jails and prisons, or to smuggle drugs across borders. 

When considering cultural lag, laws are some of the slowest changing aspects of culture. It can easily take years for even simple laws to be enacted. As a result, when drone technology rapidly advanced, making them affordable for almost anyone, governments raced to catch-up, creating regulations to help balance public safety with personal recreation. 

As is probably clear, it’s hard to hold someone accountable for improper drone use if there is no law defining proper drone use. Thus, the cultural lag created between the rapid advancement of drone technology and the much slower development of drone-related laws has created some serious concerns, including disruptions of airports, concerns about privacy and use of drone cameras around personal residences, military installations, and other sensitive locations. 

Our students from the online course provided some other examples of cultural lag in everyday life. Including the impacts of social media on teenagers, especially from cyber bullying. The spreading of fake news and false stories via social media which is made possible because of the omnipresence of smartphone technology. And the environmental costs of mining Bitcoin which will be one of the topics that we’re going to discuss in the next chapter.

So when new technologies are introduced, and these gaps or lags created, who should be responsible for the negative consequences? The innovators and inventors? The government? The users? Governments around the world have been grappling with questions like these for a long time, and some disruptive FinTech innovations are going to pose significant challenges for regulators – and some already do.