Editor's note: Bradley Blankenship is a Prague-based American journalist, political analyst and freelance reporter. The article reflects the author's opinions, and not necessarily the views of CGTN.

The American stock market appears to be booming while the real economy is in utter shambles due to the COVID-19 crisis, which seems to be a total perplexity. As millions are struggling to pay for basic necessities such as food, health care and housing, stocks, especially in tech, are soaring. 

A new paper published by the National Bureau of Economic Research in October alludes to this mystery and provides an interesting analysis on this odd paradigm in capitalism. 

The central thesis of this paper is that "firms listed on the stock market in aggregate as well as the top market capitalization firm contribute less to total non-farm employment and GDP now than in the 1970s."

It shows that there is a declining correlation between a firm's employment and market capitalization – which flies totally in the conventional wisdom about "trickle-down economics," but largely falls in line with the fruition of neoliberal capitalism. 

To understand this, it's important to note the logic of the particular managerial capitalism that emerged in America in the 20th century, commonly called "Fordism", named after Ford Motor Company. Under this system, it was understood that mass production leading to low-cost goods would fuel economic growth through consumer spending. 

Part of this system entailed paying workers higher wages so they could purchase these products, and while the technological revolution of this era that created assembly lines cut down on the workforce needed to create products, the prevailing form of capitalism followed the straight-forward logic of reinvesting capital into expansion, which at that time meant hiring more workers.

At that time, the labor movement in America was strong and companies employed massive labor forces within communities, creating a latent sense of accountability. 

The neoliberal paradigm of the 1970s and onward decoupled wages from productivity and also market capitalization from employment, as the National Bureau of Economic Research paper shows. 

This can be explained by the post-Fordist neoliberal approach that molded the conventional wisdom of market capitalism into a new form that turned essentially every firm into one focusing on profit futures and not products. Under this paradigm, costs – labor and wages especially – are cut as much as possible in order to compound profits.

As economist Paul Krugman pointed out in regards to this negative correlation between market capitalization and employment shown in the paper, "Case in point: in the 1950s the biggest market cap was either AT&T or GM, which were also the top two employers. In 2019 it was Apple, which was only the #40 employer."

He goes on, "It made some sense to say that what was good for America was good for General Motors and vice versa. But what's good for America and what's good for Apple have almost nothing to do with each other."

Large companies today, including Apple as Krugman mentioned, are posting record profits and enriching a select few to ungodly levels while leaving the public largely in the dust. Work is outsourced, offshored, or workers are simply expected to work more for the same or less pay. Certainly rising unemployment in America will drive this; with a larger share of the population unemployed, employers gain more leverage over the terms of employment. 

While this is certainly a known danger to American workers, it is not the exact new one they face. The switch from a manufacturing economy to a service one that occurred, especially based on tech, has created a disparity vaster than imagined between corporations and the public. 

While Apple may not be the best example of how tech is accelerating the decoupling of the public from corporations because it relies heavily on the sale of (expensive) consumer products, companies such as Facebook, Twitter, Google, and others certainly are. 

Instead of being wholly geared toward future profits in a speculative sense, these firms specialize in producing behavioral certainties that then make profits certain. They are dealing in what Harvard's Shoshana Zuboff has called "behavioral futures," a thing which is now the norm under the new paradigm of "surveillance capitalism." These companies that peddle in behavioral futures by using data to "personalize" content are as detached as possible from the public.

Under surveillance capitalism, people are not the customers (advertisers are) nor the product (predicted behavior is), they are instead an unrefined resource that produces data to be fed into algorithms – the new gold. Because of this, people have little to do with their operation in the conventional sense – they have remarkably few employees considering their market capitalization and do not rely on people but instead other firms to buy their services. 

The coronavirus and its corresponding increase of technology use has probably boosted these firms' data potentials more than any singular event since the smartphone was invented. People are staying at home, working from home and shopping from home while big tech collects more data and advertisers spend more on ads. 

All of this, and the tsunami of mergers and acquisitions soon to come, explains the tech industry's boom in the stock market. But it is a given that this will not result in a positive correlation with job creation or wage growth. 

The only question now facing big tech is whether it is so safely disconnected from the real economy that it can essentially be in another dimension while the real economy craters. The answer: probably not. This new paradigm of capitalism is still capitalism, with its same contradictions and failings. As I wrote previously for CGTN, there is serious reason to believe that these stock valuations are all wrong and, at some point, reality will make its way into the financial market.

(If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com.)