How mansion-dwelling, carbon-spewing cutthroat capitalists can still be politically correct.
Silicon Valley is an American success story. At a time of supposed American decline, a gifted group of young entrepreneurs invented, merchandized, and institutionalized everything from smartphones and eBay to Google and Facebook. The collective genius within a small corridor from San Francisco to Stanford University somehow put hand-held electronics into over a billion households worldwide — and hundreds of billions of dollars in profits rolled into Northern California, and America at large.
Stranger yet, Silicon Valley excelled at 1950s-style profit-driven capitalism while projecting the image of hip and cool. The result is a bizarre 21st-century 1-percenter culture of $1,000-a-square-foot homes, $100,000 BMWs, and $500 loafers coexisting with left-wing politics and trendy pop culture. Silicon Valley valiantly tries to square the circle of driving a Mercedes or flying in a Gulfstream while lambasting those who produce its fuel.
But the paradox finally has reached its logically absurd end. In medieval times, rich sinners sought to save their souls by buying indulgences to wash away their sins. In the updated version, Silicon Valley crony capitalists and wheeler-dealers buy exemption for their conspicuous consumption with loud manifestations of cool left-wing politics.
Take the cutthroat capitalism President Obama blasts when he goes after firms that outsource jobs and offshore profits. These are the sorts of excessive money-making gambits that the president was railing against when he told the successful that they did not really build their own businesses, or that they should have known to quit once they had made enough money.
Apple, Google, and Cisco, to take just a few examples, are among the worst offenders of all U.S. companies in using legal loopholes to offshore their profits in order to reduce their state and U.S. income taxes. In fact, tax-dodging tech firms have offshored almost $1 trillion in profits — at a time when the strapped tax-and-spend state government in Sacramento that they so overwhelmingly support has piled up billions in long-term debt. Oddly, Obama has never called in any Silicon Valley CEOs to jawbone them about the practice that shorts the state and federal treasuries. Apparently, the administration associates greed with coat-and-tie-wearing CEOs in smokestack industries, not hipsters in sockless loafers.
Barack Obama ran against Mitt Romney in 2012 by blasting him as a supposed greedy outsourcer of American jobs. Yet most of Silicon Valley’s production of smartphones, laptops, tablets, and video games is outsourced to Asian factories, despite California’s high overall unemployment rate. Given that the CEOs of these huge outsourcers lavish progressive politicians with cash, talk loudly about wind and solar power, and promote gay marriage, they are apparently exempt from the sorts of accusations that are brought against more traditional corporations. An unsympathetic steel manufacturer might whine about regulations that drive his business overseas; a Silicon Valley grandee praises those regulations and then quietly follows the steel manufacturer abroad.
And what about the “war on women”? Surely such a thing could not occur in the gender paradise of Silicon Valley? In fact, the valley is currently a hotbed of sexual-harassment charges and complaints of unequal pay for equal work — from the high-profile charges leveled at the venture-capital firm of Kleiner Perkins to those at Tinder, a hip dating service. A high-end prostitution ring was recently broken up — although it had been properly packaged in cool style as a website called MyRedbook. CNN recently dubbed Silicon Valley “Sex Valley” because of its exploitative pay-for-sex hook-up culture. Of course, Silicon Valley always has a new spin on old sins, such as the recent lesbian Yahoo exec accused of coercing sex from a young woman underling.
Then there is the big-money politics — Silicon Valley–style. Liberal Silicon Valley techies don’t like the Koch brothers because of their donations to conservative candidates. But the region’s Steyer brothers give almost as much money to progressive candidates — which is apparently okay because they profess an interest in greening America. The fact that much of the Steyer fortune derived from investing in carbon-spewing coal plants in the former Third World has been more than indulged because of the brothers’ progressive confessions and multi-million-dollar penance.
Does Silicon Valley also practice de facto apartheid?
You might think just that if you counted up the burgeoning prep schools in the valley, charging $30,000 and more per student. The subtext message is that the kids of rich techies should not be slowed down on their own trajectory to influence and riches by the recent immigrants in their midst. Teachers’ unions, multicultural curricula in the schools, bilingualism, and a diverse student body are wonderful — as long as their own kids are somewhere else.
One might indeed think of South African apartheid if one drove the three miles from the barrios of Redwood City to the multi-million-dollar homes in Menlo Park and Palo Alto. As the Silicon Valley culture spreads into urban San Francisco, many of the city’s Latinos and blacks continue to flee the escalating cost of living and astronomical housing prices. Silicon Valley is turning a once racially diverse San Francisco into a mostly upscale white and Asian enclave faster than any pre–Civil Rights southern town council could have done.
Recently, San Francisco community activists have been protesting the private Google buses plying the city’s streets, as iconic of the sort of 1-percent culture that likes big money and nice things without much consideration of the larger ramifications for the community. But what an odd scene when both the protesters and their targets overwhelmingly support the community organizer in the White House, who swept every precinct from San Francisco to San Jose.
The point of reviewing these hypocrisies is not to suggest that the rich profit-makers of Silicon Valley are any greedier or more cutthroat than the speculators of Wall Street or the frackers of Texas, but merely that they are judged by quite different standards. Cool — defined by casual dress, hip popular culture, and the loud embrace of green energy, gay marriage, relaxation of drug laws, and other hot-button social issue — means that one can live life as selfishly as he pleases in the concrete by sounding as communitarian as he can in the abstract. Buying jet skis is as crass a self-indulgence as buying an even more expensive all-carbon imported road bike is neat.
If Silicon Valley produced gas and oil, built bulldozers, processed logs, mined bauxite, or grew potatoes, then the administration, academia, Hollywood, and the press would damn its white-male exclusivity, patronization of women, huge material appetites, lack of commitment to racial diversity, concern for ever-greater profits, and seeming indifference to the poor. But they do not, because the denizens of the valley have paid for their indulgences and therefore are free to sin as they please, convinced that their future days in Purgatory can be reduced by a few correct words about Solyndra, Barack Obama, and the war on women.
Practicing cutthroat capitalism while professing cool communitarianism should be a paradox. But in Silicon Valley it is simply smart business. The more money you make, any way you can make it, the more you can find ways of contextualizing it. At first these Silicon Valley contradictions were amusing, then they were grating, and now they are mostly just pathetic.
9 thoughts on “The Valley of the Shadow”
Mr Davis has a way with words, and like Joel Kotkin is pointing out some of the hypocrisies of the tech industry. However, these hypocrisies are not limited to tech but are largely shared by many in white collar professions in law, finance, academia, and entertainment. There is something of a war being raged against those industries that rely more on blue collar employees that is slowly succeeding in driving them out of California. Your audience here should really be the Hispanic and black communities and the working class of any race.
The tech industry is fairly free of regulatory constraint, at least relative to other industries. Zoning codes permit most office activities, so there is no authority to say that yes you may write this program but not that one. If much of your actual work is done abroad local labor laws do not apply to much of your business. I suppose it could happen, but I’ve never heard of OSHA inspections in a software company’s office. Overseas profits can remain largely untaxed (the US ought to switch to a territorial system). One can support an increased regulatory state knowing that you really won’t be regulated all that much.
On a minor quibble, the Google bus riders between SF and the peninsula are largely kids; relatively young people who make good salaries, but the 1% they are not, though perhaps hoping to be. Being young they often prefer to live in the city closer to the night life. It’s something the Silicon Valley companies have to deal with; it’s hard to argue that they cause this. San Francisco could trying being less fun for the young.
Relatively minor quibble: Quit calling them kids.
This culture of rich liberals preaching one thing and doing the opposite while holding themselves above what their politics calls for should be referred to as the Janus Complex or Janus Syndrome because it so incredibly two faced.
He didn’t mention the rather glaring example of Forrest Hayes, the Google executive who was overdosed by a prostitute! What was a successful father of FIVE doing heroin on his yacht with a hooker? Seems he was a touch compulsive too: “Hayes once vented to a co-worker on a Friday about his 40-minute commute to Google in Mountain View and he said he wished he could use the carpool lane. By Monday, Hayes had bought a Chevy Volt hybrid to do just that.
Another friend said he sent Hayes a picture of a yacht for sale. Days later, Hayes had bought it.”
VDH nailed it with “The result is a bizarre 21st-century 1-percenter culture of $1,000-a-square-foot homes, $100,000 BMWs, and $500 loafers coexisting with left-wing politics and trendy pop culture. Silicon Valley valiantly tries to square the circle of driving a Mercedes or flying in a Gulfstream while lambasting those who produce its fuel.”
I never lived in The Valley but “grew up” there in the 60’s & 70’s working for leading semiconductor firms in Silicon Valley—I saw what VDH describes, we all aspired to achieve the BMW lifestyle,not that there is anything wrong with that, there is a certain disconnect out there..
But the key is the loss of the manufacturing jobs and perhaps more importantly – for our future- the technical/mechanical knowledge drain for for the future.
Regarding outsourcing to Asia – Mr Obama’s friend and Head of The Administration’s “Jobs Council”, Jeff Immelt, Chairman of GE has moved the manufacture of GE Medical Imaging Devices to China, creating manufacturing job losses in the US and gains in China. Outsourcing started at GE in the ’60s when they moved consumer electronics to Hong Kong and the semiconductor companies quickly followed
“Since Immelt took over in 2001, GE has shed 34,000 jobs in the U.S., according to its most recent annual filing with the Securities and Exchange Commission. But it’s added 25,000 jobs overseas.” [Source:Michael Snyder, on July 29th, 2011 in the “Economic Collapse”]
All one needs to remember is:being a progressive means you always shoot from the moral high ground.
In this context the taxs SF needs is driven by regentrification by those young proffesionals, meanwhile the very same city council drives minority votes by bashing those moving there, and, those young professionals then buy into the very same eat the rich political dogma, you really have to have your head up your culo to buy both ends of this crtically fractured argument, but alas……
I don’t remember who said it but someone once said being ‘liberal is being so broad-minded you can’t take your own side in your own fight’.
Interesting, California should be cut three ways. The richest form of Capitalism exists in SF. The capitalist is in subjection to the total GNP of a nation. SF seems one of the richest areas of the nation thanks to its average per capita. Who the number of people whom the GNP will serve. For instance my father in Vietnam found out why South East Asia was so poor: Rice paddies and the humble farmer cannot compete with machinery and technology. Reganomics provided a simple lesson in economics. A mass market makes possible mass production. A market that encourages keen competition makes for a stronger America. Ryan knows economics while Bidden knows the environment. Lasissez fair economics and theory is lacking in the current administration,
Capitalism is a force that is sweeping the world. It is also a force that has many different faces. The common element of capitalism in the riches part of California is the factors of production, privately owned. VDH mentions the above monopolies but how does one compare capitalism to communism. in one of my articles I mentioned that the creator of face book and President Obama have created a pinto machine in the tech world. Essentially if everyone had to drive a pinto, in order for communism to work would they? Bragging rights belongs to the United States in the techno hooking of face book and other internet social networks and applications. Doesn’t Japan still have the most capitalist economy? Having had to jump from job to job due to the lack of loyalty, I might at some point have to venture off to Japan. Why? Large tech companies their not only supply intense loyalty to their employees but allow them to join and work for large companies of life. These large companies are following : The role of public sector in Japan is superior when teaching I often model my classroom’s after the Japanese model for success. No one leaves the work floor or goes home until every worker’s task has been complex. Although I do not know that info structure for sure of the companies that Victor has referred to I do know that they appear to be CAPITAL INTENSIVE….
A better model for the America is a “closed economy.” A better model of SF. would be a huge trade imbalance in tech software and gizmos. The “Asian Tigers,” of business have have shown their faces in SF.. Victor does an excellent job once again at looking at them in this article…
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