Culture

5 Worst Things About the Techno-Libertarians Solidifying Their Grasp on Our Economy and Culture

There's a lot wrong with the tech industry, and it's increasingly impacting ordinary Americans.

Nowadays the Silicon Valley is either celebrated as a hotbed of creativity or condemned as a cauldron of greed and wealth inequality.

While there are certainly some talented and even idealistic people in the Valley, there's also an excess of shallow libertarianism, from people who have enriched themselves with government-created technology who then decide they're being held back by government. That's shortsighted and vain. And yes, there are serious problems with sexism and age discrimination – problems which manifest themselves with some ugly behavior.  

But such ethical problems aren't solely, or even primarily, the product of individual character defects. They're the result of self-reinforcing cultural norms at work. Anthropologists and sociologists could do worse than study the tech culture of the Silicon Valley. It would be important work, in fact, because this insular culture is having a deep and lasting impact on our economy and society.

Here, to star them off, are five socially destructive aspects of Silicon Valley culture:

1. Tech products become the byproducts of a money-making scheme rather than an end unto themselves.

It's almost inevitable when big money enters the picture: Smart or talented people are drawn to a field for the chance to get rich, not necessarily because it's where their greatest talents or dreams lie.  The same thing has happened to fields as diverse as film, pop music, and the financial sector.  There's nothing wrong with getting rich, but it should be the byproduct of a happy marriage between talent and  inspiration.

But here's how it works instead: The goal of entrepreneurs and innovators was once summed up in the cliched phrase, “build a better mousetrap.” But for  many Silicon Valley products and services, including services like Uber and AirBnB, the goal now is to build a product which can be hyped into a multi-billion-dollar valuation – preferably by winning as much market share as possible, and then using that market position to engage in the kinds of practices usually reserved for monopolies and monopsonies (markets in which there is only one buyer). This process is described in more detail here.

Instead of building a better mousetrap, the new Silicon Valley business model works like this:

i. Give your “mousetrap” away for free, or as close to free as you can make it. (Since you're working with digital signals transmitted over a government-invented network, that can usually be done at minimal cost. In other cases it pays to benefit from a government tax loophole (see Amazon) or make an end run around the regulations your competitors must follow (see Uber, Lyft, and AirBnB).

ii. Use these government-conferred advantages, along with your own aggressive market moves, to gain a large or decisive marketshare.  (See Amazon, Facebook, etc.) In exceptional cases, actually build brilliant and superior software to win your market share. (See Google.)

iii. Use your newfound market share to a) bend government to your will wherever possible, b) screw down your suppliers' prices, c) hit your customers with increased prices and/or new ads or other profit-making devices, and d) manipulate your customers without their knowledge. (See Uber, Amazon, Google, Facebook, et al.)

This business model has directed much of the Valley's efforts away from inventing genuinely creative new products – and toward the kinds of aggressive tactics that, as we've written before, would be very familiar to the Robber Barons of the 19th century.

2. Even inspired leaders internalize a worldview which places profits over humane behavior.

Steve Jobs is a prime example of this phenomenon. As an early innovator in the tech field, Jobs – however interested he was in making money – was not drawn to the field for the sake of money alone. Nor was he following in the footsteps of others, seeking to replicate the successes of a Zuckerberg or a Sergey Brin, as newcomers to the field are now. Jobs possessed a genuinely inspired design vision, from the earliest days of his career to his last.

And yet, for all his gifts, the pursuit of wealth led Jobs to commit some morally reprehensible deeds. As “white collar criminologist” William K. Black Jr. told me in a 2012 radio interview, Jobs' drive to maximize profits – and his craving to get new products to market as quickly as possible – almost certainly led him to knowingly ignore abuses and safety threats to the Chinese workers who built his products.  That, in turn, led to dormitory-based workers being forced to work under extreme conditions. These unheeded warnings also led to the horrific burning deaths of several workers.

Amazon's Jeff Bezos is also unquestionably an innovator. But the working conditions which Amazon's warehouse workers endure would seem familiar to their Apple counterparts in China. As documented by Simon Head in his book “Mindless: Why Smarter Machines Are Making Dumber Humans” (excerpt here), Amazon's American warehouse workers are subjected to ever-harsher production expectations and invasive measurement techniques. Head documents the case of a Pennsylvania employee who worked 11-hour shifts and was ultimately fired for “unproductive periods” which lasted only minutes. GPS devices in an England warehouse tell workers which routes they must travel – inside the warehouse – and their expected travel time.  

Amazon's German operations employed “a security firm with alleged neo-Nazi connections that … intimidated temporary workers lodged in a company dormitory … with guards entering their rooms without permission at all times of the day and night.” An Allentown facility which lacked air conditioning repeatedly reached temperatures of more than 100 degrees one summer. More than fifteen workers collapsed, but supervisors refused to open garage doors. Reports Head: “Calls to the local ambulance service became so frequent that for five hot days in June and July, ambulances and paramedics were stationed all day at the depot.”

A number of Silicon Valley CEOs were also implicated in a widespread conspiracy to illegally suppress wages and prevent job-seeking from engineers and other key employees. Mark Ames, who has reported extensively on the conspiracy, wrote that “confidential internal Google and Apple memos … clearly show that what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP.”

These incidents are by no means exceptions in the Silicon Valley culture. The most generous way to interpret behavior like this is to assume that Steve Jobs and operated in a culture whose worldview downplayed the human impact of business practices. That, in fact, is reinforced by other aspects of Silicon Valley's leadership society.

3. The culture encourages a solipsistic detachment from reality, even as its brute economic strength colonizes everything it touches.

A dispassionate observer might be tempted to wonder how a culture filled with so many smart people can remain so unaware of, and/or disinterested in, their effect on other people's lives?

For many of them, the evidence is literally right before their eyes: San Francisco's richness and diversity is being drained away, as the city becomes unaffordable for more and more of its citizens.  They are all good with numbers, so the statistics on growing wealth inequality should not be hard for them to understand. And their arguments – e.g., that the “sharing economy” will benefit struggling Americans – are easily punctured by even a superficial look at US demographics. (Are struggling Milwaukee residents going to get rich driving tourists around their battered town, or renting out their inner-city apartments on AirBnB?)

Most of the tech executives I've known aren't bad guys. (To be clear, I haven't met Uber's leadership – with the exception of a brief encounter with former Obama advisor David Plouffe – and they certainly appear to be an exception.)   But even many of the “good” ones seem oblivious to the effect of their own behavior.

To a certain extent that's an occupational hazard. I've spent just enough time hammering out software in the glow of a computer screen to see how easily a synthetic world can replace the one inhabited by other human beings.

But there are correctives for that: reading, contemplation, speaking with human beings from different walks of life. The Valley's tech culture doesn't seem to encourage that – to its detriment, and that of society as a whole.

4. The Valley gets fixated on lame (and sometimes antisocial) buzzwords.

“Move fast and break things,” said Mark Zuckerberg in a much-repeated quotation. Other tech types prattle on about “the next Big Idea.” And almost everyone wants to “disrupt” an existing industry.

Why is it good to “move fast and break things”? Isn't it usually wiser to move carefully and build things? There may be times when it's wise to act rapidly, or break with conventional ways of doing things. But there are also times when a hastily-executed rollout dooms a product. Sometimes it makes sense to improve the established ways of doing things, rather than upend them altogether.

When you think about it, what does this expression even mean? It's only repeated because a) it sounds smart, and b) it was spoken by someone who is extremely wealthy, and such people are to be imitated whenever possible in the hope that some of their magic will rub off.

As for “Big Ideas”: do they really correlate with tech success? Google was a smarter search engine, but search engines were no longer a new or “big” idea by the time it came along. Craigslist? It's online classified ads.  Facebook was originally conceived as the online version of the printed “facebooks” traditionally given to incoming freshmen so they could get to know their classmates. Neither Zuckerberg nor those Harvard twins knew what it would someday become.   There is surprisingly little correlation between tech success and actual “Big Ideas.”

Disruption's overrated, too. Sure, it can work. Instagram disrupted home photography, for example. But Twitter, one of the smarter ideas to come from the Valley in recent years, didn't disrupt anything. Instead it created a new market and a new medium. Sometimes “disruption” is a euphemism, whose real meaning is “use tax loopholes to undercut law-abiding vendors” or “employ Robber Baron business practices to cut suppliers prices.”

Sometimes it means nothing at all.

5. Silicon Valley's culture is hurting our economy.

Politicians like to celebrate the tech industry as a boon to the economy, but for most Americans the opposite is true. As economist Joseph Stiglitz and others have documented, monopoly practices exert a significant drag on the economy. The economy becomes increasingly capital-driven, rather than labor-driven. Monopolies suppress wages, overcharge consumers, mistreat suppliers, and drive the economy increasingly off-course.

There's also a price to be paid for product inefficiency. Monopolies can sometimes squander human capital – that is, waste people's time – by forcing them to struggle with inefficient products like Microsoft's operating system or Facebook's user interfaces. (More on this topic here.) Multiply every minute wasted on a Windows inefficiency or Facebook's privacy settings by millions of users, and the cost begins to add up.

The Valley's hurting our economy in another way, too. Somehow, some of the titans of tech have gotten the misguided idea that they are exemplars of libertarian self-created success. Nothing could be further from the truth. The Silicon Valley runs on government-subsidized technology, from microchips to the Internet itself. Corporations like Amazon used government-created tax breaks to build near-monopoly leverage and turn it against their suppliers.

And now, having enriched themselves through government generosity, some of the Valley's billionaires are using their publicly-assisted wealth to back political candidates and organizations under a “libertarian” label that is better described, at least economically, as a far-right agenda. These candidates and organizations push our political dialogue in a more conservative direction – which in turn creates a political climate which tends to permit more of the things that have already wounded our economy, like deregulation and lower taxes for the wealthy and corporations.

All of the Valley's cultural traits, from the profound to the trivial, reflect a culture that is urgently in need of maturation and change. One thing's for sure: If I hear another tech titan say he plans to “disrupt” an industry, I'm going to move fast and break something.

Richard (RJ) Eskow is a blogger and writer, a former Wall Street executive, a consultant, and a former musician.

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