Silicon Valley as Ally or Foe? Reflections on the Politics of Income Inequality

Post,Reflections February 23, 2016 12:03 pm

[I wrote this for the Platypus (the blog for CASTAC) last week.  But I thought it might be fun to repost it here.]

Occupy Wall Street made income inequality the basis of its existence. Source: David Shankbone on Flickr. Creative Commons License.

Occupy Wall Street made income inequality the basis of its existence. Source: David Shankbone on Flickr, Creative Commons license.

The meteoric rise of Bernie Sanders in the Democratic primaries—and the Occupy movement before that—have officially put income inequality on the political radar in the U.S., after years of slow wage growth and a near-catastrophic financial crash. In keeping with the times, Silicon Valley too has begun thinking about inequality. Resident philosopher Paul Graham, venture capitalist and founder of the famous YCombinator startup incubator, wrote an essay on inequality that caused a bit of a ruckus (in Silicon Valley and without).

The short version: Graham is not happy with the current rhetorical war on inequality that politicians are waging. He thinks inequality is a natural product of a culture that values startups and innovation, and that a full-scale political fight against inequality is inadvisable. YCombinator recently put out a “Request for Research” to sponsor social science research on Basic Income guarantee schemes. Such a scheme—Silicon Valley’s go-to solution for the rise of inequality and artificial intelligence—would mean every citizen receives a basic income that insulates them from the rise of automation and the progress of technology. (You can apply for the job here.)

In this post, I want to reflect on Silicon Valley’s political leanings, which allows me to bring in the fascinating political surveys of start-up founders that journalist Greg Ferenstein has conducted. There are some obvious (and important!) things to say about Graham’s essay and the Basic Income advertisement: that these writings take technology as an autonomous force that shapes society rather than seeing technological change as an outcome of negotiations between interest groups. They are articulations of very Silicon Valley notions of progress.

What I really want to talk about, however, is good old-fashioned electoral politics. In the kinds of political alliances and interest groups that will come to define the United States over the next few decades—perhaps as inequality takes an even bigger role in political discourse—could it be possible that Silicon Valley might be an ally for progressive causes rather than a foe (as it often emerges in critical theory analyses)?

The Paradox of Silicon Valley

Silicon Valley—by which I mean this complex material-semiotic assemblage based in California but whose tentacles extend far and wide—is a strange beast. Many programmers, computer scientists, and others (i.e., people who say “I work in tech” when you ask them what they do, especially in the San Francisco area) are reliably like social scientists who study them: secular and supportive of progressive causes. (And unlike, say, Wall Street, another material-semiotic assemblage which is far more conservative.) Where they differ is in their conception of technology and the role it plays in the fulfillment of any kind of progressive vision (itself a wide tent).

Sometimes this twists social science research up in peculiar ways. Canay Ozden-Schilling’s blog post from July 2015, for example, starts off with a puzzle. She tried to understand the role of experts—economists, systems engineers, computer scientists—in creating new electricity markets, and found that these markets came out of the internal research questions of engineers rather than any overt preference for market-based structures. These experts were constructing a neoliberal governance regime—by which I mean a regime that puts individual choice at the center of regulation rather than blanket rules forbidding this or that type of activity—without any professed allegiance to any particular regulatory model. This suggests technical experts may be playing a greater role in the march of the neoliberal regulatory model than the usual suspects like economists, policy-makers, and conservative politicians.

The logical question then is: do the actual professed political beliefs of these actors matter? Journalist Greg Ferenstein has spent the last few years chronicling and surveying Silicon Valley’s political beliefs, and contends that they do indeed and that Democrats should be worried. In a survey of  start-up founders, Ferenstein finds that while most vote Democratic, they have certain odd positions.  They loathe labor unions, for instance, because unions are premised on an interest-group model of power that assumes that society is full of underlying conflicts and tradeoffs, and labor might provide a check on capital. Start-up founders, however, believe that technologically-empowered citizens acting together can accomplish far more than interest-groups that fight each other. What’s more, they tend to view the government itself as a kind of corporation/investor, which invests in its citizens and empowers them to coordinate to solve problems together.

Silicon Valley wants, in Ferenstein’s words, a “civil society completely oriented toward innovation. They don’t see conflicts between citizens, the government, big corporations, and other countries—just one big mass of people coming up with mutually beneficial solutions as fast as possible.” The Democratic Party should beware, he says, for “tech elites love the Democratic Party in the same way they love the health care, transportation, and education industries—as a hodgepodge of aging leaders ripe for disruption.”

What does one call this set of political beliefs? Ferenstein says it’s akin to communitarianism: to prefer that problems be solved by communities rather than by markets or governments. Except that, as I understand it, communitarianism is an explicitly political position on collective action, while Silicon Valley’s take on collective action embodied in the apps they build is anything but. My own instinct is to compare it to what Thomas Malaby calls “technoliberalism”: an “intense suspicion of vertical authority, a commitment to making technology universally accessible and beyond institutional control and a deep faith in the positive aggregate effects that follow from individual use of this technology for the purposes of creative expression” (Malaby 2012: 295).


Which brings us to inequality. Paul Graham’s problem with the fight against inequality is that it’s too diffuse and antithetical to the innovation that Silicon Valley produces. In response, journalist Ezra Klein argues the fight against inequality in the US is a fight against financialization and the power of the finance industry; Silicon Valley startups don’t really have anything to fear. Graham was not buying this. As he sees it, the inequality-fighters have a broader target in mind than just the finance industry.

But in this back-and-forth Graham makes what I think is an interesting point. Klein argues that Graham is mistaken that startups contribute to inequality because, in the period that inequality has risen, the number of startups has actually declined and shows a chart to that effect. In response, Graham says:

[Klein's graph] is not a graph of the number of startups, but of all new businesses.

As I’ve explained many times, startups are a tiny fraction of businesses. Most businesses are barber shops, gas stations, restaurants, and so on. What his graph shows is that fewer of these are being started. If you want to see the trend in startups, one way to see it is by looking at the trend in VC [venture capital] deals. Any graph of VC deals will show the trend has not been downward.  [In Graham’s definition, a new company is a startup only if it shows growth: “The only essential thing is growth. Everything else we associate with startups follows from growth.”]

As an articulation of the Silicon Valley worldview, this is significant. Graham is saying that not only is any new company not a startup (meaning not all entrepreneurs are entrepreneurs, and not all innovation is innovation), VCs alone can evaluate what counts as innovation (and thereby be the best adjudicators of what startups to fund). I admit I did a double-take when I read this: given the discourse around and worship of entrepreneurship and collaboration that emanates from the so-called “sharing economy,” this is almost a slap in the face. By Graham’s definition, an Uber driver or an AirBnB host are not real entrepreneurs because their businesses do not “grow.”

Silicon Valley and progressive politics in the US

So what about the Basic Income, clearly something that Silicon Valley is starting to think about seriously? Politically, a Basic Income in the United States would be a huge progressive achievement (though, of course, the details matter: how much would it be?  Would it be in addition to universal health care?). And Silicon Valley would be a valuable ally in that fight because they make their case for Basic Income, not as a progressive goal, or as a source of human welfare, but as a policy that enables technological progress by providing a bulwark against automation. A Basic Income might even have some unintended consequences: as Lilly Irani suggests, it might push people to participate less rather than more in the sharing economy, slowing down Silicon Valley’s pursuit of its own brand of technical and political innovation.

The upside here is that allying strategically with Silicon Valley in pursuing a Basic Income (as a step towards more innovation) might make more sense in this age of political polarization, when accomplishing any progressive goal looks increasingly difficult. And indeed, one reason for the success of Silicon Valley’s brand of technoliberalism—that they will offer tools to the people who will then together solve the political problems that aren’t being addressed by the political process—might very well be because American electoral politics is so grid-locked and promises to be so for the foreseeable future. And given that resurrecting unions—the lynchpins of the progressive movement through much of the 20th century, before they were hollowed out by globalization and capital via the Republican Party—to their former political influence seems like a pipedream, the best prospects for progressive change in the US might well be through strategic alliances like these with Silicon Valley.

But there is a downside too. Accepting Silicon Valley as an ally means accepting the narrative of innovation as progress. As Lee Vinsel describes, in the last 30-odd years, this discourse of innovation has come to dominate elite policy circles. In this view, it is innovation that drives economic growth, and consequently, innovation must be excavated, nurtured, nourished, and allowed to flourish—and clearly in Graham’s reading of this, VCs are the right people to do this. Vinsel notes that the hegemony of the innovation narrative coincides with the rise of income inequality, but suggests that this is a correlation rather than a causal relationship. Graham, on the other hand, nearly imputes a causal relationship between the two.

Would that be such a bad thing, to ally with the innovation theory of progress? It’s hard to tell, but my sense is that it’s not. (I’m prepared to be convinced otherwise.) It’s possible that Silicon Valley’s theory of progressive change through innovation is, well, wrong. Consider, for instance, the story that Malaby (2011) tells us about Linden Labs.  Lindens saw themselves as designing for contingency by giving Second Life users more and more technological tools for creativity, a project Malaby sees as a new form of (non-bureaucratic) governance. And more often than not, Lindens were disappointed by what users ended up doing with those tools; rather than flights of creativity and collaboration, they saw mostly commerce, some pornography, and endless disputes.  Perhaps Silicon Valley founders with their visions of social entrepreneurship and collective problem-solving mediated by software will end up in the same place.

It’s also notable that when it comes to their own disputes over regulation, Silicon Valley has taken a take-no-prisoners approach. Uber went against New York Mayor Bill de Blasio guns blazing, with advertisements, but also by recruiting customers into advocating for them. AirBnB’s San Francisco advertisements sound like they were dreamed up by petulant employee in their marketing department. And the Gates Foundation has achieved its influence on education policy by playing the long game of finding and cultivating like-minded partners and trying to put them into influential positions. All have achieved their present influence through constructing and winning good old-fashioned political fights. The project to de-politicize politics may not work; but along the way, we may end up attaining some progressive goals.

All of which is to say: I hope anthropologists and other STS-types are also applying for that YCombinator money!


Malaby, Thomas. 2012. Digital Gaming, Game Design, and its Precursors. Miller, D., & Horst, H., eds. Digital Anthropology. Oxford: Berg, 288-305.

Malaby, Thomas. Making Virtual Worlds: Linden lab and Second Life. Cornell University Press, 2011.

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