fundamental contradictions, as Karl Marx would have noted, lie in
the collision of interests between a group that has come to
epitomize self-consciously progressive megawealth and a mass base
which is increasingly concerned about downward mobility. For all
his occasional populist lapses, President Obama generally has
embraced Silicon Valley as an intrinsic part of his political
coalition. He has even enlisted several tech giants – including
venture capitalist John Doerr, LinkedIn billionaire Reid Hoffman
and Sun Microsystems co-founder Vinod Khosla – in helping plan out
Obama’s no-doubt lavish and highly political retirement.
contrast, Hillary Clinton is hardly the icon in the Valley and its
San Francisco annex as are both her husband and President Obama.
But her “technocratic liberalism,” albeit hard to pin down, and
close ties to the financial oligarchs seems more congenial than
the grass-roots populism identified with Bernie Sanders, her chief
rival for the Democratic presidential nomination.
don’t like Sanders at all,” notes researcher Greg Ferenstein, who
has been polling Internet company founders for an upcoming book.
Sanders’ emphasis on income redistribution and protecting union
privileges and pensions is hardly popular among the tech elite.
“He’s an egalitarian liberal,” Ferenstein explains, “These people
are tech liberals. Equality is a nonissue in Silicon Valley.”
conflict is most obvious in the assault on ride-booking firms,
like Uber, by progressives like Sanders, as well as New York City
Mayor Bill de Blasio. This battle reveals a deepening split
between the party’s mass base, including conventional taxi
companies and operators, and its increasingly influential tech
conservatives, such as pollster Scott Rasmussen, see Republican
backing for Uber as an opening for the GOP. Yet Ferenstein’s poll
of Internet founders reveals that barely 3 percent say they are
Republicans; 18 percent are libertarian, while nearly half are
Democrats. Republican operatives peg the tech donors to be 9-1 in
favor of Democrats. Talk about unrequited love!
the hotbeds of the tech and information economies, including
media, have become the financial bedrock of the Democratic Party.
The 10 leading counties for Democratic fundraising in 2012
included, for the first time, Santa Clara, as well as San
Francisco, Los Angeles and New York. Given their domination of the
ranks of wealthy people under age 40, one can expect that this
power will only increase in the years ahead.
suggests that the tech elite, far from deserting the Democratic
Party, more likely will aim take to it over. They are doing this,
as other industries have, by absorbing key party operatives. Uber,
for example, uses Obama campaign manager David Ploufee to lead its
public relations, while other former officials have joined other
tech firms such as Airbnb, Google, Twitter and Amazon.
conflict between populists and tech oligarchs has been muted in
the past, in large part due to common views on social issues like
gay marriage and, to some extent, environmental protection. But as
the social issues fade, having been “won” by progressives, the
focus necessarily moves to economics, where the gap between these
two factions is greatest.
Silicon Valley worships at the altar of “disruption,” seeking ways
to create at least the prospect of megaprofits by doing things
differently. Change is celebrated by those who benefit the most
from it. But groups – from cab drivers to Hollywood tradespeople,
even hotel workers – whose livelihoods are threatened by the
disruptions of the “share” economy, may not be so sanguine.
aspects of the Silicon Valley mentality – what Ferenstein calls
“the politics of the creative class” – reveal the unconscious
elitism of its worldview. Although their industry is overwhelming
based amid the Bay Area’s suburban sprawl, the Internet oligarchs,
he claims, want “everyone” to move in to the urban center,
something not remotely practical for most middle- and
working-class families. Other policies advocated by the oligarchs,
such as pushing for ever-higher energy prices, don’t threaten
their lifestyles but are devastating to the classes below them.
the biggest area of disagreement between the oligarchy and the
populists is the role of labor unions. Simply put, the oligarchs
are, at best, indifferent, if not hostile, to union influence.
After all, tech has blossomed virtually without organized labor,
which remains a bulwark of Democratic operations. Silicon
Valley-backed attempts to reform schools, or weaken pensions for
government workers, can expect ferocious opposition from the
potential dividing line can be seen on immigration, where
left-leaning groups like the Economic Policy Institute have
campaigned against attempts by establishment Democrats and
Republicans alike to expand the H1B and other “guest worker” visa
programs. In a moment of politically incorrect candor, Sen.
Sanders suggested that the kind of “open borders” policy advocated
by Silicon Valley, libertarians and immigration activists would
result in “substantially lower wages” for working-class Americans.
now, the populists have numbers on their side, as well as much of
the media. The recent New York Times expose on Amazon’s brutal
management practices reveals a deep discord between the media
mouthpieces of the political Left and their usual capitalist
heroes from the information economy.
biggest challenge for the tech oligarchs is that their rise has
come as class divisions have widened, and inequality has grown.
The benefits to society of the current technology wave – outside
of being able to more conveniently waste time on your phone –
whether in terms of creating jobs (outside of the Bay Area) or
boosting productivity, appear largely limited.
given what many find the unattractive nature of the Republican
alternative, one can expect the oligarchs to seek out a modus
vivendi with the populists. They could
exchange a regime of higher taxes and regulation for
ever-expanding crony capitalist opportunities and political
protection. As the hegemons of today, Facebook and Google, not to
mention Apple and Amazon, have an intense interest in protecting
themselves, for example, from antitrust legislation. History is
pretty clear: Heroic entrepreneurs of one decade often turn into
the insider capitalists of the next.
people certainly have no objection to joining the ranks of crony
capitalists, notably when cloaked in environmentally green garb.
The solar energy and electric car empire of Elon Musk has been
made possible by subsidies; unlike most manufacturing industries,
he has a well-developed interest in the most Draconian energy
legislation. Other tech figures, including Doerr, Khosla and top
executives at Google, have benefited from government-subsidized
ventures produce very expensive energy – an economic disaster for
most Californians – but have been bolstered by alliances with
unions, which seek to monopolize construction within green
industries. Rather than seek at least some alliance with the
Right, it seems more likely that the oligarchs will be forced to
make some concessions to the populist Left, including to women and
minorities, groups unrepresented in the tech industry.
possible model for such an alliance can be seen in the coupling of
San Francisco hedge-fund billionaire environmentalist Tom Steyer
and his Latino sidekick, the now-well-funded climate-change
acolyte state Senate President pro Tem Kevin de León of Los
Angeles, by such things as using cap-and-trade funds to fund a
relatively small number of affordable houses. With the industrial
economy hampered by regulation, the old blue-collar economy is
dying off. This means the oligarchs may need only to support a few
symbolic measures to benefit those who no longer have a productive
place in the economy.
even has plans in 2018 to succeed Gov. Jerry Brown, who he thinks
may not have been sufficiently Draconian in his campaign against
climate change. Steyer will probably be able to count on the
support of de León and other Latino politicians whom Steyer
new platform would be a combination of climate change militancy
and redistribution of wealth to the poor who, due in large part to
the policies advocated by Silicon Valley, have little hope of
moving up economically, much less buying a home in our state. This
“upstairs downstairs” coalition – largely indifferent to the
interests of the traditional middle class or working class – may
well represent the future of the Democratic Party, initially in
the Golden State and, increasingly, nationally.
course, Bernie Sanders may yet have his moment, but the America he
represents, that of sure things and widespread equality, will fade
with him. The economic future likely belongs not to the populists
but to the oligarchs and those in politics who choose to tap their
money and influence to gain power. Welcome to the 21st century.
Kotkin is the R.C. Hobbs Fellow in Urban Studies at Chapman
University in Orange and the executive director of the
Houston-based Center for Opportunity Urbanism (www.opportunityurbanism.org).
most recent book is “The New Class Conflict”
(Telos Publishing: 2014).