SILICON VALLEY’S PAYPAL MAFIA LEADS TO THE SAND HILL ROAD VC’S
Perhaps most interesting is that Silicon Valley has a public history and a secret history. The Paypal Mafia is a shadowy, manipulative group born of the founding families. Palo Alto and Stanford University reflect this conspiratorial past.
They represent a threat that is so embedded and so intrinsic to America because of the historical origin that they have, that even few at the FBI know about it.
The notion of a threat that is so intimately tied to Big Tech that the San Francisco FBI considers to be their turf, that they know ‘like the back of their hand’, that they have been patrolling for, literally, decades at this point; that’s a very intimidating and scary idea. That the Paypal Mafia have been operating behind the scenes in the shadows, pulling strings, manipulating elections and monopolies, using their power and wealth in this fashion, and that they’re quite content to just not have the FBI notice them… That’s a terrifying idea…
So with that in mind, what you know is that you needed to have a sense of Silicon Valley’s history in order to be able to show all the ways in which the Paypal Mafia is embedded in that. That feeling that truth is kind of an adversary in a way, and that the PayPal Mafia is the embodiment of the dark side of that, the personification of it…is what the facts reveal.
You can imagine how the form of the city could be affected by that. It highlights an urban geography to the city going all the way back to like the late 1600s. You have to think: ‘Okay, well, what were the major events in history that they would’ve reacted to? Is it the revolutionary war? Is it the kind of exploitation of the west? The building of the railroads?’ All of these ideas become part of that conversation and allow you to see layers of the dark tech history. Then you say: ‘Okay, what’s buried under the city? What are the hidden secrets that you can find in the course of investigating the Paypal Mafia?
The Paypal Mafia is involved in everything. If you were to go to a major city in North America, often they’ll build a city on top of another one. Like Chicago, like they had the fire, they just built on top of it, because it’s not worth rebuilding, destroying and rebuilding.
They meet at each other’s homes, the back rooms of restaurants and at gatherings on yachts and resorts like The Post Ranch Inn. There they conspire to rig elections, mass hire ‘protesters’ and black-list competitors.
What to know about the company ‘PayPal’:
– Paypal owners are all political activists from a single ideology who use Paypal against those with different opinions
– Paypal bosses subscribe to a Mafia mentality and created the concept of “The PayPal Mafia” down to dressing like mobsters in group photos; discussing Mafia-like tactics in their personal emails and political events and bribing government officials
– PayPal will slow down, hide or cut-off your funding if you disagree with the politics of the PayPal owners
– PayPal bosses cheat on their taxes and hide their money off-shore
– Paypal bosses spy on your financial activities and keep a private data-base of your business which they provide to political groups, marketing companies and the NSA
– PayPal bosses have been caught in a number of sex scandals and other unseemly sex situations which indicate that they have a loose relationship with morality
-PayPal bosses radically defend tech mobster Elon Musk because he is part of their club, while ignoring his crimes, tax evasions, safety cover-ups, scandals, FEC violations and misdeeds
– PayPal has been hacked into multiple times
What to know about the ‘PayPal Mafia’:
Who are the criminal mobsters of Silicon Valley’s democracy manipulation millionaires and billionaires? Who are the elitist tax evader, sex freak, money-laundering, Senator bribing, off-shore cash hiding, election rigging insiders who manipulate the system for their own insider trading schemes: Reid Hoffman, Larry Page, Sergy Brin, Elon Musk, Dustin Moskovitz, Mark Zuckerberg, Eric Schmidt, Laurene Powell Jobs, Steve Spinner, Steve Westly, Vinod Khosla, Andy Bechtolsheim, Brian Goncher, Cheryl Sandberg, David Drummond, Andy Rubin, David Plouffe, Tim Draper, Jeffrey Epstein, Gilman Louie, Ira Ehrenpreis, Tim Cook, McKinsey Consulting, Deloitte, Goldman Sachs, Jerry Brown, Richard Blum, James Breyer, John Podesta, Joe Lonsdale, John Doerr, Keith Rabois, Marc Andreesen, George Soros, Mario Rosatti, Martin LaGod, Michael Moritz, Viktor Vekselberg, Larry Summers, Pierre Omidyar,Tom Steyer, Steve Jurvetson, Steve Rattner and their CARTEL! They have “command and control and exclusive beneficiary positions in ongoing, coordinated, criminal and anti-trust activities involving government and stock market funds…”. The sex crime victims of Cartel member Jeffrey Epstein reported him to the DOJ a decade ago, yet nothing was done. We reported this Cartel in 2008, STILL, nothing has been done! These people are Ponzi-Scheming State and Federal funds “stimulus” after “stimulus”! They use free government money, stock valuation pump-and-dump and black-lists to make certain that no competitor can ever operate against them in any market. How much of this will the public stand for?…
Silicon Valley, Clubhouse, and the cult of VC victimhood
By Zoe Schiffer and Megan Farokhmanesh
On July 1st, a group of venture capitalists and well-known tech elites logged on to the invite-only social platform Clubhouse to discuss a pressing issue in Silicon Valley: journalists canceling CEOs. “When it comes to our industry, specifically how the tech industry is covered, there’s a really, really toxic dynamic that exists right now,” said Nait Jones, a venture capitalist at Andreessen Horowitz. While some harsh tech coverage was warranted, he said, “there has been kind of an influx of takedowns.”
At another point in the discussion, multiple sources tell The Verge that Figs co-founder and co-CEO Trina Spear said she didn’t understand what gave the reporters the right to investigate private companies. Instead, she suggested the “markets” should decide.
Spear denied saying this in a statement given to The Verge. “This quote is inaccurate and is being falsely attributed to me. I did not make this statement nor do I agree with its sentiments.” Spear did not respond to follow-up questions.
“To many tech executives and investors, this was cancel culture going too far”
The Clubhouse discussion was sparked by a tweet from New York Times journalist Taylor Lorenz regarding the CEO of the luggage company Away. The executive, Steph Korey, had been railing against the media on Instagram. Lorenz posted screenshots of the tirade, writing, “Steph Korey, the disgraced former CEO of Away luggage company, is ranting on IG stories about the media. Her posts are incoherent and it’s disappointing to see a woman who ran a luggage brand perpetuate falsehoods like this abt an industry she clearly has 0 understanding of.”
The post exploded on Twitter, prompting a wave of harassment from venture capitalists and other tech executives who felt Lorenz was being unfair. A “cancel Taylor Lorenz” Twitter account popped up, and a parody website resurfaced. “Every CEO, founder, investor, and engineer in tech sees the vitriolic tweets these employees of media corporations put out,” wrote Balaji Srinivasan, an angel investor who previously worked at Andreessen Horowitz. “Then they turn around and feign neutrality by writing passive voice articles. We get it: you hate us. And you’re competitors.”
Investors had been defending Korey since December 2019, when The Verge published a series of investigative articles detailing employee complaints about the CEO’s management style. The articles, which drew wide attention, were followed by a fresh wave of reports about working conditions at venture-backed startups like Outdoor Voices, Bird, and The Wing.
““Overall, it seems like cancel culture has become this really easy thing to deflect to.””
To many tech executives and investors, this was cancel culture going too far. “100% of companies could have a negative article written about them, and without any fishing at all. All the reporter has to do is decide he wants to write a negative article,” tweeted venture capitalist Paul Graham after the first Away report was published.
Away employees felt Korey’s defenders were missing the point. “Overall, it seems like cancel culture has become this really easy thing to deflect to, instead of needing to say there’s a solid issue here I need to pay attention to,” says a current member of Away’s leadership team. “The default has become ‘this is a hit piece, this is a snarky journalist trying to get clicks.’ I think there’s a genuine group of people who haven’t had the first hand experience that sources in these stories have had.”
If the venture capitalists’ rhetoric feels familiar, it’s because the tactics aren’t new. In 2014, under the banner of “ethics in games journalism,” an online mob attacked outspoken women and progressive figures within the game industry for months. Eron Gjoni penned a vengeful screed about his ex, developer Zoe Quinn, in August 2014, which Gamergate supporters used to create a narrative about the games media at large. In addition to doxxing and harassing Quinn, Gamergaters coordinated harassment against several other prominent women with vicious online attacks; figures like Brianna Wu fled their homes out of concern for personal safety. Gamergaters also badgered advertisers in an effort to silence voices they disagreed with.
Despite Gamergaters’ best efforts to push a narrative about paid-for coverage and collusion in the industry, no such corruption ever came to light. In the time since, the Gamergate crowd has shown little interest in actual ethical concerns in games, such as exploitative labor practices and sexual harassment and abuse perpetrated by powerful figures at the top.
This strategy has resurfaced elsewhere, marking the emergence of a culture war that has shaped the internet and even American politics. In Silicon Valley, harassers have latched on to “ethics in journalism” to legitimize their attacks and turn the conversation away from the larger issue: a conflict between tech workers and executives.
VentureVenture capital firm Andreessen Horowitz — which invested $10 million in Clubhouse directly and bought up an additional $2 million of previous investors’ shares — was early to tap the power of media to raise the profiles of its startups. “Unlike established venture firms such as Kleiner Perkins Caufield & Byers and Sequoia, which let the press come to them, Andreessen Horowitz has gone on the offensive, pitching stories about its startups, leaking news to reporters, and planting itself right in the middle of the technology news churn,” Bloomberg News wrote in 2014.
The firm’s co-founder, Marc Andreessen, “loves Twitter because ‘reporters are obsessed with it. It’s like a tube and I have loudspeakers installed in every reporting cubicle around the world,’” according to a May 2015 New Yorker profile.
But Silicon Valley’s relationship with the media began to change in October 2015, when The Wall Street Journal published the first of a series of blockbuster stories that exposed high-flying blood-testing startup Theranos as a scam. The news embarrassed journalists who’d written glowing profiles of Theranos CEO Elizabeth Holmes and inspired a fresh generation of investigative reporting on the tech industry. Andreessen defended Holmes throughout, blocking Twitter users who questioned his remarks, though he hadn’t invested in the startup.
The sources of The Wall Street Journal’s reporting were current and former employees of Theranos. In the 2018 Facebook Cambridge Analytica scandal, employees of that company also revealed that millions of users had their data harvested without consent, another turning point for how the media covered tech companies. In the past few years, story after story has been driven by employees and contractors at tech companies disillusioned by their working conditions and their products’ effects on society.
““What they’re trying to do is destabilize the ability to be critical about tech CEOs.””
This shift posed something of a problem for founder-centric VCs. “I think the Andreessen marching order, which is a great one, is to defend the founders at any cost,” Upstream co-founder Alex Taub says. He adds that while it’s good for founders, it gets complicated when those people are accused of abuse or fraud.
Similarly, unquestioningly backing the founder while dismissing worker concerns isn’t good public relations, but refusing to stand by the founders could inhibit future investments. The answer, when it presented itself, was simple: go after the media instead.
“There’s sort of this larger project going on where they are trying to transmute accountability for CEOs, and the rising worker movements with values they don’t agree [with], into what they are going to reframe as part of the ‘cancel culture’ problem, because that’s the thing that has larger purchase, that there’s pushback on,” one well-known tech CEO tells The Verge. “What they’re trying to do is destabilize the ability to be critical about tech CEOs.”
“I am convinced that most people in the tech world do not understand the role of a free media in a liberal society,” Can Duruk, a product manager at Very Good Security, wrote in his newsletter, The Margins, in January. “The media is not there to be your friend. It’s there to inform the public, and make you feel self-aware.”
Andreessen Horowitz did not respond to a request for comment on this story.
The tension between tech journalism and venture capital was at the heart of the discussion that took place on Clubhouse on July 1st. In an hour-long audio clip obtained by The Verge and first reported by Vice, some speakers painted CEOs as the victims and questioned why the industry needed journalists.
“I believe in standing up for people who do not have a voice, who cannot stand up for themselves,” said Srinivasan when asked during the discussion about defending Steph Korey, the CEO of Away, who New York Times journalist Taylor Lorenz had tweeted about. On the recording, Felicia Horowitz, the founder of the Horowitz Family Foundation and wife of a16z founder Ben Horowitz, added: “You can’t fucking hit somebody, attack them and just say, ‘Hey, I have ovaries and therefore, you can’t fight back.’”
““The New York Times company is not the free press.””
Srinivasan also pushed his belief that the industry needed to move away from professional journalists. “The New York Times company is not the free press. You are the free press. You the citizen,” he said. “As citizens it’s your responsibility and mine to hold every institution accountable.” Later, he added that the reason media companies won’t issue retractions is that “their business model is literally marketing themselves as the truth … They are not the truth, mathematics is the truth.”
The next day, Srinivasan issued a $1,000 bounty (to be paid in bitcoin) for a retraction or correction to a February 13th Recode article about Silicon Valley’s early response to the coronavirus. The story, entitled “‘No handshakes, please’: The tech industry is terrified of the coronavirus,” opens with an anecdote: “Andreessen Horowitz recently put up a sign on its door, cautioning eager startup founders and business partners who walk into its offices: ‘Due to the Coronavirus, no Handshakes please. Thank you.’”
The first sentence is supported by a photograph of the sign in question; the rest of the piece is about the tech industry’s early response to the virus, which was substantially more aggressive than the state and federal response at the time. (Recode, like The Verge, is owned by Vox Media.)
Asked about these bounties and whether they lead to harassment, Srinivasan replied: “Do you think attacking female founders for profit, till they get fired, constitutes harassment?” He then began tweeting about The Verge’s coverage of Away, saying our strategy was to “pretend cancel culture isn’t real” and then to “crash a company’s stock price, making everyone poorer, while pretending to care about employees.” (Away is not a publicly traded company.)
““You’re making some boogeyman about journalists rather than talking about the real situation.””
The tenor of the Clubhouse discussion didn’t sit well with some of the listeners. “It felt fairly one-sided,” says a woman who was listening to the call and requested anonymity because she currently works in tech and does not want to face retaliation. “There were a couple people who’d worked in comms before and tried to even it out. But there wasn’t a lot of active dissent. And the moderators never asked for dissent to come forward. With a large audience you have to actively ask people.”
An app builder who was listening in agreed. “They’re all under the premise that running a company as CEO is very, very hard, sometimes stuff goes on. We should get a pass. You’re making some boogeyman about journalists rather than talking about the real situation. Or being held accountable.”
After the main discussion died down, a group of younger tech workers moved to another room in Clubhouse (a process called “rerooming”). There, they rehashed the debate — and why some had felt it was unproductive. “It was mostly women talking,” the app builder said. “It almost became a therapy session talking about how painful the first discussion was made.”
Clubhouse co-founder Paul Davison joined and asked the group for feedback on how the app could make discussions more productive or inclusive. The talk then shifted to a product feedback session, where people brought up the need for more moderation.
A spokesperson for Clubhouse declined to comment for this story.
AA preview of the tech industry’s animosity toward the Times occurred on Twitter the week before the Lorenz kerfuffle erupted, when Scott Alexander — a pseudonym — deleted his blog, SlateStarCodex, which centered on rationalist thought. In a final post, Alexander claimed The New York Times was going to “dox” him by revealing his real name in an article — an article he believed couldn’t be written if the blog was taken down. He directed people to contact Times tech editor Pui-Wing Tam, who subsequently received thousands of emails and tweets, some of which were “toxic” in nature, a source familiar with Times’ reporting says. Srinivasan named the reporter on Twitter, who was subsequently harassed as well.
“Alexander, whose role has been to help explain Silicon Valley to itself, was taken up as a mascot and a martyr in a struggle against the Times, which, in the tweets of Srinivasan, Graham, and others, was enlisted as a proxy for all of the gatekeepers—the arbiters of what it is and is not O.K. to say, and who is allowed, by virtue of their identity, to say it,” wrote Gideon Lewis-Kraus in an article about the campaign in The New Yorker.
Ultimately, these efforts ran out of steam, as nothing about Alexander or SlateStarCodex has yet been published by The New York Times. The source familiar with the Times’ reporting says “not a word” of the SlateStarCodex story had been written when Alexander deleted his blog. But the tenor of the discussion had been set.
At the heart of the tech backlash to the media is a fear of getting “canceled” — a nebulous term that’s often used to refer to those who get called out online and may subsequently lose power in real life as a result. For investors and CEOs, the idea that one damning article can throw a whole company into turmoil is infuriating: it often feels like only part of the story is being told — and that part is often unflattering.
But hidden in the discussion is the fact that workers are also at risk of getting “canceled” — and they often have much more to lose. “We don’t have a lot of money or the name recognition that the founders and venture capitalists do,” says a former Away employee. They added that no CEO, male or female, should be able to treat workers poorly — a reference to the argument that male leaders aren’t held to the same standards. “It’s white feminism,” the employee adds. “[The CEO] got to where they were by playing the game and now they’re getting called out for mistreatment. So yes, for years men have been doing the same things. But what makes it okay for men to do this? That was the ‘girl boss’ promise. That women would do it better. But they didn’t.”
“Now that the tech industry has grown to be a major cultural force, workers are wondering why they aren’t treated better”
“Cancel culture” aside, it seems like there has been a major cultural change in both the tech industry and tech reporting. Ten years ago, tech employees were excited to do something that might change the world for the better. Now that the tech industry has grown to be a major cultural force, workers are wondering why they aren’t treated better. They want to know why their platforms require armies of moderators who frequently get PTSD. Or why their cloud platforms are being used by the military. Or why their facial recognition systems appear to be openly racist.
As a result, tech reporting has focused less on founders and CEOs and more on the hundreds of thousands of workers who power their businesses. For founders and CEOs, that means public calls for their accountability. Some of those are bound to appear on major media outlets.
As Marc Andreessen pointed out in that 2015 New Yorker profile, the future changes in ways one can’t necessarily predict. It is no longer 1999; a founder-focused culture has been the norm in Silicon Valley for at least a decade. This particular reckoning may erode media credibility among some members of the tech community. It’s also possible that founders and CEOs learn to listen to their employees before they go to the press. After all, workers wouldn’t have to leak their stories to the media if companies responded to their concerns.
Who knows? It might even be good business.
With reporting by Nilay Patel.
Inside Big Tech’s Years-Long Manipulation of American Op-Ed Pages
Why you should probably read opinion pieces supporting the tech giants with skepticism
Photo illustration. Image: scanrail/Getty Images
For years, the tech giants and organizations they fund have pushed op-eds from small-business owners, think tanks, and academics into US newspapers without disclosing their involvement.
The op-eds, which advance the tech giants’ policy positions, make it seem like they have more public support than they actually do — and that’s exactly the point. Their aim is to persuade lawmakers and regulators that the people they purportedly hurt prefer the status quo. And perhaps some do. But when no one knows you’re behind an article, it’s easier to press the case.
“It’s common practice,” one former Google communications professional told Big Technology. “The way democracy is supposed to work is you pay less heed to a corporation. But a local small business that has ten employees? That goes much further.”
In the policy world, planting op-eds from “independent” third parties is so common it has a name: “Grasstops,” a word derived from grassroots. Grasstops advocacy is not limited to the tech giants, but these companies and their allies are especially adept at using the practice to fight off regulation. As antitrust inquiries against them build in the U.S., it’s worth reading op-eds supporting their positions with healthy skepticism.
“It was always baffling to me that this was so natural,” the ex-Googler said. “By 2012, I couldn’t open an op-ed page without being like — Okay, who’s actually behind that?”
A second tech giant communications pro described the process: “They’re always written by the company, edited by whomever they’re affixing the name to, and sent back and forth,” the person said. “Eventually they get it to where they want, and the company places the article.”
The ex-Googler said they provided substantial guidance on a 2015 Wall Street Journal article headlined “Some Things Should Not Be ‘Forgotten,’” which advocated against the “right to be forgotten,” a policy that allows people to force search engines to remove certain personal links. “It was a successful op-ed,” the ex-Googler said. The Journal article does not mention Google’s involvement. Its author, Jason Wright, declined to comment.
More recently, a Phoenix-based boot maker named David Espinoza blasted Arizona Attorney General Mark Brnovich for his antitrust investigation into Google via the Arizona Capitol Times. Espinoza’s opinion piece contains his byline, but the Connected Commerce Council (3C) — a small business trade organization that’s accepted funding from Google, Amazon, and Facebook — wrote it and placed it. The Washington Post first reported the connection. The Arizona Capitol Times declined an interview request.
“When they approached me, I had no idea what they were talking about or why they wanted to see me,” Espinoza told Big Technology. “I don’t think they did anything wrong, but maybe it was a little bit deceptive.”
Jake Ward, president of 3C, told Big Technology his organization would no longer submit op-eds without disclosing its members’ association with the group. “It was an oversight that needed to be fixed,” Ward said. “It’s been fixed.”
The Kansas City Star Mystery
Sometimes, multiple opaque layers can obscure the entities backing an op-ed. An extremely strange example might be a Kansas City Star op-ed that ran earlier this month (buckle up for this one). Kimberly Vincent, a local vegan bakery owner, wrote a July 5 op-ed in the KC Star supporting CDA Section 230. This law gives internet services like Facebook and Google broad immunity for what’s posted on their sites. Conservative politicians, in an attempt to intimidate these platforms into keeping their hands off right-wing content, have threatened to amend it.
Vincent, in her op-ed, pushed back on these Republican lawmakers. “For some elected officials — like our own Sen. Josh Hawley, who has introduced legislation to amend Section 230 — these internet laws are about politics,” she said. “But for me, this is about my business.”
Vincent told Big Technology she did not work with an outside group on the op-ed. 3C’s Jake Ward said that a consultancy his organization sometimes works with, Alaris Strategies, did help Vincent on the op-ed, though not in its work for 3C. After further inquiry from Big Technology, Alaris partner Chris Grimm called to talk. “The Kansas City op-ed you asked about, we did not pitch for 3C, we pitched for another client,” he said.
Asked to name the client, Grimm declined. “We don’t disclose our clients,” he said.
Vincent did not respond to further inquiries. The Kansas City Star did not respond to multiple emails. Senator Hawley’s office did not respond. Facebook, Google, and Twitter all said they do not work with Alaris. The Computer and Communications Industry Association (CCIA), a trade group that lists Google, Facebook, and Amazon among its members, did not respond to a request for comment.
So, who knows who’s behind that KC Star article. If anyone is at all. And that’s the crux of the problem. Unlike traditional lobbying, companies working to wield influence on politicians through op-eds are not required to disclose they’re involved, ensuring the practice will continue.
“There’s no existing regulation,” another person who’s worked on these campaigns inside the tech giants said. “It’s entirely outside of lobbying disclosures. So if they disclosed it, it would seem like excessive disclosure. It’s not even in the realm of what’s being required.”
Until lawmakers require disclosure, it will fall on news publishers to press for it themselves, and the tech giants and their associated industry groups may also want to act with integrity here too.
“News publishers should be disciplined in asking where financial backing, or communications backing came from, and disclosing that,” David Chavern, the head of the News Media Alliance, an industry group that is itself seeking an antitrust exemption so its members can negotiate together against the tech giants, told Big Technology. “It doesn’t mean you don’t run it. it means you disclose to the public exactly what’s going on.”
For longtime political operatives, this story may seem like a rundown of a common practice. But for the general public, there’s reason to believe it’s surprising. Even the small business owners involved, like Espinoza, can be confused by how it works. So it’s time to stop looking at this as simply “part of the business” and to take some real steps to end the deception.
Twitter’s Inside Threat
Once Twitter admitted its employees helped facilitate yesterday’s A-List user hack, it felt like a step into a recurring nightmare. The FBI previously accused Twitter employees of accessing Saudi dissidents’ private data and passing it along to people connected with the Saudi Royal Family. Now, Twitter’s employees were involved again.
For Twitter, another inside job is not surprising. But this episode makes you wonder how much Twitter actually locked down its internal systems after the Saudi incident. Whatever the answer, it was not enough.
Some employees must always have access to a company’s innermost areas, but there’s no excuse for not building safeguards to detect this abuse. Imagine what else could’ve happened in a slightly darker scenario. Now, all manner of questions about Twitter’s security practices will come to the fore: Can you trust Twitter to protect your messages? (I’m glad I’ve moved mostly to Signal.) Also, will Twitter’s industry-leading commitment to remote work last?
It appears this was simply a case of hackers playing a joke and walking away with some cash. Yet we’re all crossing our fingers and hoping there’s nothing more nefarious at play. If Twitter’s direct message database leaked, for instance, it would be an instant global scandal. This episode may simply be a case of a few people getting bored and deciding on some reckless fun. Anything more, and we could be looking at one of the most serious stories of 2020.
The 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.
In 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.
“They 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.”
This 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 business allies.
Some 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!
Overall, 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.
This 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.
Colliding Worldviews
This 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.
Fundamentally, 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.
Other 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.
Perhaps 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 unions.
Another 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.
Progressivism’s future?
Right 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.
The 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.
Yet 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.
Tech 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 renewable-energy schemes.
These 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.
A 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.
Steyer 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 finances.
The 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.
Of 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.
