27 November 2015

Why Silicon Valley is heading right


A couple of years ago New York Magazine did some work on the political orientation of Silicon Valley in which they reported the big news that some of the giants of the tech world were – shock! horror! – moving to the right, albeit very tentatively. The irony is that this should be newsworthy since the evidence of a rightward trend was so very paltry. As PayPal founder Peter Thiel has admitted, “most of Silicon Valley, most of the executives, tend to be Democrats.” And there’s another reason: Why should anyone involved in this field be attracted to the political left at all. The technology sector is characterized by fast-moving innovation, efficiency and autonomy. Not quite the description of the generally, sclerotic, monopolist and statist left.

The simplest explanation however is likely the most accurate: The technology sector generally has a different experience of government than other industries. You do not need licenses, inspections or permits to start a start-up. And in general, they’ve been treated differently by federal regulators, so those who work in IT just don’t know what it’s like for other industries. In the few instances when they get a taste of overbearing government messing around with their market, they don’t like it much.

In 2012, Nate Silver catalogued how strongly left-wing most IT folk voted in that’s year’s presidential election. “Mr. Obama won the election by 49 percentage points in the Bay Area, more than double his 22-point margin throughout California.” This is the same area and state where Ronald Reagan enjoyed significant support so it isn’t that the West Coast has always been the left coast. But Obama also won nearly all the money, which Silver argued meant that the leftward bent of the sector went deeper than just the top brass – the Gates, Brins and Zuckerbergs of the industry – who have also given some support to Republican candidates.

This connection to the political left was helped by two important recent developments: First, Barack Obama loves technology, has always been an early adopter of technological innovations, and has consistently spoken of the IT sector as a force for good in the world. Quite a bit different say than Mr. Obama’s feelings towards the energy sector where he has openly spoken of the sins of fossil fuels and the need to curb growth to protect the environment.

The second element is that the IT sector caught on quickly to the need for spending millions on lobbying in order to protect its interests and get the best deal possible when government oversight is inevitable.

Take the fight over net neutrality rules earlier this year, which was a bonanza for lobbying firms. Telecom giants AT&T, Comcast and Verizon were pitted against IT companies like Google, Apple, Kickstarter and Etsy. And in the end, the Federal Communication Commission threw the broadband companies (that is, Internet service providers) under the bus, by categorizing them as Title II telecommunications services subject to the 1934 Communications Act. The IT sector got the best deal they could by having the government guarantee that ISP’s couldn’t discriminate based on content. Whether there was an actual problem that the FCC needed to solve – there actually wasn’t – got drowned out by the Left’s default setting: government involvement is necessarily an improvement in just about every circumstance.

In the case of small drones, lobbyist Michael Drobac got his clients the best deal he could by organizing what was basically a small-drone festival on Capitol Hill, “complete with a tech fair that allowed lawmakers and staffers to check out some small drones and a concert at a local D.C. club by the band OK Go, which used drones to film a video,” reported re/code. Lo and behold, a few weeks later the Federal Aviation Administration released generous rules on drone use. The FAA also said they wanted private companies and drone makers to cooperate with the government on safety regulations.

Once innovators like Uber and Airbnb got to a certain size, their relationship to government oversight changed dramatically. In Uber’s case the company decided to get the best lobbyist money can buy hiring David Plouffe, Obama’s former political strategist, as its senior vice president of policy and strategy. Uber founder and CEO Travis Kalanick declared at the time that Plouffe was going to make sure “that our story is told, and that the right outcome happens,” namely winning out over regulators and insurance and taxi companies opposing them. “There are a number of places that we aren’t in because of the regulations that exist today,” Kalanick said. “And we have tens of thousands of consumers, and sometimes hundreds of thousands of consumers, who are clamoring for a way to get around that city.”

Another shift among IT and other technology innovators has been revelations about massive government data collection – otherwise known as spying – by the National Security Agency, which companies like Google, Facebook and Microsoft have vigorously rejected. And then there is the ongoing debate and the new regulations over the online currency bitcoin. Reactions among those affected by the new BitLicense rules were less than thrilled to have to accept government intervention in what had otherwise been a hugely successful and hugely popular consumer-regulated market.

Technology moves so much faster than government that innovation and disruption is going to continue while elected leaders struggle to keep up. And as Gregory Ferenstein reported in The Guardian, there are natural fissures between the technology industry and the left – labor unions, free trade, high-skilled immigrants and charter schools are a few – while there are some symmetries as well: “tech startup founders see the government as an investor in citizens, rather than as a protector from capitalism…. [And] they also believe the government has a duty to actively help citizens solve global problems,” Ferenstein wrote. Maintaining this balance is tricky and like much about the rapid pace of technology, unpredictable.

Abby W. Schachter is a Pittsburgh-based writer. Her forthcoming book is No Child Left Alone: Getting the Government out of Parenting (Encounter, 2016).