In her April 2018 New Yorker profile of Uber CEO Dara Khosrowshahi, Sheelah Kolhatkar wrote drily that “the dramatic decline of Uber’s reputation has shaken Silicon Valley, which likes to think of itself as a force for good, even when confronted with evidence to the contrary.” It’s certainly easy to tick off the list of reasons why the ride-share giant may have fallen from grace, from its harassment of critics to former engineer Susan Fowler’s revelations about its frat-house culture to “vomit fraud,” the practice some drivers have of concocting outrageous lies to overcharge passengers for spills and stains that never happened.
But in the same paragraph, Kolhatkar further complicates Silicon Valley’s moral reckoning over its own darlings. “Is it OK to condone unethical behavior if you make a lot of money?” she quotes one analyst as musing, as if the answer should be anything but obvious.
The thing is, though, Uber doesn’t have to answer that question, because Uber doesn’t make any money. It technically turned a profit in the first quarter of the year, but only because of one-time mergers with competitors in Asia as it pivoted back to the Western Hemisphere. Uber then coolly lost $891 million the next quarter — a figure that, to its credit, was down from $1.1 billion the year before. In preparation for its IPO sometime in 2019, Uber’s model is clearly Amazon, whose CEO Jeff Bezos famously convinced investors to tolerate a long string of quarterly losses as long as overall growth galloped ahead. Bezos’ strategy was unconventional, but he’s now the world’s richest human being — while once-scrappy Netflix pulled off a feat similar to Amazon’s.
For all their current missteps, Facebook and Google are immensely profitable. Apple, of course, is the world’s largest corporation by market capitalization, sitting on a pile of cash after its transition from computing giant to luxury-goods behemoth. (Dodgy tax-avoidance strategies no doubt helped.) But whether they earn oodles of money or set it on fire at spectacular rates, the common theme to all these companies is that they believe they are changing the world for the better.
In Keith A. Spencer’s new, accessible A People’s History of Silicon Valley, he attempts to dispel tech’s myths and puffery with more substance and historical context than the usual blog post about Dropbox bros kicking teenagers off a Mission soccer field. Residual 1960s idealism and Wall Street-style hubris have combined to give the tech industry the impression of invincibility and fundamental benevolence. Or, as Spencer writes, “The situation of Silicon Valley as one hub of the hippie counterculture was convenient to a narrative of technological and cultural change that made tech companies seem like revolutionary social vanguards, rather than an enterprise equally exploitative as any industry.”
Elaborating on this point in a coffee place on Sixth Street, Spencer adds that tech is basically no different from the candy industry, only with considerably more power to fight off threats to its business model. (As recently as 1998, he notes, the Justice Department’s antitrust warriors nearly broke up Microsoft, something that would be nearly unthinkable under today’s DOJ.) But rather than locked in eternal battle with a hostile government, tech has a curious relationship with the State. Namely, it was postwar federal investments in and around San Jose that birthed it.
“What’s so amazing about this historical moment we’re in is that there’s so much power for corporations to deflect any regulatory threat to their revenue,” Spencer says. “And the tech industry benefits from rhetorical strategies where it presents itself as synonymous with progress and its leaders as visionaries.”
But as we know from the still-unspooling aftermath of the last presidential election, the circa-1993 promise of an amplified “digital democracy” was not merely naive, but has actually nudged the West into an existential emergency. The e-public square turned into a comments section, unaccountable, tribalized, and full of bile. Concurrent with the rise of alternative facts and a reinvigorated far-right, tech giants now possess the ability to disappear critics, too.
Deplatforming is often satisfying when it silences malicious actors on the opposite side of the political spectrum — the Milo Yiannopouloses and Laura Loomers of the world, if you’re a lefty — but it’s a frightening power, and Google and Twitter have certainly not earned the right to be entrusted with it. Just as smartphones and social media have collapsed the printing press and the telegraph and the newspaper into one, Spencer says, they’ve also essentially created an authoritarian-regime-in-waiting that can be turned on with the flip of a switch. We already live in a surveillance state of all against all, but the vast amounts of ostensibly neutral data Silicon Valley collects could easily become an instrument of oppression if the federal government forced them to hand it over.
In light of this, Spencer’s text is essentially two books in one. Apart from his flaying of contemporary tech’s hagiography, there’s also a helpful series of chapters that puts the industry’s genesis into historical context. Since IBM exited the personal-computer universe, it’s been largely written out of the account of tech’s rise. (That it’s headquartered in Westchester County, N.Y., 3,000 miles from Sand Hill Road, no doubt plays a role in that.) Founded as the charmingly clunky Computing-Tabulating-Recording Company in 1911, IBM remains a cloud-computing juggernaut and component of the Dow Jones Industrial Average — whereas, say, Motorola (founded in 1928) was unceremoniously absorbed by Google in 2012 and sold to the Chinese company Lenovo two years later.
But it was the military need for computer networking, for decentralized communications in the event of a nuclear attack, that spurred the development of semiconductors (which are now overwhelmingly produced by Asian firms) microchips, and the internet itself. Tech, Spencer says, can beget culture and overwrite the natural environment, and that phenomenon largely took root in what was until the 1950s known as the Valley of Heart’s Delight, perhaps the most productive agricultural region in the world.
Fascinatingly, he goes back as far as the Ohlone people’s contact with Spanish missionaries to evaluate Northern California as a site where technology physically changes the landscape. Centuries before the anonymous office parks and server farms, the colonizers marveled at the almost Noah’s Ark-like behavior of wildlife that exhibited virtually no fear of the humans who shared the land. The arrival of guns brought terror to that Eden, and may also have brought sound pollution that interfered with the harmony of their mating calls. It’s a phenomenon that has carried forward to the present day, with social media rewiring our brains for that constant hit of dopamine and smartphones rejiggering virtually every domain of human socialization, from restaurant etiquette to porn consumption.
“A phone is not a reflection of what we want to do,” Spencer says. “The tech industry creates a culture and these social-conditioning devices. They condition us to behave and interact in ways that benefit their profit margins. It’s not this raw format that lets you do whatever you want to do.”
As the maxim goes, if the product is free, then you are the product — and while smartphones can run to $1,000, most apps are a comparative bargain. The axiom seems to be true whether the purveyors of those products make money or not — but Spencer seems optimistic on one point. With Facebook and its peers reeling from the disclosures of data breaches, alliances with anti-Semitic crisis PR firms, and general malfeasance, momentum may be growing to regulate social media or even break those companies up, the way the government did with AT&T in 1984 and almost did with Microsoft barely a decade later. In the short-term, that might lead to further balkanization of public discourse as people seek refuge in echo chambers.
But, he adds, “if their users owned them, or they were nationalized, there wouldn’t be such a tilt toward sensationalism.”
In essence, remove the profit motive and the nobler virtues would float to the top?
“I think so,” he says. “Because there wouldn’t be advertising. That was the case with Burning Man, originally.”