It’s always the same story arc, though the details may differ. It starts in a dorm room. Our protagonist is a dogged Harvard undergrad who’s stumbled upon an algorithm for objectifying women. Or it’s a garage in California where some enterprising PhDs have hatched a new way to organise information on the web. Or it’s a different garage, a few hundred miles to the north, where a hedge fund executive has quit his job to start an online bookstore.
This is the story of Silicon Valley: that well-worn American tale of genius meeting capital and changing the world. This valley in Santa Clara, California, once filled with lush orchards, has become synonymous with the booming tech industry, whether companies have their headquarters there or not. Facebook, Google (now known as Alphabet), Amazon, Microsoft, Apple: these are the tech giants on permanent rotation among the top ten public companies by market capitalisation. From humble beginnings they’ve catapulted to dizzying heights, achieving wealth and power on an unimaginable scale.
And for a while, that seemed like something to celebrate. Politicians and journalists heralded Silicon Valley’s successes as welcome in an otherwise lethargic economy, and preached about the need for local imitators. All of a sudden we were talking about Silicon Roundabouts, Silicon Alleys, Silicon Slopes. Tech, it seemed, was the path to prosperity. If we put our faith in it, perhaps there might be a future after all.
But in recent years the realisation has dawned that what’s good for Silicon Valley is not always good for everyone. What started with scrappy upstarts promising to make the world a better place has morphed into something more sinister: a pantheon of faceless multinationals who collectively dominate the world’s digital infrastructure, flouting regulations, avoiding taxes, and taking advantage of precarious labour to make a small number of people tremendously wealthy.
How did we get here? For all of its forward-looking ‘innovation’, there’s something suspiciously feudal about Silicon Valley. Tech royalty compete for dominance in platform wars, prepared to sacrifice their subjects’ privacy for business contracts and advertising dollars. They hoard resources while showering key personnel with lavish gifts to ensure loyalty and peddling a compelling story about their right to rule. Meanwhile, the remaining workers, dependent on ‘gigs’ for their livelihood, are made to battle with each other for scraps.
Even former enthusiasts are willing to admit that something is awry. But when it comes to actual solutions, there’s little forthcoming. Policymakers echo weary lines about codes of ethics, up-to-date regulation, and diversity in leadership roles. All of which are essentially cosmetic tweaks, little more than window-dressing for tech’s worst excesses. The accumulated power of its corporate behemoths, and their role in propping up an increasingly lopsided economy, remain untouched.
Place Silicon Valley in its proper historical context and you see that, despite its mythology, it’s far from unique. Rather, it fits into a pattern of rapid technological change which has shaped recent centuries. In this case, advances in information technology have unleashed a wave of new capabilities. Just as the internal combustion engine and the growth of the railroads created Rockefeller, and the telecommunications boom created ATT, this breakthrough enabled a few well-placed corporations to reap the rewards. By capitalising on network effects, early mover advantage, and near-zero marginal costs of production, they have positioned themselves as gateways to information, giving them the power to extract rent from every transaction.
Undergirding this state of affairs is a set of intellectual property rights explicitly designed to favour corporations. This system — the flip side of globalisation — is propagated by various trade agreements and global institutions at the behest of the nation states who benefit from it the most. It’s no accident that Silicon Valley is a uniquely American phenomenon; not only does it owe its success to the United States’ exceptionally high defence spending — the source of its research funding and foundational technological breakthroughs — that very military might is itself what implicitly secures the intellectual property regime.
Seen in that light, tech’s recent development begins to look rather different. Far from launching a new era of global prosperity, it has facilitated the further concentration of wealth and power. By virtue of their position as digital middlemen, Silicon Valley companies are able to extract vast amounts of capital from all over the world. The most salient example is Apple: recently crowned the world’s most valuable company, Apple rakes in enormous quarterly profits even as the Chinese workers who actually assemble its products are driven to suicide.
Whereas we were once led to believe that the network society would produce an egalitarian world, we increasingly see tech as a machine for the commodification of information itself. Something that has the potential to be abundant is made artificially scarce, because capital finds it profitable to enclose the digital commons and dictate its terms of access. Facebook wants a monopoly over your social network so it can show you ads; Google is the internet’s directory; Netflix, Spotify, YouTube, and Apple Music are your tollbooths for cultural production; Amazon is the gateway for your retail needs. These corporations serve social functions integral to modern life, in ways similar to industries that were nationalised in the past — and yet, not only are they not publicly owned, they are immune to any sort of democratic control.
This is the dark side of Silicon Valley, the uncomfortable reality that lurks beneath its glitzy exterior. Whatever its emancipatory narrative, Silicon Valley is facilitating a system where wealth concentrates, labour is disciplined, the public sphere is diminished, and global inequities are reinforced.
The Silicon Valley model of technological development is structurally flawed. It can’t simply be tweaked in a more socially beneficial direction, because it was never intended to be useful for all of society in the first place. At its core, it was always a class project, meant to advance the interests of capital. The founders and investors and engineers who dutifully keep the engines running may not deliberately be reinforcing class divides, but functionally, they are carrying out technological development in a way that enables capitalism’s desire for endless accumulation.
Consequently, fixing the problems with the tech industry requires revisiting the economic assumptions that underpin it. If technological development is to be truly liberating, it cannot be funded and developed by an imperial machine, driven by the hare-brained schemes of growth-hungry investors, and owned by a miniscule clique not accountable to broader society.
What’s needed instead is a movement to reclaim technology: to prevent its capture by capital, and direct it towards creating social value. Of course, the tech giants are not going to cede this ground easily. This is why the demand of the future will not be to tame or reform Silicon Valley, but to abolish it. For it to serve society, technology will have to be liberated from the constraints of corporate ownership and subjected to democracy.
If this is hard to imagine, it’s probably because we’re so used to the way technology works in today’s economy that most of us are unable to see beyond its horizons. But it’s time we started seeing Silicon Valley for what it really is: not separate from the economy, and not its saviour, but instead capitalism on steroids. All the negatives we associate with Silicon Valley — useless gadgets that no one needs, companies with billion-dollar valuations going up in smoke, exploitation of precarious workers — are a microcosm of a broader economic system. Abolishing Silicon Valley, then, means more than breaking up a few corporations; it’ll require a fundamental transformation of the economic structures that govern society.
In the coming years you’ll read a lot of columns agonising over how to ‘fix’ Silicon Valley. Most will be technocratic, evacuating politics from the discussion. This is, after all, the framing that allowed Silicon Valley to grow so powerful in the first place: a binary choice between technological development on capital’s terms, or remaining stuck in the past. But structural problems require structural solutions. Rather than relying on ‘ethical’ founders or investors to change the system, we need collective action to challenge it.
This will mean undoing the labyrinth of intellectual property rights, which are intended to protect corporations and commodify information. It will mean revisiting the funding model that gave rise to the ‘go-big-or-go-home’ culture responsible for so many wasteful start-ups, shifting away from the return-driven venture capital model, and towards a state-backed social entrepreneurship with public responsibilities.
It will also mean building worker power, within the tech industry and beyond it. Within it, the long-term goal must be a union culture encompassing all workers involved in production. That means not just the highly-paid software engineers but contractors packing boxes for Amazon, or driving for Uber, or cleaning offices in Silicon Valley should all have representation in decision-making structures. And beyond the confines of the industry, a wider-organised labour movement needs to offer resistance to technology being used to facilitate increased worker exploitation through surveillance or regulatory arbitrage.
None of this will be easy, of course. Reclaiming the emancipatory potential of technology will require prying it from the clutches of capital. But that is a worthy fight. If the task of politics is to imagine a different world, then the job of technology is to help us get there. Whether technology is developed for the right ends — for the public good, instead of creating a privatised dystopia — will depend on the outcome of political struggles.