Big tech is out of touch

Unlike El Dorado or Camelot, Silicon Valley is a real place. The beating heart of the modern information technology industry is contained in a handful of small towns at the southern end of San Francisco bay, along the El Camino Real. This is where, in the minds of the residents and their global allies, the future is being made.

Blessed by a mild climate and physical beauty, the Valley looks like Shangri-La and creates almost astronomical wealth. Santa Clara County, where much of the Valley lies, had a GDP of over $275 billion in 2017, an astronomical $142,000 per person. Household incomes among the Valley’s elite engineers and executives is much higher, with median incomes in the most exclusive towns exceeding $200,000 a year. The Valley is growing at an amazing rate, nearly 8% per year for the last ten years. Developing country growth rates, super-elite incomes and an amazing physical environment: what’s not to like?

The Valley creates all of this without building much of anything nearby. Industries whose primary value is in what they place on the Internet, such as Google or Facebook, maintain their server farms elsewhere. Companies that still build things, like HP or Cisco, also do that somewhere else. To their eyes, therefore, their wealth is environmentally clean and what’s more, it’s produced in a largely egalitarian social setting.

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Can Big Tech save its soul?

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Global trade is also a daily feature of life in the Valley’s heartland. Many employees are migrants from China and India. Sales are worldwide, production is managed from plants throughout the world. For Valley residents, immigration, trade, and globalisation are unmitigatedly good things.

These views are most strongly held among Silicon Valley business leaders. A survey last year found them supportive of free trade and more open immigration, which perhaps explains why around 99% of Silicon Valley’s political contributions went to Hillary Clinton in 2016.

The lived experience of ‘flyover country’ residents, though, couldn’t be more different. For many, globalisation can kill your firm, your job, and your community. While immigrants in the elite areas of the Valley are mainly college-educated and fluent in English, immigrants in flyover country are not necessarily either.

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It’s no surprise, then, that Valley residents’ political views are diametrically opposed to those who live in the world’s declining manufacturing regions, where blue-collar populism thrives. The survey above suggested that Valley people are strongly on the Left on the cultural issues (abortion, same-sex marriage) that divide American politics, inclining the Valley strongly towards the Democrats for many years. But Donald Trump’s nomination sparked a revolt even among the Valley’s remaining Republicans. 

Fewer than 60% of the Republican (Mitt Romney) voters in 2012 in elite Silicon Valley towns supported Donald Trump in 2016. Trump won only 12% of the vote in Palo Alto and only 26% in posh Atherton, a town that Mitt Romney had carried just four years ago. Trump’s message – trade is bad, immigrants bring crime, and America has been in decline – made no sense to people whose lives taught them otherwise.

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Trump was elected President, of course, because people whose lives were the polar opposite of those in the Valley moved dramatically in Trump’s favour. People in places that had been losing jobs and population for years abandoned Democrat Hillary Clinton for Trump even if they had previously backed Barack Obama. Clinton lost between a quarter and 40% of Obama’s support in places such as the old steel and manufacturing regions of Scranton-Wilkes Barre in Pennsylvania or Youngstown in northeastern Ohio.

The battle over coal highlights the difference in outlook between the Valley and the hinterlands. The coal mining areas of southeastern Ohio, southwestern Pennsylvania and Kentucky turned even more sharply against Clinton – with her policies to put coal mining out of business – than did depressed manufacturing towns. Tiny Elliott County in Kentucky, for example, had never voted for a Republican for President since it was created in 1869, but it gave pro-coal Donald Trump over 70% of the vote. Yet California recently passed an anti-global warming law that will bar the state’s utilities from buying coal-produced electricity from out of state. The devastation that will wreak on more coal-centric communities receives nary a thought from the ostensibly generous Valleyites.

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This contrast in world views is replicated in many developed countries, with the split between wealthy London and blue-collar Britain over Brexit an obvious example. A socially healthy society would find a way to mediate these competing claims and find a way to make the Valleys and the flyover countries of the world work together. The continuing and increasingly bitter political debates suggest that health isn’t coming any time soon.

Silicon Valley imagines itself to be the envy of the world and its residents seem secure in the belief that their future is certain and bright. But the election of Trump, the victory of Brexit, and the continuing growth of populist politics suggest that confidence may be misplaced. History teaches us that content cosmopolitans can be oblivious to the causes of their own impending demise, resisting change until it is forced upon them.

Barbarians won’t tear down the gates before the Valley’s stately homes, but Shangri-La’s existence ultimately depends upon the sufferance of the people outside. If they should ever choose to explore the real world outside, any Iranian exile or former Eastern European apparatchik could tell them what can happen when a political order suddenly crashes down.