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AEIdeas

A lot has been made of the tech world’s growing involvement in politics — from accusations that social media sites such as Facebook are politically biased, to questions over certain Silicon Valley leaders’ endorsements, to the sector’s support of issues such as more high-skill immigration.

Republicans and other on the right bemoan that Silicon Valley tends to go blue. They’re confused. How could this hotbed of entrepreneurship and wealth creation be largely pro-Democrat? But Silicon Valley boasts a unique culture that emerges from an environment of competition, innovation, government involvement, and collaboration. As journalist Greg Ferenstein has written, these “hippies who dig capitalism and science” – many of them millennials – are hard to label. They go with the public policies that make their ventures possible.

So what is the “political philosophy” of Silicon Valley? And what do these tech leaders want from public policy? I sat down with Greg, editor of the Ferenstein Wire and author of The Age Of Optimists, a free book on Silicon Valley’s political endgame, available on Medium. Here’s some of our conversation, which you can listen at in full over on Ricochet.

Pethokoukis: You’ve done interviews with some 130 Silicon Valley founders. What you’ve found is that they donate overwhelmingly to Democrats, but they have some beliefs that don’t necessarily align perfectly with Democrats or Republicans. You call them “hippies who dig capitalism and science,” pro-business liberals.

They’re big on globalization, free trade, open borders, and they’re anti-labor union, but they’re also pro-Obamacare, and believe that governments should act like a business. They have a meritocratic world view, prioritize individual creativity as a source of problem solving, yet also believe in collaboration and competition.

Why do all these free enterprise loving Silicon Valley folks vote for Democrats?

Ferenstein: The high level elevator pitch is that Silicon Valley and, broadly, urbanized professionals, represent an entirely new political category — not libertarian, not Democrat, and not Republican. I argue that they are pro-capitalism and pro-government and their belief is that the government should be an investor in citizens to make them more educated, entrepreneurial and civic, rather than act as a regulator of the two parties.

What we’re seeing is the emergence of an entirely new thing… They’re trying to race into a better future as quickly as possible.

The Democratic Party comes closest to this, and the people that they fund pretty heavily tend to author laws that focus on education and civics and making people healthier rather than regulations and labor unions. So that’s the upshot: what we’re seeing is the emergence of an entirely new thing, which I’m tentatively calling optimists, because that’s their basic philosophical output. They’re trying to race into a better future as quickly as possible.

And as part of that optimism, they’re optimistic that government can do things that work where certainly on the right there’s deep, deep pessimism on the ability of government to do much of anything.

Yeah, but the internet was created by a government lab. Much of Silicon Valley is based on government funding, whether it be basic research or education or outreach for free trade the internet requires pretty substantial government involvement.

But yet there are certainly parts of the Democratic Party that don’t seem to fit very well: regulation, teachers’ unions. Quite a bit in the Democratic Party doesn’t seem to very forward looking, with a lot of economic nostalgia for the 1960s. But are the people in Silicon Valley who like Bernie Sanders, are they not like the founders, but they’re the 23 year olds who work for the founders?

There’s actually not a lot of support for Bernie Sanders in Silicon Valley, and Bernie Sanders does represent the old Democratic Party, the old populist Democratic Party. Hillary Clinton represents a little bit more of what are actually called the new Democrats, which her husband coined in the 90s, which tend to be this more Silicon Valley business-friendly liberal, although she’s a pretty mild version of it. Michael Bloomberg was a much purer version. And Bernie Sanders doesn’t have a lot of fans out here. I did a poll of internet founders and found that Clinton was actually the most popular and Bernie Sanders was a distant second.

But what about the employees between the ages of 23 and 35, or something like that?

Same thing; you go through Open Secrets right now and you look at donations of Google versus Facebook versus Apple and you type in Hillary Clinton or Bernie Sanders, and Clinton has way, way more donations.

So even on the employee level — people who aren’t wealthy, who still probably have college loans to pay off — that isn’t a hot bed of Bernie Sanders love in Silicon Valley.

Oh no, and even more fascinating, what I found was when I began to poll the entire spectrum of tech employs, I also found that gig economy workers — that is like Uber drivers — were much more pro-Hillary Clinton and high skilled immigrant than people who were in labor unions. So if you want to think of what the Silicon Valley demographic is, it’s not just tech people — it’s tech people plus people who are self-employed, the creative class, and anyone with a generally entrepreneurial or high skilled job, because all of that spectrum needs an entirely different role for government, regulation doesn’t help them, neither do unions.

I’m looking at your e-book right now, and you list policy positions tech founders reject, for instance, the Keystone Pipeline because they’re very worried about the environment, while they like the Obamacare healthcare mandate. They don’t like unions, and they like free trade. If those are your positions, that seems like a movement without a party.

So they are a new thing and they’re struggling to get into either party.

It is, which is why they’re struggling. Which is why one billionaire investor said that he would shut down his entire operation if Mike Bloomberg were to run for president, and campaign for him. So they are a new thing and they’re struggling to get into either party, although they’re having quite a bit of success within the Democratic Party on a number of issues. Like high skilled immigration and charter schools, both of which the Obama administration supported. But you’re right, they’re a bit nomadic.

How much is being more culturally liberal a factor that overwhelms their economic perspective?

Well, so there’s two things. So one is, I can’t stress this enough, they are not fans of libertarians. Libertarians have threatened to cut funding for economic studies, basic research in the sciences, education. These things are absolutely crucial to emerging industries and governments roll in it.

How did Rand Paul do out there when he visited?

Oh, I have a wonderful video of him, I’ve shown it all over the internet much to his chagrin. Rand Paul did terrible. It’s one of my favorite videos ever: Rand Paul getting up right after he announced and was running high on his top status. And he got up in front of a whole bunch of tech people and said, “Who’s a part of the “Leave-me-alone” coalition?” And no one clapped. It was so awkward that he actually had to say something. I found crucial to what is distinct between libertarians and valley folk that Silicon Valley’s ideology is pro-market but it is not pro-liberty. Liberty is not a value. They are highly, highly, collectivist. They believe that every single person has a positive obligation to society and the government can help people or coerce people or incentive into making a unique contribution.

I just did a podcast with Kevin Kelly about his new book, “The Inevitable,”and the big technological trends over the next generation, and he talked about something that he called digital socialism but what he meant was more collaboration. I think that’s what you’re getting at when you talk about how the Silicon Valley folks are pro-market, but they don’t believe in atomistic individualism.

Yeah, and to give your readers a little flavor of how they differ from Democrats, equality is also not a value. So if you look at traditional Democrats, most of what they do on social justice or whatever is they try to make people more equal and give them stable lives.

Liberty is not a value. They are highly, highly, collectivist… equality is also not a value. Silicon Valley is all about inequity and unpredictability.

Silicon Valley is all about inequity and unpredictability. They really believe that some people are much more productive or inventive than others. One of the ways in which this manifests itself is performance based funding, where they will encourage competition among schools and will give some schools more money than other. Labor unions hate it.

So one of the tensions is that we have is between folks out there who are Democrats, who really believe in education and they believe in competition and meritocracy and charter schools. Yet one of the most powerful forces within today’s Democratic Party are teachers’ unions. Huge natural tension.

Labor unions and Silicon Valley fight head to head on almost every single issue they care about. It is fascinating to watch literally every single emerging issue that comes up, whether it’s housing and construction costs or teachers’ unions and charter schools. It is civil war on every issue that tech cares about and is becoming more concerned with.

And yet, despite that, teachers’ unions aren’t going away, public sector unions aren’t going away anytime soon.

Well, kind of.

You think they are going away?

Silicon Valley is literally creating the tools that wipe them off the face of the earth, whether it’s through automation of manufacturing jobs or the rise of the gig economy which isn’t unionized.

But do you see teachers unions becoming significantly less powerful force over the next, I don’t know 15, 20 years?

Teachers unions are a little strange. Silicon Valley has had a hard time disrupting education because it’s so heavily regulated. Potentially with the rise of for profit vocational startups like Udacity and Coursera — what they do is that they’re taught by actual businessmen. Someone from Facebook will teach you programming. These folks are not unionized, and they’re just starting to qualify for federal funding, so you’re starting to see nonunionized teachers creep into the educational establishment.

The Democratic Party seems obsessed by income inequality. Again, it seems like a strange fit that Silicon Valley, with this amazing amount of wealth being generated, likes a party which seems to have a problem with that kind of money, when it adds value to society. Is this an issue with the founders? Does this shake their allegiance to the Democratic Party?

Silicon Valley is literally creating the tools that wipe [unions] off the face of the earth.I always find that kind of interesting, especially from folks who come from the Republican Party, where libertarians have teamed up with another political group that literally wants to tell people who to have sex with. Parties by their nature tend to team up between groups that really don’t like each other very much, and in some cases vehemently disagree.

but Democrats tend to be more a collection of interest groups. Republicans too, but they’ve tended to be more coherent ideologically.

I have no idea what the Republican Party is going to be, maybe wandering in the desert for a long time. If any of you want to crash on my couch in San Francisco, you’re welcome to—all of you.

I know there are Republicans who want more support from Silicon Valley, but now the presumptive nominee is someone I think who wants to break up Amazon, or sue Amazon, wants Apple to bring their jobs back to the United States… It feels like any progress that GOPers have made being more tech friendly has evaporated.

I would say that’s a diplomatic way of describing it. They think you guys are crazy. The night that Donald Trump became the presumptive nominee, many here just went to Twitter and started pledging their support for Hillary Clinton. It was just a wave.

Were there any Republicans running this time around who could have attracted a larger amount of tech support than did Mitt Romney or John McCain eight years ago?

They didn’t really like Ted Cruz. Marco Rubio got a decent amount of donations because he was like a mild technocrat who was okay with government and was mostly anti-regulation, which is as close an analog to Hilary Clinton as there is on the Republican side. So they would have liked some of the establishment candidates.

Are the Republicans just dead out there for a generation now? Anything the Republicans can do to break through?

Beyond the Trump thing, which seems to be ever present, I would say don’t play to people’s individuality; the whole “leave me alone, get government out of my way” shtick just doesn’t play well here. When you start talking about the free market, and how government can be a friend to the free market by getting out of the way but also helping a bit, that’s something completely within Republican principles. Decentralization of the welfare state, decentralization of anything, running government like a business, these are all things that are within the Republican philosophy and play well out here.

When you start talking about the free market… that’s something completely within Republican principles.

Recently, one of the guys who started Politico, whose name is just escaping me, he wrote a long essay about the state of American politics, and he suggested his own ticket of Mark Zuckerberg and David Petraeus as a third party. Is there any talk of creating some kind of party, since maybe the Silicon Valley doesn’t really fit perfectly into either party? Creating some third party which may be a neater fit with some of the issues that you talked about?

Not a month goes by where someone doesn’t say maybe we should just create our own party. There are just some realities that don’t allow it to happen, because America is a first-past-the-post voting system, not a proportional system, so you pretty much always get two parties out of that. That’s why no one takes it seriously.

It seems to me that Silicon Valley is trying to get involved in policy, talking about issues which aren’t necessarily tech issues — like housing or creating universal basic income — so let’s talk a little about the housing issue.

If anyone wants to make best friends immediately with Silicon Valley, say you’re going to fix housing. It is a crisis out here; we’re talking about median rents over $4,000, people are getting evicted left and right, and it’s because the super-left progressive wing in San Francisco has basically made it impossible to build anything but single family homes, and it can take years to get anything approved. It is a regulation jungle.

It can take years to get anything approved. It is a regulation jungle.

Can I get out there, say a house for $240,000, or an apartment for let’s say $1,200 bucks a month?

Do you ever get packages from Amazon?

Yes, on occasion I do.

You would get a larger package from Amazon.

Good, that’s about what I thought. Cozy.

So, there was a sign in SF that advertised houses for sale in the low millions, you pretty much cannot afford a home unless you’re making $300,000 a year here. There are micro-apartments, these are like 150 square feet, going for $1500 a month.

These issues do spread; there are plenty of other cities that have very high housing costs, and that’s bad for US productivity.

Housing, actually, should probably be regulated at the national level. There is some jurisdiction to do it; actually HUD does it under the Obama administration. What they did is they started penalizing groups for not allowing more dense developments, which they say basically excludes minorities. So, yeah, housing could be a national issue and the Valley really, really wants it to. Everywhere they set up a tech hub, whether it’s Austin or New York, or L.A., they bring a wave of new workers, and all of the NIMBYs, the people who don’t want new housing, block them from creating homes.

Let me ask you a question from Twitter from Richard Reeves over at Brookings. He writes, ”Is there support for basic income, the idea that everybody would get a check from the government that might replace all the other welfare programs, is there support for basic incomes based on guilt about the job loss potential of technology?”

What they want to do is they basically want everyone to live like they lived in college, where you get to play all day long, discover new things, you don’t have to work much, maybe you have a part time job and you just get to chill. The working phrase for this is automated luxury communism. And the way for automated luxury communism to work, and this is a real thing that could be happening within our lifetimes, is that robots replace most work and you just get a check from the government every month that allows you to spend as you want. And it comes from a very, very high tax on the relatively few workers who do have economic value.

Is it more fear that without this kind of broad redistribution policy, the alternative is Ludditism, ridiculous taxes, regulation?

No, I think what I described is, if you want to understand Silicon Valley, always think in the most radically optimistic terms possible. Your question discloses you live in D.C., and you’re like, “Are they doing this to stave off some political revolution or political backlash?” That’s part of it, but really it is a vision in which people don’t have to work, that is what they’re going for. They want to create that world. And basic income is a necessary step.

A vision in which people don’t have to work, that is what they’re going for.

At AEI, we like the idea of work, something to do, contributing. But it sounds like what you’re talking about is not that. Maybe you’ll do something or maybe you’ll float around in virtual reality all day. At least from my perspective, that doesn’t seem like you’re flourishing as a human being, as opposed to contributing in some way to society.

Yeah, no, it’s a really important question and it’s not just like sci-fi philosophy, this is actually happening to people right now. The labor force participation rate, the total labor force participation rate, has been dropping, and the amount of leisure time that the average American has been going up. If you look at what they’re doing, they’re lounging around, sleeping in and watching TV. And so in some cases Silicon Valley got what it asked for, but it didn’t give people something to do. We thought they would educate themselves and watch National Geographic and read Shakespeare, but they’re not doing it—it’s a real problem.

And we don’t have an answer for that yet.

Believing that information alone can be a solution is a distinct ideology.

No, we don’t, we don’t. I love playing video games but you’re right, people need to be productive; they need to feel like they’re contributing. It’s a discussion we need to start having right now because a lot of people are just never returning to the workforce, we don’t need them to work… so what do they do?

One last question: At some point does the idea of a technology political ideology disappear because all companies are technology companies?

No. And the answer comes from Mark Zuckerberg. When the Atlantic’s James Bennet asked Zuckerberg what his political ideology was, “are you a conservative or a Democrat”, he said, no I’m pro-knowledge economy. And the knowledge economy is a distinctly different beast. Boeing and the other things are also technology companies — missiles and planes. The act of creating information, and believing that information alone can be a solution is a distinct ideology. Most companies will not be information technology companies, and that is why it will remain a distinct way of life.