Silicon Valley is a Failure

new Eternal daily season of the show. Um, but obviously over the last year or so, it's it's morphed into something very different and something wonderful and successful, and it's brought a lot of new voices, or at least voices people maybe hadn't heard from as much out in front of the audience, and I've been really happy about that. But what I also haven't been doing is writing any more essays about the world and how fucked up shit is, because you know, I've been managing a bunch of stuff

and there's been a lot of work to do. But I like doing that stuff, and I think you people like it, So I'm gonna try to do more of that. And I wanted to kind of start by talking a little bit about Silicon Valley, and I'm going to say something at the start of this essay that a lot of people are probably instinctively going to want to disagree with, which is that Silicon Valley and the tech industry have

been gigantic failures by every metric that matters. They have made life comprehensively worse for humanity, and there is no real fact based counter argument to that statement. This is a hard pill for people to swallow. I'm sure a lot of folks are frustrated in me for saying it

right now, and they're thinking of counter arguments. Most people today are critical of the tech industry, obviously, particularly major social media companies, but they still tend to acknowledge the tremendous wealth created by Silicon Valley, as if there's some sort of inherent value to that Behind a number on

a spreadsheet. Collectively, Amazon, Apple, Microsoft, Facebook, and Google, the so called Big five had a seven point I have trillion dollar market cap in every person listening to this keeps a device in their pocket made by or using the software of one or more of these companies, And so when people want to make the counter argument to what I just said, they'll tend to point out some version of this. Uh yeah, companies like Facebook have done bad things, but the Internet still a tool for good.

It connects people, YadA, YadA, YadA. Smartphones empower us. You know. There's all these positive things about the internet, to which I will say, present me with your fucking evidence that that has mattered for people really in terms that actually inaggregate improve their lives. I will show you my arguments

to the contrary. In the period of time from Harry Truman's election to the end of the Nixon administration, American productivity on a per capita basis increased at a faster rate than it did at any other point in history. But then something happened. From nineteen seventy three to two thousand and thirteen, income growth was eight percent slower than

it had been in the previous three decades. If productivity had continued to grow with the same rate from nineteen seventy three to two thousand thirteen as it did from nineteen forty six to nineteen seventy three, the economy in two thousand thirteen would have been sixty percent larger than it actually was. Now, I'm gonna guess a decent number of the people listening to this grew up watching the Jetsons.

I know I didn't. For the most part, it was a silly, pretty harmless animated show, but at the center of it was a dream about the future that seems unfathomable in light of current events. George Jetson, who was in the show a pretty normal working class guy, worked three hours a day for three days a week. One of the running jokes in the show is that he considered himself overworked despite this pretty idyllic schedule. Now, this

was never particularly a focus of the show. It was just kind of something that was mentioned from time to time. And that's because the idea that a work week might just be nine hours in the future wasn't a joke. This was the direction of futurists in the nineteen sixties, looking at that surgeon productivity I just mentioned, and all of the middle class wealth that had been created from

the forties through the early exties. This is the direction they saw us heading in around a decade ago, in a period that was still significantly more optimistic than our current age. The Atlantics Alexis Madrigal, when on a reading spree of some early twentieth century futurist novels. His conclusion was this quote. Technological optimists sold the world on automation by telling people it would create unimaginable amounts of leisure

for them. The big question for the workers of the twenty first century would be how to spend their copious amounts of free time. Now, the future we've actually gotten has given us the opposite of this dream to try and cover up the rank and rampant ways modern technology has failed humanity. Think tanks funded by venture capitalists and tech gurus produce an endless stream of identical futurist thinker types who write columns about how the world is actually

better today than it's ever been. A good example of this would be this June column by Rob Askar titled the World's getting better, Here's why your brain can't believe it. It opens with this paragraph, Life has improved for most people around the world over the past generation, temporary pandemics aside.

The rub is that you can't get anyone to believe the good news, and the result is a toxic political environment and the potential collapse of democratic norms if too few people feel that a stressed system is worth saving. Now I might point out, for example, that if people don't actually feel like the system is good, perhaps it's not really working well. There's a number of counter arguments you can make to this. Now, two years later, this again was written in June, we've got a massive war

in Europe. People are worried about nuclear warfare as a result of that. Again, we've got a degradation of democracy worldwide that's continued to pace from where it was in We've got soaring inequality, we've got inflation the likes of which a lot of people alive have never seen, myself included prior to this point. And we still have a pandemic. So it's clear that Rob is at least not as smart as he thinks he is, which is what I would say about everyone who makes versions of the same

claim that he was making. Now, this doesn't mean I'm saying that life is worse now than it was at some imagined pre lapse arian version of the past. I actually think that's kind of a useless way to think about the past. In the future, there's different things people would have preferred. There's things that are objectively better, there's

things that are objectively indebatably worse. You know, that's hard to make those kind of claims about history, especially when they often rely on saying, well, X amount of more people have been pulled out of poverty, and the question to that as well, I don't know, before colonization of Africa, would you say all of those people in what became the colonized parts of Africa were in poverty or were they simply not part of a system that measures poverty

and anyway, whatever. We can go on and on about that. My point is that the metrics these people used to claim the success of our current system to talk about how wonderful things are today are constantly shifting, and they're widely arbitrary. The same year Rob wrote his stupid column, an in O r C studies showed that Americans self reported being happy at the lowest levels in fifty years.

You can quote jupe statistics about wealth or acts as to luxury goods all you want, but the modern world and the post two thousand eight financial crash economy, all of which was built in the shade of the tech industry, is making people miserable now. Happiness is obviously not a perfect measure of progress either. Self reporting is always dicey, but things like the consumer price index in per capita income, which are often used by folks on the optimist side,

are also juked and jiggered to hell and back. So to provide a bit more of an international scale, I'm going to quote from the Berkeley University's Greater Good magazine quote. Released annually on the International Day of Happiness, the World Happiness Report ranks countries based on their life satisfaction and the Gallop World Poll. Residents rate how satisfied they are with their lives in the scale of zero to ten, from the worst possible life to the best possible life.

This year's report also analyzes how global happiness has changed over time, based on data stretching back to two thousand five. One trend is very clear. Negative feelings, worries, sadness, and anger have been rising around the world, up by from two thousand ten to two thousand eighteen. The others also found troubling trends, and happiness in equality, which is the psychological parallel to income inequality, how much individuals in society

differ and how satisfied they are with life. Since two thousand seven, happiness inequality has been rising within countries, meaning that the gap between the unhappy and the happy has been getting wider. This trend is particularly strong in Latin America, Asia and Sub Saharan Africa. And this is kind of getting it. I think, what is an incredibly important point, for one thing, if you want to look at how

people have self reported their unhappiness rising. This massive recent surge and unhappiness occurs almost at exactly the period of time that the smartphone takes off and becomes ubiquitous. And the smartphone is such a bafflingly useful device. I would never want to give mine up as a thing that I had access to. And the Internet is incredibly powerful tool.

I wouldn't want to give the Internet up either. But the usefulness and the the undoubtable brilliance behind these products makes it seem inconceivable to argue that they haven't made us better at accomplishing the things that matter to us. But the evidence on this is pretty clear. I want to quote now from a write up in The Atlantic. No matter how aggressively you torture the numbers, the computer age has coincided with a decline in the rate of

economic growth. When Chad Civerson, an economist, at the University of Chicago's Business School looked at the question of missing growth. He found that the productivity slowdown has reduced GDP by two points seven trillion dollars since two thousand four. Americans may love their smartphones, but all those free apps aren't

worth trillions of dollars. The physical world of the city, the glow of electric powered lights, the rumble of automobiles, the roar of airplanes overhead and subways below is a product of late nineteenth century In early twentieth century invention, the physical environment feels depressingly finished. The bulk of innovation has been shunted into the invisible realm of bites and code.

All of that code, technology advocates argue has increased human ingenuity by allowing individuals to tinker, talk, and trade with unprecedented ease. This certainly feels true. Who could spute the fact that it's easier than ever to record music, market a video game, or published an essay. But by most measures, individual innovation is in decline. In two thousand fifteen, Americans were far less likely to start a company than they

were in the nineteen eighties. According to the economist Tyler Cohen, the spread of broadband technology has corresponded with a drop off an entrepreneurial activity in almost every city and in almost every industry. Now you might think from all this that I'm left ahead into some sort of techno dum er anti primitives rant here. I'm not. Perhaps I should, but I'm not. I am a person who loves technology. I got my start as a journalist as a tech journalist.

I've joyously traveled the world for years visiting conventions looking at new gadgets, and a lot of this was in that pretty wondrous period if you're a gadget nerd from two thousand eight to two thousand eleven, where there were just these amazing, new, weird sci fi gadgets dropping every single week, stuff that you'd grown up watching, and like Star Trek, the next generation suddenly getting mailed to your

door for you to test out. I tested hundreds of tablets and smart gadgets in that time frame, and there's some really great products that came out from that period. Bluetooth speakers are wonderful. A lot of people, including me, use them happily on a daily basis, But when it comes to legitimately life changing applications of technology that's come to us in the last fifteen years or so. I can really only think of three things. Number one is

the ability to navigate by GPS basically everywhere. Number two is the ability to be in constant contact with people around the world. And number three is the ability to store a shipload of media on a portable device. So I'm not anti technology. Nor am I saying that big tech doesn't make things that are cool or useful. Nor am I saying we should get rid of this stuff.

The point I'm making is that viewed at thirty thou feet, the tech industry has produced very little of quantifiable value to the human race, and it has caused unfathomable harm at the same time. Now, in my opinion, this has nothing, or at least fairly little to do with how the technology inherently works, and instead has everything to do with the ideology behind the people who developed and who continue

to marshal that technology. In nineteen ninety five, two of the smartest guys in the twentieth century by my estimation, Richard Barbrook and Andy Cameron, wrote an essay about the ideology that animated the men who had come to dominate the twenty first century tech industry. They titled their essay the Californian Ideology, and I think it still counts as one of the three or four most incisive accurate essays

of that century. The gist of the idea was that as the first wave of the digital boom started to hit in the mid nineteen nineties, the thinkers behind it were fueled by a mix of left wing by a mix of left wing egalitarian, often anti status beliefs that got wedded to right wing free market fundamentalist libertarian ideology and created this deeply toxic way of thinking about the future. You can see this in the story of guys like Steve Wozniak, the inventor of the personal computer, who was

also a former phone freaker. He committed federal crimes as a kid, hacking the phone system primarily because fuck the man. But then when he's a young man, the waws hooks up with a guy named Steve Jobs, and Jobs is a brilliant but heartless con man who cares about nothing but market dominance. Jobs recognizes the naive brilliance of Steve Wozniak, and he turns it into an engine for wealth creation.

At one point, he steals money that Wosniak was owed for a project that they took on together, money Wosniac probably would have just given him if he'd asked, and he used it secretly to fund their business, which became Apple. In their essay, Cameron and Barbara, who are much better

writers than I, described the Californian ideology this way. The Californian ideology is a mix of cybernetics, free market economics, and counterculture libertarianism, and is promuligated by magazines such as Wired and Mondo two thousand and preached in the books of Stuart Brand, Kevin Kelly, and others. The New Faith has been embraced by computer nerds, slacker students, thirty something cap the lists, hip academics, futurist bureaucrats, and even by

the President of the USA himself. Now, the tech industry as we know it got its start courtesy of government money. Everyone knows that the first version of the Internet was developed as part of a Defense Department project, but the entire computer industry, all of the coders and engineers who would form the first generation of selincom Valley profit engines. All these guys got their start working for or as

defense contractors. When the US pulled out of Vietnam, thousands of these people were left out of jobs and they were forced to move into the private sector. Everything worthwhile that's come out of big tech has involved a titanic amount of public funding, one way or the other. And I'm gonna quote from that essay again. Almost every major technological advance of the last two hundred years has taken place with the aid of large amounts of public money

and under a good deal of government influence. The technologies of the computer in the net were invented with the aid of massive state subsidies. For example, the first difference Engine project received a British government grant of five hundred and seventeen thousand, four hundred and seven d pounds a small fortune in eighteen thirty four. From Colossus to ed VAC, from flight simulators to virtual reality, the development of computing has depended at key moments on public research handouts or

fat contracts with public agencies. The IBM Corporation built the first programmable digital computer only after it was requested to do so by the U. S Defense Department during the Korean War. The result of a lack of state intervention meant that Nazi Germany lost the opportunity to build the first electronic computer in the late thirties when the Wehrmacht refused to fund Conrad Zooz, who had pioneered the use

of binary code, stored programs, and electronic logic gates. One of the weirdest things about the Californian ideology is that the West Coast itself was a product of massive state intervention. Government dollars were used to build the irrigation systems, highway schools, universities, and other infrastructural projects which make the good life possible. On top of these public subsidies, the West Coast high tech industrial complex has been feasting off the fattest pork

barrel in history. For decades, the US government has poured billions of tax dollars in to buying planes, missiles, electronics, and nuclear bombs from Californian companies. Americans have always had state planning, but they prefer to call it the defense budget. Now this state of affairs is more or less unchanged today. Elon Musk is probably the most celebrated modern tech visionary.

Miss Sundry companies have taken nearly five billion dollars in public funding, subsidies, and government support since two thousand fifteen. All of these libertarian visionaries who push in their political lives for a world of lossyfair economics and corporate sovereignty, only produce value with the help of taxpayer dollars. Period.

The irrational exuberance of public financing and the narcissism to ignore its role in innovation has given us a generation of tech industry overlords who seem bound and determined to destroy their own creations. Steve Jobs represented the most successful and probably the most intelligent manifestation of the Californian ideology. Every tech industry ghoul currently boiling away fortunes for the sake of their ego. I'm thinking of Zuckerberg and Musk

most prominently right now, is trying to be him. Steve's skill was being able to perfectly inhabit the form of a visionary, and he was so good at doing this that he convinced this generation they could follow in his footsteps. But Steve Jobs was only ever playing at being a creator, at being an inventor. His skill was not in making things.

He had other people to do the making Steve was an exceptional confidence man, and like all good confidence men, he was able to make money because he understood on

a deep level what other human beings wanted. This skill allowed him to lock Apple into spending hundreds of millions of dollars on R and D for what would become the first proper smartphone, and for a while he was just having them toss that money into an apparent chasm, repeatedly turning back iterations of the product that weren't quite right, on the strength of his leaf that when they got

it right, it would be worth it. In the year since, we've seen many wanna be Steves try to follow in his footsteps, igniting tens of billions of dollars of venture capital for absolutely nothing. One of the best examples would be Uber. They lost eight point five billion dollars in

two thousand nineteen, six point eight billion dollars. Once upon a time, the understanding, the jobs and vision of what Uber could be was that all of this ignited VC cash would be worthwhile because eventually the company would succeed in replacing human drivers with autonomous cars, cutting out the primary cost in the entire professional driving industry, and making the potential for a shipload of profit, but after investing more than a billion dollars in self driving cars, Uber

sold their entire autonomous vehicle division off at a loss. All of that expense had resulted in self driving cars that averaged one half mile travel per accident. Despite this, after a two point six billion dollar loss in August of two Uber stocks sword Now the realities of what generates profit and loss in the tech industry have been completely divorced from productive reality or value created for quite some time. The delamination of real value in big tech

happens subtly. It's not hard to see why Apple, who created a device every human being wanted to have in their pocket, became worth a shipload more money, right pretty obvious. The value case for Google's core business, search is also pretty obvious. And as much as I hate Facebook, it became initially successful because it provided people with something of real value, a way to stay in touch with human beings they had met over the course of their lives.

Younger folks may find this odd because they've grown up with the Internet, but as a kid, I can remember very vividly my parents talking about the friends they'd had in high school and in college and how a lifetime of moving regularly had severed many of the connections they'd valued with these people. When I joined Facebook and my freshman year of college, I found real value and the ability to maintain and sometimes even build stronger connection with

people I would otherwise have lost touch with entirely. There is the core of something good, or something at least valued inherently by people in Facebook, and that's true with most, if not all, of the Big five companies. When people reflexively leap to defend the tech industry as an engine of innovation, they can point to these successes. But the point that I'm making isn't that no good ideas come out of Silicon Valley, or that there isn't anything valuable

that is involved in what these companies do. It's that the endless quest for profit and the narcissism of this Californian ideology lead inevitably to the destruction of whatever value the industry creates. This is why none of these innovations have actually led to surges and productivity, why none of them have made us any happier, which I think might be more important. Any potential these creations had was smothered

by the ideology that drives Silicon Valley money. Facebook took the connections that they'd made with people and used them to feed those same people rage bait. They destroyed the open Internet, shut countless local news sites, put tons of people out of business, while algorithmically pushing millions of folks around the world towards whatever kept them angriest and most online.

Google spent billions on an endless stream of spinoff products like Google Plus and Google Glass, which were nearly all catastrophic failures, at least on a financial sense, and all the while they gradually turned the search results they prided themselves on into a sponsored ad feed. Google is less useful now than it was a couple of years ago. You noticed this immediately if you just get on there

and start asking it questions. Elon Musk has taken the visionary technology that underpins the Tesla, all created by other people, and used the clout from that to shatter any chance of California developing a high speed rail system. By the way, in June of two, Tesla stock value plunged seventy five billion dollars, which is substantially more money than the company

has ever actually made. Elucidating the full scale of the failure of Silicon Valley and America and techno optimism would take more time than I'm able to spend right now, So instead, I want to talk about the idea that's behind so much of the recent big failures that we've seen from big tech, stuff like Meta pissing away ten billion dollars half the budget of NASA in a year to create a worse version of vr chat. The idea is called blitz scaling, and it basically means attempting to

achieve massive scale at breakneck speed. You take big risks and you spend huge amounts of money very quickly to try enforce apps or other products onto the market that are then adopted rapidly by huge numbers of people. This brings in a shipload of VC money and as a way that you can make a fortune. In the years since Jobs brought the first iPhone out on stage, this

has become the dominant model of Silicon Valley entrepreneurship. Everyone is looking for the next iPhone, right, something that can take over an industry, something you can take over the world that rapidly, that can change human life almost overnight. In funding Calls, Mark Zuckerberg says this in Funding Calls, Mark Zuckerberg says this very directly, comparing his company's metaverse

dreams to the new smartphone. The thing that Mark misses because his ideology renders it invisible, is that Steve Jobs didn't make people want the iPhone. He was able to figure out what they wanted already, what they had talked about wanting for decades, starting with trike orders and communicators on Star Trek, and he lashed his dev team until

they built the damn thing. Now. The metaverse has some analogs in fiction, including the thing that it gets its name from um, but number one, most depictions of the metaverse in fiction are not aspirational things people want their dystopian uh. There's no evidence that people actually want this thing that he's igniting a fortune to build, or that they'd spend meaningful periods of time in it if it existed.

There's not a lot of polling on this data, but one in seven but one se person survey I found showed less than respondents respect expressing an interest in meta in a metaverse like the one Zuck is trying to build. The last time Facebook provided any kind of information about how many people are on Horizon Worlds, which is kind of the core of their metaverse efforts, It was somewhere

around three thousand people in the most recent quarter. They declined to provide an update to those numbers, which suggests the number has not increased um And if you just want to look at what happens when people create a digital product that actually has a strong base of interest, look at how quickly World of Warcraft went from, you know, a thing that very few people outside of nerds would have known much about, to a thing that was entirely mainstream,

millions of users, regular references to it on television. You're just not seeing that with any of this metaverse ship because there's nothing in it that people actually want. The sheer hollowness of big tech is starting to become financially obvious to Facebook, Stock has lost fifty seven percent of its value in the last year. Amazon is down Google

by and even Apple has fallen by fourteen percent. More to the point, I think any honest person has to look at the last fifteen years or so in which these companies have ruled our economic and social lives and asked, are we better off now? Over the course of the nineteenth century, productivity and income rose at unprecedented rates. There

was a lot of brutality in this process, right. We talked, you know, on Behind the Bastards regularly about all of the horrible labor things that happened in the nineteenth century. It also marked the beginning of the fossil fuel age, which may well kill us all. But while all this was going on, another thing that happened is wages for the working class doubled in the first half of the

nineteenth century, and the second half. Life expectancy rose faster than it ever had before as well, and that continued through the first part of the twentieth century. Now, near the end of the first quarter of the twenty one century, we're not seeing that kind of movement. The United States is now ending its second consecutive year of declining life expectancy for the first time in any of our lifetimes, and real average wage, adjusted for inflation, has remained flat

for almost half a century. Progress has flatlined, and nothing about how brilliant the modern tech industry is or how cool some of these gadgets and products are can change those fundamental facts. It's a failure. It Could Happen Here as a production of cool Zone Media. For more podcasts from cool Zone Media, visit our website cool zone media dot com or check us out on the I Heart Radio app, Apple Podcasts, or wherever you listen to podcasts.

You can find sources for It could Happen Here, updated monthly at cool zone Media dot com slash sources. Thanks for listening.