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The Shantytowns Of Silicon Valley

Charlotte Allen has a dynamite piece in The Weekly Standard, taking a tour of Silicon Valley and observing the stark wealth and class divide there — a chasm that is likely a picture of America’s future. Excerpt: The extreme economic and social inequality that characterizes Silicon Valley is not exactly the way it was supposed […]

Charlotte Allen has a dynamite piece in The Weekly Standard, taking a tour of Silicon Valley and observing the stark wealth and class divide there — a chasm that is likely a picture of America’s future. Excerpt:

The extreme economic and social inequality that characterizes Silicon Valley is not exactly the way it was supposed to be. Globalization and de-industrialization were supposed to free up Americans for better-paying, more interesting work; all they had to do was retrain themselves for the information age. The 2002 book The Rise of the Creative Class, by Richard Florida, then an urban studies professor at Carnegie Mellon University (he is now at the University of Toronto), urged Americans to embrace what Florida called “the knowledge economy” and touted high-tech entrepreneurs as massive job-creators. Florida launched a lucrative side-career for himself advising Northeastern cities ravaged by deindustrialization on how to attract some of those entrepreneurs and other affluent young professionals by reinventing themselves as hip, gay-friendly, arts-promoting hubs where the cool people would want to hang. As recently as late October of this year, Florida, in a blog entry for the Atlantic, was promoting Silicon Valley and its environs as America’s number-one jobs-generator. Florida wrote: “[H]igh-paying, high-tech jobs are key factors in economic growth and prosperity.”

The current long-running recession, together with the fact that most of the jobs that have been created recently are at the low-wage bottom, has led the futurists to adjust their rhetoric radically. They have switched from the manic-phase optimism of the 1990s and early 2000s to a combination of putting a happy face on middle-class disappearance and telling Americans to get used to it. Florida, for example, candidly admitted in one of his recent Atlantic posts that what he called the “talent clustering process,” the agglomeration of “highly skilled knowledge, professional, and creative workers” in “knowledge-based metros” such as Silicon Valley “provides little in the way of trickle-down benefits” to those lower on the scale of brains and education.


Tyler Cowen in Average Is Over is more forthright. He advises the construction of Rio de Janeiro-style shantytowns for the 85 percent of Americans whose livelihoods will be swept away by the New Knowledge Economy he touts—although no shantytowns, please, in Cowen’s own neighborhood in upscale Fairfax County, Virginia! And also, says Cowen:

There is one final way in which we will adjust to uneven wage patterns and that is with our tastes. Many of society’s lower earners will reshape their tastes—will have to reshape their tastes—toward cheaper desires. Caviar is an expensive desire and Goya canned beans is a relatively cheap desire. Don’t scoff at the beans: With an income above the national average, I receive more pleasure from the beans, which I cook with freshly ground cumin and rehydrated pureed chilies.

Yes! Let them eat beans! Master and servant. Oligarchs and serfs. Two years ago the Occupy movement of progressives raised a battle cry against the “1 percent,” who were supposed to be striped-pants, Republican-voting tycoons lifted from the Monopoly board. What they didn’t know was that the 1 percent actually wear rubber shower sandals, ride bicycles—$20,000 bicycles—and vote Democratic and green, green, green. It was them. It was the future, and it has already arrived in the Silicon Valley.

Note this passage, which follows an observation that the US industrial behemoths of ages past may have produced oligarchs, but they also produced hundreds of thousands of good jobs for American workers. Not these Bay Area billionaires:

Furthermore, the oligarchs of Silicon Valley seem intent on keeping the social pyramid stacked in exactly the same layers in which it’s stacked right now. After decades of political quietism during which Silicon Valley entrepreneurs expressed libertarian sentiments but mostly voted Democratic and funded Democratic candidates who shared their elite-class social and political views, Silicon Valley has finally mobilized—for immigration expansion. In April Mark Zuckerberg, with help from Yahoo CEO Marissa Mayer, LinkedIn cofounder Reid Hoffman, and venture capitalist John Doerr, launched FWD.us, a $25 million-and-counting lobbying group aimed at lawmakers in both political parties. FWD.us, unlike other pro-immigration groups, isn’t much interested in amnesty for illegal immigrants or easier border-crossing for lettuce-pickers. Its chief interest is in expanding the H-1B work visa program for “highly skilled” workers that’s mostly used by tech employers to hire temporary guest-workers from foreign countries, usually from East and South Asia.

Please read the whole thing. It’s full of visceral details that paint a vivid picture of contemporary feudalism. One thing I find interesting about this phenomenon: the image politics of the whole thing.

From the Right, I wonder if the Standard would have published a similar takedown of the habitats of Wall Street executives. After all, the Hamptons, the tony resort towns on Long Island that cater to wealthy Manhattanites, are notorious for having become too expensive for their own year-round residents to live in. They’re not all Wall Streeters out in the summer Hamptons, of course, but the point is simply that it’s probably not hard to find a similar story on the East Coast. Silicon Valley is a tempting target for right-of-center writers because it’s the Bay Area, and because behind the casual, eco-friendly, lifestyle-left façade is the same old class dynamic — and that’s what Allen identifies so very well in this piece.

And that is why, from the Left, you just don’t get the kind of anti-One Percent outrage at the Silicon Valley ultrarich and the system that allows them to get that way. Everybody in that crowd knows why Wall Streeters are despicable. But Silicon Valley makes cool things, and is, well, cool. Sergey Brin is not Jamie Dimon, for the same reason that Target (cool) is not Wal-mart (uncool), even though it essentially is.

UPDATE: I had to run my son to Baton Rouge this morning — rocket camp at the Observatory — so I didn’t have time to follow up with a bit more. The thing I can’t figure out is what we do about this. It’s not like you could tax the hell out of Silicon Valley billionaires and redistribute the wealth. I mean, you could, but that’s just a Band-Aid on the problem. The real problem is that all that economic activity in Silicon Valley does not result in a lot of middle-class jobs. I don’t think any of us want Silicon Valley to do poorly, or to punish them for their success. The challenge facing us is the result of a post-industrial economy. I can’t see that this current state of affairs is sustainable in a bourgeois democracy like ours, but I can’t see how it can be adequately addressed. That probably reveals nothing more than the limits of my imagination. Help me out here. Tell me what you know.