Go Easy on Silicon Valley's Nerds
As I write this post, I'm sitting in a café on Valencia Street in San Francisco's ever-trendy Mission District. Outside, the summer sun is shining on wide, quiet streets and beautiful clean buildings. Around me sit healthy-looking people of every race and national origin, typing away on their laptops, but friendly and eager to talk to a stranger. You could forgive me for thinking I'm sitting in a paradise.
But no actually, I'm sitting in Mordor. San Francisco, epicenter of the tech industry, is the land from which the new hosts of evil issue forth, under clouds of swirling darkness, to conquer the realms of men.
Or so you'd think, from the press Silicon Valley has been receiving lately. The hosts of Mordor include venture capitalists who trick bright young people into throwing their lives away on hopeless startups; sexist "brogrammers" who treat objects like women (or is it the other way around?); tech companies that are raising rents for normal folks; plutocrats who are going to replace us with robots and make Thomas Piketty's nightmare scenarios a reality; age-ist corporations who throw away old workers like used Kleenex; sociopath entrepreneurs who want to profit by destroying the rule of law; and neo-monarchist wackaloons who are plotting to destroy democracy.
The latest broadside against the tech industry started with an article by Jill Lepore in the New Yorker magazine. Lepore is upset about the widespread influence of business guru Clay Christensen's idea of "disruptive innovation." Her article was immediately interpreted as a dagger aimed at the heart of the Silicon Valley elite. Paul Krugman wrote that the cult of disruption "lets nerdy guys come across as bold heroes."
Nerdy guys as heroes?! Man the battlements, men of Gondor!
Seriously, America. The nerd-bashing has gone too far. Sure, there is a grain of truth in all of the criticisms of the tech industry -- but only a grain. Yes, startups are riskier than many founders realize; but founders are people with good skills who will never go hungry. Yes, San Francisco rents are out of control, but this is more about development policy and NIMBYism than Google and Apple. Yes, inequality is increasing, but it's increasing across all industries and classes, and bashing Silicon Valley isn't going to stop the march of automation. Yes, big American companies and corporate governance need to improve, but bashing "disruptive" startups isn't going to help the situation. Yes, some tech companies ignore the public interest when pushing for deregulation, but show me an industry that doesn't do that. Yes, there are sociopaths and wackos among the ranks of tech entrepreneurs, but they're certainly a tiny minority. (The only tech industry problem that really seems to live up to the hype is the sexism.)
My intuition tells me that the tech-bashing is actually all about the financial crisis and its aftermath. We saw a lot of very, very rich people make a lot of money crashing the economy. Now there's essentially no way for us to get at the rich people who did it -- they have retired comfortably and anonymously to the tonier precincts of Long Island. Meanwhile, the rest of America is out of a job, or working unpaid overtime to keep their jobs, or working at crappy jobs because there's nothing else around, or seeing their wages get cut.
And now here comes a one-industry boom, out in Silicon Valley. Suddenly coders are seeing their salaries shoot through the roof while everyone else tightens their belts. A few lucky nerds are making billions selling their companies to Facebook. And to top it all off, a lot of the Brooks Brothers banker bros are jumping from Wall Street to the Valley.
We're looking for rich, successful people to bash. And Silicon Valley happens to be where the rich, successful people are right now. So we've turned on the nerds.
Very little good can come of this. First, the technology industry is important to America's economy; bash it enough, and it will move some operations overseas. But it isn't like tech is holding our economy hostage; compared to a lot of industries, tech generates very few negative externalities. Oil companies release carbon into the air and pollutants into the ground and water; agribusiness uses up groundwater and gobbles up billions of dollars in subsidies; health care is a hopeless mess; and finance and real estate you already know about. Tech, on the other hand, produces mostly benign products with mostly benign production processes. It's relatively clean, it's safe, and it gives us things we want -- often for free.
Fortunately, most Americans still agree with me. The computer industry has higher favorability ratings than any other (the Internet industry is ranked fourth out of 25), and those numbers have remained stable for 15 years. The backlash against tech is confined to the intellectual class.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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Noah Smith at email@example.com