September 26, 2016

Silicon Valley is Eating the Democratic Party



With the presidential election a little more than a month away, newspapers across the country are making their endorsements known. The most recent came from The New York Times, arguing that “the country should put her to work,” in part because Donald Trump “discloses nothing concrete about himself or his plans while promising the moon and offering the stars on layaway.” In fact, no newspaper of significant circulation or renown has offered its support for Mr. Trump. Even Gary Johnson, the Libertarian Party nominee, has received a number of endorsements, most notably from the Richmond Times-Dispatch. The biggest surprise, however, is the endorsement from one notable technology magazine.

Scott Dadich, writing in Wired, recently wrote of the “strain of optimistic libertarianism native to Silicon Valley” that characterize the magazine’s initial founding principles:

Like any sane group of thinkers, we’ve calibrated our judgments along the way. But much of our worldview hasn’t changed. We value freedom: open systems, open markets, free people, free information, free inquiry. We’ve become even more dedicated to scientific rigor, good data, and evidence-driven thinking. And we’ve never lost our optimism.

He brings this all up because Wired, for the first time in its history, officially came out in support of a presidential candidate: Hillary Clinton. But given their “optimistic libertarianism,” why not Mr. Johnson? After all, much has been made of the supposed libertarian streak that runs through the region. Surely something must be amiss in Wired’s endorsement.

Or maybe not. A closer examination of Silicon Valley’s politics reveals numerous ideological fissures that right-libertarians and conservatives fail to fully appreciate. As an example, let’s take an archetypal exemplar of a Silicon Valley-ite. We’ll call him Elon.

Elon is a now-former Google software engineer who leaves the company in order to start his own business. His startup is intent on disrupting the software industry with a new financial payment algorithm. Call it BitPal. Elon gets his first round of venture capital seed money to start building his new app. Unfortunately, BitPal lies in a regulatory gray area: possibly subject to the SEC, as well as FTC and FCC consumer protection and privacy guidelines. Elon’s biggest concern, given what he’d like to do, is government regulation. In order to actualize his vision of a new payment processing platform he needs to weave through a host of regulatory agencies, none of which are certain how this new innovation can or should be regulated. That results in clear market uncertainty, potentially jeopardizing future funding rounds and limiting his ability to grow his business.

Given these concerns, Elon’s high level of motivation and entrepreneurship, and status as a high-income earner, you’d expect him to be a Republican. Yet he’s not. Nor are the vast majority of his colleagues in Silicon Valley.

The West Coast tech community has sometimes been characterized as a fortress of libertarian-leaning free marketeers, but the reality is far more complicated—and far less “Atlas Shrugged”—than many critics and supporters would have us believe. Although a stream of libertarianism permeates the Valley, it only selectively penetrates the cultural ethos. Randian prime movers are lauded, entrepreneurs pay reverence to Schumpeterian creative destruction, and an ever-present optimism that technology can cure what ails the world abounds in abundance. At the same time, there is a belief that government can be a force for good, bringing out the best in citizens by investing in their potential—what the World Values Survey (WVS) referred to as the aforementioned “civic form of modern individualism.” Failing to recognize this is why so many on the right (see: Rand Paul) have repeatedly failed to successfully court Valley donors, and why the region remains staunchly blue in its voting record and contributions.

Since the 1980s, the Valley has been a bastion of support for Democrats. In the most recent California primary, half a million residents in the Valley region voted; over 411,000 of them voted for either Hillary Clinton or Bernie Sanders. That’s 80 percent support for Democrats. On top of that, almost 9 out of every 10 dollars contributed to political campaigns in the Valley landed in the pockets of candidates on the political left.

Despite being a perceived hotspot of libertarian, free-market values, Silicon Valley is as blue a region as they come. What does this tell us about the Valley’s politics and, perhaps more importantly, the future of the Democratic party?

Modelling the (Atypical) Politics of Silicon Valley

The real story here is not a divergence between “left” and “right.” Rather, the divide is between various values that don’t track so simply along a liberal and conservative spectrum. Parsing through the various value distinctions can be difficult, but that’s precisely what the WVS attempts to do.

The WVS looks at four distinct value sets: traditional, secular-rational, survival, and self-expression. Traditional values are those that tend to emphasize what you may expect: deference to authority and traditional notions of family values, stressing the importance of religion, and close family bonds. They also track closely to high levels of national pride and a more nationalistic viewpoint. On the other side are secular-rational values, which tend towards the opposite preferences, emphasizing ambivalence towards traditional moral institutions and religion.

Survival values prioritize security, both economic and physical. This perspective is dominated by an ethnocentric outlook and a limited willingness to tolerate outsiders. Self-expression values, by contrast, are those placing high priority on the opposite: high degrees of tolerance for outside groups, non-traditional family structures, and a greater focus on engendering trust in society through civic engagement and participation in economic and political life.

If we were to track this paradigm on a graph, and those individuals and political demographics that track closely with the respective value dimensions, it might look something like this:

screen-shot-2016-09-26-at-2-38-50-pm

Emancipative values (a subset of the self-expression category of values) emphasize a set of freedoms that prioritize human empowerment. In particular, as the WVS notes, these values inhere in individuals “a civic form of modern individualism that favours out-group trust and cosmopolitan orientations towards others.” A belief in empowering women, openness to immigrants and other cultures, an optimistic disposition towards the future, and a healthy respect for democracy and civic engagement are all characteristic of an emancipative-friendly worldview. This, in a nutshell, is the essential ingredient in the values system that permeates Silicon Valley, and provides significant explanatory power for why the region is less-inclined towards a right-libertarian political perspective.

Silicon Valley is largely defined by a dominance of emancipative and secular-rational values that characterizes the broader cultural inclination towards inclusivity, globalism, and innovation. A diverse and immigrant-friendly culture puts the Valley decisively on the globalist side of the nationalist/globalist divide. The attractions of lower top tax rates and less meddlesome regulation are insignificant compared to the more potent cultural ethos of self-expressive emancipation. When the GOP hunkers down into traditionalist nationalism and hostility to secular-rational values as Mr. Trump has done, it doesn’t stand a chance with a polyglot culture of collaborative cosmopolitanism, progressive techno-optimism, and expressive self-fashioning.

This is the why that explains our old pal Elon’s inclination to vote Democrat. Elon values a secular-rational worldview that prioritizes the emancipative power of technology. He sees firsthand the transformative power of technology everyday. He is driven less by a desire to accumulate wealth and more by a belief that his vision of BitPal will help liberate people, further driving humanity towards a fuller actualization of true individual self-expression. Elon votes for Mrs. Clinton because his penchant for cosmopolitanism tracks more closely with those candidates.

By contrast, Donald Trump and most modern Republican candidates are very much the opposite of that worldview, appealing more to voters with a traditional value system and a survival values ethos prioritizing economic stability and physical security. Right-libertarians are also associated with this general values grouping, focusing more on issues related to “economic freedom” than the secular-rational, emancipative values that inheres in the Valley’s political DNA. Interestingly, however, the secular-rational and emancipative values of Silicon Valley are not the traditional values base of the Democratic party.

Old Guard Democrats vs New Tech-Democrats

There is an antagonistic relationship between labor and business in American politics, going back to the era of Eugene V. Debs and the Socialist Movement in early 20th Century America. Government, the traditional Democratic mantra goes, is used as a countervailing force pushing back against the competing interests between business and labor, ensuring the excesses of capitalism remain under control and the benefits are more equitably shared across society. For the Democrats, that bastion of support has been slipping away in significant numbers over recent decades. As Andrew Prokop wrote in Vox:

Labor remains a key pillar in the Democratic coalition in states where it still has a presence. But union membership has dropped so much, and unions have been so weakened, that the party now has to look elsewhere for much of its financial support and organizational muscle — to rich donors and social issue interest groups. Private-sector union membership has particularly plummeted, from 35 percent or so in the 1950s to just 6.9 percent in 2011.

That “elsewhere” is clearly lining up to be Silicon Valley. But that will require a change in the Party’s historical focus areas. Unlike the survival values Democratic coalition, the Silicon Valley crowd is largely opposed to a government-as-arbitrator model; not because it inhibits the accumulation of wealth or profits, but because it inhibits the acceleration of humanity realizing its full potential.

So how does this relate to Silicon Valley’s politics and the future of the Democratic Party?

Historically, the Democrats have been the survival values party for the poor and the working class. But they’ve been becoming the self-expression values party for the cosmopolitan professional class for quite a while now. Mr. Trump is helping to consolidate that development. There’s a stark conflict between these two values-based factions, which is why Democrats won’t be able to hold onto white, poorer working class, union voters and will lose the non-white survival values voters when running against conservative populist nationalists in the future.

And while the Democratic coalition seems relatively strong, so too did the GOP before the onslaught of the Tea Party uprising. The current election, and perhaps a bit of normalcy bias, obscures the coming rift. Bernie Sanders managed the amazing trick of selling a nationalist anti-capitalist agenda as an emancipatory agenda. This created an illusion of shared interests between young, cosmopolitan Silicon Valley techno-capitalist types and more traditional Democratic constituencies. But, as a matter of fact, the survival values Democrat constituencies (Black, Latinos, and unions) hugely favored Hillary, who combined their support with the conservative Democratic professional and finance rentier classes. And there is now a growing cleavage between Bernie supporters, whose post-Great Recession experiences are increasingly pushing them towards the threat of experiencing a survival values voting mentality, and that traditional Democratic constituency. This is yet another unstable coalition that is destined to tear at the seams, once the civil war within the GOP fails to serve as an incentive for continued unity.

If the traditional Democrats are the traditional-survival values voters and the Bernie youths are the secular-rational-survival values voters, then the Silicon Valley techno-optimists are the secular-rational-emancipative values voters. And the Valley is poised to come out on top, reinventing the Democratic party in the process. Already the Democrats couldn’t own anymore billionaires. Between the Goldman Sachs-style liberals in the finance sector and the Silicon Valley tech-Democrat CEOs, Democrats seem to have a lock on the biggest monied sectors in the American economy. To wit, there are 159 tech billionaires on the Forbes list of billionaires, with a combined wealth of over $818 billion. That’s a lot of potential campaign contributions; it’s also a lot more than the party can expect in the future from their longtime union allies, whose membership dues are poised to continue deteriorating in an era of outsourced manufacturing and increased automation.

In short, Democrats will increasingly turn towards the Valley tech crowd as its base of support. That direction, however, will necessitate a reprioritization of values and policies.

To begin, government as a countervailing force mediating between the interests of business and labor represents a fundamental threat to the emancipative mission of the Valley. That mission is not fundamentally tied to economic interests, but to the ideological vision of the Valley’s elites; ideology, not economic interests, is the strongest progressive force, and guides the actions of many entrepreneurs. (Elon Musk is a perfect example embodying mission-oriented ideology.) And the Valley’s mission can only be actualized by tearing down or circumventing government anachronistic regulations—the same regulations that have been a cornerstone of the government-as-arbitrator mentality driving a core component of the Democratic coalition.

“Innovation” and “disruption” aren’t just buzzwords in the Valley. They are living representations of the emancipative-secular-rational worldview that defines the region’s culture and drive. The tech community is in favor of constant market destabilization because of a belief in the emancipatory power of markets generally, and the theory of creative destruction in particular. “Innovation is a race and competition is good” is their mantra.

Unfortunately for the DNC and other party bosses, this runs counter to the old blue collar unionized Democrat’s perspective, which hopes to stabilize market forces to benefit the middle class. What we have here, in essence, is the struggle between what Virginia Postrel once called dynamism and stasism—between a future governed by liberal techno-optimists who embrace values that lead to the open-ended future, and reactionary technocrats who eschew a future of stupendous possibilities for the stability and certainty of the present.

These two perspectives cannot coexist within a stable Democratic coalition. The result is an inevitable civil war between the historically entrenched and newly emerging interests within the Party. As such, old policy equilibriums within the Democratic Party are poised to disequilibrate. Once a clear exit for blue-collar, traditional-survival values voters emerges—perhaps to a new faction within the GOP after its bloody internal self-purge—the Democrats will move ever-further from their roots, towards a pro-market, globalist, cosmopolitan base—the values of which Silicon Valley, and our opening friend Elon, are the exemplars.

Conclusion

Looking further ahead to beyond 2016, there is a window of opportunity for moderate Democrats—socially liberal, pro-growth, and pro-innovation representatives who share a healthy respect for market forces—to capitalize on the growing divide between West Coast and East Coast elites. As Greg Ferenstein noted in an article last year, “we are witnessing the rise of an entirely new type of Democrat” in the Valley: the Tech-Democrat.

The politics of Silicon Valley are Janusian, with one face looking towards the future as one gazes upon the past. Technological progress can make a better world, but only by reinvigorating the institutions of old. If market liberals can carry that ideological banner, the spoils of Silicon Valley’s politics will be theirs for the taking.