How Silicon Valley’s whiz-kids finally ran out of friends

John Naughton
Photograph: Eric Risberg/AP

Remember the time when tech companies were cool? So do I. Once upon a time, Silicon Valley was the jewel in the American crown, a magnet for high IQ – and predominately male – talent from all over the world. Palo Alto was the centre of what its more delusional inhabitants regarded as the Florence of Renaissance 2.0. Parents swelled with pride when their offspring landed a job with the Googles, Facebooks and Apples of that world, where they stood a sporting chance of becoming as rich as they might have done if they had joined Goldman Sachs or Lehman Brothers, but without the moral odium attendant on investment backing. I mean to say, where else could you be employed by a company to which every president, prime minister and aspirant politician craved an invitation? Where else could you be part of inventing the future?

But that was then and this is now. It’s taken an unconscionable length of time, but the tide of approbation has turned. Tech has suddenly lost its halo. Everywhere one looks, we find groups sharpening knives for a critique or an attack on big tech. In an interesting essay in the Atlantic, for example, the commentator Alexis Madrigal identifies no fewer than 15 different groups preparing ambushes. They include angry conservatives and progressive politicians, disillusioned tech luminaries, competition lawyers, privacy advocates, European regulators, mainstream media, scholarly critics, other corporations (telecoms firms, for example, plus Oracle and other business-software companies, for example), consumer-protection organisations and, last but not least, Chinese internet companies. With enemies like these, the US tech companies are suddenly discovering that they really need some friends.

Since the tech guys think they embody the future, they have little use for history. Which is a shame, since it may have some lessons for them. “There was a time,” writes Madrigal, for example, “when Americans loved and talked about the transcontinental railroads the way we loved and talked about the internet.” The steel lines spanning the continental United States were once “the epitome of modernity”, as the historian Richard White put it in his book, Railroaded: The Transcontinentals and the Making of Modern America. But then things changed: the public turned on the railroads. “The innovations entrepreneurs brought to the railroads – financial mechanisms, pricing innovations and political techniques – were as harmful to the public, to the republic, and even to the corporation as they were profitable to many of the innovators.”

They were cool, young, idealist, smart and never, ever wore suits

Something like this lies ahead for the titans of Silicon Valley. The forces driving public disillusionment with their companies are many and varied. They include the sociopathic failure of some of the founders of these outfits to appreciate the consequences of their deployment of digital technology. Exhibit A in this regard is the Facebook boss, Mark Zuckerberg, but there are many other of his ilk among his peers in Silicon Valley. Then there’s the fact that the future that tech giants aspire to bring about no longer looks so attractive to ordinary citizens, who see their communities, jobs, societies and politics being screwed by tech giants.

The companies themselves are engines of inequality, enriching tiny elites while laying waste to whole swaths of our economies. The unscrupulous ethos of the surveillance capitalism that some of them practise now looks as distasteful as the financial capitalism that brought about the banking catastrophe of 2008. And we are beginning to realise that the immense power that the valley’s uber-geeks have acquired is what Stanley Baldwin memorably nailed as “power without responsibility – the prerogative of the harlot throughout the ages”.

With hindsight, the most intriguing question is why these companies were given such a free ride for so long. One major reason is that the areas in which they most aggressively innovated were lawless, in the sense that at the time there was no applicable law that might have hindered them. So their prevailing mindset that “it’s easier to ask forgiveness than to seek permission” was allowed to run amok. Another is that governments were so dazzled by the technology – and so paralysed by neoliberal notions of the alleged inadequacy of the state – that they just let the creative destruction rip. But the biggest problem of all was that we collectively took tech companies at their own valuation. The people who founded these outfits all maintained that they were not like the evil capitalists of old. They were cool, young, idealistic, smart and never, ever wore suits. They supported the Democrats and had mantras such as “don’t be evil” in their filings to regulators. What we omitted to notice was that the companies they founded were just corporations. And once they went public they did what corporations do: maximise shareholder value, come what may, avoid regulation and pay as little tax as possible. Just like tobacco companies and arms manufacturers, in fact. It has taken a long time for these pennies to drop, but better late than never.

What I’m reading

Robots’ heavy footprint
The environmental footprint of machine-learning technology. A good New Scientist report shows that – as usual – there’s no such thing as a free lunch.

Lost in the Mail
There’s a fascinating report on Search Engine Roundtable showing that the Mail Online’s website traffic dropped 50% after Google revamped its search algorithm. Now there’s real power for you.

Just can’t get enough
A fascinating (and sobering) New Yorker essay on the online phenomenon of “involuntary celibates” – young male virgins who rage against women.