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Home Publications Blogs Beat the Press Why Would Anyone Expect Silicon Valley to Give a Damn?

Why Would Anyone Expect Silicon Valley to Give a Damn?

Wednesday, 29 May 2013 04:49

I have had several people send me this George Packer article in the New Yorker on the political and social attitudes of the Silicon Valley millionaires and billionaires. While the piece makes for entertaining reading, it is difficult to see it as any great expose.

The piece basically shows that Silicon Valley fast lane is filled with self-absorbed twits who don't have a clue about what the rest of the country looks like. So?

Seriously, who did we think was making big bucks in high tech, great philanthropists? As a general rule it is reasonable to assume that people who make lots of money in any industry, whether it finance, manufacturing, entertainment, or anything else, are primarily concerned with making money in that industry. I don't know whether we should blame them for that fact, but we certainly should blame policy types who then imagine that these people's success at money making gives them great insight into how we should run society.

Bill Gates got incredibly rich because he has sharp elbows and perhaps was willing to bend the law more than his competitors. The same applies to Mark Zuckerberg. That doesn't mean that both are not smart and hard working people, but it does mean that they may not be the best people to determine our education policy or how best to lift the world's poor out of poverty. Their money may give  them considerable voice in these areas, but there is no reason to assume that their insights are any better than those of the latest Powerball winner.


Comments (7)Add Comment
written by R.M.Flanagan, May 29, 2013 6:09
Thanks. It may be part of "the american character" to assume that if you are rich at an early age you must also be charitable.
Unfortunately they ARE directing policy
written by Jennifer, May 29, 2013 7:28
You are absolutely right there is no reason to think these people have any other skills then the ones that are needed to be successful in their particular line of work. But there seems to be a fetish in this country both for technology-look, a bright shiny thing-and money-of course if you have made a lot of money you must be really smart and can help us all make a lot of money. As a result these people are having a disproporiate impact in some areas of policy, education in particular. Bill Gates has put a ton of money into the charter school movement (I believe Steve Jobs was a big charter school supporter as well) which under the guise of "education reform" has turned into a flat-out transfer of public money to private corporations. "Non-profit" of course, Dean I would love to see a discourse on the Orwellian nature of that term. Philadelphia, Chicago are prime examples. Gates has also been very active in global health-while it's been very positive in some ways he's not pro-patent or IP reform which would be of tremendous help in the countries his fund is working in.
written by skeptonomist, May 29, 2013 9:22
Bill Gates got incredibly rich largely because of chance. When the IBM PC came out there was a choice of two and only two operating systems, and Microsoft's MSDOS or PCDOS was the better one, as it was newer (it was based, by the way, largely on UNIX, which was a product of the peculiar monopolistic Bell Labs). It has never made sense to have multiple operating systems, so Microsoft was the beneficiary of essentially a built-in monopoly from the very beginning. Although Apple's GUI operating system (itself designed not by Apple, but by Xerox) was clearly better when it appeared, Microsoft had several years to come up with its version (Windows) for the PC market, thanks to its monopoly.

Microsoft might not have succeeded if its CEO had been less aggressive than Gates, but many other aggressive CEO's could have done the same with the same starting advantages.
When the Villain Becomes a Hero
written by Last Mover, May 29, 2013 10:18
The worship of millionaires and billionaires is so over the top it has come to glorify even those who dupe the government out of millions on a regular basis and get away with it, for example Medicare fraud.

Where this was once decried in economics as rent seeking and moral hazard in the extreme, it has evolved among the political right into an activity similar to ancient honor killings given the foamy mouth hatred of anything related to government except the military, where the fraud is conveniently converted to fake legitimatized "whatever it takes" cost.
it's where they came from
written by freebird, May 29, 2013 11:31
The American middle class is also filled with self-absorbed twits who don't have a clue about what the rest of the world looks like.
written by Kat, May 29, 2013 5:44
Powerball winners don't get invited to the White House.
All this Gates hate...
written by bah, May 29, 2013 10:26
Why no articles here about Steve Jobs and how he chose to use and manage his money? I find it kind of disgusting and counter-productive that many left types are so eager to attack Gates and his foundation. Telling is the sort of comment above, which attacks the manner in which he made his money, which also happens to consider positive contrast with Jobs and Apple.

Just as how nobly someone attained money says nothing about how well they'd choose to use it, the converse is true -- how Gates made his money should not color the way in which he uses or does not use it.

While Dean Baker does not go not explicitly support Steve Jobs and similar ultra-rich, by repeatedly targeting Gates he implicitly condones Jobs.

Why not take a closer look at Jobs? He never made any meaningful attempt to use the wealth he accumulated over the course of his lifetime. He ended charity programs at Apple and stated his own wealth was best used re-investing and expanding Apple. Furthermore, when considering the living conditions of their workers and supply chain, Apple is far from a gift to the less fortunate in its expansion.

In fact, Jobs went out of his way never to pay taxes on his vast wealth by borrowing on stock equity rather than ever realizing his gains through actual sale. He also avoided as much tax payment as possible for Apple. Finally he passed his wealth on with minimal tax impact to his children.

As Dean is so fond of pointing out, all of Jobs' tax avoidance eventually become taxes paid by non-billionaires classes. In his single minded dedication to carving out his own fortune, he had no qualms in functioning as a relative parasite on the government's largess. In contrast, Gates pays and paid taxes on his earnings and has advocated in favor of increased taxation.

However, there continue these spiteful attacks against Gates foundation, simply because Gates' choices are not ideal from many people's perspective. Is the right argument really about whether Gates should be spending his money pushing IP law changes, rather than trying to eradicate disease by purchasing and distributing vaccines?

Why is the argument not considering the far more typical alternative -- that Gates should, instead of curing malaria or funding schools of his choosing, instead do nothing more than hoard his cash for petty vanity?

Why all this talk of tech hubris and foolish waste, and not a peep about Steve Jobs' choices? Not only did he spend his whole life and fortune without any regard for the common good, with one of the most treatable cancers, he instead chose to jet around the world spending money on snake oil from shamans and fruit juices, because he felt he knew better than the best traditional doctors. It's impossible for me to his life as anything other than the epitome of a tech giant's selfish vanity and the folly of hubris.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.