Today I’m writing about a video I stumbled across while researching for a post about the “administrative state” – what that term means, why it’s being used by Peter Thiel and the like, and how it intersects with public interest technology. Hopefully I’ll get that one out soon.
For now, though, I’ll focus on this talk from 2013, which I found juicy enough to warrant its own commentary.
Balaji Srinivasan is a tech entrepreneur and A16z guy. In 2013, he gave a talk at Y Combinator called Silicon Valley’s Ultimate Exit. In it, he imagines a world in which tech entrepreneurs have disrupted society to the point where we all become free-floating digital nomads, semi-citizens of a distributed global society.
He begins with an overview of political economist Albert O. Hirschman’s concept of Exit, Voice, and Loyalty, which is a framework for understanding how consumers (or citizens) can attempt to alter a product (or society) by either protesting or threatening to leave. The logic is that the freedom to “exit” creates some leverage for you to be able to change the system, assuming the system wants to retain you. He uses the example of emigration to demonstrate how “exiting” can significantly improve somebody’s life and financial prosperity.
It’s an interesting concept, and certainly relevant to the present moment, where the state of the U.S. seems…bad, and relatively sober pragmatists in my life are talking seriously about Portuguese citizenship laws. With the recent catastrophic Roe v. Wade decision, for example, and the deference to state authority on the question of abortion, the Exit, Voice, and Loyalty theory would suggest that people’s ability to migrate from oppressive states to more free ones could impact how states legislate. I’m skeptical, but it’s an interesting thought experiment.
In this talk, though, Srinivasan is chiefly concerned with the relationship between the private sector and society as a whole. He talks about what he calls “The Paper Belt” of influential cities (NYC, DC, Boston, and LA) and how they’re being disrupted by tech’s influence. (Again, this talk was in 2013.) The advertising industry is being disrupted by Google. Education is being disrupted by Coursera. Hollywood is being disrupted by Netflix. Et cetera.
To Srinivasan, the logic of inevitable technological progress means that eventually tech will usurp government itself. Software is eating the world, after all. It’s unclear whether he thinks this this progress should be undertaken by private or public actors. He references Estonia and Singapore as positive examples of government modernization, but his vision is steeped in free market ideology. Eventually (11:58) he gets to the core question: “What would a government run by Silicon Valley actually look like?”
If the idea of a government run by Silicon Valley sends a little shudder down your spine, you’ve come to the right newsletter.
Anticipating challenges to this worldview, Srinivasan addresses the straw man cliché of “robots taking people’s jobs,” and levies some valid critiques of “Paper Belt” institutional corruption in response. But the issue with a Silicon Valley state is not that it would automate jobs aways. The issue is that Silicon Valley is an amoral force powered by venture capitalist speculation. Whatever you think of the United States government, it has a stated ethic that is its raison d'être. To the extent that Silicon Valley has an ethic at all it is to maximize profit. Srinivasan-style venture capitalism in particular relies on periodic mega-returns to justify enormously risky spending. The incentives of the “unicorn” enterprises that arise from this hardly align with democratic values.
Towards the end of the talk, shit gets weird and he starts talking about private islands and space colonies. He imagines a litany of futuristic innovations ranging from “humanoid robots” used for health care procedures to “tax shelters for the middle class.” It’s easy to dismiss these ideas as fantastical, but the bigger issue is that they’re rooted in the philosophy of individual autonomy over social improvement. He wants to create a free market of countries. Pick and choose your favorite. (“If you like your government, you can keep it,” he wryly jokes, referencing Obama’s famous gaffe regarding the ACA, which itself is the prime example of a failed attempt to bring free market principles to social services). I’ve written in the past about why this mentality of city-sampling is corrosive to civic life. How are we supposed to grow together, build together, improve the collective lot if we aren’t committed to a collective lot in the first place?
2013 was probably the peak of this latest tech boom. That’s the year I moved to San Francisco to join the party wave, and let me tell you the lines to get a $20 bowl at the Ramen Festival in Japantown were long (if this sounds like fun to you, I urge you to reconsider). Point being, this was tech at its most prolific and optimistic. Money and talent were flowing in. Self-driving cars were on the horizon. Obama liked Facebook. It’s easy to see how someone like Srinivasan could think Silicon Valley should run the government. But the excitement and arrogance of tech entrepreneurs blinds them to the inherent flaws of their endeavor. The private tech sector is concerned ultimately with profit, and — as the decade since this talk has proven — any attempt to “fix” government by private interests will be crippled by this fundamental conflict of interest.
None of the companies Srinivasan heralds as virtuous disruptors (Netflix, Airbnb, Spotify) are interested in projects that puts investor return at risk. So while he uses the language of political philosophy, and points to the power of the state to generate wealth, he fails to recognize that the purpose of government is to create a more just social order. You can’t have it both ways.