Techxodus

“California today provides a model for America as a whole,” Peter Leyden, CEO of Reinvent, declared in a TED talk in 2018:

In the early 2000s, California faced a similar situation to the one America faces today. Its state politics were severely polarized, and state government was largely paralyzed. … The solution for the people of California was to reconfigure the political landscape and shift a supermajority of citizens—and by extension their elected officials—under the Democratic Party’s big tent. The natural continuum of more progressive to more moderate solutions then got worked out within the context of the only remaining functioning party. This model of politics and government is by no means perfect, but it is far ahead of the nation in coming to terms with the inexorable digital, global, sustainable transformation of our era. It is a thriving work in progress that gives hope that America can pull out of the political mess we’re in. California today provides a playbook for America’s new way forward.

How’s that California-inspired, national one-party, Democratic monopoly rule thing working out, Peter? With massive funding from Silicon Valley and Wall Street, helped by censorship of conservative media, ads and memes by social media monopolies, the Democrats won back the White House from the unpopular Donald Trump in the middle of a pandemic—with a Californian, Kamala Harris, becoming vice president. But while the Democrats won over some upscale, white, Never-Trump Republicans, the Republicans picked up votes among African Americans, Hispanics, and Asian Americans, leaving Republicans with a good chance of winning back the House in the 2022 midterms and perhaps the White House in 2024.

Meanwhile in 2020, California’s population growth slowed to a rate of 0.05%, the slowest since 1900. Tech giants that got their start in the Bay Area like Oracle, Hewlett-Packard, Apple, Google, and Palantir have either moved their headquarters or are building campuses in Austin, Houston, or other Texas cities. Elon Musk is now an Austinite.

While Bay Area diasporas are finding refuge across the lower 48 states, what some are calling the “Techxodus” from California is largely a “Texodus.” My hometown of Austin leads the list of the cities to which people are moving in the United States, with Dallas at No. 7. Meanwhile, San Francisco has achieved the grim honor of being No. 3 on the list of cities that people are escaping, following Hartford, Connecticut, and New York City. And yet, despite tweet after tweet from locals confirming these trends, they have received almost no mainstream media coverage.

The “pull” factors of Texas and similar conservative states—the absence of a state income tax, a pro-business (and anti-labor) political climate—are real enough. But these factors are not new—and if they were the real causes of the flight from California of industry and population, that flight would have occurred long ago, in the 1970s or 1980s.

What has made California so repulsive that many of its star companies and most talented individuals are making like East Germans trying to scramble over the Berlin Wall? We can begin with the squalor of San Francisco with its streets littered with needles and human feces and its public parks turned into homeless encampments. Though the crisis of public order is usually blamed on low-density zoning restrictions, the homeless tend to be drug addicts or the deinstitutionalized mentally ill, not working-class people and professionals priced out of local home ownership. Meanwhile, a wave of woke education policy aimed at the ritual leveling of Bay Area’s few actual meritocratic institutions—like San Francisco’s sole merit-based STEM high school—augurs poorly for the prospects of the children of tech workers whose parents can’t afford private schools.

Until now, many tech employers have relied on the H-1B visa program to provide them with a steady stream of college-educated indentured servants and allow California industry to be decoupled from public education in California and the country as a whole. In the event of a new travel-freezing pandemic, or immigration restrictions more stringent than those the Trump administration managed to impose, the tech oligarchs might find themselves reliant on an innumerate and semiliterate workforce emerging from public schools and universities which have lowered standards in the name of radical-left conceptions of social justice.

The original Silicon Valley tech milieu arose from the cross-fertilization of Cold War nerd engineering culture and the bohemian counterculture of San Francisco, capital of the beats and then the hippies. The national anthem of first wave Silicon Valley was a 1965 poem by Richard Brautigan, “All Watched Over by Machines of Loving Grace”:

I like to think
(it has to be!)
of a cybernetic ecology
where we are free of our labors
and joined back to nature,
returned to our mammal
brothers and sisters,
and all watched over
by machines of loving grace.

In 1995, the British scholars Richard Barbrook and Andy Cameron dubbed the resulting “dotcom neoliberalism” as “The Californian Ideology”:

The California Ideology is a mix of cybernetics, free market economics, and counter-culture libertarianism and is promulgated by magazines such as WIRED and MONDO 2000 and preached in the books of Stewart Brand, Kevin Kelly and others. The new faith P has been embraced by computer nerds, slacker students, 30-something capitalists, hip academics, futurist bureaucrats and even the President of the USA himself [Bill Clinton] … On a superficial reading, the writings of the Californian ideologists are an amusing cocktail of Bay Area cultural wackiness and in-depth analysis of the latest developments in the hi-tech arts, entertainment and media industries. Their politics appear to be impeccably libertarian - they want information technologies to be used to create a new ‘Jeffersonian democracy’ in cyberspace in its certainties, the Californian ideology offers a fatalistic vision of the natural and inevitable triumph of the hi-tech free market.

The California synthesis of free-market fundamentalism and left-wing social attitudes transformed American politics beginning in the 1990s, as cash began to flow to both Democrats and Republicans from California’s IPO billionaires and newly colossal companies like Microsoft, Google, and Apple. In alliance with the techno-libertarian Progress and Freedom Foundation, Newt Gingrich tried to rebrand the Republican Party as the party of high tech. The Democratic Party did the same, with the help of groups like the New Democrats, the Progressive Policy Institute, and Third Way. Not since the generation between the Civil War and the 1880s, when railroad companies were the only giant firms in the United States, had a single industry so completely dominated the politicians and policies of both national parties.

From the 1990s until recently, Democrats and Republicans competed to give Silicon Valley whatever it wanted. No taxes on e-commerce? Sure, Amazon. More nonimmigrant visa contract workers from abroad, three-quarters male and mostly aged 25-34, to be bound as indentured servants to single companies like Microsoft or Apple by the H-1B program? Whatever you say, sir. Laws exempting social media companies from legal penalties for spreading libels or child pornography? Bipartisan support. Government approval of the offshoring of much of American manufacturing and tech R&D to the unfree workforce of Leninist China, America’s greatest economic and military rival? No problem. Who needs stinky manufacturing and low-brow Neanderthal union bosses anyway? The future was the nonzero sum win-win immaterial knowledge economy of Palo Alto.

I watched this infatuation with Silicon Valley on the part of the New York-D.C. establishment, from the late 1990s until the 2016 election (full disclosure: The think tank I co-founded, New America, had Eric Schmidt, the CEO of Google, as its chair for a number of years). In my experience, successful leaders in the tech industry tend to be exceptionally smart and accomplished in their areas of expertise. Their political views, however, tend to be either standard centrist neoliberalism or market fundamentalist libertarianism.

Tech money didn’t corrupt Washington. Washington corrupted itself, in the hope of wheedling campaign contributions or donations out of the big firms and billionaires who had emerged as the winners in Silicon Valley after the turn of the century. It would take the talents of the late Tom Wolfe to do justice to the deformation of the culture of academic, nonprofit, and media institutions that the mere gravitational influence of tech donors produced, as otherwise perfectly ordinary politicians, professors, think tank experts and journalists tried to ingratiate themselves with the new tech titans by sycophantically imitating their speech and style to make familiar things seem tech-y and futuristic:

“Hack.” Translation: Tip or trick or shortcut, as in “Five Hacks for Making that Perfect Pumpkin Pie this Thanksgiving!”

“Lab.” Translation: Anything that is not a real laboratory.

“Disruption.” Translation: Doing or saying the same thing all other corporate, academic or nonprofit types are doing and saying.

“Nonprofit startup.” Translation: A nonprofit that just got started.

The trick (or hack) to success in Techspeak was to string borrowed technical terms into an impressive-sounding word salad: “We’re disruptive entrepreneurs whose innovative new nonprofit startup is based on applying the dynamic principles of venture capital to social impact investing.” Translation: It’s an ordinary charity staffed by upper-middle-class administrators with liberal arts degrees and funded by rich people who get a tax break.

Many organizations, run and staffed by folks who might struggle to program a microwave, went for the startup-in-an-old-industrial-loft look, with exposed brick walls carefully streaked with paint to make it seem that until recently cattle had been butchered and hung on hooks in the auditorium. Ceiling panels would be removed, so that a mass of pipes and ducts and wires dangled overhead like the undercarriage of an automobile, giving staffers in cubicles and conference rooms something like the view that a doomed armadillo must have when it looks up beneath a passing five-axle semitruck trailer in the moments before it becomes roadkill.

After nearly two decades of flirtation with both suitors, Silicon Valley finally spurned Newt Gingrich’s cheap-labor, anti-regulation, libertarian Republican Party, and shacked up with the Clintonian cheap-labor, anti-regulation, neoliberal Democratic Party. The Obama administration was Silicon Valley in power, and Silicon Valley after the defeat of Hillary Clinton in 2016 has to some degree been the Obama administration in exile, with White House alums Ubering and Lyfting their way to cushy positions at Uber, Lyft and other “tech” companies.

I put scare quotes around “tech” when referring to Uber and Lyft for a reason. While the original inventors and entrepreneurs of the Bay Area from the 1960s to the 1990s, often funded by the Defense Department, made actual machinery, like desktops and laptops and iPhones, or the basic software needed to run them, since the early 2000s “tech” had been redefined to mean any ordinary business that uses modern information technology. Companies like Uber and Lyft are nothing more than unregulated gypsy cab companies that you call with an iPhone: Their business model is based on cheap labor, extracted from desperate workers who are obviously taxi company employees but are misclassified by their employers as independent contractors. Calling Uber and Lyft “tech” companies is like calling Yellow Cab a telephone company because you call for a Yellow Cab on the phone.

When a friend of mine who edited a magazine quit about a decade ago, I was impressed to learn that he had joined a “tech startup.” That was pretty cool, I thought, going from journalism into science and technology. Alas, the “tech startup” turned out to be a website that permitted people to upload videos of their pets—a business model that illustrates the unproductive, labor-exploiting parasitism of much “tech” in the expanded definition. As Jaron Lanier has argued, much of the tech industry depends not only on underpaid labor (Chinese workers, American Uber and Lyft contractors) but also on free labor volunteered by consumers: A self-styled “tech entrepreneur” can allow grandmothers to upload videos of their cute kittens for free, and then sell the advertising rights to the videos and pocket the cash. The grandmothers get no share of the ad revenues, and neither do the kittens.

Far from being innovative, this business model of getting people to volunteer to work for free goes back a long way in the United States. It was first described by Mark Twain in 1876 in The Adventures of Tom Sawyer, in which Tom persuades the neighborhood kids that his chore of repainting the fence is fun and generously allows them to do it.

After about 30 years of domination by the railroad industry, Americans in both parties finally turned against the railroad robber barons with their palaces in Newport and their strike-breaking Pinkerton detective goons around 1900. In the past four years, hostility toward tech companies has erupted on both the left and the right. The identification of the tech industry with the Democratic Party, and the regular and repeated censorship of Republicans and conservatives by Twitter and Facebook, has made the rising populist right within the GOP into bitter enemies of “The Valley.” Meanwhile, what remains of the labor left justifiably wants to classify tech contractors as full-time workers with greater rights, perhaps even unionize them.

The woke cultural left is even more hostile than the old labor left is to Silicon Valley. The California legislature has interfered with entrepreneurial autonomy by passing a law mandating quotas for female board members and new legislation would mandate nonwhite board members and members who are lesbian, gay, bisexual, or transgender.

The California legislature is now debating a wealth tax which would also be an “exit tax,” applying retroactively for the previous 10 years. Envision executives and investors fleeing to other states as part of the Techxodus and being stopped at the California border, searched, and forced to turn over their cash, their jewelry, their weed, their escort addresses, and their Burning Man costumes before being allowed to flee in their Teslas to Austin.

Will the refugees from the West Coast Californicate the rest of the country? My home town of Austin, once the laid-back home of outlaw country music and slackerdom, now reminds me of San Francisco circa 2010, with food snobs, arrogant bikers, and a city government at war against plastic bags and cars. In the scenic Hill Country west of Austin, old Texas ranching families are selling out to rich Californians and others who carve up the properties into Sonoma-style vanity wineries and New Age spa resorts.

The good news for the nation and the world is that the era in which the highest aspiration of tech entrepreneurs was to get rich with the IPOs of their new pet video businesses appears to be ending. Whatever you think of Elon Musk and Jeff Bezos, they are building and testing rockets in rural Texas. Musk is building cars in Fremont, California, and Travis County, Texas, and batteries in Reno, Nevada. Boston Dynamics, home of spooky dancing robots, is in Waltham, Massachusetts.

I suspect that in the next industrial era, the focus will be on tangible industries making self-driving automobiles, robots, drones, rockets, and maybe even flying cars. The factories and suppliers will be scattered around the country in areas where commercial real estate and housing costs are reasonable. The concentration of a single industry in one metro area, and the domination of both political parties by the politics and fashions of that single industry, is not likely to recur—if we are lucky.