Both the Democrats and Silicon Valley shifted their political views

An alternative theory of to the Tech sector's rightward turn.

Why did Silicon Valley turn right?

Institutions shape people's understanding of their interests and alliances during stable times. In crises, institutional frameworks come under strain and certainties crumble. This creates opportunities for political entrepreneurs armed with new ideas to reshape how people understand their interests — new alliances form over time.

This summarises Mark Blythe’s theory of the process by which shifts in institutional frameworks occur. Why do institutions matter for the question of Silicon Valley’s right turn? Shifts in our ideas and ideologies are embodied in institutions and alliances over time, so they become a framework for—and indeed constrain—action.

Here's a practical example of why this matters: Although many argued against neoliberalism in the 1990s, neoliberalism as an idea was embedded in institutions and alliances, which muted the impact of these broadsides against the dominant dogma of the time. So the changes in alliances we are seeing mean this is a significant moment.

Political scientist Henry Farrell (he of an important concept du jour—weaponised interdependence) used Blythe’s theory to disagree with Noah Smith and Matty Igesias, who claim that it was the Democrats who moved away from the Valley.

Not so, says Farrell. That’s too simplistic. Both sides moved away from each other. In this post, I will summarise and comment on Farrell’s argument, which will help me think through it. TLDR: I think Farrel’s choice of Blythe’s theory and his application of it is typically excellent.

However, his description of the forces shaping Silicon Valley’s shift is light on detail. In a follow-up post, I will attempt to provide some ideas on the forces and events that may explain Silicon Valley’s shift.

The Californian Ideology is not libertarian but "liberal-tarian"

A survey conducted in 2017 is apparently the only solid social scientific evidence we have of Silicon Valley politics, says Farrel. Fascinatingly, it does not entirely confirm the idea many had, ever since Richard Barbrook and Andy Cameron’s influential Californian Ideology essay, that Silicon Valley ideas were simply a peculiar example of early neoliberalism.

The Californian Ideology eloquently argued that Silicon Valley’s politics was a novel mix of the New Left’s counter-cultural social values—personal freedom—and the right’s free market politics. A potent form of neoliberalism.

But the survey by Broockman, Greg Ferenstein and Neil Malhotra found that 75% of tech founders rejected libertarianism, instead showing a unique "liberal-tarian" ideology: “liberal” (in the American sense of the word) on most issues, including globalism, redistribution (public goods provision, education, the environment and significantly, taxation). Yet, they were also strongly anti-regulation, similar on that to Republican donors, and more so than non-tech entrepreneurs, especially regarding labour markets.

Proving that ideology was at work and not only self-interest, tech elites in 2017 showed broader anti-regulation views beyond their own industry. They opposed regulation and unions more strongly than typical millionaires and were particularly anti-union. Both Farrel and Broockman, Ferenstein and Malhotra argue that the Silicon Valley that held these beliefs influenced the Democrats.

Farrell references Margaret O’Mara, who hailed these anti-regulation Democrats the “Atari Democrats”. The effects of this point of view can be seen in the bipartisan consensus that meant that e-commerce wasn’t regulated or taxed (“see the influence of the Framework for Global Electronic Commerce”), the opposition to the copyright protection measures contained in SOPA, as well as Section 230 of the 1996 Communications Decency Act, which indemnified social media companies from being held liable for the content posted on their platforms.

Curiously, nobody mentions Net Neutrality provisions, which prohibit ISPs and telecom networks from preferencing and differentially pricing the data they carry. A form of regulation itself, Silicon Valley types tended to have no issue with it and framed it as necessary to protect speech and innovation.

When tech elites clashed with the Democrats back then, Farrell notes that it was because their illiberal policies threatened tech’s business model — and, in their minds, the world becoming more liberal. This is because they were fully bought into the quaint view that a more globally connected world, would mean a more liberal world, which would be a good thing. So, Google’s Eric Schmidt, during the Obama presidency, expressed fear in response to Snowden's revelations that U.S. surveillance might destroy the Internet.

But the symbioses between the neoliberal Democrats and Palo Alto consensus mostly worked just fine:

…the neoliberal consensus among Washington DC Democrats and the Palo Alto Consensus were highly compatible with each other. Both favored free markets and minimal regulation of technology, while sidelining unions, labor politics and too close an examination of the market power of the big tech companies. There were frictions of course - even neoliberal Democrats were often keener on regulation for many people in Silicon Valley - but Democrats could see themselves in Silicon Valley and vice versa without too much squinting.

Much has been written about the US left’s move away from central tenets of neoliberalism — like free trade. The idea is that unbridled free trade led the US to the China Shock, which was bad for US manufacturing jobs. And a lack of US vision and industrial planning has led China, armed with an industrial strategy, to steal a march on some future key technologies, like solar and, more recently, electric vehicles. The Inflation Reduction Act is an attempt to address that. Much of Biden’s CHIPS Act’s specific design is aimed at slowing China’s progress in AI by denying the Chinese access to the most powerful semiconductors.

For Farrell, this shift by the Democrats is matched by a shift away from the Palo Alto consensus in Silicon Valley. More digital tech is not necessarily going to lead to more liberal societies. The “obvious” link between innovation and liberalism has been broken. All we hear now from the Valley is about the importance of innovation for economic growth, and sometimes, they add that it is also important for state power. When Mark Zuckerberg sought to defend Facebook’s ill-fated Libra before Congress, he framed its success in championing the US in geopolitical currency competition.

So, Farrell’s argument seems to have great explanatory power. But it’s an account that lacks enough explanatory detail about the shift Silicon Valley has undergone — why and why not all of Silicon Valley has shifted in the same way. And I will attempt to flesh that out in the next.

Footnote: Also see John Ganz’s commentary on Farrel from a Gramscian perspective. He says that what Blyth is describing sounds identical to what Gramsci calls a “crisis of authority” or “crisis of hegemony”.