Silicon Valley’s Reality Check

It’s interesting how there is so much variation in the viralness of Scott’s posts. Some posts barely create a ripple, while others send waves throughout the high-IQ rationalist communities. An example of the latter is Scott’s most recent post SILICON VALLEY: A REALITY CHECK, which went viral on Reddit and Hacker News and was shared over 1,000 times on Facebook.

Why did this post create such a storm? First, because it’s about Silicon Valley, a subject that is controversial in and of itself. Silicon Valley, on one hand, has extreme wealth, but this wealth is juxtaposed with great poverty, too, such as San Francisco’s spiraling homeless population, as well as the large Hispanic immigrant population. There is a sense that Silicon Valley’s tech elite are insulated from the problems facing the rest of the country–be it job loss, crippling student loan debt and medical expenses, and a general sense of hopelessness, angst, and despair. Subjects such as class envy, the ‘haves’ vs. the ‘have-nots’, power, and privilege arise in any mention of Silicon Valley. For example: Google buses, out of control rent, gentrification, and homelessness. Like, why do some people make so much, while others are so poor, all living within a square mile of each other? Images come to mind of rich tech founders carefully sidestepping the homeless on the sidewalk on the way to work. I’m not taking sides, but the issue of class, privilege, and envy is no more acute than it is when discussing Silicon Valley. It’s like a hundred Reddit threads on wealth inequity rolled up into one city.

All cities have poor people, but Silicon Valley is perhaps unique in that there is so much wealth, too, and the destitute and rich live in such close vicinity, whereas in most cites, such as Baltimore and Detroit, the distribution of wealth isn’t so bi-modal. Also, politics play a role. Because Silicon Valley’s tech elite are, generally speaking, left-wing, there is a sense–a noblesse oblige–they they should be doing more to help the poor, but aren’t, and this tends to make far-left liberals upset and adds to the controversy. Like, instead of $400 wifi-enabled food blenders and $150,000 self-driving cars, how about affordable housing? Instead of escaping to virtual reality, how about confronting actual reality? Also, valuations of Silicon Valley tech companies, which many on the left perceive as too high and a bubble.

And then there is the writing style. Scott uses the ‘wall of links’ method to convey authority. Each link is like equal to 10 Facebook shares and his article is choked with links. Afterwards, he has a clever rhetorical technique/shortcut of showing that how because two things are either equivalent or polar opposites, that it implies something is true or false. Some might call this the ‘excluded middle’ fallacy, but to the reader it’s very convincing.

So I would recommend people stop talking about how Silicon Valley only makes ridiculous overpriced juicers. It’s not that it doesn’t make those. It does, just like everywhere else. A Facebook friend pointed out that QVC has been selling our parents ridiculous overpriced kitchen items since before we were born. Billy Mays pitched the EZ Crunch Bowl, which promised to “revolutionize your cereal-eating experience”. The unique thing about Silicon Valley isn’t that it’s got overpriced status goods designed to separate rich people from their money. The unique thing about Silicon Valley is that it’s got anything else.

When Capitol Hill screws up, tens of thousands of innocent Iraqis get killed.

When Wall Street screws up, the country is plunged into recession and poor families lose their homes.

When Silicon Valley screws up, people who want a pointless Wi-Fi enabled juicer get a pointless Wi-Fi enabled juicer. Which by all accounts makes pretty good juice.

Scott is mostly right, although the last three sentences seem like hasty generalizations. The financial crisis was caused by people buying more home than they could afford and then defaulting on their payments en masse when home prices began to fall in 2006-2007 (the actual financial crisis would occur a year later, in 2008). These ‘poor people’ (and it wasn’t just the poor) had homes that they should have never been able to afford in the first place. The problem is when the government gets involved in the housing market, and this creates incentives for risky behavior. When Silicon Valley screws up, VC can lose a lot of money, but at least that’s private money and not public.