The Valley of the Shadow

Silicon Valley is an American success story. At a time of supposed American decline, a gifted group of young entrepreneurs invented, merchandized, and institutionalized everything from smartphones and eBay to Google and Facebook. The collective genius within a small corridor from San Francisco to Stanford University somehow put hand-held electronics into over a billion households worldwide — and hundreds of billions of dollars in profits rolled into Northern California, and America at large.

Stranger yet, Silicon Valley excelled at 1950s-style profit-driven capitalism while projecting the image of hip and cool. The result is a bizarre 21st-century 1-percenter culture of $1,000-a-square-foot homes, $100,000 BMWs, and $500 loafers coexisting with left-wing politics and trendy pop culture. Silicon Valley valiantly tries to square the circle of driving a Mercedes or flying in a Gulfstream while lambasting those who produce its fuel.

But the paradox finally has reached its logically absurd end. In medieval times, rich sinners sought to save their souls by buying indulgences to wash away their sins. In the updated version, Silicon Valley crony capitalists and wheeler-dealers buy exemption for their conspicuous consumption with loud manifestations of cool left-wing politics.

Take the cutthroat capitalism President Obama blasts when he goes after firms that outsource jobs and offshore profits. These are the sorts of excessive money-making gambits that the president was railing against when he told the successful that they did not really build their own businesses, or that they should have known to quit once they had made enough money.

Apple, Google, and Cisco, to take just a few examples, are among the worst offenders of all U.S. companies in using legal loopholes to offshore their profits in order to reduce their state and U.S. income taxes. In fact, tax-dodging tech firms have offshored almost $1 trillion in profits — at a time when the strapped tax-and-spend state government in Sacramento that they so overwhelmingly support has piled up billions in long-term debt. Oddly, Obama has never called in any Silicon Valley CEOs to jawbone them about the practice that shorts the state and federal treasuries. Apparently, the administration associates greed with coat-and-tie-wearing CEOs in smokestack industries, not hipsters in sockless loafers.

Barack Obama ran against Mitt Romney in 2012 by blasting him as a supposed greedy outsourcer of American jobs. Yet most of Silicon Valley’s production of smartphones, laptops, tablets, and video games is outsourced to Asian factories, despite California’s high overall unemployment rate. Given that the CEOs of these huge outsourcers lavish progressive politicians with cash, talk loudly about wind and solar power, and promote gay marriage, they are apparently exempt from the sorts of accusations that are brought against more traditional corporations. An unsympathetic steel manufacturer might whine about regulations that drive his business overseas; a Silicon Valley grandee praises those regulations and then quietly follows the steel manufacturer abroad.

And what about the “war on women”? Surely such a thing could not occur in the gender paradise of Silicon Valley? In fact, the valley is currently a hotbed of sexual-harassment charges and complaints of unequal pay for equal work — from the high-profile charges leveled at the venture-capital firm of Kleiner Perkins to those at Tinder, a hip dating service. A high-end prostitution ring was recently broken up — although it had been properly packaged in cool style as a website called MyRedbook. CNN recently dubbed Silicon Valley “Sex Valley” because of its exploitative pay-for-sex hook-up culture. Of course, Silicon Valley always has a new spin on old sins, such as the recent lesbian Yahoo exec accused of coercing sex from a young woman underling.

Then there is the big-money politics — Silicon Valley–style. Liberal Silicon Valley techies don’t like the Koch brothers because of their donations to conservative candidates. But the region’s Steyer brothers give almost as much money to progressive candidates — which is apparently okay because they profess an interest in greening America. The fact that much of the Steyer fortune derived from investing in carbon-spewing coal plants in the former Third World has been more than indulged because of the brothers’ progressive confessions and multi-million-dollar penance.

Does Silicon Valley also practice de facto apartheid?

You might think just that if you counted up the burgeoning prep schools in the valley, charging $30,000 and more per student. The subtext message is that the kids of rich techies should not be slowed down on their own trajectory to influence and riches by the recent immigrants in their midst. Teachers’ unions, multicultural curricula in the schools, bilingualism, and a diverse student body are wonderful — as long as their own kids are somewhere else.

One might indeed think of South African apartheid if one drove the three miles from the barrios of Redwood City to the multi-million-dollar homes in Menlo Park and Palo Alto. As the Silicon Valley culture spreads into urban San Francisco, many of the city’s Latinos and blacks continue to flee the escalating cost of living and astronomical housing prices. Silicon Valley is turning a once racially diverse San Francisco into a mostly upscale white and Asian enclave faster than any pre–Civil Rights southern town council could have done.

Recently, San Francisco community activists have been protesting the private Google buses plying the city’s streets, as iconic of the sort of 1-percent culture that likes big money and nice things without much consideration of the larger ramifications for the community. But what an odd scene when both the protesters and their targets overwhelmingly support the community organizer in the White House, who swept every precinct from San Francisco to San Jose.

The point of reviewing these hypocrisies is not to suggest that the rich profit-makers of Silicon Valley are any greedier or more cutthroat than the speculators of Wall Street or the frackers of Texas, but merely that they are judged by quite different standards. Cool — defined by casual dress, hip popular culture, and the loud embrace of green energy, gay marriage, relaxation of drug laws, and other hot-button social issues — means that one can live life as selfishly as he pleases in the concrete by sounding as communitarian as he can in the abstract. Buying jet skis is as crass a self-indulgence as buying an even more expensive all-carbon imported road bike is neat.

If Silicon Valley produced gas and oil, built bulldozers, processed logs, mined bauxite, or grew potatoes, then the administration, academia, Hollywood, and the press would damn its white-male exclusivity, patronization of women, huge material appetites, lack of commitment to racial diversity, concern for ever-greater profits, and seeming indifference to the poor. But they do not, because the denizens of the valley have paid for their indulgences and therefore are free to sin as they please, convinced that their future days in Purgatory can be reduced by a few correct words about Solyndra, Barack Obama, and the war on women.

Practicing cutthroat capitalism while professing cool communitarianism should be a paradox. But in Silicon Valley it is simply smart business. The more money you make, any way you can make it, the more you can find ways of contextualizing it. At first these Silicon Valley contradictions were amusing, then they were grating, and now they are mostly just pathetic.

— NRO contributor Victor Davis Hanson is a senior fellow at the Hoover Institution and the author, most recently, of The Savior Generals.