The Breakdown

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In Silicon Valley, nice guys aren't for real

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At Breakingviews, Rob Cox lays into our presumptions about the virtues of Silicon Valley startup founders like Mark Zuckerberg, Mark Pincus, and (by implication) Steve Jobs. Here's a salient paragraph:

Though Silicon Valley’s newest billionaires may anoint themselves the saints of American capitalism, they’re beginning to resemble something else entirely: robber barons. Behind the hoodies and flip-flops lurk businesspeople as rapacious as the black-suited and top-hatted industrialists of the late 19th century. Like their predecessors in railroads, steel, banking, and oil a century ago, Silicon Valley’s new entrepreneurs are harnessing technology to make the world more efficient. But along the way, that process is bringing great economic and labor dislocation, as well as an unequal share of the spoils. Just last week, the Justice Department warned Apple that it planned to sue the company along with several U.S. publishers for colluding to raise the price of electronic books - monopolistic behavior that would have made John Rockefeller proud. 

He goes on to discuss Apple's Foxconn debacle, Google's sneaking code into ads to fool browsers, and the SOPA/PIPA debate over online content piracy. But he really gets going when he starts talking about the looming battle between Washington regulators and tech companies over privacy concerns, as well as the way that startups are going public in a way that enables them to exercise disproportionate control over shareholders even as they tap public markets through highly touted (and not always very successful) IPOs.

Cox has put his finger on something truly disturburing about Silicon Valley and the whole tech space. The robber barons of the past were unabashed in their regard for hierarchy; there were very few of them and deserved everything they got. Too bad for everyone else. The little people weren't industrious enough or rapacious enough to do the robber-baron thing.

Silicon Valley entrepreneurs are, by contrast, accustomed to being celebrated for their idealistic commitment — their anti-hierachicalism, their devotion to "flat" organizations, their singular focus on being cool. Steve Jobs established the paradigm by insisting that Apple products be "insanely great." It wasn't a leap for this to become Google's "Don't be evil."

But before you know it, you've got Mark Zuckerberg talking about "rewiring" people in the letter that accompanied Facebook's S-1 IPO filing with the SEC:

By helping people form these connections, we hope to rewire the way people spread and consume information. We think the world’s information infrastructure should resemble the social graph — a network built from the bottom up or peer-to-peer, rather than the monolithic, top-down structure that has existed to date. We also believe that giving people control over what they share is a fundamental principle of this rewiring.

You can't read that and fail to find it:

1. Creepy

2. Malevolent

3. Cynical, given that Facebook wants to monetize this "rewiring," initially and reluctantly, to the tune of a $10 billion IPO and a $100 billion market capitalization

So the direction that Silicon Valley is headed in might not, you know, be all for the best. And there's another problem. Apple recently published a study that the company commissioned, arguing that it's a job-creating machine. Nonetheless, Silicon Valley isn't in the business of generating broad prosperity, unless you want to take risks on the stock of tech companies. Apple employs around 50,000 people (not including the small army of workers in Asia). General Motors, at its height, employed half a million. GM helped build the U.S. middle class. Apple, Facebook, Zygna et al. want to either sell the increasingly constricting middle class an expensive new gadget every two years; or get the middle class to donate their labor to the cause of status updates, photo uploads, and online games that sell virtual goods.

In other words, don't ever believe anything that anyone from Silicon Valley says when it comes to making the world a better place. The RobberBarons.com (to steal Cox's term) might get around to it, one of these days. But they won't do it with their companies. Especially if those companies are as wildly successful as they all hope they will be.

Follow Matthew DeBord and the DeBord Report on Twitter.

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