Chamath Palihapitiya and the Neo-Libertarians of Silicon Valley

I left San Francisco after living there approximately one third of the time for four or five years, basically a year in aggregate. One of the things that really disturbed me was the underlying elitist, libertarian, dog-eat-dog, beggar-thy-neighbor attitude of many tech leaders, a neolibertarian ethos that has come to dominate much of the tech world there. This is shown to an extreme by Peter Thiel, who goes so far as to suggest that increases and welfare and giving women the vote made ‘capitalist democracy’ an oxymoron (see Peter Thiel, Techno-Utopian, and Beware Peter Thiel). But even a slightly more benign techo-libertarian like Eric Schmidt show his deeper leanings when he says I love gridlock’.

So this exchange last week between ex-Facebooker and angel Chamath Palihapitiya and Jason Calicanis, the host of This Week in Start-ups, is just the newest go around in the rapidly emerging neo-libertarian worldview of the tech elite in SF.

Calacanis makes a joke about the government shutdown, and this ensues:

Palihapitiya: The government, they’re completely useless.

Calacanis: The government got shut down today and the stock market went up 1 percent.

Palihapitiya: We’re in this really interesting shift. The center of power is here, make no mistake. I think we’ve known it now for probably four or five years.But it’s becoming excruciatingly, obviously clear to everyone else that where value is created is no longer in New York, it’s no longer in Washington, it’s no longer in LA. It’s in San Francisco and the Bay Area. And when you look at sort of, like, how markets react to things like that, and when there’s no reaction, it should be taken as a very subtle signal that the power dynamics have changed. Because markets value meaningful events, markets discount meaningless events. And so the functional value of the government is effectively discounted to zero …

Companies are transcending power now. We are becoming the eminent vehicles for change and influence, and capital structures that matter. If companies shut down, the stock market would collapse. If the government shuts down, nothing happens and we all move on, because it just doesn’t matter. Stasis in the government is actually good for all of us. It means they can neither do anything semi-useful nor anything really stupid. They just sit there and they just kind of, you know …


Calacanis: There you have it.

Yes. There you have it.

Kevin Roose sizes this up this way:

The bigger takeaway from Palihapitiya’s rant is that a certain strain of influential Silicon Valley thought has moved past passive political apathy and into a kind of anarchist cheerleading. Dysfunction and shutdowns are good, this line of thinking goes, because it hamstrings Washington’s ability to mess with the private sector’s profit-making schemes. And as long as the Bay Area is still churning out successful start-ups, what does it matter if hundreds of thousands of government workers are furloughed, essential services are cut off for low-income Americans, and the threat of a sovereign default endangers the entire economy?


For them [Bay area tech elite], government is mostly a hindrance — a regulatory obstacle to the kinds of disruptive start-ups they fund, and an enemy of a looser immigration policy that would allow their portfolio companies to recruit more talented foreign engineers.

But the message they’re pushing isn’t as simple as small-government libertarianism or selfish profit-seeking. It’s a kind of regional declaration of independence. The entrepreneurial community in San Francisco and Silicon Valley increasingly thinks of itself as a semi-autonomous region within the U.S. — one that has its own funding scheme, its own leaders, and its own paths to success. And the message they’re sending is simple: We matter, you don’t.

And they could be the answer to the GOP’s burning problem, which is finding a constituency that isn’t just the Confederacy. Yes, the tech elite that back that neo-libertarianism will become the new quadrant of the right in American politics.


The recent Keystone Kops routine in Washington was the attempt of the Tea Partiers to move the country abruptly to the lower right quadrant of this chart, despite the rejection of those ideas by the electorate in the last presidential elections.

But the goals of the neo-libertarian, SF billionaires club are much more in line with American sentiment, especially those upward strivers on both populous coasts. They will be in favor of gay rights, legalization of pot, and women’s rights (Thiel’s bile and Twitter’s board of directors, notwithstanding). They will push for directed immigration relaxation on economic grounds: they want more Indian and Rumanian PhDs. And they will support corporatist globalism, and even the extreme risks posed by big banks will not bring them to argue for increased government regulation of the financial system.

But on the economics dimension they can go pretty far to the right. They will oppose raising taxes to better the welfare of poor people, or to underwrite better schools in districts that historically have done badly. They will oppose extending health care, and forget single payer.

They will be able to fund their objectives, and once they get over their dislike of government – which is completely useless, after all – they will likely start to play a larger role in the power vacuum left by the collapsing of the traditional constituencies of the fading conservative bloc in the US, which is aging, and out of step on a societal level with the sentiments of the young, who have come to accept interracial marriage, gays and lesbians, smoking pot, and the decline of religion as an ethical foundation.

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