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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 …

[Applause.]

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, FWD.us the tech elite that back that neo-libertarianism will become the new quadrant of the right in American politics.

image

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.

The Future and Its Discontents ← Joshua Foust

http://joshuafoust.com/the-future-and-its-discontents/

Joshua Foust riffs on Evgeny Morozov’s takedown of the new technoutopian The New Digital Age of Eric Schmidt and Jared Cohen, and winds up at Jaron Lanier’s weak-wristed response to the uncertainty of the postmodern world of work:

Of course, Lanier doesn’t have an answer. His idea – “sell your data” – only gets us part of the way there. Lanier correctly notes that the financial industry, governments, and tech firms thrive not on open data, but on expensive proprietary data (even Google, which claims to love openness so much, has a vast, private trove of your information it sells to advertisers). But his vision of selling data that is already freely out there to large data centers doesn’t make any sense.  The reason those systems are already thriving is because the cat is long out of the bag.

[…]

“In a world of free information,” Lanier writes, “The economy will start to shrink as automation rises radically. This is because in an ultra-automated economy, there won’t be much to trade other than information.”

It’s a bit late for that. The middle class has already begun to shrink, from both automation and from the torrent of free information about the public, monetized into the financial industry for the benefit of a few thousand traders on Wall Street (along with, let us not forget, incredibly abusive labor practices and banking systems). While it’s nice to think that monetizing one’s own information could create a new techno-middle class, the reality is that this is the same sort of high-minded digital utopianism that animates Schmidt and Cohen.

So where do we go from here? The post-employment economy is a scary and dangerous place — I’m learning this the longer I exist in the workforce as a free agent, not necessarily employed per se but also not without income. There are huge pitfalls (taxes can approach 45% for the first $50k of income) and uncertainties (who’s going to hire you for a project next), and it’s difficult to plan much for the long term. Yet, our society, economy, and even politics are based on the long term in their own ways. That is what a mortgage, IRA, pension plan, healthcare, and everything else we associate with adulthood is focused on — and it’s what animates the most vicious knife fights in Washington.

The scary, uncomfortable answer is that we really don’t have a solid idea of where to go from here. Wealthy people whose employers cover their healthcare, half their taxes, and provide a pension glibly suggest that young people simply “invent your own job” as if it’s that simple. The tech people, who were supposed to create the future, instead suggest reverting to a time that never existed (Lanier’s vision where we could “sell” our personal data for a profit) or a one-to-one recreation of our analog world online (Schmidt and Cohen).

The future is going to be marked by stable employment for the elite, and unstable employment for everyone else. Young people today will face more or less permanent underemployment, working far below their skills and capabilities. Poor and middle income people will face much the same. It leads to misleading jobs numbers (after all, being underemployed still gets one counted as “employed” by the BLS), and a false sense of prosperity as the 1% thrives from jobless profits.

Yet, rather than asking “how can we adjust our institutions to minimize the negative effects of unstable employment,” our thinkers are slinging around terms (“virtual” “digital” “monetize”) that were cutting edge in the early 90s, when Sandra Bullock blew everyone’s mind by ordering a pizza from her computer, than anything relevant to today. If we are going to create an economy of self employment — which is to say an economy of mass uncertainty — then we need to simplify things like the tax code, healthcare, and retirement (if that will even be a relevant term two decades from now). But instead of asking to simplify institutions and thus expand their capacity to adapt and help, we’re talking in nonsense circles about internet things.

I see some hope in the rise of placeforms (marketplace + platforms = placeforms) like oDesk and the like, some of which will figure out a way to disguise the freelancers in full-time employment clothes (albeit it, with highly variable income and a cafeteria-style pick-your-benefits-and-pay-for-‘em model). I envision the possibility of the Freelancers Union turning into an actual workers cooperative, and handling the back office side for freelancers, and maybe marketing their services.

But we will still be at risk, precarious, but operating as a connective, and cooperatively leveraging the inherent fluidarity of our way of working.

If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.

Eric Schmidt

This thinking is totally wrong, an authoritarian, absolutist remark. People have the right to entertain all sorts of unpalatable and unpopular ideas, and it is generally the well-off and powerful who don’t want to recognize that. This is the West Coast libertarianism that comes pouring out of Mark Zuckerberg, too, advocating a single, absolutely consistent identity online at all times.

One Counter To Schmidt’s Facial Recognition Claim

The other day I read a number of pieces that quoted Eric Schmidt, former CEO of Google, for example, this:

Bianca Bosca, Facial Recognition: The One Technology Google Is Holding Back

former Google CEO Eric Schmidt shared one technology he says is the only one Google has ever built, then withheld: facial recognition.

"We built that technology and we withheld it," Schmidt said of facial recognition at the All Things Digital D9 conference in California. “As far as I know, it’s the only technology Google has built and, after looking at it, we decided to stop.”

"I’m very concerned personally about the union of mobile tracking and face recognition," he explained, adding that the company feared that these capabilities could be used both for good and "in a very bad way." Schmidt described a scenario in which an "evil dictator" could use facial recognition to identify people in a crowd and use the technology "against" its citizens.

Though Google may not be releasing products with facial recognition capabilities, Schmidt acknowledged that the open nature of Google’s Android and Chrome platforms could enable third parties to develop and distribute this technology.

"There are plenty of apps I don’t like that are still legal," he noted.

Still, for the time being, Schmidt maintains that Google is “not going to go into” facial recognition in a “general way.”

I figured that Google had developed and held back — or killed — other technologies, and decided to look for examples. Here we are, a few days later, and I see this:

Cade Metz, Apple iCloud: Steve Jobs’ own private internet

Just before the launch of its long-rumored GDrive – a service for storing all your desktop files on the web – Google killed the thing. “Files are so 1990. … I don’t think we need files anymore,” Google’s Sundar Pichai told colleague Bradley Horowitz, according to the new book In the Plex. “You just want to get information into the cloud. When people use our Google Docs, there are no more files. You just start editing in the cloud, and there’s never a file.”

According to the book, penned by Wired scribe Steven Levy, Horowitz – who led the GDrive project – was skeptical of Pinchai’s stance. GDrive eventually vanished in favor of the Google Docs model, after more than a year of development, even though it was never released to the public.

I’m betting that many other examples will come to light, over time, which just shows that Schmidt didn’t get down in the bit mines with the product people.

Google’s Eric Schmidt Says He ‘Screwed Up’ on Social Networking - Sam Gustin

http://www.wired.com/epicenter/2011/06/googles-schmidt-social/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed: wiredbusinessblog (Blog - Epicenter (Business))

via Wired, Sam Gustin

Google chairman Eric Schmidt took responsibility for the search titan’s failure to counter Facebook’s explosive growth, saying he saw the threat coming but failed to counter it.

Speaking at the D9 tech conference outside of Los Angeles Tuesday evening, Schmidt said that for five years, he’s been aware of the competitive threat posed by upstart social networking websites like Facebook and LinkedIn. Schmidt even wrote internal memos about the threat, he said, but was so focused on running Google’s day-to-day operations that he didn’t give the issue the necessary attention.

In an interview with AllThingsD’s Kara Swisher, Schmidt described Google’s social stumble as his biggest regret.

“I clearly knew I had to do something and I failed to do it,” Schmidt said. “CEOs need to take responsibility. I screwed up.”

Pressed by Swisher and her co-host, Wall Street Journal tech columnist Walt Mossberg, about why he didn’t focus more on social networking, Schmidt had a simple answer:

“I was busy,” he said.

The most expensive error of all time?

Schmidt is looking more like a Steve Ballmer or John Sculley type: a suit occupying the front office while the business loses its way in a world of unprecendented innovations.

Let’s see if Larry Page can make up for the five years of social misteps that Schmidt oversaw.

There is still time to make Android a social operating system, and not miss the next generation of innovation, Larry.

And this is not some sideline: Google’s core business is search, and as we move into a world based on social connection the nature of search is shifting very quickly:

We’ve moved out of scarcity-based search, where there were few results for searches. In a time of super-abundant information, the problem becomes ‘who do you want filtering for you?’ Google’s foundational method is counting incoming links, weighted by a reputation, derived again on incoming links. From this it derives a position in search results.

But in an era where we can connect directly to others in social networks, we can rely directly on our connections to filter the immense web, so meaning is the new search:

Increasingly, we will switch to a social connection mode to filter and find for us. Our networks will become engines of meaning, as Bruce Sterling said.

Everything we want to find has been found, and will find us through our social connections. Like head colds and happiness.

We will find everything through social relationships: what washing machine to buy, or the best Thai restaurant in Beacon NY, or the company that makes those horizontal corduroys. People that care about these issues, and to who we matter, will share meaning with us: they have beliefs that they can justify, also called knowledge.

Google is only the echo of our linking behavior, a second-order derivative of our combined gestures. But generally, we would be happier with fewer results from trusted sources, and the rise of social tools makes that almost as fast as Google search.

Google must plan to adapt to the social revolution or fall into the spam darkness.

Why Google Does Not Own Skype « StevenLevy.com

http://www.stevenlevy.com/index.php/05/10/why-google-does-not-own-skype

Steven Levy relates the story of Wesley Chan, a Google product manager, derailing the Skype acquisition:

if Google bought Skype, Chan concluded, it would have to rewrite the entire Skype platform.

Basically, he was convinced that peer-to-peer wouldn’t work within Google’s infrastructure, and that Google could build a better mousetrap on it’s own.

Especially interesting is the description of the meeting when the deal went south:

“Salar [Kamangar, now CEO of YouTube] and I laid the grenades,” Chan told me. According to Chan, the pair went to Sergey Brin and convinced him it was a terrible deal. Then, Chan says, they brainstormed a plan to sabotage the deal in a key meeting of top executives, a gather that presumably would wind up blessing the purchase.

The idea was bait and switch—the executives in favor of the deal would assume that everything was on track, and Chan and his allies would use shock and awe to turn things around. Chan says that he began the meeting by praising the deal. “I even had a deck that was super supportive of it,” he says.

But, according to Chan, halfway through the deck, Sergey Brin seized the floor “and started getting really negative.” He asked a series of questions that he knew would get unsatisfactory answers. Is this purchase data-driven? Who is going to spend all those months commuting to Europe? (No one stepped up.) How long is the government review expected to take? As Chan had figured, the advocates of the deal were unprepared to respond to these last-minute objections.

Chan then described the climatic moment. “[Sergey] looks at me and says, ‘Why would I want this risk? We have a team capable of building the carrier, we have the users, we have hundreds of millions of Gmail users, why do we need to have Skype?’ And at that point, Sergey gets up and says, ‘This is the dumbest shit I’ve ever seen.’ And Eric gets up and walks out of the room, and I’m like, okay, the deal’s off.” And it was.

If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.

- Eric Schmidt

This is Schmidt verbalizing conventional moralistic nonsense, which would be fine if he were just another private citizen, although it is conservative mumbo jumbo.

The problem is that he is the head of Google, who potentially could amass damaging evidence about people’s unconventional interests, unpopular political views, or who knows what. If the moral philosophy of Google turns out to be ‘don’t do anything that you wouldn’t want your grandmother, your boss, or the IRS to know about’ then we have the possibility of bad privacy/publicy decisions from Google.

We are not owed the right of privacy and publicy conditionally, only if we don’t do, or think, or say something that would offend the general population. We have these rights unconditionally, and Google’s chief executive officer should studiously avoid and comments that suggest these rights are granted to us by governments, society, or corporate behemoths. These are inalienable rights, not open to tinkering, and especially not open to being rolled by political force.

Eric Schmidt Confirms Google Is Off Track

Last week it was Peter Norvig admitting that Google has missed the opening rounds of the battle for the social web (see Google’s Biggest Mistake: The Rise Of The Social (Post Search) Web), and this week his boss confirms that Google is still off in algorithm land instead of understanding the social dimension of the web:

Holman W. Jenkins, Jr.: Google and the Search for the Future

The day is coming when the Google search box—and the activity known as Googling—no longer will be at the center of our online lives. Then what? “We’re trying to figure out what the future of search is,” Mr. Schmidt acknowledges. “I mean that in a positive way. We’re still happy to be in search, believe me. But one idea is that more and more searches are done on your behalf without you needing to type.”

"I actually think most people don’t want Google to answer their questions," he elaborates. "They want Google to tell them what they should be doing next."

Let’s say you’re walking down the street. Because of the info Google has collected about you, “we know roughly who you are, roughly what you care about, roughly who your friends are.” Google also knows, to within a foot, where you are. Mr. Schmidt leaves it to a listener to imagine the possibilities: If you need milk and there’s a place nearby to get milk, Google will remind you to get milk. It will tell you a store ahead has a collection of horse-racing posters, that a 19th-century murder you’ve been reading about took place on the next block.

Says Mr. Schmidt, a generation of powerful handheld devices is just around the corner that will be adept at surprising you with information that you didn’t know you wanted to know. “The thing that makes newspapers so fundamentally fascinating—that serendipity—can be calculated now. We can actually produce it electronically,” Mr. Schmidt says.

The idea that machines will tell us what to do next is chilling, rather than liberating. Yes, we will use social tools that harness the millions of activities of our social circles and scenes, but our affiliation with others is where we will find meaning, not some functional result served up by Google or Facebook or Twitter.

Meaning is the new search.

Google Is Now Officially Evil

Eric Schmidt! WOW! Welcome Google to Argentina! =)
Image by TheAlieness GiselaGiardino²³ via Flickr

Eric Schmidt threw out some provocative one-liners at yesterday’s Techonomy conference, and based on what I read in the tea leaves, Google has inched into evilness.

The backdrop for this is the apparent agreement between Google and Verizon to scuttle near-term hopes for net nuetrality (see here).

And then Schmidt’s stand-up act: beware billionaires describing technology as culturally neutral. Baloney. There is a strong conservative streak built into the web, which is why so many people lose their jobs for speaking out on websites, and why over 70% of recruiters have opted not to hire candidates based on information found in social networks, like Facebook. This is a steady, corrosive force, and it inexorably excludes edgy lifestyles, and ‘dangerous’ or unpopular political stances from being openly advocated by anyone that needs employment.

He starts by saying that there is a data explosion going on, with more information being created everyday than all of human civilization through 2000. Yawn. We all know it’s old porn being turned into HD, Eric.

Then the fear starts to creep in. Apparently, Google can now predict where you are going to be based on messaging and location information. They can predict disease, personal behavior, and crises. And then, he responds to the idea that information can be misused for criminal or anti-social purposes:

The only way to manage this is true transparency and no anonymity. In a world of asynchronous threats, it is too dangerous for there not to be some way to identify you. We need a [verified] name service for people. Governments will demand it.

via Marshall Kirkpatrick

Let me start by saying that what governments might ‘demand’ has little relationship with the principles of a liberal, open society. There are valid, rational reasons for many activities to remain anonymous, however much repressive governments or nosey business would like to know everything about citizens and employees. That’s one of the wonderful attributes of paper money: it is anonymous. As a result, your romantic tryst, your Saturday night poker game, and the $20 to the illegal immigrant who cleans your car remain your own business.

But Schmidt takes the side of the neo-cons:

True anonymity is too dangerous.

So, we are headed to a Brave New World, an Orwellian nightmare where Google will work on behalf of the government — ‘who will demand it’ — to reveal our past actions and future predilections, because they can.

I don’t think that is a good enough reason.

Note: I am an advocate for publicy replacing privacy as a social norm online. But that is a matter of personal choice, of deciding how and in what way to share information based on social benefits and inducements. But publicy has to be developed in the context of circles of trust — where social scale leads to the damping out of details as information moves farther from the source.

Instead of telling us that anonymity is dead, Google could be announcing tools for the social scaled disclosure of information, and techniques for information erosion, as a counter to the dangers of societal repression.

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