A week off from Facebook? Participants in Danish experiment like this

Group who quit site for a week felt less stressed and spoke more with family and friends face to face, in study by Danish Happiness Research Institute

People taking pictures under blooming cherry blossoms at the cemetery of Bispebjerg in Copenhagen, Denmark.
Those in the Danish study that quit the social media site for week said they felt a ‘calmness from not being confronted by Facebook all the time’. Photograph: Sophia Juliane Lydoplh/EPA

“We look at a lot of data on happiness and one of the things that often comes up is that comparing ourselves to our peers can increase dissatisfaction,” said Meik Wiking, CEO of the Happiness Research Institute in Copenhagen.

“Facebook is a constant bombardment of everyone else’s great news, but many of us look out of the window and see grey skies and rain (especially in Denmark!),” he said. “This makes the Facebook world, where everyone’s showing their best side, seem even more distortedly bright by contrast, so we wanted to see what happened when users took a break.”

Participants aged between 16 and 76 were quizzed before the experiment began on how satisfied they felt, how active their social life was, how much they compared themselves to others, and how easy they found it to concentrate. The group was then split, with half behaving as normal and half agreeing to abstain from Facebook for seven days – “a big ask for many,” according to Wiking.

Stine Chen, 26, found it tough at first, saying: “Facebook’s been a huge part of life since I was a teenager and lots of social activities are organised around it.”

It was also a challenge for Sophie Anne Dornoy, 35: “When I woke up, even before getting out of bed, I’d open Facebook on my phone just to check if something exciting or important had happened during the night. I worried I’d end up on Facebook just out of habit.”

She deleted the smartphone app and blocked the site on her desktop to reduce temptation. “After a few days, I noticed my to-do list was getting done faster than normal as I spent my time more productively,” she said. “I also felt a sort of calmness from not being confronted by Facebook all the time.”

A week later, the group who had abstained reported higher levels of life satisfaction and better concentration, as well as feeling less lonely, less stressed and more sociable.

“My flatmates and I had to chat instead of just checking Facebook,” said Chen. Dornoy found she had longer conversations on the phone than normal and reached out more to family and friends: “It felt good to know that the world doesn’t end without Facebook and that people are still able to reach you if they want to,” she said.

The next step for researchers is to assess how long the positive effects of a social media sabbatical last, and what happens when volunteers go without Facebook for extended periods. “I’d like to try for a year,” said Wiking, “but we’d have to see how many volunteers we get for that.”



How your Facebook profile can affect your credit

Many people are guilty of over-sharing on Facebook — whether they realize it or not — and the potential consequences of what people post on social media are getting even worse.

There once was a time when the only thing at stake was your reputation, but those days are long gone. Most people are well aware of the potential risks of social media these days, and it’s no secret that a Facebook post can get you fired from a job or prevent you from getting a job in the future.

But your Facebook profile now poses a new threat — to your credit score.

According to a report by the Financial Times, some of the top credit rating companies are now using people’s social media accounts to assess their ability to repay debt. So if you want to be able to qualify for a loan and borrow money, this is just another reason to avoid saying certain things on Facebook.

“If you look at how many times a person says ‘wasted’ in their profile, it has some value in predicting whether they’re going to repay their debt,” Will Lansing, chief executive at credit rating company FICO, told the FT. “It’s not much, but it’s more than zero.”

Lansing said FICO is working with credit card companies to use several different methods for deciding what size loans people can handle, and using non-traditional sources like social media allows them to collect information on people who don’t have an in-depth credit history. According to the FT, both FICO and TransUnion have had to find alternative ways to assess people who don’t have a traditional credit profile — including people who haven’t borrowed enough to give creditors an idea of what kind of risk they pose.

According to Lansing, FICO is “increasingly looking at data on a spectrum” to determine an individual’s credit-worthiness — with credit card repayment history being the most important factor on one end and information volunteered via social media on the other end.

And social media isn’t the only alternative source factoring in to people’s credit-worthiness. Credit rating companies are also using individuals’ payment history on phone bills, utility bills and even movie rentals. One good sign to creditors is if someone hasn’t moved a lot — which could suggest they’ve had problems paying rent.

“We can now score the previously un-scoreable,” said Jim Wehmann, executive vice-president for scores at FICO.

And while this may be a great way for more people to get access to loans, it’s also a wake-up call for those “previously un-scoreable” people to clean up their digital footprint — and fast.


Mouthbreathing Machiavellis Dream of a Silicon Reich


One day in March of 2014, a Google engineer named Justine Tunney created a strange and ultimately doomed petition at the White House website. The petition proposed a three-point national referendum, as follows:

1. Retire all government employees with full pensions.
2. Transfer administrative authority to the tech industry.
3. Appoint [Google executive chairman] Eric Schmidt CEO of America.

This could easily be written off as stunt, a flamboyant act of corporate kiss-assery, which, on one level, it probably was. But Tunney happened to be serious. “It’s time for the U.S. Regime to politely take its exit from history and do what’s best for America,” she wrote. “The tech industry can offer us good governance and prevent further American decline.”

Welcome to the latest political fashion among the California Confederacy: total corporate despotism. It is a potent and bitter ideological mash that could have only been concocted at tech culture’s funky smoothie bar—a little Steve Jobs here, a little Ayn Rand there, and some Ray Kurzweil for color.

Tunney was at one time a prominent and divisive fixture of the Occupy Wall Street movement. Lately, though, her views have . . . evolved. How does an anticapitalist “tranarchist” (transgender anarchist) become a hard-right seditionist?

“Read Mencius Moldbug,” Tunney told her Twitter followers last month, referring to an aggressively dogmatic blogger with a reverent following in certain tech circles.

Keanu Reeves cartoon

Keanu cartoon by Pete Simon

Tunney’s advice is easier said than done, for Moldbug is as prolific as he is incomprehensible. His devotees, many of whom are also bloggers, describe themselves as the “neoreactionary” vanguard of a “Dark Enlightenment.” They oppose popular suffrage, egalitarianism and pluralism. Some are atheists, while others affect obscure orthodox beliefs, but most are youngish white males embittered by “political correctness.” As best I can tell, their ideal society best resembles Blade Runner, but without all those Asian people cluttering up the streets. Neoreactionaries like to see themselves as the heroes of another sci-fi movie, in fact, sometimes boasting that they have been “redpilled,” like Keanu Reeves’s character in The Matrix—a movie Moldbug regards as “genius.”

“Moldbug.” The name sounds like it belongs to a troll who belches from the depths of an Internet rabbit hole. And so it does. Mencius Moldbug is the blogonym of Curtis Guy Yarvin, a San Francisco software developer and frustrated poet. (Here he is reading a poem at a 1997 open mic.)

According to Yarvin, the child of federal civil servants, he dropped out of a graduate computer science program at U. C. Berkeley in the early 1990s (he has self-consciously noted that he is the only man in his immediate family without a PhD) yet managed to make a small pile of money in the original dot-com bubble. Yarvin betrayed an endearingly strange sense of humor in his student days, posting odd stories and absurdist jokes on bulletin board services, contributing to Wired and writing cranky letters to alternative weekly newspapers.

Yet even as a student at Brown in 1991, Yarvin’s preoccupations with domineering strongmen were evident: “I wonder if the Soviet power ladder of vicious bureaucratic backbiting brings stronger men to the top than the American system of feel-good soundbites,” he wrote in one board discussion.

Yarvin’s public writing tapered off as his software career solidified. In 2007, he reemerged under an angry pseudonym, Moldbug, on a humble Blogspot blog called “Unqualified Reservations.” As might be expected of a “DIY ideology . . . designed by geeks for other geeks,” his political treatises are heavily informed by the works of J.R.R. Tolkien and George Lucas. What set Yarvin apart from the typical keyboard kook was his archaic, grandiose tone, which echoed the snippets Yarvin cherry-picked from obscure old reactionary tracts. Yarvin told one friendly interviewer that he spent $500 a month on books.

Elsewhere he confessed to having taken a grand total of five undergraduate humanities courses (history and creative writing). The lack of higher ed creds hasn’t hurt his confidence. On his blog, Yarvin holds forth oneverything from the intricacies of Korean history to contemporary Pakistani politics, from the proper conduct of a counterinsurgency operation to macroeconomic theory and fiscal policy, and he never gives an inch. “The neat thing about primary sources is that often, it takes only one to prove your point,” he writes.

In short, Moldbug reads like an overconfident autodidact’s imitation of a Lewis Lapham essay—if Lewis Lapham were a fascist teenage Dungeon Master.

Yarvin’s most toxic arguments come snugly wrapped in purple prose and coded language. (For instance,“The Cathedral” is Moldbuggian for the oppressive nexus of liberal newspapers, universities and the State Department, where his father worked after getting a PhD in philosophy from Brown.) By so doing, Moldbug has been able to an attract an audience that welcomes the usual teeth-gnashing white supremacists who haunt the web while also leaving room for a more socially acceptable assortment of “men’s rights” advocates, gun nuts, transhumanist libertarians, disillusioned Occupiers and well-credentialed Silicon Valley entrepreneurs.

When Justine Tunney posted her petition online, the press treated it like comic relief that came from nowhere. In fact, it is straight Moldbug. Item one, “retire all government employees,” comes verbatim from a 2012 talk that Yarvin gave to an approving crowd of California techies (see video below). In his typical smarmy, meandering style, Yarvin concluded by calling for “a national CEO [or] what’s called a dictator.”

“If Americans want to change their government, they’re going to have to get over their dictator phobia,” Yarvin said in his talk. He conceded that, given the current political divisions, it might be better to have two dictators, one for Red Staters and one for Blue Staters. The trick would be to “make sure they work together.” (Sure. Easy!)

“There’s really no other solution,” Yarvin concluded. The crowd applauded.

This plea for autocracy is the essence of Yarvin’s work. He has concluded that America’s problems come not from a deficit of democracy but from an excess of it—or, as Yarvin puts it, “chronic kinglessness.” Incredible as it sounds, absolute dictatorship may be the least objectionable tenet espoused by the Dark Enlightenment neoreactionaries.

Moldbug is the widely acknowledged lodestar of the movement, but he’s not the only leading figure. Another is Nick Land, a British former academic now living in Shanghai, where he writes admiringly of Chinese eugenics and the impending global reign of “autistic nerds, who alone are capable of participating effectively in the advanced technological processes that characterize the emerging economy.”

These imaginary übermensch have inspired a sprawling network of blogs, sub-Reddits and meetups aimed at spreading their views. Apart from their reverence for old-timey tyrants, they espouse a belief in “human biodiversity,” which is basically racism in a lab coat. This scientific-sounding euphemism invariably refers to supposed differences in intelligence across races. It is so spurious that the Wikipedia article on human biodiversity was deleted because, in the words of one editor, it is “purely an Internet theory.” Censored once again by The Cathedral, alas.

“I am not a white nationalist, but I do read white-nationalist blogs, and I’m not afraid to link to them . . . I am not exactly allergic to the stuff,” Yarvin writes. He also praises a blogger who advocated the deportation of Muslims and the closure of mosques as “probably the most imaginative and interesting right-wing writer on the planet.” Hectoring a Swarthmore history professor, Yarvin rhapsodizes on colonial rule in Southern Africa, and suggests that black people had it better under apartheid. “If you ask me to condemn [mass murderer] Anders Breivik, but adore Nelson Mandela, perhaps you have a mother you’d like to fuck,” Yarvinwrites.

His jargon may be novel, but whenever Mencius Moldbug descends to the realm of the concrete, he offersfamiliar tropes of white victimhood. Yarvin’s favorite author, the nineteenth-century writer Scot Thomas Carlyle, is perhaps best known for his infamous slavery apologia, “Occasional Discourse on the Negro Question.” “If there is one writer in English whose name can be uttered with Shakespeare’s, it is Carlyle,” Yarvin writes. Later in the same essay Yarvin calls slavery “a natural human relationship” akin to “that of patron and client.”

As I soldiered through the Moldbug canon, my reactions numbed. Here he is expressing sympathy for poor, persecuted Senator Joe McCarthy. Big surprise. Here he claims “America is a communist country.” Sure, whatever. Here he doubts that Barack Obama ever attended Columbia University. You don’t say? After a while, Yarvin’s blog feels like the pseudo-intellectual equivalent of a Gwar concert, one sick stunt after another, calculated to shock. To express revulsion and disapproval is to grant the attention he so transparently craves.

Yet the question inevitably arrives: Do we need to take this stuff seriously? The few mainstream assessments of the neoreactionaries have been divided on the question.

Sympathetic citations are spreading: In the Daily Caller, The American Conservative and National Review. Yet the conservative press remains generally dismissive. The American Spectator’s Matthew Walther calls neoreactionism “silly not scary” and declares that “all of these people need to relax: spend some time with P.G. Wodehouse, watch a football game, get drunk, whatever.”

TechCrunch, which first introduced me to Moldbug, treats the “Geeks for Monarchy” movement as an Internet curio. But The Telegraph says, yes, this is “sophisticated neo-fascism” and must be confronted.Vocativ, which calls it “creepy,” agrees that it should be taken seriously.

The science fiction author David Brin goes further in his comment on a Moldbug blog post, accusing the blogger of auditioning for the part of Machiavelli to some future-fascist dictator:

The world oligarchy is looking for boffins to help them re-establish their old – pyramidal – social order. And your screeds are clearly interview essays. “Pick me! Pick me! Look! I hate democracy too! And I will propagandize for people to accept your rule again, really I will! See the fancy rationalizations I can concoct????”

But your audition materials are just . .  too . . . jibbering . . . loopy. You will not get the job.

As strange as it sounds, Brin may be closest to the truth. Neoreactionaries are explicitly courting wealthy elites in the tech sector as the most receptive and influential audience. Why bother with mass appeal, when you’re rebuilding the ancien régime?

Moldbuggism, for now, remains mostly an Internet phenomenon. Which is not to say it is “merely” an Internet phenomenon. This is, after all, a technological age. Last November, Yarvin claimed that his blog had received 500,000 views. It is not quantity of his audience that matters so much as the nature of it, however. And the neoreactionaries do seem to be influencing the drift of Silicon Valley libertarianism, which is no small force today. This is why I have concluded, sadly, that Yarvin needs answering.

If the Koch brothers have proved anything, it’s that no matter how crazy your ideas are, if you put serious money behind those ideas, you can seize key positions of authority and power and eventually bring large numbers of people around to your way of thinking. Moreover, the radicalism may intensify with each generation. Yesterday’s Republicans and Independents are today’s Libertarians. Today’s Libertarians may be tomorrow’s neoreactionaries, whose views flatter the prejudices of the new Silicon Valley elite.

In a widely covered secessionist speech at a Silicon Valley “startup school” last year, there was more than a hint of Moldbug (see video below). The speech, by former Stanford professor and Andreessen Horowitz partner Balaji Srinivasan, never mentioned Moldbug or the Dark Enlightenment, but it was suffused with neoreactionary rhetoric and ideas. Srinivasan used the phrase “the paper belt” to describe his enemies, namely the government, the publishing industries, and universities. The formulation mirrored Moldbug’s “Cathedral.” Srinivasan’s central theme was the notion of “exit”—as in, exit from democratic society, and entry into any number of corporate mini-states whose arrival will leave the world looking like a patchwork map of feudal Europe.

Forget universal rights; this is the true “opt-in society.”

An excerpt:

We want to show what a society run by Silicon Valley would look like. That’s where “exit” comes in . . . . It basically means: build an opt-in society, ultimately outside the US, run by technology. And this is actually where the Valley is going. This is where we’re going over the next ten years . . . [Google co-founder] Larry Page, for example, wants to set aside a part of the world for unregulated experimentation. That’s carefully phrased. He’s not saying, “take away the laws in the U.S.” If you like your country, you can keep it. Same with Marc Andreessen: “The world is going to see an explosion of countries in the years ahead—doubled, tripled, quadrupled countries.”

Srinivasan ticked through the signposts of the neoreactionary fantasyland: Bitcoin as the future of finance, corporate city-states as the future of government, Detroit as a loaded symbol of government failure and 3D-printed firearms as an example of emerging technology that defies regulation.

The speech succeeded in promoting the anti-democratic authoritarianism at the core of neoreactionary thought, while glossing over the attendant bigotry. This has long been a goal of some in the movement. One such moderate—if the word can be used in this context—is Patri Friedman, grandson of the late libertarian demigod Milton Friedman. The younger Friedman expressed the need for “a more politically correct dark enlightenment” after a public falling out with Yarvin in 2009.

Friedman has lately been devoting his time (and leveraging his family name) to raise money for the SeaSteading Institute, which, as the name suggests, is a blue-sea libertarian dream to build floating fiefdoms free of outside regulation and law. Sound familiar?

The principal backer of the SeaSteading project, Peter Thiel, is also an investor in companies run by Balaji Srinivasan and Curtis Yarvin. Thiel is a co-founder of PayPal, an original investor in Facebook and hedge fund manager, as well as being the inspiration for a villainous investor on the satirical HBO series Silicon Valley. Thiel’s extreme libertarian advocacy is long and storied, beginning with his days founding the Collegiate Network-backed Stanford Review. Lately he’s been noticed writing big checks for Ted Cruz.

He’s invested in Yarvin’s current startup, Tlon. Thiel invested personally in Tlon co-founder John Burnham. In 2011, at age 18, Burnham accepted $100,000 from Thiel to skip college and go directly into business. Instead of mining asteroids as he originally intended, Burnham wound up working on obscure networking software with Yarvin, whose title at Tlon is, appropriately enough, “benevolent dictator for life.”

California libertarian software developers inhabit a small and shallow world. It should be no surprise then, that, although Thiel has never publicly endorsed Yarvin’s side project specifically, or the neoreactionary program in general, there is definitely a whiff of something Moldbuggy in Thiel’s own writing. For instance, Thiel echoed Moldbug in an infamous 2009 essay for the Cato Institute in which he explained that he had moved beyond libertarianism. “I no longer believe that freedom and democracy are compatible,” Thiel wrote.

Thiel’s eponymous foundation funds, among other things, an institute to advance the ideas of a conservative Stanford academic, René Girard, under whom Thiel studied as an undergraduate. In 2012 Thiel delivered a lecture at Stanford that explained his views regarding the divine rights of Silicon Valley CEOs. The lecture did address some of Girard’s ideas about historical “mimetics,” but it also contained a heavy dose of Moldbuggian thought. Thiel says:

A startup is basically structured as a monarchy. We don’t call it that, of course. That would seem weirdly outdated, and anything that’s not democracy makes people uncomfortable. We are biased toward the democratic-republican side of the spectrum. That’s what we’re used to from civics classes. But the truth is that startups and founders lean toward the dictatorial side because that structure works better for startups.

Might a dictatorial approach, in Thiel’s opinion, also work better for society at large? He doesn’t say so in his Stanford lecture (although he does cast tech CEOs as the heirs to mythical “god-kings” such as Romulus). But Thiel knows where to draw the line in mixed company. Ordinary people get so “uncomfortable” when powerful billionaires start talking about the obsolescence of participatory government and “the unthinking demos,” as he put it in his Cato essay. Stupid proles! They don’t deserve our brilliance! “The fate of our world may depend on the effort of a single person who builds or propagates the machinery of freedom,” Thiel wrote.

It is clear that Thiel sees corporations as the governments of the future and capitalists such as himself as the kings, and it is also clear that this is a shockingly common view in Thiel’s cohort. In a 2011 New Yorkerprofile, George Packer wrote:

Thiel and his circle in Silicon Valley may be able to imagine a future that would never occur to other people precisely because they’ve refused to leave that stage of youthful wonder which life forces most human beings to outgrow . . . . He wants to live forever, have the option to escape to outer space or an oceanic city-state, and play chess against a robot that can discuss Tolkien, because these were the fantasies that filled his childhood imagination.

Packer is perhaps too generous to his subject. But he captures the fundamental problem with these mouthbreathers’ dreams of monarchy. They’ve never role-played the part of the peasant.

Corey Pein is a writer and reporter in Brighton, England. He offers free samples at coreypein.net.



Is the dotcom bubble about to burst (again)?


In Silicon Valley, millions of dollars change hands every day as investors hunt the next big thing – the ‘unicorn’, or billion-dollar tech firm. There are now almost 150, but can they all succeed?

Have you heard the story about the tip from the shoeshine boy, a Brit called James Pallot asks me on my last day at TechCrunch Disrupt. I have, I say, though later I Google it to get the facts straight.

It’s attributed to Joseph Kennedy, paterfamilias of the Kennedy clan who, in 1929, was getting his shoes shined by a young boy who was also making confident predictions about which stocks would rise. For Kennedy, it was a moment of revelation. He sold his portfolio. Not long afterwards, Wall Street crashed and the world was plunged into the greatest depression ever seen. So a tip from the shoeshine boy is a sign that the bubble is about to burst. That the wave of confidence will finally crash upon the shore. That the jig is up.

Pallot used to be the digital editorial director of Condé Nast in New York and now he has a startup. But then, we’re at the world’s biggest startup conference in San Francisco, a few miles down the road from Silicon Valley where the world’s greatest concentration of technology startups first started up.

His company is in the booming field of VR, or virtual reality, which is to 2015 roughly what Rubik’s Cubes were to 1982, though with rather bigger potential consequences. Pallot claims it’s the logical next step for journalistic content. In 20 years’ time, you won’t be reading this on the page, I’ll probably be leading you by the hand through a 3D rendering of a virtual TechCrunch conference floor. Or, more likely, you’ll be leading yourself and I’ll be claiming jobseeker’s allowance.

But anyway. In the meantime, Pallot asks me if I’ve heard of the tip from the shoeshine boy. I have, I say, and tell him it’s been on my mind. Because for three days, I’ve been hearing about “unicorns” – a Silicon Valley term for companies that have been valued at more than $1bn. When this usage was first coined, less than two years ago, there were 39 of them. Today, there are 147. Or as Matthew Wong, a senior analyst at CB Insights, tells me: “The funding is at levels that we haven’t seen since 2000.”

As those with longer memories will recall, that was the year the dotcom bubble burst. It needs explaining because there are an awful lot of people at TechCrunch whose memories simply don’t go back that far: the typical startup founder is male and in his 20s. Back in 2000, Google was less than 18 months old and Facebook wasn’t even a glimmer in Mark Zuckerberg’s eye – he was still at high school. (At 31, he’s now practically Silicon Valley’s elder statesman.)

Everything has changed. And is changing at an ever-faster pace. Eight years ago, TechCrunch launched its Disrupt conference with 45 startups. This year, there are 5,000 of them. Over three days I talk to founders of companies from San Francisco and Texas and Uruguay and Beirut and Stockholm and Tel Aviv and Warsaw. There are apps for crowdfunded mortgages and cheaper divorces and better sex. There’s “Expedia for golf” and “Facebook for cars” and “Nest for water” and “Tinder for dogs”. There’s a virtual reality teddy bear, a device that claims it will be able to read your emotions via a contact lens in your eye and another that will automate your home cannabis farm (marijuana is a big deal in Silicon Valley right now). I miss the panel on nuclear fusion startups but they’re around.

They’ve all paid upwards of $3,000 (£1,900) to be here and they’re all trying to attract the attention of Silicon Valley’s biggest beasts. The VCs – venture capitalists to you and me. The money guys.

“How do you spot them?” I ask Peter Becronis, the founder of a real estate startup called Owner’s Vault. “Oh, it’s easy,” he says. “They’re all men, older guys who are in jeans and brown boots and perhaps a blue jacket. Oh, and a good watch. They’re the ones who shuffle past you trying not to catch your eye.”

It’s a long shot for the likes of Becronis to be here, but not a total pipe dream. Because hundreds of startups are being funded each month. Vast sums of money are changing hands. Crunchbase, TechCrunch’s sister site, lists the deals that are being done on a daily basis. On the day I write this, I check it and find 24 companies that have just received funding, including Kreditech, which got $92m (it uses “big data and complex machine-learning algorithms to credit score everyone worldwide”) and Medium, which received $57m (it’s a platform that has found another new business model that seems to involve not paying journalists).

Every month the amount of money being invested in early-stage startups goes up. And every month, more and more people are starting to use the B-word. Bubble. The last time this amount of money was swilling around, we know how it ended. “Back then, a lot of websites launched but that’s all they were, websites,” Mike Butcher, TechCrunch’s editor-at-large, tells me. “Now in 2015, all those technologies that were predicted – AI, drones, VR – have all turned up. The innovation is real. And it just continues to get bigger and bigger. There are more VC firms here than you can poke a stick at.

“Is it a bubble?” he asks and then answers the question himself, vividly, if not entirely clearly. “It depends. How many unicorns can you fit through the eye of a needle? Anyway, unicorns are over. It’s all about decacorns now. Companies that are worth tens of billions of dollars.”

In 2000 the bubble was in publicly listed companies – organisations like the then upstart AOL, which bought Time Warner for $164bn, the largest merger in America business history, and then most spectacular blow-up. Or in Britain,Lastminute.com, whose share price peaked at 511p before crashing to 80p a month later. Both companies survived, unlike many, but it was a long struggle back up for both of them. (In a neat bit of circularity, AOL bought TechCrunchalong the way.) In 2015, it’s private money flowing into companies that may or may not go public one day.

The shoeshine boy wouldn’t be tipping stocks in 2015, but what would he be doing? I ask Ned Desmond, the chief operating officer of TechCrunch. He thinks for a moment. “He would probably be an Uber driver who has his own angel investment line,” he says.

But James Pallot tops that. He’s flown in from JFK and had his shoes shined in the airport. “And the guy had a startup. I literally got a tip from the shoeshine boy! He was trying to find an investor for his national shoeshine franchise.” But then, in many ways, there has never been a better time to be a startup. Niko Bonatsos, a VC with General Catalyst Partners, tells me that the sheer number of companies at TechCrunch “speaks volumes about how the barriers to entry have been removed. It’s really easy to start a company. And lots of companies from other parts of the world see this as a lottery ticket. And for some of them, it will be. It’s the survival of the fittest. And the luckiest.”

Pallot and his co-founder are currently “bootstrapping” their company, Emblematic Group, which is creating virtual reality news content. “Bootstrapping” is Silicon Valley jargon. It means getting by with what you’ve got. It’s how people have set up companies since the dawn of capitalism. You start a business with a bit of money you already have and you try to attract customers and build it from there.

“Bootstrapping” is how you figure out if there’s a market and, if so, how you reach it. It’s also, like, totally 20th century. The reason 5,000 companies pay $3,000-plus to come to TechCrunch is because Silicon Valley has another model. People – strangers – will give you vast sums of cash to build your company into a global brand overnight. If you can deliver the killer pitch. The pitch that convinces the valley’s top VCs that you are the next Facebook, the next Uber, the next Airbnb.

“It doesn’t work like this in the rest of the world,” Ned Desmond tells me. “In Indonesia or Turkey or wherever, normal business culture demands collateral and security. Venture investing has none of that. You are investing in potential.” You’re gambling, basically. Silicon Valley, in 2015, is a giant casino. And the bets are so large because the potential payoffs are so huge. The next Google has to start somewhere.

So is it a bubble? “Everything is cyclical,” says Desmond. Does he remember the last crash? “I was there! I was in it. It was terrible. We had just launched a magazine, Business 2.0. Even the name sounds so cringeworthy now. We launched in May 2000 with a record number of advertisements. We had 150 ad pages. A year on, we had 15.”

This is not exactly an answer, so I try again. Is it a bubble? “We published a graph showing the unicorns. It’s a hockey stick. It’s near vertical growth.”




Robert Reich: How Silicon Valley Giants Are Destroying U.S. Capitalism

‘Saving Capitalism,’ Reich’s new book calls for sweeping anti-trust actions.

Photo Credit: Findability.org

Throughout American history, whatever industries have dominated the economy have also had outsized control of the political system—until something shifted and their monopoly power was broken.

“Two centuries ago slaves were among the nation’s most valuable assets, and after the Civil War, perhaps land was,” wrote former Secretary of Labor Robert Reich in an excerptin the New York Times from his forthcoming book, Saving Capitalism. “Then factories, machines, railroads and oil transformed America. By the 1920s most working Americans were employees, and the most contested property issue was their freedom to organize into unions.”

Reich’s knows that government and the private sector are not separate entities, but deeply related. He notes the federal government has intervened over the decades to restrain and rebalance capitalism’s excesses. And he says that America is again at one of those moments when the economy is overrun by monopolies—with Silicon Valley’s giants as the top example.

Today, the most valuable asset in America is digitized information pulsing through the portals that Americans tap when sitting at a computer or using a phone, and the underlying infrastructure created by the Internet’s giants: Google, Apple, Facebook, telecoms, cable TV, etc.

“Now information and ideas are the most valuable forms of property,” Reich writes. “The most valuable intellectual properties are platforms so widely used that everyone else has to use them, too. Think of standard operating systems like Microsoft’s Windows or Google’s Android; Google’s search engine; Amazon’s shopping system; and Facebook’s communication network.”

Reich points out that Silicon Valley has a concentration of well-known monopolies. Google runs two-thirds of all Internet searches in the U.S., he notes. Amazon now sells almost half of all new books. Facebook has nearly 1.5 billion global monthly users. This, he said, is “where the money is.”

And just as the biggest slave owners found many ways to keep slavery growing in colonial America and a young nation, so too have high-tech giants convinced the government to keep its regulatory hands off.

“Antitrust laws used to fight this sort of market power,” Reich writes. “In the 1990s, the federal government accused Microsoft of illegally bundling its popular Windows operating system with its Internet Explorer browser to create an industry standard that stifled competition. Microsoft settled the case by agreeing to share its programming interfaces with other companies. But since then Big Tech has been almost immune to serious antitrust scrutiny, even though the largest tech companies have more market power than ever. Maybe that’s because they’ve accumulated so much political power.”

Reich believes the time has already come for the historic regulatory pendulum to start swinging the other way—that is, for the federal government to reign in monopolistic excess.

“As has happened before with other forms of property, the most politically influential owners of the new property are doing their utmost to increase their profits by creating monopolies that must eventually be broken up,” he writes. “Whenever markets become concentrated, consumers end up paying more than they otherwise would, and innovations are squelched. Sure, big platforms let creators showcase and introduce new apps, songs, books, videos and other content. But almost all of the profits go to the platforms’ owners, who have all of the bargaining power.”

Reich points to numerous economic statistics that show that since the late 1970s, “the rate at which new businesses have formed in the United States has slowed markedly.” This is especially true in Silicon Valley, he said, as “Big Tech’s sweeping patents, standard platforms, fleets of lawyers to litigate against potential rivals and armies of lobbyists have created formidable barriers to new entrants.”

Arcane areas of the federal government—such as U.S. Patent Office—helped make this so by assisting giants like Google and Apple acquire near-monopoly control over their respective profit centers. His prescription, of course, is for federal policymakers to reverse course and stand up for the little guy or gal.

“The underlying issue has little to do with whether one prefers the “free market” or government,” he writes, seeking to debunk the notion that these companies exist in a sphere immune from public accountability.

“The real question is how government organizes the market, and who has the most influence over its decisions,” Reich said. “We are now in a new gilded age similar to the first Gilded Age, when the nation’s antitrust laws were enacted. As then, those with great power and resources are making the “free market” function on their behalf. Big Tech — along with the drug, insurance, agriculture and financial giants — dominates both our economy and our politics.”

Reich says the time has come for federal power to break up the 21st centuries newest monopolies for the benefit of the rest of the economy. But it will take clear thinking to see the American economy for what its biggest actors have largely become—modern monopolies.

“Yet as long as we remain obsessed by the debate over the relative merits of the “free market” and “government,” we have little hope of seeing what’s occurring and taking the action that’s needed to make our economy work for the many, not the few.”


Steven Rosenfeld covers national political issues for AlterNet, including America’s retirement crisis, democracy and voting rights, and campaigns and elections. He is the author of “Count My Vote: A Citizen’s Guide to Voting” (AlterNet Books, 2008).



Why the Rich Love Burning Man

Burning Man became a festival that rich libertarians love because it never had a radical critique at its core.


In principle the annual Burning Man festival sounds a bit like a socialist utopia: bring thousands of people to an empty desert to create an alternative society. Ban money and advertisements and make it a gift economy. Encourage members to bring the necessary ingredients of this new world with them, according to their ability.

Introduce “radical inclusion,” “radical self-expression,” and “decommodification” as tenets, and designate the alternative society as a free space, where sex and gender boundaries are fluid and meant to be transgressed.

These ideas — the essence of Burning Man — are certainly appealing.

Yet capitalists also unironically love Burning Man, and to anyone who has followed the recent history of Burning Man, the idea that it is at all anticapitalist seems absurd: last year, a venture capitalist billionaire threw a $16,500-per-head party at the festival, his camp a hyper-exclusive affair replete with wristbands and models flown in to keep the guests company.

Burning Man is earning a reputation as a “networking event” among Silicon Valley techies, and tech magazines now send reporters to cover it. CEOs like Mark Zuckerberg of Facebook and Larry Page of Alphabet are foaming fans, along with conservative anti-tax icon Grover Norquist and many writers of the libertarian (and Koch-funded) Reason magazine. Tesla CEO Elon Musk even went so far as to claim that Burning Man “is Silicon Valley.”

Radical Self-Expression

The weeklong Burning Man festival takes place once a year over Labor Day weekend in a remote alkali flat in northwestern Nevada. Two hours north of Reno, the inhospitable Black Rock Desert seems a poor place to create a temporary sixty-thousand-person city — and yet that’s entirely the point. On the desert playa, an alien world is created and then dismantled within the span of a month. The festival culminates with the deliberate burning of a symbolic effigy, the titular “man,” a wooden sculpture around a hundred feet tall.

Burning Man grew from unpretentious origins: a group of artists and hippies came together to burn an effigy at Baker Beach in San Francisco, and in 1990 set out to have the same festival in a place where the cops wouldn’t hassle them about unlicensed pyrotechnics. The search led them to the Black Rock Desert.

Burning Man is very much a descendent of the counterculture San Francisco of yesteryear, and possesses the same sort of libertine, nudity-positive spirit. Some of the early organizers of the festival professed particular admiration for the Situationists, the group of French leftists whose manifestos and graffitied slogans like “Never Work” became icons of the May 1968 upsurge in France.

Though the Situationists were always a bit ideologically opaque, one of their core beliefs was that cities had become oppressive slabs of consumption and labor, and needed to be reimagined as places of play and revolt. Hence, much of their art involved cutting up and reassembling maps, and consuming intoxicants while wandering about in Paris.

You can feel traces of the Situationists when walking through Black Rock City, Burning Man’s ephemeral village. Though Black Rock City resembles a city in some sense, with a circular dirt street grid oriented around the “man” sculpture, in another sense it is completely surreal: people walk half-naked in furs and glitter, art cars shaped like ships or dragons pump house music as they purr down the street.

Like a real city, Burning Man has bars, restaurants, clubs, and theaters, but they are all brought by participants because everyone is required to “bring something”:

The people who attend Burning Man are no mere “attendees,” but rather active participants in every sense of the word: they create the city, the interaction, the art, the performance and ultimately the “experience.” Participation is at the very core of Burning Man.

Participation sounds egalitarian, but it leads to some interesting contradictions. The most elaborate camps and spectacles tend to be brought by the rich because they have the time, the money, or both, to do so. Wealthier attendees often pay laborers to build and plan their own massive (and often exclusive) camps. If you scan San Francisco’s Craigslist in the month of August, you’ll start to see ads for part-time service labor gigs to plump the metaphorical pillows of wealthy Burners.

The rich also hire sherpas to guide them around the festival and wait on them at the camp. Some burners derogatorily refer to these rich person camps as “turnkey camps.

Silicon Valley’s adoration of Burning Man goes back a long way, and tech workers have always been fans of the festival. But it hasn’t always been the provenance of billionaires — in the early days, it was a free festival with a cluster of pitched tents, weird art, and explosives; but as the years went on, more exclusive, turnkey camps appeared and increased in step with the ticket price — which went from $35 in 1994 to $390 in 2015 (about sixteen times the rate of inflation).

Black Rock City has had its own FAA-licensed airport since 2000, and it’s been getting much busier. These days you can even get from San Carlos in Silicon Valley to the festival for $1500. In 2012, Mark Zuckerberg flew into Burning Man on a private helicopter, staying for just one day, to eat and serve artisanal grilled cheese sandwiches. From the New York Times:

“We used to have R.V.s and precooked meals,” said a man who attends Burning Man with a group of Silicon Valley entrepreneurs. (He asked not to be named so as not to jeopardize those relationships.) “Now, we have the craziest chefs in the world and people who build yurts for us that have beds and air-conditioning.” He added with a sense of amazement, “Yes, air-conditioning in the middle of the desert!”

The growing presence of the elite in Burning Man is not just noticed by outsiders — long-time attendees grumble that Burning Man has become “gentrified.” Commenting on the New York Times piece, burners express dismay at attendees who do no work. “Paying people to come and take care of you and build for you . . . and clean up after you . . . those people missed the point.”

Many Burners seethed after reading one woman’s first-person account of how she was exploited while working at the $17,000-per-head camp of venture capitalist Jim Tananbaum. In her account, she documented the many ways in which Tananbaum violated the principles of the festival, maintaining “VIP status” by making events and art cars private and flipping out on one of his hired artists.

Tananbaum’s workers were paid a flat $180 a day with no overtime, but the anonymous whistleblower attests that she and others worked fifteen- to twenty-hour days during the festival.

The emergent class divides of Burning Man attendees is borne out by data: the Burning Man census (yes, they have a census, just like a real nation-state) showed that from 2010 to 2014, the number of attendees who make more than $300,000 a year doubled from 1.4% to 2.7%. This number is especially significant given the outsize presence 1 percenters command at Burning Man.

In a just, democratic society, everyone has equal voice. At Burning Man everyone is invited to participate, but the people who have the most money decide what kind of society Burning Man will be — they commission artists of their choice and build to their own whims. They also determine how generous they are feeling, and whether to withhold money.

It might seem silly to quibble over the lack of democracy in the “governance” of Black Rock City. After all, why should we care whether Jeff Bezos has commissioned a giant metal unicorn or a giant metal pirate ship, or whether Tananbaum wants to spend $2 million on an air-conditioned camp? But the principles of these tech scions — that societies are created through charity, and that the true “world-builders” are the rich and privileged — don’t just play out in the Burning Man fantasy world. They carry over into the real world, often with less-than-positive results.

Remember when Facebook CEO Mark Zuckerberg decided to help “fix” Newark’s public schools? In 2010, Zuckerberg — perhaps hoping to improve his image after his callous depiction in biopic The Social Network donated $100 million to Newark’s education system to overhaul Newark schools.

The money was directed as a part of then–Newark Mayor Cory Booker’s plan to remake the city into the “charter school capital of the nation,” bypassing public oversight through partnership with private philanthropists.

Traditionally, public education has been interwoven with the democratic process: in a given school district, the community elects the school board every few years. School boards then make public decisions and deliberations. Zuckerberg’s donation, and the project it was attached to, directly undermined this democratic process by promoting an agenda to privatize public schools, destroy local unions, disempower teachers, and put the reins of public education into the hands of technocrats and profiteers.

This might seem like an unrelated tangent — after all, Burning Man is supposed to be a fun, liberating world all its own. But it isn’t. The top-down, do what you want, radically express yourself and fuck everyone else worldview is precisely why Burning Man is so appealing to the Silicon Valley technocratic scions.

To these young tech workers — mostly white, mostly men — who flock to the festival, Burning Man reinforces and fosters the idea that they can remake the world without anyone else’s input. It’s a rabid libertarian fantasy. It fluffs their egos and tells them that they have the power and right to make society for all of us, to determine how things should be.

This is the dark heart of Burning Man, the reason that high-powered capitalists — and especially capitalist libertarians — love Burning Man so much. It heralds their ideal world: one where vague notions of participation replace real democracy, and the only form of taxation is self-imposed charity. Recall Whole Foods CEO John Mackey’s op-ed, in the wake of the Obamacare announcement, in which he proposed a healthcare system reliant on “voluntary, tax-deductible donations.”

This is the dream of libertarians and the 1 percent, and it reifies itself at Burning Man — the lower caste of Burners who want to partake in the festival are dependent on the whims and fantasies of the wealthy to create Black Rock City.

Burning Man foreshadows a future social model that is particularly appealing to the wealthy: a libertarian oligarchy, where people of all classes and identities coexist, yet social welfare and the commons exist solely on a charitable basis.

Of course, the wealthy can afford more, both in lodging and in what they “bring” to the table: so at Burning Man, those with more money, who can bring more in terms of participation, labor and charity, are celebrated more.

It is a society that we find ourselves moving closer towards the other 358 (non–Burning Man) days of the year: with a decaying social welfare state, more and more public amenities exist only as the result of the hyper-wealthy donating them. But when the commons are donated by the wealthy, rather than guaranteed by membership in society, the democratic component of civic society is vastly diminished and placed in the hands of the elite few who gained their wealth by using their influence to cut taxes and gut the social welfare state in the first place.

It’s much like how in my former home of Pittsburgh, the library system is named for Andrew Carnegie, who donated a portion of the initial funds. But the donated money was not earned by Carnegie; it trickled up from his workers’ backs, many of them suffering from overwork and illness caused by his steel factories’ pollution. The real social cost of charitable giving is the forgotten labor that builds it and the destructive effects that flow from it.

At Burning Man the 1 percenters — who have earned their money in the same way that Carnegie did so long ago — show up with an army of service laborers, yet they take the credit for what they’ve “brought.”

Burning Man’s tagline and central principle is radical self-expression:

Radical self-expression arises from the unique gifts of the individual. No one other than the individual or a collaborating group can determine its content. It is offered as a gift to others. In this spirit, the giver should respect the rights and liberties of the recipient.

The root of Burning Man’s degeneration may lie in the concept itself. Indeed, the idea of radical self-expression is, at least under the constraints of capitalism, a right-wing, Randian ideal, and could easily be the core motto of any of the large social media companies in Silicon Valley, who profit from people investing unpaid labor into cultivating their digital representations.

It is in their interest that we are as self-interested as possible, since the more we obsess over our digital identity, the more personal information of ours they can mine and sell. Little wonder that the founders of these companies have found their home on the playa.

It doesn’t seem like Burning Man can ever be salvaged, or taken back from the rich power-brokers who’ve come to adore it and now populate its board of directors. It became a festival that rich libertarians love because it never had a radical critique at its core; and, without any semblance of democracy, it could easily be controlled by those with influence, power, and wealth.

Burning Man will be remembered more as the model for Google CEO Larry Page’s dream of a libertarian state, than as the revolutionary Situationist space that it could have been.

As such, it is a cautionary tale for radicals and utopianists. When “freedom” and “inclusion” are disconnected from democracy, they often lead to elitism and reinforcement of the status quo.



Facebook patents technology to help lenders discriminate against borrowers

Facebook chief executive Mark Zuckerberg

Above: Facebook chief executive Mark Zuckerberg

Image Credit: Eduardo Munoz/Reuters

Facebook has been granted an updated patent from the U.S. Patent office on a technology that can help lenders discriminate against certain borrowers based on the borrower’s social network connections.

The patent describes a technology that tracks the way users are connected in a network. The main use case is for preventing members of a network from sending spam to other members with who they’re not directly or legitimately connected. Other use cases involve preventing network members from receiving emails from, or showing up in the search results of, people with whom they have no direct or legitimate connection.

But the technology can also aid in other types of discrimination. Here’s the last use case Facebook describes in the patent:

In a fourth embodiment of the invention, the service provider is a lender. When an individual applies for a loan, the lender examines the credit ratings of members of the individual’s social network who are connected to the individual through authorized nodes. If the average credit rating of these members is at least a minimum credit score, the lender continues to process the loan application. Otherwise, the loan application is rejected.

The use of social network contacts as a basis for establishing credit worthiness is questionable; just because some of my friends have bad credit scores doesn’t mean I do.  But the technology would likely be valued by some banks to add a new metric to the review process.

Such technology could be harmful for the estimated 51 million Americans who have limited or no access to banking services, and could make them more prone to using alternative predatory systems such as payday loans.

Facebook bought the patent from Friendster in 2010. The inventor, Christopher Lunt, now works at getinsured.com, a website that offers tools to help people enroll in health insurance plans.

Research provided by legal technology firm SmartUp Legal.