Trump Damaged Democracy, Silicon Valley Will Finish It Off

‘BRAIN HACKING’

Donald Trump’s rise is, in a sense, just one symptom of the damage the tech oligarchs are doing to America.

When Democrats made their post-election populist “Better Deal” pitch, they took a strong stance against pharmaceutical and financial monopolies. But they conspicuously left out the most profound antitrust challenge of our time—the tech oligarchy.

The information sector, notes The Economist, is now the most consolidated sector of the American economy.

The Silicon Valley and its Puget Sound annex dominated by Google, Apple, Facebook, Amazon, and Microsoft increasingly resemble the pre-gas crisis Detroit of the Big Three. Tech’s Big Five all enjoy overwhelming market shares—for example Google controls upwards of 80 percent of global search—and the capital to either acquire or crush any newcomers. They are bringing us a hardly gilded age of prosperity but depressed competition, economic stagnation, and, increasingly, a chilling desire to control the national conversation.

Jeff Bezos harrumphs through his chosen megaphone, The Washington Post, about how “democracy dies in the dark.” But if Bezos—the world’s third richest man, who used the Post first to undermine Bernie Sanders and then to wage ceaseless war on the admittedly heinous Donald Trump—really wants to identify the biggest long-term threat to individual and community autonomy, he should turn on the lights and look in the mirror.

Trump’s election and volatile presidency may pose a more immediate menace, but when he is gone, or neutered by lack of support, the oligarchs’ damage to our democracy and culture will continue to metastasize.

Killing the Old Silicon Valley

Americans justifiably take pride in the creative and entrepreneurial genius of Silicon Valley. The tech sector has been, along with culture, agriculture, and energy, one of our most competitive industries, one defined by risk-taking and intense competition between firms in the Valley, and elsewhere.

This old model is fading. All but shielded from antitrust laws, the new Silicon Valley is losing its entrepreneurial yeastiness—which, ironically enough, was in part spawned by government efforts against old-line monopolists such as ATT and IBM. While the industry still promotes the myth of the stalwart tinkerers in their garages seeking to build the next great company, the model now is to get funding so that their company can be acquired by Facebook or one of the other titans. As one recent paper demonstrates, these “super platforms” depress competition, squeeze suppliers and reduce opportunities for potential rivals, much as the monopolists of the late 19th century did (PDF). The rush toward artificial intelligence, requiring vast reservoirs of both money and talent, may accelerate this consolidation. A few firms may join the oligarchy over time, such as Tesla or Uber, but these are all controlled by the same investors on the current Big Five.

This new hierarchy is narrowing the path to riches, or even the middle class. Rather than expand opportunity, the Valley increasingly creates jobs in the “gig economy” that promises not a way to the middle class, much less riches, but into the rising precariat—part-time, conditional workers. This emerging “gig economy” will likely expand with the digitization of retail, which could cost millions of working-class jobs.

For most Americans, the once promising “New Economy,” has meant a descent, as MIT’s Peter Temin recently put it, toward a precarious position usually associated with developing nations. Workers in the “gig economy,” unlike the old middle- and working-class, have little chance, for example, of buying a house—once a sure sign of upward mobility, something that is depressingly evident in the Bay Area, along the California coast, and parts of the Northeast.

Certainly the chances of striking out on one’s own have diminished. Sergei Brin, Google’s co-founder, recently suggested that startups would be better off moving from Silicon Valley to areas that are less expensive and highly regulated, and where the competition for talent is not dominated by a few behemoths who can gobble up potential competitors—Instagram, WhatsApp, Skype, LinkedIn, Oculus—or slowly crush them, as may be happening to Snap, a firm that followed the old model and refused to be swallowed by Facebook but went through with its own public offering. Now the Los Angeles-based company is under assault by the social media giant which is using technologies at its Instagram unit, itself an acquisition, that duplicate Snap’s trademark technologies and features.

Snap’s problems are not an isolated case. The result is that the number of high-tech startups is down by almost half from just two years ago; overall National Venture Capital Association reports that the number of deals is now at the lowest level since 2010. Outsiders, the supposed lifeblood of entrepreneurial development, are increasingly irrelevant in an increasingly closed system.

The New Hierarchy

For all its talk about “disruption,” Silicon Valley is increasingly about three things: money, hierarchy, and conformity. Tech entrepreneurs long have enjoyed financial success, but their dominance in the ranks of the ultra-rich has never been so profound. They now account for three of world’s five richest people—Bill Gates, Jeff Bezos, and Mark Zuckerberg—and dominate the list of billionaires under 40.

Unlike their often ruthless and unpleasant 20th century moguls, the Silicon Valley elite has done relatively little for the country’s lagging productivity or to create broad-based opportunity. The information sector has overall been a poor source of new jobs—roughly 70,000 since 2010—with the gains concentrated in just a few places. This as the number of generally more middle-class jobs tied to producing equipment has fallen by half since 1990 and most new employment opportunities have been in low-wage sectors like hospitality, medical care, and food preparation.

The rich, that is, have gotten richer, in part by taking pains to minimize their tax exposure. Now they are talking grandly about having the government provide all the now “excess” humans with a guaranteed minimum income. The titans who have shared or spread so little of their own wealth are increasingly united in the idea that the government—i.e., middle-class taxpayers—should spread more around.

Not at all coincidentally, the Bay Area itself—once a fertile place of grassroots and middle-class opportunity—now boasts an increasingly bifurcated economy. San Francisco, the Valley’s northern annex, regularly clocks in as among the most unequal cities in the country, with both extraordinary wealth and a vast homeless population.

The more suburban Silicon Valley now suffers a poverty rate of near 20 percent, above the national average. It also has its own large homeless population living in what KQED has described as “modern nomadic villages.” In recent years income gains in the region have flowed overwhelmingly to the top quintile of income-earners, who have seen their wages increase by over 25 percent since 1989, while income levels have declined for low-income households.

Despite endless prattling about diversity, African Americans and Hispanics who make up roughly one-third of the valley’s population, have barely 5 percent of jobs in the top Silicon Valley firms. Between 2009 and 2011, earnings dropped 18 percent for blacks in the Valley and by 5 percent for Latinos, according to a 2013 Joint Venture Silicon Valley report (PDF).

Similarly the share of women in the tech industry is barely half of their 47 percent share in the total workforce, and their ranks may even be shrinking. Stanford researcher Vivek Wadhwa describes the Valley still as “a boys’ club that regarded women as less capable than men and subjected them to negative stereotypes and abuse.”

While the industry hasn’t done much to actually employ women or minorities, it’s both self-righteously and opportunistically fed the outrage industry by booting right-wing voices from various platforms and pushing out people like former Google staffer James Damore, and before that Mozilla founder Brendan Eich after he made a small contribution to a 2014 measure banning gay marriage. Skepticism, once the benchmark of technology development, is now increasingly unwelcome in much of the Valley.

This marks a distinct change from the ’80s and ’90s, when the tech companies—then still involved in the manufacturing of physical products in the United States—tended toward libertarian political views. As late as the 1980s, moderate Republicans frequently won elections in places like San Mateo and Santa Clara. Now the area has evolved into one of the most one-sidedly progressive bastions in the nation. Over 70 percent of Bay Area residents are Democrats up from 55 percent in the 1970s. Today, the Calexit backers, many based in the Valley, even think that the country is too dunderheaded, and suggest they represent “different,” and morally superior, values than the rest of the country.

The Danger to Democracy

If these were policies adopted by an ice-cream chain, or a machine-tool maker, they might be annoying. But in the tech giants, with their vast and growing power to shape opinion, represent an existential threat. Mark Zuckerberg whose Facebook is now the largest source of media for younger people, has emerged, in the words of one European journalist (PDF), as “‘the world’s most powerful editor.” In the past they were the primary carriers of “fake news,” and have done as much as any institution to erode the old values (and economics) of journalism.

Both Facebook and Google now offer news “curated” by algorithms. Bans are increasingly used by Facebook and Twitter to keep out unpopular or incendiary views, and especially in the echo chamber of the Bay Area. This is sometimes directed at conservatives, such as Prager University, whose content may be offensive to some, but hardly subversive or “fake.” The real crime now is simply to question dominant ideology of Silicon Valley gentry progressivism.

Even at their most powerful the industrial age moguls could not control what people knew. They might back a newspaper, or later a radio or television station, but never secured absolute control of media. Competing interests still tussled in a highly regionalized and diverse media market. In contrast the digital universe, dominated by a handful of players located in just a few locales, threaten to make a pluralism of opinions a thing of the past. The former Google design ethicist Tristan Harris suggests that “a handful of tech leaders at Google and Facebook have built the most pervasive, centralized systems for steering human attention that has ever existed.”

Ultimately, particularly after the disasters associated with the Trump regime, the oligarchs seem certain to expand their efforts to control the one institution which could challenge their hegemony: government. Once seen as politically marginal, the oligarchs achieved a dominated role in the Democratic Party, in part by financing President Obama and later support for Hillary Clinton. In the Obama years Google operatives were in fact fairly ubiquitous, leading at least one magazine to label it “the Android Administration.” Since then a stream of Obama people have headed to Silicon Valley, working for firms such as Apple, Uber, and Airbnb. Obama himself has even mused about becoming a venture capitalist himself.

Of course with Trump in power, the oligarchs are mostly on the outs, although the twitterer in chief tried to recruit them. Now many of Silicon Valley power players are supporting the “resistance” and lending their expertise to Democratic campaigns. Unlike undocumented immigrants or other victims of Trumpism, they can count on many GOP politicians to watch their flank until the lunatic storm recedes.

In a future Democratic administration, as is already evident in places like California, the tech titans will use their money, savvy, and new dominance over our communications channels to steer and even dictate America’s political and cultural agendas to wield power in ways that even the likes of J.P. Morgan or John D. Rockefeller would envy.

What started as a brilliant, and profoundly non-political extension of the information revolution, notes early Google and Facebook investor Robert McNamee, now looms as “a menace,” part of a systematic “brain hacking” on a massive scale. We can choose to confront this reality—as the early 20th century progressives did—or stand aside and let the oligarchs chart our future without imposing any curbs on their seemingly inexorable hegemony.

http://www.thedailybeast.com/trump-damaged-democracy-silicon-valley-will-finish-it-off?via=newsletter&source=Weekend

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America is becoming more like the illiberal pseudo-democracies and kleptocracies.

Can American Democracy Survive Against Rising Political Corruption and Privatization?

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In 1932, on the eve of FDR’s presidency, Benito Mussolini proclaimed, “The liberal state is destined to perish.” He added, all too accurately, “All the political experiments of our day are anti-liberal.”

The democracies were doomed, Il Duce declared, because they could not solve crucial problems. Unlike the dictatorships, which were willing to forcefully use a strong state, the democracies could not fix their broken economies. Parliamentary systems were hamstrung politically. The democracies were also war-weary, conflict-averse, and ill-prepared to fight. The fascists, unlike the democracies, had solved the problem of who was part of the community.

Mussolini’s ally, Adolf Hitler, was further contemptuous of “mongrelization” in American democracy. Who was an American? How did immigrants fit in? What about Negroes? The fascist states, by contrast, rallied their citizens to a common vision and a common purpose. Hitler was quite confident that he knew who was a German and who was not. To prove it, he fashioned the Nuremberg laws; he annexed German-speaking regions of his neighbors. As Hitler infamously put it, Ein Volk, ein Reich, ein Fuehrer.

Though he was a buffoonish dictator, Il Duce was not such a bad political scientist. In the 1930s, a lot of liberal democrats wondered the same thing, and for the same reasons. As Ira Katznelson wrote in Fear Itself: “Such beliefs and opinions were not limited to dictators and dictatorships. As Roosevelt prepared to speak [in his first inaugural], skepticism was prevalent about whether representative parliamentary democracies could cope within their liberal constitutional bounds with capitalism’s utter collapse, the manifest military ambitions by the dictatorships, or international politics characterized by ultranationalist territorial demands. Hesitation, alarm, and democratic exhaustion were widespread.”

The democracies did survive, of course, and they flourished. The New Deal got us halfway out of the Great Depression, and the war buildup did the rest. Fascism was defeated, militarily and ideologically. The collapse of Soviet communism took another half-century. Thanks to the wisdom of containment, Stalinism fell of its own weight, as both an economic and political failure.

Not only did the democracies endure—by the 1980s, America had broadened the inclusiveness of its polity. Europe had embarked on a bold experiment toward continental democracy. In the final days of communism, there was triumphalism in the West. Francis Fukuyama even proclaimed, incautiously, in his 1989 essay, “The End of History?” that all societies were necessarily gravitating toward capitalism and democracy, two ideals that were supposedly linked.

***

Today, it is Mussolini’s words that resonate. Once again, the democracies are having grave difficulty pulling their economies out of a prolonged economic slump. Once again, they are suffering from parliamentary deadlock and loss of faith in democratic institutions. The American version reflects a radically obstructionist Republican Party taking advantage of constitutional provisions that Madison (and Obama) imagined as promoting compromise; instead, the result is deadlock. The European variant is enfeebled by the multiple veto points of a flawed European Union unable to pursue anything but crippling austerity. Once again, several anti-liberal alternatives are on the march. “All the political experiments of our day are anti-liberal.”

Take a tour of the horizon. Mussolini would not be surprised. The fastest-growing economy, China’s, is nothing if not anti-liberal, and getting steadily more adroit at suppressing liberal aspirations. The Beijing regime, which has learned the virtues of patience since Tiananmen, waited out the Hong Kong protests and efficiently shut them down. The Hong Kong elections of 2017 will be limited to candidates approved by the communist regime on the mainland. Capitalism was supposed to bring with it democracy and rule of law. But the Chinese have been superbly effective at combining dynamic state-led capitalism with one-party rule.

What unites regimes as dissimilar as Iran, Turkey, Hungary, Egypt, Venezuela, and Russia is that they combine some of the outward forms of democracy with illiberal rule. The press is not truly free, but is mostly a tool of the government. Editors and journalists are in personal danger of disappearing. There are elections, but  the opposition somehow doesn’t get to come to power. Minority religion and ethnic groups are repressed, sometimes subtly, sometimes brutally. Dissidents, even if they break no laws, risk life and limb. The regimes in these nations have varying degrees of corruption between the state and economic oligarchs, which helps keep both in power. In Hungary, a member of the E.U., which is a union of liberal democracies, Prime Minister Viktor Orbán has expressly invoked the ideal of an illiberal state. In Turkey, Recep Tayyip Erdogan has dramatically increased enrollments in state-supported religious schools and automatically assigned some children to them, against the wishes of their secular parents.

Turkey is a stalwart member of NATO. Elsewhere in the Middle East, our closest allies don’t even go through the motions of democracy; they are proud monarchies. Israel, our most intimate friend in the region, is becoming less of a democracy almost daily. Israelis are seriously debating whether to formally sacrifice elements of democracy for Jewish identity. And this tally doesn’t even include the flagrant tyrannies such as the insurgency that calls itself the Islamic State, or ISIL. All the political experiments of our day are anti-liberal.

Ironically, some liberals are pinning great hopes on recent stirrings in a venerable institution of hierarchy, autocracy, secrecy, and privilege that has been the antithesis of liberal for nearly two millennia—the Catholic Church, now under a reformist pope. One has to wish Francis well and hope that his new openness extends to the entire institution, but these reforms are fragile. It has been a few centuries since the Church murdered its rivals, but in my lifetime the Church was very cozy with fascists.

One of the great inventions of liberal democracy was the concept of a loyal opposition. You could oppose the government without being considered treasonous. A leader, conversely, could be tossed out of office by the electorate without fearing imprisonment or execution by successors. In much of the world, this ideal now seems almost quaint, and certainly imprudent. A corrupt or dictatorial regime has much to fear from displacement, including jail and even death at the hands of an opposition in power.

There are a few bright spots. Some of Africa has managed to have roughly free and fair elections. South Africa’s young democracy is fragile, but seems to be holding. Some of the Pacific Rim is moving in the direction of genuine democracy. Many former Soviet satellites in Eastern Europe are functioning democracies, even liberal ones. And democratic aspiration is far from dead, as events in Ukraine show. Latin America has more democratically elected governments than it has had in a generation, but it also has several nominal democracies that are illiberal, or prone to coups, or simply corrupt. Mexico, our close NAFTA partner, epitomizes illiberal democracy.

***

But it is the democratic heartland, Europe and North America, that presents the most cause for dismay. Rather than the United States serving as a beacon to inspire repressed peoples seeking true liberal democracy, America is becoming more like the illiberal pseudo-democracies and kleptocracies. A dispassionate review of what is occurring in our own country has to include deliberate suppression of the right to vote; ever more cynical manipulation of voting districts in the nation that invented gerrymandering; the deepening displacement of citizenship with money and rise of plutocracy; the corruption of the regulatory process; a steep decline in public confidence in government and in democracy itself; and a concomitant doubt that democratic participation is worth the trouble. In my piece in this issue’s special report, I address some of these questions in the context of markets versus government, but the challenge goes much deeper.

Obstruction feeds public cynicism about government. Though the mischief and refusal to compromise are mostly one-sided—it is hard to recall a Democratic president more genuinely eager to accommodate the opposition than Barack Obama—the resulting deadlock erodes confidence in democracy and government in general. Why can’t these people just get along and work for the common good? Democrats, as the party that believes in government, take the blame more than Republicans. Government’s failure to address festering, complex problems feeds the dynamic.

This is all the more alarming because the challenges ahead will require strong government and above all legitimate government. At best, global climate change and sea level rise will require public coordination and some personal dislocation. Transition to a sustainable economy demands far more intensive public measures, as well as public trust in the hope that changes in old habits of carbon energy use need not result in reduced living standards. The risk of epidemics such as Ebola will require more effective government to coordinate responses that the private sector can’t manage. The popular frustration with flat or declining earnings for all but the top demands more government intervention. Weak government can’t accomplish any of this. Mussolini’s taunt burns: The liberal democracies are incapable of solving national problems.

A generation ago, political scientists coined a useful phrase—strong democracy. The Prospect published some pieces making this case, by authors like Benjamin Barber. Others, such as Jane Mansbridge and James Fishkin, writing in the same spirit, called for more participatory democracy. The common theme was that democracy needed to be re-energized, with more citizen involvement, more direct deliberation. What has happened is the reverse. The combination of economic stresses, the allure of other entertainments, the rise of the Internet as a venue for more social interchange but less civic renewal, has left democracy weaker when it needs to be stronger.

The other contention of the fascists—that the democracies had trouble with the vexing questions of community and membership—was never more of a challenge. In Europe, the poisonous mix of high unemployment, anxiety about terrorism, and influx of refugees and immigrants is feeding a vicious nationalist backlash and nurturing the far right. At home, the failure to normalize the status of an estimated 12 million immigrants lacking proper documents deprives large numbers of residents of normal rights and stokes nativism. Assaults on voting rights even for citizens, coupled with physical assaults by police, make African Americans less than full members of the democracy, despite the civil rights revolution of half a century ago.

Mussolini’s other taunt was that the liberal democracies were too divided and war-weary to fight. When Hitler remilitarized the Rhineland in March 1936, in defiance of the Treaty of Versailles, the democracies did nothing. They dithered right up until Germany’s invasion of Poland in September 1939. As late as 1940, Roosevelt was more eager to keep America out of another European war than to help the British make a stand against the Nazis.

The military challenge today is more complex. America in this century has vacillated between grandiosity and timidity. It fought the wrong war in Iraq, and then may have pulled out prematurely. The administration has been weak and divided in its policies toward Syria and ISIL. To some extent this is understandable; these are hydra-headed threats, with no easy solutions. If President Obama is ambivalent, the public is even more so. Yet the greatest military threats to American democracy are not the risks of invasion or terrorist assault, but what we are doing to ourselves. The Obama administration, like that of George W. Bush, has been all too willing to subordinate liberty to security, secrecy, and autocracy, even in cases where these objectives are not in direct contention.

The risk is not that American democracy will abruptly “perish,” but that it will be slowly denuded of its vital content. If we are to reverse the appeal of anti-liberal society globally, we have to repair our democracy at home. The challenge is multifaceted, and will take time. It should be the great project of the next president and the ongoing work of the citizenry.

Robert Kuttner is the former co-editor of the American Prospect and a senior fellow at Demos. His latest book is “Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency.”

 

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