One of the most memorable characters in the television series Silicon Valley is Gavin Belson, the slick and ruthless CEO of Hooli, a Google-like company. In one of his many pep talks to staff, Belson declares: ‘I don’t know about you people, but I don’t want to live in a world where someone else makes the world a better place better than we do.’
Tech companies, and start-ups more generally, have become synonymous with a kind of progressive entrepreneurialism – a symbiotic union between the quest for profit and a passion for improving the world. It is one of the few parts of the American economy that feels fresh and hopeful, especially when compared with the archaic captains of industry, or the savage wolves of Wall Street. The political class loves them: Hillary Clinton, for example, ran for president on a policy of loan forgiveness for entrepreneurs and employees of start-ups. The pundit class feels similarly: Vanity Fair’s Nick Bilton declared that Mark Zuckerberg would make ‘an astounding president’. Recently, France’s President Marcon tweeted that he wanted France to be ‘a nation that thinks and moves like a start-up’.
A growing number of start-ups are registering as public-benefit corporations, rather than following more traditional routes to profit. Facebook’s mission statement is about creating a more open and connected world; Microsoft wants to empower every person and every organisation on the planet to achieve more; Alphabet, Google’s parent company, aims to organise the world’s information and make it universally accessible and useful. This trend towards social good is perhaps best epitomised in Google’s original motto: ‘Don’t be evil’. In other words, none of these companies simply want to make money or lead their industry; instead, they want to creatively disrupt the planet.
This concept of creative disruption can be traced back to Austrian economist Joseph Schumpeter (1883–1950); the phrase is now used in the technology sector almost as often as the sun shines over California. For Schumpeter, one of the great qualities of capitalism is its potential to generate innovations that improve average standards of living. Money, we are told, is a powerful animating force for improving the processes of production. The profit motive generates ‘the perennial gale of creative destruction’, Schumpeter writes in Capitalism, Socialism and Democracy, which ‘incessantly revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one.’ It is this cyclical process that drives invention and innovation under capitalism – and the individual entrepreneur plays a pivotal role in making it happen. ‘By creating the social space for a new class that stood upon individual achievement in the economic field,’ Schumpeter writes, emerging capitalism ‘attracted to that field the strong wills and the strong intellects.’
Entrepreneurs are a vital catalyst for innovation under capitalism: they initiate creative destruction by coming up with new combinations of resources with which to make things.
Schumpeter argued that entrepreneurialism comes in two forms: there are the bold inventions that change markets and lives, and there are adaptive innovations, implemented by managers and engineers over time, through trial and error and applied learning. The first comes from a subjective rationality exported to the world; the second from modifying ideas to the objective reality. Technology capitalism – if we take that to mean the collection of enterprises thriving on the development of digital technology – finds its mystique in the relentless cultivation of the first subjective form of invention, rather than the second. ‘Most people focus on just building new products, apps, or software,’ writes one start-up founder in a popular Medium post, recounting advice he received from an anonymous tech billionaire (apparently this mystery mogul is ‘self-made’ and ‘humble, kind, and funny’). As they chatted around a California campfire, the billionaire reflected that people should instead ‘be aiming to create new markets that have never existed before’.
No person personifies this spirit better than Nikola Tesla. Eccentric and iconoclastic, Tesla represents the ultimate geek: brilliantly smart but also socially eccentric. Tesla was motivated by bigger things than money (which he constantly seemed to be denied, or cheated out of it) and the received wisdom is that he brought innovations to the world that far exceeded his contemporaries, but without the attending accolades. The mainstream understanding of Tesla’s life portrays him as a spirited advocate for the virtues of the alternating current, unlike his rival Thomas Edison who favoured the direct current. Edison was the plodder, designing his inventions in iterative physical models; Tesla refined his projects in his mind so they seemed to spring into the world fully formed. Edison was the savvy businessman who got his products to market, while Tesla was off running visionary experiments and quickly ran out of money. For too long Tesla was overlooked and undervalued, while Edison went on to become the equivalent of a billionaire in today’s money.
Edison may have won the battle of the day, geeks tell us, but Tesla won the war, with alternating currents now being used in many everyday consumer products, including the eponymously branded electric car. Tesla was a genius, with sufficient self-belief to ignore the social constraints that denied him recognition, and the outcome was his ideas outliving him (despite his lack of business savvy). In doing good, he may have failed to do well, but that was the injustice of his life: Tesla embodied the potential of breaking rules, with a bittersweet legacy. His combination of insouciance and brilliance elicits deep devotion among those who believe in the idea of a meritocracy, where hard work and talent is rewarded. Tesla has become a kind of refracted version of Pepe the Frog for technology capitalism, an icon who is appealing through being a loser; he represents a paradoxical nexus of success and failure.
The spirit of steadfast creative destruction is exactly what the now infamous company Juicero aimed to apply to its idea. Using a combination of unnecessary rights-management software, an onerous subscription regime and pricey organic produce, Juicero attempted to create a market for wifi-enabled cold-pressed juicing machines. The juice packs, which contained mushed fruits and vegetables, cost $35 per week. The large, unwieldy press came onto the market priced at $700, and by some estimates the moulding alone cost at least $1 million to produce. Juicero had received funding from some of the most-respected venture capitalists in the industry. But there was something awry with this glamourous invention: shortly after Juicero’s launch, Bloomberg journalists figured out that the packs could be squeezed by hand.
The Juicero press was marketed as remedial, dispensing nutritious, healthy juice at the press of a button; in reality, it sucked money from its customers, vampire like. The packs themselves bore an uncanny resemblance to intravenous blood bags.
The Juicero story exhibits all the excesses of the technology industry in one neat bundle: the assumption that technological development is inherently good; the overly clever design with shortcomings that appear patently obvious to outsiders; the zeal for throwing vast sums of money at a brazenly ostentatious product in a time when many struggle to meet their basic needs. How did we get to a point where inane products are designed and financed by a community that fancies itself the repository of the globe’s brightest minds?
Way back in the nineteenth century, Marx wrote about the dynamic between the forces of production and the relations of production. It was also a topic that fascinated Schumpeter (so much so that he devoted four chapters to understanding Marx in Capitalism, Socialism and Democracy). In the case of Juicero, the forces of production are things like the fruits and vegetables, the chip in the juicer (helpfully surveilling our juicing habits and sending this data back to the mother ship) and the money invested by venture capitalists (over $120 million to be precise). Perhaps most significantly in the digital age, the forces of production also include the human ingenuity of tech workers. The relations of production include the intellectual property rights that protect these kinds of inventions, the salary system that allows companies to hire tech workers, and the rules around buying and selling that create a consumer market for juice.
The start-ups of Silicon Valley are profit-generating enterprises, meaning that all the forces of production are oriented towards creating a market for consumption with a hefty mark-up, using every kind of trick in the book to convince us to part with our money.
The point of analysing these processes is to demonstrate how ideas about productivity and innovation are not natural or immutable, but rather socially determined. ‘Social relations are closely bound up with productive forces,’ explains Marx in The Poverty of Philosophy. ‘In acquiring new productive forces men change their mode of production; and in changing their mode of production, in changing the way of earning their living, they change all their social relations.’ Social relations are fluid and have historically been responsive to how the forces of production evolve. ‘The hand-mill gives you society with the feudal lord,’ Marx continues, ‘the steam-mill, society with the industrial capitalist.’
Could it be that the networked computer gives us the beginning of the end of capitalism?
The captains of technology capitalism are doing their best to avoid this. ‘Emotional attachment to the social order,’ warns Schumpeter, is ‘the very thing capitalism is constitutionally unable to produce.’ Silicon Valley has, for some time, served to rehabilitate capitalism, through selling convenience and fun, and through perpetuating the myth that it is the crucible of the best new ideas. But at the heart of that industry remains a project of acquisition and destruction for profit, which looks like a very old way of doing things. (Just ask Elon Musk, the founder and CEO of Tesla and SpaceX, the rumoured model for Tony Stark aka Iron Man and the great white hope of American capitalism. In an interview with the Washington Post, Musk spoke about his desire to colonise Mars, ‘equating the spirit of the missions with the settlement of the New World by the colonists who crossed the Atlantic Ocean centuries ago.’)
The potential of the forces of production is far greater than the relations of production allows; the social relations that govern our current system have outlived their usefulness. This is why the outputs of technology capitalism have become less exciting than we had hoped – instead of innovation, we have conformity. As Tad Friend put it, in his New Yorker portrait of the quintessential venture capitalist Marc Andreessen, co-creator of Netscape (the predecessor of Mozilla) and board member at Facebook: ‘Firms trumpet their boldness, yet they often follow one another, lemming-like, pursuing the latest innovation.’ Instead of flying cars, we have black-ops marketing. ‘The best minds of my generation are thinking about how to make people click ads,’ famously quipped ex-Facebooker Jeffrey Hammerbacher. ‘That sucks.’
Digital technology has the potential to transform some of the most pressing problems facing humanity, like climate change. It has the capacity to provide access to the world’s libraries – to the complete canon of human knowledge – to people everywhere at the click of a button. It can build social spaces that are free from traditional forms of discrimination and bias. Meanwhile, capitalism is marshalling the forces of production towards creating what is essentially an over-engineered version of the opposable thumb. Could this mean that the mode of production will change, and with it social relations?
Perhaps this is the moment, then, to reimagine the nature of innovation and how it works. Schumpeter claimed he was avoiding advocating for a political program, merely pointing out the nature of capitalism. But implicit in his work is a kind of mourning for the gale of innovative regeneration that capitalism creates, a process he believed was under threat – a sentiment that is worthy of unpacking. How can we cultivate the practice of making ‘new combinations’ of resources, as Schumpeter called it, that prioritise improving lives, rather than lining the pockets of the rich?
That is to say, can innovation thrive without capitalism?
The first step might be to rethink the history that got us here, and in doing so create something of a usable past of innovation. Why is it that the lonesome, visionary, tragic Tesla dominates our idea of technological innovation rather than, say, Ada Lovelace, who way back in the 1840s invented the first computer program and was – gasp! – a woman? Lovelace was interested in tinkering for the sake of exploration, and furthering knowledge (as with the history of academia, or, more recently, hacking). Her story jars with the colonist mentality of Musk and co, perhaps in part because the alpha men who dominate technology capitalism do not genuinely value a diversity of life experiences.
Why is it that when we celebrate visionary innovations we think of Steve Jobs and Bill Gates, rather than, say, Tim Berners-Lee, the inventor of the World Wide Web? Berners-Lee worked at a research organisation funded by major public investment, an environment where there was room to explore and colleagues to bounce ideas around with. He elected not to commodify and profit from his invention. These are probably related. They highlight how the process of invention is commonly a collaborative, rather than isolated, effort: it is rarely the story of a profit-driven individual impressing their genius on the plebs. A close reading of Schumpeter reveals his understanding of this, and, in part, this is why he valued monopolistic enterprise where objective innovations could be explored (a somewhat rare position among those who value modern free-market economics). Even Tesla, the archetypal great subjective thinker, worked in a social context, as Bernard Carlson touches on in his biography of him: ‘For ideas to become disruptive technology, inventors must balance imagination and analysis not only in their own minds but also in relationships with their backers.’ Innovation is ultimately a social process – a negotiation between nature and society – that involves personal relationships (with partners and financers) and collective relationships (with users and tinkerers). People have to use things that entrepreneurs create; greater engagement and influence in both directions improves the likelihood of new and useful ideas. In other words, much more can and should be made of the collective context in which innovations come about – a process that is, incidentally, facilitated by digital technology, but currently held back by oppressive intellectual property laws designed to protect profitability. Open-source software has proven the value of collaborative innovation, but closed proprietary software, protected by copyright and patents, is the dominant form of software production under capitalism.
The time is ripe for us to argue for a new collaborative approach to the work of innovation. ‘The standard explanation today for why a new technology is introduced is that it is either a response to market demand or the result of scientific discoveries,’ Carlson writes. But people flock to Tesla as an icon because some people struggle to accept this:
[S]ome people would like to believe that new technology should also reflect the values, dreams, and wishes of a culture. Technology is so important in our lives that, for some people, it cannot simply be boiled down to the impersonal forces of the marketplace or the laboratory.
At first, such a view seems at best hopelessly naive, at worst a blind embrace of the ‘entrepreneurial altruism’ propaganda of Silicon Valley. But contained in that sentiment is also a desire for a better way of doing things, for exploring the potential of humanity without the pressures of the market, for using the laboratory as a place to struggle for a better world. In his compelling book Four Futures, Peter Frase talks about the potential for the technological revolution to deliver a world of abundance, one in which problems like climate change are addressed while living standards remain high, and where work is necessary, minimal and fulfilling. ‘Then we could all obey the injunction to “do what you love” – not as a disingenuous apology for accepting exploitation, but as a real description of the state of existence.’ Carlson’s explanation for Tesla’s appeal outlines a want with which left-wing politics can find common cause.
Despite being a committed documenter of the benefits of capitalism, Schumpeter was actually quite pessimistic about its longevity; he expected it to fall apart before long. He shared a commonality with Marx on this front, though they diverged in how they thought the end would come. For Schumpeter, the rise of special interest groups would provide grounds for intellectuals to argue against capitalism and in favour of welfare and redistributive regimes. The elevation of labour interests and bureaucracies, his argument implied, would dull the potential of capitalism to generate innovations that improve the standard of living. It would be a victim of its own success. (It ought not come as much of a surprise that he was not an enthusiastic supporter of democracy – too oppressive to economic freedoms, he thought.)
But there is another way of looking at this demise. If we had a chance to create a system for production ourselves, what might the end of capitalism look like? Maybe it is already happening. If we ignore white saviours like Musk, we can see the beginnings of a possible future among the workers of technology capitalism themselves. The Tech Workers Coalition (TWC) are organising their colleagues, filling a lacuna that has been traditionally underserviced by unions. They are increasingly seeing the class dynamics that cleave a place like Silicon Valley in two, and are responding by challenging the common perceptions of it as a single community or social force. Capitalism is perhaps more resilient than Schumpeter or Marx anticipated, but it is still riven with crises – and these weaknesses can be leveraged for building an alternative.
Here is a place for the left to step up and build a bridge between struggles of the past and our digital future. ‘Traditional organizations need tech workers’ technical skills, and tech workers need to draw on the accumulated knowledge of the history of organizing on the ground,’ says TWC member Matt Schaefer in a recent interview published in Jacobin. ‘It goes both ways.’ As his colleague Kristin Sheets points out: ‘Tech work is crucial to every industry at this point, and it is done by a fairly small group of people. You can shut down quite a lot with a relatively few number of workers if you collectively decide to.’
Strong wills and strong intellects are ubiquitous in Silicon Valley, and the tech world more generally, and they are not all sitting in the executive suite. The dynamism of humanity will surely survive the end of capitalism. The struggle is finding ways to make use of it for the urgent problems we face before it is too late.
First published in Overland 227: https://overland.org.au/previous-issues/issue-227/feature-lizzie-oshea/