Silicon valley and America’s economy

Newsweek reveals that as of mid 1999, Silicon Valley was home to roughly 250,000 millionaires. On average, people were becoming millionaires at a rate of 64 a day, while Regional Financial Review reported in the 1990’s, Silicon Valley had an average annual growth rate of over 4%, more than double the US.-wide growth rate. Price-Waterhouse Coopers on its part disclosed that in the third quarter of 1999, the Silicon Valley region of California received USD 3.3 billion in venture capital investment. That was roughly equal to the total amount received by the next five largest United States technology centers.

According to Public Policy Institute of California, Chinese and Indian chief executives ran 13% of Silicon Valley’s technology companies started between 1980 and 1984 — and 29% of those launched between 1995 and 1998. Washington Post reported that as of 1998, more than 35% of Silicon Valley programmers and computer engineers are foreign-born.

According to Robert Atkinson, President of the Information Technology and Innovation Foundation, the Silicon Valley dream machine is a unique meld of angel, spiritual guide, dating service, matchmaker and, not least, source of seed money for start-ups. It is an organizational species all its own whose native habitat is a roughly 100 square mile zone of suburban sprawl located 50 miles south of San Francisco.

Robert Atkinson noted that Silicon Valley has no natural predators. It can always beat any potential competition indirectly first by adopting the idea and then offering an array of niblets, so that whatever good new idea becomes grist for the alphas of the Valley’s IT food chain. Key players in Silicon Valley like to say they gather America’s “best and brightest” from elite United States universities.

Robert Atkinson further argued that, these youngsters march to the tune of a Pied Piper who has instilled in them a very special belief and destiny that they are building a wondrous global community wherein all humanity are in touch with each other. They can achieve all that glorious stuff while still having one hand free to write code. No wonder then that Silicon Valley and its annex, the San Francisco sandbox, is a world populated by juveniles. As Robert Atkinson explained it well, the phrases that jump to people’s mind are: instant gratification; impulsive; narcissistic; thin-skinned; inability to empathize; naïve; relentless ambition; shortened time horizons.

The only denominator of success in Silicon Valley, of reputation, of status and the pleasures that money alone can provide are cold, hard cash and stock options. One crucial question here is that where do these masses of lucre come from that propel the IT world? It is astonishing only on the surface. True, the hundreds of millions of people, now well over a billion users for Facebook, often into the far reaches of India which is now the world’s biggest Facebook nation, don’t pay for the service overtly. Being a citizen of the Facebook empire is pretty much free.

However, users pay indirectly. Every user is also a consumer. That is what all those code writers, venture capitalists, etc at the summit of the Silicon Valley pyramid have in their sights. Michael Brenner, Professor Emeritus of International Affairs at the University of Pittsburgh stated that, they want a precisely defined target whose features and preferences they can explore with data.

According to Michael Brenner, we gladly provide every time with fodder for their algorithms every time you post a blog comment, click on a site, make searches or reach out to some stranger in the desire to create a better connected world. A lot of brainpower devising sophisticated techniques is deployed in the operation, metadata, key word filters, algorithms, dummy variables, etc. The net result is that vast amounts of national wealth are funneled into the pockets of the Zuckerbergs, Gateses, Thiels and numerous others, plus many, many more minor IT wizards of less renown.

They, in turn, use their wealth to achieve their own, self-defined larger purposes. Michael Brenner adamantly argued that, for Bill Gates, the target of his fancy is to replace the public school system in the United States with a motley array of Charter schools established by whomever for fun or profit or indoctrination. Google actually is an exception. The super-rich founders of Google generously fund causes in particular environmental ones, with a minimum of posturing, compared to that of the Zuckerberg variety.

According to Michael Brenner, for all the glitz, let ’s not overlook the legions of talented persons who are the worker bees of the IT hives. Most are well rewarded in salary, perks, stock options and multiple other forms of gratification derived from being part of the Silicon Valley scene at least until their hormones and metabolism start to give out at the end of their thirties.

Michael Brenner further argued that today, the vision is of “monetizing” data brokerage skills. So the world turns. It is hard not to regret what opportunities are being wasted by having such a large fraction of the nation’s resources swallowed up by the antics of the Silicon Valley world and equally unproductive antic worlds of Wall Street, the Pentagon and the NSA. The crumbs and cast-offs that are left cannot prevent the long decline on which we already are embarked.