San Francisco – Queen of the Pacific Basin

The ultimate proof of Brechin’s thesis can be had in today’s Washington Post which describes the phenomenal, dazzling wealth in the City by the Bay, named after the humble Francis of Assisi. We see via this piece that the Great Queen of the Pacific Basin, the Colossus, home of “tech”, presses on to the profitable colonization of the globe and enslaves humanity to the production of valuable bits, for which no recompense is returned to the producers and deception reigns supreme.

The Bay Area is home to more billionaires per capita than anywhere on Earth, one out of every 11,600 residents, according to Vox. The entire region, as far as two hours away, has been affected by spiraling real estate prices. Venture capitalist John Doerr has claimed that the area’s economic growth is “the greatest legal accumulation of wealth in history.”

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But today’s Bay Area is much much more powerful than it was in the period Brechin describes.

Figure 4. “Man’s Great Storehouse of Wealth.” A graphic in the Hearst newspapers celebrates mining as a violent assault upon the “Beautiful Planet Devoted to His Use.” San Francisco Examiner, February 8, 1907. -Brechin, Imperial San Francisco, 2006, UC Berkeley Press

Continue reading “San Francisco – Queen of the Pacific Basin”

California Technology Exports

Check out this sentence. I’ll reveal who wrote it later:

…the American West had been the most fertile field for technical innovation…California engineers exported their technology to the rest of the world and improved on that which they imported from everywhere else.

Interesting sentence, right? The author is making the point that California, particularly the Bay Area in this case, is a hub of technical innovation and engineering prowess.

And indeed it is. I mean just look all around us. Silicon Valley companies dominate the world. Three of the top five technology companies (Google, Facebook, Apple) are headquartered there, and the other two, Microsoft & Amazon, have significant presence in Silicon Valley.

Consider those five companies and what they’ve done. Just as the author alleges, those five companies have found a formula for success; they’ve “imported from everywhere else” elemental technology primitives, things like standardized and open protocols built by academics and expert committees in the IETF, IEEE and other standards bodies. These companies have taken those elemental primitives and packaged them up into new exciting innovations and won dominance in the marketplace with them. How much dominance?

Look at this chart I made in Excel. $3.5+ trillion of market dominance, that’s how much dominance. And notice how few they actually employ compared to other titans of the marketplace. They’re massively efficient. That’s the whole point. That’s why capital is so excited about the Big 5.

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Numbers are out of date reflecting 2017 LTM Revenue & employment numbers but you get the idea

All around the world, people have tried but largely failed to replicate the supposed success of this vibrant hive of technical & engineering prowess. I hear it all the time on podcasts, I read it on Twitter, I read it in blogs. Everyone wants to be Silicon Valley, to be the exciting hub of innovation. Indeed, they want to be the next Silicon Valley, as if this is a repeatable formula there for the taking, as if you could just divine it out of the ether and bam, the next Silicon Valley. 

You see the big 5 marketed endlessly by the apostles of the Disruption Gospel, by the trade press, by us, even when we just think we’re talking about a new device or service. Oh yeah, I love this new feature on my Android. Oh Instagram is introducing end-to-end encryption & direct messaging. People love the products they’re using from these big five companies, and some study them so much they’ve launched ancillary careers just by studying how they work.  I’ve mentioned it before how I admire Ben Thompson, of stratechery.com for the one-man punditry business he’s built atop what he calls Aggregation Theory.

And the founders! We construct mythologies about them too. We build them up into icons. They collectively have more money than God or the tycoons of old.

Now circle your mind back to the quoted sentence. That’s it. Now let’s zoom out:

By 1893, the renowned Canadian mining operator James Douglas could claim that the American West had been the most fertile field for technical innovation in the development of hardware, techniques, and chemistry. California engineers exported their technology to the rest of the world and improved on that which they imported from everywhere else.

The quoted passage is from Dr Gray Brechin’s masterpiece polemic, Imperial San Francisco:Urban Power, Earthly Ruinpublished by University of California Press in 1999, revised in 2006.

Brechin, is, in the words of people I follow on Twitter, my spirit animal. He’s a Geographic Historian who lectures at Berkeley and other universities in the Mountain West. His book -which invokes huge themes about mining, agriculture, cities vs rural areas, and what he terms the Anglo-Aryan race- is all about the conquest of the frontier, and how that conquest was directed by a cartel of mining interests in San Francisco just after the start of the Gold Rush. If you’re interested in Manifest Destiny, you can’t miss this book.

Throughout his polemic, Brechin details the ruthlessness of the early titans of gold & silver mining in and around San Francisco. How they pushed out or simply killed natives. How President Polk, on discovery of gold in California, sparked a war with Mexico and ultimately won control of the west for America. How the early miners scooped up and collected the easy gold first, then pitched a false vision of California to the rest of America and got suckers to move out west for cheap & easy gold. How the miners & miner interests leveled entire forests in the Sierra Nevada, changed the course of rivers, dynamited and blasted their way deep into the scarred earth. And how, once the great con was over, they set their eyes westward again, to spreading the Anglo-Aryan race across the Pacific Basin from the mouth of the Golden Gate.

It’s really a yarn, quite the page turner I tell you. Definitely a great purchase, especially if you’re interested in place and history. Brechin even links the mining & mineral themes almost up to the present day, with the founding of Lawrence Livermore Labs in the east Bay, and its work on developing nuclear weapons.

We see all the time in technology commentary people invoking the same themes Brechin masterfully describes. They talk of atoms versus bits, as in the mining of precious metal atoms vs the mining of non-physical bits, or elements of technology. We ourselves call the titans of bit-mining today founders, and we all listen to the founders as they pitch a vision that, like the mining cartels and newspaper barons before them, results in more wealth accruing to them, and, like the rubes we are, only marginal value for the rest of us*.

It is hardly surprising that the bronze men at the prow of the Pioneer Monument were gold panners working the Sierra placers. California artists almost always depicted the Western miners as free men working under friendly Western skies—not underground,not for others, and not in squalor of their own creation. Such hardy individuals quickly came to symbolize Western opportunity itself, for they were the first to tap untouched bonanzas amid then-unspoiled scenery, and they remain the most enduring agents in the legend of entrepreneurial independence and of he-men living close to nature’s ample bosom.

ibid, Chapter 1, A Promised Land Plundered

And just as the gold miners of the 19th century externalized costs onto society, the environment, indigenous peoples, the Chinese,so too do the mining titans of the 21st Century externalize their costs onto our society. 

These founders, and the people working to sell the vision have, like the mining cartels before them, become digital prophets and invoke almost with religious intensity the themes of the frontier, the very words & phrases of Manifest Destiny.Simon Wardley, for instance, has built another business atop bits and bit mining. He calls them Wardley Maps, and they offer strategic advice and interesting mapping techniques to software engineers & technology companies. Wardley consistently uses the words pioneers, settlers, town planners and ‘uncharted’ as if there’s still more frontier left to exploit.

Untitled pictureThe founders in charge of today’s mining cartels have been using these words and phrases for more than a decade. I just don’t think we realized they actually meant what they were saying.  I think we all got confused by the razzle dazzle of what we saw on our screens, and so we listened to and trusted the razzle dazzle prophets and founders. In short order, we’ve all adopted the language of this new frontier. We’ve all taken Manifest Destiny a step further, even if we’d object to the old Manifest Destiny in principal if not in our history. Because we don’t see the metaphors the founders use for what they truly are: actual frontier-speak. 

The founders’ conquests are occurring in and around San Francisco, where the last frontier closed a little over a century ago. It’s a place that, on the surface, looks much different than the one Brechin details in his polemic. Yes, there is chronic homelessness and skyrocketing rents on the surface, but no one could claim San Francisco or the Bay Area is uncivilized, that it is not a world class city, that most people feel safe there.

But San Francisco -and the Bay Area- always looked beautiful. It’s a beautiful and lovely place. As beautiful as it was in 1898 to be sure, probably more so. But that’s just the surface. You’ve got to dig deeper, you’ve got to peer across whatever industry vertical you work in in 2019 to see the real costs. To see the con and misdirection. Until you do that, you’ll miss the externalized costs and exploitation of the 21st century mining cartels. You need to look at the razzle dazzle on your screen and realize the words you’re seeing are deceptive, that the metaphors have been used to misdirect you, to create a ‘smoky hall of mirrors’ effect, as I called it in an earlier essay. And then you’ve got to read the news and study it and think about it: Rohingya violence, violence in India, the amplification of bad information, anti-vaxxer ads, measles cases soaring, the flat earth, white supremacy on the march, and so much more. All of it organized, spread, and amplified at lightning speed with tooling created by the founders, their cartels, and the engineering prowess of the Bay Area.

tahoeAs Brechin would point out, the costs of the first mining cartels were hidden from the eyes of the wealthy urbanites in San Francisco as they extracted value out of people and the land far away.  They never saw the destruction of old growth Sierra Nevada forests because they didn’t want to see it. They never saw the Chinese Coolies -practically slave labor- herded into railcars and dispatched post-haste once the mining was done and the railroads were built. They never saw the mud and floods as millions of metric tons of toxins and earth flowed down the Central Valley and into the Bay itself. They never saw any of the costs because those costs were intentionally remote.

But in our age, we do see the costs. The exploitation. We see the costs all the time and everyday on our screens, if we just flip the script and study a little bit. You see the costs and you even think about the costs in the privacy of your own home, with yesterday’s Momo freakout. You see the costs but you don’t conceive of them as costs on you or your loved ones. You think of them as social media problems or platform abuse. 

Zoom out a bit, and the vista becomes clear. You see that the founders imported the elemental primitives of 20th Century standards bodies -things like TCP/IP, SMTP, and DNS, the WWW, and packet-switched networking- and got busy constructing and exporting Manifest Destiny 2.0 with those elements. And they’ve been telling us what they’ve been doing the whole time, we just didn’t realize it.

*I have noted in a previous essay how wonderful these technologies have been for women, People of Color and LGBTQ folks. I celebrate their agenda and the fact that they are seizing real political power long denied to them in the old, physical world. The value & benefit to them is immense, and I acknowledge that, and I want to ally with them in my politics. But this essay explores the costs side of the equation.

On the Advocacy & Entitlement of tech workers

Google backs out of Pentagon cloud contract after workers protest20,000 Googlers walk-out to protest sexual harassment and workplace discrimination….Microsoft workers protest use of Halolens by US ArmyGooglers protests AI board..Google closes AI board..Microsoft workers stand-up for Chinese tech workers….Googlers claim retaliation for walkout….

On and on over the last 18 months we’ve seen headlines and stories like this, stories about political advocacy at what are technically -and legally- private workplaces, but which, in reality, function differently. We see these stories on our screens, and we read about the workers and their workplaces, but what are all these stories really about? Are we seeing the birth of a proto-labor movement, or is this something else? Why did I feel support & solidarity with Googlers walking out following sexual harassment at their workplace, while secretly resenting their ability to organize & protest?

Their Workplace and Our Workplace

These are workplaces where all the familiar trappings of American workplaces are present. Por ejemplo, if a Google workplace is in California, I’m 100% certain there’s a “Your rights & responsibilities” placard in the facility that’s meant to inform workers of their rights. There’s likely OSHA placards too. Information about worker’s comp. Minimum wage notices. Exit signage. Fire & building regulations. There’s probably compliance hotlines for employees to dime on bad or unethical behavior they see at their employer. All the legal trappings and rights that labor won for us politically in the 20th century, all those things are at Google, at Microsoft, at Amazon, just like they are at your workplace & my workplace, no matter how big or small it is.

Untitled
A Googler is entitled to complain publicly about workplace politics and decisions and to even hire counsel to assist in their complaint

And yet, step back, and these tech workers enjoy much more liberty -indeed, are entitled to more rights- at their workplaces than we are at our’s. So much liberty, in fact, they can be themselves on our screens. During work hours even. Rarely do they have to say, “Thoughts & Opinions expressed here are mine nad mine alone and do not represent those of my employer, ” like I have to say. They can even show off the gifts they’ve received on social media -no need to disclose how or why they are receiving compensation from other companies- they can just show it off.

They are evidently entitled to so many rights within their workplaces, they can even criticize their superiors in public, by name. Wild!

Meanwhile, the rest of us don’t have that power. We’d be fired *instantly* if we did a 10th of what the tech workers do.

The Tech Workers’ Entitlement to Rights We Don’t Have

This then, is their entitlement, their privilege. They are entitled to lobby and organize and effect political change at their workplace -which intersects with our workplaces & homes by virtue of the internet, our screens and their products-  during work hours, while we cannot do the same at our’s. What explains that and what are their goals?

Well, their entitlement to rights we don’t have springs from their ability to code a world -a frontier- that achieves returns in an effecient manner for the shareholders. They are, in effect, hired guns building out a frontier that ultimately will deliver a reliable annuity to their sponsors, the bank*. Let’s take a look at this chart I made in Excel to understand how this works.

marketcap

Particularly pay attention to the revenue per employee number & market cap/employee. Those numbers are the Rosetta Stone for divining the political power of these tech workers, and indeed, the economic model that SiliconValley itself uses in its conquest of the world, and of the 20th Century’s verticals.

Notice that, for instance, every Google employee generates almost $1.4 million worth of revenue for the company. A Costco employee, on the other hand, generates only about half that much. Notice too that the Googler’s share of market cap (this chart was done on 2017 numbers but generally is accurate) is almost $9 million, 18x that of the Costco employee’s share of that corporation’s market cap.

Apple’s revenue/employee figure is off the charts too. Nearly $2m of revenue is generated by each Apple employee**. Microsoft & Amazon’s are more modest -particularly Amazon’s due to the larger number of people they employ- but even they are able to protest and organize politically at their workplaces, though their employees seem to make fewer waves as compared to Google’s.

Facebook employees, in contrast, are the great outlier. What little we hear from inside Facebook comes from ex-employees. The firm, like Apple, seems to have a stronger management culture than Google, but a less politically aware one. But notice that Facebook -whose revenue per employee numbers are very high- outsources the dirty work of managing its frontier to third party firms. We recently heard from one company’s employees about the work they do to moderate content on the Facebook frontier. It was not a happy story.

Now look at Walmart: Walmart employs almost 3 million people yet its revenue per employee is the lowest of the bunch, as is its market cap/employee figure. How often do we hear from Walmart employees?

The Political Objectives of some Big Tech workers

Every political movement needs to unite disparate and sovereign peoples under a banner of change and a well-understood set of objectives. Typically, we calll this an “agenda” or even a manifesto. As best I can tell, the tech workers’ agenda is this:

  • To have a say in how AI Systems are built and work, such that these products don’t discriminate or target marginalized groups inside the company and outside the company
  • To be free to not work on products that will be used by the US military, public sector governments, or even cities and municipalities
  • To blunt or evade the power and sovereignty of foreign nations like China by delivering products that guarantee anonymity, encryption, and privacy on the internet in opposition to China’s or another nation’s laws
  • To freedom at their workplaces from harassment & discrimination
  • To not be censored at work, and to not have their external communities be censored within the products they build

Notice, this is very much a political agenda.  These -apart from harassment & discrimination- are not things most people working in most workplaces expect or demand to have a say in. I certainly don’t at my work place. We use our government for that. We go to the polls for that. We pester our representatives in government to write laws for this kind of stuff.

But on the frontier, there is no government and there is no law.

Notice too that these employees’ demands are not material. That is to say, they aren’t about compensation, a shorter work week, more time off, or a greater share of revenue. They are not about the relationship of the employee with the employer, largely. They are more about product development, about the next stage of the conquest of the frontier.

Notice too that these employees are free to leave the employ of their workplaces, just like you and I are. But they largely….don’t.

And notice that largely, these employees are looking out for their own cohorts’ interests in the development of those products. Not your’s necessarily, nor mine necessarily.

And unlike my workplace, or your workplace, the work these employees do at their workplace intersects and impacts us at our homes and work. Daily. Globally. Their work impacts you and me, and our loved ones, and people as far away as Myanmar, South Africa, and New Zealand.

Mostly, I like their agenda. But it’s inherently a non-democratic agenda because I have no say in how the products are being developed. It’s an agenda that includes some laudable aims & goals -especially as it pertains to empowering marginalized groups- but it’s still an agenda that’s predicated upon their employers & sponsors conquering what little remains of Hannah Arendt’s ‘public’ and all the institutions thereof. It’s an agenda not necessarily at odds with Zuboff’s surveillance capitalism, so long as their cohorts are protected -favored even- on the frontier.

And I’m not sure I’m okay with that.

*I call this arrangement Capitaltech, and you can see how it works here, in this chart which I made in Visio, based largely off Everett Rogers’ Theory of Diffusion of Innovation with some bits added on from Wardley & Brechin.

**Notice Apple still primarily designs, builds and sells tangible products to customers. The business is therefore different & relationship between buyer & seller is transparent and easy to understand