Keeping The Benevolent Dictators Of Silicon Valley Honest

from the is-that-any-way-to-build-an-internet? dept

I don’t think I’ve ever had more people send me a single blog post than a blog post from earlier this week by Rebecca MacKinnon discussing her worries about “Silicon Valley’s benevolent dictators.” It’s an interesting read that brings up some excellent points. It starts off pointing out the rather insular view many folks have in Silicon Valley about “the rest of the world” and the sort of hubris that comes out of the Valley on a regular basis. That, of course, is nothing new, and is a criticism that has been leveled at Valley inhabitants for many, many years. And, indeed, there is a “clubby” nature to Silicon Valley at times, that has both good and bad sides to it.

MacKinnon points out, correctly, that Silicon Valley-ites also tend to put blind faith into the idea that technology = freedom, and freedom = good, in a rather libertarian sense. Again, that’s been said before. But then she points out something of a contradiction in all of this libertarianism, by noting that in fighting against any government regulation while putting all our faith in technology, we actually end up with a system of “benevolent dictators” made up of the folks who control the technology we put our faith in. That is, she worries that in rejecting government regulation, we’ve approved a defacto dictatorship in the form of the companies we put our trust in. In some sense, this is channelling Jonathan Zittrain’s pessimism about what happens when those benevolent dictators turn away from benevolence.

Basically, what both MacKinnon and Zittrain are pointing out is that technology is just a tool. It can be used for good or for bad purposes, and it’s part of Silicon Valley’s hubris to assume that good will automatically win out in the end. That is, we’ve been mostly blessed, because the people putting such tools into practice are doing it for good (benevolent) reasons, but there’s always a risk that someone else will do something much worse with it. It’s a fantastic point, and one well worth thinking about, but I think the assumptions are a little bit wrong.

It’s not necessarily a blind faith that “technology” and “capitalism” are flat out “good,” but more a recognition that an expanding market tends to open more opportunities for everyone, and the end result of that expansion is good at a macro level. Capitalism tends to remove the barriers for growth, while technology (or, more specifically following Paul Romer’s thesis, “ideas”) are what then creates that growth. Capitalism is about removing the barriers, and technology and ideas are about enabling that growth. That doesn’t mean that there aren’t downsides to both — but the net gain does appear. And, one thing that has become incredibly clear throughout history is that it’s nearly impossible to take away that net gain once it appears. And, conversely, asking the government to create those net gains instead almost always fails, due to the difficulty in accurately regulating a market.

In other words, by removing the barriers and enabling the potential, you’ve almost guaranteed that when someone tries to use the tools for less-than-benevolent reasons, it only opens up strong demand for someone else to provide the equivalent (or better) in a benevolent way again. And, at the same time, in asking the gov’t to manage the benevolence, you almost guarantee less opportunities to actually provide good tools, because you’ve added hurdles they need to jump through. Yes, there can be bumps in the road — and, no, it’s not always a fun process along the way. But enabling for growth is not blind faith. And, there are plenty of checks and balances in place that should these “benevolent dictators” turn authoritarian instead, the end result (or “revolt” as the case may be) can often be strong enough to deal with it.

So, yes, there may be some benevolent dictators in Silicon Valley — but they’d be hard pressed to successfully ditch that benevolence without paying a huge price.

Related to this, I’ve recently been doing a presentation for various corporate execs (almost all from outside the US) on “What Makes Silicon Valley Silicon Valley.” It’s probably my favorite presentation, because it’s fun and it usually challenges a lot of the assumptions many people have about why Silicon Valley has been so successful for so long — that is, while it discusses some of the “common” reasons, it focuses more attention on the hidden, unexpected and accidental reasons for why Silicon Valley became what it did.

The last time I gave it, I ended up getting into a huge discussion with some European execs who pointed out that many of the explanations seem to run almost entirely counter to what many countries who try to set up their “own” Silicon Valley think. That is, many folks look at Silicon Valley and try to replicate the outward manifestations (a good university, some venture capitalists) and miss the underlying details that create the real culture of Silicon Valley, because they almost seem counterintuitive. And the most basic element of this is enabling the free exchange of ideas (that engine for growth). Instead of doing that, most focus on protecting ideas and limiting that free exchange, falsely believing that hoarding information beats sharing information (even with competitors).

So, what happens is that other countries set up their own Silicon Valleys by focusing on protectionism (greater intellectual property rules, non-competes, hugely funded labs), and ignore the power of the cross pollination of ideas and people throughout Silicon Valley, which make it that much more difficult for any single company to abuse the trust of the people they serve. Should any company turn away from benevolence, that openness almost guarantees a more open competitor shows up in return (sometimes with the same employees from the older company). That openness drives innovation, but also keeps these benevolent dictators honest.

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Comments on “Keeping The Benevolent Dictators Of Silicon Valley Honest”

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30 Comments
Mike (profile) says:

Re: Re: Re: yeah right...

He also happens to disagree with the Founding Fathers and the US Constitution…

You amaze me sometimes, angry dude. We’ve explained, repeatedly, using exact quotes, how we very much agree with the Founding Fathers. Their goal with IP was to promote the progress.

We are simply pointing out how the current IP system does not do that — which they were certainly afraid was a possibility.

So, we’re in near perfect agreement with the Founding Fathers.

What they were most afraid of is the system you like: the one which is easy to abuse (and you are the first to admit that the system is regularly abused).

Kiba (user link) says:

Call for Abolishment!

I call again, for the abolishment of the patent and copyright system!

The premises that copyright and patent can benefit society is a bunch of BS because fundamentally, monopolies doesn’t work.

It has been shown throughout history, through the free software sector, the agriculture industry, the pharmaceutical industry, and more that competition WORK! And that monopolies create economic inefficiency through the wasteful allocation of resources such as suing people instead of inventing.

So all this talk of “reform” is nonsense. It is like trying to institute a kinder form of slavery, even though slavery is still wrong.

So what is stopping you guys from saying that monopolies need to be abolished?

angry dude says:

Re: Call for Abolishment!

You can call all you want, little dude

But there is a litle obstacle called “US Constitution”
The patent and copyright law is enshrined in the US Constitution – might be a little difficult to convince general folks (not the techdirt punks like you) that the constitutional principles are somehow fundamentally wrong…

Mike (profile) says:

Re: Re: Call for Abolishment!

The patent and copyright law is enshrined in the US Constitution – might be a little difficult to convince general folks (not the techdirt punks like you) that the constitutional principles are somehow fundamentally wrong…

No one is arguing that constitutional principles are fundamentally wrong… other than you.

We’re arguing that those principles are quite sound. That such monopolies should be granted solely for the purpose of promoting the progress.

You are the one saying that they should be granted even in absence of promoting the progress.

Brian Hayes (user link) says:

Theory of the Game

Sitting on the porch observing the flow of sand! Look, the government is a blockage there. And there. And there. Look, the despot has fallen into the rush of that quicker sand with the better deal. Isn’t unfettered sand fun? And so much meritocracy too. Let’s see if we can follow along, network to matrix, matrix to node, to coin this modern ode.

But the issue isn’t that government makes markets or creates and controls economies. Gee whiz, when will this commie analogy quit?

Restraining brigands, keeping us safe, and assuring we are free will be nice though. Injustice isn’t a theory. Poisoning coastlines…all the waste of pillage! There is no real argument on the table that says the American government is best if it controls the economy or it does not. The thing is only that our representatives carry on our good nation. Good government is damn needed.

Bart says:

Dictators...

… require power and ultimately depend on force to maintain their power. In the absence of patents if the “Benevolent Dictators Of Silicon Valley” were to become abusive people would just abandon and ignore them. However, through the use of the patent system these so-called dictators have established a relationship with the US government (and others) through which they can ultimately call upon force for protection. Eliminate patents and you eliminate their power to abuse.

Anonymous Coward says:

Capitalism is Good

Starting from the position that capitalism is the least worst economic solution, you are being a little less than fully honest (or being naive) about capitalism necessarily tending to remove the barriers to growth – all the capitalists who push for copyright and patent laws highlight that capitalism is inherently monopolistic – to maximise profits you limit the ability of your opponents to compete

Mike (profile) says:

Re: Re: Capitalism is Good

… for people with capital.

it’s awesome if you are a big corporation or super rich and can afford an army of lawyers and bankers to help you raise capital.

it’s not so great for the rest of us.

Really? So, let me ask you this: If you are a small player without access to capital, how are you better off in a scenario where the gov’t manages everything and determines who gets what. In that scenario, you have less competition, meaning higher prices for you, and less innovation, meaning worse products.

I don’t see how that’s beneficial at all.

Tony (user link) says:

Re: Re: Capitalism is Good

“it’s awesome if you are a big corporation or super rich and can afford an army of lawyers and bankers to help you raise capital.”

Spoken by someone who has obviously never run a small business.

You know why it takes an army of lawyers and bankers to raise capital?

Because of all the government regulation.

Less regulation makes it easier for the little guy to compete. More regulation makes it harder.

I suppose you would prefer Socialism or Communism? Those really help the little guy, don’t they?

Mike (profile) says:

Re: Capitalism is Good

all the capitalists who push for copyright and patent laws highlight that capitalism is inherently monopolistic – to maximise profits you limit the ability of your opponents to compete

Ah, well, I don’t consider that to be capitalism, but the opposite. Pushing for gov’t sanctioned monopolies is the opposite of capitalism, which is about enabling competition.

Anonymous Coward says:

Re: Re: Capitalism is Good

Ah, well, I don’t consider that to be capitalism, but the opposite. Pushing for gov’t sanctioned monopolies is the opposite of capitalism, which is about enabling competition.

Huh? It sounds more like you are confusing socialism with capitalism. Free market economics are about enabling competition. Capitalism is about maximizing profits and the two are not always the same. Sacrificing individual profits for the greater good of society is socialism. Let me explain.

Publicly traded companies have a legal duty to maximize profits by any legal means. If corporate profits can be increased by pushing for government granted monopolies to eliminate competition then they have a duty to do so regardless of any detrimental effects on the economy or society as a whole. To voluntarily refrain from doing so in the interest of the greater good of society would be a form of voluntary socialism (and illegal). Instead, the individual investors themselves can take their profits and use them in socially beneficial but unprofitable ways, if they so desire.

That is why in a capitalistic system it is important to maintain strong laws governing what corporations can and cannot do, because the companies themselves are expected to be socially immoral and interested only in profits. “Capitalism” and “free market” are not one in the same.

Mike (profile) says:

Re: Re: Re: Capitalism is Good

Huh? It sounds more like you are confusing socialism with capitalism. Free market economics are about enabling competition. Capitalism is about maximizing profits and the two are not always the same.

I’d argue in the long run, they are very much the same. True competition leads to greater innovation, which leads to greater markets, which leads to greater profits.

Monopolies only lead to greater profits in the short term.

Mike (profile) says:

Re: Re: Re:3 Capitalism is Good

And that is all those corporate CEOs care about: current and next quarter profits and short-term stock performance

Sure. I don’t deny it. But the focus was on what’s best for the overall economy and society. And in those cases, a longer term economic view does make more sense.

I’m not sure what you’re arguing here, other than admitting that the existing system has problems — something we’ve pointed out to you repeatedly, and which you deny repeatedly.

angry dude says:

Re: Re: Re:4 Capitalism is Good

Mikey

you have a real talent for demagogy

If you admit that corporate CEOs do not care much about what’s best for their country and overall economic progress (which you just did) then the next question is: who is gonna steer the business in the right direction ?

I don’t see any other entity capable of doing it other than the Government.
here we go again: government regulation of business, which includes patent rights btw
There is no such thing as free market
You are never free in this world, unless you are dead

Mike (profile) says:

Re: Re: Re:5 Capitalism is Good

If you admit that corporate CEOs do not care much about what’s best for their country and overall economic progress (which you just did) then the next question is: who is gonna steer the business in the right direction ?

No, the problem isn’t the CEOs themselves, it’s the incentive structure created by current regulations. That’s what makes everyone focus on quarterly earnings and short term thinking.

Change that and you change the incentives.

Mike (profile) says:

Re: Re: Re:7 Capitalism is Good

I know of only one incentive for corporate critters:
money, money now, more money, and the quicker the better…

Indeed. Not denying that at all. But the problem is that in the rush to get small amounts of money now, the incentive to get larger amounts of money a year from now, or 10 years from now, is quashed.

Apparently, net present value is a new concept to you?

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