Silicon Valley and Social Value

Opinion by Sunil Rao
July 24, 2013, 11:22 a.m.

This is the second piece in a two-part series on less celebrated aspects of Silicon Valley. The first piece, on Silicon Valley’s contribution to income inequality in the United States can be found here.


As George Packer ponders in an article in The New Yorker about Silicon Valley and politics, “it suddenly occurred to me that the hottest tech start-ups are solving all the problems of being twenty years old, with cash on hand, because that’s who thinks them up,” with young firms like Airbnb and Uber in mind.

One could put Instagram, acquired last year by Facebook, into the same group. It might seem beside the point to discuss whether these firms actually make the world a better place in addition to simply returning money to shareholders or providing a service or platform for which customers and advertisers will pay. They have no obligation to serve as the harbingers of a better tomorrow, but Valley firms should not pretend that they necessarily perform services that further human kind, as many do.

After all, many Silicon Valley companies lavishly promote the idea that their firm is saving or changing the country or world on a grand scale (the hyperbole of most quixotic startup pitches is evidence enough). According to Packer, however, this may be the exception rather than the norm.

One prominent technologist and intellectual, Jaron Lanier, has argued that technology is doing just the opposite. In fact, Lanier holds the technology industry directly responsible for inequality and the shrinking of the middle class. He observes that information technology and automation have and will continue to destroy middle-class jobs, and eventually even legal research and pharmaceutical and scientific investigation.

He asserts more controversially that information technology has concentrated power in the hands of people who control the largest computers – servers capable of analyzing and employing the large swaths of data about internet-users that companies gather for free.

Aware of our choices, purchases, relationships and movements, companies are becoming able to “predict and manipulate people gradually, over time, shaping tastes and consumption in more effective and insidious ways than even subliminal advertisements do.” Big corporations have been doing this for years.

Lanier’s suggestion is that people should be paid “when information that exists because they exist turns out to be valuable, no matter what kind of information is involved or whether a person intended to provide it or not,” at a price determined by a market.

Lanier’s proposition seems far-fetched as the solution to American economic inequality. It is hard to imagine any company, even the visionary Google, whose advertising revenue depends heavily on its collection of such information, benevolently agreeing to it. In an imaginable future, then, where personal information is the last asset of a middle-class struggling to find stable employment, perhaps Google and Facebook are the malevolent, elite capitalists.

Perhaps only a position at Palantir is as prestigious as one at Google or Facebook among many Stanford students. Their innocent t-shirts abound on our campus – “You had me at ‘Hello, World.’” Yet Palantir conducts analysis of the kind of data and information that many Americans were shocked to learn that their government and its contractors had access to when Edward Snowden leaked classified information to the media several weeks ago.

Has the convenient scapegoat of the financial industry given us an excuse to forget common, reasonable concerns we should have about corporations that crunch Big Data, or from another perspective, the arguably minimal social value of many of the tech firms that grab headlines today?

None of this is to say that Silicon Valley or any particular company or computer technology in general is inherently evil, nor to deny the astounding products, services and ideas that are coming out of Silicon Valley as we speak, or to say that Stanford students should be above making money.

Yet the common arguments that Stanford students should be “above” Wall Street sometimes accompanies the misplaced belief that Silicon Valley is America’s silver bullet and that we as Stanford students are less elitist by association.

And when students casually yet seriously express their openness to government-by-Google (Ggov, if you will) over lunch or a beer, it may be time to step back. The Valley has taken encouraging steps to support immigration and education reform but it surely has the power to do more, perhaps with the influence of forward and outward looking individuals guiding firms from within or pushing against them from without.

Humans have a say in how technological development will actually be put to use – it is not all predetermined. But inequality is increasingly everyone’s problem, and there may be a day when we realize that the magic of the Valley will dissipate as we come to terms with the social value (or lack thereof) of ludicrously financed and universally celebrated technology startups.

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