Keeping The Benevolent Dictators Of Silicon Valley Honest

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

Fri, Aug 1st 2008 9:35am — Mike Masnick

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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Filed Under: benevelent dictators, capitalism, culture, economics, entrepreneurship, growth, silicon valley

30 Comments

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angry dude, 1 Aug 2008 @ 10:03am

yeah right...
Mikey gets to discuss some issues of global importance with tech execs all the time, yet he can't find a few minutes a day to familiarize himself with very basic concepts of patent and copyright laws...
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Anonymous Coward, 1 Aug 2008 @ 10:21am

Re: yeah right...
Alternatively, he disagrees with you on the premises of said laws, and you don't have an eloquent means of expressing your difference of opinion.
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angry dude, 1 Aug 2008 @ 10:31am

Re: Re: yeah right...
"Alternatively, he disagrees with you on the premises of said laws"

He also happens to disagree with the Founding Fathers and the US Constitution...
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Anonymous Coward, 1 Aug 2008 @ 10:35am

Re: Re: Re: yeah right...
He also happens to disagree with the Founding Fathers and the US Constitution... /sarcasm

FIXED.
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Mike (profile), 1 Aug 2008 @ 10:36am

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).
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Kiba, 1 Aug 2008 @ 10:49am

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?
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Prophet Kahlil Gibran gives expert advice, 1 Aug 2008 @ 10:54am

Your pain is the breaking of the shell that encloses your understanding.
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Anonymous Coward, 1 Aug 2008 @ 11:00am

"It's not necessarily a blind faith that ...."
But your claims about what the benefits of capitalism are not backed by anything but blind faith ... that doesn't mean you are wrong neccessarily - just blind.
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Brian Hayes, 1 Aug 2008 @ 11:08am

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.
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Bart, 1 Aug 2008 @ 11:16am

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.
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Anonymous Coward, 1 Aug 2008 @ 11:20am

Re: yeah right...
Mikey gets to discuss some issues of global importance with tech execs all the time,...
And yet, angry dude, they don't seem to be very anxious to talk to you do they? I wonder why that could be.
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Anonymous Coward, 1 Aug 2008 @ 12:25pm

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
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chris (profile), 1 Aug 2008 @ 12:45pm

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.
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Mike (profile), 1 Aug 2008 @ 12:49pm

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.
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Mike (profile), 1 Aug 2008 @ 12:50pm

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.
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MLS, 1 Aug 2008 @ 12:51pm

I much preferred Silicon Valley when it was the Santa Clara Valley, and the cross-pollination taking place was when bees moved from one cherry orchard to another.
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angry dude, 1 Aug 2008 @ 12:54pm

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...
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Tony, 1 Aug 2008 @ 2:46pm

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?
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Mike (profile), 1 Aug 2008 @ 3:35pm

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.
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Anonymous Coward, 1 Aug 2008 @ 3:59pm

Re: Re: Re: Capitalism is Good
You know why it takes an army of lawyers and bankers to raise capital?
Because of all the government regulation.
Agreed. If it weren't for the government getting in the way I could take some guns and raise all the capital I needed.
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Anonymous Coward, 2 Aug 2008 @ 9:38am

Re: Re: Capitalism is Good
"...I don't consider that to be capitalism..."
Not understanding what capitalism is doesn't make your argument any more convincing.
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Anonymous Coward, 2 Aug 2008 @ 12:43pm

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.
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Anonymous Coward, 2 Aug 2008 @ 7:15pm

The Benevolent Dictators need to live in a branded community
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Mike (profile), 3 Aug 2008 @ 10:20pm

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.
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angry dude, 4 Aug 2008 @ 6:36am

Re: Re: Re: Re: Capitalism is Good
"Monopolies only lead to greater profits in the short term."

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

You should know it, Mikey

You claim to be an "economics expert" all the time
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Mike (profile), 4 Aug 2008 @ 11:18am

Re: Re: Re: Re: Re: 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.
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angry dude, 4 Aug 2008 @ 1:10pm

Re: Re: Re: Re: Re: Re: 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
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Mike (profile), 4 Aug 2008 @ 3:00pm

Re: Re: Re: Re: Re: Re: Re: 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.
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angry dude, 4 Aug 2008 @ 5:01pm

Re: Re: Re: Re: Re: Re: Re: Re: Capitalism is Good
I know of only one incentive for corporate critters:
money, money now, more money, and the quicker the better...

What do you read before you go to sleep, Mikey ?
"The Little Prince" by Saint Exupéry ?
Nice reading for a 10-year old
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Mike (profile), 4 Aug 2008 @ 5:34pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: 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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