Democrats Are Blowing It With Silicon Valley

From a New York Times essay by Neil Malhotra headlined “Democrats Are Blowing It With Silicon Valley”:

One of my most confident, data-based predictions four years ago was that Silicon Valley would grow more influential in the Democratic Party and would move the party to the right on issues related to labor and economic regulation.

I was wrong. The political landscape has completely changed. The Democratic Party has instead become friendlier to labor and increasingly hostile to tech. And Silicon Valley, which since its founding was considered a bastion of progressivism and social liberalism, is moving to the right. The technology industry is the most powerful wealth generation engine in the world, and its products and platforms hold the attention of billions of eyeballs. Given its power and scope, tech could be turning into one of the Democratic Party’s toughest opponents. Although the red wave of 2022 did not materialize, the party still needs to be on the lookout for potential threats.

Take Peter Thiel. An early investor in Facebook, he started out in the early 2010s as a relatively small political donor, focusing his advocacy on libertarian causes and on making the Republican Party more tolerant toward gay rights. This election cycle, Mr. Thiel is one of the G.O.P.’s largest individual donors, giving the bulk of his tens of millions of dollars in donations to Senate candidates and former employees Blake Masters and J.D. Vance. Mr. Vance won his election; both men reiterated Donald Trump’s false claim that the 2020 election was stolen.

Elon Musk, once beloved by liberals for electrifying the automobile industry to address climate change, posted (and then deleted) a meme of himself with Kanye West and Mr. Trump. The day before the midterm elections, and mere days after he acquired Twitter for $44 billion, he encouraged his 115 million followers on the platform to support Republicans running for Congress. (Mr. Musk later added that he was an independent and was open to voting for Democrats in the future.) Three weeks ago, an industry newsletter, The Information, reported that the share of Republican-aligned contributions from employees of Google, Apple, Amazon and Meta this election cycle tripled to 15 percent in 2022 from 5 percent in 2020.

The Democrats are a bulwark against existential threats such as climate change and the erosion of democracy. All of our other public-policy debates, ranging from marginal tax rates to education policy, are meaningless without a planet to live on and democratic institutions that provide the rules of the game. In other words, this is the wrong time for the Democrats to be losing one of this country’s most potent constituencies. And while Silicon Valley bears some responsibility for the fracture, blame can also be cast on the party and on the Biden administration, which at some points has gone out of its way to alienate the tech community.

Things were very different in the Obama era, during which time a love affair bloomed between the Democratic Party and the technology industry. President Barack Obama’s win in 2008 was partially credited to his campaign’s ability to harness the power of social media to mobilize and energize young voters. Tech executives like Sheryl Sandberg, then the chief operating officer at Facebook, were praised for both their business successes and their work on social issues. Several alumni of the Obama and Clinton administrations took lucrative positions in companies such as Uber, Airbnb and Amazon.

In 2017, David Broockman, Gregory Ferenstein and I conducted the first large-scale survey of the founders of technology companies. We found that they were heavily Democratic, with over 75 percent indicating that they supported Hillary Clinton in the 2016 election. Yet technology founders were unusual in that they took liberal positions on wealth redistribution but conservative positions on regulating the economy, particularly the labor market. Their basic worldview is to let the free market operate and then redistribute after the fact through taxes and transfers.

What changed? While our survey found that technology founders were extremely liberal on social issues like gay marriage, abortion and gun control, I question whether the same can be said for more recent social divides around transgender rights, racial equity and the penumbra of other issues surrounding the concept of “wokeness.” And as the pandemic emptied offices, many tech executives spoke out against lockdown policies that were popular among the left. The venture capitalist David Sacks, who supported Gov. Gavin Newsom of California in 2018, donated to the effort to recall the governor in 2021 because of Covid policies, among other issues.

At the same time, the growing, uncontrolled power of Big Tech was fomenting concern on the left. The same social-media platforms that were credited with boosting Mr. Obama in 2008 were blamed for helping Donald Trump in 2016. As populist voices like Bernie Sanders and Alexandria Ocasio-Cortez have gained prominence, so too have concerns with the wealthy tech community and powerful monopolies. Democratic senators across the political spectrum, from Elizabeth Warren to Amy Klobuchar, have proposed legislation reining in Big Tech.

In June 2021, President Biden named Lina Khan, a lawyer who has written influential work criticizing tech monopolies, to head the Federal Trade Commission. Her appointment raised alarm among the tech giants, with both Amazon and Facebook (now called Meta) calling for her recusal in dealing with investigations of the two companies.

One clear source of friction has been the growing influence of organized labor, which has proved more popular with younger workers and has a clear seat at the table in the Biden administration. In August 2021, executives from G.M. and Ford, companies that rely on organized labor, were invited to a White House event on electric cars, but Mr. Musk, whose nonunionized Tesla is regarded as a pioneer in the market, was left out. “The general public is not aware of the degree to which unions control the Democratic Party,” Mr. Musk said this summer. “They have so much power over the White House that they can exclude Tesla from an EV summit.”

On March 1, Mr. Biden mentioned the unionized companies in his State of the Union address but again pointedly left out industry leader Tesla. While Tesla is likely to be able to benefit from tax credits made possible by Mr. Biden’s Inflation Reduction Act, excluding Mr. Musk from discussions on the electrification of the automobile industry was both substantively illogical and strategically foolish. At a minimum, Tesla’s extensive network of superchargers could have served as the basis for expanding charging infrastructure.

The roots of the high-tech industry are embedded in the countercultural movement of the 1960s, so it was perhaps unsurprising that technology elites viewed themselves as part of the left. Now that the left dominates major cultural institutions, some members of the tech community represent the new counterculture.

Of course, a large part of the tech industry — both founders and lower-level employees — remains staunchly Democratic and progressive. Nonetheless, the stirring of shifting political allegiances should concern Democrats. Attempting to rebuild the broad and diverse Obama coalition, which included tech as willing partners, should be a high priority. Finding areas of commonality, including the preservation of the institutions of democracy and capitalism, is the best path forward.

Neil Malhotra is a professor of political economy and the director of the Center for Social Innovation at Stanford’s Graduate School of Business.

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