
The New Masters of the Universe: From Silicon Valley, a New Elite Is Coming - nkurz
http://www.spiked-online.com/spiked-review/article/the-new-masters-of-the-universe
======
HillaryBriss
This article has some interesting things to say, and paints a useful picture
of California's politics.

But, I think one of its flaws is that it lumps Tech and Entertainment/Media
into the same category. These industries are somewhat different.

For example, tech employment can be relatively robust for people in San
Francisco and the Valley at the same time as Southern California's
entertainment production workers are losing their jobs to other US states
which offer relatively large tax incentives to production companies and
studios.

And, I think, as a point of comparison, it's interesting that, in recent
years, the California legislature handed the entertainment industry a large
boost in tax credits for productions it kept in state (as opposed to
competitors like Louisiana and Georgia).

And that's an important difference. I haven't seen the legislature giving,
say, Yahoo, a special tax holiday if it can just get its act together and stop
laying off people. And the state government's reaction to Uber has not been
particularly friendly either. I see some antagonism to Tech in state and local
government. And the Tech industry is still viewed as a monstrously fat tax cow
by the government.

Still, the article's portrait of California as a "bifurcated" economy has some
truth. The state contains a huge number of poor and middle class people who do
not directly benefit from "Software Valley's" jobs machine. (The main thing
they receive from it is some government services paid for by taxes on that
machine's workers.)

~~~
eli_gottlieb
>And, I think, as a point of comparison, it's interesting that, in recent
years, the California legislature handed the entertainment industry a large
boost in tax credits for productions it kept in state (as opposed to
competitors like Louisiana and Georgia).

What I always wonder is how Silicon Valley can have such an utterly monstrous
cost of living problem, exacerbated by public policies that explicitly favor
landowners and incumbent residents over scrappy young arrivals with new ideas
and small budgets, _and the tech industry doesn 't just move somewhere cheaper
out of sheer self-interest._

~~~
emgeee
The land owners and incumbents are the ones that provide the funding and
expertise

~~~
trhway
generation ago they were the "scrappy young arrivals with new ideas and small
budgets". And the generation before them... My former manager who bought house
in Los Altos in 1981 still remembers how tough it was back then even with 2
high-tech salaries...

Generation after generation the thing is working - may be something in the
air? :)

------
blisterpeanuts
Then again, it's possible that a new paradigm is right around the corner and
will fundamentally disrupt everyone including the Silicon Valley elite.

Of course, most of us have no idea what it will be -- some radical advance in
biotech such as CRISPR[1], huge advances in 3-D printing, virtual reality
workplaces, cold fusion, discovering and harnessing gravitons, virtually-
sentient robotic devices, teleportation of physical objects....

When this happens--and given the rate of acceleration of new discoveries in
our hyper-connected, 24x7 world, it's definitely "when" and not "if"\--we will
experience massive economic disruption that will be exploited by a new
generation of visionaries. Those visionaries won't necessarily be the same
people who are really good with javascript. It will be yet another class, and
the javascript folks will become the elders, like Gates and Ellison.

Should be an interesting time; hope I'm around to see it and take part in it!

1\. [http://www.nature.com/news/crispr-the-
disruptor-1.17673](http://www.nature.com/news/crispr-the-disruptor-1.17673)

------
loukrazy
Is this just a rehash of the "economic civil war" article from a few weeks
ago?

~~~
hammock
Link?

~~~
psimyn
Probably this
[https://news.ycombinator.com/item?id=10714292](https://news.ycombinator.com/item?id=10714292)

------
chubot
Aside from the somewhat out-of-place right wing tone, this is all basically
true.

About 5-6 years ago, it occurred to me that:

    
    
        - information is the new oil
        - politics is the exchange of power
    

which implies:

    
    
        - in 2030 or so, we will have someone with a tech background as president.
    

Why did we have George H.W. Bush and George W. Bush as presidents? Because
they developed immense wealth through controlling the flow of oil around the
globe. They went to Saudi Arabia and brought back oil.

Then they exchanged this power for political power.

Information is like oil in that _everybody_ needs it. You can't build a house,
open a restaurant, import shoes, etc. without energy, and you can't do any of
it without information either. Whereas you can open a restaurant without
building a house. These two things are special and fundamental.

Now we have the flow of information concentrated in the hands of the very few.
We rent our devices from Apple and Google, and they exercise control over what
apps you run on it, and what content is surfaced through searches. Things that
happen on Facebook can change the course of your life.

In the near future, there will be undoubtedly be someone who exchanges this
immense power for political power, just as the Bushes did. I'm not saying this
is good or bad -- it's just a fact, in an almost mathematical sense.

~~~
lsc
>We rent our devices from Apple and Google, and they exercise control over
what apps you run on it,

From my understanding, Apple is a little different in that as far as I can
tell, they make money off of, you know, _you_ \- selling you things directly,
not off of selling your information to third parties. I mean, they do control
what you can and can't install on your device, but they do so not in service
of collecting more data on you, but in service of getting you to buy more
stuff from them. Because their money ultimately comes from you rather than
from advertisers, they ultimately have different aims.

(if this is wrong, please correct me.)

This is relevant because Your whole thesis rests on the idea that the
currently-popular business model of "give consumers free stuff in exchange for
personal data" will remain stable, that the "advertising based" model will win
over the apple model.

And maybe it will. I don't know. But right now? it looks like the apple model
has won the high end, while the "give you stuff in exchange for your personal
information" dominates the low end. Now, personally, I wouldn't bet money that
the current situation is stable; in part _because_ of this huge economic
inequality, and _because_ the people you really want as customers are paying
for the services with money rather than with personal information. There is an
argument to be made that a lot of this personal data collected by the
cellphone companies who make their money through collecting data is mostly
personal data of the poor, because wealthier people use the cellphone company
who charges you money.

I mean, you could be right, certainly, but my point is just that things
haven't settled out yet. We're still in the part of the economic cycle where
we simply don't know what will stick after the "dumb money" leaves the system.

~~~
chubot
They are different, but Apple still exercises a high degree of control over
what's in the App Store. There's no porn. They restrict the programming
languages you can use, and AFAIK you can't make certain types of programming
environments.

You could argue that they are nibbling around the edges, and "most stuff you
want" is in the App Store. But I still see it as a huge amount of control.

They also seem to auto-complete what's typed into the Safari address bar,
which heavily influences the sites you visit. And they choose the default
search provider. Defaults matter.

My thesis doesn't really rest on profit from advertising vs. devices. I agree
that they are different, but I'm just saying that these companies have a lot
of power in the abstract sense. True, some of that power could be more
exchangeable for political power. Maybe Facebook and Google are more powerful
politically than Apple, just because they deal more directly with information.

~~~
lsc
>You could argue that they are nibbling around the edges, and "most stuff you
want" is in the App Store. But I still see it as a huge amount of control.

Apple has control, sure, like Microsoft did in the '90s. More, really, because
it was harder for Microsoft to lock competing application developers out than
it is for apple. And yeah, the perception I had was that Microsoft was all
about control... but it was about control over your desktop, like Apple has
over your phone, not about control over personal data that it can use to
better sell stuff. Microsoft used that control to make programs that you
didn't pay them for work less well (and Apple does the same) - You can make a
good argument that it's a bad and maybe even scary thing, but it's
straightforward and very different from someone who wants control in exchange
for your personal data.

I would _very much_ compare apple to microsoft in the '90s, only with less
market share (and I think it's really interesting that Apple asserts control
in ways that Microsoft would have loved to in the '90s, and Apple does it
without anything close to a monopoly)

>They also seem to auto-complete what's typed into the Safari address bar,
which heavily influences the sites you visit. And they choose the default
search provider. Defaults matter.

This is an example of how that sort of power could get scary, and raising
concerns about this makes a lot of sense.

But that really has nothing to do with my point.

But my point was just that apple presents a counterargument to this idea that
information will be the new oil. The Apple counterargument is that it's
possible that collecting a bunch of data on users in order to sell advertising
is... less valuable than we think. Less valuable than simply charging people
for premium (both in quality and margin) goods and services. I mean, sure,
personal data for targeted advertising is clearly worth _something_ \- but
right now, we seem to think that it's worth more than the rest of the
advertising-supported media industry put together, and... it's possible that
we are wrong, and that using user data to sell advertising just isn't as huge
of a deal as we think it is. Maybe instead of the new oil, that sort of
information is the new, say, wood pulp. That sounds a lot more reasonable to
me.

The idea is that Apple, like Microsoft in the '90s, sure, could use their
power over your desktop for evil... but gaining power over your desktop isn't
why they write programs. Companies that release free softare in exchange for
user tracking have a very different model; their goal is to collect user data,
in part because they really do think that 'information is the new oil' \-
which, like, I said, may very well turn out to be the case, but is not a
settled thing yet, not by a long shot.

For you to understand my point, you also need to understand that I was also
assuming that by "information" you meant "personal data" in the sense of
personal data that is used to convince advertisers that they should pay more
for ads because they are better targeted - which may or may not be what you
meant, but it was what I was responding to. If you meant something different
by 'information' of course, none of what I wrote makes any sense.

~~~
chubot
I didn't necessarily mean personal data, although it's worth thinking about
the distinction between personal data and information in general, and how that
relates to exchanging power. There is some amount of power that flows from
just making tons of money, as Apple/Facebook/Google all do, and some amount of
power that flows from having information and exploiting it (above the money
that you made from that information).

A good example of the latter is using social graphs for very targeted
campaigns to sway voters, which only appeared in the 2008 and 2012 elections.
[1]

Apple does have all that personal data too -- your device usage patterns,
location, app installs, browsing habits, e-mail, calendar, etc. It just seems
like they use it less (for the time being). They have the potential to
capitalize on that, but haven't done it to a great extent.

Your point is taken -- Apple has a more lucrative business in selling devices
than Google or Facebook have in pure information. Although, I don't
necessarily think this is fundamental, and it could easily change in the next
5-10 years. I expect information to continue to become more important and more
lucrative.

I don't think the fact that Apple makes more money from devices necessarily
refutes the idea that information is the new oil. I guess you could say that
computer hardware is fundamental too, in that basically everybody needs it,
but I don't really think it is as fundamental as information or oil.

I guess what happened with both information and oil is that a small group of
companies monopolized them. If you choose not to use Facebook, there is not a
great alternative, because your friends aren't there. Similarly, there are few
alternatives to many of Google's services. In the case of oil, control was
through mechanisms like OPEC and Western military power.

Apple has had tremendous success with computer hardware, but they don't have a
monopoly. I don't think the computer hardware business is as prone to
monopolies as software and information.

[1] Not sure if these are the best articles, but voter targeting as a new and
advancing technology is pretty well documented:

[http://bigthink.com/age-of-engagement/obama-2012-the-most-
mi...](http://bigthink.com/age-of-engagement/obama-2012-the-most-micro-
targeted-campaign-in-history)

[https://www.washingtonpost.com/politics/how-the-obama-
campai...](https://www.washingtonpost.com/politics/how-the-obama-campaign-won-
the-race-for-voter-
data/2013/07/28/ad32c7b4-ee4e-11e2-a1f9-ea873b7e0424_story.html)

Also see : [http://www.dailydot.com/politics/search-engine-
manipulation-...](http://www.dailydot.com/politics/search-engine-manipulation-
effect-election/)

~~~
lsc
the fundamental disagreement here is:

>I expect information to continue to become more important and more lucrative.

whereas I am arguing for the opposite. I certainly don't know that I'm right
or not, but I _do_ think that the valuations of the companies that give away
services in exchange for personal data are betting that you are right and I am
wrong. Apple... I _believe_ apple is betting my way. I _believe_ (and
certainly don't know for sure) that apple is being much more cautious about
user's data because they know that, well, this is part of why they are getting
my money, and I assume the same can be said for a fairly large group of
consumers.

>Apple has had tremendous success with computer hardware, but they don't have
a monopoly. I don't think the computer hardware business is as prone to
monopolies as software and information.

I believe that apple is best thought of as a software company, like Microsoft.
Apple gets involved in hardware because by controlling the hardware, they can
make their software better, and charge more for it.

Modern Apple hardware isn't particularly amazing or innovative compared to the
competition. I mean, it's not terrible (except the keyboards, but that's just
a matter of taste.) - it's not behind the curve in terms of hardware, but it's
not really ahead of the curve, either, unless we're talking about fashion (and
personally, I think it goes both ways. You'd be embarrassed to use an apple in
the '90s because they were kind of terrible. it's possible that they are cool
now because they actually work pretty well. It's a "smart" thing to use - It's
possible that fashion is following function here.)

It's interesting, because before last year, I had not owned or even seriously
used an apple device in the 30+ years I've used computers. I really want to
control my own software. I had a n900 for a long time, then one of the
keyboarded android phones... and I worked _so hard_ to install my own android
build and control my own software for so long, but because the phone hardware
market is so fractured, doing so on a phone is way harder than doing so on a
laptop, so while I run linux or bsd on all my servers, desktops and laptops
(aside from the one game machine) - I have an apple phone, because I have
decided that I don't have the time to sysadmin my phone, and apple sysadmins
my phone in ways that aren't annoying and offensive.

But yeah... things haven't settled out yet, so it's possible apple will go the
'mine user data route' \- but the thing is, I don't think they can do that
without significantly hurting the customer experience that their products
provide.

