A People's History of Silicon Valley

ENDNOTES

INTRODUCTION:

WHAT IS SILICON VALLEY?

The modern fable of the self-made tech entrepreneur follows a common formula: A scrappy whiz-kid in Silicon Valley conceives of a startup that rents out other peoples’ goods, services, and information to strangers. The entrepreneur designs a platform to facilitate that rental. Aside from the web platform, the company owns no products and manufactures nothing. Within a decade the company is valued in the billions of dollars, and the founders are hailed as geniuses. Everyone lives happily, and wealthily, ever after.

This is the story of many a sharing economy company, from ride-sharing app Uber to vacation rental-site Airbnb, both of which count among the ‘unicorn’ startups – companies with valuations over $1 billion.

Yet there is an alternative version of this startup story, with its own familiar arc, that goes vaguely like this: while the startup is growing, the founders ignore the social ills their platform will inflict on the world. People – both workers and consumers – find themselves exploited and displaced because of their product or services. The company avoids taxes and dodges regulations to amass its hefty profits, sometimes knowingly breaking the law. Along the way, someone in upper management makes a public blunder, saying something sexist or racist in a public forum that exposes the rotten internal culture of the company. The company’s PR team runs diversions. Civic officials around the world start to notice how the company, despite positioning itself as a friendly example of the ‘gig economy’, evades regulations and taxation. Finally, the protests start. Propositions appear on ballots around the globe, an attempt to help cure some of the social ills caused by said company.

This dystopian version of the common fable continuously repeats itself in the San Francisco Bay Area, home to Silicon Valley. Yet most of us are more familiar with the fairytale story of the self-made Silicon Valley millionaire than the alternative history of how their platform led to other people’s impoverishment. That may be because Silicon Valley has been adept at exporting a vision of itself as clean, progressive, futuristic and utopian. Hence, when we think of Silicon Valley, we are less likely to think of immiseration and more likely to think of amazing gadgets and sunny promises from industry leaders about a brighter future.

Perhaps because of its reputation as a wonderland of wealth and futurism, the name ‘Silicon Valley’ has become synonymous with growth, invention, and prosperity. Cities across the globe have issued tax breaks for technology companies and created special ‘innovation’ zones in hopes of attracting their own versions of Silicon Valley, often giving them cute monikers that suggest parallels with the original: this includes Silicon Beach (Los Angeles), Silicon Alley (Manhattan), Silicon Gulf (Davao City, Philippines), and Silicon Fen (Cambridge).

Those who hail from the San Francisco Bay Area know that these jovial feelings about Silicon Valley do not encircle its home region. As tech wealth has poured into the Bay Area, its economic benefits have not spread equally; indeed, recently the Bay Area has seen its middle class stagnate as income inequality skyrockets. In January 2016, the World Bank issued a warning that Silicon Valley’s tech companies were ‘exacerbating income inequality, rather than improving it.’ ‘Not surprisingly, the better-educated, well-connected, and more capable have received most of the benefits – circumscribing the gains from the digital revolution,’ their report stated.¹ In short, the tech industry creates a lot of wealth, but that wealth is very unevenly distributed.

Even former President Barack Obama admitted that rural Americans’ anger over income inequality exacerbated by the tech industry may have led to Donald Trump’s victory in the 2016 presidential race.² Indeed, the 2010s have been characterized by both the ubiquity of social media and the rise of far-right movements and parties around the world, phenomena that are not separable. Social media platforms like Twitter, Facebook and Tumblr have created distinct reality bubbles, each with their own ideological and political underpinnings, which have helped Balkanize humanity. It is not too much of a stretch to say that Brexit, Trump, and the rise of far-right parties in countries like Austria, Germany, and France owe their existence to the enabling power of Facebook and Twitter.

Meanwhile, Silicon Valley has become a microcosm of the social discord unleashed by the tech industry around the world. In the Bay Area, the gap between rich tech workers and the working-class has wreaked havoc on the region’s social fabric. Low-income families in the San Francisco Bay Area region are worse off in 2016 than they were in 2009, and San Francisco’s middle class shrank 10 percent in the 25 years from 1989 to 2014. In San Mateo County, home of Facebook, the top 1% of earners take home 46 times as much as the average of the bottom 99%.³ ‘It’s clear that Silicon Valley is developing into a two-tier society: those who have caught the technological wave and those who are being left behind,’ wrote social critic Rebecca Solnit in 2000. ‘This is not simply a phenomenon of class or race or age or the distribution of wealth... it’s really about the Darwinian nature of unfettered capitalism when it’s operating at warp speed.’⁴

Silicon Valley’s techie culture, which proliferated as tech jobs spread around the region, has become a source of anger, pride, and satire. The hubris of tech culture is often mocked in film and television – as in Mike Judge’s Silicon Valley, or the Mark Zuckerberg biopic, The Social Network, both of which portray the tech elite as hopelessly out of touch with everyday people. These representations mirror the social reality of the Bay Area; again, despite vast tech wealth and constant promises from the tech elite of a better life through technology, homelessness continues to be an intractable social problem. Moreover, much of the homeless population of the Bay Area constitutes people who once had homes but were pushed out by the pressures associated with gentrification. A 2015 homeless survey of San Francisco found a record 71% of homeless people had been living in a ‘stable’ housing situation prior to becoming homeless.⁵ Other social problems in the region have been similarly worsened by tech wealth; until recently, the city of San Jose housed the largest homeless encampment – at 68 acres – in the United States.⁶ The Bay Area Rapid Transit (BART), a regional train system, is stretched so thin that the agency revealed in 2015 that it would be underfunded by over $9 billion over the next ten years.⁷

Perhaps most illustrative of the discontent in the region, a 2016 poll of Bay Area residents showed that one third hope to leave the Bay Area – with ‘cost of living,’ ‘housing,’ and ‘traffic’ cited as the top three reasons driving residents away.⁸

If Silicon Valley is a utopian land of innovation and promise, the people who live within and around it don’t seem too enthralled. The agglomeration of Northern California technology companies are good at making a small number of people very rich while exacerbating social problems. So why do so many politicians and leaders across the globe speak so highly of emulating this region? And why, in spite of its problems, is Silicon Valley – the region and its industries – so well-regarded by the rest of the world?

To understand how Silicon Valley became such an enchanting idea requires an investigation into precisely how the major tech companies have come to infect our lives, our minds, and our hearts – in short, how a medley of software and hardware firms remade the way we communicate, inserted their own brands and advertising in the process, and squirreled themselves into the heart of government and the people. You may be familiar with historian Howard Zinn’s seminal book A People’s History of the United States, in which he attempts to weave together a history of the United States that accounts for the experience of the oppressed and exploited that built the country. This book is an attempt to do the same for Silicon Valley in an economical space.

Yet writing a people’s history of Silicon Valley is different, in the sense that many of the people who are most affected by Silicon Valley do not live there; the social and economic repercussions of the tech industry’s decisions radiate out across the globe. When San Francisco–based Uber lowers the base fare for its global workforce of millions of drivers, a worker in Mumbai suddenly suffers. And when the engineers at Facebook in Menlo Park decide to toy with the algorithm that determines who and what you see in your timeline, the reduction in visibility is felt by a small family business in Cairo. In fact, in a sinister way, many tech companies make their customers into sources of microlabor, in effect turning the customer into the product. A people’s history of Silicon Valley must, therefore, encompass those of us who may not even realize the way that our actions and behaviors are being mined as a source of free work. In other words, Silicon Valley may be physically located in California, but its business decisions reverberate across planet Earth.

Within each chapter, you will see a story of Silicon Valley told in two folds: the ways that the tech industry has disrupted the lives of those who work and live in the Bay Area, and a simultaneous history of how the tech industry’s digital tendrils affect people around the world.

CHAPTER 1:

A TRIP AROUND SILICON VALLEY

There is no reason anyone would

want a computer in their home.

– Ken Olsen, 1977⁹

If we wish to understand how Silicon Valley became what it is today, it is best to break it into its constituent pieces – the people and laborers who create the industry’s vast wealth. Yet if you were to attempt to take a stroll around Silicon Valley, to follow the production chain of a smartphone or a piece of software, you would quickly find yourself transported far away from California. In fact, you would have to start in the Congo.

Silicon Valley could not exist as it is without the labor of the men, women and children in the Congo who mine the elemental metal coltan – a portmanteau of ‘columbite’ and ‘tantalite,’ the minerals from which elemental niobium and tantalum, respectively, are mined. Coltan is crucial in the manufacture of the kind of capacitors that are used in computers and mobile phones, and it is estimated that 80% of the world’s coltan supply sits in the eastern part of the Democratic Republic of Congo.¹⁰ As such, Silicon Valley could never have existed and grown to the extent that it did without the resources of the Congo, though few in Silicon Valley would see their fate as intertwined with Congolese miners. And yet, in fall 2000, when demand surged for Sony’s Playstation 2 video game console, the price of coltan increased 1000%, and militias in the Eastern Congo region forced civilians into slave labor to help them mine the precious mineral.¹¹ The money from coltan mining has fueled the ongoing civil war, which has killed over 5 million and continues to kill hundreds a month despite having officially ended in 2003.¹²

Over the years, various Western groups have attempted to obtain coltan from legitimate operations in Eastern Congo, yet even these sanctioned mines can be tremendously exploitative and primitive. It is common for workers to work 12 hours a day, using pans and picks, digging through the mud without helmets or gloves.¹³

A 2016 documentary produced by the International Cooperation for Development and Solidarity (a Catholic social justice group) profiled some of the workers at the Fungamwaka mine in the eastern Democratic Republic of Congo. The Fungamwaka mine has been called a ‘model’ mine, in that it uses no child or slave labor, has no involvement with militia groups, and operates entirely legally.

Audry Bialura began working as a miner at the Fungamwaka mine in 2014, and came to the mine because after rebels stole his cattle, he could no longer work as a farmer. He lives in a wooden shack in the nearby village of Numbi. The wage from mining coltan is variable depending on the global market, and currently is not as high as it once was. ‘I’ve earned nothing so far,’ says Bialura. ‘I’ve had to borrow money from my boss in order to pay for my mining license, and rent, and food. Life is expensive in Numbi, and the yield from the mine is much too low.’ Bialura spends all day shoveling sand down the hill and sifting through mud for coltan. ‘I couldn’t send a single franc to my family in the last few months,’ Bialura continues. ‘I also can’t go home. I would be arrested immediately, because of my debts.’¹⁴

Despite working at a co-operative mine that is lauded by government and tech as an example of ‘ethical’ mining, Audry Bialura’s life is not too dissimilar to that of an indentured servant. And interestingly, the conditions of his labor – working as a contractor, and paying for his own license – are reminiscent of the practices common to many tech industry contractors in the developed world. (See chapter 6 for more on contractors in Silicon Valley.)

Regardless of labor practices, there are other negative social consequences of coltan mining in this region. Many Congolese people have ceased growing food because mining is more lucrative; as a result, food shortages are common.¹⁵ Likewise much of the coltan that is mined illicitly by slaves or via warlords is smuggled, often through Rwanda, and mixed with legitimate operations’ stock. It is very likely that all of us own electronic devices that contain coltan mined by slaves.

From Africa, coltan is shipped to places like Shenzhen, just north of Hong Kong in China, where the massive factory-cities of Foxconn sit. Foxconn Technology Group is the 25th largest company by revenue in the world; many hardware companies in Silicon Valley are reliant on Foxconn to supply their gadgets, including Apple, Amazon, Nintendo, Sony, and Microsoft. We think of the latter tech companies as the visionary designers of our favorite tech toys; iPads, Xboxes and Kindles – yet the actual production of these devices is overseen by some of Foxconn’s 1.4 million employees.¹⁶ To put that in context: Apple Inc. – by some measures, the largest publicly-traded company in the world – has 110,000 employees, less than one-tenth of the number of people Foxconn employs.¹⁷ And yet Apple couldn’t exist without Foxconn; Foxconn is enmeshed within its production process. Foxconn’s bureaucracy is divided into 12 internal ‘business groups,’ two of which serve Apple and Apple alone.¹⁸

Tian Yu was one of the 1.4 million people whose labor helped make the iPhones that symbolize Silicon Valley’s innovation. Many rural Chinese people are enticed to work at places like Foxconn, by the promise of high wages and a stable job; Yu was one of them. She grew up in a small village in central China, and left home at