Twitter commentators claimed as much after technology entrepreneurs demanded a Federal bailout of Silicon Valley Bank (“SVB”). This bank, which provided financial services to ~50 percent of all US venture-backed tech and life science companies, had taken customer deposits and invested them into what are supposed to be risk-free investments: US government bonds. Of course, SVB was not unique in this behavior–essentially, all banks make investments with their customers' deposits; SVB just did this a little more aggressively than others.
When the Federal Reserve–which has the legal authority to centrally control the price of money–increased interest rates at the fastest pace in decades, the value of SVB’s investments tumbled (bond prices fall as rates rise, and vice versa). In an unmasked panic, tech industry leaders demanded that their finances (and those of their portfolio companies) be secured beyond the $250,000 FDIC limit. An uproar then ensued, alleging that these ‘libertarians’ had gone against the core of their free-market ideology.
Yet, few tech leaders are amenable to free and open markets and don’t even claim to be libertarian, so let’s put the myth of the Silicon Valley Libertarian to rest.
The idea that Silicon Valley is libertarian is a thinly-veiled smear campaign on the technology sector. According to many, we libertarians are all Ayn Rand-loving fiscal conservatives/fascists, and our wealth and success come from greedy capitalist exploitation. If such critics had bothered to read Atlas Shrugged, they might notice that the tech industry is more accurately described as a sea of Peter Keatings (quite similar to themselves), and the fabled John Galts are few and far between.
The “tech is libertarian” narrative provides a way for the state and its tandem media to position the tech sector against the rest of the middle and working classes. Class warfare is always their strategy. They demand that tech pay more taxes (rhetorically dressed as “their fair share”) while ignoring that such people are already taxed to oblivion and getting little for it. Those tech workers hardly even have their personal safety protected in San Francisco. Wealthy Californian neighborhoods rely on private security firms while giving 40% of their income to a state that has failed them, and they cheer this state on in a sad display of Stockholm Syndrome.
If you’re wondering where those high California taxes are going, more than $980 billion went to public welfare in the last decade. Is it helping? Well, more than a quarter of Californians still live in poverty, so it may not. Where else does the money go? Around 900,000 CA government employees earn twice the private sector average. All this is with little accountability because none of it is working. If high taxes lead to prosperity, what happened to San Francisco?
The problem isn’t that the Bay Area tech sector is libertarian; the problem is that it isn’t. Over 90% of the $40 million donated by big tech employees to political causes between 2004-2018 has gone to the Democrats. Staff at Google's parent company, Alphabet, were collectively the biggest funders of Democratic candidates and causes. Employees donated $16.3 million to the party, nearly $10 million more than employees from the next biggest funder, Amazon. Democrats had a near-monopoly on donations from staff at Netflix, accounting for 98% of worker contributions to political parties.
For the 2020 election cycle, employees from internet companies committed 98% of their contributions to Democrats, according to the Center for Responsive Politics.
A Stanford study asked more than 600 technology company leaders and founders about their political leanings. In almost every regard, Silicon Valley was on board (or even to the left) of the Democratic Party. Most entrepreneurs favor high taxes on the wealthy, generous social services for the poor, and universal healthcare. Environmental protection and income inequality were ranked as extremely important, as well as gun control laws. These aren’t the views of Friedman or Hayek. These aren’t even the views of America’s Founding Fathers. The tech sector, empirically, is moderately left-of-center.
You can also tell how not Libertarian Silicon Valley is by reading March’s slew of headlines criticizing Silicon Valley for being pro-bailout. The New Statesman, Vox, and Politico used Peter Thiel as their cover image. The few publications that didn’t overtly use an image of Thiel (often mid-sentence and snarling) generally evoke him heavily. Any technologist is depicted as “Thiel-adjacent,” as if interacting with or accepting capital from a person defines their political views. Furthermore, Peter Thiel publicly left Silicon Valley for Los Angeles in 2018 “to escape the political hegemony.” Silicon Valley is not libertarian. It should be.
Hilarious attempts by the media have been made to reconcile the dichotomy between reality and fiction. The label “Libeltarian” has been thrown around in an attempt to combine liberalism and libertarianism. In one headline, Vox, which perhaps correctly presumes no sense of irony in their audience, described Silicon Valley as “Libertarian but very pro-government.” War is peace. Freedom is slavery. Government is libertarian.
With the mainstream media’s hatred towards liberty (and, ironically, free speech itself) becoming increasingly apparent in the last few years, are we surprised that they grasp for any example through which to smear a philosophy that respects the rights of individuals? Libertarianism is dead because non-libertarians ask for government bailouts of their government-adjacent institutions? Are we expecting The New York Times to respect its audience? Does the American government respect its taxpayers? Does any looter respect the looted?
Libertarianism is a humble appeal to decentralized, market-based order. And why do we make this appeal? Because the “order” provided by central monopolies is unavoidably corrupt and unjustly coercive. Sam Bankman-Fried, who ran an exchange that was heavily “regulated” and yet still somehow defrauded billions, is playing League of Legends in a mansion while Ross Ulbricht serves two life sentences. Aaron Schwartz is dead. People rightly object to this discrepancy in treatment and yet too rarely question the entire premise upon which they surrender a heavy percentage of their income to politicians.
Don’t like the Ukraine war? Your hard-earned money is funding it. Disgusted by the woke propaganda that’s driving our children into psychiatric drugs? It comes from a state-controlled education and health system that you continue to fund. Upset about San Francisco but not sure who to blame? Taylor Swift has the words you need - “It’s me, I am the problem, it’s me.” But never the state.
Our current state governments would be the worst-performing startups of all time, yet we, the investors and customers, keep writing the checks. Banks bought the “risk-free debt” of government bonds and discovered risk-free sometimes means bankruptcy. The state pretends that the system is working—and we keep pretending with them. In this land of make-believe virtue, Trump and Biden are the best candidates democracy can put forward.
You’re lucky not to experience random attacks in San Francisco. The pregnant lady hiding in the vitamin aisle at 16th Street Walgreens tells you this is her second time observing a violent incident in a week as you wait for police that never show. That Walgreens branch closed down a few months later, alongside many other Bay Area businesses that can’t handle the local violence. The state apparatus here is the opposite of minimal and cannot even claim to protect our fundamental property rights. And now Kamala Harris is going to handle AI for America’s future? God help us all.
More banks are going to fail. And more people, just like the technologists back in March, will demand that the government guarantees their assets. The Stockholm victims continue demanding services from their captors. The media will blame the private sector because anyone questioning state power seems to get de-platformed. And yet Americans look down on the North Koreans and the Chinese… maybe because they see their own future approaching.
Libertarianism hasn’t died, but liberty, perhaps.