Why does everybody now hate the tech industry?

Well-heeled VCs and founders may yet pay a high price for crashing their favourite bank and then shrilly demanding it immediately bailed out

Photo by Nikita Kachanovsky on Unsplash

Venture capitalists are parasites who couldn’t be trusted with the financial institution that held up their industry, let alone the direction of our technological development. Euthanizing them is imperative if we want a better world.
Journalist, Edward Ongweso Jr

We’re having actual, honest to god, hammer and sickle communists hating tech and actually wanting our heads on a spike.
Tech company founder, Flo Crivello  

It’s painful for me to watch so many smart pundits and politicians on both the right and the left buy into a media narrative that seeks to blame “wealthy speculators” or “tech bros” or VCs for a banking crisis that ultimately started in Washington.
High-profile tech bro, David Sacks

After tanking their own bank, some of the most powerful people in the [tech] industry took to Twitter to whine about what they’d done and send a warning that if they weren’t made whole, there would be hell to pay.
Tech industry critic, Paris Marx   

Rest assured, this is not the eleventy gazillionth thinkpiece about the mechanics or morality of bank bailouts. Instead, it’s an article about how the Silicon Valley’s denizens might have been too clever by half with their Silicon Valley Bank shenanigans and energised a ’techlash’ that has been building for at least a decade.  

Tech’s prolonged honeymoon
Prominent tech industry figures seem baffled as to why the great unwashed no longer love them. Below, I’ll attempt to explain why the general public and many of their elected representatives have turned against America’s tech industry.

But first, a little background.

In late 2014, I authored one of my first think pieces on the tech industry. It was published in the (then) Fairfax broadsheets and focused on Apple’s genteel decline. (Cultural though, as it turned out, certainly not financial).

Younger readers may find this hard to comprehend, but Apple generated widespread and often intense fanboydom for over a decade following the release of the first iPod in late October, 2001. In a time before the ‘forever wars’ in Iraq and Afghanistan, the GFC and the rise of China, Americans in particular and Westerners in general were enjoying a peaceful and, at least compared to what was to follow, relatively prosperous ‘unipolar moment’.

Two decades down the track, it’s difficult to imagine how excited we all were by Apple creating a supercharged Walkman. One that could store hundreds – or thousands if you shelled out for the top-of-the-range model – of songs. And when Apple released the first smartphone six years later it was like a 21st-century form of Beatlemania. Hyped-up crowds slept outside of Apple stores for days to get their hands on an iPhone at the earliest possible opportunity. For a time, some people even referred to the iPhone as “the Jesus phone” with a straight face.

The iPad (2010) and iWatch (2015) prompted far less mass hysteria. But they helped reinforce a narrative that benefited the tech industry for many years. That narrative ran something like this: “Silicon Valley is full of idealistic inventors who are creating products that are making all our lives much, much better.”

If you believed that narrative and – aside from a handful of widely ignored ‘tech industry critics’ – pretty much everyone did, you weren’t inclined to notice that the movers and shakers in the tech industry were even then doing what the movers and shakers in any industry will do given half a chance.

That is, avoid tax, play nations and regions off against each other, exploit workers, downplay negative externalities and ‘lobby’ (i.e. bribe) politicians to either (a) keep their industry entirely unregulated or (b) construct a ‘light touch’ regulatory environment.

But the US tech industry has now managed to pull off the rare feat of alienating the Left, the Right, and the general public.

Tech journalists often point to putative watershed moments, such as the Cambridge Analytica data scandal of 2018, to explain the emergence of a ‘techlash’. I suspect the truth is both more prosaic and tragic.

I’d argue we were all once very much in love with the tech industry, but then we slowly fell out of love with it. Not because of any one incident or flaw but out of a slow-dawning realisation it wasn’t what we imagined it to be and hoped it was. The general public may not (yet) have initiated divorce proceedings, but it mentally checked out of the relationship years ago. So, it’s hardly surprising it reacted with schadenfreude rather than concern when the tech industry shot itself in the foot and then demanded the hat be passed around to fund toe-reattachment surgery.

How the tech industry lost the political class
Tech industry critics on the Right make great play of the fact that almost all tech industry workers and a seemingly large majority of tech industry bosses support the Democrats. Especially after the recent revelations that Sam Bankman-Fried was secretly funnelling money to Republicans while luxuriating in his reputation as the Democrats’ second-largest donor, I’m inclined to believe there are plenty of shy Tories in Silicon Valley. Especially among the ranks of founders and venture capitalists.

But even if we accept that the overwhelming majority of tech industry types support America’s left-of-centre party, it doesn’t mean they share the worldview of traditional Democratic Party supporters. Faced with a binary choice, a highly paid software engineer or successful founder will usually vote for a Democrat over a Republican. However, in their heart, they remain a Libertarian.

Those on the Left dig Libertarians’ social liberalism but find their economic liberalism a buzzkill. Those on the Right are sympatico with Libertarians’ economic liberalism but take objection to their social liberalism.

The problem the tech industry now faces is that the Left is no longer prepared to ignore its economic liberalism and the Right has now become enraged with its heavy-handed enforcement of social liberalism.

Let’s take those one at a time.

Tech companies have never been keen on paying tax. Of course, no business over the course of human history has ever been keen on paying tax, but for old-school businesses avoiding tax is challenging. If a company manufactures cars in Germany and sells them in Australia, it's straightforward for the tax authorities in both Germany and Australia to get a slice of the action.

Once products and services are being dreamed up in one country, manufactured in another, and then sold all around the world, it becomes much harder to pinpoint where the (taxable) economic activity is occurring. For at least the last three decades, almost all tech companies have been utterly shameless about taking advantage of that situation, frequently paying little or no tax in countries where they have been generating billions of dollars in revenue. Tech companies have a well-earned reputation for treating their most valuable staff well. However, they can be as exploitative as any other ruthless multinational corporation when it comes to the treatment of workers further down the food chain.  

Some of the more cynical commentators have suggested that the tech industry and the Left entered, albeit implicitly, into a digital-economy-era version of the Molotov-Ribbentrop pact. The dirty deal was that progressives would turn a blind eye to tech companies behaving even more evilly than the standard capitalist villains – say what you will about big banks, mining companies and the military-industrial complex, but they pay a hell of a lot more tax than the FAANGsters – so long as these tech companies reliably championed social hyperliberalism.

That is: voting for, donating to and deploying cutting-edge technology on behalf of progressive politicians; taking the Diversity, Equity and Inclusion agenda to once unimaginable extremes; inflicting significant economic pain on any democratically elected government socially conservative enough to antagonise the LGBT lobby; and making sure no hate speech – broadly defined as any speech the Left might dislike – appeared on major platforms such as Twitter and Facebook.

Even before Trump and the pandemic, the Right, especially the populist Right, was souring on the tech industry. After the tech industry threw its substantial weight between the Great Awokening, Black Lives Matter and the pandemic-era censorship of conservative, or even just heterodox, thinkers all bets were off.

The respect Right-leaning folk are constitutionally inclined to have for Howard Roarkesque plutocrats such as Bezos, Jobs, Musk and Zuckerberg was overshadowed by their outrage over these figures advocating for – or at least allowing their minions to advocate for – what conservatives perceive as cultural Marxism.

How the tech industry lost Joe Sixpack                
Over the last decade or so, it’s been a drip, drip, drip of disillusionment as people have come to realise tech company founders aren’t digitally savvy hippies, tech companies don’t treat their personal data with the respect it deserves, venture capitalists are more focused on fattening their bank balances than bringing into being a techno-utopia  and, perhaps most importantly of all, that the tech industry generates externalities that it has been reluctant to acknowledge, let alone address.

(Back in late 2007, we were all unreservedly marvelling at the iPhone. A decade and a half on, most of us hate that we are so addicted to our smartphones. We are also worried that the tech industry’s wares are degrading the mental health of our children.)   

In short, our childish hopes that the tech industry would somehow eliminate drudgery, boredom and scarcity have been dashed. We now see the clay feet of the tech gods, and there can be no returning to a state of prelapsarian innocence.

The GFC redux?
The GFC was a non-event in Australia. It seems few Australians understand the depth of feeling about it in nations such as the US and UK. (Countries where a sizeable proportion of the population lost their homes and jobs and everybody had to endure a grim period of austerity.) In places where the GFC had a devastating impact, many people on the Left, lots of people on the Right, and plenty of people who are centrist or politically disengaged remain enraged to this day at the finance industry getting away with privatising its gains and socialising its losses.

As an American who was a terrible venture capitalist but a superb writer once observed, “History doesn’t repeat itself, but it often rhymes”. The average American probably isn’t paying much attention to the finer details of the Silicon Valley Bank collapse. But the average American probably is hearing a strong rhyme emerging from all the white noise of the breathless media coverage. Yet again, a group of fantastically wealthy, politically well-connected individuals who are on the record as being vehemently opposed to government regulation now expect the government to save them from the consequences of their folly.

Especially if the collapse of Silicon Valley Bank sets off a wider economic meltdown, expect the tech industry to become even more on the nose than it currently is. As Mike Solana recently observed at

Pirate Wires

, “Frankly, with no natural allies and what appears to be actual hatred from every direction, the future of American tech is dire… The populist left and right will have to be appeased by both parties, and if unprotected the nation’s most important engine of progress and prosperity will be devoured.”