Hardly a week passes without another billionaire endorsing Donald Trump. With Joe Biden proposing a 25% tax on those with assets over $100m (£80m), this is no shock. The real twist? The pro-Trump multimillionaire club now includes a growing number of venture capitalists. Unlike hedge funders or private equity barons, venture capitalists have traditionally held progressive credentials. They’ve styled themselves as the heroes of innovation, and the Democrats have done more to polish their progressive image than anyone else. So why are they now cosying up to Trump?
Venture capitalists and Democrats long shared a mutual belief in techno-solutionism – the idea that markets, enhanced by digital technology, could achieve social goods where government policy had failed. Over the past two decades, we’ve been living in the ruins of this utopia. We were promised that social media could topple dictators, that crypto could tackle poverty, and that AI could cure cancer. But the progressive credentials of venture capitalists were only ever skin deep, and now that Biden has adopted a tougher stance on Silicon Valley, VCs are more than happy to support Trump’s Republicans.
The Democrats’ romance with techno-solutionism began in the early 1980s. Democrats saw Silicon Valley as the key to boosting environmentalism, worker autonomy and global justice. Venture capitalists, as the financial backers of this new and apparently benign form of capitalism, were crucial to this vision. Whenever Republicans pushed for measures favourable to the VC industry – such as changes in capital gains tax, or the liberalisation of pension fund legislation – Democrats eventually acquiesced. On issues such as intellectual property, Democrats have actively advanced the industry’s agenda.
This alliance has shaped how the US now finances innovation. Public institutions such as the National Science Foundation and National Institutes of Health fund basic science, while venture capitalists finance the startups that commercialise it. These startups, in turn, build on intellectual property licensed from recipients of public grants to design apps, gadgets and drugs. A good chunk of these profits, naturally, flows back to the venture capitalists who own a stake in these startups. Thanks to this model, Americans now pay some of the highest drug prices in the world – yet when politicians have tried to curb these egregious outcomes, they have been met with accusations from the VC industry that they’re undermining progress.
Venture capitalists have been keen to emphasise the role they play in delivering progress. Through podcasts, conferences and publications, they have successfully recast their interests as those of humanity at large. For a clear distillation of this worldview, look no further than The Techno-Optimist Manifesto, a 5,200-word treatise by Marc Andreessen, co-founder of the VC firm Andreessen Horowitz. Its jarring universalism suggests that all of us – San Francisco’s venture capitalists and homeless alike – are in this together. Andreessen urges readers to join venture capitalists as “allies in the pursuit of technology, abundance, and life”. Yet his text quickly reveals its true colours. “Free markets,” he writes, “are the most effective way to organise a technological economy.” (Andreessen has criticised Biden without endorsing Trump.)
Andreessen isn’t celebrating technology in the abstract, but promoting what he calls the “techno-capital machine”. This system allows investors like him to reap most of the rewards of innovation, while steering its direction so that alternative models to Silicon Valley hegemony never achieve the kind of take-up that would allow them to drive out for-profit solutions. Andresseen, like all VCs, never stops to consider that a more effective technological economy might not revolve around free markets at all. How can VCs be so sure that we wouldn’t get a better kind of generative AI, or less destructive social media platforms, by treating data as a collective good?
The tragedy is that we won’t be trying anything like this any time soon. We’re shackled by a worldview that has fooled us into thinking there is no alternative to a system that relies on poorly paid workers in the global south to assemble our devices and moderate our content, and that consumes unsustainable volumes of energy to train AI models and mine bitcoin. Even the idea that social media might promote democracy has now been abandoned; instead, tech leaders seem more concerned with evading responsibility for the role their platforms have played in subverting democracy and fanning the flames of genocide.
Where do we find the much-needed alternative? While researching my latest podcast, A Sense of Rebellion, I stumbled on a series of debates that took place in the 1970s and pointed in the right direction. Back then, a small group of hippy radicals were advocating for “ecological technology” and “counter-technology”. They weren’t satisfied with merely making existing tools more accessible and transparent: they saw technology as the product of power relations, and wanted to fundamentally alter the system itself. I came across a particularly compelling example of this thinking in a quirky 1971 manifesto published in Radical Software, a small but influential magazine. Its author was anonymous, and signed themselves as “Aquarius Project”, listing only a Berkeley-based postal box. I eventually tracked them down, partly because the points they made in that manifesto are so often lost in today’s debates about Silicon Valley. “‘Technology’ does nothing, creates no problems, has no ‘imperatives’,” they wrote. “Our problem is not ‘Technology’ in the abstract, but specifically capitalist technology.”
Being hippies, the group struggled to translate these insights into policy demands. In fact, somebody else had done this three decades earlier. In the late 1940s, the Democratic senator Harley Kilgore saw the dangers of postwar science becoming “the handmaiden for corporate or industrial research”. He envisioned a National Science Foundation (NSF) governed by representatives from unions, consumers, agriculture and industry to ensure technology served social needs and remained in democratic control. Corporations would be forced to share their intellectual property (IP) if they built on public research, and would be prevented from becoming the sole providers of “solutions” to social problems. Yet with its insistence on democratic oversight and sharing IP riches, his model was eventually defeated.
Instead, our prevailing approach to innovation has allowed scientists to set their priorities, and does not require companies that benefit from public research to share their IP. As Biden’s Chips Act directs $81bn to the NSF, we must now question if this approach still makes sense. Shouldn’t democratic decision-making guide how this money is spent? And what about the IP created? How much will end up enriching venture capitalists? Similar questions arise with data and AI. Should big tech firms be allowed to use data from public institutions to train privately owned, lucrative AI models? Why not make the data accessible to nonprofits and universities? Why should companies such as OpenAI, backed by venture capital, dominate this space?
Today’s AI gold rush is inefficient and irrational. A single, authoritative, publicly owned curator of the data and models behind generative AI could do a better job, saving money and resources. It could charge corporations for access, while providing cheaper access to public media organisations and libraries. Yet the merchants of Silicon Valley are taking us in the opposite direction. They are obsessed with accelerating Andreessen’s “techno-capital machine”, which relies on detaching markets and technologies from democratic control. And, with Trump in the White House, they’ll waste no time repurposing their tools to serve authoritarianism as easily as they served the neoliberal agendas of his Democratic predecessors.
Biden and his allies should recognise venture capitalists as a problem, not a solution. The sooner progressive forces get over their fascination with Silicon Valley, the better. This won’t be enough, though: to build a truly progressive techno-public machine, we need to rethink the relationship between science and technology on the one hand and democracy and equality on the other. If that means reopening old, seemingly settled debates, so be it.
Evgeny Morozov is the author of several books on technology and politics. His latest podcast, A Sense of Rebellion, is available now
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