September 21, 2019

JOEL KOTKIN: Silicon Valley’s Useful Idiots: Tech elites paid for the rope that may hang them.

The term “useful idiot,” often credited to Vladimir Lenin, applies to people supporting a cause or movement injurious to their own self-interest. Nowhere is this more relevant these days than in Silicon Valley, a place dominated by brilliant technologists and marketers who often seem to have the social and political acuity of middle schoolers, as evidenced by their strong support for progressive Democrats poised to destroy the underpinnings of their businesses.

California governor Gavin Newsom is expected to sign the recently passed Assembly Bill 5, which will effectively turn many contractors into employees. AB5 codifies the California Supreme Court’s unanimous May 2018 ruling in Dynamex Operations West, Inc. v. Superior Court of Los Angeles that many contractors should be treated as employees. The legislation’s prime backers are the state’s unions, which see it as an ideal way to organize now out-of-reach workers.

The new measure is potentially devastating, though, for companies like Uber, Lyft, and Postmates, all built around part-time employees, and none yet profitable. Many other tech firms—including profitable ones—use contractors for everything from app development to catering to cleaning. As many as 2 million Californians are employed in so-called gig work. If AB5 passes, job losses won’t just be felt by the ride-hailing firms but also by many other businesses, including newspapers, small trucking firms, some medical providers, and even franchise owners.

In the 1980s and 1990s, Silicon Valley, like many industries, placed its bets on both political parties. Moderate Republicans like Pete McCloskey, Ed Zschau, and Tom Campbell routinely won congressional elections, as did similarly minded members of the state legislature. But over the past few decades, the Valley has become politically monochromatic, with virtually no elected Republicans. Almost all contributions from Silicon Valley tech owners and employees in the 2016 and 2018 elections went to Democrats. Tech money helped Newsom outspend his GOP rival by three to one—with major contributions from former Yahoo CEO Marissa Mayer, and Lauren Jobs (widow of the Apple founder) at the top of the donor list. Former Google chairman Eric Schmidt heads data efforts for several Democratic presidential candidates, including Joe Biden, Kamala Harris, Cory Booker, and arch-populist Elizabeth Warren. Tech employees are, if anything, more progressive-leaning in their political contributions than their corporate masters.

Just a few years ago, these investments seemed to be paying off.

Now not so much.

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