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But the bigger takeaway from Palihapitiya's rant is that a certain strain of influential Silicon Valley thought has moved past passive political apathy and into a kind of anarchist cheerleading. Dysfunction and shutdowns are good, this line of thinking goes, because it hamstrings Washington's ability to mess with the private sector's profit-making schemes. And as long as the Bay Area is still churning out successful start-ups, what does it matter if hundreds of thousands of government workers are furloughed, essential services are cut off for low-income Americans, and the threat of a sovereign default endangers the entire economy?
But the message they're pushing isn't as simple as small-government libertarianism or selfish profit-seeking. It's a kind of regional declaration of independence. The entrepreneurial community in San Francisco and Silicon Valley increasingly thinks of itself as a semi-autonomous region within the U.S. — one that has its own funding scheme, its own leaders, and its own paths to success. And the message they're sending is simple: We matter, you don't.
It would be an easy view to write off, if it weren't so influential. Silicon Valley is, after all, the country's most lucrative economic engine right now, and it is accumulating political capital to accompany its profits. If tech leaders like Palihapitiya and groups like FWD.us have their way, future bouts of dysfunction in Washington might not just be about the tea party clashing with Democrats and the Republican Establishment. One day, they might be carried in by a Bay Area breeze.
At last I went to the artisans, for I was conscious that I knew nothing at all, as I may say, and I was sure that they knew many fine things; and in this I was not mistaken, for they did know many things of which I was ignorant, and in this they certainly were wiser than I was. But I observed that even the good artisans fell into the same error as the poets; because they were good workmen they thought that they also knew all sorts of high matters, and this defect in them overshadowed their wisdom ...
Box 6. A One-Off Capital Levy?
The sharp deterioration of the public finances in many countries has revived interest in a “capital levy”— a one-off tax on private wealth—as an exceptional measure to restore debt sustainability.¹ The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair). There have been illustrious supporters, including Pigou, Ricardo, Schumpeter, and—until he changed his mind—Keynes. The conditions for success are strong, but also need to be weighed against the risks of the alternatives, which include repudiating public debt or inflating it away (these, in turn, are a particular form of wealth tax—on bondholders—that also falls on nonresidents).
There is a surprisingly large amount of experience to draw on, as such levies were widely adopted in Europe after World War I and in Germany and Japan after World War II. Reviewed in Eichengreen (1990), this experience suggests that more notable than any loss of credibility was a simple failure to achieve debt reduction, largely because the delay in introduction gave space for extensive avoidance and capital flight—in turn spurring inflation.
The tax rates needed to bring down public debt to precrisis levels, moreover, are sizable: reducing debt ratios to end-2007 levels would require (for a sample of 15 euro area countries) a tax rate of about 10 percent on households with positive net wealth.²
1 As for instance in Bach (2012).
2 IMF staff calculation using the Eurosystem’s Household Finance and Consumption Survey (Household Finance and Consumption Network, 2013); unweighted average."
Much of this public jerkiness has come from Wall Street. But over the past few years, Silicon Valley seems to have taken over as the capital of the Dilded Age. Here, the dilding is usually carried out by people who call themselves "libertarian." On economic matters, there's no real difference between libertarianism and the "conservatism" that drove the Gilded Age's plutocrats and baron-monopolists. There isn't much actual political philosophy (which might be defined as "a theory for how to order the world to achieve the best results of the largest number of people") behind these people's worldviews. Then, as now, they were motivated by pure self-interest. "Libertarianism" in these cases is the chosen worldview because it's considered cooler than just being a conservative. After the '60s and '70s, it had become a mark of deep uncoolness to be thought of as conservative, with good reason. If you're a libertarian, you can still espouse conservative ideas but also smoke weed, watch dirty movies, and dig rock music, man. The libertarian label offers a free out.
For that to happen, he envisions a mass "opting out," all under the framework of private enterprise. This, he says, is because civil society has failed, because it refused to take its lead from the tech sector. Eventually, he said "they are going to try to blame the economy on Silicon Valley."
"They" means "us," presumably. The losers. The sheeple (OK, he didn't use that word, but he might as well have). The people who don't know any venture capitalists who will finance some dumb mobile app that few people will ever use and that will never make any money.
It's actually not real clear what the fuck he was talking about, but he seemed to be trying to ape John Galt's "taking our toys and going home" speech at the end of Ayn Rand's "Atlas Shrugged," ironically perhaps the whiniest bit of speechmaking ever conceived by a rugged-individualist champion of the capitalist ideal.
It "looks like there has been a bit of telephone with respect to the original presentation," Srinivasan writes me in an email. "I'm not a libertarian, don't believe in secession, am a registered Democrat, etcetera etcetera.
"This is really a talk that is more about emigration and exit," he adds. "The US is a nation of immigrants, so it's also a nation of emigrants. There's nothing wrong with thinking about leaving the country of your birth in search of a better life, especially when children are worse off than their parents for the first time in US history. Most of this country originated from people who did exactly that. Contrariwise, most of the population (in any country) likes it just fine and doesn't want to leave."
Hirschman wants to know how the pursuit of personal gain came to be viewed as the central human virtue, the foundational assumption of much of the social sciences, and the foundation of the liberal ideal of society. And implicitly, he wants to know if we can arrive at a more adequate theory of the good society by reconsidering some of those assumptions.
One way of characterizing Hirschman's leading intuition in this book is the question of whether different kinds of society reflect different mentalities at the level of the ordinary actors within them. Is there a "spirit" of capitalism, a characteristic set of motives and ways of thinking that its denizens possess? Is this spirit different from those associated with feudalism or the socioeconomic system of the ancient world? And how would various passions be linked to various features of the social order?
...we might say that greed and self-interest are the spirit of capitalism, honor is the spirit of feudalism, and power is the spirit of the ancient world. And it turns out that each of these ideas corresponds to a passion in traditional philosophy of action (greed for material wealth, quest for glory, thirst for power)...
On this genealogy, interest started out as one of the three primary passions -- love of power, lust, and avarice. The passions were thought to produce bad behavior; so a recurring question was how to harness the passions in more socially constructive ways. And many thinkers came to the conclusion that only the passions themselves could serve to regulate the passions -- not pure reason. In particular, it was maintained that a strong regard for one's own interests could lead to self-regulation. But the most interesting part of the evolution of meanings is that interests came to be normatively favored, and they came to be understood to be distinct from the passions...
We might call this the intellectual history of economic liberalism as a political ideology. And it is an ideology that Hirschman finds ultimately flawed... More generally, the anti-capitalist critiques associated with Marx, Durkheim, and the anarchists were powerful: the pure pursuit of gain has resulted in a society in which poverty, coercion, and anomie have become the lot of the majority of society.
Alienated from both the Old South and the New America, Binx staggers towards the same sobering realization that dogged Jimmy Carter in the summer of 1979. "We've discovered that owning things and consuming things does not satisfy our longing for meaning," Carter preached in his speech. "We've learned that piling up material goods cannot fill the emptiness of lives which have no confidence or purpose."
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