How Silicon Valley Follows the Money
Pepe ESCOBAR | 01.09.2016 | OPINION

How Silicon Valley Follows the Money

There’s way more in common between Wall Street and Silicon Valley than meets the untrained eye

There’s way more in common between Wall Street and Silicon Valley than meets the untrained eye

Wall Street and Silicon Valley are two of the key strategic hubs of hyperpower global domination. The others are the industrial-military-surveillance-security complex – of which Hollywood and corporate media are the soft power extensions – and the petrodollar racket/tributary system.

Silicon Valley has been relentlessly constructed and idolized as a benign myth; technology breaking the ultimate frontiers and reaching Utopia At Last. Not really. A joyride of a book - Chaos Monkeys: Inside the Silicon Valley Money Machine, by Antonio Garcia Martinez – argues it’s all about, what else, money. As in cold, hard cash, stock options and, just like in Wall Street, bonuses.

Martinez tells it like an American Dream insider. He’s a son of Cuban exiles, born in Southern California, with an almost PhD in Physics at Stanford, and a detour across Goldman Sachs that taught him how the casino system works. Then, back in California, he built a start-up with two friends whose embryonic product was a code-grounded method to target and boost electronic advertising. Secret revealed; electronic ads happen to be the real Holy Grail of the much lauded IT Revolution.

Academic Michael Brenner defined Chaos Monkeys as Divine Comedy as anthropology. Not quite. We’re not in the presence of Virgil guiding Dante here, more like a Benzedrine-boosted neo-Kerouac let loose on the (techno) road.

Right on page 25 Martinez captures Silicon Valley’s business logic, something that I learned myself three decades ago when I was crisscrossing the Valley – with a later stint on MIT – doing a special report on the Brave New Digital World ahead. At the time, I heard from the late great Marvin Minsky that the future would be a cross between artificial intelligence (AI) and genetic engineering. We are almost there. Martinez notes that in the future, it’s all about «computers talking to one another, with humans involved only in the writing of the logic itself».

Wall Street, of course, saw it before anyone else. Then came transportation (Uber), the hotel business (Airbnb), food delivery (Instacart), a massive array of services. We are smack on the road towards humans merely filling the gaps in a sanitized, non-stop computer workflow.

The world all that fabulous concentration of engineers, code writers, product managers, venture capitalists, key word filters, metadata and algorithms Silicon Valley is shaping is for all practical purposes a Consumer Holy Grail. We are all «free», but essentially free as extremely, precisely defined targets with a ton of features and preferences supplied to the digital workflow every time we click for a post, a comment, a search. Then, in a few minutes of digital life, we will be hit by a pop-up offer to buy something, anything.

Martinez also concisely explains the basics of search engine marketing. Marketers curate keyword lists «like a bonsai tree»; «If the revenue generated by postclick sales outpaces cost, up go the bid and the budget». This in a nutshell is how «Google makes more than some European countries produce in a year».

Monetize those bits, baby

What is a chaos monkey, really? That’s a software tool created and open-sourced by Netflix. One uses it to test a website’s resiliency against that proverbial nightmare; a server failure.

That leads Martinez to conceptualize tech entrepreneurs as society’s chaos monkeys wreaking havoc on traditional industries; «One industry after another is simply knocked out via venture-backed entrepreneurial daring and hastily shipped software. Silicon Valley is a zoo where the chaos monkeys are kept, and their numbers only grow in time. With the explosion of venture capital, there is no shortage of bananas to feed them. The question for society is whether it can survive these entrepreneurial chaos monkeys intact, and at what human cost».

The Silicon Valley zoo is predictably populated by hordes of talent –Ants? Bees? - all invariably fixated on monetizing their data brokerage skills, for their companies and especially for themselves. An extra cast of characters revolves around the geeks – from venture capitalists to an army of lawyers and the odd «angel investor» doubling as spiritual guide.

For the geek hordes, the base salary may not be exceptional, but there is prestige, perks and in a few cases stock options involved. Hotel California this ain’t; you can’t check out any time you like, because then you will lose all those perks and the lifestyle associated with them. You can always leave (or get fired) – and in this case you will always miss what you will never have elsewhere. Very few – essentially founders and CEOs - touch serious «f**k you money» and enter the billion-dollar league.

Startup life is usually hell; «backroom deals negotiated via phone calls to leave no legal trace, behind-the-back betrayals of investors or cofounders, seductive duping of credulous employees so they work for essentially nothing». It’s an extremely closed system, as I saw it for myself. In San Francisco, an extension of the Valley, everything is concentrated between First and Eight Streets, and between King and Market, in the SoMa (South of Market) district. That’s where you find, among others, Twitter, Airbnb and Uber, once startups, now enjoying Masters of the Universe status.

The ecosystem is also an apotheosis of juvenilia – in thesis the best and the brightest from the US’s elite schools all striving purposely towards an open, transparent, hyper-connected Brave New World, a never-before-tested original human experience. Well, the goals are not that lofty. A telling episode is that when Facebook faced a mortal challenge from Google in the social network front, it was pure war, Rome against Carthage-style. The standard psychological profile across the Valley would reveal an empathy-deprived Narcissus Drowned. Mature adults are extremely hard to find.

It’s quite telling that Martinez spends the last stretch of the book deconstructing his experience as a Facebook product manager, developing what would be the ineffable ad targeting mechanism. Silicon Valley after all is about how to monetize technology.

Facebook is actually going one step beyond, exploring the monetization of users’ news feeds and expanding a dominant role in the news business itself. A June study by Oxford University determined that 44% of internet users already get their news through Facebook. There are no less than 1.7 billion Facebook users around the world – and counting. Its algorithms will progressively rule content published on news sites. Computers talking to computers – with humans just filling the gaps.

Tags: Wall Street 

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