In Silicon Valley, corporate execs at companies like Google, Apple, Facebook and Zynga like to think of themselves as making the world a better place. Apple makes products that are "insanely great." Google does no evil. Facebook makes the world more social. Zynga...gives you something to do while waiting in line at the DMV.
But in a lengthy essay in Newsweek, Breaking Views editor Rob Cox makes the case that all this talk about the Valley's largest companies being somehow morally superior to your average maker of canned goods, lawn furniture, furniture polish or liner board is basically a bunch of hooey.
Though Silicon Valley’s newest billionaires may anoint themselves the saints of American capitalism, they’re beginning to resemble something else entirely: robber barons. Behind the hoodies and flip-flops lurk businesspeople as rapacious as the black-suited and top-hatted industrialists of the late-19th century. Like their predecessors in railroads, steel, banking, and oil a century ago, Silicon Valley’s new entrepreneurs are harnessing technology to make the world more efficient. But along the way, that process is bringing great economic and labor dislocation, as well as an unequal share of the spoils. Just last week, the Justice Department warned Apple that it planned to sue the company along with several U.S. publishers for colluding to raise the price of electronic books—monopolistic behavior that would have made John D. Rockefeller proud.
I expect there is going to be a lot of righteous indignation here in the Valley about this piece, which provides a laundry list of tech industry sins: ignoring the Dickensian working conditions of the Asian factories where technology goods are fabricated; disregarding their customers' right to privacy; manipulating the capital structure of their companies to maintain control in ways that make good corporate governance advocates blanch.
The piece will get knocked for not being balanced; it makes no mention of the many services provided without cost on the Web that would not be available were it not for the ability to deliver targeted advertising - the model supports the free availability of Facebook, YouTube, Gmail, Google, Bing and a wide variety of other services.
But the broader point is right on the money. The companies of Silicon Valley often start life with the idea of changing the world, but as they mature they must answer to their employees and investors, just like every other company.
I one wrote an editorial for the late, great Internet magazine The Industry Standard about an idea that was floating around in the 1999-2000 time frame that investors needed to come up with new metrics to measure this emerging new economy. But as I noted at the time, the same old rules apply even in a changing economy. There aren't any new rules. At the end of the day, once your company crosses the line into the public markets, you must play by the same old rules. It is about profits and revenues first, and changing the world second.
