Why Silicon Valley is not the second coming of the Gilded Age • Hacker News Board

Re: Why Silicon Valley is not the second coming of the Gilded Age

#31

Post by throwaway2048 » Tue, May 21, 2013, 7:16 PM UTC

nostrademons wrote: post #15

milang wrote: post #5

"There is a growing body of research that shows that companies that limit their high-low wage ratios and distribute generous option plans consistently outperform more traditional, inegalitarian firms." I'd love to know more about this growing body of research. A basic Google search yields the ten most profitable firms: Gazprom, Exxon Mobil, Industrial & Commercial Bank of China, Royal Dutch Shell, Chevron, China Cons…

Both oil companies and big banks compensate their skilled employees very well. It's not hard to make six-figures straight out of an MS as a petroleum engineer or geologist; you can do $200K/year with 5-10 years experience. And banks, of course, are legendary for their comp structures: you could be doing $80K salary + $160K bonus straight out of college and making half a mil or more 5-10 years out. It's the roughnecks…

Even roughnecks make a fair amount of money in the oil industry. In canada a skilled tradesperson, like a ticketed welder, can easily clear 250k a year. The hours are long, and the work is hard, but it tends to be peicemeal in basis, so you arnt stuck doing it all year long. Also adding to this, as their work is typically all over the map, both living and traveling expenses are typically covered via something like a $100 a day living stipend.

Re: Why Silicon Valley is not the second coming of the Gilded Age

#32

Post by YokoZar » Tue, May 21, 2013, 7:17 PM UTC

A much simpler point the author missed is that wealth doesn't exactly cause the housing shortage so much as not building houses. San Francisco has rent control, and most of the peninsula has severe zoning controls.

It would be extraordinarily profitable to build commercial buildings with dense lofted apartments in many areas of the peninsula, however they are simply prohibited by local governments. That's neither libertarian nor egalitarian.

Re: Why Silicon Valley is not the second coming of the Gilded Age

#33

Post by rayiner » Tue, May 21, 2013, 7:18 PM UTC

dmmalam wrote: post #10

"I would be surprised if there were any new industry in the history of capitalism that distributed its economic rewards to its employees as widely as Silicon Valley has." Wall street has been distributing most of it's profits to employees in the form of bonuses for decades. Though unlike SV, it get criticised heavily (a lot unfairly IMHO) for it. Having worked in both, I feel they are full of the same 'type' of peopl…

Yeah, this quote is totally off base. Finance, consulting, law, and accounting all distribute company earnings very widely (often, entirely) to the people who do the actual work.

These companies also tend to have much flatter structures than Silicon Valley tech companies. The greenest associate at a big NYC law or consulting firm probably has just a few levels above him to the managing partner or CEO. The structure is instead broad and flat, with potentially hundreds of partners or managing directors leading their teams with high levels of autonomy.

Pay spreads are also narrower. I don't have numbers for consulting, but many NYC law firms are 5:1 or less top to bottom for partners, and around 30:1 for highest earning partner down to greenest associate (and many of these scales are lock-step, meaning everyone at the same level of seniority is paid the same). Finance is of course broader (thanks to huge bonuses for traders), and my impression is that consulting and accounting are narrower. The pay spread at Yahoo between Marissa Mayer and the most junior programmer is more like 250:1, and even within the ranks of executives the spread is probably more like 50:1.

The deep irony of these professions is that while they are a major part of the capitalist system, they are personally mostly free from that system. It takes very little capital to run a services businesses like these, which means there is no need to bring in shareholders, which means that the money of the business stays with the workers rather than being diverted to investors.

Re: Why Silicon Valley is not the second coming of the Gilded Age

#34

Post by Dirlewanger » Tue, May 21, 2013, 7:19 PM UTC

d4vlx wrote: post #3

This article conflates Libertarians with Republicans which I don't think makes sense in Silicon Valley. Yes, nationwide they tend to be in the same group but not in the valley. Judging from comments on HN the valley does sound quite libertarian but not the kind that register and vote Republican. It seems more intellectual and based in logic while Republicans are more about dogma and scoring political points.

Grouping those under ~30 or so into distinct political camps is both hopeless and erroneous, especially given how many of just people in general today don't identify with either major political party.

Re: Why Silicon Valley is not the second coming of the Gilded Age

#35

Post by arh68 » Tue, May 21, 2013, 7:22 PM UTC

Sort of a unexpected result, isn't it? The more 'egalitarian' companies distribute (massive) amounts of wealth into a (relatively) large number of people, gentrifying the entire Valley, and threatening to push the old inhabitants out. Is this egalitarianism? In making the middle managers (or whoever these people are) into millionaires, the divide between billionaires and the layman isn't actually improved: now the gap is even wider.

There is also some curious use of evidence: Obama won Santa Clara by 42% implies "the most dynamic sector .. is now decisively in the camp of the Democrats", but it was only 30 years ago that Reagan won the same county by >10%. The data seems to imply that the county could swing back next election, but the author doesn't seem to appreciate that idea. Why does the author have a hunch that while they temporarily voted Republican, they're truly Democrats at heart?

Re: Why Silicon Valley is not the second coming of the Gilded Age

#36

Post by jbooth » Tue, May 21, 2013, 7:23 PM UTC

jmduke wrote: post #12

d4vlx wrote: post #3

This article conflates Libertarians with Republicans which I don't think makes sense in Silicon Valley. Yes, nationwide they tend to be in the same group but not in the valley. Judging from comments on HN the valley does sound quite libertarian but not the kind that register and vote Republican. It seems more intellectual and based in logic while Republicans are more about dogma and scoring political points.

Judging from comments on HN the valley does sound quite libertarian but not the kind that register and vote Republican. It seems more intellectual and based in logic while Republicans are more about dogma and scoring political points. I think deciding half the nation eschews logic and intellect in favor of dogma and 'political points' is an extremely unfortunate move. People are not the pastiches you see on TV and Hu…

More like half of that half. There's polls on how many people still think Saddam had WMDs or think Obama was born in Kenya or whatever. That's still enough to swing primaries and give us the current Congress.

I think a good number of small-l libertarians would consider voting Republican if they were a reasonable alternative and if Obama was actually the socialist he's made out to be. But the fact is, they're not and he isn't. Half of the political system is in fact impervious to reason.

Re: Why Silicon Valley is not the second coming of the Gilded Age

#37

Post by jseliger » Tue, May 21, 2013, 7:29 PM UTC

I find it somewhat funny that the original New Yorker article about the tech industry's insularity is itself hidden behind a paywall; I actually wanted to submit the Packer article itself this morning but didn't bother. Nonetheless, I do think Johnson does a decent job of giving the other side.

But I did send this as a letter to the editor, since it concerns a pet peeve that I constantly see in the media:

George Packer's essay on Silicon Valley's politics makes several references to housing prices, including that "the past two years have seen a twenty-per-cent rise in homelessness, largely because of the soaring cost of housing." But he doesn't mention how supply and demand affect pricing, as Matt Yglesias does in The Rent is Too Damn High or Edward Glaeser does in The Triumph of the City. Both writers have correctly observed that many urban jurisdictions prevent housing from being built to accommodate growing demand; as a result, prices rise. It's not primarily tech companies or their employees who have driven housing prices in Silicon Valley: it's residents themselves, and the courts that have given residents and politicians extraordinary powers to block development—which is why "San Francisco is becoming a city without a middle class."

Re: Why Silicon Valley is not the second coming of the Gilded Age

#38

Post by stephencanon » Tue, May 21, 2013, 7:33 PM UTC

brown9-2 wrote: post #26

pyoung wrote: post #20

Earlier quoted context omitted.

I think he did a good job at making the distinction. Not sure if you got the jist of it, but he clearly states that despite the heavy libertarian leaning culture, SV overwhelmingly voted for Democrats the last few elections, indicating they were not on board with the Republican platform. My take on it is that SV is 'liberaltarian', in that they prefer small, efficient, decentralized organizational structures, but tha…

but he clearly states that despite the heavy libertarian leaning culture, SV overwhelmingly voted for Democrats the last few elections, indicating they were not on board with the Republican platform. The author seems to use this fact to negate the idea that many in SV lean libertarian: If libertarianism is so rampant in Silicon Valley, why are they voting for higher taxes and funding a big government liberal by such…

> what is the "Los Gatos" in reference to?

Presumably the town of Los Gatos (a relatively wealthy suburb of San Jose). Why Los Gatos in particular? I have no idea.

Re: Why Silicon Valley is not the second coming of the Gilded Age

#39

Post by api » Tue, May 21, 2013, 7:34 PM UTC

Alex3917 wrote: post #17

stcredzero wrote: post #4

Since I moved to California and the Bay Area, I have to say I've encountered more smarmyness and arrogance than in Houston Texas. This by itself isn't a negative indicator. However, if you couple it with a tendency for people to judge you by "your cover," then it is. The real attitudes of people, and how they differ from stated ones, are a big part of the downsides of a milieu like the "Gilded Age." Success itself is…

"Since I moved to California and the Bay Area, I have to say I've encountered more smarmyness and arrogance than in Houston Texas." I'd describe it more as snobbishness and cliqueyness, but same basic idea. Silicon Valley is great if you're working on something trendy, but it can be surprisingly unfriendly if you're just trying to make cool stuff.

Thanks for reminding me again why I'm not in The Valley. Seems to me the place has become a very trendy echo chamber, more of a hot fashion and marketing center than a center of innovation or creativity.

Re: Why Silicon Valley is not the second coming of the Gilded Age

#40

Post by jiggy2011 » Tue, May 21, 2013, 7:35 PM UTC

pg wrote: post #22

smacktoward wrote: post #19

The fundamental error of this piece is that it assumes that if you vote Democratic, you're by definition not a one-percenter. But this is just wrong. There are lots of one-percenters who vote Democratic. They just mostly feel more strongly about cultural-liberalism issues than they do about economic ones. But when it comes to economic issues, these folks still tend to lean rightward; they overestimate the degree of s…

The fundamental error of this piece is that it assumes that if you vote Democratic, you're by definition not a one-percenter. What? Much of the article is devoted to making the opposite point: that the SV elite overwhelmingly support the Democrats.

Political affiliation seems like a red herring in a two party system. It wouldn't surprise me if people in SV vote democrat because they don't like certain things associated with the republicans (religion , anti-gay rights, guns , whatever) rather than agreeing wholesale with the democratic party manifesto.