Since the Occupy demonstrations in 2011, economic inequality has been on people’s minds, and for good reason: In the United States, income inequality has reached levels not seen since 1928 (the year before the Great Depression); globally,Oxfam reports that theeight richest peopleare as wealthy as half the planet. The global elite have even given lip service to the problem, to the point of making it a featured topic at the highly exclusive World Economic Forum in Davos earlier this year.
Yet while some tech leaders acknowledge the consequences of exacerbated inequality, others are not convinced — and many are less concerned with bridging the gap and more concerned with finding a way to protect themselves in the event that everything goes south.
In 2014, after reading Thomas Piketty’s Capital in the Twenty-First Century, a tome on inequality that became an unexpected best seller, Bill Gates acknowledged that “[c]apitalism does not self-correct toward greater equality,” and that “[h]igh levels of inequality are…undercutting the ideal that all people are created equal.” Gates agreed with Piketty that taxes must shift away from labor and that capital should be taxed at a higher rate — more recently suggesting an openness to a robot tax — but among the leaders of Silicon Valley, Gates’s words are more the exception than the norm.
Survivalism has become an obsession among some of the wealthiest people in the country.
At the Code Conference that same year, many tech leaders suggested that instead of being responsible for the growing income gap, technology was the solution. That’s not entirely false. Technology can certainly be a tool to expand access to opportunity, but Silicon Valley has proven itself not to be truly concerned about the economic impacts of its disruptions.
Buying Sanctuary
The CEOs of Silicon Valley’s largest companies have been happy to use their platforms to speak out on social issues (and deserve credit for doing so); but when it comes to advocating for specific economic policies, lower tax rates are prioritized far above tackling inequality. Instead, some tech leaders are pursuing a far different objective: to prepare themselves for a possible backlash or, worse, to insulate themselves against possible civilizational collapse caused climate change or some other disaster.
No longer the realm of reality TV, survivalism has become an obsession among some of the wealthiest people in the country, as documented well in a recent New Yorker piece entitled “Doomsday Prep for the Super-Rich.” Instead of learning how to survive in the wilderness, they’re buying rooms in refurbished nuclear silos, stockpiling food and ammunition, and even paying for refuge and residency in foreign countries they consider more stable. The people preparing for a dystopian future have a tendency toward anonymity, but they are not some fringe element within the tech community. Indeed, one of Silicon Valley’s most prominent billionaires is among them: Trump supporter and possible vampire Peter Thiel.
The New Zealand Escape Route
The leading foreign destination for these centi-millionaire and billionaire “suvivalists” is the peaceful, South Pacific island nation of New Zealand. In his New Yorker piece about this elite trend, Evan Osnos found that while bunkers are more popular stateside, helipads and secluded estates are at the top of the list for those who go abroad. However, the increase in properties being purchased in New Zealand is angering some of the country’s citizens, and Thiel’s case is particularly indicative of why.
In order to obtain New Zealand citizenship, the average expat must first obtain permanent residency — typically after at least two years of work — then spend another five years there as a contributing member of society before being able to apply for naturalization. Thiel’s New Zealand citizenship — his third, having been born in Germany and later naturalized in the United States — was granted to him despite his never having lived in the country, and his bearing no intentions to ever move there.
Though Thiel became a Kiwi citizen in 2011, the public didn’t find out until January 2017. Naturally, they had a lot of questions, and the government wasn’t initially very forthcoming with answers. After persistence from the local media, Thiel’s application for citizenship was released, and it showed that the minister of internal affairs had granted Thiel an exception because of investments he had made in several local tech companies, as well as letters of support provided by wealthy New Zealanders. Thiel didn’t even travel to the country for his citizenship ceremony but instead received it during a private ceremony at the consulate in Santa Monica.
Yet the story doesn’t end there. Nine months after becoming a citizen, Thiel’s Valar Ventures entered into an investment partnership with the New Zealand government in which Thiel pledged to invest $40 million in local technology companies. This pledge was never fully realized — instead, Valar invested only $18 million, and most of those funds were used to buy stocks in Xero, an accounting software company in which Thiel had already invested and whose founder had provided a letter of support for Thiel’s citizenship application. Xero’s shares subsequently soared, and Thiel activated a buyback option in the contract, which netted him a $30 million profit while the government barely broke even.
While the New Zealand government has officially said that the granting of Thiel’s citizenship had nothing to do with these relationships, the timing of the investment deal and the Palantir relationship raise legitimate questions about why Thiel was granted an exception.
Further, Palantir Technologies, a Big Data company founded by Thiel, established relationships with the New Zealand Defence Force, the Security Intelligence Service and the Government Communications and Security Bureau in 2012, not long after Thiel received his citizenship. These agencies license Palantir software for use in surveillance activities, and while the government has officially said that the granting of Thiel’s citizenship had nothing to do with these relationships, the timing of the investment deal and the Palantir relationship do raise legitimate questions about why Thiel was granted an exception.
Thiel has never lived in New Zealand and has no intention of doing so — and the profits he made from the investment partnership show that he is clearly benefiting more from his third citizenship than he is acting in the public interest. Thiel now has his sanctuary to which he can escape if Americans do rise up in response to their further impoverishment and disenfranchisement, and his story is indicative of how wealth comes with a different set of rules.
Open Borders for the Rich
When Donald Trump scaremongers about immigrants flooding over the borders and signs travel bans directed at people from predominantly Muslim countries, he’s targeting a particular class of people: the poor and destitute. His actions will not make a difference to oil barons from the Gulf states nor Mexican billionaire oligarchs. Instead, it is the refugees fleeing the Syrian war and the Central Americans trying to escape the drug cartels who will suffer.
While borders are increasingly closed to poor migrants, the rich can buy citizenship in agrowing number of countriesaround the world.For them, the world is effectively borderless, and their wealth allows them to go almost anywhere they want to with little hinderance. The rich can access any opportunity wherever it is in the world, but the poor are confined to their national borders, unable to seek out higher wages or better jobs elsewhere.
As the rich craft their escape plans to foreign countries where they’re welcomed as long as they make an investment, uneven border policies and empty savings accounts will force the poor, the working class and the increasingly hollowed-out middle to shoulder the burden of the inevitable collapse of the elite’s free-market experiment, which has slashed social supports and decimated the economic prospects of so many.
Insufficient Solutions
A few voices among the leadership of Silicon Valley are beginning to speak out in favour of a basic income to address the growing crisis of inequality and the lack of good jobs in the country. While there’s no doubt that providing a basic standard of living to everyone would be an improvement, it is not a sufficient response to the automation or gig-ification of much of the economy.
There seems to be an acknowledgement from at least some of the richest and most powerful people in the country that there’s a problem with the current economic model, but while some have no solution, others are more concerned with cultivating a paranoid community of wealthy survivalists. A final group does have some ideas, but they do not go far enough. The idea that a coal worker, just to use an example, will simply be content with losing their job as long as they’re granted a subsistence living is wishful thinking.
This isn’t to say that the future is hopeless. We can create a more equitable society, but it seems unlikely that that action will come from the boardrooms of Silicon Valley, and even less so from Washington or the state capitols. Instead, it will require a radical departure from the current free-market, low-regulation framework that inflicts so much suffering on so many while distributing benefits to so few.
Silicon Valley is constantly praised for its ability to imagine the future, then bring it to life. It’s time for the tech industry to acknowledge the impacts its so-called disruptions are having on average people and consider its collective responsibility to provide real improvements in the lives of its fellow citizens.
