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Confronting the System in Silicon Valley

As the social struggles of Silicon Valley workers (and others) are arising, they are increasingly held back by the economic and political power of the tech industry, both locally and nationally. Tech industry CEOs and financiers are play a prominent role in especially the Democratic Party, increasingly influencing the policies of the Clintons, Obamas, and other party leaders who repeatedly return to the Bay Area to raise campaign cash.

The tech industry wields its enormous power not just because of its wealth, but because it plays such an important role in the worldwide electronics revolution. Technological advances are driving the polarization of the world’s wealth and radically destabilizing the entirety of human society – and in fact destabilizing the earth itself. Chips, computers, smart phones, software, 3D printing, machine learning, artificial intelligence, and social media together constitute the cutting edge of the automation that is transforming society as we know it.

Technological Revolution

This technological revolution creates the possibility of economic fulfillment for all – although not in our current capitalist economic system. Even though it replaces human labor, automation easily allows us to produce the abundance necessary to meet the needs of every person on earth. For example,  technology writer and engineering researcher at Carnegie Mellon and Duke Universities,Vivek Wadhwa, has projected that the geometric reduction in solar and renewable energy costs could provide all the power needed to supply all human needs for water, food, housing, heat, and transportation, virtually for free, within about twenty years.

The revolutionary impact of electronic technology today clearly shows the visionary possibilities of a new world. At one time, steam-powered technology in industrial production made possible and necessary the elimination of slavery and serfdom. Today, electronic technology makes it possible, and therefore necessary, to end wage slavery, poverty, and environmental destruction.

However, the possibilities created by this potential abundance are blocked by the private property system. For example, a major section of the ruling class is moving to prevent further development of renewable energy, in order to protect its enormous investment in the fossil fuel industry that is becoming economically obsolete. By definition, the private property system can only distribute society’s wealth according to the ability to pay, not according to the needs of human beings.

Automation within the private property system replaces workers in production, leaving them with no income with which to buy the necessities of life. This contributes to a permanent systemic crisis. Instead of “pastures of plenty,” there is spreading unemployment and government austerity. Social resources are slashed for those most in need.

For many in Silicon Valley, this takes the form of skyrocketing rents and declining or disappearing incomes. Tens of thousands of low-income service workers are forced to move out of the area and become “supercommuters,” spending hours on the freeways, driving back and forth from work. Others simply move into RVs, cars, vans, or tents, causing Silicon Valley to have one of the highest numbers of unsheltered homeless people in the entire nation.

Technology and the Growth of Poverty

The electronics revolution does not proceed in a linear fashion, but in an exponential one. Once  any electronic technology is introduced, its productivity increases faster and at an ever-accelerating rate. Most people have heard of Moore’s Law, the projection that the number of transistors in an integrated circuit tends to double every two years. This process is at the heart of the technological revolution. But fewer people have heard of its economic corollary, which is known as Mead’s Law, named after Caltech professor Carver Mead. Mead’s Law points out that not only does computer power double, but its cost simultaneously goes down by half.

Mead’s Law applies not only to computer processing power, but also to digital storage and digital bandwidth. This increase in overall computing capacity has led to a vast expansion of the “cloud,” a huge online storehouse of information that lives in server farms scattered across the country and around the globe. The cloud in turn unleashes “cloud robotics,” whereby robotic production is networked, centralized, and enhanced by machine learning.

The technological revolution under the private property system drives more and more workers permanently out of production through robotization and other forms of automation. Vast areas of the country such as the Rust Belt, Appalachia, and the rural South and West – as well as countries across the globe – have become economic deserts where a living wage job is a thing of the past. Where jobs continue to exist, competition with machines drives wages down to the point where those employed are forced to live in poverty.

Another effect has been the emergence of the so-called “gig economy.” An estimated 55 million U.S. workers – 35 percent of the entire workforce – now work as freelance contractors. Although some workers may prefer to be independent contractors, about 30 percent are forced into the gig economy by the lack of traditional jobs, especially those at the lower end of the pay scale like Uber drivers. This sector is expected to grow rapidly as the technology develops, and employers increasingly seek low-cost part-time workers, without having to pay for benefits such as vacation time, healthcare insurance, or pensions.

The unemployed, the part-time, and the gig workers make up a growing section of a new class of workers that has been permanently separated from the formal economy. The system cannot help but exponentially increase the use of technology in production. The growth of technology in a private property economy will continue to rapidly create and expand this new class. The ruling class has no use for this class. The ruling class reduces and eliminates the safety net programs necessary for people to survive. There are no reforms left in the system to meet the growing needs and demands of this class.

Tech Industry Mythology

The tech industry has masterfully parlayed its reputation as “the smartest people in the world,” into a mythology that gives it powerful political influence both locally and nationally, especially in the Democratic Party. It has carefully cultivated an image of environmental consciousness, social progressivism, and enlightenment that makes it “exceptional” to the exploitative smokestack industries of the past era. The misery of those who have lost everything, that live in its shadow, gives the lie to these claims.

Contrary to the statements of its ideologists, the tech industry actually creates relatively little value compared to its profits. Value is created by human labor. Instagram, for example, had only 13 employees when it was sold to Facebook in 2012 for $1 billion. The tech industry uses its monopoly of certain brands, products, and platforms to drain enormous amounts of money out of other economic sectors, the same way nineteenth century railroad monopolists extorted farmers by overcharging them for moving their crops to market.

In general, tech profits depend entirely on stringent intellectual property laws, excessive durations of patents and copyrights, platform monopolies that violate antitrust laws, and coercive contracts. Google, for example, collects virtually all its revenue not from building products, but from selling ads on the internet, based on its stranglehold over search engine results. A huge portion of technology corporations’  profits actually come from selling the private information of their customers to other corporations.

The working class in Silicon Valley and elsewhere cannot confront the power of the tech corporations without discrediting the lie that tech owners deserve their inordinate wealth, and their lie about the way to save the American economy is to further reduce their taxes and regulations. A recent bus tour of the Rust Belt by tech venture capitalists sought to persuade local officials that tech start-ups were all they needed to make their economies thrive again. The misery of low-income workers in Silicon Valley serves as a dire warning to any local officials considering such enterprises.

Role of Revolutionaries

Humans using digital technology have the potential to create an enormous abundance of necessities for life on earth and the products necessary for restoring the environment as well. However, our ability to create wealth for humanity and the planet is blocked by the systemic barriers that force us to submit to the demands of private capital for ever-expanding profits. The private property system makes it impossible to apply modern electronic technology to address the human needs that are right in front of our face: homes for the homeless, protection from displacement and evictions, protection of families from deportations, food, safe water, clothing, education, and health care.

The more advanced the electronic means of production become, the more obvious is the system’s reliance on a foundation of poverty and exploitation to power it. The solution is to dismantle the private property system, and build a cooperative society that distributes its wealth on the basis of need instead of profit. Technology develops in antagonism with private property relations and it creates the new class in antagonism with the ruling corporate class. But the solution cannot be brought about without a conscious, scientific understanding of the problem and how to address it. The role of revolutionaries is to introduce that consciousness to educate and guide the new class around its historic task of abolishing private property and creating a cooperative society based on the distribution according need.

Members of this new class of workers, those forced into temporary employment, the gig economy, or unemployment and destitution, are forced to enter into social and political struggle simply to secure their most fundamental human needs. As the remaining jobs are increasingly stripped of benefits and living wages, more and more workers will no longer survive without battling the government for food, water, health care, housing, and education. As one gig worker expressed it, how do you fight when your boss is an algorithm? They are finding the new ways to fight. Revolutionaries are called on to participate in these struggles, and use social media as well as every other available propaganda form to point out the need to wrestle the tech means of production away from their private owners and turn them over to the public for the benefit of humanity.

July/August 2018 Vol28.Ed4
This article originated in Rally, Comrades!
P.O. Box 477113 Chicago, IL 60647 rally@lrna.org
Free to reproduce unless otherwise marked.
Please include this message with any reproduction.


Photo of Protest

30,000 March in Support of
Chicago Teachers Union Strike
Photo by Ryan L Williams
used with permission

The age-old vision of a world without scarcity, without exploitation, class domination, organized violence, and stultifying labor has been the dream of millenia. The new completely socialized labor-eliminating means of production ... sets the basis for its realization. Now human history can begin, the light of the individual shining in the full brightness of liberated life, that can only be realized within true equality and cooperation: communism, a cooperative society.

'Without Vision, the People Perish'
Rally, Comrades ! May/June 2011

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Rally, Comrades! is the political paper of the League of Revolutionaries for a New America. If you are one of the thousands of revolutionaries around the country looking for a perspective on the problems we face today, and for a political strategy to achieve the goal of a world free from exploitation and poverty, then Rally, Comrades! is for you.

Rally, Comrades! examines and analyzes the real problems of the revolutionary movement, and draws political conclusions for the tasks of revolutionaries at each stage of the revolutionary process. We reach out to revolutionaries wherever they may be to engage in debate and discussion, and to provide a forum for these discussions. Rally, Comrades! provides a strategic outlook for revolutionaries by indicating and illuminating the line of march of the revolutionary process.

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