Make Government Cool Again

The birth of contemporary Silicon Valley is accelerating the slow death of Washington bureaucracy. How we rebuild civic institutions will define the American experiment for decades.

When asked to choose the best film of the last decade, Quentin Tarantino, the greatest director of our time, didn’t equivocate.

“It’s The Social Network hands down,” Tarantino said in a recent interview with the French publication Premiere. “It is number one because it’s the best. That’s all. It crushes all the competition.”

His coyness as to why it’s the best film of the decade led critics to surmise that he was making some kind of veiled social commentary. Perhaps the film was an indictment of social media, unfettered capitalism, fake news, Russian election interference and the array of ills we now associate with the tech giant. Others hinted that the film became more important just as Facebook became more important. Of course, it’s the most important film of the 2010s. It’s the most consequential company of the same era.

This reading of Tarantino’s choice might make sense if we weren’t talking about Quentin Tarantino, who in the same interview, named an independent horror film about killer alligators as his top film of 2019. Tarantino has long been a fan of director David Fincher’s films, particularly Fight Club, and also a fan of Social Network screenwriter Aaron Sorkin, whom he calls “the greatest active dialogist.” Tarantino’s choice of film has little to do with Facebook’s ascendancy or its implications for democracy, as virtually none of the controversies de jour are portrayed in the film.

The Social Network, lest you’ve forgotten, is about a group of Harvard students who end up building one of the most valuable companies in the world. The drama centers around cofounder disputes, unending litigation, some alleged cocaine use and the absurd question of whether Mark Zuckerberg built Facebook because he wasn’t tapped for a final club. As Tarantino said, the film is excellent because it is excellent. And that excellence makes it the greatest mythological depiction of Silicon Valley that has ever been distributed globally. The Social Network grossed more than $250 million at the box office, familiarizing the origin myth of a company that several billion people use.

Great films often precede cultural shifts. And though one can quibble with whether the film makes the myth or vice versa, the Silicon Valley myth accelerated just as The Social Network premiered and a new type of tech worker flocked west. The group of people that this myth affected most were not the hackers or technologists who grew up coding, but the elite young people at top colleges around the country for whom the myth provided the ultimate out—the mainstreaming of Silicon Valley’s anti-institutionalism. It marked the beginning of the shift of Silicon Valley becoming the dominant outpost for both the culture and the counter-culture. The destination for business school students and early Bitcoiners. A blueprint for cities across the world who would market their own slope or alley or other topographical feature by building incubators with open floor plans and free cold brew. The Social Network marked the moment when all institutions woke up and noticed the sheen of Silicon Valley and incorporated its culture, making tech less of an industry and more of an ethos that every institution needed to mimic to ensure survival.

Every institution except the federal government, whose power was already so decimated by its own hubris that it couldn’t even fake it. Though innovation in Silicon Valley is positive sum, the war for America’s talent and mindshare is not. And the long-running financialization of the American economy meant that much of the talent had already given up on bureaucratic Washington or worse, public service, and gone to Wall Street. Now, the most idealistic talent could merge financialization with civic-mindedness, implementing social protest in the form of a venture-backed startup. Indeed, the last decade of growth in Silicon Valley accelerated forty years of rapid governmental decline and bolstered Silicon Valley’s civic reach, fermenting its status as a shadow capital that would eventually usurp every function of government that we’ve ever known.

If all this sounds a bit hyperbolic, look no further than January 7, 2021, the day after America’s purported coup, when public markets rose to such great heights that a man trafficking in electric vehicles and reusable rockets—two of the government’s most difficult technical problems— became the richest man in the world. He knocked off Jeff Bezos, our logistics prince, whose delivery network promises to effectively distribute the Covid vaccine and end our collective nightmare. Meanwhile, that most excellent film of the last decade? The protagonist banished the 45th President of the United States from his platform, thus beginning a cascade of erasure from every other internet company of similar stature.

We are living by the laws of a shadow capital that is no longer operating in the shadows. The question is—is it now our only hope?

Shadow Capitals and the Great Unbundling of the Federal Government

Recently, some politicians have claimed that we are living in a “banana republic,” but it’s likely not for the reasons they claim. In 1930, the United Fruit Company was the largest employer in Latin America. It was boom times for the fruit business in the early 20th century, and United Fruit wielded greater power than many Central American governments, leading Guatemala, Honduras and some other Central American countries to be deemed “Banana Republics.” Though the term is dated and often misused, these countries were originally given the moniker not because they were countries or economies in decline, as the term is often used today— but because they were managed almost exclusively by private industry. The term was used to signify the power a single industry wielded over people and governments—in this case, the fruit industry. With such gravitas and scale, United Fruit would eventually run many essential functions of the relatively weak Guatemalan government: they owned more land than any other entity, so why not run the postal service, as well? Though the capital of Guatemala was formally Guatemala City, many of the duties of government were run by the shadow capital of New Orleans, the hometown of  “Sam The Banana Man” Zemurray, who ran United Fruit for 20 years until his retirement in the early 1950s.

Shadow capitals are a city or region that usurps a government’s authority or major responsibilities, sometimes without that government’s knowledge or consent. They can be malignant—as was the case of United Fruit —or positive when the concentrated commercial power or domination by a single industry leads to better outcomes and economic growth. But today’s shadow capital is different than others throughout history: unlike United Fruit, which took decades to build through mergers, technology is accelerating the reach and scale of private industry so that a company can usurp the powers of government in years, not decades.

One can look at any of the departments in the executive branch and see the true innovation not coming from the policy realm, but from the technology sector. In the case of transportation, the most consequential innovations have come from Uber and Lyft, two companies that have replaced much of public transport in cities across America with superior algorithms and ease of use. In public safety and security, Palantir and other hardware surveillance startups have transformed our intelligence agencies and our police forces, too. In education, the most consequential questions—from upskilling the adult workforce or early childhood education –are being tackled by audacious founders, many of whom have no credentials in education or have never lectured in a classroom. In elementary education, alternatives to public education have soared during Covid as parents wake up to the federal government’s curriculum.

There have always been innovation in these sectors, but technology’s rise as a consolidated shadow capital comes from the peculiarity of software: how easily is scales and how it builds dependencies that make it impossible for legacy monopolies such as government to compete. As these companies scale, they gain singularity—they aggregate the talent, data and capital. This singularity gives power not just to the CEOs of these companies, but to everyone participating in the shadow capital. And never before have employees at technology companies had such sway over how governments function. It’s why the Department of Defense was stunned when a group of engineers walked out of Google to protest the Project Maven contract, causing Google to drop out from working on the government’s artificial intelligence capabilities in 2018. Amazon had a similar push in 2018 to stop working with ICE after employees signed a petition to pull the contract. More recently, employees at these companies have helped craft trust and safety policies at Twitter and Facebook that have effectively managed the flow of information from the executive branch. Whether one believes these employees to be righteous in their aims, we can all agree that tech workers in Menlo Park and San Francisco are unelected, highly-educated people who do not work in the federal government.

It's now clear that if a young person today wants to have greater sway over policy, one should move to Silicon Valley and build a company to compete with government. If one wants to adjudicate the norms and values of the country, there’s no greater role than Twitter’s trust and safety team. It’s hard to argue that a young person could have more sway in Washington as a congressional aide than a product manager with really, really good intentions.

Endless Wars on Talent

In 2012, The Atlantic published a piece with an ominous title that should have been more worrisome for those in Washington: “Why Do Our Best and Brightest End Up in Silicon Valley and not D.C.?”

The author hoped venture capitalists might shed light on whether Silicon Valley can help reshape policy. But the interview betrayed that no one really wants to reshape anything in Washington at all. The people who really want to see things change head west (figuratively) and build something new.

The decline of the federal government tracks to the rise of global financialization— a common social critique that everyone from Bernie Sanders to Ben Shapiro has embraced. In 1989, Paul Volcker, former Chairman of the Federal Reserve, referred to the decline in public service as “a quiet crisis.” Even then, it was understood that there used to be an elite class of Americans who felt the duty and social pressure to serve their country. But things changed in the late 1960s, with many pointing to 1968 as the moment when this era collapsed. While the social upheaval of the 60s certainly led to a change in culture, it was a change in policy that would cripple the federal government’s reach and change the appeal of public service forever. Indeed, it was President Nixon’s least controversial decision— eliminating the draft—that changed America’s relationship with public service forever.

Before then, all healthy young men served in the military or might be called to do so. Elite universities used to be feeders for new bureaucratic agencies: post-war graduates of Yale and Princeton, for example, became the early backbone of America’s intelligence community in the mid-20th century. The sexiness of serving one’s country was bolstered by paperbacks by Ian Fleming that made careers in espionage (albeit, across the pond) seem preferable to those jobs on Madison Avenue or at a bank. Even the Peace Corps was sexy in the 1960s, spurred by Kennedy’s call to ask not what your country can do for you but which countries America could help save. Elected public service, too, had real cache. The American presidency was populated by Camelot, a fantasy of American royalty that cemented the Kennedy and the Georgetown sets as the American aristocracy.

As public and military service declined, America’s talent set it sights on other pursuits. By the 2000s, if you were a top graduate at one of America’s elite universities, you’d study history or economics and learn Arabic, but you were more likely to impress McKinsey clients over dinner than to use it for a policy job. From 2010, when The Social Network rolled around, to 2015, the percentage of Harvard College graduates pursuing careers in engineering grew from 4 percent to 12 percent; technology was the second most popular post-graduate field just behind financial services, at 14 percent. Anecdotally, at Georgetown University—one of the few universities with a separate feeder school for the U.S. foreign service—the 2010s saw that the most coveted jobs with training tracks for the Central Intelligence Agency or the State Department had been replaced by the likes of Palantir, which offered equity for similar work. By the end of the decade, it was clear: public service had become an increasingly dead end for career-minded young people.

Make Government Work Again

Washington tried the cool thing before. We once had a cool president who invited all the cool tech people to work in Washington and now those cool people make Spotify podcasts and Netflix documentaries. We pretend that Washington is eager for change—that our septuagenarian leadership understands where the future is headed. But it doesn’t seem to understand the digital worlds that their citizens create.

As the civic infrastructure of Washington frays and polarization increases, the only thing Americans can agree on is that Amazon Prime is an amazing service. That Elon might actually make it to Mars. Americans may disagree on the causes of climate change, but who wouldn’t want to own a Cybertruck? American renewal is not coming from Washington, but from the young people congregating on the Internet and building new institutions that solve critical civic needs.

Silicon Valley is really good at enterprise and consumer tech. It’s really good at culture. But we’ve long avoided the uncomfortable observation: Silicon Valley is really good at government. In fact, it might be the only place in America that’s actually governing, that’s building technology to solve critical problems and doing so with efficiency and scale.

These results are largely by design. Venture capital evolved separately from Washington’s perverse incentive structure, and we should be grateful for its relatively narrow goals. Companies aim for excellence, reach and customer satisfaction, which is why software has become the primary engine of growth over the last few decades, buffering America from further stagnation and decline. The speed at which software can scale—combined with monetary policy that encouraged capital to flow to private markets— has made venture capital the most efficient incentive system for solving civic problems. What a company can accomplish in a venture fund’s investment time horizon is far greater than what politicians can accomplish in a two-term presidency.

How we rebuild civic institutions will define the American experiment for decades. And venture-backed startups may become the true engine for American renewal. The coolest thing that our government could do now is accept the existence of this permanent shadow capital and ensure that the talented young people who’ve flocked to the tech sector are making government work again far, far away from Washington.