Robber barons of Silicon Valley?

March 13, 2012, 12:57 AM UTC

Are hoodies the new top hats?

Newsweek has published a provocative essay by Rob Cox, titled The Ruthless Overlords of Silicon Valley. I first thought that it was about Palo Alto real estate agents, but then realized that Cox believes Zuckerberg et al. are this generation’s robber barons. Seriously:

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.

I’m all for name-calling, so let me do some of my own: This piece is well-intentioned lunacy. Link-bait masquerading as revelation.

Cox builds his argument around the deconstruction of Silicon Valley’s smug moralism, as embodied by Google’s (GOOG) “Don’t be evil” motto. And I’ll certainly grant that too much of today’s technorati confuses building a popular social app with curing cancer. But, at the same time, failing to cure cancer isn’t the same thing as creating cancer.

Robber barons weren’t despised because they were narcissistic. They earned their scorn through opposition to basic workplace safety, poverty-level pay and massive political corruption. Have you seen Facebook employees living in rat-infested tenements? Has Twitter threatened to fire staffers if they don’t support Dick Costolo’s preferred candidates? Mark Pincus may be a particularly demanding boss, but Zynga (ZNGA) isn’t asking its coders to literally risk their lives for the cause.

Part of the problem here is that Cox lumps Apple (AAPL) in with the aforementioned Internet companies, thus allowing him to introduce the various abuses perpetrated by Chinese manufacturer Foxconn. Apple may be as hip as today’s Internet class — and based in the same geography — but it’s of a distinctly earlier vintage.

It’s an attempt of guilt by association, and not even a terribly good one. Not only is there the issue of physical products vs. digital products, but Steve Jobs never pretended to be terribly interested in building a broader tech ecosystem in which other companies could launch and thrive (Apple, for example, never invested in start-ups like Google has begun to do). Jobs may well have been interested in “an unequal share of the spoils,” but many of today’s most successful Internet entrepreneurs seem intent on helping the next guy achieve his own measure of success. Competition, they’ve realized, doesn’t have to come through exclusion.

Cox’s other major argument revolves around privacy, and the tendency of companies like Facebook to do wrong by their users in this regard. The difference between such errors and those of industrial-age robber barons is that today’s media will call tech CEOs to account. Do you remember Zuckerberg having to backtrack on Beacon? Or Mark Pincus on in-game lead generation schemes? Or the recent Path debacle?

For all the fawning that tech media does over its princes, it also is eager to pounce when user interest is threatened. Such business criticism was largely absent from media in the robber baron days. And, when it did exist, it was largely irrelevant because the barons had shamelessly bought and paid for the regulators. Sure the tech community won its fight on SOPA, but via a viral public pressure campaign rather than by bribery. Moreover, the bigger K Street interests in that fight were on the other side.

Mark Zuckerberg may indeed see a saint in his bathroom mirror. Or maybe not. All I know is that others shouldn’t look at him, or his peers, as rivals to some of corporate America’s most notorious sinners.

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