Silicon Valley wants unfettered control of the tech market. That’s why it’s cosying up to Trump
Spooked by Biden’s wealth tax, big tech venture capitalists are showing their progressive credentials were only ever skin deep
Evgeny Morozov
Wed 26 Jun 2024 12.00 CEST
Hardly a week passes without another billionaire endorsing Donald Trump. With Joe Biden proposing a 25% tax on those with assets over $100m (£80m), this is no shock. The real twist? The pro-Trump multimillionaire club now includes a growing number of venture capitalists. Unlike hedge funders or private equity barons, venture capitalists have traditionally held progressive credentials. They’ve styled themselves as the heroes of innovation, and the Democrats have done more to polish their progressive image than anyone else. So why are they now cosying up to Trump?
Venture capitalists and Democrats long shared a mutual belief in techno-solutionism – the idea that markets, enhanced by digital technology, could achieve social goods where government policy had failed. Over the past two decades, we’ve been living in the ruins of this utopia. We were promised that social media could topple dictators, that crypto could tackle poverty, and that AI could cure cancer. But the progressive credentials of venture capitalists were only ever skin deep, and now that Biden has adopted a tougher stance on Silicon Valley, VCs are more than happy to support Trump’s Republicans.
The Democrats’ romance with techno-solutionism began in the early 1980s. Democrats saw Silicon Valley as the key to boosting environmentalism, worker autonomy and global justice. Venture capitalists, as the financial backers of this new and apparently benign form of capitalism, were crucial to this vision. Whenever Republicans pushed for measures favourable to the VC industry – such as changes in capital gains tax, or the liberalisation of pension fund legislation – Democrats eventually acquiesced. On issues such as intellectual property, Democrats have actively advanced the industry’s agenda.
This alliance has shaped how the US now finances innovation. Public institutions such as the National Science Foundation and National Institutes of Health fund basic science, while venture capitalists finance the startups that commercialise it. These startups, in turn, build on intellectual property licensed from recipients of public grants to design apps, gadgets and drugs. A good chunk of these profits, naturally, flows back to the venture capitalists who own a stake in these startups. Thanks to this model, Americans now pay some of the highest drug prices in the world – yet when politicians have tried to curb these egregious outcomes, they have been met with accusations from the VC industry that they’re undermining progress.
Venture capitalists have been keen to emphasise the role they play in delivering progress. Through podcasts, conferences and publications, they have successfully recast their interests as those of humanity at large. For a clear distillation of this worldview, look no further than The Techno-Optimist Manifesto, a 5,200-word treatise by Marc Andreessen, co-founder of the VC firm Andreessen Horowitz. Its jarring universalism suggests that all of us – San Francisco’s venture capitalists and homeless alike – are in this together. Andreessen urges readers to join venture capitalists as “allies in the pursuit of technology, abundance, and life”. Yet his text quickly reveals its true colours. “Free markets,” he writes, “are the most effective way to organise a technological economy.” (Andreessen has criticised Biden without endorsing Trump.)
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