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**In Silicon Valley the new masters of the universe think they know best**
A new elite wants to change the world, but they don’t want to accept any rules. Do they need to be reined in?
In the Silicon Valley, a new elite is forming that wants to determine not only what we consume, but also the way we live. They want to change the world, but they don’t want to accept any rules. Do they need to be reined in?
The word on the street is that Travis Kalanick, founder and chief executive of Uber, can be an ass----. He publicly insults the competition, mocks his own customers on Twitter and believes that politicians are incompetent. A top company executive even went so far as to suggest that journalists be spied on and Kalanick himself has said that it is as easy for him to seduce women as it is for others to call a taxi. In response to unhappy Uber drivers protesting poor pay, Kalanick predicted that they would soon be replaced by computers anyway.
Since December, Uber has been valued at $US41 billion ($53.6 billion), not much less than Germany’s largest financial institution, Deutsche Bank. It only took the company five years to spread from San Francisco to more than 260 cities in over 50 countries around the world. Every month, the company adds another couple of countries and a handful of cities to its portfolio.
Uber is a good – no, a great – product. Essentially carpooling at the push of a button, it is an extremely simple service and one whose implementation is technically brilliant and easy to use. In most parts of the world, Uber is not only cheaper than any taxi service on offer, but also better. The company says that 50,000 new drivers join Uber each month.
The fact that the boss isn’t particularly nice shouldn’t really matter that much, but things aren’t quite that easy in this case. The company, after all, is a mirror image of its founder: aggressive, ruthless and overly ambitious.
After Portland, Oregon, banned the ride-sharing company from operating in the city late last year, Kalanick launched the service there anyway. The head of the local bureau of transportation was furious. “They think they can just come in here and flagrantly violate the law?” he asked. “This is really amazing. Apparently they believe they’re gods.”
There has been similar resistance in many other cities around the world, including in Germany, where Uber simply ignored court orders. For Kalanick, though, such skirmishes are small frays in a much larger war for supremacy. His “vision,” as he calls it, sees Uber becoming a kind of global transportation service that will ultimately allow city dwellers to eschew owning a car. He sees it transforming into a mobility giant that doesn’t just take people from place to place, but also goods – at the click of a button and at the lowest price available. Ideally with a driverless vehicle.
But Uber isn’t the only company with ambitions of taking over the world. That’s how they all think: Google and Facebook, Apple and Airbnb – all the digital giants along with the myriad of smaller companies in their wake.
Their goal is never a niche market; it’s always the entire world. But far from being driven by delusional fantasies, their objectives are often realistic, made possible by a potent cocktail unique in economic history: globalisation combined with digitalisation.
The technological advances made in the last decade have been breathtaking, but it is likely still just the beginning. The growth of new technologies, after all, has been exponential rather than linear, with ever larger advances coming at an increasingly rapid rate. It is like a gigantic avalanche that begins as a tiny snowball at the top of the mountain.
The iPhone made its appearance only seven years ago, but most of us no longer remember what the world was like before. Driverless cars were considered to be a crazy fantasy not long ago, but today nobody is particularly amazed by them. All the world’s knowledge condensed into a digital map and easily accessible? Normal. The fact that algorithms in the United States control some 70 per cent of all trading on the stock market? Crazy, to be sure. But normal craziness.
Dozens of companies are trying to figure out how to use drones for commercial use, be it for deliveries, data collection or other purposes. Huge armies of engineers are chasing after the holy grail of artificial intelligence. And the advances keep coming. Machines that can learn, intelligent robots: We have begun overtaking science fiction.
The phenomenon is still misunderstood, first and foremost by policymakers. It appears they have not yet decided whether to dive in and create a usable policy framework for the future or to stand aside as others create a global revolution. After all, what we are witnessing is not just the triumph of a particular technology. And it is not just an economic phenomenon. It isn’t about “the internet” or “the social networks,” nor is it about intelligence services and Edward Snowden or the question as to what Google is doing with our data. It isn’t about the huge numbers of newspapers that are going broke nor is it about jobs being replaced by software. It’s not about a messaging service being worth $US19 billion ($24.8 billion) or the fact that 20-year-olds are launching entire new industries.
We are witnessing nothing less than a societal transformation that ultimately nobody will be able to avoid. It is the kind of sea change that can only be compared with 19th century industrialisation, but it is happening much faster this time. Just as the change from hand work to mass production dramatically changed our society over 100 years ago, the digital revolution isn’t just altering specific sectors of the economy, it is changing the way we think and live.
This time, though, the transformation is different. This time, it is being driven by just a few hundred people.
There is, of course, nothing new about powerful elites. Indeed, wealthy factory and oil barons dominated the 19th century. Later, it was bankers and hedge fund managers who felt called upon to grab control of the world’s destiny – a group that un-ironically called itself “masters of the universe”. But their era is slowly reaching an end.
The new global elite are no longer based on Wall Street. Rather, they have their headquarters in Silicon Valley, the 80-kilometre long valley south of San Francisco. It is here that the chip industry got its start and where the computer age began – and it is now where the leaders of the current digital revolution are located. They are founders and chief executives like Sergey Brin of Google, Tim Cook of Apple and Mark Zuckerberg of Facebook. They are more recent newcomers like Travis Kalanick of Uber and Joe Gebbia of Airbnb. They are angel investors who pump billions into up-and-coming tech companies. And they are all supported by an innumerable army of programmers, computer experts and engineers who are constantly seeking to replace an old concept with a new product.
The new “masters of the universe,” though, are fundamentally different from their predecessors: Their primary focus isn’t on money. They don’t want to just determine what we consume, but how we consume it and how we live. They aren’t trying to capture just one economic sector, but all of them. They aren’t stumbling haphazardly into the future, rather they are ideologues with a clear agenda. Indeed, aside from their astounding success, it is that ideology that makes them unique. The religion of Wall Street is money. But the religion of Silicon Valley goes much deeper. It is driven by substance; it is the unfailing belief in a message.
That message holds that technology can change humanity for the better. The people from the valley who hope to reshape the world fundamentally believe that their high-tech solutions will create a better future for all of mankind just as pious Hindus believe in reincarnation. But they are not interested in external interference. The Silicon Valley elite has little use for policymakers and considers regulation to be more than just a hindrance, they see it as an anachronism. Their message seems to be: If societal values such as privacy and data protection stand in the way, then we simply have to develop new values.
They see the roots of their technological crusade in the counterculture of the 1960s, the era that formed Apple co-founder Steve Jobs. But their worldview is a libertarian one, in the tradition of radical thinkers such as Noam Chomsky, Ayn Rand and Friedrich Hayek. The result is a unique political philosophy that combines esoteric hippie sensibilities with hardcore capitalism. And the Silicon Valley elite aren’t reticent about their plans. They openly admit to wanting to shape the world in accordance with their ideas. And they are convinced that the changes we have already seen in recent years were nothing but the opening act.
Is their success preordained? Is the attempt to block Uber just as silly as the attempt to preserve the horse-drawn wagon was a century ago? Is now the time to impose regulation before the world falls into the hands of a digital monopoly? Or should we simply gratefully accept the high-tech solutions that are making our lives easier? Should we be afraid of a technological future or should we yearn for it as a path to greater prosperity?
There is also one more important question. Silicon Valley is a masculine world, one in which Yahoo chief executive Marissa Mayer is the exception. Indeed, some start-ups don’t hire any women at all and it is more difficult for female entrepreneurs to access funding. Can a global vision be so one-sided?
This much is certain: Over the coming years, we will have a global debate about what the framework for the digital future needs to look like. Those who wish to play a part in shaping the future need to understand how Silicon Valley leaders view the world and what they want. Four encounters with prominent thought leaders, protagonists of the technological elite open a window into that world.
Ray Kurzweil: the prophet
Ray Kurzweil is widely recognised as a genius. He is director of engineering at Google, holds 19 honorary doctorate degrees, is the inventor of the flatbed scanner and the first text-to-speech synthesiser and holds dozens of additional patents. Kurzweil has dedicated his life to thinking about technology, and not long ago he reached the following conclusion: In 2029, computers will be able to do everything that humans can, just better.
Kurzweil is 67 years old, but is as spry and energetic as a 35-year-old. Slender, with wispy hair and angular glasses, his appearance is slightly reminiscent of Woody Allen. Every day, Kurzweil swallows 150 pills – vitamins, minerals and enzymes – and injects himself with additional supplements. His goal is to hang on long enough that technological advances make it possible to extend human life indefinitely. He is convinced that such advances aren’t too far off. After all, Google and a dozen other companies are working on putting a stop to aging and on finding a cure for cancer.
Radical faith in technological advances has always been a key element of the Silicon Valley mindset, ever since engineers began fabricating the first microchips here 50 years ago and ever since Steve Jobs and Steve Wozniak assembled the first Apple computer in their garage. A decade ago, Kurzweil cemented and concentrated this tech optimism into a single term: Singularity.
The word describes the moment in the future when humans and machines become so similar that humankind will suddenly be catapulted into the next level of civilisation. It is a kind of chain reaction, triggered by mutually accelerating technologies that suddenly make everything possible that had thus far only existed in science fiction novels: intelligent machines, extended life spans and three-dimensional holograms, for example. He describes it as a kind of digital Big Bang, after which the world won’t just have changed. It will be a completely different place. “The pace of technological change will be so rapid, its impact so deep, that human life will be irreversibly transformed,” Kurzweil writes in his book “The Singularity Is Near: When Humans Transcend Biology”.
That may sound like a pre-pubescent fantasy, but in Silicon Valley, pretty much everyone believes it in some form or another, even the most sober scientists and the most hard-bitten businesspeople. It is part of the invisible manifesto that everyone in Silicon Valley adheres to: the belief in the limitless possibilities of technology; the belief that we are on a path characterised by an increasing number of breakthroughs that are becoming more frequent and more significant.
The “singularity” gives that belief its necessary structure, its zenith. Leading humanity into a better future is the goal – and tech-optimism becomes a redemption fantasy.
Kurzweil has been making prognostications about the future of technology for some time, and has often – though not always – been right. In 1990, for example, he predicted that computers would be able to beat humans in chess within eight years. It happened in 1997. He insisted that the internet would change the world at a time when just a few hundred academics had access to the web. He spoke of “cybernetic chauffeurs” that would be able to drive cars, a prediction which has since become reality.
Kurzweil has often been laughed at for his ideas, as he still is today, even if the laughter isn’t as loud as it once was. “My ideas aren’t radical any longer,” he says in a soft voice. Kurzweil isn’t a missionary or a blazing prophet. Rather, he simply shrugs his shoulders as if to say: It’s great that more and more people share my view of the world.
The idea of a singularity seems less and less crazy the further digitalisation advances. The power of computers and the capabilities of machines are both increasing dramatically. On the one hand, this development is the product of Moore’s Law, which holds that the power of computer chips doubles roughly every two years. A processor from 2014, for example, is 32 million times as powerful as the first Intel chip from 1971. On the other hand, faster and better computers are merely the prerequisite for many additional technologies that are currently exploding: networks, robots, medical drugs, materials science and biotechnology, to name a few.
All of these technologies influence each other, but the results of that have not yet become completely clear. What, for example, does it mean for medicine when a human genome can be sequenced in just a few hours at a cost of a mere $US1000?
Due to its grand dimensions and profundity, it is a development that is difficult to comprehend. Psychologists and sociologists say there is a reason for that: During the last 100,000 years, developments appeared to have been linear and local. Now, suddenly, civilisation is developing exponentially and globally.
Kurzweil explains the change with the following example: If you take 30 linear steps, you travel 30 metres. If you take 30 steps exponentially, you travel a billion metres. It is not an easy concept to grasp and even digital leaders in Silicon Valley have their difficulties. If you talk to computer experts and engineers at high-tech giants these days, their faces are often covered in a huge grin, euphoric but also surprised at the crazy pace of progress.
Roughly 20 years elapsed between the creation of the first portable computer fit for the broader marketplace and the introduction of the iPhone. Now, smartphones are being improved at intervals of decreasing length. In another 25 years, say techies from the Valley, we won’t have to carry devices with us at all anymore. They will be replaced by molecular computers and biometric sensors that are woven into the world around us.
Sebastian Thrun: the engineer
In recent years, Google has developed more projects that have become symbolic of the opportunities and dangers of the new science fiction world than any other company in the world. It has developed a driverless car, it sought to market the data-eyeglasses Google Glass and it has even come up with contact lenses that measure blood-sugar levels.
All of these inventions come from a single research laboratory called Google X, whose founder is a German computer scientist named Sebastian Thrun. Tanned and tall, Thrun was born in Solingen before going on to study at the University of Bonn. He has since become a close confidant of Google head Larry Page.
“The singularity is already here,” he says. “It’s not something that just happens next Tuesday at 9:40 in the morning. It’s a process and it is taking place right now.”
Thrun doesn’t believe that machines will ever completely replace all people, but he does think that enough will be made redundant that it is time to start thinking about how we will study, work and even organise our governments in the future. “One person in the correct system is as efficient today as 100 people were just a short time ago,” he says. He is concerned about what that might mean for the labor market. An ever greater number of jobs will be replaced by software, he believes, in a process that is irreversible.
Thrun has been interested in the brain and human intelligence since his youth, leading him to become a robotics specialist. “Those who try to make a robot intelligent develop a huge amount of respect for the magnitude of human intelligence,” he says. Stanford University has made him director of its Artificial Intelligence Laboratory. And he has become something of an authority in Silicon Valley, an example for all those engineers and programmers who are working away in their garages and dreaming of building machines that are more intelligent than the ones we have today.
Forty-seven-year-old Thrun has built perhaps the best robot in the world: Google’s driverless car. The automobile is now even able to manoeuvre its way through busy city traffic in a manner that makes it indistinguishable from human-driven cars.
These days, though, Thrun is spending most of his time at his own company instead of Google or Stanford. He has assembled 120 people in the cluttered offices of a building located in an unremarkable industrial park in the hopes of revolutionising education. His company is called Udacity and it offers large numbers of online educational programs and credentials in so-called Massive Open Online Courses.
Why education, a field that seems to have nothing to do with robotics and technology? “I would like to change society and I asked myself how I could maximise my positive influence on the world,” Thrun says.
Long ago, Thrun put together a list of 20 areas where he could change our lives. Every now and then he takes a fresh look at the list and thinks about what he has to invent to make each change a reality. At the very top of the list was his desire to improve traffic safety. “Every year,” he says, “1.2 million people lose their lives due to driver error.” The creation of the driverless car has taken care of that life chaning item, leaving 19 more.
Another area toward the top is education. Technological change is one of the drivers of increasing inequality in the world and Thrun is convinced that society must adopt concepts of life-long learning in response, affordable and accessible to all.
Education is a slow and difficult-to-reform sector, but that is exactly what motivates Thrun to act. “The more resistance, the better,” he says. “I love doing things that people say are impossible.” In the final analysis, he says, the Silicon Valley formula is quite simple: “Everyone here wants to change the world with technology and isn’t afraid of failing or of doing something wrong.”
Thrun is convinced that the world would be much further along if people thought like that everywhere. He thinks that is particularly true of Germany, a country which he says has the “greatest amount of unused potential.” Early last year, Thrun was invited to speak at a dinner with German President Joachim Gauck, where he presented his vision of the world as it will look tomorrow and spoke about how Google Glass was an example of artificial intelligence that can augment our own brains.
After dinner at the president’s residence in Berlin, Gauck came to him and said: “Mr Thrun, you make me afraid.” Thrun understands that viewpoint and its historical background, but wants the debate to be focused more on opportunities than on fears – because the advance of technology, he believes, can’t be stopped. “It’s not the naysayers, but the optimists who will change the world,” he says. “And the consequence is that such people will also amass more wealth and power.”
So is everything just a question of attitude? Certainly, Thrun says, and it’s learnable. And the best place to learn it is in Silicon Valley. “We have a group of great thinkers here who are capable of reflecting on fundamental principles. Who says that we can’t live 1000 years or that cars can’t fly?”
Thrun knows how such thoughts sound and says that people in the Valley are both arrogant and modest at the same time. Arrogant “because we say that we can change the world.” But modest “because we admit that we don’t quite know how, but we simply try and try.”
Google X recently assembled a group whose mission is to defeat cancer, a seemingly hopeless undertaking. But at some point, the Google scientists arrived at the realisation that all you have to do is recognise cancer at an extremely early stage when it is much easier to surgically remove. So now they are experimenting with early diagnosis systems, such as a camera in the shower that conducts daily scans for skin cancer, or nano-particles in the blood that can detect cancer cells.
“I don’t believe in plans, on precise forecasts regarding how something will develop,” Thrun says. “I believe in ambitious goals, in missions.” Udacity, his education company, is hoping to someday produce 1000 graduates. Each day. “I don’t know when we’ll get there or how we’ll get there, but we can try to work as hard and as fast as we can each day.” Thrun believes that only those companies that are constantly moving and never stop experimenting will win out in the end. Those that fall into ageing business models will die.
Peter Thiel: the ideologue
In the US political landscape, libertarians are often rather odd, with many of them tending to be staunch right-wingers like Ron Paul, the former presidential candidate who once wanted to get rid of the Federal Reserve.
But in Silicon Valley, Peter Thiel says, libertarianism is “quite strong.” One might also say it’s the dominant political philosophy – and Thiel is its most prominent representative. He’s a central figure in the digital world – smart and controversial, a thought leader and a chief ideologist, an exceptional person even within the small leading group of billionaire tech giants.
At the end of the 1990s, Thiel helped found PayPal, the online payment service that is one of the few New Economy success stories. It made him rich for the first time. He followed it up by founding an investment firm that began making investments that ran counter to conventional wisdom. The money began flowing again and he got richer. Later, Thiel became the first person to invest in the company Mark Zuckerberg had only just created, investing $US500,000 in Facebook in exchange for a 10 per cent holding, making him rich for the third time.
He’s now investing hundreds of millions of dollars in new and young companies and has become one of the Silicon Valley’s most influential venture capitalists, cherished as much for money as for his advice.
If you speak to Thiel about libertarianism, it quickly becomes clear that this is not about daily politics to him or about having influence on the political process. On the contrary, like so many others in the Valley, he doesn’t want to have anything to do with Washington or Brussels.
In fact, the tech elite have created a world view, a political philosophy that corresponds with their goals. They seek to create prosperity and satisfaction by way of the greatest amount of autonomy and the least amount of government possible. It holds that all authority should be viewed sceptically. Indeed, there is little room in this world for regulations or government guidelines.
A few years ago, Thiel established a foundation that each year provides $US100,000 to 20 people under 20 years old to quit college and set up their own companies. The stipend comes with the stipulation that they drop out of school for at least two years. Thiel feels the state education system is bloated and often a hindrance to progress – he believes that people with good ideas should be applying them and not waiting to be told from above what to do.
In 2009, Thiel published an essay called “The Education of a Libertarian”. In it, he writes, “We are in a deadly race between politics and technology”. The fate of our world may depend on the effort of a single person who builds or propagates the “machinery of freedom that makes the world safe for capitalism.”
Thiel is originally from Germany, having been born near Frankfurt, but he left the country at the age of one. His father, a chemical engineer, took the family with him around the world, including stints in South Africa and Namibia, before finally settling in a suburb near San Francisco. As a boy, Thiel proved to be a genius at chess, placing seventh in a national competition. He read the “Lord of the Rings” countless times and still names his investment funds today after figures and places in his favorite childhood book.
The headquarters for Thiel Capital are located in San Francisco’s Presidio, a historic former military base originally erected by the Spanish. The offices are surrounded by eucalyptus trees and king palms. In the foyer, there’s a statue of Darth Vader because “Star Wars” producer LucasFilm also has offices in the building. The upper floors have a view of the Golden Gate Bridge and Alcatraz. Offices in Silicon Valley tend to be hip and youthful, but Thiel has a taste for the more upscale and elegant. It resembles a large New York law firm, with orchids, a library and designer furniture.
Thiel himself dresses casually, wearing a gray V-neck t-shirt and expensive sneakers. He rarely wears a suit, saying that over-dressed entrepreneurs are merely salesmen attempting to hide the weakness of their product.
He speaks in measured tones, but not always in a polished style. He speaks haltingly, sometimes stopping to contemplate for 30 seconds or even a minute before providing an answer. He thrusts aside anything he finds boring.
Thiel says he doesn’t understand why the world has become so exclusively focused on the Internet today. Smartphones and social networks, he says, are all fine and dandy, but “thinking has become far too narrow.” He wonders what happened to the “really big dreams” of the 1950s and 1960s when our pursuits were defined by things like “underwater cities” and “supersonic transport”.
Thiel believes we need to find our way back to far more fundamental visions and that we should be working toward a future of “radical breakthroughs,” with things like “clean energy sources” and “deserts that can be transformed into fertile landscapes.” In Thiel’s mind, there’s a clear reason why computers and software – or the world of bits, as he likes to call it – have made such great strides: They have largely been spared of constraining rules. That’s a stark contrast to the “World of Atoms,” which includes things like medicine and transportation, both of which are heavily regulated. “That’s why it’s so hard to advance in those areas,” he says.
Laments like that are one of the main reasons that libertarianism has attracted so many followers. They’re also the reason that almost all of the tech giants make the pilgrimage each year to the Nevada desert to attend Burning Man, an anarchist art festival. Socially, the event is a free-for-all, and Google founder Larry Page has argued that it could serve as a model for creating an environment in the technology field where “people can try new things” without all the rules applying.
There are extreme plans for floating offices on cruise ships operating in international waters and even more extreme plans to create entire floating cities on artificial islands that would serve as tech nations. Thiel himself has donated a half-million dollars to establish the Seasteading Institute, which is dedicated to creating these experimental ocean communities.
It all ties in with an underestimated undercurrent that shapes the Silicon Valley more than anything else: the counter-culture of the 1960s and the deeply anchored roots of San Francisco’s hippie movement.
Steve Jobs lived for a short time in a commune. His Apple co-founder Steve Wozniak recently repeated in a television interview something he has said before: “The counter-culture means so much to me. I wanted to be part of the revolution. Computers were the exclusive domain of the rich and I wanted to take that away from them.”
In the past 20 years, an ideology has taken shape from this odd mishmash of New Age Utopianism, ultra-capitalism and the age-old American ideal of individual self-determination. It even has a name: the “Californian Ideology.” Two British media theorists came up with the term in an essay published during the mid-1990s in an attempt to explore the results of combining the “free-wheeling spirit of the hippies and the entrepreneurial zeal of the yuppies.” The essay had been intended as a cultural critique, but instead Silicon Valley co-opted it as the basis for its own ideology. It is a symbol of the Valley’s role as a movement for humanity’s advancement.
“For a long time, we weren’t asking ourselves the right questions,” says Thiel. “What has to happen in order to make the world a better place?”