The 39th post on the Journal of American Greatness originally published in March, 2016.
Lost in the adulation of departed Intel chief Andy Grove—but noticed by the non-Trumpists at the New York Times—was his entirely reasonable concern about Silicon Valley’s failure to create jobs for American workers.
“Lost in the lore,” the New York Times specified, “is Mr. Grove’s critique of Silicon Valley in an essay he wrote in 2010 in Bloomberg Businessweek. According to Mr. Grove, Silicon Valley was squandering its competitive edge in innovation by failing to propel strong job growth in the United States.
“Mr. Grove acknowledged that it was cheaper and thus more profitable for companies to hire workers and build factories in Asia than in the United States. But in his view, those lower Asian costs masked the high price of offshoring as measured by lost jobs and lost expertise. Silicon Valley misjudged the severity of those losses, he wrote, because of a ‘misplaced faith in the power of start-ups to create U.S. jobs.'”
We must duly note the (temporary) magnanimity of the NYT in remarking Grove’s essay, since Grove explicitly placed the Tom Friedman vision of the world in his sights. Happy as the moment of innovation might be, conjuring up the images that are lovingly whispered to children reared on the hallowed words of Peter Thiel’s Zero to One, startups “cannot by themselves increase tech employment,” wrote Grove. Even tech startups!
The problem, as Grove noted in Bloomberg, is that “[t]he scaling process is no longer happening in the U.S.” but abroad, where labor is more plentiful.
Naturally, the NYT omitted not only Grove’s criticism of its editorial page’s Chief Shaman, but also the fact that Grove’s concerns are precisely those propelling the candidacy of Donald Trump. Acknowledging that fact, though, would jeopardize Friedman’s (nonexistent) prophetic powers.
As Grove notes in his Bloomberg essay, the excitement about offshoring—typified for him by the aptly named Princeton economist Alan S. Blinder—overlooks the long-term importance that real knowledge in manufacturing can have in an economy, precisely because one doesn’t know what’s coming next. “Not only did we lose an untold number of jobs” through offshoring, Grove argues, but “we broke the chain of experience that is so important in technological evolution. As happened with batteries, abandoning today’s ‘commodity’ manufacturing can lock you out of tomorrow’s emerging industry.”
Perhaps coincidentally, the Wall Street Journal today drew attention to the wide expansion of the “gig economy” even well outside the obvious hotspots such as Uber. “The rise,” the WSJ notes, “has happened even across industries including health care and education, manufacturing and public administration, with professions that have traditionally offered stable employment.”
The expansion of the gig economy has also disproportionately harmed female workers. “Alternative work,” as the WSJ innocuously calls the modern forms of temping, used to be more common among men. “A decade ago, the phenomenon was more common for male workers, about 12% of whom were in alternative arrangements compared to 8% of women. That gender pattern has reversed. . . . Today, about 17% of women and 15% of men hold such jobs.”
The reasons for this shift will doubtless go unexplored by the very politically correct, impeccably liberal young tech workers who are making the Bay Area uninhabitable for anyone else. As their great innovations lead to more redundancy among precisely the communities their “political correctness” is supposed to guard (its function is in fact strictly academic), the political tide they hope to stem will continue to gain force.
The arc of Capital is long, but it bends toward unemployment.