George Packer’s Silicon Valley myopia

It’s ironic that George Packer’s New Yorker article about the tech industry’s supposed political insularity is itself hidden behind a paywall (if this were a New Yorker article, I would cite statistics demonstrating the wealthy demographic served by the magazine and mention a telling detail about the luxury watches advertised within, perhaps with with the cost of the watches as a percentage of median household income used as a comparison). Packer makes a lot of noises about concern for the poor, but genuinely poor people might not be able to afford the magazine and now can’t even read the article about how San Francisco is alluringly pricing them out San Francisco for free.

Perhaps the weakest part of the article comes from references to housing prices, like “the past two years have seen a twenty-per-cent rise in homelessness, largely because of the soaring cost of housing.” But he doesn’t explain how limited supply in the face of increasing demand raises prices, as Matt Yglesias does in The Rent is Too Damn High or Edward Glaeser does in The Triumph of the City. There is a simple solution deploying century-old technology that can ameliorate San Francisco’s housing crisis.

Both Glaeser and Yglesias correctly observe that many urban jurisdictions prevent housing from being built; as a result, prices rise. But it’s not primarily tech companies or their employees who have driven housing prices in Silicon Valley: it’s residents themselves, and the courts that have given residents and politicians extraordinary powers to block development. That’s why “San Francisco is becoming a city without a middle class,” as Packer says in the article.

My own family was part of that exodus: my parents moved us from northern California to suburban Seattle in 1994 because housing prices were unreasonable and because California was becoming an increasingly bad place for middle-class people. Since then, housing prices have continued to drive most population growth towards places like Seattle, Phoenix, Las Vegas, and many of Texas’s cities, especially because urban development is easier in Sun Belt cities. Seattle, unfortunately, appears to be following in California’s footsteps by restricting the growth of housing stock and thus causing prices to rise.

The housing-price thing is one of my own pet peeves, since so few people connect supply restrictions, demand, and pricing; even Steven Berlin Johnson’s otherwise interesting rebuttal buys into Packer’s economic illiteracy. Beyond the housing issues, Packer writes:

Joshua Cohen, a Stanford political philosopher who also edits Boston Review, described a conversation he had with John Hennessy, the president of Stanford, who has extensive financial and professional tides to Silicon Valley. “He was talking about the incompetent people who are in government,” Cohen recalled. “I said, ‘If you think they’re so incompetent, why don’t you include in a speech you’re making some urging of Stanford students to go into government?’ He thought this was a ridiculous idea.”

Hennessy is more right than Cohen: if the system itself doesn’t work, why would anyone want to join it? Few highly competent people want to be ruled by incompetent people, and in government seniority rules. There’s often no way to make important changes from the bottom and no way to reach the top without going through the intermediate layers. That’s presumably why Hennessy doesn’t urge “Stanford students to go into government.”

In tech startups, if you think your company is doing something stupid and everyone ignores you, or ignores an obvious opportunity, you can leave and start your own startup. If you start your own version of government within the U.S., men with guns will show up to stop you.

Although Hennessy might not put it the way I have in the above paragraphs, such thinking is probably behind his statement (assuming, as I do, that Cohen is expressing it reasonably well). I’m writing this as someone whose business is to deal with various sections of federal and state government. It’s hard to imagine that Packer has this kind of experience; if he did, I doubt he’d have the worldview he does.

Packer does note that government investment in technology and research is partially responsible for the Silicon Valley of today (“The Valley’s libertarianism—which ignores the federal government’s crucial role in in providing research money—is less doctrinal than instinctive”), and that’s an important government contribution. But today, spending on science and medical research occupies about 2% of the federal budget; by contrast, spending on old people in the form of Social Security and Medicare occupies about 30%. Warfare, formally known as “Defense and International Security Assistance,” occupies 19%, and some of that goes to R&D of various kinds.

If federal R&D spending were higher as a proportion of the federal budget, Silicon Valley types would probably be much more pro-government. Note that this is a positive statement more than a normative one—that is, I’m not trying to argue that more money should be allocated to R&D and less to old people, but I do think we’d see a more positive view of government among Silicon Valley-types if we did.

There is this comment, which is somewhat myopic and somewhat accurate:

Technology can be an answer to incompetence and inefficiency. But it has little to say about larger issues of justice and fairness, unless you think that political problems are bugs that can be fixed by engineering rather than fundamental conflicts of interest and value

Regarding “larger issues of justice and fairness,” 300 years ago people who couldn’t work starved to death, median life expectancy was low, and numerous infants died of now-preventable diseases. Until the Industrial Revolution, starvation was a reasonably common and regular occurrence. Today, no industrialized countries have mass starvation, and that’s largely because of the technological and scientific progress that enables the social and monetary surpluses to provide important safety nets that Packer now takes for granted. “Political problems” are still real and still important, but so is a sense of progress that has enabled society, collectively, to worry much more “about issues of justice and fairness,” instead of working continually on farms. Technology actually has a lot “to say about large issues of justice and fairness,” because technology has given us the leisure to think about those issues and the wealth with which to address them.

In addition, Packer is mixing up questions about “fairness,” but, as as Roy Baumeister writes:

Fairness is important in all human social relations, whether large or small. But there are two different kinds of fairness. Experts call these equity and equality. Equality means treating everyone the same (obviously). Equity means giving out rewards in proportion to what each person contributed. Under equity, the person who contributes more or better work gets a proportionately bigger share of the reward (97).

Packer is focusing on equality, as he does throughout the article, but equity is important too, and New Yorker and New York Times articles almost always ignore this in discussions of “justice and fairness.” Fairness has to balance how rewards accrue to those who have made outsized contributions versus those who haven’t. That Packer doesn’t even acknowledge this distinction tells us a lot about the political glasses that color his world outlook but very little about how to think about the trade-offs involved with equality versus equity. There is a reasonable argument to be made about how governments should take more from major economic winners and give that to those who aren’t producing much of economic value, but Packer doesn’t even acknowledge these issues.

Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier — Edward Glaeser

When I lived in Seattle, I was driving a friend home when she said she didn’t like all the new buildings because they pushed poor people out of the city. I was confused by her argument and that building more housing units will make it easier for poor people—any people, really—to afford to live in the city, but she argued that wasn’t true because the existing buildings were “worse.” But that doesn’t matter much: if a given parcel of land goes from having four units on it to four hundred, that’s vastly more supply. The conversation’s already low level of intellectual content degenerated, but I thought of it as I read Triumph of the City, which gathers a lot of useful information about cities and what they offer in one place. Yes, the title is overwrought, but the content is useful, and I especially noticed this, about Jane Jacobs:

Because she saw that older, shorter buildings were cheaper, she incorrectly believed that restricting heights and preserving old neighborhoods would ensure affordability. That’s not how supply and demand work. When the demand for a city rises, prices will rise unless more homes are built. When cities restrict new construction, they become more expensive.

It’s basic supply and demand, but, from what I can tell, relatively few cities actually discuss supply, demand, and housing costs—which is unfortunate given the extreme costs of many desirable cities that offer intensive knowledge spillover effects. If how we live affects what we think and how we think, we should pay a lot of attention to how we live. Yet few of us do, though more of us should. Triumph of the City is the kind of book unmoored young people and people contemplating career changes need to read, because where you live affects so much of how you live. This part speaks to a dilemma I’m facing:

In the year 2000, people were willing to accept lower real wages to live in New York, which means that they were coming to New York despite the fact that higher prices more than erased higher wages. It’s not that New York had become less productive; the city’s nominal wages, which reflect productivity, were higher than ever. But housing prices, fueled by the robust demand to live and play in the city, had risen even more than nominal earnings. If housing prices rise enough relative to nominal incomes, as they do when cities become more pleasant, then real incomes can actually fall during a period of great urban success. Manhattan had changed from a battlefield to an urban playground, and people were willing to pay, in the form of lower wages, for the privilege of living there.

I’m likely to move to New York and live for at least two years. Which raises questions: am I willing to “accept lower real wages” because of the housing cost increases? How valuable is “an urban playground?” Perhaps not valuable enough to keep me there. I love New York and just wish I could live there. L.A. has similar problems, and I have some friends who want to leave Tucson—for which I blame them not at all—and are contemplating where to go; based on their disposition and temperaments, Seattle or Portland would be obvious choices. They’re much less expensive, and moving to either will probably result in an increase of 10 – 20% in real income terms, as Virginia Postrel shows in “A Tale of Two Town Houses.” (Glaeser speaks to L.A., too, however indirectly: “Cities grow by building up, or out, and when a city doesn’t build, people are prevented from experiencing the magic of urban proximity.” L.A. has replaced proximity with traffic.)

And there tend to be clusters of artists and other creative types in cities that offer dense environments, not totally dysfunctional politics, and cheap housing. The 1920s Paris immortalized by Hemingway and Fitzgerald, and recently recreated in Woody Allen’s Midnight in Paris was such a place; today, as Glaeser says, “Restrictions on new construction have ensured that Paris—once famously hospitable to starving artists—is now affordable only to the wealthy.” It’s a useful reminder that you can’t beat economics with raw policy alone, and so many articles about rising rent prices or changing demographics utterly fail to connect housing costs with the needs of the poor outsiders who will one day start startups or be artists (for a recent, positive example, see Megan McArdle’s post “Empty Apartments, Stupid Laws“).

Artists simply can’t afford Paris anymore, and New York is becoming expensive too.

The really famous, important parts of the world—New York, London, Tokyo, Beijing—are important because of what large networks of hundreds of millions of people have done with and to them. They’re not intrinsically important because of the land they occupy. Cities that want to emulate their example and distinguish themselves from surrounding suburbs and rural lands need to build up, not out (or not at all). New York’s housing prices are so high because lots of people want to live there—because it’s awesome. As Glaeser shows, we should want them to be able to live there, too. But we often can’t.

This doesn’t just hurt us as individuals, or economies composed of people who can’t live in spaces where they connect with one another: it also hurts the environment because: “Traditional cities have fewer carbon emissions because they don’t require vast amounts of driving. [. . .] Department of Energy data confirms that New York State’s per capita energy consumption is next to last in the country, which largely reflects public transit use in New York.” And:

Good environmentalism means putting buildings in places where they will do the least ecological harm. This means that we must be more tolerant of tearing down the short buildings in cities in order to build tall ones, and more intolerant of the activists who oppose emissions-reducing urban growth.

But I think he misses something here: for a lot of people, environmentalism is just a pose, a way to show they care—provided it doesn’t harm or affect their life in some immediate, substantial way (those of you firing up your e-mail clients to send me angry missives should hold off: this applies to lots of other subjects too, like religion). So the people who claim to be environmentalists are really claiming that they want you to think they care about the environment, and that’s a cheap stance until people start to complain about construction noise, or loss of a neighborhood’s dubious “character,” or whatever other excuse comes up. As Alex Tabarrok says in Launching The Innovation Renaissance, one major, underappreciated problem the U.S. faces is the sheer number of veto players who can affect any building project at any scale. Glaeser is in effect pointing to a single facet of this general principle.

In essence, there’s too much regulation of what happens in most cities. For example, take parking policies: if people (especially those who claim to be environmentalist) want good public transportation, one useful strategy is to raise the real cost of cars, which is an especially good idea because Free Parking Comes at a Price. And that price is innumerable underutilized parking spaces. I see this price every day in Tucson, where miles and miles of land are given over to hideous parking lots that make walking virtually anywhere impossible.

One interesting missing piece: a concrete theory of why cities offer the advantages they do. We have lots of indirect information showing the advantage of cities, combined with some theories about why they offer the things they do, but little else. Steven Berlin Johnson is similarly indirect in Where Good Ideas Come From; like Triumph of the City, it’s a fascinating book (and he speaks to cities as innovative environments in it), but it also has this gap that I don’t know how to fill. Perhaps no one can at current levels of technology and understanding.

A lot of the prose in Triumph of the City is uninspired, and occasionally garbled, like this: “Urban proximity enables cross-cultural connection by reducing the curse of communicating complexity, the fact that a garbled message increases the amount of information that is being transferred.” But the density of ideas makes up for the weakness of the language, and Glaeser is also a native economist, rather than a writer.


Here’s Slate’s (positive) review. I don’t think I’ve read any negative reviews; if you’ve seen any, post a comment.

Looking them in the eye and Peter Shankman's story

There’s a back-and-forth going on at Hacker News over Peter Shankman’s post, “The Greatest Customer Service Story Ever Told, Starring Morton’s Steakhouse.” First, read Shankman’s post, because what Morton’s did is, in fact, amazing, and I say this in an age where most of what people call “amazing” is, in fact, not. And I don’t want to spoil the surprise, beyond noting that he sent this Tweet as a joke: “Hey @Mortons – can you meet me at newark airport with a porterhouse when I land in two hours? K, thanks. :)”

The top Hacker News commenter said, “With modern communication systems, flying in airplanes to lunch meetings and flying back that night is such an absurd waste of resources it qualifies as obscene.” Someone else disagreed: “The difference of quality between meeting face to face and through a webcam is so high that it’s sometimes worth taking a plane just for one lunch.”

The second person is right: sometimes the quality of a face-to-face meeting is worth a plane trip. As Paul Graham said in “Cities and Ambition:” “The physical world is very high bandwidth, and some of the ways cities send you messages are quite subtle.” You don’t reproduce the same effect meeting someone in person when you “meet” them online. This doesn’t just apply to romantic partners, either, although that’s an obvious example of the effect described: how many people want to see their lovers solely on the Internet?

The high-bandwidth physical world argues for meetings, and I suspect Shankman wasn’t just going to New Jersey for the meeting—he was going to communicate how important the meeting was. You don’t just spend hours on a plane for something frivolous; he was sending a signal and reaping face-to-face rewards. If someone flew to Tucson solely to meet with me, I’d be impressed. Very few people fly on a whim.

A brief story, although it‘s not on the same scale as Shankman’s: I’m a grad student in English Lit at the University of Arizona, which means I teach freshman composition. Students e-mail me all the time. Constantly. Unless there’s some compelling reason to reply, I usually answer their emails in class; if they want or need a longish explanation, I tell them to come to office hours (note: if they can’t make office hours, I also do office hours by appointment, so I’m not doing this to stiff them).

This strategy has a three-fold benefit: it cuts down on the amount of e-mail I receive over the course of the semester because students realize I won’t answer frivolous e-mails twelve hours after they’re sent. If I have follow-up questions, or the student does, those questions are easier to ask face-to-face. Misunderstandings caused by not not being face-to-face are evaded; it’s hard to ascertain context from e-mail. I think everyone has had misunderstandings and hurt feelings caused by dashed off e-mails that aren’t carefully considered. Finally, if students want me to read their papers or other work and show up to office hours, I know they really want me to edit their work, and their desire to get feedback isn’t just a passing fancy as ephemeral as a Facebook status update. The back-and-forth that can come from reading work and immediately responding to it can’t be easily duplicated—especially among non-professionals—over e-mail or other asynchronous communications.

I meant to list three things, I really did. But the reasons kept popping into my head, and I think they’re all valid.

Taken together, these issues point to why I doubt face-to-face meetings will disappear any time soon. If anything, their value might rise as they become less common. When I can, I interview writers, and I only do such interviews face-to-face because I think they’re more valuable. I’ve signaled to the writer that their time is valuable enough for me to come to them, and the conversations that result are, on average, deeper than I think they would be otherwise. There’s something about a person sitting across from you that you don’t get over the phone or Internet.

EDIT: Regarding students and e-mail, this story by Wired’s Chris Anderson also gets it right: “Why is e-mail volume getting ever worse? I believe it’s because of a simple fact: E-mail is easier to create than to respond to. This seems counterintuitive — after all, it’s quicker to read than to write. But reading a message is just the start. It may contain a hard-to-answer question, such as ‘What are your thoughts on this?'” The solution is to reduce e-mail wherever possible by making it equally expensive for emailers as e-mail receivers. Office hours help do this, and showing up at them signals that the student isn’t merely wasting time.

This principle affects other scales, too. Big tech companies still have central offices, usually in very high-rent areas, where they make sure everyone in the company gets together on a regular basis. The willingness of companies to pay for offices indicates they still get a lot of utility from having large numbers of people hanging out in a concentrated area—perhaps because of knowledge-spillover effects, which is Edward Glaeser’s explanation in The Triumph of the City.

If there weren’t such spillover effects, companies would disburse to avoid paying for office space, people would move to rural areas with fast internet and low real estate costs, education wouldn’t consist of a group getting together in a classroom, and the world would look much different than it does. Even in an age of social media, a lot of people want to live in Manhattan—a city not exactly renown for its wonderful weather. Commenters have been predicting the death of distance and the death of place and so on since the dawn of the Internet, if not earlier, and so far they’ve proven wrong. As long as humans remain basically as we are today—in the absence, in other words, of some singularity-type event—I don’t think people are going to want to stop seeing each across a table, or standing next to each other in a room. Social media has not turned our world in Snow Crash, at least not yet. Shankman knows this. Digital technologies complement, rather than substitute for, real world experience. He uses Twitter and flies for face-to-face meetings. That’s the essence of one aspect of modernity: being able to handle multiple registers of communication fluently and realizing that most of them have their place for most people.

Looking them in the eye and Peter Shankman’s story

There’s a back-and-forth going on at Hacker News over Peter Shankman’s post, “The Greatest Customer Service Story Ever Told, Starring Morton’s Steakhouse.” First, read Shankman’s post, because what Morton’s did is, in fact, amazing, and I say this in an age where most of what people call “amazing” is, in fact, not. And I don’t want to spoil the surprise, beyond noting that he sent this Tweet as a joke: “Hey @Mortons – can you meet me at newark airport with a porterhouse when I land in two hours? K, thanks. :)”

The top Hacker News commenter said, “With modern communication systems, flying in airplanes to lunch meetings and flying back that night is such an absurd waste of resources it qualifies as obscene.” Someone else disagreed: “The difference of quality between meeting face to face and through a webcam is so high that it’s sometimes worth taking a plane just for one lunch.”

The second person is right: sometimes the quality of a face-to-face meeting is worth a plane trip. As Paul Graham said in “Cities and Ambition:” “The physical world is very high bandwidth, and some of the ways cities send you messages are quite subtle.” You don’t reproduce the same effect meeting someone in person when you “meet” them online. This doesn’t just apply to romantic partners, either, although that’s an obvious example of the effect described: how many people want to see their lovers solely on the Internet?

The high-bandwidth physical world argues for meetings, and I suspect Shankman wasn’t just going to New Jersey for the meeting—he was going to communicate how important the meeting was. You don’t just spend hours on a plane for something frivolous; he was sending a signal and reaping face-to-face rewards. If someone flew to Tucson solely to meet with me, I’d be impressed. Very few people fly on a whim.

A brief story, although it‘s not on the same scale as Shankman’s: I’m a grad student in English Lit at the University of Arizona, which means I teach freshman composition. Students e-mail me all the time. Constantly. Unless there’s some compelling reason to reply, I usually answer their emails in class; if they want or need a longish explanation, I tell them to come to office hours (note: if they can’t make office hours, I also do office hours by appointment, so I’m not doing this to stiff them).

This strategy has a three-fold benefit: it cuts down on the amount of e-mail I receive over the course of the semester because students realize I won’t answer frivolous e-mails twelve hours after they’re sent. If I have follow-up questions, or the student does, those questions are easier to ask face-to-face. Misunderstandings caused by not not being face-to-face are evaded; it’s hard to ascertain context from e-mail. I think everyone has had misunderstandings and hurt feelings caused by dashed off e-mails that aren’t carefully considered. Finally, if students want me to read their papers or other work and show up to office hours, I know they really want me to edit their work, and their desire to get feedback isn’t just a passing fancy as ephemeral as a Facebook status update. The back-and-forth that can come from reading work and immediately responding to it can’t be easily duplicated—especially among non-professionals—over e-mail or other asynchronous communications.

I meant to list three things, I really did. But the reasons kept popping into my head, and I think they’re all valid.

Taken together, these issues point to why I doubt face-to-face meetings will disappear any time soon. If anything, their value might rise as they become less common. When I can, I interview writers, and I only do such interviews face-to-face because I think they’re more valuable. I’ve signaled to the writer that their time is valuable enough for me to come to them, and the conversations that result are, on average, deeper than I think they would be otherwise. There’s something about a person sitting across from you that you don’t get over the phone or Internet.

EDIT: Regarding students and e-mail, this story by Wired’s Chris Anderson also gets it right: “Why is e-mail volume getting ever worse? I believe it’s because of a simple fact: E-mail is easier to create than to respond to. This seems counterintuitive — after all, it’s quicker to read than to write. But reading a message is just the start. It may contain a hard-to-answer question, such as ‘What are your thoughts on this?'” The solution is to reduce e-mail wherever possible by making it equally expensive for emailers as e-mail receivers. Office hours help do this, and showing up at them signals that the student isn’t merely wasting time.

This principle affects other scales, too. Big tech companies still have central offices, usually in very high-rent areas, where they make sure everyone in the company gets together on a regular basis. The willingness of companies to pay for offices indicates they still get a lot of utility from having large numbers of people hanging out in a concentrated area—perhaps because of knowledge-spillover effects, which is Edward Glaeser’s explanation in The Triumph of the City.

If there weren’t such spillover effects, companies would disburse to avoid paying for office space, people would move to rural areas with fast internet and low real estate costs, education wouldn’t consist of a group getting together in a classroom, and the world would look much different than it does. Even in an age of social media, a lot of people want to live in Manhattan—a city not exactly renown for its wonderful weather. Commenters have been predicting the death of distance and the death of place and so on since the dawn of the Internet, if not earlier, and so far they’ve proven wrong. As long as humans remain basically as we are today—in the absence, in other words, of some singularity-type event—I don’t think people are going to want to stop seeing each across a table, or standing next to each other in a room. Social media has not turned our world in Snow Crash, at least not yet. Shankman knows this. Digital technologies complement, rather than substitute for, real world experience. He uses Twitter and flies for face-to-face meetings. That’s the essence of one aspect of modernity: being able to handle multiple registers of communication fluently and realizing that most of them have their place for most people.

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