Reading Emily Chang’s adaption from her book, Brotopia, in Vanity Fair, I have to admit that the lurid details don’t surprise me at all. Yes, it is a boy’s club, and yes, it seems to engage in boy’s club excesses and “decadence.” I wouldn’t dispute any of that. Is it in any way surprising that a new attempt make money from innovation and disruption in an area of the economy that is heavily dependent on monopoly mirrors the decadence of similar booms in the financialization period of the late 70s through the Mid-80s? It was a transitional state of economics who “disruption” is oddly dependent on barriers to access being selectively broken down. It shares similar traits in a variety of ways–it creates bubbles of investment fueling innovation that applies largely to the outside world and has little checks that such cultures in the earlier periods of capital development that created more clearly physical commodities.
A younger me would explain this purely in terms of labor theory of value. An even younger me, in my more geo-libertarian days, would explain this in terms of monopoly access creating a quick influx of wealth in limited area. Indeed, the housing patterns around the Bay Area in California even mirror those of New York. In a way, now, I think both are right because this kind of market boom is not impossible, but things like IP protect the risky behavior. After all, not only are a lot these Silicon Valley ventures not really profitable with IP, many aren’t profitable without government money directly. Often this will be explained as reinvestment into products, which in some cases it is, but in physical commodities not protected by IP, the re-investment has to be slower as the competition driving prices down off-sets the gains. By definition, this tamps down on risk behavior and on QUICK excess income. It also makes investment more risky even with slower growth, which is why in the dreaded “neoliberal” period, these markets depend on state level invention to really work. Even the heroic periods of capitalism, such as the “Robber Barons” period, depended on access to exclusive rights to both moderate overuse and to secure pricing.
OF course, a male-driven culture with a lot of young people with money would be decadent, we know that because it rhymes with the wall street boom. There are reasons why it rhymes with Wall Street though in ways beyond the madcap hedonism and excess Chang describes.