Understanding the new Tech Right
There are many reasons some tech companies and figures are now supporting Trump.
Two years ago, sitting in a bar in the Mission district of San Francisco, a startup founder I know told me that he thought the tech industry was shifting toward supporting Trump. A couple of months later, some other founder friends told me the same. Now it might seem like their prophecies are coming true. Elon Musk, who said in March that he had no plans to donate to any political campaign, has now committed to giving $45 million a month to a pro-Trump super PAC. Venture capitalists Marc Andreessen and Ben Horowitz also announced that they’re donating to Trump, as did sometime tech investor Bill Ackman. The news is now filled with a flurry of stories about how the tech industry is turning to the right.
These stories exaggerate enormously. There have always been some tech figures on the political right — think of Peter Thiel and Palmer Luckey in 2016. Overall, the list of high-profile tech businesspeople declaring for Trump so far is pretty small:
When you have to mention Cameron and Tyler Winklevoss separately on your list, it’s not that impressive of a list. And surveys still show that the tech industry as a whole leans strongly Democratic and dislikes Trump quite a bit. Most tech people are highly educated, and educated Americans are usually Democrats. If most of your friends in tech are Trump supporters, chances are very high that it’s a selection effect.
There was always going to be some significant minority of the tech industry that leaned to the political right — I suspect they’re just more open about it now. America is heavily polarized by education, which means that most of the educated people that tech figures hang out with — especially in the Bay Area — are going to get very mad at them if they put on a MAGA hat. But as unrest slowly fades in America, that social opprobrium will be less vitriolic — people will frown and roll their eyes and invite you to fewer cocktail parties, but they won’t run you out of town or blackball your VC firm like they might have done in 2017.
On top of that, the fact that Trump is now heavily favored to win the election means there’s now an incentive for businesspeople to attach themselves to Trump, whatever their true beliefs. If you know who the next President is going to be, supporting him is probably a good business move — if you’re a gambler, you want to bet on the strong horse. Yes that’s cynical, but most super-rich people didn’t get where they are today by being ideological crusaders.
Having said all that, though, I do think there are a number of forces pushing the tech industry to the political right. And I think that Democrats should be clear-eyed about what these are, because if they don’t make some adjustments, they could steadily lose more and more support from the industry over the next decade.
Basically, I see seven main factors pushing tech to the right:
Taxes and regulation
Antitrust
Crypto
Negative polarization and the “techlash”
DEI and leftist activism
The bitter aftertaste of the “cancel culture” era
Ethnic issues
Individually, none of these might be decisive, but together they actually add up to a lot. I’m going to talk a bit about what I think the impact Trump’s policies will be for the tech industry, but first I want to go through this list.
Factor 1: Taxes and regulation
It may surprise you to hear this, but tech people are businesspeople. They make money by selling goods and services through the capitalist system. The lower taxes are on corporations, the more money people in tech can make. And the more that regulation takes a light touch, the fewer impediments there are to tech business models.
Remember that I often try to understand the 2020s by looking back to the 1970s. In his book Reaganland, Rick Perlstein writes about how businesses shifted to the right in the late 1970s:
Wary of escalating environmental and consumer protection regulations, corporations — “boardroom Jacobins” in Perlstein’s lexicon — amped up their lobbying efforts to promote the GOP’s calls for deregulation and lower taxes.
Education polarization means this shift is a bit more difficult to pull off in the 2020s, but the pressure is exactly the same. Trump cut corporate taxes in the 2010s, and he has said he wants to do so again. Biden, meanwhile, has proposed a tax on unrealized capital gains that would hit the startup sector very hard if enacted. And Trump’s appointees generally take a much lighter regulatory touch than Biden’s.
In 2019 or 2021, with tech valuations riding high, taxes and regulation might not have seemed very important for Silicon Valley businesses — they’d make money no matter what. But a tech bust in 2022 has put a lot more pressure on both Big Tech and “Little Tech” alike. There are fewer winner-take-all markets out there than the VCs of the 2010s had hoped, and even the markets that do tend toward natural monopolies in the short term — web search, social media, and e-commerce — are very vulnerable to disruption from AI and other new developments.
All of that basically became apparent in 2022. In the new, more challenging business environment, taxes and regulation loom larger, just as they did in the 1970s for many other U.S. industries. Basically, tech is becoming a mature industry, and for mature industries, tax and regulatory policies matter more.
AI, of course, has been the one big bright spot in the tech universe since 2022. But Democrats have been quick to try to regulate the new technology. Biden issued an executive order on AI safety that includes various reporting requirements — these requirements are cumbersome and annoying, and their usefulness in actually increasing AI safety is dubious. In California, Scott Wiener has championed a bill that goes further, imposing criminal penalties on the people who run AI companies if their models are judged to have caused some kind of large-scale harm. This bill also has obvious costs and dubious benefits.
On top of that, many progressives worry that AI could be racist, that it could replace human jobs, and so on — all worries that portend more regulatory efforts in the future. In other words, the progressive turn in the Democratic party threatens the one industry in which an increasingly pressured tech industry has placed most of its hopes.
Yes, that’s going to result in some “boardroom Jacobins”.
Factor 2: Antitrust
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