Political economist Neil Malholtra on why some in Silicon Valley turned

Whether or not Democratic California Governor Gavin Newsom survives Tuesday’s recall election may depend in part on a small but vocal group of Silicon Valley power players who have thrown their weight behind the effort to oust him, Including some who previously supported most Democratic politicians.

To better understand what happened, we recently spoke with political economist and Stanford Business School professor Neil Malhotra about research conducted in 2017 about the political attitudes of the tech elite – And why some seemed so quick to turn to Newsom this year. Our conversation has been lightly edited for a long time.

TC: How did you get into this work area?

NM: It was inspired by a historical point of view. When you look at the many major changes in American politics and parties, a lot of them are driven by major business interests and sources of funding. Outlaw barons including Leland Stanford at the turn of the century are a good example. And it looks like we are going through that phase right now.

TC: Based on your research, how does the outlook of the people of Silicon Valley differ from that of the California population as well as the national population in general?

NM: To be clear, I use Silicon Valley as a metaphor. Many of these people are also located in other areas of the country, such as Boston, Austin, Research Triangle, Los Angeles, etc. But in general, I think the approach of this group of the technology elite is unique and something you don’t. It is not found in any other segment of the population. I called them Liberal-Tarians. To differentiate them from liberals, they tend to be very liberal on social issues and issues related to globalization, such as immigration and free trade. And they support redistribution, so they have a lot of support for universal health care. But they are very much against government regulation. So this difference between redistribution and regulation is what makes this population very distinctive, even among the very wealthy in the United States.

TC: Mean regulation around labor? Is it about limiting the number of skilled educated immigrants that can come to the US or about gig workers or . . .?

NM: They are very, very supportive of immigration, and also very supportive of gig workers, and against the ability to restrict the labor market in any way.

They are very, very anti-Union, which also sets them apart from others in the Democratic Party. I think they have the general belief system to let the market operate and then later redistribute wealth through taxes and social programs, because they think this is what gives the pie the greatest and yet the need for equality. will allow, rather than impose a lot of restrictions in place possibly, which will shrink innovation, shrink the pie.

TC: There are many in technology who talk about redistributing wealth but in practice shielding their assets or the assets of their companies. Any thoughts on how honest they are about this based on your research?

NM: They are very supportive of higher income taxes. But that may be self-serving, given that a lot of their wealth comes from capital gains, and it’s quite possible that they’ll support capital gains taxes less, not because it takes away their wealth, But because they think it inhibits innovation.

Chamath Palihapitiya, one of Silicon Valley’s leading tech figures, has said that California’s high taxes were one of the reasons he supported the recall.

TC: Do you find that in general, proponents of the recall were citing taxation as an issue or are there other issues that were on the front of mind?

NM: COVID restrictions [were also top of mind]. I think there is a sense that these tech entrepreneurs really identify with entrepreneurs, even if they are not elite entrepreneurs, and that includes small business owners, restaurant owners, gym owners, small landlords. They feel that the government is punishing these people during the pandemic. Also, I think apart from being against unions, they are generally against public sector unions like teachers unions. And so I think the restrictions on the opening of schools have also matched with this population.

TC: Newsom’s camp has raised significantly more money than its recalled opponents. Do you think the money raised in this recall effort is going to have a significant impact on voting?

NM: I think the margins matter everything. All that money goes to advertising vote-out-the-vote efforts. But at the end of the day, if there is any real movement, it can’t really make it go away. Hillary Clinton upped Trump tremendously, and I’m sure all that money helped. But the bigger question will be who’s excited to walk out, who’s going to inspire, and they may need $70 million to convince people who aren’t excited to vote in this election that they should. Vote to save.

TC: Several tech giants who have supported this recall. What does it benefit them if Newsom loses? It seems that they are betting on chaos in a way.

NM: I think its a good test case [congressman] Ro Khanna. In his first campaign against Mike Honda [in 2014], he ran as a Silicon Valley technocrat and was supported by [Facebook COO Shery] Sandberg and all these tech giants, and he lost the election. Then he shifted and Bernie Sanders became the guy and I think, Bernie Sanders was the national co-chair of the campaign, and now it’s the quasi “squad” member that’s on the far left. I think it’s really interesting. It’s almost like a microcosm of the Democratic Party that was first embracing the tech community, and then now turning very against it. This recall could potentially reshape those alliances,

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