The Washington PostDemocracy Dies in Darkness

A new history unveils the exploitative origins of the tech giants

In his book ‘Palo Alto,’ Malcolm Harris deconstructs the myth of Silicon Valley by investigating the historical forces that actually shaped the region

In "Palo Alto," Malcolm Harris surveys two centuries of history of the town that has long been the heart of Silicon Valley. (Eleanor Shakespeare/for The Washigton Post/AP; Library of Congress; Eric Risberg/AP, Vince Maggiora/San Francisco Chronicle/AP; Paul Sakuma/AP; ddp images/Sipa USA/AP/Unsplash)
8 min

Here’s an enchanting myth: In Northern California lies a new Olympus, a metaphorical summit whose rarefied air sustains flip-flopped geniuses as they change the world with their brilliant, unconventional ideas. They’ve done it this way since they were LSD-dropping hippies, or maybe since they bailed out of Harvard and set up shop in their parents’ garages. This is their kingdom now, Palo Alto, with Stanford University at its core, the beating heart of Silicon Valley, a site of pilgrimage for aspiring disrupters, where the misunderstood can find room to grow.

Too good to be true? Malcolm Harris’s “Palo Alto: A History of California, Capitalism, and the World” cuts past the deceit, examining the histories the fable dresses up in heroic garb. Doing for Palo Alto — population 70,000 — what Mike Davis’s classic “City of Quartz” did for Los Angeles, Harris reconsiders 200 years of history that many in the town would rather forget. Over more than 600 concussive pages, Harris narrates the town’s evolution and influence throughout the 19th and 20th centuries. He theorizes, above all, that it is defined by its distinctive approach to capitalism and profit, known as the “Palo Alto System”: a rapacious, violently exploitative mode of capitalism that generations of would-be moguls have perfected. “Palo Alto” is a skeptic’s record, a vital, critical demonstration of Northern California’s two centuries of mixing technology and cruelty for money.

Harris, born and raised in Palo Alto, home to one of the most unequal and competitive school districts in the country, understands the consequences of a town obsessed with achievement and built on destruction. Most accounts of U.S. tech culture, like Stanford professor Fred Turner’s “From Counterculture to Cyberculture” or Richard Barbrook and Andy Cameron’s landmark essay “The Californian Ideology,” follow technology’s trail to the military-industrial complex of the 1940s and ’50s and to the counterculture of the 1960s. Historians of California, for their part, have written extensively about the importance of the railroad and other technologies to the state’s brutal regimes of exploitation that catalyzed its furiously accelerated early development. Harris is interested both in the ideology of tech entrepreneurs and in the labor practices that underlie their ideas, ultimately rooting the dynamics that built Silicon Valley in practices old as the United States itself.

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In the 1830s, the region’s Anglophone settlers rebelled and declared themselves part of the United States instead of Mexico. Subsequently, the region’s Indigenous populations — named the Ohlone by anthropologists and settlers though there were dozens of distinct groups in the area — were nearly exterminated as the United States reneged on treaties, enslaving, displacing and slaughtering entire communities in the process. By 1850, in the throes of the Gold Rush, mass migration populated the West with Americans and spurred the Golden State’s first technological innovations. “California engineers,” experts in maximizing mining yields for the already wealthy who could afford to assemble large-scale, mechanized operations, were soon in demand the world over. Harris distills the settlers’ formula: “Anglos rule; all natives are Indians; all land and water is just gold waiting to happen.”

As easily accessible gold ran out, those lucky (or cutthroat) enough to survive the bust mostly pivoted to other endeavors. Here, Harris spots an incipient pattern that continues to play out: Wealthy investors pile their money into “promising” endeavors after being charmed by enchanting visionaries who grow fabulously rich — almost always before the venture has succeeded (or even begun operations). The investments raise the valuation of the business and facilitate further cycles of capitalization, so that executives need not worry about generating profits or revenue, or having a workable project. Environmental destruction, resource depletion and worker exploitation ensued in 19th-century California, Harris shows, and those same consequences recur in our time.

Criminals thought crypto was untraceable. They sure were wrong.

Even while attending to larger patterns, “Palo Alto” studiously works through the town’s history by focusing on its most famous and influential residents. Our first star is Leland Stanford, railroad baron and university founder. Stanford got his start by managing the Sacramento location of his brother’s dry-goods business, and expanded quickly throughout the area. Through sheer persistence and wealth, he became governor of California and a senior adviser to President Abraham Lincoln, whom he persuaded to greenlight a railroad linking California with the East Coast. The venture left Stanford one of the world’s wealthiest men, though not, Harris suggests, by his own merit, especially “given the amount of financial chicanery going on” and his reputation as a “big oaf.”

As time went on, disgruntled former employees kept protesting at Stanford’s San Francisco manor, so he bought a farm off the Santa Clara County train tracks called Mayfield Grange and renamed it Palo Alto after an imposing sequoia tree nearby. Racehorse breeding was Stanford’s passion, and he built out the facilities to host a top-level stable, with genetic optimization as his priority. Harris suggests that “the Palo Alto Stock Farm was really in the business of intellectual property,” like a Google or Apple of equine genetics. Stanford even hired photographer “Helios” (Eadweard Muybridge), whose groundbreaking visual experiments served as promotional materials affirming Stanford’s place on the cutting edge.

Stanford’s commitment to “disruptive” logic — efficiency uber alles — lives on as Palo Alto’s guiding principle, the aforementioned “Palo Alto System.” The system matured as West Coast capitalists emancipated themselves from Eastern funds and companies that financed the early generations of entrepreneurs. To this day, entrepreneurs and investors prioritize start-ups’ capacity to scale rapidly over profits, revenue or even functionality. Harris shows that monopoly, in Palo Alto’s imagination, is the only acceptable possibility. Latter chapters of “Palo Alto” feature failures such as, as well as familiar giants such as Amazon and Facebook, all of which relied heavily on this system. (Amazon founder Jeff Bezos owns The Washington Post.) With destructive conditions for factory workers, and payment systems that distribute stock options instead of wages to employees, highly valued start-ups often lumber on for years without profits or, sometimes, even a product.

Leland Stanford left his mark on the region in other ways, too. After his son, Leland Jr., died young, the former governor and his wife, Jane, founded Leland Stanford Junior University, and the institution soon became Palo Alto’s epicenter. In exploring Palo Alto’s history, Harris has an eye for scandals, often emerging out of the university itself — like the murder of Jane Stanford, in which the school’s first president, David Starr Jordan, was apparently involved — and hypocrisy, particularly around eugenics and military funding. Many of Stanford’s early luminaries, Jordan chief among them, were obsessed with eugenics, and Harris suggests that their inheritors — including Frederick Terman and William Shockley, regarded as the founders of modern-day Silicon Valley — kept up the game to varying degrees.

No alum better symbolizes Stanford, for Harris, than its first U.S. president: Herbert Hoover, “a representative of the worldwide ruling class, super-imperialism personified.” Hoover studied geology and graduated near the bottom of Stanford’s first class, but quickly became a world-renowned “California engineer” specializing in mining. Rising to the presidency, he perfected another Palo Alto trademark that Harris calls the “associative model” — “the free, voluntary association of businessmen in their common interest,” ensuring profits for the select few in the loop and freezing out everyone else. Hoover was Stanford’s perfect man, a relentless, self-made capitalist elitist who remained massively influential after the ignominious end of his presidency thanks to his membership in the San Francisco Bohemian Club, where he functioned as a “global kingmaker” until his death.

“Palo Alto” continues onward, ranging from San Francisco’s Black beat poet laureate Bob Kaufman to MK-Ultra, the Black Panthers, the Homebrew Computer Club, Sun Microsystems, Elon Musk, Amazon warehouses and beyond. Famous names give way to dark histories, including the redlining and subsequent ghettoization of East Palo Alto, but also stretching beyond the region to encompass the Iran-contra affair and more. Harris’s fervent argumentation sometimes feels repetitious or meandering, but conviction and research burn through the page and give coherence and urgency to a daunting subject. Alas, a concluding call for the restitution of Palo Alto to the descendants of its original inhabitants, the Muwekma Ohlone Tribe, feels underwhelming, partly because their struggle remains marginal throughout a book that more frequently focuses on the oppression of Latin American, Asian and Black workers and residents.

Harris demonstrates that the charming story with which we began, in which hippies freed the world by virtue of their genius and creativity, was always a convenient deception. That narrative avoids mentioning decades of profiteering in U.S. imperial pursuits, from Vietnam to Nicaragua to Iraq; the nepotism and exploitation that built these would-be saviors’ fortunes; and, above all, the murderous displacements that created present-day Palo Alto. Though the town’s ideologues aspire to sun-soaked ascension above earthly clouds, their Olympus was always shrouded in shadows. Only by acknowledging its failings can the damage be repaired — if it’s not too late.

Federico Perelmuter is a writer from Buenos Aires.

Palo Alto

A History of California, Capitalism, and the World

By Malcolm Harris

Little, Brown. 708 pp. $36

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