The Dark Side of the Silicon Gold Rush
Q&A with Richard Walker, author Pictures of a Gone CityBy Richard Florida
July 3rd, 2018
Pictures of a Gone City is the culmination of the life’s work of Richard A. Walker, a professor emeritus of geography at the University of California, Berkeley. A student of the great Marxist geographer David Harvey, Walker brings a profoundly historical approach to his scholarship. His lens spans economics, urban design, politics, and the environment, to name just a few of his interests.
Walker’s new book is urban geography for our times. It illuminates the basic crisis and contradiction of the San Francisco Bay Area, which is an example of capitalism at its most innovative and dynamic, and simultaneously the site of severe inequality and failing public policies and infrastructure. Walker has lived and worked in the Bay Area for most of his life. I was delighted to speak with him about topics ranging from the real geographic definition of the Bay Area, to its history of innovation (stretching back to the Gold Rush days), to the contemporary movements that might help the Bay Area reclaim its radical roots.
One of the things I like most about your book is its historical perspective. The Bay Area has always been a much desired and relatively expensive place to live. What’s different now?
In the 1950s postwar era, when the Beats were going strong, and right through the 1960s, San Francisco was remarkably cheap, actually, because it wasn’t as in demand as New York. So people could find places to rent in North Beach, which now is regarded as very luxurious. What [happened] is, around 1970, there’s an inflection point where prices in California in general take off and start to outrun most of the rest the country. And then there’s another inflection point around the 1990s.
Trying to explain this, of course, is what everybody’s got their pet theory about—but it’s not simple. Certainly, it has to do with the unbelievable success of California, and particularly with the success of the Bay Area, which has outrun California. California created enormous numbers of jobs for a very long time, and then it’s generated massive wealth, particularly here in the Bay Area.
That means that the upper 20 percent of the population have an enormous amount of disposable income they can spend on rent, [so] they’ve bid the rents up for the desirable parts of the city.
What is it about the area that allowed it to create such an advantage in high-tech industries?
It’s always had a very high component of skilled labor. It always had tons of capital—it really was the number-two financial center in the country since World War II. And that had always supported new industries. There’s a certain social culture of openness and opportunity. It really goes back to the Gold Rush. This is something that runs very deep in the Bay Area, and California as a whole.
The Bay Area is a major tech economy, but not a one-industry economy, the way steel was to Pittsburgh or autos were to Detroit. Talk more about that breadth.
It’s much more on the New York model or even the Chicago model than some of these more one-horse places. It is “Tech Town,” the most dominated by the tech industry of any place in the world. But at the same time, it has this long history of manufacturing, especially related to agriculture, as well as mining and canning and food production.
Because of higher education and research, it developed biotech ahead of everybody. This is where the beginnings of gene splicing [were] done. So we have this huge medical-tech and health-service complex; [a] higher-education complex. And then a surprising amount of logistics, because of the Port of Oakland. San Francisco was the biggest port on the West Coast up until World War II. And then Oakland took over as one of the major container ports for many years, with all the associated warehousing and transport. That’s still pretty big.
And the tech industry is itself different because it is so fertile in terms of the potential uses of electronics and chips—that we could go from chip-making to the internet is a huge leap. And then you could leap into the software of the internet and social media and all the rest.
One of the things you also write about is how big and fractured the Bay Area is: 125 municipalities sprawling out in every direction—with its own Inland Empire. Give us a picture of what this region really looks like.
New York absorbed its challenger in Brooklyn in a way that San Francisco never was able to do with Oakland; and then Silicon Valley pops up, and so you have a third head. The book Edge Cities used the outer East Bay as one of the prime cases of the Edge City along the 680 corridor, with the decentralization of offices that was going on there starting in the 1980s. And now we have suburbs going all the way into Central Valley. We’re merging with Stockton and even Sacramento.
Even people here are just waking up to this. But it’s important to see that we have an Inland Empire, to see the whole and not just the parts. It’s important for people elsewhere to realize how enormous this place is. It’s the fourth biggest city [metro area] in the United States after Chicago.
In your book, you talk about the perils of prosperity. You outline the dynamism of the Bay Area and the problems that come with it—unaffordability, inequality, poverty, sprawl, environmental degradation, and more.
I call it the Communist Manifesto problem. Marx and Engels write one of the great paeans to capitalism in that statement. It has produced wonders far beyond any previous civilization—massive potential for well-being. And at the same time, tremendous immiseration of the working people, disruption, “all that is solid melts into air,” modernity that undermines all fixed conditions.
I try to keep juggling the two sides. I think it’s too easy—and I think the left often falls victim to this, and I’m on the left so I’m saying this sympathetically—to go for the low-hanging fruit. Like, the emptying out of Detroit is catastrophic, how could a country could let this happen?
But in this case, I want to show that this is the center of the dynamism of capitalism today. As one person put it, “Tech makes capitalism fun again.” And there is a sense of that. I think you have to recognize the excitement of this industry, the excitement that modernity has always generated.
My challenge is to say, “Okay, given that this place is so successful, perhaps the most successful place on Earth certainly in the last decade, what’s still wrong and how could it go so wrong?” How could you have this gross inequality, how could you have so many working people earning minimum wage? A quarter of them are earning minimum wage; a third of them can’t earn a living wage. And then the homeless situation is just beyond immoral. Perhaps the most disgusting homeless situation anywhere in this pretty heartless country. And so that’s what I do, is take it apart and show both sides.
So what are the things that have gone badly wrong in the Bay Area?
We are one of the leading generators of inequality, which is hidden because we look at our high median income—the highest in the world of any big city—and say, “Wow, that’s great.
Capitalism lifts all boats.” On the top you see that most of the big boats are bobbing around quite nicely, steaming ahead. But then the little boats are getting swamped.
The next thing is housing. The housing crisis is really grotesque here. Hundreds of thousands of people are being priced out of the city and having to move either far out into the Central Valley, where you’re 100 miles away from the center, or they give up and go to Las Vegas or Reno or Oregon, or wherever the possibilities seem better for ordinary working folks.
“You look at the revival of San Francisco and many of the centers, like Oakland. But at the same time, urban sprawl goes on forever, with all the negatives of that.”
Urban sprawl—that has not been solved at all. You look at the revival of San Francisco and many of the centers, like Oakland. But at the same time, urban sprawl goes on forever, with all the negatives of that, which I discuss in a whole chapter on environmental impacts, because that is still eating land like crazy and eating resources and water, and we’re dealing with its air pollution.
Another big thing is the ideology of the tech industry. The siren song of the innovators and of the tech moguls saying that they’re creating this new world, a much better world, which we’re all discovering is not the utopia that we were promised. Far from it: In some respects it’s a nightmare.
The last thing is, we have a long and pretty honorable tradition of progressive politics in the Bay Area. And the question is, where’s that going? Even though we’re still the bluest of the blue, that doesn’t necessarily mean that our radical edge, our progressive edge, is doing well. A lot of that has been blunted.
You made the point that tech made capitalism fun. But it doesn’t feel like fun anymore. As you say, it seems to be turning into a nightmare for many people and communities. We can all sense the growing backlash against Big Tech. What is causing this shift in the Bay Area, specifically?
I think it’s a problem Americans have always had, and illusions that we’ve always had about the promise of technology. We want to believe that technology will deliver us from evil without cost, which never turns out to be what you hoped. It may be wonderful and dynamic and deliver a lot of goods. But it delivers a lot of social change, social upheaval, new kinds of problems that you never imagined. And that’s what we’re getting: a lot of the unexpected consequences.
Americans have always thought that the market delivered competition and that we’re a country of small business. Now you may have a proliferation of little-guy startups, which seems very dynamic and kind of fulfills the American Dream, but what happens of course if the industry is really successful [is] a few of these guys turn into corporate giants like Google and Facebook, and then they start gobbling up the little guys.
That becomes the endpoint of a startup—it’s not to enter the market and compete, but to end up being acquired by a corporate giant, and you become a multimillionaire. You’re delivered your cut of the goodies, but it doesn’t deliver the promised competition, and instead you end up with these mega-monopolies who made most of their money off advertising. What could be more boringly American and less like the promised land than simply having to deal all the time with electronic billboards?
Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a University Professor and Director of Cities at the University of Toronto’s Martin Prosperity Institute, and a Distinguished Fellow at New York University’s Schack Institute of Real Estate.