Business

Power And Paranoia In Silicon Valley

A new essay by star investor Paul Graham reveals an anxious mindset that characterizes many powerful people.

Joe Corrigan / Getty Images

You might not expect Paul Graham’s mind to be troubled.

Graham, a wealthy Silicon Valley entrepreneur, who helped create the elite startup factory Y Combinator, is held up as a hero by many young strivers. Among the startups he shepherded into existence is Airbnb, the home-rental company that is now synonymous with tech success. No one, except for maybe a handful of activists in the Bay Area, wishes him harm. America’s most admired companies are in his industry.

And yet Graham says he feels like a “wild animal overhearing a conversation between hunters.” He says he thinks about “whether they want to kill me or not.” He suggests that his world, the world of startups, is under attack.

These feelings motivated Graham to write an essay analyzing the public debate over economic inequality. The essay, which has generated a lot of discussion among tech pundits and others this week, draws a connection between attacks on inequality and attacks on the world of startups. People shouldn’t attack “economic inequality” as such, Graham argues, since one cause of widening inequality is tech people getting rich from startups (which is good).

His argument, boiled down to its essence, is not very controversial and seems to be largely about semantics. “Instead of attacking economic inequality, we should attack poverty,” Graham says in a shorter, “simplified” version of the original post. Sounds good!

In Graham’s mind, though, this matter is urgent.

“When I hear people saying that economic inequality is bad and should be decreased, I feel rather like a wild animal overhearing a conversation between hunters,” he says. “But the thing that strikes me most about the conversations I overhear is how confused they are. They don’t even seem clear whether they want to kill me or not.”

Graham seems to dismiss the possibility that attacks on economic inequality don’t always mean attacks on wealth (and therefore on startups).

“Eliminating great variations in wealth would mean eliminating startups,” he says. “Are you sure, hunters, that you want to shoot this particular animal?”

“If our goal is to decrease economic inequality, then it is equally important to prevent people from becoming rich and to prevent them becoming poor,” he argues later.

Leaving aside the economic merits of Graham’s argument, the essay seems to reveal a worldview particular to the rich and powerful, according to Dacher Keltner, a UC Berkeley psychology professor who studies power, class, and morality. Plutocrats, he says, have a tendency to feel like victims.

“The minute people in positions of power and wealth are subject to a little bit of criticism, they almost see it as this irrational witch hunt, or that they’re being violently persecuted,” Keltner told BuzzFeed News. “The imagery of being hunted is just bogus and, frankly, outrageous.”

Graham can take comfort in knowing that he’s not alone.

After the financial crisis, for example, the hedge fund billionaire Leon Cooperman railed against President Obama for remarks that he thought antagonized the rich. He went so far as to compare the president to Hitler.

In extreme cases, “the rich feel that they have become the new, vilified underclass,” Chrystia Freeland, the author of Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, wrote in a piece about Cooperman in The New Yorker.

Signs of this mindset are evident in Silicon Valley, where plutocrats strive to point out how they’re different from the titans of Wall Street. Most examples are not as obvious or inflammatory as the time the pioneering venture capitalist Tom Perkins compared criticism of the rich to Nazi attacks on Jews.

Just take a look at how tech elites responded on Twitter to an explosive Wall Street Journal article claiming the hot startup Theranos wasn’t all it seemed.

Or observe how tech elites interpreted the efforts of reporters asking skeptical questions about Mark Zuckerberg’s intentions for his plan to give away most of his Facebook stock.

Many leaders, including United States presidents, experience at least a small amount of paranoia, which they often view as serving a useful purpose, according to a 2001 essay co-written by Roderick M. Kramer, a professor of organizational behavior at the Stanford Graduate School of Business.

“The conviction of political leaders that they are victims of elaborate, well-orchestrated conspiracies turn out to be far from rare historically,” according to the paper, “The Exaggerated Perception of Conspiracy: Leader Paranoia as Adaptive Cognition.”

“Leaders often find themselves, figuratively speaking, looking over their shoulders at those they worry may be trying to challenge their power or take their place,” it says.

“Those in positions of power may intuit better than more trusting observers that prudence and caution are better than regret,” it says later. “Relatedly, the increased vigilance of others’ behavior and the propensity to ruminate about their motives may be quite functional in such environments.”

UPDATE

Paul Graham responded to our email seeking comment. His response, in full:

“When I said I felt like I wild animal overhearing hunters, I didn’t mean I felt afraid or persecuted or anything like that. I just meant it was strange constantly reading pundits saying that we ought to get rid of something and thinking “the thing they want to get rid of is what I create.”

It’s certainly true that being rich and/or powerful means you’re ipso facto suspect to some people. Though to be fair also ipso facto credible to other people. It polarizes people. Frankly I’d prefer to do without both. I’d rather just have whatever I write judged for whether it’s true or false and not who wrote it.

But there’s nothing I can do about this. I’m not going to stop writing just because I know anything I say will be attacked. (Literally anything; the hardest of the hard core haters even attacked that essay I wrote about Jessica.) The good news is that I’m used to being attacked. Before Twitter even existed I used to get mauled on Slashdot for things I wrote. “Microsoft is Dead” caused huge outrage. So I have a pretty thick skin by now.”







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William Alden is a business reporter for BuzzFeed News and is based in San Francisco. Alden covers the technology industry.
Contact William Alden at will.alden@buzzfeed.com.
 
 

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