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Whining About Google Bus Protests Get Us Nowhere

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Tom Perkins, co-founder of the iconic venture capital firm Kleiner Perkins Caufield & Byers, caused a stir recently with his Wall Street Journal letter, "Progressive Kristallnacht Coming?" Perkins fears that recent protests over Google buses in San Francisco and growing resentments around income inequality could ultimately turn to violence against the wealthy.

As protests have grown against the white Google buses plying the streets of the Mission to bring young techies down to the Silicon Valley, it was the Counterforce anarchists breaking Google bus windows that for Perkins evoked images of Kristallnacht. One might have thought that as a long-time resident of the area, Perkins would have a greater sense of perspective. Protest -- whether about income inequality, bank lending practices, gentrification, LGBT rights, Black Power, immigrant rights, the wearing of animal fur, the list goes on -- is deeply rooted in Bay area culture and history. And the periodic involvement of self-styled anarchist groups -- be it the Counterforce, Anonymous or the Black Bloc -- have periodically elevated the tenor of otherwise peaceful protests, increasing the potential for property damage along the way. Protest happens, and in the worst cases the police show up. Sometimes it leads to greater public attention on important issues. Sometimes it contributes to constructive civic debate.

Perkins was roundly vilified for his use of a Nazi metaphor. We have seen this story before, as when billionaire Steven Schwarzman compared an Obama administration proposal to require financiers like he and Perkins -- along with Warren Buffett and Mitt Romney -- to pay the same income tax rates as the rest of us to Hitler's invasion of Poland.

The thing about Nazi metaphors is that they end conversations rather than encourage them. Perkins actually had a real point to make. There is real and growing animosity in the Mission, and it should be a cause for concern. Not very long ago, the Google buses were a source of bemusement rather than resentment. They began as a symbol of hip, socially responsible capitalism -- a sort of corporate carpooling that takes cars off the road and mitigates the adverse environmental impacts of rapid economic growth in the tech sector. Similarly, the burgeoning techie population in the Mission began as a benign phenomenon, just one more population migration into a city that has long attracted post-college kids, bringing new energy to the city, along with a plethora of new restaurants and cafes.

There is no small irony in the demographics of the street protests. The community of artists, progressives and bohemians who now find themselves being squeezed out by a new, wealthy hipster population themselves arrived in the Mission and the adjacent Noe Valley neighborhood a few decades ago, when they in turn displaced the working class, largely Latino, residents at that time. The gentrifiers are being gentrified.

But it was Perkins words as he walked back from his Nazi allusions that were most illuminating. He is, after all, not Steven Schwarzman. He is not a big Republican contributor. He is not even a billionaire. He is friends with and voted for Jerry Brown, and intends to again "even though he raised my taxes 30 percent." And he agrees that income inequality is "probably and possibly" the number one challenge facing the nation.

Yet even as he sought to put the controversy behind him, he remained -- like Schwarzman -- trapped within his own sense of entitlement, of being unfairly victimized by an unappreciative world. He was unable to look at the circumstances and seek to understand how others might experience it.

It's absurd to demonize the rich for being rich and for doing what the rich do, which is get richer by creating opportunity for others... Let the rich do what the rich do, which is get richer. But along the way, they bring everybody else with them when the system is working.

Is it really absurd? For many in the American middle class, letting the rich do what the rich do has not been an effective formulation for increasing either economic opportunity or outcomes. The three greatest forces that have undermined middle class incomes over the past several decades have been the advent of free trade, technological change and financial deregulation. Each of these have created cohorts of winners and losers. Free trade was heavily supported by and benefitted corporate America, which saw increased profitability and capital mobility through outsourcing, and along the way it benefitted the American consumer and lifted millions around the world out of abject poverty. These are good things, but they did not come without a price, and that price was paid by the domestic manufacturing sector and the industrial middle class.

Similarly, technological change has dramatically increased domestic productivity -- defined as economic output per hour of labor worked -- which has driven corporate profitability to new heights. It has transformed society and created a new class of young, uber-wealthy entrepreneurs. But this increased profitably and labor productivity again did not translate into higher domestic wages, and along the way new technologies destroyed myriad occupations upon which millions derived their living, as technologist Jeron Lanier has observed.

And little needs to be said about the impacts of financial deregulation.

These changes have been largely enabled by federal legislation, supported, if not instigated, by the lobbying and political contributions of those who would benefit. The rich, to use Perkins' formulation. However, it should be noted, particularly in light of the current protests, that the wealth in the tech sector in particular has been the least directly enabled by federal legislation, though the entire online world comprises companies that are effectively free riders on years of federal investment. The core value of Google, Facebook and others lies in their use of user data and user generated content, control over which has been effectively ceded to them voluntarily by users. Thus, the artist in the Mission has been an unwitting co-conspirator in the accumulation of wealth in the tech sector. As Jaron Lanier has observed, this ceding of value is exchange for "free" services is neither a necessary nor preferable outcome for the mass of users of the Web, and it has been a further contributor to the issues of economic stratification underlying the protests in San Francisco.

In that light, is it not reasonable that artists or others living in the Mission might feel some resentment toward the rich? Could they not interpret the past several decades -- years of flat real incomes for many cohorts of society -- as ones in which the rich continually adjusted the rules to their own benefit, but largely failed, as Perkins suggested, to bring everybody else with them. For those who saw their livelihoods directly undermined by these changes, is resentment not a natural response? Is it reasonable, as Perkins would have it, that instead they reflect equanimously on the larger benefits to the world -- and to the rich -- of free trade and new technologies, and say to themselves, 'well, if my livelihood is the price of progress, that is fair enough... I will just have to start over.'

Class resentments -- I use the term class deliberately as it is the term that Perkins chose to describe the rich -- are a problems common to many societies, exacerbated by images of elites using their political and economic power to solidify their advantages. The challenge for democratic societies has always been to build both economic structures that enable people to believe that they or their children will not be shut out of the opportunities that the future may bring, and political institutions that enable conflicts and differences to be addressed, if not resolved.

Increasingly, we are failing on both accounts. Perkins' plea to the artists and anarchists in the Mission that the rich be appreciated, respected and left alone to do their thing stands in stark contrast to a national political climate in which the defaming and demonizing of groups across society has been elevated to an art form. In recent years, teachers, public employees, retirees, union members, immigrants and others have been the target of withering political assault for partisan political purposes. The demonization of bankers and the rich is really just the most recent evolution in a toxic political climate where the notion of respecting and appreciating the diverse roles that different groups play in our national economy and civic life has been ground into the dust. If appreciation and respect is what Perkins wants, he should engage directly with the communities involved rather than complain about the lot of the rich on the pages of the Wall Street Journal. And perhaps he should consider that respect and appreciation are rarely given to those who do not show it to others.

Against that backdrop, the current protests have really been unremarkable. Hopefully, they will lead to real engagement and understanding across groups within the community. Reaching out, rather than lashing out. And Perkins should take comfort from the comment on one anarchist website. Things could be worse: "So, what, the Irish starved because Oliver Cromwell took their land, the Ethiopians are having their land taken away from them now, and all the bloody far left can do is to protest Google Buses."