Roger McNamee is a prominent venture capitalist, investor, musician, and activist. Previously a mentor to Mark Zuckerberg and Sheryl Sandberg at Facebook and an early investor in the company, he is the author of 2019’s Zucked: Waking Upto the Facebook Catastrophe. The book is his insider’s account of learning that the design of Facebook, founded in 2004, had allowed bad actors to tip the 2016 election—and his realization that Zuckerberg and Sandberg were indifferent to the situation.
From a warmly lit, unconventionally decorated study, McNamee speaks to me over Zoom about how Silicon Valley has affected society in the past 20 years and the work it should be doing to make the future better. He remarks that most of the popular books written about Silicon Valley are “genuinely harmful” because reporters don’t understand the context and access is the dominant form of journalism. Later, he clarifies, “If you’re working with a whistleblower, you’ve got a fighting shot.”
This interview has been edited for brevity and clarity.
ROGER MCNAMEE: The problem with Big Tech is that the leaders are convinced that they are entitled to experiment on the entire population at will, without safety nets or guardrails, and that the mission each one is on justifies staggering levels of harm in the interest of what they would call science. And yet, if you step back and look at what Silicon Valley has been doing since the financial crisis, I think you can make a case that Silicon Valley has not actually created a single company addressing any of the issues that really matter. That essentially the companies are solving problems created by Silicon Valley for Silicon Valley to solve.
One of the best examples of this is self-driving cars. You have to ask yourself, What is the problem for which self-driving cars are the solution? Our long-term interest is in reducing private ownership of vehicles. The notion that a car that drives itself that costs half a million dollars, that somehow that’s going to solve a transportation problem? I don’t see that.
As a culture, we have come to accept the notion that anything new created by the tech industry must be both important and safe. From where I sit, nothing since the financial crisis has qualified under either metric, much less both.
ANITA FELICELLI: Why do you think of the financial crisis as a pivotal moment?
Because the solution to the financial crisis was to drive interest rates to zero. And then for political reasons, they stayed basically at zero until Russia invaded Ukraine. Interest rates begin their upward march. At zero percent interest rates, investors struggle for return, because the bond market offers nothing. What you saw because it lasted so long—people took more and more risks without realizing. There’s a story in the New York Times where they’re talking about how 3,200 startups had gone broke in 2023. That’s grossly undercounted because it’s just the ones that shut their doors.
Does that loss trickle through and affect what decisions are made by venture capitalists about new startups?
We can hope. Here’s what happened: interest rates go to zero, and Silicon Valley realizes something profound and extremely dangerous, which is, they no longer need to focus on empowerment and productivity, both of which are hard work and take a long time. When interest rates were at zero, they realized there would be essentially unlimited capital at no cost. Over time, what happened was, the bigger the story, the bigger the check they could get, so they started to promise increasingly outrageous things.
It starts with Spotify. It then goes to the gig economy, then the Internet of Things, crypto, self-driving cars, the metaverse, and then, finally, generative AI. The common characteristics of all of these things are that they were effectively over the horizon. In order to make them happen, you needed to have really large amounts of capital.
Each one of these things, instead of being about empowerment and productivity, was about using data and free capital to exploit human weakness. They would throw capital at the problem without any intention of making a profit, because their notion was that if they could drive out all the competition, clear the decks, then later they’d be able to raise the price. Cory Doctorow calls this the “enshittification” process.
What do you think about generative AI in this context?
Generative AI? There isn’t any evidence that it’s real. There’s a fair amount of evidence that it’s just another hype-storm surrounding a half-baked idea with a terrible business model and that if Microsoft hadn’t bailed out OpenAI, the whole category would have disappeared along with crypto and the metaverse.
Have you used ChatGPT for purposes of seeing what it does?
Why would you do that? If you want to be serious about this, wouldn’t you sit down and go, Oh, how was this product created? The first step was, they stole personal information and copyrighted content to train their system. Were they training to identify facts? To separate fact from fiction? No, they trained it for plausibility. Now, why would they do that?
The answer is because humans tend toward anthropomorphism. If you can create a product that creates the illusion of being human, people will impute to that system all kinds of attributes that aren’t there, which is exactly what they do with ChatGPT. You create a thing that was designed to con people. It’s basically a Magic 8 Ball that answers in complete sentences.
Does that mean you don’t find AI threatening?
No, I’m terrified about generative AI because I see no upside and almost infinite downside. It is one more thing that destroys our opportunity for self-realization. Generative AI is about saturating the environment so that the human has no autonomy at all. The experiments they’re running are designed to maximize their wealth and power at the expense of everyone else.
The problem is that we have allowed the interests of the technology industry to come decoupled from the interests of society. Can you imagine what would happen if the full intellectual weight and capital of Silicon Valley were devoted to solving climate change? Public health and education? It wouldn’t take long to make huge progress. Those are gigantic issues that apply to every single person.
There had been a period of tech optimism in Silicon Valley 20 years ago.
The real period of tech optimism was 1956 to about 20 years ago. After that, once the internet bubble burst, we had this period when the venture industry was in retreat, but a series of things happened in the technology itself, specifically, the capability of processors, storage, memory, and bandwidth. That essentially eliminated the constraints for engineers that existed prior to 2003 or 2004. If you were an engineer back then, you had to listen carefully to your customer and deliver the thing they would pay for that day. That’s what kept the industry focused on empowerment and productivity. But once you could have more processing power than you needed, once you had more bandwidth, once you had more memory and more storage, things like Amazon Web Services got started.
When that happened, the cost of doing a startup collapsed. So in 1999, if you’re doing a dot-com, it would cost you $125 million or $150 million to build the stack to run your website. When the predecessors to Amazon Web Services came in 2003, suddenly, you could bring a credit card and rent what you needed. That took the cost of a minimum viable product from, call it, $150 million down to $10 million, which took the risk down proportionately.
What other changes led to where we are?
We’re up against a cultural shift that took place in Silicon Valley beginning 20 years ago that began to flower after the financial crisis, but what’s incredible is that we as a society ignored all the signs that this had gone wrong. When I first went to Washington in May of 2017, I went to the Senate Intelligence Committee, and they were focused on Russian interference in the 2016 election. The point that I went to make to them was that the issue here was Facebook, that Facebook was a tool anybody could use to interfere in elections. They needed to look at that. By September, October of 2017, we were talking to everybody in Washington.
Six-plus years have gone by since then, and not one meaningful piece of tech-reform legislation has passed Congress.
Which governmental officials have taken the right stances on tech regulation recently?
Two civil servants thrill me: Lina Khan at the Federal Trade Commission and Jonathan Kanter at the antitrust division of the Justice Department. They are the bright, shining lights. Lina Khan has done more than I could have dreamed. She’s infinitely talented, but Congress has been emasculating the Federal Trade Commission for 40 years, cutting the budgets, reducing its scope, passing laws that made its job harder. Somehow, through all of that, Lina has scared the ever-living crap out of monopolists in America and caused consumer protection to become a priority of the Federal Trade Commission again. Jonathan at the Justice Department is leading the Google cases. The evidence in the Search case is so compelling: the $26 billion that they paid to keep companies, including Apple, from entering the search business. Twenty-six billion dollars. That’s bigger than the gross domestic product of, I think, 100 countries around the world.
Eventually, these guys are going to lose. I love the AGs in California, New York, Colorado, in particular—those three are heroes. But New Mexico, Massachusetts, the District of Columbia, Pennsylvania—there are a bunch of other good ones. There are 33 states that are working on a federal case against Meta over Instagram and kids, but there are also individual states that are prosecuting the same case in their state. All the evidence is that the federal judge is going to do what federal judges do, which is protect corporate power. But what they’re going to have to say is that the First Amendment and section 230 of the Communications Decency Act entitle Meta to knowingly harm its users for profit. Each time that conclusion comes down, the political pressure is going to rise. People are going to say, “There is no way on God’s green earth the First Amendment was designed to allow corporations to harm the people who use their products.” Eventually, the scales are going to tip. The question is, Will we remain a democracy long enough to win those fights? Because the wheels of justice turn very slowly.
Well, not only that but the Supreme Court is favorably stacked for business.
That’s obviously an issue also. But quite clearly, if we stop having elections, that simplifies things. If you simply watch their behavior, these companies are much more comfortable in authoritarian countries than they are in democratic countries.
So then the solution becomes to turn the country into a more authoritarian country.
To be clear, we’re there. We’re right at the edge. If you look at it, you’ve got 14 states that operate outside the normal bounds of democracy, where they’re increasingly combining religious and political views. They’re no longer hiding that that’s the objective at the federal levels. We’ll see what happens here, but the country is in peril.
I do think it’s possible to stop it, because we are catching some lucky breaks at the margin. President Biden has been remarkably successful, far more so than I would have anticipated. The Inflation Reduction Act included a provision to stimulate investment in plant equipment, basically factories, which came right in front of Russia invading Ukraine. And you’ve seen the amount of investment in plants and equipment in America just going nuts in the most positive way. The one thing it doesn’t do is fix the problems of the last 3 years, which was the inflation caused by COVID, when corporations took full advantage of the immobility of people to maximize their own profits. People are justifiably unhappy about price levels, and they’re justifiably unhappy about high interest rates, but the right answer to this is not to turn the country over to the people undermining our value system for the last 40 years.
Could AI change things in terms of human behavior?
To the degree that it gets deployed widely, it’s likely to change absolutely everything. But essentially, Silicon Valley didn’t create these problems. It really comes from the shift that took place from the New Deal to the Reagan years, where we decided that we were going to go from collective action, high tax rates, and the government directing investment in public goods, which was something we’d been doing since the Depression, to go back to unfettered capitalism, and we were going to essentially allow markets to allocate all the resources.
In parallel, we said to CEOs, “You’re no longer responsible to your employees, the communities where the employees live, your customers, your suppliers, you, or your country. You’re only responsible to your shareholders.” You make all those changes and then let them stew for 30 or 40 years—that’s how you get to where we are now, where the law has been transformed by that value system.
If questions about privacy and technology regulation come to the Supreme Court during these justices’ lifetimes, they may not allow reform.
But we have seen things like this before, and we rose to the occasion—eventually—each time. To me, the productive thing is to say, What avenues are available to us to get this right? Because, remember, we can get lucky. If you look at 1929, there was a crash at the New York Stock Exchange. That crash precipitated a global depression. The system that was in place at the time was unfettered capitalism. In 1932, Franklin Roosevelt gets elected with a mandate to fix things. In 1933, they conceive of the New Deal. What wound up happening in ’36 and beyond is that we had a political realignment.
Just the way that Jimmy Carter deregulated the airlines and started the process before Reagan of opening up the economy, Joe Biden took the essential step with the Inflation Reduction Act of setting up a new economy. Sometime in the next 7 or 10 years, we shouldn’t be at all shocked about massive political realignment.
Are you optimistic that California is starting to work on these problems, even though there’s no comprehensive privacy law, for example? There are a number of people working on it.
There are a very small number of people working incredibly hard, who got a terrific law passed, which the industry completely watered down, before a ballot initiative put baby teeth into it. And now the Delete Act puts the first adult tooth into it. It’s against the most important problem—the problem that’s at the heart of everything—and it’s about 1 percent of the solution: Your car is spying on you. Your television is spying on you. Your Roomba. Your Alexa. Your Ring doorbells—all these things are spying on you, not for your protection but for their profit. Everybody is a surveillance capitalist today.
There’s no restriction on people using your activity online or your activity in cloud-based apps. The big players have reserved the right to use that to train their AI, which means your most intimate stuff is being used to train their AI.
We don’t see that this is the same thing that undermined the 2016 election, but on steroids. It’s really weird, but as Russia invaded Ukraine, the interest rates go up—that breaks the economic model that created all these things. Knock wood that generative AI is the last one—and if it hadn’t been for Microsoft, the last one would have been the metaverse. If everybody had a moment of clarity on Election Day in ’24 and made sure that their voice counted, that’s the key thing. In a lot of states, they’re doing everything in their power to deny people of color and Gen Z from voting. Black voters have saved democracy now, at a minimum, in 2018, 2020, and 2022. I think you can make the case they’ve been saving us for a lot longer than that. The rest of us have got to get our butts in gear.
It’s disheartening that only a small number of people are working on privacy.
We live in a time where all the support systems that existed at the time my parents were young adults are gone. If you’re a parent of young children, the expectations for how you spend your time are crazy. They just don’t leave any time for people to deliberate stuff like this.
If all of this were an accident, that’d be one thing. But a group of people have been trying to bring about this outcome for 40 years. It makes you realize, Wow, there really are puppet masters pulling strings. They have more money than anybody else, so they can last a long time. Too many of the people who represent us are conflicted.
This is a democracy/authoritarianism problem. This is a capital-versus-everything-else problem. The one thing that’s incredibly clear is that participation is central, so we’re going to have to find a way, as a country, to prioritize democratic processes more highly than we have.
Is there room to revive the former hippie spirit of Silicon Valley that we both remember? Are we looking at something where we need to completely reconstruct?
I don’t know. That’s the part I think is hard to predict. What I know is that Silicon Valley has never been perfect, but it was governed for a long time by a culture of empowerment and productivity, which are things that often lead to widespread benefits. And Silicon Valley today stands for something different than that; the country has accepted that as though there is no other way. Silicon Valley sits there and says, “Tech is a continuum. There’s only one path. We’re on it. You just have to trust us.” That is total and utter nonsense. The technology industry could be doing unbelievably great things with everything that’s available today.
People underestimate how great the Green New Deal would be for our economy. Here’s a thought experiment I encourage all of our readers to entertain. Ask yourself first, If you said it was illegal to use petroleum, what would happen to our national security? How many of our national-security problems are directly linked to petro-states? A lot of them. It’s not just Russia. It’s the entire Middle East, Venezuela. The great thing about renewables is that renewables are inherently local, so they tend to be a counterweight to geopolitical tension.
There’s an enormous amount of science in the Green New Deal, and science has historically been one of our greatest strengths. Now, we’ve done a lot to undermine science in this country. Importantly, we’d have to build whole new industries, which would make a huge difference to reviving it, which would create tons of good jobs. We need to invest in public transportation. We need it to be state-of-the-art. My proposal is that we take Highway 80—we’re going to get rid of all the cars, and we’re going to lay down track from coast to coast on Highway 80. High-speed rail. It used to be that public transportation was a sign of advanced civilization. In advanced civilizations, everybody rides public transit; these things should be beautiful. They should be monuments to human achievement. Silicon Valley has a huge role to play in all of that.
As a culture, we’ve lost the thing that my parents’ generation had from their experience of the Depression and their experience in the Second World War, where they recognized that collective action is a good thing and that we have these things that we share that are not only worth preserving but worth fighting for.•
Roger McNamee’s Updated Recommended Reading About Big Tech and Privacy Since 2019
- Privacy Is Power: Why and How You Should Take Back Control of Your Data, by Carissa Véliz
- The Age of Surveillance Capitalism, by Shoshana Zuboff
- No Filter: The Inside Story of Instagram, by Sarah Frier
- The End of Reality: How Four Billionaires Are Selling a Fantasy Future of the Metaverse, Mars, and Crypto, by Jonathan Taplin
- Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy, Jonathan Taplin
Join us on February 15 at 5 p.m. Pacific, when author Dave Eggers will appear in conversation with California Book Club host John Freeman and special guest Caterina Fake to discuss The Every. Register for the Zoom conversation here.
