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J.D. Vance’s life is full of twists and turns. His memoir from 2016, “Hillbilly Elegy”, chronicles how a boy from a drug-afflicted home in the Ohio rustbelt, who almost flunked high school, made it to Yale Law School. As a bestselling author, celebrated by liberals for his unflinching portrayal of left-behind people and places, he turned staunchly anti-establishment, attacking what he saw as business elites benefiting from moving factories abroad and paying low wages at home. As a venture capitalist, he was mentored in Silicon Valley by Peter Thiel, a conservative contrarian who then backed him for the Senate. Now he crusades against the very tech giants that, like Meta, owner of Facebook, made Mr Thiel billions as an early investor. He was once a “never-Trumper”. Now he is Donald Trump’s vice-presidential running-mate.
Among entrepreneurs in Silicon Valley and elsewhere, Mr Vance’s nomination has led tech bros who once kept their arch-conservative clothes in the closet to come out in full MAGA regalia. Elon Musk, who according to the Wall Street Journal is planning to throw $45m a month behind Mr Trump’s presidential run, said the Trump-Vance ticket “resounds with victory”. Delian Asparouhov of the Founders Fund, a venture-capital (VC) firm co-founded by Mr Thiel, jumped the gun with boyish insouciance, tweeting: “We have a former tech VC in the White House. Greatest country on earth baby.” Marc Andreessen and Ben Horowitz, the eponymous co-founders of a VC Goliath, released a video the day after Mr Vance’s nomination backing Mr Trump (albeit with pretend sheepishness: “Sorry Mom,” Mr Horowitz bleated).
There is naked self-interest in these declarations. Their justification, they say, is that the startup industry is being burned by the anti-tech zeal of President Joe Biden. In Mr Vance, they no doubt see a kindred spirit whom they can influence. Yet in corporate America at large, the recognition that Mr Trump looks increasingly likely to win the election also comes with deep misgivings about Mr Vance as his consigliere. Both men are driven by grievances. Both are highly unpredictable. Yet for all the Ohioan’s twists and turns, his antipathy towards big business and his desire to break up big tech appear to run deep. That may make him harder to deal with than the transactional Mr Trump.
It is strange to see parts of Silicon Valley shifting to the MAGA camp. In 2016 Mr Thiel was almost unique among the tech elite in throwing his weight behind Mr Trump, and was pilloried as a result (this time he says he may vote for Mr Trump but will not give money to his campaign). Yet the Andreessen-Horowitz duo, who used to vote Democrat, offer a full-throated argument for being pushed into the arms of Mr Biden’s opponents. They frame it as an existential battle of “little tech” against big tech.
Their first gripe is over cryptocurrencies and the blockchain. These, they say, are vital for encouraging innovation beyond the confines of big tech. Yet crypto startups are hobbled by what the venture capitalists argue is excessive regulation, particularly from the Securities and Exchange Commission. This is a view shared by Mr Vance. In what sounds like an echo of the “little tech” manifesto, the Republican platform promises to end Democrats’ “unlawful and unAmerican Crypto crackdown”.
Next come concerns about Mr Biden’s efforts to regulate artificial intelligence (AI). Some in Silicon Valley take particular issue with his executive order last year requiring builders of powerful AI models to report to the government for safety reasons. They say the order provides an unfair advantage to tech giants, which have vastly more resources to deal with red tape. Mr Vance agrees. He recently told a congressional hearing that though he was worried about the threat of AI to child safety, he wanted to prevent “pre-emptive overregulation” from entrenching big tech.
The third, and most immediate, concern is Mr Biden’s latest budget proposal, which includes a 25% tax on unrealised capital gains for those with over $100m of wealth, and which Messrs Andreessen and Horowitz say threatens to kill the VC industry. On top of hurting innovation, it makes the distinction between the two candidates’ approach to business taxes all the starker. Mr Trump wants to cut these, not raise them.
Beyond Silicon Valley, concerns about Mr Biden run deep, too. Many CEOs would love him to step aside in favour of a younger candidate. Yet a Trump-Vance ticket is more of a worry. Although bosses may like the sound of tax cuts and deregulation, they fear further descent into protectionism and political chaos.
There are Mr Trump’s tariff threats, echoed by Mr Vance, that risk inflaming trade wars, and the spectre of mass deportation of immigrants, which may exacerbate labour shortages. There is economic populism: “We’re done…catering to Wall Street,” Mr Vance thundered in a deeply isolationist speech on July 17th at the Republican National Convention. There is geopolitical uncertainty, as illustrated in a recent interview in which Mr Trump, in a reminder of how loose-lipped he can be, reaffirmed his misgivings about arming Taiwan against China. As for the Biden administration’s obsession with antitrust, Mr Vance promises more of the same. He is a fan of Lina Khan, who heads the Federal Trade Commission. Like her, he wants to stick it to giants like Google.
Oh for boredom in the boardroom
Picture this: Mr Trump and Mr Vance in the White House, and Mr Musk, Mr Thiel and other tech billionaires influencing policy from behind the throne. No wonder Silicon Valley’s libertarians are salivating. Put yourself in a boardroom, though, where instead of discussing business, CEOs will be bogged down by trade wars, geopolitical rifts or social divisions, and you are likely to have your heart in your mouth. Things are fractious enough under Mr Biden. They could be worse under Messrs Trump and Vance. ■
If you want to write directly to Schumpeter, email him at [email protected]
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