The Null Device

The Bacon-Wrapped Economy

The Bacon-Wrapped Economy, an article looking at how the rise of a stratum of extremely well-paid engineers and wealthy dot-com founders, mostly in their 20s, has changed the San Francisco Bay Area, economically and culturally:
You don't need to look hard to see the effects of tech money everywhere in the Bay Area. The housing market is the most obvious and immediate: As Rebecca Solnit succinctly put it in a February essay for the London Review of Books, "young people routinely make six-figure salaries, not necessarily beginning with a 1, and they have enormous clout in the housing market." According to a March 11 report by the National Low Income Housing Coalition, four of the ten most expensive housing markets in the country — San Francisco, San Mateo, Santa Clara, and Marin counties — were located in the greater Bay Area. Even Oakland, long considered a cheaper alternative to the city, saw an 11 percent spike in average rent between fiscal year 2011-12 and the previous year; all told, San Francisco and Oakland were the two American cities with the greatest increases in rent. Parts of San Francisco that were previously desolate, dangerous, or both are now home to gleaming office towers, new condos, and well-scrubbed people.
The economic effects of gentrification, soaring costs of living and previous generations of residents being priced out are predictable enough (and San Francisco has been suffering from similar effects since the 1990s .com boom, when a famous graffito in one of the city's then seamy neighbourhoods read “artists are the shock troops of gentrification”). And then there are the effects of the city's wealthy elite being replaced by a new crop of the wealthy who, being in their 20s and from the internet world, share little of the aesthetic tastes and cultural assumptions of the traditional plutocracy, favouring street art to oil on canvas and laptop glitch mash-ups to the philharmonic; their clout has sent shockwaves through the philanthropic structures of patronage that supported high culture in the city:
Historically, most arts funding has, of course, come from older people, for the simple reason that they tend to be wealthier. But San Francisco's moneyed generation is now significantly younger than ever before. And the swath of twenties- and thirties-aged guys — they are almost entirely guys — that represents the fattest part of San Francisco's financial bell curve is, by and large, simply not interested.
"If you're talking the symphony or other classical old-man shit, I would say [interest] is very low," an employee at a smallish San Francisco startup recently told me. "The amount of people I know that give a shit about the symphony as opposed to the amount of people I know who would look at a cool stencil on the street ... is really small."
And not only the content of philanthropy has changed, but so have the mechanisms. Just handing over money to a museum, without any strings, no longer cuts it to a generation of techies raised on test-driven development and the market-oriented philosophy of Ayn Rand, and believing in fast iteration, continuous feedback and quantifiable results. Consequently, donations to old-fashioned arts institutions have declined with the decline of the old money, but have largely been replaced by the rise of crowdfunding, with measurable results:
(Kickstarter) The self-described "world's largest funding platform for creative projects" has, in its three-year existence, raised more than half a billion dollars for more than 90,000 projects and is getting more popular by the day; at this point, it metes out roughly twice as much money as the National Endowment for the Arts. And though hard statistics are difficult to come by, it's clear that this is a funding model that's taken particular hold in the tech world, even over traditional mechanisms of philanthropy. "Arts patronage is definitely very low," one tech employee said. "But it's like, Kickstarters? Oh, off the map." Which makes sense — Kickstarter is entirely in and of the web, and possibly for that reason, it tends to attract people who are interested in starting and funding projects that are oriented toward DIY and nerd culture. But it represents a tectonic shift in the way we — and more specifically, the local elite, the people with means — relate to art.
"A lot of this is about the difference between consuming culture and supporting culture," a startup-world refugee told me a few weeks ago: If Old Money is investing in season tickets to the symphony and writing checks to the Legion of Honor, New Money is buying ultra-limited-edition indie-rock LPs and contributing to art projects on IndieGoGo in exchange for early prints. And if the old conception of art and philanthropy was about, essentially, building a civilization — about funding institutions without expecting anything in return, simply because they present an inherent, sometimes ineffable, sometimes free market-defying value to society, present and future, because they help us understand ourselves and our world in a way that can occasionally transcend popular opinion— the new one is, for better or for worse, about voting with your dollars.
Which suggests the idea of the societal equivalent of the philosopher's zombie, a society radically restructured by a post-Reaganite, market-essentialist worldview, in which all the inefficient, inflexible bits of the old society, from philanthropic foundations in support of a greater Civilisation to senses of civic values and community, have been replaced by the effects of market forces: a world where, if society is assumed to be nothing but the aggregation of huge numbers of self-interested agents interacting in markets, things work as they did before, perhaps more efficiently in a lot of ways, and to the casual observer it looks like a society or a civilisation, only at its core, there's nothing there. Or perhaps there is one supreme value transcending market forces, the value of lulz, an affectation of nihilistic nonchalance for the new no-hierarchy hierarchies.

The article goes on to describe the changes to other things in San Francisco, such as the attire by which the elite identify one another and measure status (the old preppie brands of the East Coast are out, and in their place are luxury denim and “dress pants sweatpants” costing upwards of $100 a pair–a way of looking casual and unaffected, in the classic Californian-dude style, to the outside observer, whilst signalling one's status to those in the know as meticulously as a Brooks Brothers suit would in old Manhattan), the dining scene (which has become more technical and artisanal; third-wave coffee is mentioned) and an economy of internet-disintermediated personal services which has cropped up to tend to the needs of the new masters of the online universe:

And then there are companies like TaskRabbit and Exec, both of which serve as sort of informal, paid marketplaces for personal assistant-style tasks like laundry, grocery shopping, and household chores. (Workers who use TaskRabbit bid on projects in a race-to-the-bottom model, while Execs are paid a uniform $20 per hour, regardless of the work.) According to Molly Rabinowitz, a San Franciscan in her early twenties who briefly made a living doing this kind of work — though she declined to reveal which service she used — many tech companies give their employees a set amount of credit for these tasks a month or year, and that's in addition to the people using the services privately. "There's no way this would exist without tech," she said. "No way." At one point, Rabinowitz was hired for several hours by a pair of young Googlers to launder and iron their clothes while they worked from home. ("It was ridiculous. They didn't want to iron anything, but they wanted everything, including their T-shirts, to be ironed.") Another user had her buy 3,000 cans of Diet Coke and stack them in a pyramid in the lobby of a startup "because they thought it would be fun and quirky." Including labor, gas, and the cost of the actual soda, Rabinowitz estimated the entire project must have cost at least several hundred dollars. "It's like ... you don't care," she said. "It doesn't mean anything because it's not your money. Or there's just so much money that it doesn't matter what you spend it on."

There are 2 comments on "The Bacon-Wrapped Economy":

Posted by: Derek R Sun Mar 24 19:21:43 2013

At least they will have happy memories of "teh lulz" when the proles start kicking in doors...

Posted by: Greg Thu Mar 28 11:35:19 2013

Interesting stuff. When they talk about too much money to bother being sensible I get a strong deja vu of 2000.

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