Sunday, June 22, 2025
  • Login
Euro Times
No Result
View All Result
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology
Euro Times
No Result
View All Result

Peter Thiel says California suffers from a “tech curse”. Is he right?

by Euro Times
September 24, 2022
in Finance
Reading Time: 3 mins read
A A
0
Home Finance
Share on FacebookShare on Twitter


Speaking recently at the National Conservatism Conference in Miami, Peter Thiel, an investor and intellectual, made a provocative argument. He suggested that California suffers from a “tech curse”: a play on the “resource curse”, the notion that countries with abundant natural resources often have weak economies and corrupt political systems. If data is the new oil, then California is the new Saudi Arabia—even, he said, if things aren’t quite “as bad as Equatorial Guinea”.

Mr Thiel made the Equatorial Guinea comparison with tongue firmly in cheek, but he was deadly serious about the tech-curse theory. At first glance it seems plausible. California’s tech industry has in recent years produced astonishing wealth. The state is also in many ways dysfunctional. Parts of downtown San Francisco resemble an open-air drug den. Many of the state’s public schools seem keener on talking about social justice than teaching children. Each year, one in every 100 Californians, on net, leaves for another state.

Mr Thiel thinks that California’s poverty and prosperity are two sides of the same coin, with state and local governments providing the link. Public-sector employees draw on tech’s enormous tax revenues to overpay themselves and do no work, he says. The state’s tech moguls in effect buy off politicians, ensuring, for example, that they enact super-restrictive planning regulations to keep house prices high.

It is in vogue to criticise both California and tech: doing both at the same time left the audience in raptures. There is also a grain of truth to what Mr Thiel says. But there are two big problems with his theory.

Take the benefits offered by California’s tech industry first. Tech has, in fact, turned the state into a growth superstar, not a laggard. In the past five years, California’s state-level gdp has grown by 18%, the fourth-fastest rate in the country and a better performance than either Florida or Texas (see chart). Even subtracting tech, California’s growth was above average, according to our calculations. Less fashionable industries such as chemicals manufacturing have also done well in recent years.

Many of the proceeds of this growth have gone on enormous mansions in Atherton and Los Altos, but they have also trickled down to a greater extent than Mr Thiel appreciates. Just over a decade ago the median Californian household had an income 7% higher than the median American one. Now their income is 15% higher. The unemployment rate, relative to the national average, has fallen. So has poverty. And there is little to suggest that the decline in joblessness or poverty is caused by poor people leaving the state.

Mr Thiel also overstates tech’s costs. It is true that some of California’s politicians behave with nearly as much impunity as the Saudi elite. Yet anyone with a passing knowledge of Californian history knows that dirty dealing in politics long predates tech. San Francisco’s politics today is tame in comparison with the 1970s.

It is similarly hard to blame tech for California’s housing market. The ratio of California’s average house price to America’s is much lower than in the mid-2000s. Meanwhile, California’s anti-building rules, the cause of sky-high prices, emerged with the environmentalist movement of the 1970s, not Mark Zuckerberg and Elon Musk. There is a lot to dislike about Big Tech, but it is not as malign as Mr Thiel believes. ■

For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter.



Source link

Tags: CaliforniaCursePetersufferstechThiel
Previous Post

Brit POW Shaun Pinner’s emotional reunion with family in the UK after being released from death row in Ukraine

Next Post

Why Wall Street is snapping up family homes

Related Posts

Links 6/22/2025 | naked capitalism

Links 6/22/2025 | naked capitalism

by Haig Hovaness
June 22, 2025
0

Yves right here. Haig assembles his hyperlinks Saturday night, which implies he could be a bit behind the state of...

Hogs Higher Going Into Weekend, With Some New Life of Contract Highs

Hogs Higher Going Into Weekend, With Some New Life of Contract Highs

by Barchart
June 21, 2025
0

Lean hog futures closed out the Wednesday session blended however are greater at noon on Friday.  Close by contracts present 20...

Entrepreneurship Can’t Be Taught in a College Classroom

Entrepreneurship Can’t Be Taught in a College Classroom

by Douglas French
June 22, 2025
0

“With the intention to reach enterprise a person doesn't want a level from a college of enterprise administration. These faculties...

LIC Housing Finance reduces interest rate in line with recent RBI repo rate cut

LIC Housing Finance reduces interest rate in line with recent RBI repo rate cut

by Euro Times
June 21, 2025
0

New Delhi: LIC Housing Finance has lowered its price of curiosity on new dwelling loans by 50 foundation factors, in...

Safety Shot expects to finalize Yerbae Brands acquisition next week

Safety Shot expects to finalize Yerbae Brands acquisition next week

by TipRanks
June 21, 2025
0

Security Shot (SHOT) offered an replace on the anticipated timing for the closing of its beforehand introduced acquisition of Yerbae...

DWP news: July 2025 payment dates for Universal Credit, state pension and PIP

DWP news: July 2025 payment dates for Universal Credit, state pension and PIP

by Albert Toth
June 21, 2025
0

Get the free Morning Headlines e mail for information from our reporters the world overSignal as much as our free...

Next Post
Why Wall Street is snapping up family homes

Why Wall Street is snapping up family homes

Ready Capital: Steady Double-Digit Yields With Minimal Risk (NYSE:RC)

Ready Capital: Steady Double-Digit Yields With Minimal Risk (NYSE:RC)

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

XRP, SOL, ETH, HYPE Oversold Bounce Possible If BTC Recovers

XRP, SOL, ETH, HYPE Oversold Bounce Possible If BTC Recovers

June 22, 2025
Spain reaches deal with NATO ahead of summit to be excluded from 5% defense spending goal

Spain reaches deal with NATO ahead of summit to be excluded from 5% defense spending goal

June 22, 2025
Chopper crashes must lead up to better regulation

Chopper crashes must lead up to better regulation

June 22, 2025
Real Madrid vs. Pachuca From Anywhere for Free: Stream FIFA Club World Cup Soccer

Real Madrid vs. Pachuca From Anywhere for Free: Stream FIFA Club World Cup Soccer

June 22, 2025
Dogecoin Falls Below alt=

Dogecoin Falls Below $0.16: Here’s How Its Price Action Could Play Out

June 22, 2025
Bitcoin crashes on Iranian Parliament approval of Hormuz Strait closure

Bitcoin crashes on Iranian Parliament approval of Hormuz Strait closure

June 22, 2025
Euro Times

Get the latest news and follow the coverage of Business & Financial News, Stock Market Updates, Analysis, and more from the trusted sources.

CATEGORIES

  • Business
  • Cryptocurrency
  • Finance
  • Health
  • Investing
  • Markets
  • Politics
  • Stock Market
  • Technology
  • Uncategorized
  • World

LATEST UPDATES

XRP, SOL, ETH, HYPE Oversold Bounce Possible If BTC Recovers

Spain reaches deal with NATO ahead of summit to be excluded from 5% defense spending goal

  • Disclaimer
  • Privacy Policy
  • DMCA
  • Cookie Privacy Policy
  • Terms and Conditions
  • Contact us

Copyright © 2022 - Euro Times.
Euro Times is not responsible for the content of external sites.

No Result
View All Result
  • Home
  • Finance
  • Business
  • World
  • Politics
  • Markets
  • Stock Market
  • Cryptocurrency
  • Investing
  • Health
  • Technology

Copyright © 2022 - Euro Times.
Euro Times is not responsible for the content of external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In