Wednesday, April 20, 2016

The “God Mode”

“The New New Thing – A Silicon Valley Story,” by Michael Lewis, 2000

This is the story of former Texan Jim Clark, an eccentric ADD ‘anarchist’ who invented the first 3-D micro-processor for computers, which eventually became Silicon Graphics.  Then he started Netscape, the first net browser company.  He continued with a plan and program called “Healtheon” - health industry mid-ware that would link all of the fractionated U.S. health industry together.  Healtheon’s first IPO was called off in 1998 prior to the ‘tech wreck’ on Wall Street, but a later offering in 1999 made him a billionaire.  In the process Clark evolves into the key ‘idea’ person in Silicon Valley.  He started the lawsuit between Netscape and Microsoft over Microsoft’s anti-competitive browser monopoly.  He spends most of his time working on a massive computerized sailboat, the Hyperion – which was stylized as the 1990s predecessor to a home controlled by computers.   

The Valley of the Kings
Lewis is a journalist who normally rakes mostly capitalist muck, but in this case he has written a panegyric to a capitalist ‘outsider’ – Clark.  The book glories in all his oddities, his unorthodox style, the brilliant coders around him, his ‘genius’ and his love of money.  This is a man who dropped out of a Texas high-school.  It is somewhat like the early biographies of ruthless titans of industry like Rockefeller or Morgan, or the later ones around Bill Gates or Steve Jobs – and tiresome in just that sense.  If you look back over most of Lewis’ work, that same theme of kissing-up to a group of capitalist outsiders is there.   

MoneyBall” – the baseball recruiter that favored statistics over the ‘good ‘ol boy’ network to succeed; The Big Short – the Wall Street short-sellers who knew that mortgage derivatives were garbage; “Flash Boys,” - how some Wall Street contrarians invented a way to prevent the main firms from scamming clients through high-speed trading; “Liar’s Poker,” his first book, which didn’t lionize anyone … yet.  Lewis, while denigrating the mainstream of American capitalism, loves its outriders.  He has no outlook beyond that.

Clark knew that 3-D computing would be copied by everyone as soon as possible.  He knew that Microsoft would throttle Netscape with its own web browser, which turned out to be Explorer. He also thought that Microsoft, due to its monopoly position, would seize software control of a vertical industry like health care. So the important thing for Clark was always the … new, new thing.  The next shiny object.  The latest commodity.  This is how it works in Silicon Valley, which reflects its role as the leading commodity provider in the world. 

One absurd part of this was the promotion of Healtheon in Europe. Lewis actually went on a ‘road show’ for this product through Europe with Clark – like an embedded reporter in Iraq suffering Stockholm syndrome.  What seems obvious is that Lewis actually missed the fact that Healtheon – which was supposed to connect the 11 different sectoral ‘bubbles’ of the U.S. health care system into one web – was not as useful to a ‘single-payer’ or government-run system as in Europe.  So Lewis laughs at the Dutch or English when their eyes glaze over, while the Dutch or English are thinking – what the fuck? 

Knitting the millions of vendors in U.S. health care together, along with the numerous health firms, vendors like drug companies, equipment makers, doctors as well as multiple U.S. government programs and their vast laws, along with 50 state systems, is extremely difficult, especially without single-payer.  Clark’s employees admitted they knew nothing about the U.S. health care system when they started. Software forms an essential connection that could be used to convert the U.S. to single-payer more easily.  The real point of this failed road-show was missed by Clark’s crew, even though it is staring these ignorant geniuses in the face.  Single-payer is the road to simple software.

Lewis covered the Microsoft/Netscape lawsuit, surprisingly filed by the U.S. Justice department, until its denouement when one of Clark’s e-mails seems to have torpedoed the case.  Lewis is then locked-up with Clark and crew on board the Hyperion’s first problem-filled crossing of the Atlantic Ocean.  (The ‘god mode’ is Clark’s override authority on the Hyperion’s 24 computers.) In this book Lewis ends up being like those craven biographers that rich people hire to paint them or write about them.  It’s unseemly at a certain point. 

This book again emphasizes the value of the technology ‘boom’ as one of the engines of capitalist profitability. The Marxists at Monthly Review think because technology doesn’t employ as many people as the rail or auto industries, it is not a significant development that can energize capital. This can also be said of the financial services industry, especially Wall Street. Yet these two forces are the only thing breathing cash (and new commodities) into the stagnating capitalist economy.  On a practical level, technology has actually made imperialist ventures across the globe more possible.  This is a topic that some Marxists really have to understand, instead of preaching about imminent doom all the time.

Profitless Silicon Valley companies like this, that ‘might’ make money in the future, were behind the 2000 dot-com bubble that crashed the U.S. financial markets.  “Value investors’ they were not. 

Let’s look back to 2000 and see what Jim Clark wrought.  3-D computing is still with us, useful for architects, doctors and Hollywood, but Silicon Graphics filed for bankruptcy in 2009.  Netscape Communications was bought by AOL and is now ancient history.  Clark inspired the first efforts at interactive television – ITV – which flopped. @Home, which was based on a computer network providing data to televisions, merged with Excite in 1999 and went bankrupt in 2001.  myCFO, a financial company for billionaires, was sold to Harris Bank in 2002 and is now an ordinary part of their investing platform.  Healtheon merged with Microsoft’s WebMD and now is called “Change Healthcare” - the largest exchange and payment system for health data and finance in the U.S.  All of these programs mostly enable the system as it is.  But it is true that a single health care software program would be essential to a single-payer system.  But so far over-head costs in the U.S. health-care industry still outpace actual medical costs, so software alone is insufficient.

Clark is on the list of the 400 richest Americans, so this is a portrait of a billionaire.  Many of the companies Clark was involved in bit the dust, but he was their inspiration.  He launched them, then collected.   A few of them were useful and the others were not. Oddly, he was involved in the documentary, “The Cove” about the criminal slaughter of dolphins for meat in Japan.  What do Marxists make of men with ideas like this, driven by greed, which are sometimes useful?  It is that there is plenty of proof that greed is not the only stimulus to new ideas.  Paeans to Silicon Valley internet heroes have become cheap literature and Lewis should know that by now.      

Other books by Michael Lewis reviewed below:  Liar’s Poker,” “The Big Short,” and “Flash Boys.”  Other books or commentary about technology below:  Cypher Punks,”  Citizen Four,” “In Letters of Blood & Fire,” “The Cultural Apparatus of Monopoly Capital” and “Creative Destruction.”  Use blog search box, upper left. 

And I bought it in Mayday’s excellent used book section!
Red Frog
April 20, 2016

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