18 July 2016

The Rise and Fall of the Republican Party

Just last week, many of the country’s tech leaders signed a letter arguing “Trump would be a disaster for innovation.Signatories include Vint Cerf, who helped to invent the Internet, Steve Wozniak, the man who helped to invent the personal computer, and local Qualcomm founder Irwin Jacobs, who helped to invent the smart phone. These people understand innovation and the Republican Party’s presidential candidate alarms them.

This week the party faithful gather in Cleveland to present their nominee. The party's first president was Lincoln and since then the parade of candidates has included Teddy Roosevelt, Eisenhower, Reagan, Bush, and now Trump. It's easy to think the party's struggles are because of increasingly weaker candidates; it might be that it's instead because of increasingly weaker policies. 

Once upon a time, the Republican Party was the voice for tech leaders and their policies fed progress.

The Rise
Republicans emerged as the anti-slavery party in the late 1800s. They were the progressive party on two counts: they were more humane and they were the capitalists who believed in investment and innovation as a better route to prosperity than enslavement. Northern Republicans created a new economy.

The industrial economy made regional economies national. Railroads let big factories sell across state lines. In this new reality, the notion of states’ rights that complicated things like enforcing contracts across state borders became as quaint as sewing by hand.

When the South seceded from the Union, the Northern – largely Republican – representatives passed a flurry of legislation that created the modern corporation and expanded interstate commerce, laying the foundation for unprecedented prosperity.

Between 1861 and 1933, Republicans had the White House 72% of the time. In 1865 the economy was not much different than what it was in 1776; by 1933, the nation had automobiles, electricity, telephones, and radio. Capital was king and Republicans were presidents.

The Fall
Since then, the economy has evolved more rapidly than the GOP. The region that now leads the world is Silicon Valley and it represents a new, entrepreneurial economy that is different in many ways from the industrial economy. Detroit made cars. Silicon Valley makes companies. Wages there (specifically, Santa Clara County) are about two-thirds higher than the rest of the country, and the region has created trillions in wealth.

Every politician approves of Silicon Valley but it doesn’t approve of every politician. Republicans have struggled there.

In California’s 17th in 2014– a Congressional district that includes Santa Clara and headquarters for Apple, Intel, Yahoo, and eBay – no Republican candidate won enough primary votes to compete in the Congressional general election. The same happened in District 14, which includes Stanford, and headquarters for Alphabet (Google) and Facebook.

Immigration and social traditions are two reasons Republicans struggle in the Valley.

Depending on how it is measured, immigrants are members of 25% to 50% of tech industry’s founding teams. These companies aren’t part of a national market: they are part of a global market that includes customers, employees, investors, and partners. They connect countries rather than wall them off and they aren’t going to support isolationist policies.

Social tradition is another issue. San Francisco’s government became the first to officially recognize gay marriage. The folks in startup friendly regions like Cambridge, Massachusetts, Austin, Texas, and Boulder, Colorado realize that the boundaries between technology innovation and social change are fluid. When they talk about disruption, they might be talking about Uber or gay marriage.

The entrepreneurial economy will challenge any political party that is nationalist and socially conservative. (And of course Donald Trump’s aversion to free trade is yet another reason for the Valley to recoil from the GOP.) To adapt, the Republican Party would have to abandon so much of what now defines it.

Many Republicans will rightfully argue that they, too, embrace entrepreneurship, global markets and the disruption that comes with this. As this year’s primaries revealed, though, such Republicans are now a minority within the Party.

It’s possible that advocates of the new entrepreneurial economy won’t affect the outcome of this election and as a nation we will opt for candidates and policies that make our economy more closed and less innovative; the policies that make a country more prosperous are not always the most popular.

Still, one hopes that forces within the Republican Party are studying Silicon Valley because until the GOP adapts to the new realities it represents, the GOP will represent the past of this great country and not its future.


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