A little less than a year ago I made some venture capitalists very angry when I made an offhand remark in an episode of Crypto Critics’ Corner: “I mean, I would probably argue that venture capitalists are not good for society regardless of what they’re investing in.” I am always surprised at how controversial a statement that is, and how much it attracts the kind of “not all venture capitalists!” sort of reaction that’s usually reserved for criticism of cops and landlords.

I am feeling particularly secure in my opinion on the investor class after the shitshow we just witnessed, where a relatively small group of venture capitalists and various other financiers did not, let’s say, cover themselves in glory.

When it became apparent to this small group of very powerful, very wealthy individuals that Silicon Valley Bank — the bank used by much of the Silicon Valley startup ecosystem — was on shaky footing, they had a choice to make. They could remain calm, urge the founders of companies they’d invested in to do the same, and hope the bank could weather the storm. Or, they could all pull their money out, urge their founders to do so also, and hope that they or their companies were not the ones left standing in the teller line when the liquidity dried up.

Faced with the choice between the more communal, cooperative choice and the self-serving, every-man-for-himself choice destined to end in a bank run, it should be no surprise which option they picked. As the Titanic sank, they were the ones pushing people out of the lifeboats.

For those unfamiliar, the prisoner’s dilemma in game theory refers to a scenario in which two prisoners arrested in connection to the same crime are each offered a bargain if they betray the other. Neither has any insight into which choice the other prisoner will make. The prisoners are usually referred to as “A” and “B” but to make things a little more personable, and for absolutely no other reason than that, we’ll go with the names “David” and “Jason”.

If David and Jason both remain silent, they will both serve a lighter sentence of two years, because the police don’t have the evidence to convict either of them on the more serious charge. If David betrays Jason and Jason remains silent, then David goes free and Jason serves the entire, greater sentence of ten years. Same if the roles are reversed. If each betrays the other, they split the greater sentence and serve five years apiece. We can represent this all as a simple chart:

If we now extend the analogy to the Silicon Valley Bank bank run, we have a similar-looking chart, although critically the scenario in which both David and Jason panic is actually likely to be a worse scenario than the one in which one of them stays calm and the other panics.

However, this is a somewhat flawed analogy when we look at what actually happened. In reality, the investor class panicked, they received their proverbial “sentence” (the bank run), and then they walked up to the cell door and shouted at the guards “you can’t do this to us! you’ll ruin everything!” and the guards — long-time allies of the prisoners — said “you know what, they’re right” and handed the keys right on over.

Now, don’t get me wrong, the Fed’s not-a-bailout of Silicon Valley Bank and Signature Bank seems ultimately to be the right choice in an objectively bad scenario. Depositors will be made whole, and companies are no longer facing fears that they won’t be able to make payroll or keep the lights on. But the circumstances that led up to this disaster, and the people we allowed at the helm of the ship steering full-steam towards the iceberg, ought to be questioned.

We have found ourselves in a scenario where the investor class has, yet again, managed to privatize profits and socialize losses. While many of these powerful, wealthy, and connected individuals have pushed for policies that would scale back government and regulators, promoted cryptocurrencies they believe to be outside control of the state, and pushed back against any action to break up tech monopolies, they quickly found themselves begging government officials for a rescue. “No atheists in a foxhole. No libertarians in a bank run,” tweeted Eric Newcomer, after right- and libertarian-leaning David Sacks tweeted at government officials demanding they “Stop this crisis NOW”.

During the SVB crisis, the investors who took to Twitter to beg that people pressure officials for a government rescue seemed uncharacteristically self-aware that their popularity has waned in recent years. Although some attempted to sing the praises of venture capital, and warn of the supposed consequences of it being hamstrung by such a severe banking crisis, most seemed to realize that this might not widely land, and instead tried to shift the conversation towards concern for the relatable “little guy”. They trotted out examples of small, mom-and-pop style businesses who banked with SVB and who might go under if their deposits became inaccessible. They pointed to biotech companies or life sciences companies who developed life-saving medications who banked with SVB. They warned of an “extinction level event for startups [that] will set startups and innovation back by 10 years or more”,1 urging startup employees to send form letters to their representatives to say they feared for their jobs:

But this supposed concern for employees was difficult to swallow given the level of contempt for employees and “the little guy” that we have seen from the investor and executive class over the last several years. Those who once saw fit to demand workers risk their lives for the sake of their employers during a global pandemic, who rampantly union-bust, who ruthlessly slashed jobs when interest rates began to increase, and who alluded to ways they could circumvent severance payments now magically found within themselves a feeling of concern for the poor employees, those people just trying to put food on the table.

“On Monday, 100,000 Americans will be lined up at their regional bank demanding their money—most will not get it. This went from Silicon Valley investors on Thursday to the middle class on Saturday—Main Street finds out Monday”, tweeted angel investor Jason Calacanis in all capitals. “Since when do Main Street Americans have >$250k in their checking account?”, replied a follower, to which Calacanis replied, “The company they work for does“. The multiple levels of absurdity in Calacanis’s tweet were quickly pointed out in his replies, by people who questioned why an employee would be lined up to try to withdraw money directly from their employer’s bank account, or why payroll would be coming out on a Monday.

But Calacanis’s ridiculous tweet demonstrated what he and other members of the financier class realized: there was little sympathy to go around for him and his ilk, and so he needed to come up with something to mask the self-serving rescue they all desired as concern for the hoi polloi. This was concern that Calacanis miraculously managed to conjure up sometime after his April 2022 text messages2 to Elon Musk, in which he suggested slashing headcount in a way that would not require Musk to pay severance:

Day zero

Sharpen your blades boys 🔪

2 day a week Office requirement = 20% voluntary departures.

When the financiers’ pleas weren’t well received, and particularly after the rescue had happened and they no longer needed to focus as much on their image, some of them took to various platforms to express horror at what they claimed was disdain for small business owners, the tech industry, or white collar workers.

“I believe that if Silicon Valley Bank were instead called Farmers Bank Of Santa Clara (they bank a lot of winegrowers!) we would have had this easily resolved. unfortunately it became somewhat political,” tweeted entrepreneur, investor, and eyeball-scanner extraordinaire Sam Altman.

“The search for scapegoats, I think, is getting out of control, and it’s just not factually accurate,” said venture capitalist David Sacks on an episode of the All In podcast, which he co-hosts with three other Silicon Valley investors. “And it’s convenient to make tech, which his hated right now… the scapegoat,” agreed co-host Calacanis. Later in the episode, Sacks echoed the opinion that “so many people” hate tech as an industry, and claimed that these same people believe that “consumers and small businesses” should suffer.

But it was not the tech industry as a whole, its employees, or consumers and small businesses who were on the receiving end of the broad disdain that we saw throughout the SVB collapse. It was the financiers.

We are coming to a point, I think, where the shine is wearing off. People are realizing that despite the hundreds of billions of dollars being deployed each year by venture capital firms in pursuit of “innovation”, the world doesn’t really feel hundreds of billions of dollars better off for it. For all the talk of unbridled innovation, venture capital services only very specific types of innovation: those that stand to produce large exits for investors, and with relatively low risk, regardless of whether the business itself holds much promise or provides any societal benefit. As Edward Ongweso Jr. writes for Slate:

For the past 10 years venture capitalists have had near-perfect laboratory conditions to create a lot of money and make the world a much better place. And yet, some of their proudest accomplishments that have attracted some of the most eye-watering sums have been: 1) chasing the dream of zeroing out labor costs while monopolizing a sector to charge the highest price possible (A.I. and the gig economy); 2) creating infrastructure for speculating on digital assets that will be used to commodify more and more of our daily lives (cryptocurrency and the metaverse); and 3) militarizing public space, or helping bolster police and military operations.

We are overdue as a society for seriously questioning what has become, but what has not always been, the dominant model of “innovation”. Recent weeks have drawn a bold underline beneath what has been clear to many for a long time: that those controlling massive amounts of capital and power in our society are not the smartest, or most level-headed, or most altruistic among us. Venture capital may be the best way to serve the interests of capital, but we need to consider alternative models that prioritize the interests of people.

Further reading:

• “The Incredible Tantrum Venture Capitalists Threw Over Silicon Valley Bank”, Edward Ongweso Jr. at Slate.

• “Euthanasia of Silicon Valley Bank”, This Machine Kills. (Podcast).

• “Big Banks Trust First Republic With Their Money“, Matt Levine in Money Stuff at Bloomberg.

US tech innovators have a culture of regarding government as an innovation-blocking nuisance. But when Silicon Valley Bank collapsed, investors screamed for state protection

So one day Silicon Valley Bank (SVB) was a bank, and then the next day it was a smoking hulk that looked as though it might bring down a whole segment of the US banking sector. The US government, which is widely regarded by the denizens of Silicon Valley as a lumbering, obsolescent colossus, then magically turned on a dime, ensuring that no depositors would lose even a cent. And over on this side of the pond, regulators arranged that HSBC, another lumbering colossus, would buy the UK subsidiary of SVB for the princely sum of £1.

Panic over, then? We’ll see. In the meantime it’s worth taking a more sardonic look at what went on.

Sunak and Braverman’s cruel migration policy is a stunt to win over voters – but then gimmicks are all they have left to offer

The government’s bill for stopping boats will stop no boats. But its job is already done. The mission was accomplished on Monday night when opposition MPs voted against the proposed law at second reading in the Commons. There are more legislative hurdles to clear, yet Suella Braverman was exultant. Keir Starmer’s party, the home secretary said, had proved that it wanted “open borders and unlimited migration”.

That isn’t even a distortion of Labour policy. It is a falsehood animated by a fantasy of the party Braverman and her colleagues want to fight at the next election. For as long as there is an argument over the bill, the Tories will present themselves as the last defence against a migrant armada and its accomplices. The fifth columnists were named in Monday’s debate by Scott Benton, MP for Blackpool South: “lefty lawyers and celebrity do-gooders”.

Rafael Behr is a Guardian columnist

永遠に終わらない田植え

今日は『円周率の日』です。

This is the kind of reporting that usually happens when wars end, when nation states break up and new ones are formed

Most BBC “scandals” are not about the BBC. They are about a political controversy – around nuclear war in 1965, the dirty war against the IRA in 1979, the Falklands, Iraq and David Kelly – consuming the political class, who use the BBC as their magnifying glass, while being largely ignored by everyone else.

Then there are the cultural scandals, which draw much more attention – Jimmy Savile and paedophilia, most obviously, or Princess Diana and the Panorama interview. These are moments of BBC turmoil when the nation reflects on itself.

The Gary Lineker affair is a new category of BBC scandal, entirely of itself. Having been badly handled, the saga now seems to have been resolved – Lineker 1, BBC management 0 – but it leaves the corporation weakened after days of hard scrutiny of its underlying biases.

The story began with an argument over immigration on social media, and quickly engulfed the entire BBC sports department. In politics a good rule of thumb is that things get serious when the people who aren’t interested in politics start to notice. Drawing the football-watching population of the UK into a row about immigration and free speech was serious.

[See also: Gary Lineker played into the hands of the BBC’s right-wing enemies]

I’ve spoken to quite a few current BBC staff who think Tim Davie, the director-general, blew it and should now resign. He is relatively young, without broadcasting experience, a one-time Conservative and he can be cocky; and yet I don’t agree. If you look back over this century, the leaders of the BBC have had an even shorter and more perilous lifespan than the leaders of the Tory party. A culture of swift resignation in response to bad headlines has run alongside institutional failure. It might be time to move to: “lesson learnt; stay on and clear up.”

But Davie had run out of options for a successful end to this. The most sensible way out was first proposed by the former controller of Radio 4 and sometime New Statesman contributor, Mark Damazer. My edited version goes: Davie says to Lineker, “Look, we’ve both screwed up. Stay on Match of the Day until the end of the season at least. In return I’ll put all the impartiality rules out to a consultation, which will involve the staff (who mostly back you) and audiences (who seem to, as well). You will probably find the result cheering. In the meantime, pipe down.”

If Lineker had agreed Davie would have had a result – no more perilous tweeting, Match of the Day restored. If Linker had told the director-general to get stuffed, Davie could have given an interview saying “…and then he told me to get stuffed”. Lineker’s departure would have been about authority and Davie would be vindicated. Instead we have a terse armistice announcement, more on Lineker’s terms than the BBC’s, with much still to be resolved.

The essential unresolved issue is whether a new regime of discipline is now applied to Conservatives as well as the liberal left. Alan Sugar, to take one example, should be told that if he ever tweets again in the manner he did about Jeremy Corbyn he would be fired. The BBC chairman, Richard Sharp, Tory donor and friend of Boris Johnson, should resign, saying that he realises his appointment has damaged impartiality.

[See also: Sack him or back him, the BBC cannot win the row over Gary Lineker]

Of course, there are those in the Conservative Party who will try to continue their war against the BBC. But they would be ill-advised. It’s one thing to attack anonymous, “arrogant” BBC managers; it’s quite another to be responsible for mayhem in football, our strange national religion.

The question of whether a sixth programme in David Attenborough’s new series Wild Isles was removed from broadcast and confined to the iPlayer owing to fears of a right-wing backlash is much murkier. The BBC insists this isn’t the case. But again, tread warily, Tories. As the journalist AA Gill pointed out many years ago, Attenborough’s silk-and-pebbles voice is, for many people, effectively that of God, omnipresent and omniscient: “When Attenborough says something, it’s the truth. In a world of hype and puff and spin, his is the voice of absolute veracity.” If one was giving the Conservatives PR advice, I don’t think it would include taking on the national religion and God in the same week.

I worked inside the BBC for 21 years, then came out, and the experience has shown me conclusively that there are two separate realities. From the outside, the BBC really does seem vast, arrogant and metropolitan. From the inside, it feels mostly terrified, hemmed in on all sides by hostile rivals, and staffed by managers from the Midlands and north of England.

It treats Tory ministers and the Daily Mail with the abject, flinching nervousness of an abused spouse. It is masochistically keen to magnify any of its own supposed failures. Individual reporters manage to keep their spines vertical, but that’s the wider, corporate truth.

Davie sometimes seems to have staked his leadership on a single word – impartiality. But after attending innumerable BBC teach-ins on the subject, I have concluded that it has become a damaging way of thinking about modern politics. Fairness and openness are much more useful.

[See also: In defence of Gary Lineker]

To be partial is to take sides. It’s something all of us do, all the time, almost without noticing it. Clearly a public sector broadcaster can’t take sides in the sense of consistently backing one party-political position over the others. But everything in the news business is saturated with values. We select stories on the basis of our moral and emotional response to them. We instinctively perk up, notice and begin to think when we are told about dirty water and air, or violent crime, or war abroad – our values, our partiality, have been aroused.

Not to take sides in a general way implies a valueless, soggy vacancy – almost as if sides are rather vulgar. Impartiality implies that there exists a virtuous, “side-free” sensible centre position which can fend off raucous voices taking sides like a duchess in the street, quelling the oiks with her Daleky stare. 

But there is no sensible-centre middle ground. The BBC should be thinking differently. Its job is not to pretend that values can be rinsed out of the news. Imagine that: an utterly dry, monotone newsfeed, rapping out facts without context. This is what some of the BBC’s enemies may nostalgically dream of. Dream on. It would be unlistenable.

The better metaphor is the old American one of the town square: a place where the country can meet itself, stand together and talk things through in an atmosphere of mutual respect. That, to my view, is what a national broadcaster – not a state broadcaster – should be. The BBC should aspire to the condition of a platform, a generous space, saturated with values, where everybody can be heard.

There is no doubt something nostalgic about that too, but it has never been more needed. That the Lineker affair began on Twitter is highly appropriate. Twitter exemplifies everything that a proper town square is not – short, stabby bursts of performative invective, designed to make you angry, not to make you think. It is where a lot of political debate is heading. Right-wing narrowcasters such as GB News are trying to push us further in that direction, mimicking everything that’s worst about the American media ecology.

That way lies disaster for the political culture. Where Lineker can be criticised is in his Nazi comparison. (I know some people riposte that he wasn’t making that point but what else does language “not dissimilar to that used by Germany in the 1930s” mean? Was Gary referencing Hermann Hesse, perhaps? Ernst Thälmann? Thomas Mann?) Whether on social media or down the pub, calling someone a Nazi is a way of closing debate, not opening it up. There is no reasoned response to the accusation of siding with the single most horrific act in human history. Fundamentally, it’s about starting a fight.

Had Lineker challenged, for instance, what the new legislation would do to the victims of people trafficking or challenged the Home Secretary to explain in practical terms how she intended to return people to Afghanistan, Somalia or Yemen, or requested more detail on the so-called “legal routes” for migrants he might have helped shed light on this very bad legislation. But the Nazi comparison did what it was bound to do – it got wild cheers from the people who were always going to cheer, and boos from the Tories.

Polling confirms that voters hate a rule-breaking, uncontrolled migration system, but also that this isn’t about raw numbers, and that compassionate attitudes to migrants remain strong. Faced by those images of queues of exhausted people stumbling up beaches, our underlying, unresolved national hypocrisy on immigration was what made a single tweet by a sports presenter so incendiary.

And this is exactly the kind of policy conundrum which requires a national “town square” – a broad, calm space where the arguments can be taken apart. That is why we need the BBC – the antithesis of divided, raucous, my-side, your-side US-style broadcasting.

The Lineker affair took us in the wrong direction. But the defenestration of BBC managers wouldn’t actually help anything. This is the moment for the corporation to change its rules, be bolder about Conservative bullying and prioritise the search for truth, which is a far bigger thing than impartiality. The problem with these regular BBC scandals, intensified by its central yet contested place in the culture, is that one day it really will be “about the BBC”. And if it collapses in disgrace, just as if the NHS collapses – two British institutions which together define our gap with American civilisation – we will be irreversibly diminished.

[See also: Gary Lineker: “The BBC can’t stop me talking about politics”]