The “Here” of Magical Thinking: Palo Alto, by Malcolm Harris

David Helps

Malcolm Harris’s Palo Alto: A History of California, Capitalism, and the World is available at the n+1 store.

I like to imagine that, as the anesthetic began to take hold, John Vasconcellos thought about swimming. In the weeks before his septuple bypass surgery, in 1984, the state assemblyman for Silicon Valley asked his friends to visualize themselves as tiny scrubbers, paddling and scouring the plaque from his veins. “Vasco,” as his colleagues and supporters called him, had been putting off treatment for some time. But when mindfulness failed to unplug his heart, modern medicine was there. The surgery was a success, and Vasco returned to Sacramento with the sense of purpose of a man who had cheated death.

Vasco’s health aside, 1984 was a good time to be a lawmaker in the Golden State. It was “Morning in America.” The arms race with the evil Soviet empire was back on, and that was good news for the state that made more self-guided missiles than any other. It seemed like all eyes were on Silicon Valley. In Ronald Reagan’s “Morning in America” TV ad, Main Street, U.S.A. was played by picturesque Petaluma, thirty miles north of San Francisco. From this sleepy suburb, it was a half-hour commute to the San Jose laboratory where Lockheed scientists wanted to know if you could blast a nuke from the sky with a laser beam. Critics of Reagan’s “Strategic Defense Initiative” gave it a nickname that stuck: “Star Wars.” At the same time, on the other side of the San Francisco Bay, George Lucas was dreaming up his own sci-fi fantasies at Skywalker Ranch.

Much like Lucas and his New Hollywood buddies reinvented the movies, men like Vasco were the future of U.S. politics. Vasco was a new kind of Democrat: a deficit hawk with a philosophy closer to Ayn Rand than FDR. First elected in 1967, he championed medical marijuana, natural birthing, and the rights of children and mental patients.

He once enrolled at the Esalen Institute, a Big Sur spa and compound where bourgeois bohemians came to study the mysteries of “human potential” with Aldous Huxley, Buckminster Fuller, and Timothy Leary. More recently, it’s become a popular retreat for disillusioned Google and Airbnb executives: “a home for technologists to reckon with what they’ve built,” per The New York Times. If you think the notion of “ethical tech” sounds a bit ill-defined, Esalen invites you to clear your mind. “This isn’t a place,” ventured one staffer who was quoted in a 2019 New Yorker piece. “It’s a diaspora, a guiding light out of our collective darkness, an arrow pointing us toward the best way to be fully human.” Which is to say, I think, that it’s a nice place to do ketamine.

Above all, John Vasconcellos believed in himself—and he believed that you should too. In 1986, two years after his bypass surgery, Vasco won funding for his longtime pet project: a task force to study the policy implications of the latest research on the psychology of “self-esteem.” By this time, Vasco was an established and high-ranking legislator. But he relied on more than seniority to convince Republicans to study what happens when you tell kids they’re special. In the end, Vasco convinced GOP governor George Deukmejian that self-esteem was a “social vaccine” that would save taxpayers millions. With a little mandatory self-love, the thinking went, California could eradicate the “plagues” of gun violence, drug abuse, and poverty. And all this for a fraction of what the state spent on social services and aid to the needy.

He didn’t know it yet, but John Vasconcellos changed the world. For as much as conservatives rant about soft-hearted liberals and the nanny state, the invention of self-esteem was a bipartisan attack on welfare—a technocratic solution to the failures of capitalist society that promised, like so many new apps and gadgets, to disrupt our most fundamental assumptions about modern life and human nature. It was a revanchist theory of social progress that took off like a rocket, and it could only have shot forth from one place.

To understand contemporary global capitalism, look to California, argues Malcolm Harris in Palo Alto: A History of California, Capitalism, and the World. Part history and part memoir of Harris’s own upbringing in the titular city, the book sprawls across 700 pages of grandiose and darkly funny prose that readily invites comparison to the Los Angeles trilogy of the late Mike Davis. It’s a story with villains: the powerful white settler men who remade California, and then the planet. Though Vasco himself doesn’t appear in its pages, the universe of Palo Alto is the same one he helped to create—a world where magical thinking supplants material reality.

Palo Alto rejects the standard narrative about Silicon Valley: the story about Great Men whose success is a testament to the virtues of American capitalist ingenuity. Yet Harris shares with the region’s boosters a belief that this place really is different. And why not? Its endless transformations seem to substantiate the idea that under the right conditions, the right people can manifest anything. Harris shows how stolen Ohlone and Shoshone land became a frontier backwater; then came a company town for the railroads, the pastoral campus of Stanford University, the Cold War laboratory of U.S. domination, and, most recently, the “incubators” in which gestated the technologies that make up the “just-in-time” economy and our gig-ified, app-mediated daily life.

The source of this endless reinvention is what Harris calls the “Palo Alto System:” a structure that maximizes the exploitation of people and nature, and places a few (mostly white, mostly men) at the top. From an early age, children in Palo Alto learn that their town is special. Harris describes a game he played at Ohlone Elementary School, in which he and his classmates acted out life during the 1850 Gold Rush. (“Every one of us an owner, a start-up.”) Each act of make-believe contains a lesson about how the world works—in this case, “why some people had big houses and others didn’t, why some people lived here and everyone else didn’t. They deserved it.”

Anglo California was founded on this myth—and lots and lots of gold. The 19th-century scramble for land and resources placed California at the forefront of technological innovation. Digging and panning were slow, so engineers took up “hydrolicking”—the technique of blasting the earth with water to reveal the glittering veins of gold beneath. In the early settlers’ thirst for profits, Harris sees a blueprint for the extractive industries that would follow. Settlers made fortunes from oil, agriculture, and the intercontinental railroad. Each industry catalyzed the development of new ways to subdue and use up the land. Each helped bring the ravenous Palo Alto System to life. After all: “There is no such thing as enough gold.”

It took more than machines to squeeze money from the earth. To build the railroads, harvest the crops, pump the oil, and work the mines, Golden State capitalists exploited workers from Mexico, China, Japan, and the Philippines. And yet, these workers found ways to organize across the boundaries of language, nationality, and race. As Harris puts it, “bringing people together to work always risks bringing them together to do other stuff, like think, and sometimes what workers think about together is that maybe they shouldn’t have to work so hard.”

In the shadow of the Palo Alto System, an alternative California took root. The booms, busts, and crises of the early 20th century stirred up silt, and an undertow swirled currents of radical dreamers and agitators around the Pacific basin and deposited them on the shores of the San Francisco Bay. Anglo-dominated California made for an unlikely refuge for Japanese anarchists and Mexican revolutionaries, but the tides of history carried them there nonetheless. Meanwhile, at Stanford University, researchers were hard at work on a scientific theory that would explain the global status quo: why men who looked like them controlled so much of the world’s wealth and power. They may have lacked a rigorous intellectual method, but that didn’t halt the rise to prominence of men like Lewis Terman, who invented a test for “genius,” and David Starr Jordan, a eugenicist and Stanford’s first president; they were “among the most infamous American bigots” of their day.

From just outside the walls of this bastion of scientific racism, workers assembled the arsenal of democracy. Over the course of World War II, California would build much of the military-industrial and logistical might that enabled the Allies to defeat fascism and the U.S. to become the 20th century’s superpower. But the factories, fields, and docks also drew in and jumbled together working-class radicals of all stripes. Palo Alto includes a brilliant sketch of Bob Kaufman: a Black sailor, communist, labor organizer, and Beat poet whose writings have only recently received their due. Another section details the life of Ernesto Galarza, the first Chicano to attend Stanford’s graduate school in 1927. In the 1940s, Galarza turned his education into a career as a muckraker and agitator, becoming one of the foremost critics of the U.S.’s bloody foreign policy in Latin America.

In the postwar decades, California built a new tuition-free system of colleges and universities. The Cold War was on, and the state needed citizens trained for the battlefields of knowledge and industry. Yet once again, the Palo Alto System created its own gravediggers: the expansion of higher ed brought radical professors together with students who were more interested in the revolution in Cuba than the frontiers of business administration. At Oakland’s Merritt College, Bobby Seale and Huey Newton began to meet to study Marx, Mao, and Fanon. From this reading group, the Black Panther Party for Self-Defense was born. Several months later, in 1967, the Panthers would march on the Capitol to protest a gun control bill and the killing of a Black man by Oakland police. In that same Capitol building, John Vasconcellos was a novice assemblyman, having taken his seat in Sacramento earlier that year.

In 1986, Vasco’s dream was realized with the instantiation of the “California Task Force to Promote Self-esteem and Personal and Social Responsibility.” The group would deliver its final report, Toward A State Of Esteem, four years later. In Vasco’s contribution, he compared the discovery of self-esteem to the ’60s-era space race. Having helped beat the Soviets to the moon, Californians were poised “to enter our own inner space” and “improve the human condition.” These aims were characteristic of a man who resisted the labels of “liberal” and “conservative” but advocated a more “humanistic” politics. In a 1975 interview, Vasco said that, when deciding how to vote on an issue in the legislature, he would ask himself “the root questions,” such as, “What is a human being?” and “What is human potential?”

Vasco’s public image was that of a maverick, but he was hardly an independent swimming against the tide. He belonged to a movement that permanently changed California, and indeed the entire country. There’s a chapter in Palo Alto titled “California Über Alles,” after the Dead Kennedys’ 1979 satirical surf-punk single. In the song, frontman Jello Biafra narrates a near-future in which Governor Jerry Brown has declared himself “Führer.” Like Vasco, Brown was a right-wing Democrat with a New Age image. He had studied at Esalen and believed in something he called “Buddhist economics.” In “California Über Alles,” bad vibes are outlawed. Children meditate in re-education camps. Enemies are disappeared by the “suede-denim Secret Police.”

The Dead Kennedys were a few Bay Area punks expressing their hatred of hippies. Here in California, even the fascists wear Birkenstocks—get it? But though the song was a joke, the band had clearly pulled on a thread of the culture. The state that produced Richard Nixon and Ronald Reagan is today dominated by Democrats of a certain habitus. Last year, the New York Times profiled Susan Kirsch, a retired teacher in Marin County who’s spent the last two decades fighting the construction of a few townhouses on an empty hill near her home. “A Sierra Club member with a pesticide-free garden, she has an Amnesty International sticker on her front window and a photograph on her refrigerator of herself and hundreds of other people spelling ‘TAX THE 1%’ on a beach.” (Marin is the eighth-wealthiest county in the U.S.—placing it in the top 0.25% of the country.) The appreciation of home values, Harris writes, has become “an alternative path to wealth,” and monopolizing the land “is what settlers are good at.”

A similar contradiction was in evidence last year when San Franciscans, spurred by a crime panic that was manufactured by business interests, tough-on-crime Democrats, and the media, voted to recall progressive District Attorney Chesa Boudin. White and wealthy liberals punished Boudin for prosecutorial reforms intended to roll back racist mass incarceration and the unchecked power of the police. But the recall campaign spuriously, and successfully, linked his efforts to the increased visibility of violence and homelessness in a city roiled by inequality. Unaffordable housing and anemic social services are the real progenitors of poor San Franciscans’ immiseration and desperation—and police and jails make for poor substitutes. “California’s unsheltered homeless population increased by 57 percent between 2010 and 2020,” Harris notes.

If Malcolm Harris were asked about Susan Kirsch and the Boudin recall, I think he’d say that none of this should surprise us. If you own an appreciating asset, it’s in your interest to maintain its scarcity. If you’re a tech executive, it’s you the police are there to protect. But we should also see NIMBYism and liberal calls for “order” as examples of California’s most valuable export: magical thinking. The house I bought on a teacher’s salary in the 1970s is now worth millions, and I deserve it. There are lots of services for the homeless—some just choose to live that way.

The misplaced belief in capitalist meritocracy gives California history its structure. For those drawn over the generations to its successive gold rushes, Palo Alto has been not just exceptional—it’s been otherworldly. “A postmodern El Dorado,” as Harris deems it. A town where self-regard and self-promotion are synonymous with talent. Where a positive mindset and “the right amount of money could do anything.”

The dreamers and schemers were correct on one count: the right amount of money, in the right hands, can do anything. Compared to the cost of keeping Californians housed and fed, Vasco’s Self-Esteem Task Force came cheap, with a price tag of $735,000. Its success surprised even Vasco. “At first, everyone thought our concept was California-freaky and weird,” he told the Los Angeles Times in 1996. But the report’s findings were taken up by states and school boards all over. If a teacher, coach, or children’s TV presenter has ever asked you to think of a “warm fuzzy,” you have one man to thank. “The gospel of self-esteem has gone mainstream,” the Times noted, “and that makes John Vasconcellos feel good.”

Predictably, the uptake on self-esteem education was not the panacea its proponents envisioned. There is no flashy product, set of buzzwords, or pop-psychology fad that can “hack” the economy to work for everyone. A UC Berkeley professor would later put it this way: “If you want to create low self-esteem in a child, let him go hungry.” This is one of Palo Alto’s lessons: that Silicon Valley’s success has come at the expense of real innovation in social, economic, and intellectual life.

Instead of universal health care, a reduced workweek, or high-speed rail, California spits out Elizabeth Holmes and Theranos, Gwyneth Paltrow and Goop, and Elon Musk’s Hyperloops to nowhere. Instead of public (or even affordable) housing, we get Flow—the new real-estate startup from disgraced WeWork huckster Adam Neumann, now afforded another go-around at being a titanic landlord with an investment from Andreessen Horowitz. Neumann has proven he can still generate profit for shareholders, if no one else, and at society’s expense. At a recent press event, Neumann claimed that people living in the company’s properties will “feel” like homeowners. Neumann’s gambit is the same as Vasco’s: if you tell a lie enough times, the right people will start to believe you. By then, the lie is as good as true.

As a bullshit artist, Vasco was not special. Rather, he embodied a place—Silicon Valley—that Harris calls “California concentrate” and “America’s America’s America.” Pull back the curtain on these wizards of Oz and you’ll find, like Palo Alto, “less and more at the same time.” Human beings are “like butterflies,” Harris writes, “pinned live and wriggling onto history’s collage.” The real engine that moves our storyforward, then, “isn’t fate or human nature; it’s capitalism.”

Ultimately, it appears that it’s the Federal Reserve, more than any scandal or personality cult, that will usher in the end of Silicon Valley’s halcyon days. A sector that relied on cheap money has in the last year tightened its belts. In the first two months of 2023, tech companies laid off more than 120,000 workers. In February, Meta lost $240 billion in value after an ugly earnings call. It was more than any company had ever lost in a single day—and it mostly evaporated in half an hour.

Almost forty years after “Morning in America” and the invention of self-esteem, the sun seems to be setting on tech’s golden age. The Palo Alto System lives on—though, as Harris shows, it’s being challenged from all sides: by tech and gig workers organizing unions, by users fighting surveillance and the commodification of our data, by demands to tax billionaires out of existence, and by calls for Stanford to fork over its hoarded endowment and stolen land, to name a few current battlegrounds. The question driving Malcolm Harris’s inquisition into the flashy hollowness of Silicon Valley—predicated upon exploitation, grotesque inequality, and a total disavowal of the public good—becomes more urgent than ever: “How does the Palo Alto System end without taking the rest of the transformed world down with it?”♦


David Helps is a Ph.D candidate at the University of Michigan. His writing on policing, cities, and capitalism can be found in The Los Angeles Review of Books, Foreign Policy, Monthly Review, and more.

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