Silicon Valley is Star City

May 17, 2012

By John Seiler

Why do young nerds angling to be the next Steve Jobs still flock to Silicon Valley? That’s where Mark Zuckerberg transplanted Facebook, which he started in his Harvard dorm room. Facebook’s IPO this week pegs its value at around $100 billion.

But the Facebook owners are being gouged by the bankrupt state of California for $2 billion. If they had moved instead to Austin, Tex., or Seattle, Wash., they would have paid no state income or capital gains taxes. If they had moved to the Cayman Islands, Singapore or another tax haven and renounced their citizenship — as co-founder Eduardo Saverin has done — they could have avoided even most of the 35 percent U.S. income tax and 15 percent capital gains tax.

California also has numerous preposterous laws people and companies must follow, from banning the use of cell phones in cars to banning smoking almost everywhere. Well, I suppose the young gearheads don’t smoke — cigarattes, anyway.

My theory is that Silicon Valley is like Star City was in the old Soviet Union. If you were a budding young cosmonaut aspirant in the Soviet bloc, that was the place to be. According to Wikipedia,

“Cosmonauts of the Russian Federal Space Agency, and the Soviet space program before it, have lived and trained in Star City since the 1960s. In the Soviet era the location was a highly secret and guarded military installation, access to which was severely restricted.”

There was no question of defecting to the West. Sure, you maybe could escape across the border and be given asylum in the United States. The FBI would debrief you about your knowledge of the Soviet space program. You’d be given a new identity as Ivan Smithsky in Dubuque. You’d be a free person. But no way they’d let you become an American astronaut.

So you were stuck in Star City. The amenities there made it worthwhile. Unlike the subsistence living scraped out by most Soviets in the workers’ paradise, you would be given the best food and drink, a decent apartment or house, culture and entertainment, even access to banned literature the Soviet bosses winked at. They knew you weren’t going anywhere. You also had to put up with pervasive secrecy and being spied on.

The weather? Much better in Silicon Valley, of course. No Russian winters. But if you were a Russian wanting to be a cosmonaut, you grew up with the winters. And if you stuck with the program, retirement would be in the Crimea, with California-style weather and great local wines.

People will do almost anything to get what they want. They’ll put up with socialism, whether the Soviet or California kind.

That’s why Silicon Valley will continue attracting high-IQ future Jobses and Zuckerbergs. For as long as anyone reading this is alive.

For most of the rest of us, it’s Moscow circa 1970, Jerry Brown as Leonid Brezhnev, but with great weather.