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Tech is coming to Washington. Prepare for a clash of cultures

Out of Trumpian chaos and contradiction, something good might just emerge

image: klawe rzeczy/getty images/alamy/

image: klawe rzeczy/getty images/alamy/

Already things have turned nasty. Donald Trump has not even got to the White House, and his raucous court of advisers have rounded on each other. In recent days Elon Musk and other tech tycoons have traded insults with the maga crowd over highly skilled migration. What seems like a petty spat over visas is in fact a sign of a much deeper rift. For the first time, tech is coming to Washington—and its worldview is strikingly at odds with the maga movement. The ways in which these tensions are resolved, and who gains the upper hand, will profoundly affect America’s economy and its financial markets over the next four years.

As in his first term, Mr Trump has assembled an economic-policy team with disparate, sometimes contradictory goals. The maga diehards, such as Stephen Miller, Mr Trump’s choice for deputy chief of staff, are anti-trade, anti-immigration and anti-regulation, and are supported by an energetic base. The Republican mainstreamers, such as Scott Bessent, Mr Trump’s pick for treasury secretary, and Kevin Hassett, the head of the National Economic Council, are primarily low-tax, small-government enthusiasts. This time, though, there is a new faction that makes the mix more volatile still: the tech bros from Silicon Valley.

David Sacks, a venture capitalist, has been appointed Mr Trump’s crypto and artificial-intelligence tsar. He will hope to relax curbs on the crypto industry and, together with other arrivals from Silicon Valley, to loosen controls on ai to encourage faster progress. But the influence of the techies goes beyond tech policy. Mr Musk has been tasked with running the newly created Department of Government Efficiency (doge). Marc Andreessen, a renowned venture capitalist, says he has been spending about half his time at Mar-a-Lago as a “volunteer”. Scott Kupor, who worked for Mr Andreessen, will take charge of the Office of Personnel Management, which oversees public-sector hiring. Former employees of Palantir, the Thiel Foundation and Uber have been appointed to roles in the state and health departments and to the Pentagon, respectively. Once the revolving door between Wall Street and the Treasury spun so fast that Goldman Sachs was nicknamed “Government Sachs”. Mr Trump, by contrast, is trying to put the tech into technocracy.

This is new for American politics. For years Washington was a place for tech bosses to avoid, unless summoned by Congress for a scolding. Now tech sees government as something to influence and disrupt. In theory this could bring benefits for America. Like the rest of Mr Trump’s team, the techies want to sharpen America’s economic and technological edge by cutting red tape and boosting innovation. Bringing in experts to advise on ai is a good idea, given its likely economic and strategic importance. And everyone knows that government could be made more efficient.

Achieving all this in practice is another thing, though. One problem is that, when tech and maga say they are signed up to America First, they mean different things. Whereas the maga movement hopes to restore a vision of the past, including an impossible return to a manufacturing heyday, tech looks forward. It wants to accelerate progress and disrupt society, leaving the world for which maga yearns ever farther in the dust.

These contrasting visions will translate into policy disputes. maga fears that immigrants take jobs that Americans should be doing; tech wants the best talent regardless of nationality. Tech has a libertarian bent that is suspicious of government; maga loathes corporate power. Both groups see China as a rival (apart from Mr Musk, for whom it is a place to make and sell cars). But whereas maga thinks that foreigners exploit trade to cheat America, tech has benefited from flows of talent, capital and custom. Even if tech is safe from a first round of tariffs on goods, an all-out trade war could ensnare the services it provides. Such contradictions and clashes will make it hard for the tech crew to achieve their goals.

Mr Trump will make the backdrop more muddled still. Rather than resolving the tensions between his team and setting a clear direction, he is likely to act as an agent of chaos. He craves conflict and intrigue and will relish the power he holds over the various factions at his court.

The tech contingent could also let itself down. It sees shrinking the state as an engineering problem. But the history of sensible reforms that died in Congress suggests it is more of a political problem—and one of which tech has little experience. Worse, having won the president’s ear, the tech tycoons may be tempted to seek cronyist favours. That is what investors expect: the value of Mr Musk’s firms has soared since the election, outperforming the market and making him at least $150bn richer. A combination of infighting, botched implementation and self-dealing could provoke a backlash that hobbles Mr Trump’s second term.

Out of chaos

Yet that dismal scenario is not foreordained. Instead of fighting each other to a standstill, the factions on Mr Trump’s team could moderate each other in some ways and reinforce each other in others, perhaps with benign results for America. For example, the mainstreamers and the tech bosses could limit maga’s worst instincts on protectionism and immigration, while tech’s clever ideas for reform could be implemented in a way that is politically astute. Everyone’s agreement on America’s need to deregulate and innovate, meanwhile, could lend the programme useful momentum.

That may sound far-fetched. However, the stockmarket could help steer the administration towards this compromise. Mr Trump is sensitive to share prices, and will not want to endanger the roaring rally that has followed his re-election. By providing a real-time gauge of whether investors think Trumponomics will help the economy, the stockmarket could sway his decisions. If so, the administration could feel its way towards policies that boost growth. Tech’s arrival in Washington is high-risk. It could also—conceivably—be high-reward. 

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Author: Editors Desk

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