The achievement of the market consensus was to produce a mental world in which alternatives to capitalism did not seem conceivable - much less attainable. The key, it seems, was to make the principle of rapacity and plunder into a new catechism for economic policymaking, and then to watch our culture collapse into miniature idols and our technology shrink from prosthetic gods to prosthetic pals. Cutting taxes for the rich and slashing social spending, downsizing workers and deregulating financial [...] its cultural power has become so concentrated among our leaders that it's produced a nearly unbroken fog over the past twenty-five years, shrouding a tiny elite from the disasters inflicted on the rest of us.

Criticism bearing our abrasive tone and uncompromising stance is sometimes derided as lowdown or (worse yet) easy. But the truth is, this kind of criticism is the hardest thing in the world to produce if you happen to live in a culture ruled by the dicta of positive thinking and dread of the existential crime of being negative [...] your compliance is ultimately expected, and the enterprise of criticism of America has to contend with a culture of consensus that reduces conflicts over values to matters of individual attitude.

A mix of big corporations and investor-backed startup enterprises gathers around the shared strategic value of innovation, operating in an environment rich with public resources. The triumphant arc is chronicled in the rapid development of some new product and said to be personified by a Zuckerberg or a Gates, a captain of coding brimming with cowboy grit, pressing onward into the computerized frontier and all. The hero is the one who creates something from nothing, thus resolving the eternal pundit riddles of American life like Can we keep our edge? and Are we still number one?

This, you see, is how innovation works. Mask political choices in the universalist rhetoric of the market. Purge the surrounding environment of social intelligence. Surge into the space with vested interests masquerading as public ones, and then call in the future for cover.

The Innovation Economy’s futurist model of urban development is, in other words, propaganda for the present system of power—it’s class interest presenting itself in the guise of prosperity, and it appears to be the best that these most liberal of liberal Democrats have to offer to the nation.

Where this fraternity of entrepreneurs and their municipal handlers travel to remodel society in the image of a private company, inequality is synchronized to follow, and liberalism, which once robustly opposed privileges and monopolies, provides cover for ushering out those who haven’t been given the password.

So come along, while there’s still time, and let’s tour the People’s Republic of Zuckerstan. Observe the residents fleeing, the acres being enclosed in office parks and laboratories, the moguls smiling, and the thought leaders humming tidings of the future. Be sure to notice all the ways in which the composite picture doesn’t add up to progress.

The market has been driving the poor and the working class out of these cities ever since, and the Innovation Economy is finishing them off, cleaning house for the new guests. The cost of housing in Cambridge and Greater Boston has zoomed, with rising rents taking a growing share of dwindling low- and middle-incomes. Partly by design, partly by accident, the corporate consolidation of the housing stock will wind up leaching diversity from neighborhoods by pricing residents out and installing corporate professionals in their place. Innovation means the price of existing goes up.

The People’s Republic of Zuckerstan might have less and less room for poor or middle-income families and no interest in alternative models of development, but innovation economies are fine places to park overaccumulating capital. The city, indeed, could hardly be more hospitable to titans of business. That the billionaire investor Carl Icahn exerts such a heavy influence over Cambridge biotechs Biogen Idec and Genzyme is some kind of strange for sure. Once upon a time, the liberal city could join the nation in reviling Icahn’s brand of speculation as noxious corporate raiding. Now, as innovation whittles away the social basis of activism, Carl Icahn is celebrated as an “activist investor.”

Or consider the fossil fuel billionaire David H. Koch, enemy number one in the minds of progressives across the country for, among other things, funding organizations that deny global warming. Koch sits on the board of public television broadcaster WGBH and underwrites NOVA, its science program—and that’s the least of this entrepreneur’s involvement with the Innovation Economy.

[...] Swartz’s two-year prosecution took place at a time when hundreds of millions of dollars were filtering into Innovation Economy institutions. His alleged downloading of academic articles may have seemed innocuous to outsiders, but the lords of these networks knew better. In a climate of imperial expansion, his infraction was too trivial to let go.

You can almost admire the technical consistency of the respective applications of institutional “neutrality” to the cases of David H. Koch and Aaron Swartz, the celebrated polluter and the despised democracy activist—the walking, talking conflict of interest and the scholar of conflicts of interest. That one went away smiling and the other wound up dead has nothing to do with MIT’s core business, which is to innovate.

The Soul of Startup City

And so we arrive at the ultimate contradiction of the Innovation Economy’s mode of development. As we have observed, this new republic depends on reengineering the cultural environment. For the market’s winnings, a frame of acceptance must be created to justify the community’s losses. Irony must erode, so that corporate entrepreneurs can be presented as nonconformists; nonprofits must absorb surplus profit, so that hundreds of millions of dollars in government payments, grants, and contracts, along with tax incentives, subsidies, and exemptions, can be banked for subsequent transfer to the market; even the old method of “clustering” must sound futuristic, so that its actual origins in socialist redoubts like New York’s Greenwich Village (today an innovation hub, naturally) can be forgotten.

The Innovation Economy necessitates such cultural changes, but it offers no independent argument for freely choosing them. Instead, the manifest destiny of business touts innovation as if it were synonymous with progress, rather than one among its many necessary qualities, and leaves it at that.

What happened, instead, is that the spread of information technologies and new ways of organizing transport—the containerization of shipping, for example—allowed those same industrial jobs to be outsourced to East Asia, Latin America, and other countries where the availability of cheap labor allowed manufacturers to employ much less technologically sophisticated production-line techniques than they would have been obliged to employ at home.

From the perspective of those living in Europe, North America, and Japan, the results did seem to be much as predicted. Smokestack industries did disappear; jobs came to be divided between a lower stratum of service workers and an upper stratum sitting in antiseptic bubbles playing with computers. But below it all lay an uneasy awareness that the postwork civilization was a giant fraud. Our carefully engineered high-tech sneakers were not being produced by intelligent cyborgs or self-replicating molecular nanotechnology; they were being made on the equivalent of old-fashioned Singer sewing machines, by the daughters of Mexican and Indonesian farmers who, as the result of WTO or NAFTA–sponsored trade deals, had been ousted from their ancestral lands. It was a guilty awareness that lay beneath the postmodern sensibility and its celebration of the endless play of images and surfaces.