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.