By the time layoffs and early retirement programs ended, IBM had almost halved its workforce from 405,500 people to 225,000.5 One-fifth of those laid-off employees came back as consultants, a practice that became increasingly common in the 1990s.6 Making IBM “leaner” matched the image of the company that Louis Gerstner Jr., IBM’s chief executive, was trying to project. In August 1994 he said to employees, “We operate as an entrepreneurial organization with a minimum of bureaucracy and a never-ending focus on productivity.”7 Under Gerstner’s leadership, the image of IBM went from that of a large stable company with long-term employment to an “entrepreneurial” company. Netscape and IBM represented two different models of work in the technology sector. Not only did the two companies bitterly compete over how their customers would access the web, but at stake was which of their models for the workplace would prevail in the new economy. In many ways, 1994 marked the beginning of the new economy with both the Netscape initial public offering (IPO) and the IBM layoffs, and both show the institutional arrangements, technological developments, and rhetorical shifts that made possible the dot-com boom and created the environment for New York’s Silicon Alley. Both companies represent a spectrum of how technology in the 1990s was framed—at once sure, staid, and stable and young, rule-breaking, and edgy.

The decline in manufacturing jobs in the United States left a cultural vacuum that the rhetoric of the Internet filled. Changes in the economy, in markets, and in political rhetoric all supported the idea that the growth of dot-coms would continue indefinitely and that these new technologies could salvage an economy. The Internet industry in many ways represented the purest of these technological fantasies—unprecedented economic growth without the messiness of hardware manufacturing, industrial start-up investments, or slowness of the “old economy” ways of working. The prevailing message: the creation of a communication medium—the Internet—could drive economic growth and security, create wealth, and revitalize the economy.

Social scientists have studied the transition from the post–World War II reliance on industrial and manufacturing sectors to a “postindustrial” or service-based economy. The changes that came to be called the “new economy” in the 1990s are a continuation of that transition. The economic shifts are real and provide the context for understanding the shift in the culture of corporate loyalty. This shift had a political dimension as politicians shaped new rhetoric to explain what was happening. In this chapter, I argue that the dot-com boom of the late 1990s through the year 2000 marked a political, economic, and cultural transition that had already begun by the time the commercialized Internet appeared. These political, economic, and cultural shifts emphasized individual responsibility over collective, corporate, and government security and embraced individual economic opportunity. With these changes, entrepreneurialism became celebrated as a means of fixing an economy that was creaking under the weight of aging manufacturing base, losing ground internationally, and struggling to recalibrate a delicate postwar balance of welfare state and corporate benevolence. Rather than being determined solely by the technological change of the Internet, major economic, political, and cultural changes in the United States paved the way for the dot-com era and for the prevalence of entrepreneurial attitudes necessary for it.

Innovation alone cannot be blamed for this shift in workplace culture. Before the rise of Internet firms, technology companies were considered stable places to work. Companies like IBM and Kodak Eastman are examples of American companies that were the technology leaders of their time, while offering phenomenal benefits, wages, and job security compared to the rest of the economy. Kodak Eastman offered its employees company housing, in-house health care, productivity planning to minimize layoffs, profit-sharing, and jobless benefits paid out of its own private fund.19 In this arrangement, bigger organizations paid more than smaller companies, in part because they shared more profits, more equitably, among their employees. One economist showed that before the 1980s 70 percent of company profits were shared with workers, which echoes findings from other economists that profits were more evenly distributed between shareholders and employee stakeholders before the 1990s.20

The political rhetoric of both Ronald Reagan in the 1980s and Bill Clinton a decade later set a cultural stage for the rise of venture labor. With manufacturing in decline, competing political proposals emerged for how to fix the problems of the economy. For political conservatives, the answer involved allowing free markets to function more effectively through deregulation, or less governmental oversight in price levels, rules, and industry structure. The result, beginning in the 1980s, was the deregulation of transportation, communication, energy, and banking industries. Deregulation unleashed “powerful competitive forces on the markets for products and labor” far beyond the formerly regulated industries.23 Companies “restructured” by selling less profitable divisions and outsourcing “nonessential” business functions to other companies. The corporate layoff, once a temporary measure, increasingly came to mean a permanent reduction in a company’s workforce. The number of layoffs skyrocketed: at least thirty million Americans have been laid off since the 1980s.24

Political changes during the Reagan and Clinton eras established the tone for the dot-com era. The political rhetoric of both administrations was important because each set the stage for individual entrepreneurial values in the 1990s and the utopian belief in the power of technology to transform the economy. Reagan’s political rhetoric helped shift political discourse away from collective economic and social security toward individual economic freedom and entrepreneurial initiative. Clinton’s political rhetoric relied on tropes of entrepreneurial drive and technological innovation to create images of a resuscitated U.S. economy—and in the process created the discourses that encouraged venture labor in the dot-com era.

Another cultural shift was an emerging rhetoric around financial markets. What people say about markets, to some extent, makes markets.43 Nigel Thrift has called the new economy a “rhetorical fabrication,”44 and others have argued that to dismiss the rhetorical flourishes of the new economy is to miss the “symbolic efficiency of discourse, the way it structures our experience of reality.”45 Some media representations matter more than others, of course, in this discursive feedback loop of market perception, financial market representation, and continual monitoring of markets by market makers. The Financial Times presented itself as “the newspaper of the new economy,”46 and Business Week, which first used the term “new economy” in 1994, became a strong advocate of the concept within the media. An explosion in the number of financial media outlets including twenty-four-hour television channels, increases in the amount of reporting on finance by the mainstream media and the number of advertisements for financial services companies, and the concentration of information in “news, information, and technology” companies like Reuters and Bloomberg helped spur the rise of these narratives about financial markets and economic growth.47 As Thrift has argued, these narratives about finance were “an attempt at mass motivation, which, if successful, could result in a new kind of market culture—or a spiritual renewal of an old one.”48 Not only did this discourse constitute the market, it was, as Thrift argues, an attempt to reconstitute a new economy itself.

Many of these experiments emerged from early creative endeavors but were often later linked to financial business models whether through advertising, sponsorship, or other such means. Silicon Alley’s early period of experimentation—and the early days of the Internet industry—brought information to technology, connecting conceptually hardware and software companies with the work of new media, creating the symbolic space for a new industry centered on new media to emerge. The paths of the edgy downtown webzines crossed with those of corporate magazine publishing and advertising already located in Manhattan. Andrew Ross called this process of corporate interests overtaking the Silicon Alley “the industrialization of bohemia.” The history of Silicon Alley is more complicated for two reasons. First, while Ross’s term adequately describes what happened within some successful content companies, it implies cooptation of independence, rather than a longer and more mutual intertwining of corporate and artistic goals, as was the case in Silicon Alley. Second, the term also implies an earlier, uncorrupted state of independent Internet production. The social process by which Internet production moved from high-cultural elite artistic and cultural production to mass-distributed objects included both the influence of corporate media and that of independent, alternative culture on the norms, values, and aesthetics of Silicon Alley. I would argue that it is better to think about the bohemianization of industry—that new media became a model of the new economy, in which creativity functioned for capitalism. Sweeping technological changes meant that people who understood the Internet’s potential as a medium positioned themselves as business revolutionaries. Creative people suddenly found new economic value in their artistic work. And for a cohort of underemployed college graduates, Silicon Alley presented the opportunities of a growth industry. The experimentation, both cultural and economic, in Silicon Alley intertwined with the economy’s growing culture of risk so that this spirit of risk taking was flexible enough to adapt to multiple motivations.