I watched two movies recently, Hail, Caesar! and La La Land, both of which are celebrations of Los Angeles. They made me reminisce about the year I spent living in San Francisco, and prompted me to think more deeply about California as a whole. In particular, I wonder if California felt so odd (to me) because of the winner-take-all effects of tech and entertainment. What happens to the way that people think when two of its big industries have extreme blockbuster dynamics?
I have three questions:
- California’s economy is massive, but two industries dominate popular imagination: tech in Silicon Valley/San Francisco and entertainment in Hollywood/Los Angeles. Far fewer than 1 percent of all new stars and startups can expect to break out every year; those that do find terrific success. How do these dynamics change the culture of the state and the way that people live, if at all?
- California is the land of sunny optimism. But one detects, in so much of the creative output, a strain of melancholy, or at least ennui. You hear it in the Beach Boys; see it in both Hail Caesar and La La Land; read it in Philip K. Dick, John Steinbeck, Jack Kerouac, and so many others. What do people have to worry about in the land of gold and gentle weather?
- In a country of immigrants, California seems to be the state of immigrants. Few people can trace Californian roots past more than a half-dozen generations. It’s not just that many are of Asian or Latin American descent; in the beginning, California was significantly populated with migrants-twice-over who came from the eastern U.S. Within the self-selected group of immigrants, these people were willing to decamp once more to search for gold or fame. If the U.S. is the country of immigrants, is California then the most American of all states?
I’m not sure that I can answer these questions directly, but here are a few thoughts around them.
Every movie can be thought of as a startup. They both begin as ideas in notepads. Creators pitch them to studios and VCs for funding. It’s up to the creator to sell the vision and recruit others who believe in them. Most startups and movies break even or lose money; a few become massively scalable successes that are economically and culturally important for years, perhaps decades.1 They have many differences, but they share at least these characteristics.
That’s from the perspective from of creators and founders. For employees of startups and movie productions, there are similarities as well. Young people toil, not always in great positions, but they can always be on the lookout for other opportunities. It’s expected to be passionate about what you do. Things change in a big way if you meet someone willing to help you; after that, life will be forever different. (From one of the big numbers in La La Land: “Someone in the crowd could be the one you need to know; the one to finally lift you off the ground… if you’re the someone ready to be found.”) Or people are not so fortunate. Tens of thousands of dreamers move to Hollywood every year, but only a few become stars.
One tangible difference between startups and movies is that the latter needs a team to assemble for a much shorter period of time. A more interesting difference is an intangible one: While both are blockbuster industries, one can argue that Hollywood has a more zero-sum attitude than Silicon Valley does. Annual spending on movies and music is fairly stable, which means that studios are fighting over a non-growing share of consumer budgets. Meanwhile, only a few movies become blockbusters, making competition for that handful of roles more severe for actors. The world of startups doesn’t seem so zero-sum.
The zero-sum competitiveness of Hollywood is one reason that Peter Thiel disliked Sorkin’s The Social Network. He wrote that the movie is more emblematic of Hollywood than the positive-sum thinking that’s more common in Silicon Valley.
What accounts for the strain of melancholy in Californian optimism?
It’s warm and sunny in both Hail Caesar and La La Land. (When I saw La La Land on a snowy day, I thought that the director was playing a cruel joke to divide the movie in seasons: Los Angeles in the winter and summer scenes looked identical.) But you can pick out the constant doubt and deep unhappiness of the main characters. The lyrics of the Beach Boys are sunny too; but why do they sound so sad? Maybe California is less happy than it looks.
Does desperation accompany its natural optimism because homelessness is so plausible? La La Land’s opening number is about how California will always have another day of sun. The mild, warm weather makes that condition far less punishing than in the northeast. And one encounters many examples of it in San Francisco. Homelessness won’t likely affect most tech workers, but even for them the prospect of sudden, faultless unemployment looms large. Will they be able to stay in their very expensive apartments for long?
Northern California is beautiful. But are the landscapes so stark and breathtaking because they’re far too dry? The Golden Gate is placid, and is that because the yellow hills and brackish water don’t allow life to thrive?
I haven’t spent much time in LA, but I loved my brief visit. It’s the only place in which a stranger at a party remarked to me: “I didn’t like my face, so I changed it, with plastic surgery.” One would not find such candidness in San Francisco or in New York.
Werner Herzog has great things to say about the city. He lives there now, having moved from SF’s Pac Heights neighborhood, where I used to live. It’s worth quoting him at length:
“Los Angeles is the city in America with the most substance, even if it’s raw, uncouth and sometimes quite bizarre. Wherever you look is an immense depth, a tumult that resonates with me. New York is more concerned with finance than anything else. It doesn’t create culture, only consumes it; most of what you find in New York comes from elsewhere. Things actually get done in Los Angeles.
“Look beyond the glitz and glamour of Hollywood and a wild excitement of intense dreams opens up; it has more horizons than any other place. There is a great deal of industry in the city and a real working class; I also appreciate the vibrant presence of the Mexicans. In the last half century every significant cultural and technical trend has emerged from California, including the Free Speech Movement and the acceptance of gays and lesbians as an integral part of a dignified society, computers and the Internet, and—thanks to Hollywood—the collective dreams of the entire world. A fascinating density of things exists there like nowhere else in the world.”
Here’s something I’ve come to appreciate recently: There’s a world of difference between value-creation and mistake-avoidance.
In the corporate context, that’s the difference between top line and bottom line activities. The first is about generating revenue and the latter is about cutting costs. Salespeople are doing something very different from accounting people.
Let me sharpen the point with reference to writing. Academic writing is often plodding and obtuse; I submit that it’s because academics are more concerned with showing that they’re avoiding errors rather than trying to communicate incisive ideas. The opposite of academic writing may be something like blog posts; they may be fuzzy, poorly-defined, or outright mistaken, but that’s tolerable so long as they introduce fresh ideas.
I submit that California is a place that better embodies the top line mindset and that New York is dominated by the bottom line mindset. California, venture capital, and movie studios are trying to pick the winner that makes irrelevant their other losses. New York is complicated, but I want to argue that it’s finance-driven, and exemplified by the practice of insurance in particular. Insurance is about collecting a steady stream of revenue—on the liabilities side—without making a catastrophically wrong investment that wipes out half the value of assets. (A more colorful way to put it is to pick up nickels in front of a steamroller.) Venture capital tolerates mistakes in the search for a winner; insurance tries to avoid bad bets.
Finding brilliant successes and avoiding catastrophic failures are very different activities. Both are important, but they require different mindsets. I’ve found it useful to distinguish the two in nearly everything I do and see. Maybe that distinction goes some way to explaining why California and New York feel so different.
I don’t know much about California’s history, but I do know that a lot of people moved to the state in the 19th century gold rush. After gold, there came a silver rush, an oil boom, aviation, entertainment, and tech. I’m stealing a friend’s phrase: “Manifest destiny continues, not only through physical space.”
Each of these are winner-take-all industries. So you see, blockbuster dynamics have continually infused the state. Maybe we should expect that the people who were willing to move to California to be some of the most ambitious and can-do people in the world. And that subsequent generations have been nurtured with the same values as people who worked in other winner-take-all industries.
Or maybe not. Northern California offers the most outrageous examples of nimbyism, which is the total antithesis to a culture that accepts change and risk. The government doesn’t seem so can-do either. In eastern SF, replacing the Bay Bridge was initially estimated to cost $250 million; it was completed nearly 20 years later, for $6.4 billion, or a run-up of roughly 2,500 percent. In northern SF, the government has spent more time and about as much money (in real terms) building an access tunnel to the Golden Gate Bridge than it did building the bridge. California’s high-speed rail will be one of the slowest high-speed rail systems in the world, at the highest cost per mile of track. No wonder the state’s finances are a mess.
Virginia Postrel’s book on glamour highlights California as a particularly glamorous icon. It’s always attracted the ambitious. But for all the innovations of Hollywood and Silicon Valley, I wonder if people have lost some of the risk-taking tendencies of the past. Longtime residents and Uber drivers are always eager to let people know that the city isn’t like it once was. Perhaps they’re right, and the city’s startup scene is imprinted with a little bit more of the East Coast finance culture than techs would like to admit.
And maybe this is the right place to cite that, under generous definitions, about 10 percent of the San Francisco workforce is directly involved in the tech industry. That figure is closer to 20 percent for the Bay Area as a whole. And the state may not be attracting as many migrants. California’s net migration was negative between 2003 and 2014, losing about a million more people than it gained through migration. Instead of moving from Oklahoma to California, traffic may now be more common the other way. And while IT and entertainment are big sectors, together they account for only around 10 percent of state GDP—though it’s possible to argue for a bigger share under different definitions. The two big blockbuster industries may not have that big of an impact in the day-to-day lives of most Californians.
But if they do, then maybe that helps to explain a bit of the melancholy in the culture and why those who were once ahead have tried to lock in their gains.
(Picture I took last year, off Highway 1. Does the California coast look so calm because the dryness doesn’t allow for a lot of life to thrive?)
A few last notes:
I’d like to read a book about California. Not a fiction nor a work of poetry by a Californian author; instead I’m looking for a history of the state as a whole. Any recommendations?
Right now, Seattle is the part of the country I’d most like to visit. Going purely off the descriptions of Cryptonomicon, it seems like geek heaven. Is it California-lite, with its own set of tech giants and blockbuster dynamics?
I loved both Hail, Caesar! and La La Land while I was watching them. Upon reflection, I liked Hail, Caesar! more and La La Land less. Both films are excellently reviewed by Richard Brody: “The Coen Brothers’ Marvelous ‘Hail, Caesar!’” and “The Empty Exertions of ‘La La Land.’”
Thanks to MG, EW, PS, SG, and AN for discussions of these ideas.