Cutting Edge Computing

Do We Want Tech Companies Running Our Towns? March 6, 2021

I was born and raised in a company town.  That meant that a company bought thousands of acres of land, constructed a major company or plant, and built most or all of the homes and businesses within its borders.  When I was growing up, the largest retail operation was the company store (yes, where we owed our soul), a six-story building just off of Franklin Avenue.  The neighborhoods were organized as plans, built as needed to supply workers, and hundreds of houses were rented out to workers who came to work the mill.

But this concept gives an entirely new meaning to the idea of the company town.  the governor of Nevada, Steve Sisolak, announced a plan to launch “Innovation Zones” to attract technology firms. The zones would permit companies to form governments carrying the same authority as counties, including the ability to impose taxes, form school districts and courts and provide government services.

In one sense, it’s an intriguing idea.  Can tech companies do a better job than local governments?  It might be interesting to find out.  But it’s got a bunch of problems, both philosophical and practical.  From a practical standpoint, technology firms simply don’t have the infrastructure that were needed by factories and mines of a century ago.  They tend to focus on their business, not on running municipalities, and except for the very largest don’t have the resources to do so.

From a philosophical standpoint, governments stand legally and ethically accountable to the people.  I realize that this accountability is often imperfect, but I can’t imagine that a company dedicated to business really cares about serving a larger community.

But here’s really the biggest problem.  My home town, Aliquippa, reached a population of 27,000 during the heyday of the steel mill.  In the 1980s, the steel mill cratered as the steel industry underwent economic shifts.  I remember flying over it in the mid-1990s, coming into Pittsburgh airport, and amazed at the six-mile sandbar along the river where the steel mill once thrived. Today the population of Aliquippa is about 9000, with all of the economic and personal devastation you might imagine.

Tech companies are even more fleeting.  As a young adult in the Boston area, companies such as Wang Laboratories, Digital Equipment Corporation, and Data General all flourished in the 1980s and employed tens of thousands of people (in DEC’s case, well over 100,000 at its height).  Today, all have been out of business since the 1990s.  I can envision, maybe, getting a tech company enthused about starting and running a municipality, for maybe a few years, but I fail to see any level of ability or commitment to do so for a century or more.  In some cases, companies have promised to invest in existing communities or to provide a set number of jobs in return for tax breaks, but rarely deliver on those agreements.

So this is a bad idea.  I hope Nevada comes to its senses.