The Code

by Margaret O'Mara

  Unlike in the privacy wars of the 1960s and early 1970s, however, the computing world was no longer solely the domain of big government and big corporations. Now it was the playground of the gamers and hackers, masters of the microcomputer and modem, just like the young hero played by Matthew Broderick in Badham’s film. The personal computer had triumphantly moved in, particularly for American children and teenagers.

  Computer nerds had become familiar, sympathetic pop-culture characters, whether they were fictional figures from movies or television, or real-life multimillionaires like Jobs and Gates. Right at the same time that the SDI battles were brewing, journalist Steven Levy was immortalizing the history of this rebellious breed in Hackers. (The Valley tech community had been so delighted by their heroic portrayal in the book that they reclaimed the label as an honorific, and Stewart Brand began holding an annual “Hackers Conference” to celebrate the movement they had forged.) An outlaw programmer was the hero of William Gibson’s sci-fi novel Neuromancer, a cult bestseller published right around the same time. Even run-of-the-mill geeks got the girl in teen hits Sixteen Candles and Revenge of the Nerds. As the Doomsday Clock ticked closer to midnight, it wasn’t surprising that so many dreamed of a Hollywood ending where these hackers used tech to make peace instead of war.5

  STAR WARS

  Silicon Valley was ground zero for the Jedi Knights of the computer world, and not just because Apple had portrayed it that way during the 1984 Super Bowl. In the academic precincts of the Valley—Stanford, SRI, PARC—the antiwar sentiment of the Vietnam era never fully subsided, and by the middle of the 1980s these places had become hubs for the nuclear disarmament movement.

  In the 1970s, Congress had restricted defense grants going to academic projects with a direct military application, and NASA and Department of Energy funding had further declined. The arrival of Reagan’s team shifted those priorities: military spending at universities soared up from less than $500 million in 1980 to $930 million in 1985. The surge was particularly noticeable in computer science, which by two years into the Reagan era had nearly 60 percent of its federal funds for basic research coming from the Pentagon. With the arrival of SDI, that percentage promised to shoot up even more.6

  The groundswell against the new defense dependence started soon after Reagan arrived in office. Throughout 1981, PARC’s internal mail network buzzed with discussion of the bellicose new regime and its plans to build up the nuclear arsenal. By the spring of 1982, a petition signed by 150 PARC employees persuaded Xerox to sponsor a nationally broadcast television special titled Facing Up to the Bomb. By the fall, the group had a name: Computer Professionals for Social Responsibility, or CPSR. “We believe,” they proclaimed, “neither that the path to national security lies in military superiority, nor that superiority can be achieved through the use of computers.” CPSR’s founding ranks contained the Valley’s boldfaced names in AI and human-computer interaction, including a newly tenured Stanford computer science professor named Terry Winograd.7

  A baby boomer with a liberal conscience and a PhD from MIT, Winograd had made a decision early on not to accept military research money himself. Seeing the rising tide of resources rushing into the world of academic computer science, he urged his colleagues to just say no as well. “Once the university has become dependent on military funds for its survival,” wrote Winograd in an early CPSR newsletter, “it is very hard to take a stand on some ‘minor’ issue which could jeopardize everything. A few minor issues soon add up to a lot of control.”8

  The uneasiness percolated all the way to the top of the university administration. Then-president of Stanford Donald Kennedy was a biologist who had served as director of the U.S. Food and Drug Administration under Jimmy Carter. He wasn’t going to say no to research dollars, but having spent more than twenty years at Stanford, he understood keenly how politics might mess with independent research agendas. The new defense windfall, he worried, “throws the balance of science research all out of whack.”9

  It wasn’t just the ethics that troubled the academics. It was the science. The idea of an AI-enabled computer governing the nation’s nuclear arsenal was WarGames brought to life, a nightmare that wasn’t out of the realm of possibility. AI could do a lot, but the state of the art wasn’t anywhere close to making a computer-advised battlefield possible. Those closest to the heart of the machine understood that better than anyone else. In fact, the leaders of DARPA were so uncomfortable with the technical and ethical aims of SDI that the Reagan White House soon moved the program’s budget line to elsewhere in the Pentagon.10

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  The sustained opposition to nuclear buildup and SDI was only one slice of the Valley’s Reagan-era story, however. Computer moguls grabbed the headlines, but the world of military electronics had never left the Valley of Heart’s Delight. In the late 1970s and early 1980s, Santa Clara County had more defense spending per capita than any other place in the country. One-fifth of the Valley’s economic output still came from aerospace and defense. The defense buildup that these technologists opposed so passionately was, quite literally, happening in their backyards.

  ROLM, the company that had made Burt McMurtry’s venture career, earned 99 percent of its $10 million revenue in 1975 from “mil spec” sales of rugged, impact-resistant minicomputers designed for soldiers’ use in the field. A rising star of the 1980s, the relational database company Oracle got its start with a CIA contract that Larry Ellison and his co-founders completed while working at Ampex in the late 1970s. As military spending soared, this ever-present defense sector grew larger, even if it stayed partially submerged from view.11

  The beating heart remained the place that started it all: Lockheed Missiles and Space, whose 24,000-strong 1980s workforce was nearly twice as large as Intel and five times larger than Apple. Over the three decades since the company first landed in Sunnyvale, Lockheed’s 175-acre campus had grown so large that the company had its own fire department. Yet the security perimeter that surrounded it remained airtight. Defense contracts continued to make up the bulk of its business, perpetuating a secrecy and stealth that was in sharp contrast to the increasingly casual, collaborative culture of the rest of the Valley.

  Lockheed people didn’t chit-chat at the Wagon Wheel or on the sidelines of Little League games about their days at the office. They tended to be lifers, not job-hoppers. Many were military men or veterans, with the close ties to the defense establishment that had largely faded away in the new generation of Valley firms. Their hair stayed short; their shirts stayed pressed. They didn’t worry about Japan. They weren’t networked in to Valley venture capital firms, local lawyers, or public relations maestros—because they didn’t need them. They had the Department of Defense.

  Given that Sunnyvale had specialized in antimissile defense since the heyday of the space race, it was little surprise when Lockheed quickly emerged as a prime contractor for the SDI system. It was big money—$100 million here, $200 million there—spurring fresh waves of hiring and an economic impact that rippled across the region as Lockheed hired other firms as service providers and vendors. “People are on an absolute spending spree,” marveled Sunnyvale City Manager Tom Lewcock, and he pointedly noted defense spending as a major cause of it. “It’s just another paved-with-gold kind of period of time that we’re going through.” By early 1985, Lockheed’s balance sheet was so flush and its future so bright that the company announced it would spend $5 billion over five years to modernize its facilities, including Sunnyvale. Star Wars might be a miracle, or it might be a money pit. One thing it was for sure: a windfall for Silicon Valley.12

  The boom was as controversial as it was profitable. The prominence and sheer size of its SDI contracts made Lockheed a ripe target for protesters, who regularly clustered with banners and chants at the facility’s gates to register their objections to the defense buildup. Twenty-one people were arrested at one protest in April 1986.
More than twice as many were arrested that October, after a Halloween-themed event that included activists dropping pumpkins off an overpass on Highway 101 and onto incoming traffic. Lockheed management brushed off the demonstrations as a pesky nuisance and vowed that business would proceed as usual.13

  It wasn’t just the pumpkin-throwers who disliked the new order. Ed Zschau was keenly aware of how much defense contracts were helping his district, but he worried that the flood of money was diverting research resources—and research talent—from the private sector. “By virtue of our devotion to defense research and development,” he fretted to a reporter, “we’re making it more difficult to be competitive in global markets.” What’s more, the defense buildup had turned the procurement system into a runaway train of $640 toilet seats and other “gold plated” equipment, attracting vehement and bipartisan criticism on Capitol Hill. DOD cost overruns had garnered the president so much bad press that by the middle of Reagan’s second term he was forced to establish a “Blue-Ribbon Commission on Defense Management.” The person he tapped to run it: the ever-loyal and ever-thrifty David Packard.14

  CANON WARS

  Silicon Valley’s Reagan-era battles between hawk and dove, Right and Left, weren’t just about how much the U.S. Treasury was spending on defense, or on the ethics and science of high-tech weaponry. They extended even wider. And the place they raged the fiercest was the two thousand bucolic acres that always had been at the center of the Valley’s story, its intellectual hub and town square: the campus of Stanford University.

  And the center of it all was the 285-foot sandstone battlement of the Hoover Tower. Ronald Reagan’s ascension to office had cemented the Hoover Institution’s reputation as the nation’s premier conservative think tank. The young economist whom Herbert Hoover had tapped all those years ago to run it, W. Glenn Campbell, had weathered the protests of pipe-smoking humanities professors and rock-throwing students in the 1960s, so unperturbed by all their wailing that he expanded the institution’s research agenda beyond foreign affairs and into domestic policy soon after. The move into live-wire conservative topics like economic monetarism, deregulation, and welfare reform further amped up the visibility and the controversy, attracting generous private donations from billionaire right-wing backers. The expansion of policy scope also attracted high-profile “visiting fellows” like Reagan, who joined Hoover’s roster after leaving the California governor’s office, bringing along with him 1,700 boxes of gubernatorial papers and the tapes for eight rare episodes of his old TV Western, Death Valley Days. He donated all of it to the Hoover archives.15

  Little surprise, then, that, within months of Reagan’s inauguration, Campbell proposed that the Californian’s future presidential library and museum be located on Stanford’s campus. After quietly percolating for a couple of years, the library proposal began to get a serious review by the White House in 1983—and all hell broke loose back on The Farm.

  When longtime Hoover fellow and current Secretary of State George Shultz gave the 1983 commencement address, protesters gathered to condemn the Reagan Administration’s policies in general and Hoover’s complicity in particular. A petition signed by 1,500 faculty and students demanded that the institution leave campus. When Gloria Steinem visited Stanford for a book signing that autumn, she couldn’t resist weighing in. “You have my deepest sympathies,” America’s most famous feminist remarked. “The campus in the Midwest that is responsible for [Reagan’s] lack of education should be responsible for his papers.” A student group arose calling itself “Stanford Community Against Reagan University.” Faculty living nearby objected to the likely traffic and noise the library would generate; the august Center for Advanced Study in the Behavioral Sciences, which occupied the oak-studded hillside next to the proposed library site, threatened to move away from Stanford altogether.16

  The battle over the Reagan library raged on for four more years, until the president’s team at last decided to abandon Palo Alto for the ideologically friendlier climate of Southern California. “The joggers, environmentalists, and free spirits with tenure who had opposed the library held self-congratulatory parties in the rolling foothills,” wrote one Hoover fellow acerbically in National Review, “free at last from the terrors of Reaganism.” Glenn Campbell retired two years later, claiming Don Kennedy forced him to, because the Stanford president “doesn’t like me.” The accusation of partisanship was deeply unfair, said an unrepentant Campbell. “Hoover doesn’t lean to the right—it’s an optical illusion because the rest of the campus leans so far to the left. The Hoover Tower points straight up.”17

  The high-powered, high-profile Campbell gave his exit interview to a little student newspaper that was barely two years old and only published a few issues a year. The Stanford Review, however, was already making its mark as a self-styled voice of reason for Stanford’s conservative students.

  Founded in the late spring of 1987, the Review was the brainchild of a sophomore philosophy major named Peter Thiel. German-born and California-bred, a regional chess champion and J. R. R. Tolkien devotee, Thiel had arrived on campus as the battle of the Reagan library raged. For the remainder of his undergraduate years and as a Stanford law student immediately after, Thiel focused his considerable intellectual energies on the Review, making its libertarian-conservative views an inescapable feature of campus life as a fresh, even more polarizing battle erupted: the war over the undergraduate curriculum.

  The “canon wars” blazed hotly on many elite American campuses in the mid-1980s, as students and faculty demanded—and won—a more inclusive, multicultural approach to humanistic education. Civil rights and affirmative action victories of the 1960s had resulted in far more diversity on campus; people of color now made up one-third of the Stanford student body. But as access to college enlarged, so did what one national periodical primly called “public concern about student ignorance.” Bestsellers like E. D. Hirsch’s Cultural Literacy and Allan Bloom’s The Closing of the American Mind bemoaned the state of American higher education, turning academic debates about what went on the syllabus into a flashpoint of the 1980s culture wars.18

  This swirl was escalating on Stanford’s campus by the time Thiel founded what he called “a forum for rational debate” in the Review, and its eventual heat and velocity—coming right on the heels of the headline-making fight over the Reagan library—made Stanford’s canon wars national news. Where many students saw an overdue turn away from an emphasis on Western civilization and the work of dead white men, Thiel and his fellow conservatives saw an effort to “restrict the academic freedom of professors.” Soon joining him on the masthead was another campus contrarian, law student Keith Rabois, whose love of Ronald Reagan was matched by his sharp distaste for liberal orthodoxy. Rabois (who later came out as gay) later gained notoriety for yelling a gay slur outside the house of a Stanford professor, following up with “I hope you die of AIDS!” He declared that his actions were simply a protest against the university’s restrictive speech codes and left Stanford shortly afterward.19

  Other Review stalwarts displayed a similar mix of ideological rigor and misplaced performative politics. Another local chess champion, David Sacks, arrived as a freshman in 1990 and found that his social awkwardness and his delight in pummeling liberal egos left him an odd man out everywhere except the Review. Sacks later disavowed many of the things he wrote in the newspaper’s pages, but soon after he graduated he produced more of it as a published author, collaborating with Thiel on a book-length treatise titled The Diversity Myth. Multicultural education was “the intellectual equivalent of junk food,” the two declared, and it was just the tip of the iceberg. America had become “a kingdom of victims,” and university administrators like Provost Condoleezza Rice were encouraging it (ironically, the hawkish Rice was a Hoover fellow and later would serve as national security advisor and secretary of state for President George W. Bush). “Individuals must strike out and set their own destinies, free
from both the historical cultures of the past and the newer multiculture.”20

  Thiel, Rabois, and Sacks all did exactly that: striking out into tech, and ultimately striking it very, very rich. They did not do so as individuals, however, but as an immensely powerful network of men Thiel had brought together in his many years at the Review and who, armed with their Stanford degrees and their well-worn copies of Ayn Rand, set out together to remake the brave new world of the Valley’s Internet economy. Within a decade, the core group would be multimillionaires known as the PayPal Mafia, after the online-payment company they founded was sold to eBay for $1.5 billion in 2002. Nearly all went on to found and invest in other major tech hits.

  Stanford’s campus wars burned hot for only a few years, but they had lasting resonance. For the young people zooming on their bicycles through the sun-dappled quads in the late 1980s and early 1990s were the same people who would found and build some of the richest and most influential companies of the Valley’s late 1990s and 2000s. The faculty who agonized over whether to take money from the Pentagon became advisors and mentors to the Valley’s next generation of CEOs. The academic administrators steering the place in this era went on to become influential political advisors in the next. Stanford University’s stormy Reagan years became the stage on which the politics of the next-generation Valley were formed.

  As sharply polarized as Left and Right were on Stanford’s campus during this time, some common threads connected them. Both Peter Thiel and Terry Winograd were concerned about freedom of speech on campus. Both Glenn Campbell and Don Kennedy believed that Stanford scholars had an opportunity, and a responsibility, to contribute to politics and policy. Both the students crying out for a new, multicultural curriculum and the conservative elders who tut-tutted at the closing of the American mind agreed that the college years shaped a person’s trajectory for the rest of their lives.