The Marvellous Boys of Palo Alto

From Silicon Valley Bank to Sam Bankman-Fried, the recent scandals upending the tech industry are rooted in a longer tradition of innovation and impunity.
Arches from the quadrangle of Stanford University California 1975.
To grow up in Palo Alto is to grow up amid obsolete visions of the future, unsettling relics of the past, marvellous dead boys. It is to grow up haunted.Photograph from Library of Congress / Interim Archives / Getty

Not long before his death in 2007, my father told me that he “thought he might have” coined the term information technology. It turns out he was right. In an article titled “Management in the 1980’s,” published in the November, 1958, issue of the Harvard Business Review, Harold J. Leavitt and his co-author, Thomas L. Whisler, identify a “new technology” that “has begun to take hold in American business, one so new that its significance is still difficult to evaluate.” Since this technology “does not yet have a single established name,” the article notes, “we shall call it information technology. It is composed of several related parts”: “techniques for processing large amounts of information rapidly”; “the application of statistical and mathematical methods to decision-making problems”; and “in the offing, though its applications have not yet emerged very clearly . . . the simulation of higher-order thinking through computer programs.” By the end of his life, my father had adopted a far more skeptical attitude toward the organizations he earned his living trying to understand and improve. I am convinced that, if he soft-pedalled his immense if unwitting contribution to twenty-first-century English, it was because, in the deep pessimism of his old age, the last thing he wanted was to be remembered as the progenitor of the I.T. guy.

When my father co-wrote “Management in the 1980’s,” he was thirty-six and a professor at the Carnegie Institute of Technology (now Carnegie Mellon), in Pittsburgh. He was married and had two children. I was born in 1961, and in 1966 he accepted a position at the Stanford Graduate School of Business—an upheaval for my mother, who was forced to give up the dream house in Pittsburgh that they had just built, and a trauma for my brother and sister, who had to face the unhappy prospect of changing schools as teen-agers.

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For me, on the other hand, the timing couldn’t have been better. At five, I hadn’t had enough of a life in Pittsburgh to register the loss. Instead, from the morning I started kindergarten at Stanford Elementary School (now defunct) to the afternoon I graduated from Henry M. Gunn Senior High School, Palo Alto was my home, its streets my streets, its parks my parks. When I wasn’t at school, I could usually be found biking around the eight-thousand-acre Stanford campus, which I regarded as my own personal back yard. The campus opened out directly from our house, a 1917 exemplar of the “California Cottage Style,” situated amid redwoods and sloping lawns in a neighborhood known colloquially as the faculty ghetto. Because Stanford’s charter forbade the sale of any of its eight thousand acres in perpetuity, only professors and administrators could buy houses in the faculty ghetto—and only houses. To the land on which the houses were built—Stanford land—they were given a fifty-one-year lease, a policy that has led to what Theresa Johnston aptly termed the Stanford inheritance quandary, since it effectively bars homeowners from leaving their houses to their children, and that provided the jumping-off point for my novel “The Body of Jonah Boyd.”

My parents were the house’s third owners. We owed to their predecessors the fire pit that had been dug as a swimming pool but repurposed during the Depression, and the koi pond in which the koi kept dying, and the orchard of guava and persimmon trees where, as a small child, I played barefoot, sometimes stepping on bees. All told, it was an idyllic place to grow up, adults kept assuring me, the very threshold of a future that promised to be progressively governed, spiritually fulfilling, and technologically mind-blowing—which may be why, as I hit puberty, my intellectual and emotional compass began to point ever more intently East, or “back East,” as Californians say, since, for us, the East signified regression, retrogression, withdrawal into a stodgy and mildewed past. Yet this was precisely what I wanted. I wanted the stodgy and mildewed past. “Haunted” is the word that Malcolm Harris uses to describe Palo Alto, in “Palo Alto: A History of California, Capitalism, and the World,” his welcome and necessary new book—and it’s exactly right. To grow up in Palo Alto is to grow up amid obsolete visions of the future (“Management in the 1980’s”), unsettling relics of the past, marvellous dead boys. It is to grow up haunted.

Of course, if you keep travelling west to east, you end up back where you started. In 1992, in the wake of my mother’s death and my father’s remarriage, he called to tell me that he had decided to sell the house in which I’d grown up. By then, I was living in Italy, the third stop in an eastward journey that had already taken me to New Haven and New York. My brother was in Montreal. Only my sister remained close enough to home to suffer any real pangs of loss when our father, forbidden by Stanford to leave his own house to his own daughter, sold it instead to Joe Bankman and Barbara Fried, married law professors. That same year, the elder of the Bankman-Frieds’ two sons was born. His name was Sam.

I met the Bankman-Frieds once, in 2015. “Houses have no loyalty,” Geoff Dyer writes, in “Out of Sheer Rage,” a sentiment that echoed in my mind as Joe and Barbara, in shorts and T-shirts, took me on a tour of the rooms in which I had grown up and that, after nearly forty years, I barely recognized. Both of them struck me as intellectually restless and professionally ambitious in a way that reminded me of the adults I had known as a child—my parents’ friends and my friends’ parents. In addition to teaching at the law school, Joe was getting a doctoral degree in psychology, and Barbara had started a second career as a fiction writer. (The previous year, I had published one of her stories in the literary journal that I edit. A few years on, she would help to found the Democratic fund-raising organization Mind the Gap.) My memory of the hour or so that I spent with the Bankman-Frieds is tinged with an unease of which even now I have trouble locating the source. Possibly, it was an intimation of Palo Alto’s hauntedness, but one that seemed to emanate more from the future than the past—as if the multibillion-dollar failure of FTX, which Sam Bankman-Fried would not co-found for another four years, and as a result of which he would be placed under house arrest in his family home (my family home), were already exerting a proleptic influence, as if his fall were foreordained. Probably it was just the disquiet you experience when your childhood quarters take on the patina of new inhabitants and reveal the truth that they were never really yours.

The legend of Stanford is the legend of a marvellous boy. On March 13, 1884, Leland Stanford, Jr., Leland and Jane Elizabeth Lathrop Stanford’s only son, died of typhoid in Florence, two months shy of his sixteenth birthday. Demolished, his parents decided to memorialize him with a university, and in so doing unleashed upon the land they owned south of San Francisco the ghost of the tall, handsome, white boy genius who wanders its porticoes to this very day. True, Leland, Jr., himself died before his potential could be tapped, but that didn’t mean there weren’t plenty of other tall, handsome, white boy geniuses for Stanford to foster—an ethos that led Lewis Terman, who introduced the Stanford-Binet I.Q. test, to undertake the famous “genius study.” Using his own test as a measure, he winnowed out from California’s population of schoolchildren those who scored higher than 135—they were known colloquially as the Termites—and set about monitoring their intellectual progress. As Harris observes in his book, Terman’s belief “that the adult’s potential was always already observable in the child” effectively defined “potential” as a marketable commodity in its own right, and initiated a Stanford version of the drama of the gifted child.

“The children of California shall be our children,” Leland Stanford told his wife when they decided to found the university. The next question—a contentious one, as it turned out—was what the university was supposed to do with these children. For her part, Jane Stanford hoped to cultivate what she called the “soul germ” in her students. She also wanted to make psychical research part of the Stanford curriculum, much to the chagrin of the university’s first president, David Starr Jordan, whose vision of Future Stanford was as a training ground for the cadre of (tall, handsome, white, male) geniuses into whose hands its legacy—and money—could be safely passed. The conflict came to a head in 1905, when Jane, at a moment when Jordan was trying to scrape together the funds needed to pay his faculty what he felt they deserved, allocated five thousand dollars to bring no less a star of psychical research than William James to Palo Alto. But then Jane died of strychnine poisoning. At last unfettered, he diverted the psychical research money to psychology studies and went full steam ahead with his plan for a technocratic Stanford, leaving its appendix, Palo Alto, to absorb the soul germ, which flourished in its soil.

The Palo Alto of my youth was a far stranger and more remarkable place than I gave it credit for being. On California Avenue, there were head shops and herbal-medicine shops and an old-fashioned pharmacy with Clairol boxes and comic-book racks. There was the Fine Arts Theatre with its Art Deco façade. There was Sheik’s, the Indian restaurant where you sat on metal chairs exactly like the ones at my elementary school and ate off paper plates. Other streets offered other wonders: Plowshare Books, on University Avenue; East West Books and the legendary Kepler’s, on El Camino Real; both World’s Indoor Records and Chimera Books and Music were situated in the grid of streets that made up downtown Palo Alto. (With the exception of East West and Kepler’s, all these places are long gone.) At the Stanford Coffee House, my guitar teacher, Linda Waterfall (her real name), performed on Friday nights. Transcendental meditation, Gestalt therapy, and E.S.T. (Erhard Seminars Training) were at the apex of their popularity in the Bay Area, as was IAMathon, a sort of junior version of E.S.T. that my chemistry teacher suggested I join in order to alleviate my test anxiety. (Test anxiety! The middle school I’d attended was named after Terman. In such an atmosphere, how could one not have test anxiety?)

At the Printers Inc. bookstore, where I worked in the summer of 1979, the biggest sections were Computer Science and New Age, with Poetry coming in a close third. This coupling of hard science and soft theology wasn’t anything new. On the contrary, it dated back at least to the early years of the twentieth century, when the Irish poet John Varian moved to Palo Alto with his wife, Agnes. Ardent theosophists, and part of the Dublin literary circle in whose center W. B. Yeats stood, the Varians belonged to the Temple of the People, a theosophist community with headquarters in Halcyon, near Pismo Beach, and a thriving Palo Alto base. They had three sons, two of whom, Russell and Sigurd, would go on to develop the klystron tube and subsequently found Varian Associates, one of Palo Alto’s first tech firms. (As Harris notes, it was in Halcyon, just inland from the Oceano dunes, that the Varians did their initial work on the klystron—further evidence of the extent to which technological and New Age endeavors, which Jordan regarded as inimical, were becoming elsewhere in California ever more entwined.) Every weekday, I biked past the Varian headquarters on my way to school. A good friend of my sister’s lived in Ladera, a neighborhood that had begun life in the mid-nineteen-forties as a housing coöperative organized along Halcyonic lines. Sigurd Varian and the novelist Wallace Stegner were among its early members. The coöperative failed, and today a house in Ladera costs upward of three million dollars.

Meanwhile, just a few miles from our school, Stanford’s famous linear accelerator cut a crude two-mile-long diagonal across the grassy pasturelands. Down its narrow length, Nobel laureates, many of them émigrés, tossed atoms like bowling balls—which led to conjecture about the spate of weird cancers in our neighborhood, my mother being but one of its many victims. I went to school with the daughter of one of these Nobel laureates. Like my mother, the Nobel laureate’s wife shopped at the health-food store on California Avenue, the owners of which, like so many Palo Altans, were middle-aged hippies and refugees of another sort. Haight-Ashbury and its drug scene, forty minutes’ distance by car, was the place they had fled.

As for me, I was a literary kid in a town full of engineers, an uncoördinated kid in a town full of athletes, a gay kid in a town where the existence of gay people was rarely acknowledged despite San Francisco’s proximity. “You’ll come back in the end,” one of my co-workers at Printers Inc. (I think her name was Ellie), told me, when she learned I was headed for Yale in the fall. “They all come back in the end.” Ellie was her own best example. After a twenty-year career as a book editor in New York, she had at last reached the point when she could take the freezing, dirty, brutishly industrialized East no longer and fled home. (I wonder if she guessed how thrilling I found her descriptions of those New York winters, how ardently I coveted her career as a book editor!) Whereas Ellie saw Palo Alto as that uncommon place where the reasoning mind and the undernourished soul could sustain each other, I looked upon Palo Alto with the same admixture of enmity, injury, and contempt that many of Willa Cather’s young heroes exhibit toward the Nebraska hamlets of their childhoods. Yet Palo Alto was no Nebraska hamlet. It was an intellectual and technological hub. Far harder to ignore than how I saw Palo Alto was how Palo Alto saw itself: as a cradle of enlightenment, a last refuge of liberalism and peace of mind in a world descending into madness.

As a child of Palo Alto, I found Harris’s “Palo Alto” alternately blindsiding, nerve-racking, tendentious, illuminating, and revelatory. Triple exclamation points, and skull and crossbones—doodles to which I rarely resort—pepper the margins of my copy, many of the thin if plentiful pages of which are now bled through with highlighter ink. Harris’s essential argument is that Palo Alto was the crucible in which most of the ills of the American twentieth and twenty-first centuries were stirred into being—an argument that obliges him to jump all over California, capitalism, and the world, only sometimes alighting on the town that is his story’s ostensible point of origin. If Palo Alto’s diverse progeny—including James Franco, Joan Baez, the Grateful Dead, and the Donnas—receives scant or no mention in the book, it’s because, for Harris, Palo Alto really isn’t Palo Alto. Rather, it’s the existential starting point and terminus, and sometimes both, for the various big “historical tracks” (note the railroad metaphor) to which the book’s in-your-face subtitle alludes. As Harris explains early on, the story he’s telling isn’t that certain bad men did bad things in California but that “the series of plagues visited upon California in the second half of the nineteenth century took the form of men, and we can see the character of the tendencies that shaped the state (and in turn, the world) reflected in the men seized by them.” Nor did plagues cease to take the form of men as the nineteenth century gave way to the twentieth, and Stanford’s dishonor roll grew to include, along with David Starr Jordan and Lewis Terman, such dubious figures as the psychologist Philip Zimbardo, whose much vaunted Stanford Prison Experiment Harris exposes as a government-funded exercise in childish sadism, and the physicist William Shockley, Jr., whose 1945 paper “On the Economics of Atomic Bombing” argues that, with the atom bomb, in Harris’s words, “500, maybe 600 man-months” might be “destroyed for every one spent.”

“People aren’t puppets,” Harris writes in a moment of relative calm, “and to pull a person is to create the conditions for rebellion. Maybe we’re more like butterflies, pinned live and wriggling onto history’s collage.” If we are, it’s the collage, not the butterflies, that captivates Harris’s interest and keeps the book racing for more than six hundred pages that sometimes verge on the doctrinaire—Harris’s portrayal of such famous Bay Area leftists as Malcolm X and the Stanford English professor turned revolutionary H. Bruce Franklin are an especially broad brush—or succumb to the Silicon Valley appetite for Big Talk. (“Silicon Valley leaders sat on top of this world system like a cherry on a sundae, insulated from the melting foundation by a rich tower of cream,” Harris writes.) Despite my occasional wincing, however, I couldn’t stop reading. For better or worse (better, I think), “Palo Alto” eschews the personal touch in favor of the ideological gut punch. By the end of the book, Harris has mounted a largely persuasive and extremely damning argument that Jordan’s Stanford—the Stanford that hired my father—is built on a landfill of systemic racism and profiteering.

Of course, an occupational hazard for any writer who tries to use the past to explain the present is that the present is a moving target. This is especially the case in Silicon Valley, where time moves faster every day and which, as a result, has managed, in the relatively short period since the end of “Palo Alto,” to gin up a whole new array of scandals on which I’d love to get Harris’s take: the Elizabeth Holmes trial; the rise of ChatGPT; the failure of Silicon Valley Bank; and, perhaps most significant for me personally, the spectacular fall of Sam Bankman-Fried—the subject, in the immediate wake of his arrest, of a New York Times article titled “The Parents in the Middle of FTX’s Collapse.” Bankman-Fried, I read, as I sped through the article; then Bankman; then Fried; then the penny dropped. The house in which the “fallen crypto king” was being held on a two-hundred-and-fifty-million-dollar bond, pending trial, was the house in which I grew up.

According to Teddy Schleifer, a journalist who interviewed him in person, Bankman-Fried has an “activity room” containing two chess sets, two gaming monitors, and a lot of Amazon packages. Aside from his parents, his principal companion is Sandor, the German shepherd who has recently joined the family. (Supposedly, Sandor is trained to attack at the “utterance of a secret word,” a detail that has led more than one journalist to note that in Hungarian “Sandor” means “defender of men.”) When Schleifer arrives for the interview, Bankman-Fried offers him “something to drink as if we were there for a playdate,” and says that his home confinement “doesn’t feel like being bored during a vacation.” It’s worse than that, more “antsy and frustrating and stressful. And a lot of trying to find anything I can do, to the extent that there is anything.” And so Bankman-Fried orders in French fries. He reads articles about his case. He plays a video game called Storybook Brawl—“but not with other people,” Schleifer writes, “partially out of fear that someone on the platform would recognize his handle or his voice.” It might be a bizarre sequel to Zimbardo’s infamous prison experiment, except that in this case there are no guards. His prison is his childhood.

To grow up in Stanford is to be a son of Stanford in a way that no mere graduate can ever know. Bankman-Fried is a son of Stanford if there ever was one, as am I. And what are sons of Stanford taught? That if we should get into trouble, even real bad trouble, we can rest assured that our parents will bail us out, which is tantamount to resting assured that Stanford will bail us out, since Stanford has taken our parents to its heart and feeds money regularly into their bank accounts and owns the land on which they live. This faith in the certitude of protection, if not unique to the Stanford nation-state, is, I am convinced, one of its most essential aspects. And it has never been more amply demonstrated than in the case of the Bankman-Frieds, who used their house to secure their son’s bond. This is Stanford’s real inheritance quandary—not the question of who gets to keep its houses but the question of to what extent Stanford, as an institution, is responsible when its marvellous boys fail to apprehend reality and commit crimes.

From time to time, I find myself wondering what Ellie, my former co-worker at Printers Inc., would have made of all this. Before the bookshop closed, in 2001, I returned there a number of times, sometimes to give readings. I must have had ample opportunity to tell her she was wrong—that I hadn’t come back, that I’d never come back—but I didn’t. Why? Because somewhere in the recesses of my memory, I continue, even now, to cherish the lost Palo Alto of my childhood, and to harbor a secret and futile longing to live once again in a town I’ve been priced out of.

In the course of the eighteen years I spent there, I must have bicycled every inch of its territory, always ending back at the house, our house, the Bankman-Fried house. In the living room, under a window that looks onto the driveway, there is a built-in storage recess disguised as a window seat. To access it, you simply remove the cushion that covers the bench and open the hinged top. As I told Barbara and Joe when I visited them, my mother kept our Christmas-tree ornaments there. (Although we were Jews, we always had a Christmas tree.) “But what do you mean?” she asked. “Where did you keep them?”

“Here,” I said, pointing to the window seat.

She looked confused, as if I were trying to trick her.

“May I?” I asked, and showed her the recess—empty, wood-panelled, smelling faintly of camphor.

“I never knew,” she said.

Houses may have no loyalties, but they can keep secrets. ♦