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The Venture Capitalist Who Tried to Break Up California Now Wants to Break Up Unions

According to billionaire Tim Draper, unions are responsible for “fewer jobs” and “more homeless.”

Venture capitalist Tim Draper,
Venture capitalist Tim Draper, founder of Draper Associates, in 2018

In October, California’s secretary of state signaled that proponents of a new anti-union initiative could start soliciting signatures to place it on the ballot in 2022. Were it to succeed, the measure would functionally dismantle public-sector unions in California. Taking the form of an amendment to the state constitution, the initiative “eliminates collective bargaining for teachers, police officers, nurses, firefighters, and other public employees,” according to the attorney general’s summary. It would put California’s State Personnel Board in charge of dictating wages and benefits for the over two million public employees in the state, about half of whom were union members as of last year.

In order to appear on the ballot, the measure’s supporters need to drum up about one million signatures before the spring, which would appear to be a Herculean task, considering that about one in 10 California residents works in the sector the measure would affect. That said, the man backing it is the venture capitalist Tim Draper, and the last time he made an absurd plan to challenge the fundamentals of California government, he spent over $5 million—including half a million just on political consultants—and only lost his campaign to break California into three new states when the state Supreme Court intervened.

Of all the “eccentric” men who have consolidated their influence in California by investing in businesses that sell personal data or surveil citizens on behalf of the cops, Draper is among the most convinced of the tech industry’s potential to “disrupt” how government is run. A cryptocurrency enthusiast worth an estimated $1.5 billion, he has long favored the euphemistic “small government” ideal beloved by technocrats who believe regulation is a jealous trick politicians play to keep guys like them in line. As he once told Business Insider, anti-wealth bias is a terrible thing: “The bitter taste of envy brings us all down. I like to celebrate the wealth and success of great heroes.” He then listed a handful of men, among them Elon Musk, Mark Zuckerberg, and Sergey Brin. These sympathies have continued to guide Draper, who in addition to investing in the ill-fated blood-testing startup Theranos, continued to describe its founder Elizabeth Holmes as a “great icon” who had been “bullied into submission” well after she was charged with fraud.

The progeny of a long line of venture capitalists, a decade ago Draper was best known for “inventing” viral marketing and fundraising for George W. Bush. In the 2000s, he commissioned a member of the Eagles to write an ode to entrepreneurship called “RiskMaster,” which Draper sang, fists pumping, at various keynote events. But because we live in a country where extreme wealth generates extreme political hubris, his interests in classic rock and two-party politics were eventually eclipsed by more specific and localized concerns—and, notably, projects for which there were fewer individual donation caps. 

In 2000, he spent $20 million on a failed measure to support school vouchers, and a few years later, he introduced “Six Californias,” a ballot measure that would chop his home state into six separate governments, which he told credulous interviewers was intended to challenge the “monopoly” the existing government had. “If our government focused on providing the kinds of service to its constituents that Google provides its employees, I wouldn’t have to initiate Six Californias,” he told one outlet at the time. The measure, which would have separated lower-income from higher-income districts and thus would only have given a specific population universal access to a Google-style bus, never garnered enough signatures to appear. 

Not to be deterred by such matters as lack of voter support, Draper downgraded his proposal and introduced “Cal 3,” which would have divided California into three states, in 2017. As a measure to change a statute rather than the state’s constitution, the proposal required fewer signatures to make it on the ballot. After Draper sunk an estimated $1 million into his campaign, it was struck down by the Supreme Court on the basis that reconfiguring the state’s boundaries really did kind of deserve a constitutional change. “This is not the way democracies are supposed to work,” Draper said upon the destruction of his multistate dream. “This kind of corruption is what happens in third-world countries.”

His latest venture to ban public-sector collective bargaining conjures similar enemies, blaming organized labor for unemployment and homelessness, along with more general—and unsubstantiated—corruption in the statehouse and the courts. “Union bosses have run our state in the shadows for about 50 years,” he wrote recently on Medium (of course). The post also suggested union donations to politicians were responsible for an uneven democratic process. “Government unions are anathema to being a free country,” he wrote. More likely, his opposition to organized labor comes out of less noble and far more routine anti-labor concerns. This is the man, after all, who tried and failed to get the Common Sense Party, a short-lived tech-industry reaction to Bernie Sanders’s presidential campaign, off the ground. (“One party is the puppet of public unions and wants government to run everything,” he said at the time.) He’s also the kind of guy who, in March 2020, said that “governments have it wrong” and “the fear is worse than the virus,” suggesting more people would die from a “crashing economy” than from Covid-19. As with other Libertarians in the state, it might be relevant to Draper’s interests that unions have the power to represent people who preferred not to risk illness and death by consenting to an early return to in-person work.

Earlier this month, shortly after accusing unions of contributing to homelessness, Draper was interviewed in The Wall Street Journal about his new $230 million fund, which he said would conform to the broader trend of socially responsible investments with environmental, social, and good governance goals. But as the billionaire explained, there wouldn’t be any specific criteria for these investments outside of his own sense of what was fair and just: “When you start putting regulations down,” he said, “everything gets ruined.” Asked how his prior investments had contributed to environmental and social justice, Draper gave a handy rundown of how tech has already saved the world. Skype, he said, reduced the use of paper. SpaceX “gives us a hedge against the planet.” Robinhood, the investment app, is “for the good of every man to try to be an investor.” And, naturally, about one-third of future investments would be in crypto. “We think governance needs to go through a major transition,” he said, likely in reference to his belief that most everything the government does can be done on the blockchain (a transference of power that would certainly be hindered by the flesh-and-blood people who work many of those jobs).

It’s not a new feature of American democracy that the fantastically wealthy would try to override voters to push through their weird fantasies, or that powerful investors would retroactively claim to have made all their wealth in the service of greater humanity. It’s just that, as we’ve seen, California ballot initiatives can do terrible things with enough money, and, well, Draper’s money can go pretty far.