An Idea Whose Time Has Come and Gone and Come
By John C. Dvorak

All that’s missing from the hi-tech scene is creative exploitation. Exploitation the way they used to do it in the old days — with a company town.

Some people are already beginning to think in these terms. One company is planning a hi-tech community in Japan. This is to be a pre-planned silicon valley replete with malls, fancy transportation, a big airport and everything you’d supposedly want. Instead of a one-company town, though, this thing would be a valley of companies. This will never work as well as the one company town. The one company town can really put the screws to the hapless employees. Lock them in. Force them to be happy.

Historically company towns have a bad reputation. Some years ago, when Steve Jobs was still with Apple, he advocated something called Apple-town or Appleland — a company town to be built near Gilroy or in some other dusty agricultural site where land was cheap and there was plenty of room to expand. When this concept was first mentioned I ridiculed it, but now I’m beginning to think that a few screwball company towns might be a great remedy to declining American productivity. If nothing else they make for interesting sociology.

The industrial revolution bred the company town as it bred large corporations and the two grew up together. The technology revolution has not continued this tradition. IBM has bred a few ersatz company towns in upstate New York and around the country. But IBM doesn’t own the housing. Route 128 in Massachusetts and Silicon Valley have naturally evolved in a new style: areas of concentrated singular hi-tech activity. But there is no real company town where a company (or even a group of companies) actually owns the town. The closest you get is Apple Computer in Cupertino. But why doesn’t a big company do like they used to do make a town from scratch or buy one. Heck, even Kim Basinger bought a town in Georgia. Why can’t Microsoft or Dell Computers do the same?

A town owned by, say, Compaq, could build fancy homes for its employees and keep them inexpensive. It would own the police department so nobody important would get in trouble. It could make sure that people exercised properly and ate healthy food. It would own the cable company and could show training films on one channel and reruns of the board of directors meeting on another channel. Of course the normal fare would be available too (without the annoying IBM commercials). The company would have its own school system and train the employees of the future with special classes. It would be one heck of a community. There’s be no crime. Utopian. Some companies in Silicon Valley have the rudiments of this idea with on-site gyms and restaurants and special facilities designed to keep employees at the office longer. Many even call their sites “campuses.” But unlike a campus there is no housing, no campus police, no student council. The University model is a good one for corporations to adopt in the form of a company town. “Look, see, just like college. No big deal.”

With hi-tech companies growing massive, monstrous even, there is pressure to find good employees who work cheap and stay put. The attractive security provided by the benefits of a company-controlled life have always worked in the past to achieve these goals. We can expect them to be used again.

The downside is that this concept will always evolve into the form of a slave labor camp. In the beginning only utopian idealism clouds reality. Soon the evil bean-counters come in and see potential profit points surrounding a captive audience. Soon the cheap housing and inexpensive services become “competitive.” New corporate directors arrive and they lack the vision of the founders and pretty soon demands are made on the hapless employees. Within no time the company town is a shambles. The businesses in a company town (if they are not ALL owned by the ruling company) are so intertwined that once the main company rethinks its role everything comes to a screeching halt. Within a few years the company town turns into a funky half dead burg with interesting old buildings and the pallor of a ghost town. If the town doesn’t just go to pot it becomes a curiosity, perhaps a tourist trap. These dead company towns are all over the country. There are half a dozen in the vicinity of the San Francisco Bay Area: Crockett and Port Costa come to mind. There are countless in New England. The Midwest is spotted with them: Austin, Minnesota; Topeka, Kansas. Watching this process is both entertaining and educational. Promises of lifetime employment and job security are broken overnight by the large corporations who eventually determine that they aren’t really very good at being governments after all.

Pretty soon the whole notion of a company town is discredited. They eventually fade from view as a viable concept until some writer brings up the idea and some utopian ego-driven CEO figures he or she can do it right — this time, for sure. Whatever company tries it will make a tough competitor for those early years when a company town pays off in profits. You can be sure somebody will try it. I’ll be watching.

(Article Originally appeared in PC/Computing 1992.)




  1. yankinwaoz says:

    Univ. California Santa Barbara is finishing up a large development of staff housing. That way the University can retain the professors and researchers they want who could normally not afford the $1m+ housing prices, or the $3k/mo+ rent.

    I suspect that other universities in high price areas are doing the same.

  2. BubbaRay says:

    …broken overnight by the large corporations who eventually determine that they aren’t really very good at being governments after all.

    And this is the major reason no one has tried it lately, I’ll wager. Who wants a mayor that’s a corporate employee? Or a fire dept., utilities? And so on.

  3. Jägermeister says:

    The one company town can really put the screws to the hapless employees. Lock them in. Force them to be happy.

    And a couple of companies will just create an oligopoly. Sort of how the Internet market is in North America. They charge you an arm and a leg and you get a crappy service in return.

    I’m beginning to think that a few screwball company towns might be a great remedy to declining American productivity.

    Productivity isn’t the problem… salaries and bonuses are. And I’m not talking about the people at the lower levels. Cut the fat and the US would be fine.

    Thanks John… quite a 1984ish piece. Corporations have way too much power as it is. A workplace is a workplace.

  4. Bazz says:

    This already exists. Its called Redmond.

  5. McCullough says:

    Well there is iPod City, China.

    http://arstechnica.com/old/content/2006/06/7039.ars

    Apple, thinking slavery differently.

  6. RTaylor says:

    My Grandfather worked at a company mill, was forced to buy groceries from the company commissary, and rent a company house. The company owned the sheriff and police. You couldn’t save because of low wages, and if you made trouble the police would beat the crap out of you and throw you and the whole family out of town. This situation is what inspired Unions. Never has power been granted to humans that wasn’t eventually abused.

  7. audion says:

    #5 has a point, kinda.

    Google, too.

    They set up a shop with lots of shiny little perks. All the trendy HFCS fortified water you can guzzle. Good coffee. A cafe with better food than all the surrounding chain places and you have a recipe for getting their somewhat underpaid, hypermotivated, twentysomethings to stay put. Throw in the occasional team-building ski trip and you have the recipe for a workforce that doesn’t ever quite notice that they are suddenly working 60 or 80 hours a week, and don’t mind 7 a.m. meetings.

    Who needs a freakin’ company store? Maybe just a decent futon under the desk…

    And while you are at it kids, make sure you cut out all the stuff that will rile the Chinese government. Vitamin Water’s in the fridge…

  8. Palooka says:

    The Department of Defense already does this. Look at Army forts, Navy or Air Force base. You have a commissary, base housing, and the Military Police. The base commander is the mayor. In most areas a soldier can only make ends meet by shopping and living on base. Here the government is like a corporation.

  9. Jägermeister says:

    #8 – audion – Who needs a freakin’ company store? Maybe just a decent futon under the desk…

    A friend of mine just came back from a year in China. He told me that Huawei (you know, the company who copies and slightly modifies western telecom equipment and then resell them under their name) provides their employees with sleeping bags, so they can take a nap whenever they feel for. Just a trick to get them to put in 60-80 hours per week.

  10. John Paradox says:

    Revising the song for the Silicon Age:

    Sixteen cores, what do you get?
    Another CPU, and you’re still in debt….

    J/P=?

  11. Traaxx says:

    I suppose Dvorak hasn’t been keeping track of what is happening in India and China, were company towns aren’t that unusual.

    I can see more of a ‘Homeless Camp’ for the efficient safety and care of the Homeless. Then since Euthanasia is already legal in states like Oregon it’s just one more line to cross to deciding who lives and who dies, and then we would just cremate those Euthanized homeless, heck they could even screen eveyone and weed out the one’s genetically made up to cause trouble, you know those that can think on their own.

    Whatever…………
    Traaxx


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