Silicon Valley, as others have pointed out, is the result of government central planning. The government has been pumping money into computer technology since the late 19th century, and it has been fairly successful at creating an American computer industry.
Paul Graham always struck me as rather naive outside of his own personal are of expertise, and he is apparently well out of his depth here. He confuses disrupting ossified businesses with trashing things, even things that are working quite well for all parties, for the sake of trashing things. He thinks that water comes from a tap in the wall with regards to where his customers get money to buy the stuff that his innovative companies create. Like many of his ilk, he ignores the driving force of government behind so much of what we take for granted.
It is rather sad. I, like Mr. Graham, am a big fan of the LISP programming language and agree that it was quite powerful and prescient. There is a lot that anyone studying computer science can learn from it, even today. He wrote a rather good essay on dealing with venture capitalists, warning that one should wait as long as possible, build up as much of your business as you can and talk to them as late in the process as is necessary. Now he seems to have internalized their values and accepts them without question.