The early 1970s were turbulent years for the USA. In August 1971 the USA abandoned the gold standard, leading to today's world of floating exchange rates. The Watergate scandal erupted in 1972 and forced US president Richard Nixon to resign in 1974. In October 1973, Arab nations of the Organization of Petroleum Exporting Countries (OPEC) imposed an oil embargo against the USA in protest for the USA's support of Israel. In a car-centric country that had become totally dependent on oil, this wreaked havoc. In April 1975 the last remaining US troops fled Vietnam amid apocalyptic scenes. Inflation kept rising until it hit 14% in 1980.

In the midst of all the chaos, California was an island of optimism. Silicon Valley was moving past the microchip and into the world of personal computers: Atari was founded in 1972 and Apple was founded in 1976. In 1969 the physicist Frank Oppenheimer (the younger brother of Robert Oppenheimer of atomic-bomb fame) established a museum of science and technology, the Exploratorium, inside Bernard Maybeck's abandoned Palace of Fine Arts. North of San Francisco, in Napa Valley, Robert Mondavi had opened in 1966 the first major winery of the region since Prohibition and was revolutionizing California winemaking. The ports of California, especially Los Angeles, were booming thanks to the shipping container (pioneered by Malcolm McLean in 1956 in New York). Pacific trade was expanding rapidly thanks to the economic boom of Japan and then of the Asian Tigers (Taiwan, Singapore, South Korea, etc). Hollywood too was booming again after having suffered the competition of television. A number of films revitalized Hollywood (nicknamed "Tinseltown" since 1975): Warner Bros' "Bonnie and Clyde" (1967), United Artists' "The Graduate" (1967), Paramount's "The Godfather" (1972) and "Nashville" (1975), Columbia's "Taxi Driver" (1976), Paramount's "Days of Heaven" (1978), United Artists' "Manhattan" (1979), and so on. Hollywood movies became international phenomena that could influence tastes and fashions far away from California. Hits became super-hits, or, better, blockbusters, like: Universal's "Jaws" (1975), Twentieth Century-Fox's "Star Wars" (1977), Paramount's "Raiders of the Lost Ark" (1981), etc.

At the same time, television was moving away from the family sitcom and unconventional TV shows were hugely successful, watched by all generations: "M*A*S*H" (1972-83), whose final episode remained the most-watched television broadcast until 2010, "Happy Days" (1974-84), "Wonder Woman" (1975-79), "Charlie's Angels" (1976-81), "The Love Boat" (1977–87), "Dallas" (1978–91), "Three's Company" (1976–84), "The Dukes of Hazzard" (1979–85), "Night Court" (1984–92), "Married with Children" (1987–97), "The Simpsons" (1989), "Baywatch" (1989–2001), etc.

Los Angeles was two worlds in one: a polluted and congested metropolis torn by racial tensions, and a rich city inhabited by an eccentric and somewhat decadent elite. In 1971 Hugh Hefner, the founder of Playboy magazine in 1953 in Chicago, moved to a Hollywood mansion which came to be known as "Playboy Mansion", famous for lavish parties attended not only by celebrities but also by aspiring models (sometimes naked ones).

The energy was spilling over into both the urban landscape and the arts. Cementing Los Angeles' reputation for innovative architecture, Welton Becket designed the Cinerama Dome Theater in 1963 on Sunset Blvd (hosted inside a geodesic dome) and the Performing Arts Center (1964), Albert Martin's son designed the twin ARCO Plaza towers on Bunker Hill (1972), and Charles Luckman designed the United California Bank on Wilshire Boulevard (1973), the tallest building west of the Mississippi and the tallest in Los Angeles until 1990. International architects didn't look down on L.A. anymore: Century City’s Century Plaza Towers (1975) were designed by Minoru Yamasaki, the architect of New York's World Trade Center, the Crystal Cathedral (1980) was designed by Philip Johnson for televangelist Robert Schuller and the Museum of Contemporary Art (1986) was designed by Arata Isozaki.

The status of Malibu as a celebrity paradise was enhanced in the 1970s. Harry Gesner, an avid surfer, designed the "Wave House" (1963) for fellow surfers Gerry and Glenn Cooper, and "Sandcastle" for himself (1974). John Lautner designed the house of real-estate investor Daniel Stevens (1968) and the house of Joann and Gilbert Segel (1979). The architect Ed Niles, who grew up in a Los Angeles orphanage and went on to teach at University of Southern California from 1964, built famous Malibu residences including his own villa (in 1971) and the Dorn and Carla Schmidt House (in 1978, purchased in 1986 by TV celebrity Johnny Carson).

Three landmarks of San Francisco's skyline appeared: Pietro Belluschi's 52-story Bank of America Center (1969), the tallest building west of the Mississippi River for four years, Pierluigi Nervi's St Mary's Cathedral (1971) and William Pereira's Transamerica Pyramid (1973), the new tallest building of the city, built on the site of the demolished Montgomery Block. John Portman designed the Hyatt Regency in San Francisco (1973), with the world’s largest hotel lobby, the sprawling Embarcadero Center also in San Francisco (1971), and the Westin Bonaventure in Los Angeles (1977).

Homosexuals started moving to the "Castro" district of San Francisco in large numbers around 1970, the year when the first "Gay Pride Parade" was held. In 1977 Harvey Milk became the first openly gay politician elected to a major post (city supervisor). Starting from 1982, a new disease, AIDS, devastated the gay community of San Francisco (and soon the whole world).

Stanford biologist Paul Ehrlich (who had joined the university in 1959) published the bestseller "The Population Bomb" (1968), which, based on the "baby boom" of the USA, the skyrocketing populations of starving countries like India and China and the century-old ideas of Thomas Malthus, predicted coming global famines that would kill hundreds of millions of people. While it missed the mark, it galvanized environmental activism in California and beyond.

The environmental movement became an important force in California's politics after an oil spill in 1969 off the coast of Santa Barbara. San Francisco's peace activist John McConnell had the idea of an yearly "Earth Day" that was first celebrated in 1970 and spread all over the world.

There were many phenomena left behind by the hippy revolution. Jim Baker, a teenage construction worker during the Great Depression, a marine in World War II, a gym owner in Ohio, moved to Los Angeles in 1951 and somehow decided to open an organic vegetarian restaurant (an oddity at the time) on Sunset Blvd which became popular with the local celebrities. In 1970 his third marriage was officiated by the high priestess of the Builders of the Adytum cult and in 1971 he spent a few months in India, where Kundalini Yoga inspired him to become a spiritual leader. In 1973 he assumed the name of Father Yod and established a utopian occult commune, the Source Family, renting for it the historical Harry Chandler mansion (now owned by Harry's heirs Norman and Dorothy Chandler), and forming a psychedelic-rock band, Yo Ho Wha 13. Baker moved the commune to Hawaii, renamed himself YaHoWha (a name for "God" derived from the Hebrew "YHWH") and prompty died in an accident.

The guru of psychedelics Terrence McKenna, who had enrolled at UC Berkeley in 1965 and didn't graduate until 1975 because he went to study shamanism and "magic mushrooms" (natural psychedelics) in the Amazon rainforest, made a living growing magic mushrooms in Berkeley and lecturing about the benefits of psychedelics. His book "The Invisible Landscape" (1975) originated the belief the end of the Maya calendar in December 2012 heralded some kind of apocalypse; and his book "Food of the Gods" (1992) originated the belief that the cognitive leap from primitive hominids to Homo Sapiens was caused by magic mushrooms.

Jack Kornfield (born in a military base on the same day as the first atomic bomb test at Alamogordo) studied Buddhist meditation in Thailand and Myanmar for a few years, then in 1975 co-founded near Boston the Insight Meditation Society and then moved to the Bay Area where in 1988 purchased land one hour north of San Francisco and established the Spirit Rock meditation center which became popular with the San Francisco and Silicon Valley crowd.

The guru of Vipassana meditation, Satya Narayana Goenka, lectured in Massachusetts and California in 1980-81, and helped to establish the first Vipassana center in Massachusetts in 1982. It took a decade but in 1991 a second Vipassana center was born, Dhamma Mahavana, located in North Fork in the Sierra Nevada foothills, near the geographical center of California.

Los Angeles had been a conservative, White-dominated city since it had become part of the USA in 1850. But the long reign of mayor Sam Yorty, from 1961 to 1973, had been marked by trouble: the Watts riots in 1965, a corruption scandal in 1967, the assassination of Robert Kennedy in 1968, an oil spill in 1969 off the coast of Santa Barbara, the Charles Manson cult in 1969, bombs by the Chicano Liberation Front in 1970 and 1971, the police killing of journalist Ruben Salazar during an antiwar march in 1970, the San Fernando earthquake in 1971. And so in 1973 Los Angeles elected its first Black mayor, Tom Bradley, who ended up lasting 20 years, by far the longest serving mayor of the city.

Just when the militant wing of the protest movement seemed to have fizzled out, a major case of domestic terrorism captured the nation's attention, last but not least because it involved the heiress to the Hearst fortune, William Randolph Hearst's 19-year-old granddaughter Patty Hearst. Still a student at UC Berkeley, she was kidnapped from her apartment in February 1974 by the Symbionese Liberation Army, a far-left guerrilla group formed by Black fugitive Donald DeFreeze, Chicano activist Joe Remiro, and several young women (Nancy Ling, Patricia Soltysik, Angela Atwood and Camilla Hall). This was the time of the Brigate Rosse (Red Brigades) in Italy and of the Rote Armee Fraktion (aka Baader–Meinhof Group) in Germany. The shocking turn of events was that Hearst, the victim, joined the gang and carried out robberies with them. All the leaders were arrested or killed in a famous shootout in Los Angeles in May 1974, and Hearst was finally arrested in September 1975.

Then in November 1978, San Francisco's mayor George Moscone and the city supervisor Harvey Milk were shot dead inside San Francisco City Hall by a former supervisor.

In 1981 Reagan was elected president of the USA and throughout his eight-year tenure he pushed for a huge increases in military spending, which helped to revive California's defense and aerospace industries as well as NASA. Reagan was succeeded as California governor by Jerry Brown (1975-83), an emblem of the liberal Left. In a sense, the two represented the two souls of California: the business soul and the intellectual soul. They somehow merged in the unorthodox technological creativity of Silicon Valley and in the narrative and stylistic revolution of the "New Hollywood" generation of filmmakers.

California now competed with the Boston area for the title of main technological hub of the country. Besides the leadership in semiconductors, California produced the first Artificial Intelligence startups (like Stanford-spinoff Intellicorp, 1980), the first major computer with a graphical user interface (Apple's Macintosh, 1984), the first virtual reality startup (Jaron Lanier's VPL Research, 1985), the first digital camera (Dycam, 1990), the first genetically-engineered food (Calgene's "Flavr Savr" tomato, 1992), etc.

Increasingly, California was a top scientific center. Its scientists won several Nobel Prizes, notably at Caltech (seven in 1960s, six in the 1970s, three in the 1980s, etc) and at UC Berkeley (four in the 1950s and in the 1960s, three in the 1980s, etc).

Some of the most important scientific theories of the era came out of California. In 1964 Murray Gell-Mann at Caltech conceived the "quarks", fundamental particles that make up protons, and in 1980 Alan Guth Stanford proposed his "inflationary theory" to explain the accelerating expansion of the universe.

John McCarthy, the man who in 1955 had coined the term "Artificial Intelligence" and in 1963 had moved to Stanford, turned Stanford into a hotbed of symbolic A.I. Ed Feigenbaum, who had studied at Carnegie Mellon University with A.I. pioneers Allen Newell and Herbert Simon, joined Stanford in 1965 and developed the first "expert system" (an application of symbolic A.I.), named "Dendral" (1965), in collaboration with biologist Joshua Lederberg. In 1969 Cordell Green developed the first program capable of generating programs. Meanwhile, in 1969 the team of Nils Nilsson at the nearby Stanford Research Institute built a mobile robot called "Shakey". In 1972 Bruce Buchanan developed another expert system, named "Mycin". Terry Winograd, who had just written at MIT a program capable of rudimentary natural language ("Shrdlu"), moved to Stanford in 1973. That laboratory went on to graduate students like Doug Lenat (1976), who created Automated Mathematician (AM), a program capable of making mathematical discoveries, and Hans Moravec (1980), who built another pioneering robot, the "Stanford Cart" (Moravec would later become a famous futurist for the 1988 book "Mind Children"). The advent of this new discipline intrigued philosophers, but the reactions in California were mostly skeptical: Hubert Dreyfus at RAND mocked the field in his essay "Alchemy and Artificial Intelligence" (1965), and John Searle argued that "intelligent" machines could not possibly be intelligent in his essay "Minds, Brains, and Programs" (1980), in which he presented his famous "Chinese Room" thought experiment.

UC San Diego was at the vanguard of Cognitive Psychology and naturally drifted into Artificial Intelligence. The future star of the field, Geoffrey Hinton, was at UC San Diego as a visiting scholar from 1978 to 1980. San Diego's approach to Artificial Intelligence was inspired by the structure of the brain, where intelligence arises from connections among neurons. This "connectionist" school, competing with the symbolic school of the Bay Area, achieved its first major successes: in 1982 John Hopfield at CalTech described a new kind of artificial neural networks that were capable of learning; in 1983 Geoffrey Hinton and Terry Sejnowski presented their neural network called "Boltzmann Machine"; in 1986 David Rumelhart and Geoffrey Hinton perfected the backpropagation algorithm, the fundamental algorithm of neural networks; and in 1986 the physicist Paul Smolensky developed the "Restricted Boltzmann Machine".

The first wave of futurists predated the term "Silicon Valley". Founded in 1968 in Connecticut by former RAND researchers including Paul Baran, the Institute For The Future moved to Menlo Park in 1970 and became a vehicle for Jacques Vallee's vision of computer networks as instruments of group communication (Vallee being a French-born NASA astronomer and UFOlogist).

And the Bay Area remained a center of the counterculture, whose manifestations shifted with technology: Mark Pauline's Survival Research Laboratories (1978), Stewart Brand's Whole Earth Lectronic Link or "WELL" (1985), John Law's "Cacophony Society" (1986), Law's and Kevin Evans' "Burning Man Festival" (1990), etc.

However, Los Angeles had already become even more cosmopolitan: by the mid-1980s LA boasted the largest populations of Mexicans, Koreans, Japanese, Armenians, Iranians, Filipinos and Vietnamese in the USA (and more Mexicans than any city in Mexico except Ciudad de Mexico).

In 1980 Los Angeles passed Chicago as the second-largest city in the nation with just three million inhabitants. California's population kept increasing rapidly: from less than 24 million in 1980 to more than 30 million in 1990.

In the 1980s Los Angeles was swept by gang violence, largely funded by the booming market for an illicit drug called "crack" (a variant of cocaine), which South Central's druglord Ricky Ross introduced in 1983. The competition to sell crack escalated the warfare among gangs. Street gangs had taken hold in the poorest neighborhoods where families were often broken, unemployment was high and dropping out of school was normal. Two Black gangs were ruling South Central: the "Bloods" and the "Crips" (both founded in 1968). The Crips (blue clothing) had been formed by high-school students Stanley Williams (arrested in 1979) and Raymond Washington (killed in 1979). The Bloods (red clothing) had been formed by high-school students Sylvester Scott and Benson Owens. Their bloody war had started in 1971. Leveraging the ability of gangs to distribute his drugs, Ross built a business empire with thousands of couriers, dealers and sidekicks. The Hispanic gangs Mexican Mafia and Nuestra Familia (both formed in prisons) had started their war in 1965. Two new gangs emerged in the 1980s: Mara Salvatrucha, formed by Salvadoran immigrants, and the 18th Street Gang, the first major multi-ethnic gang. The difference between terrorists and gangs was that the gangs had no ideology: members fought for no principle other than loyalty to the gang and territory. At the peak of the violence, the police seemed to be powerless. The police launched the anti-gang "Operation Hammer" in 1987 which resulted in the arrest of thousands of suspected gang members. It didn't work: there were about one thousand gang-related killings in 1992. In 1988 Greg Boyle, the Jesuit pastor of the poorest Catholic parish in Los Angeles (Boyle Heights), created "Jobs for a Future", a program to provide gang members with job training and employment opportunities. "Reentry" programs like this one were more effective than the scorched-earth police tactics. Other factors led to a decline in violence: a booming economy that created millions of jobs, the saturation of the market for crack, and, last but not least, the perception that crack had killed thousands of young men and women.