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A public policy blog from AEI
America’s super-successful technology firms got that way thanks, in part, to government. Just not the way some on the right choose to acknowledge. No internet, no Big Tech. And the internet has its roots in the Defense Department-funded, packet-switching network known as ARPANET.
The military also funded the modern internet’s backbone, the TCP/IP protocol. As Vint Cerf, internet pioneer and co-inventor of that communication protocol, told CNET back in 2012, “The US government, including ARPA, NSF, DOE, NASA, among others absolutely facilitated, underwrote, and pioneered the development of the Internet.”
And then the private sector brought it to the masses and commercialized it. Thus today the race among Amazon, Apple, Facebook, Google, and Microsoft to become the first trillion-dollar company in terms of market value. So, yeah, in that way the government provided foundational support to what became the American tech industry.
But that is not the argument being made by some of the nationalist populists who are trying to turn Trumpopulism into a coherent political philosophy. Apparently part of that effort is joining with progressive populists in attacking these companies. One example is a recent piece published by American Greatness, “Congress is starting to take on Big Tech,” an action the author, Mytheos Holt, approves.
And why not? Big Tech is just a government-financed cronyist cabal, according to Holt. From his piece:
As most of those who follow the world of Big Tech already know, much of the dominance by the so-called FAANG (Facebook, Amazon, Apple, Netflix, and Google) can be traced not to pure Darwinian economic advantage, but often to government help. Google alone, for example, draws over $600 billion in government subsidies.
Much of the dominance? Of course this is ridiculous. Google doesn’t draw over $600 billion in government subsidies, either state of federal. The article Holt links to actually finds the company receives “$630 million in government subsidies . . . for things like property taxes and training reimbursements.”
What’s more, this is a company that has generated some $60 billion in net profits over the past five years on some $400 billion in revenue. So I think it’s safe to say those subsidies were not critical to the company’s tremendous success. Any statistic suggesting the contrary should have been a neon red flag.
But that oversight — hey, things happen — is just one part of the odd “You didn’t build that” argument about some of the most successful capitalist enterprises in history. They are great and inspirational stories. And they are highly competitive and innovative companies that act as if they were one bad decision from losing that competition. So may I suggest a summer reading list: “Steve Jobs“ by Walter Isaacson, “The One Device: The Secret History of the iPhone” by Brian Merchant, “In The Plex: How Google Thinks, Works, and Shapes Our Lives” by Steven Levy, and two great books by Brad Stone: “The Everything Store: Jeff Bezos and the Age of Amazon” and “The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World.“
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