NSmolenskiFan on Nostr: Protip: U.S. companies are not successful because the government invests in them. ...

Protip: U.S. companies are not successful because the government invests in them. They are successful because they make products and services people want, and they have a large (interstate) market to grow in.

(Of course, all of this can change. Many American leaders unfortunately share Varoufakis’s view that the state should direct the deployment of capital.)

The union of bank and state is perhaps the main problem in need of fundamental reform in the United States.

And yet even despite this corruption, the obstacles to technology innovation and commercial success remain lower in America than in most places on Earth. That is precious and worth defending.

There is no doubt that the U.S. government has been itself a site of fundamental technology innovation (through some of the projects you mentioned) and is one of the largest customers in any market (unfortunately, and growing). But the U.S. government is not the primary allocator of capital; neither does it commercialize technologies. If a company cannot successfully commercialize, it will eventually die—unless there is genuine corruption in play, which I think both you and I agree is a bad thing.

Finally, this merits saying explicitly: TCP/IP, the protocol for which the DARPA project laid the groundwork, is not “the internet.” The internet is a complex protocol stack that has garnered contributions, yes, from some government-employed individuals, but also from a vast network of mostly volunteers in civil society around the world. Innovation is often done precisely by those people who have nothing to gain materially or in terms of political power; innovators tend to be idealists motivated by solving hard problems or making the world a better place. Similarly—again, this cannot be stressed enough—Microsoft, Google, Apple, Meta—these companies are not “the internet.” They have produced commercial products that make use of fundamental technologies in ways that add value that people are willing to pay for. But they can and should be disrupted by companies that create greater value. By putting its thumb on the scale through onerous regulation (I.e. GDPR, the AI Act), the state in fact ensures that these wealthy incumbents will be the only players who can afford to enter the marketplace.

In short, the best thing the state can do is stay out of the way of both innovators and commercializers. The success of the software industry in America is largely a material testimony to the fact that, at least until recently, the U.S. government largely has. Perhaps the highest political priority of our current era is ensuring that remains the case. Growth is the reason that any of us have hope of a future that is not riven by zero-sum conflict, of warlords fighting over the scraps of innovation from a prior era. This requires both the idealistic innovators motivated by mission and the talented entrepreneurs motivated by profit. If the state wants to fund some fundamental (i.e. not immediately commercializable) research, that is great—but it is merely one actor among many, and not even the most significant one, at that.