back to article Dear US gov: Stay the hell out of Silicon Valley

It will come as no surprise to the largely libertarian technology industry that big government has done little to advance the interests of Silicon Valley. But you might raise your eyebrows at the degree to which the US government is hurting the very people it tries to help. As a general rule, Silicon Valley has been happiest …


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  1. Michael 17


    I've worked in silicon valley for more than 20 years. The opinion that silicon valley doesn't benefit from government programs would be laughable if it wasn't so annoyingly persistent. Sadly it's easy to find tech people in the valley who hold this view. And yet a huge fraction of the valley's economy derives from government funded research, both corporate and spinning out of universities. Not to mention direct government contracts and mandates. And defense work. And DARPA directed development efforts. And spin offs from government labs. In my career, I've been either a early stage hire or founder of four tech startups. Not one has been impeded by federal or state government policy, and more than one has benefited from government research and export promotion policies. Even tax policy has generally been encouraging rather than detrimental, ranging from R&D credits to end user tax incentives.

    1. Naughtyhorse

      The clue is in the article...

      classing paying taxes as 'government interference'

      that means republican, you know the party that wants small government, just small enough to fit in your bedroom.

      Trolls are pretty much a given on this site (thats fine) but having them write articles is taking the piss somewhat.

      entice it back into it's box and fedex it back to fox news please.

    2. Richard Taylor 2
      Thumb Up


      Quite agree (but just three - fourth about to start)

    3. Anonymous Coward
      Anonymous Coward

      Your right! Absolutely

      Especially when it comes to spying, privacy invasion, and the monetary system.

      While I won't junk your post (you are a tech after all and entitled to your opinion) I would like to at least point out, that the US government's number one export is war. And that it's unsustainable, and the signs of this unsustainability are now beginning to show, all one need do is tune out of corporate controlled media and tune in to information like zerohedge, or market-ticker and you will quickly understand the end game is approaching.

      If you ever stop to think maybe the tech being developed isn't in the best interest of the public, and arguably humanity itself.

      Don't get me wrong, I am a veteran as well, while you profited off government promotions, I exposed myself to god knows what with pay you would laugh at. I know the US needs a good defense. But the problem now is defense has become offense, while the constitution has become intermittent. In every angle, physics and electronics are now abused, and not against terrorists anymore, now it's the American people who are the targets.

      Maybe you can be the next one with your four start-ups who comes up with the next killer app

      like Internet ID, or one of the other soul sucking technologies that seem to be proposed by our worthless officials which crush dissent, and make the true thieves protected.

      But like I said, I didn't junk your post, because I give you respect as a fellow inventor and tech.

    4. Destroy All Monsters Silver badge
      Thumb Down

      Your tax dollars at work.

      "And yet a huge fraction of the valley's economy derives from government funded research, both corporate and spinning out of universities. Not to mention direct government contracts and mandates. And defense work. And DARPA directed development efforts. "

      Yep. Warcarp is where it's at. Money from universities is where it's at. All deficit funded.

      The only ridiculous thing, Michael17, is that you assume that the governement owns you stock and barrel. "Tax incentives". Imagine that. The wise overlord suddenly decides to not rob me! Praise be!

      Why doncha join the "tax me more" crowd in Wisconsion?

  2. JimC

    Government Initiative has exactly the opposite effect to that intended.

    Well stone me, that's never happened before. What bemuses me is that they are always so chock full of wonderful ideas and good intentions they never factor in the possibility of that happening...

  3. Aaron Em

    Since when is the Reg a libertarian soapbox?

    I mean, I can imagine it's a popular strain of nonsense among the less sensible here, but this kind of stuff still belongs in Odds & Sods with the rest of the fiction.

    1. thecakeis(not)alie

      Since when is the Reg a libertarian soapbox?

      Since quite some time ago. Not all folks at El Reg are libertarians and/or highly conservative gentlepersons, but several of them quite prominently are. Tim Worstall and Andrew Orlowski spring to mind as the blinking examples. You’ve got folk like Jane Fae or Trevor Pott who generally are pretty left of center and others scattered everywhere else.

      The difference between something like El Reg and another rag (for example Faux Moos) is that there is no pressure from the editors/owners/what-have-you to write with a given political/social/economic viewpoint. El Reg is a soapbox for whatever the authors choose to write about; so long as it’s on topic (science and technology) and doesn’t poke anyone in the eye badly enough that they send in the robot death machines.

      Frankly, I like that better than I do many of the alternatives. "Freedom of speech" means that you have to give airtime to those you disagree with as well as those who compliment your own beliefs.

      All of that said...this particular piece has ensured that Mr. Asay is planet deeply on my personal "be very careful about what you talk to this person about" list. Right next to scientologists and people holding "Palin for prez" placards.

  4. DavidR

    Great, except for one tiny detail...

    1) There was massive FUNDING by the government of numerous technology developments in Silicon Valley;

    2) the technology was and is sold to government ad its agencies;

    3) Large chunks of the Internet started as military or publically funded data networks.

    So government intervention CAN be beneficial, if only so some start-ups can enjoy the free ride on government dollars and the tax breaks that were implemented for new technology.

    or is the author not capable thinking back longer than 5 minutes?

    1. Anonymous Coward
      Anonymous Coward


      and the beltway bandits really do reside in the hills of silicon valley.

  5. Anonymous Coward

    your timing sucks

    it's friday, my day to unwind, have a few beers, and forget the week that was.

    keep the insightful thought provoking articles for a tuesday or wednesday.

    speaking about governments, show me one that subsidizes beer on the weekends to help it's citizens cope and i'll show you my ballot.

    beer coz it's the closest to the non-existent "i must be dreaming" icon.

  6. War Monger

    It isn't just tech...

    government should stay the hell out all industries. For example, consider how much farther along banking could be if it were free of big brother's intervention.

    1. Charles 9

      And wasn't it LACK of government intervention...

      ...that resulted in more than a few of the most-remembered financial disasters in recent memory? The collapse of a private bank whose name happened to spark fear that the United States itself was collapsing (known to be a factor that led to the Great Depression)? The S&L scandal of the 1980's? The collapse of banks supposedly "too big to fail" at the turn of this millennium? And IIRC, most of these failures were mainly due to moves made by the banks/institutions themselves, not by the government, who essentially had to clean up the mess they made AFTERWARDS.

      1. theSensibleGeek


        To have a sensible conversation, one must draw a distinction between regulation and intervention. Sensible, enforced regulations are not necessarily a bad thing, such as regulations that used to require banks keep a certain ratio of reserve to money lent. (a regulation, I might add, that government relaxation of has caused the various bubbles we've seen over the last 30 years). Regulations that require you to front at least half the face value of a stock when you buy at margin (instead of the 10% that was the rule before the 1929 crash) are sensible.

        These things are passive in nature and serve to protect people from abusive practices. These things are the government playing referee, keeping the game fair and making sure the playing field doesn't have whirring saw blades protruding.

        On the other hand, there is active governmental intervention, such as bailing out a bank, or an ailing car manufacturer, where the government takes a step further into not only protecting people from abuse, but trying to assume responsibility for people's success. In these examples, the government isn't the referee any more, they're a player. Refusing to allow GM to collapse, for example was one of the biggest affronts to the free market in known history. If a company is too bloated and sluggish to adapt to changing demands, they DESERVE to go under, thus making room for more innovative companies to succeed.

        The last line of your comment is particularly unnerving. "the government [...] essentially had to clean up the mess they made AFTERWARDS." The government didn't HAVE to do anything. The government found it politically expedient to do something, or at least politically risky to do nothing. The beauty of a properly functioning free market is that the government doesn't have to screw around with it all the time. When the government starts meddling, they create market inefficiencies/imbalances, resulting in issues that then require further government meddling, repeat ad nauseum. The reality is that if the government kept its nose where it belonged (refereeing, not playing), many/most of the issues we've seen in recent memory would simply have never occurred in the first place.

        We'd all be better off if the government didn't think it was their job to make people and businesses successful, and the only way that's going to happen is if people take responsibility for themselves. And therein, as they say, lies the rub.

      2. erkulas

        US is biggest in everything

        You consume most energy.

        You take out the most loans from your grandkids.

        You have the biggest free economy.

        You have by far the biggest government which is dwarfing the economy.

        Wasn't US gov. that created and now owns some the biggest banks in the world (Freddie/Fannie)? This was done by the way of gov. regulation and way before the economy collapsed. Looking at that measure only US could be called communist country.

      3. Destroy All Monsters Silver badge

        Some people's head are messed up

        "And wasn't it LACK of government intervention... "

        and other seriously wacky ideas like "I have insects crawling under my skins", "aliens fisted me yesterday" and "World Trade Center was brought down by nanothermite placed by GIULIANI".

        I think here is an -excellent_ place to start with some base-level education:

    2. Someone Else Silver badge

      Next time...

      ...don't forget the <sarcasm> tag.

  7. W. Keith Wingate
    Thumb Down

    So St. Peter is showing the newbie around heaven....

    ... which is apparently less exclusive but more segregated then you might have thought, and when he gets to the area where the (insert your favorite truth monopolist God botherers here) are he whispers, "Shhhhhh! Here's where the ___________ are and they think they're the only ones up here!"

    In that vein, I don't like bringing this up to libby's and tea partiers but... have you ever noticed how the countries which are eating our lunch (here in the US, and Europe too!) all tend to have VERY involved governments?

    Drop a few pretty small outliers here:

    and you find the likes of China, India, etc. ; not exactly full of Adam Smith friendly economists last I checked.


    Of course, the numbers are suspect, you know those left-wing Marxists at the IMF & the CIA.


    1. LaeMing

      Great point

      But dragging in poor Adam Smith is a bit harsh. Not his fault the West cherry-picked one of his works while conveniently ignoring the others (in which the need for a strong socialist-base government to under-pin the capitalism was discussed, for example).

    2. Jeff Held
      Thumb Down

      The largest it's ever been!

      The U.S. Government is as large and powerful as it has ever been - and the U.S. not exactly prospering. Go back to the pub.

    3. Anonymous Coward
      Anonymous Coward

      So you're saying isn't involved?

      They're so involved, they're bothering EVERYONE. I think they easily hold the record for toppling governments, installing puppet dictatorships and juntas, or simply starting wars for the heck of it. Feh, they'll even do it on behalf of their companies, going a very long way beyond mere gunboat assisted economic policy making. And is scoring lower on the "as it says on the tin" scale to boot.

  8. DemonX


    When the government took microsoft to court it was because they were engaged in criminal activities. Such activities do nothing for the tech industry or consumers or society. They don't benefit anyone except those participating in the crime. In the end microsoft didn't get much more than a slap on the wrist. The internet was originally developed by th government. You seem to forget that.

  9. Shane Kent
    Thumb Up

    Well put DemonX

    I upvoted your post. Especially about MS, but it was not government, it was government(s).

  10. Spongebob

    Transistor And Hewlett-Packard

    ..are creations of USG. The first by Bell Labs, the second grew in the Signal Corps (Bill Hewlett) and after that from lots of USG electronics work in aircraft, Radar and radios. All the killtech had to be tested and HP was happy to supply high-end gear for that.

    Then Dave Packard was Deputy Secretary of Defense for a few years during the Vietnam war. That surely didn't hurt in the later HP efforts to sell into the Aerospace/Defense sector. Agilent is still big in the aerospace/defense/intelligence business (directly or by selling expensive measurement devices to contractors). NASA needed HP also for quite a few things.

    HP is considered the "seed of Silicon Valley". So the Pentagon seeded Silicon Valley.

  11. Anonymous Coward

    What a load of horlicks

    In no particular order

    1) Rapid GDP growth is easy if you are in technology catch up mode i.e. China.

    2) Don't confuse hands off govt. funding (Bell Labs) with politically driven, hands on make me look good funding (Startup America / Internet Freedom Agenda)

    3) Invention != Innovation. Generally speaking Govt funding is good for invention not so hot for innovation. Private funding is essentially the opposite (HP Invent anyone lol)

    4) Politicians demand fealty from corporations and take action when they don't get it. No coincidence in the different attitude of US gov to MS since 1990 hmmm spend no money get DoJ'd, spend lots and a blind eye is turned.

    5) Smith would be turning in his grave to be called socialist - he was a liberal (as am I). But will concede there has been a huge collective brain fart by the media by equating free-markets to capitalism.

  12. chebucto

    Great article, but

    Great article, except for the fact that it offered no facts, no clear line of reasoning, and in substance nothing more than tired slogans.

    The author's assertion that the 'accidental agents of revolution' are begin tarred with the brush of imperialism because of a speech is just that - an assertion. He overestimates the importance of State Department speeches and underestimates the intelligence of foreigners. If Twitter really is a threat, foreign governments will treat it that way; if it isn't, they won't [case in point: Iran blocked Twitter during those post-election riots a year or so ago, before any grand speechifying by Clinton].

    On top of all this is the fact that promoting freedom in Middle Eastern fiefdoms was never Google or Twitter's goal in the first place; even assuming the author of TFA is right, there's still no harm to silicon valley.

    Ideologues are always annoying, and libertarians are no exception.

  13. Magellan

    Asay is right and wrong

    Right on our need to keep Federal meddling out of start ups. Yes, the Feds have been involved in Silicon Valley inventions, but for Federal benefit, not just for the sake of doing it. The best thing the Feds did for Silicon Valley in the 1970s was deregulate the telecommunications industry, which helped drive the innovation which provide a large consumer market for the Internet and mobile communications.

    Where Matt is wrong is in quoting Morozov's article. I just read this yesterday, having picked up the FP magazine in an airport. I laughed out loud at how wrong Morozov got it. Granted, this article was written in late 2010, and published in early January. But reading it on 24 January was quite entertaining. Morozov completely jumped the shark on this. Egypt was the Facebook revolution.

    I am amazed Asay would use this article as an example. It appears the U.S. government's engagement with youth group leaders (started under the Bush administration), and the drive for freedom of the Internet accomplished in Egypt what took an army to accomplish in Iraq.

  14. McBeese

    Help or get out of the way... C money goes to entrepreneurs with a track record (the club) or new entrepreneurs with established customers and revenue. There is almost no money going to first time entrepreneurs with a product that is more than a website (may include hardware) and needs money to get to market. The gov't should allocate some high-risk money to get some of these companies off the ground. If you aren't offering cash, shut up and get out of the way.

  15. Diane Miller

    "Yes, government is good for many things..."

    Why, yes, it is. Things like... umm, well, like...


    I'll get back to you on this.

    1. Anonymous Coward
      Anonymous Coward

      @diane miller

      What a wonderfully glib post. It would have been even more humorous had you changed it to 'What have the Romans ever done for us?'

      On a side note, can someone explain the difference between a libertarian and an anarchist ? Seems to me the anarchist has more social responsibility but I could be wrong.

      1. h4rm0ny

        Re: Anarchist vs. Libertarian

        AC - you asked what the difference is. In practical terms or theoretical? In terms of theory, American Libertarians sort of correspond to Anarcho-Capitalists (which themselves are often damned passionately by all the anarcho-socialists and those that are just generally defined as anarchist). However, American Libtertarianism is something of a political movement of its own and acquires the usual baggage when theory is moved into the realm of practice (or at least active demagoguery). For example, Libertarians are anti-abortion and other such things, whilst the theory of anarchism includes less such riders on. Also, at the core of anarchism is usually a level of faith in humanity - i.e. a belief that we are better able to look after each other voluntarily then by means of some government. Libertarianism seems to me to be more a case of "get off my back". I guess to sum up the subtle difference (imo), Anarchism is about "we don't need a government to self-govern" and Libertarianism is about "get the government out of my way".

        No doubt some would disagree and certainly there are some muppets who call themselves anarchist without really understanding the theory.

        1. Eddy Ito

          Re: Anarchist vs. Libertarian


          Clearly you don't know the difference between the Tea Party and Libertarians. You see the Tea Party is a faction of the Republican party. Your assertion that "Libertarians are anti-abortion and other such things" is clearly, being generous, misguided. You seem to believe that a Tea Party member and a Libertarian is merely a distinction without a difference but you couldn't be further from reality. The truth is that the Libertarian position on abortion is, hang on to your socks, government should keep their snotty noses out of people's medical choices. Notice that this doesn't stop any given Libertarian from holding a personal opinion either way, merely that it isn't within the purview of government to force either on you.

          In general, if you are looking to find the a position on anything ask yourself a simple question; who is better equipped to make decisions about you, your lifestyle, your family and your belongings? Choose one.

          A. You and government isn't needed.

          D. Government, but you get to pick from a small number of lifestyle options.

          R. Government, but you get to pick from a small number of ways to spend your money.

          L. You but government is a necessary evil to prevent others from forcing their decisions on you.


          To get back to AC's answer, the difference seems to be one of extremity. Libertarians recognize a need for government as a check against the encroachment on an individuals rights by another entity. Anarchism doesn't seem go that far and I'll assume the theory says the greedy thugs are held in check by the rest of the populous. But then I'm a libertarian muppet and not an h4rm0nious one.

    2. Michael 17

      Allow me to help out your memory

      Things government is good for:

      1. Regulating markets so they don't spin out of control.

      2. Providing infrastructure the private sector wouldn't, like highways.

      3. Funding research too speculative for private industry, like the internet.

      4. Industrial policy to promote economic growth: see South Korea, Japan, Taiwan, China.

      5. Education, both high school and university.

      6. Socialism, providing various safety nets: see Social Security, Medicare, etc.

      7. Labor laws, to prevent the capital owners from screwing the rest of us.

      It'd be easy to go on and on. The problem with the anti-government crowd is that their members keep running for political office. If you're so sure that government doesn't work, why should we trust you to run it?

      1. Eddy Ito

        Re: Allow me to help out your memory

        1. Market regulation should be to prevent coercion, fraud and collusion. If the markets were actually open, meaning without overbearing regulations designed to heighten barriers to entry, we shouldn't have to care if some "spin out of control" as others businesses will crop up to replace them that may be more stable. Acceptable risk/ reward ratios being determined by the customers rather than government. Of course that would mean institutions like banks would have to open their books for inspection but instead we have the Fed which keeps books closed because they worry if the public actually knew how bad things were there would be runs on banks on a weekly basis.

        2. The private sector would be happy to provide highways in the same way they did railroads. Unfortunately, most people would balk at having to pay a toll that actually covered the cost of maintaining the road plus a small profit. The result is the cost gets hidden in taxes and acts as a subsidy to the auto industry because folks don't realize the actual cost of driving and make less than ideal choices of vehicles as a result.

        3. You finally win one but remember who actually did the work to break up the phone monopoly and opened up the world to invent devices like the iPhone, Droid X, etc. It was MCI who did all the legwork before government woke up 8 months later. Without that the internet as we know it is much less useful and would probably be run by @&T.

        4. Environmental policy to promote breathable air: don't bother seeing South Korea, Japan, Taiwan, China.

        5. High school? Too funny. Only university is acceptable.

        6. Socialism? Really? So-so Security isn't something anyone should count on in the long run as Ponzi schemes have a way of running out. Mediocre^H^H^H^Hcare is... I think I've made my point. Oh, for future reference, citing two of the most regressive taxes US citizens are burdened with isn't a great way to make a point. You are aware only poor people pay them, no?

        7. You are really just restating #1 here aren't you? The difference is using terms like "Labor" and "us" to bring it home. Ok, let's do the old arguement; "If you don't like you're job, work somewhere else." "But there is nowhere else in this, or any other, economy!" Now can we see that regulations which have raised the barrier to entry into any given market don't help anyone, especially workers?

        We finally agree on one thing, it would be easy to go on and on. I've fixed this for you; "The problem with the pro-government crowd is that their members keep holding political office. Being that I'm so sure that government doesn't work, why should I trust it to run me?"

      2. Ted Treen
        Big Brother

        Check out the UK, then...

        1. Regulating markets so they don't spin out of control.

        Just like the last government's "light touch" regulations prevented the financial sector spinning out of control.

        2. Providing infrastructure the private sector wouldn't, like highways.

        Railtrack/Network Rail, The M6 relief route (now more accurately called a toll road), privatised prisons, attempting to privatise armed forces' training, ad infinitum, ad nauseam,

        3. Funding research too speculative for private industry, like the internet.

        They've only ever funded social engineering studies which are pre-ordained to come up with their preferred answer

        4. Industrial policy to promote economic growth: see South Korea, Japan, Taiwan, China.

        In the UK??? You gotta be kidding!

        5. Education, both high school and university.

        Secondary education in the UK is now at its lowest ever standard - and deteriorating further daily.

        6. Socialism, providing various safety nets: see Social Security, Medicare, etc.

        We have a whole class who choose Social Security asd a career path, not a safety net.

        7. Labor laws, to prevent the capital owners from screwing the rest of us.

        But no laws tp prevent the government/public sector from not just screwing us but raping us!

  16. Anonymous Coward

    Internet search, social networking, and even email [...] need to be protected from foreign control

    Well, because they bloody do!

    1. Anonymous Coward


      It's clear this is the opinion of the US gov't, I don't see why Iran, N. Korea, China, etc wouldn't feel the same way. Oh, I see, the theory must be that the US gubbies aren't foreign regardless of where someone is from... no wait... globo corp... circular logi... stra... burni... DANGER! Will Robinson! DANGER! Alien approaching!

      -- Robbie the Robot

  17. Anonymous Coward
    Anonymous Coward

    The title is too long.

    "I can't help but think there has always been more opportunity in the government’s loopholes than in their legislation."

    If that is so, then that is a rather damning verdict on the general quality of lawmaking. Not that it should surprise anyone or anything, Mark Twain wasn't very positive on the characters meddling there either, but that doesn't change that it gives rise to calls to finally get rid of the lawmakery and get some competent people in there.

    That lawmakers are generally light on understanding anything but concocting the most unreadable verbiage is also well-known. What defies belief is how much they fail to work around the deficits by twisting the laws such that their reliance on deep technical understanding is minimised. But given that they thrive on meddling anyway, phat chance that'll happen.

    The best "help" you can get from such a government is a sincere drive to reduce complexity and remove as many rules and laws as possible (but no more). But that also goes right against the grain of the sort of personality that inevitably is attracted to "government".

    This is not to say that I agree with the premise of the article, which actually I don't. The problem there is that after a bunch of technologists, even the starry eyed "do no evil"-saying kind, but all the others too down to the blue tarnished in a redmond gutter kind, grow too big to stay sane, they start to think themselves more important than anyone else and start to lose touch with, even become harmful to the society they're rooted in. And moderating that is exactly what government ought to be for.

    But in the Capitalist America, big business already bought the government. Why they haven't already reorganised the largely useless senate and congress middle management away and let the lobbyists vote directly for the laws they're writing already anyway as a cost-cutting measure they someday will have to explain to their shareholders; before the hostile takeover comes.

  18. Eddy Ito

    "Dear US gov"

    "Stay the hell out of Silicon Valley"

    I wholeheartedly concur but the author might be disappointed by my meaning. I assume the real meaning is 'Stay the hell out but keep the money flowing in.' What's that? I hurt your feelings? From the SF Gate, "Tax breaks for corporations that promise to help Obama achieve that goal will be the topic du jour for Silicon Valley CEOs with whom Locke is scheduled to meet behind closed doors." How about this little tidbit from the Mercury News; "President Barack Obama, looking to gain backing from Silicon Valley for his just-released 2012 budget -- which includes generous support for research and development amid calls from congressional Republicans for deeper spending cuts -- is scheduled to meet privately with tech heavyweights Thursday evening..."

    You want to play both sides? The Valley wants the people's money but doesn't want to deal with the people's rules. I gotta say; I'm sorry pumpkin, it doesn't work that way.

  19. Anonymous Coward

    Yeah sure

    Silicon valley wants government to stay out of its business unless:

    1. defending Silicon Valley copyrights

    2. Sending people to prison for watching Youtube jail breaking videos of their poorly made


    3. Defending their right to form patent pools to eliminate any competition.

    Other than that not much new is coming from Silicon Valley or from other computer businesses.

  20. Peter Clarke 1

    Daer US gov

    stay outta Silicon Valley, we don't need your stinkin' help.

    PS thanks for the DMCA and USPO :)

  21. Doug Glass

    How about ....

    ... the US govern-ment just the the hell out of people's lives altogether. The less those crooks get into my business the more it sours.

  22. Alan Firminger


    I think Obama recognized the coming of competitive Chinese microchips, aeroplanes and power stations, as described in a higher story.

  23. Paul Hovnanian Silver badge
    Big Brother

    Government, stay out!

    Unless you've got some of that nice R&D money. Or someone tries to steal our intellectual property. Or just competes with us with low cost labor (like those darned Chinese).

    Otherwise, stay out!

  24. EWI
    Dead Vulture


    The relentless shilling around the telecoms' and Big Content's efforts to privatise/balkanise the Internet is starting to get tiresome.

  25. TheOtherHobbbes
    Dead Vulture


    did the Reg start giving shelf space to cranky poorly informed pseudo-religious rants?

    The sad thing is that US tech has become a theme park version of itself, dedicated to providing style over substance "innovation" - most of which is really just shrinking, wrapping, and advertising - while starving real invention of useful cash and talent.

    The reality is that the smart people who would have been inventing cutting-edge tech fifty years ago now have useless jobs playing with numbers for Wall St where they design the models that create financial meltdowns.

    And that's the kind of convergence of idiocy you get when you leave industrial strategy to "free" markets with the morals and attention span of a crack-addicted vampire bat.

  26. W. Keith Wingate

    @Micheal 17: Nice list!


    += putting people into space, defeating Hitler (didn't outsource that one to the highest bidder: Halliburton, Blackwater).

    I regret dragging poor Adam Smith into things since as pointed out, his "invisible hand" is certainly not representative of ALL of his work, but it is what he is best known for today and illustrates the error of the whole "markets should make all decisions" argument.

    Whether the fellow would consider himself a "socialist" whatever that neologism might have meant in his day is certainly doubtful.

    It's also doubtful that any real "socialist" would recognize China or India as being in their camp today.

    Certainly, GDP growth is hardly an absolute measure of goodness (environmentalists should perish the thought), and yes (@AC 22:23), countries starting behind the curve (China was mentioned) have an easier time of producing growth numbers than countries once frequently seen at the top.

    My point: somewhere between laissez-faire capitalism and a completely planned command economy is the sweet spot for ... any place on Earth I can imagine. Different spot probably, for different nations but certainly it's at neither extreme, and libertarians seem not to get this and are on the wrong side of history. The emerging super-powers of China & India seem to be finding their sweet spots. The US (although not Canada, interestingly), the UK, and others in Europe seem to be looking back on that invisible hand.

    The reason they can't find it is that it doesn't exist.

    1. Destroy All Monsters Silver badge
      Paris Hilton

      Nah, not really.

      "defeating Hitler (didn't outsource that one to the highest bidder: Halliburton, Blackwater)."

      It was outsourced to the Soviet Union.

  27. Anonymous Coward


    I read this article straight after the one about Godson:

    they were next to each other on elreg's main page.

    the combination made Asay's latest effort seem even more crass and superficial than usual.

  28. Throatwobbler Mangrove


    "Ever since the US Justice Department inserted itself into Microsoft's business practices, however, the tech world has been forced to invest in lobbying federal lawmakers. Just last year, Google increased such spending by 29 percent over 2009."

    1) Practically all major US corporations lobby and make or funnel political donations to protect their corporate interests, not just "the tech world". There is nothing unusual about tech firms lobbying. It's pretty remarkable that the author thinks that the whole of US tech firms can be explained in terms of one cause, one effect, one timeframe and one trend.

    2) US v Microsoft litigation began in May 1998. Google was incorporated in September 1998. Using Google as an example of how corporations have changed their political activity post-US v Microsoft is a pretty pointless exercise seeing as Google Inc didn't have any pre-US v Microsoft activity!

  29. Anonymous Coward
    Anonymous Coward

    hehe: capital gains - the scourge of entrepeneurs

    'cause that's what entrepreneurs do, buy and asset and wait for it's value to increase.

  30. PghMike


    Gee whiz, didn't the Federal government develop something called the Arpanet, which I recall some folks in the Valley managed to exploit commercially in some way or another. Face it -- the US Federal government has always contributed to the success of the Valley, and to pretend otherwise shows a great deal of ignorance.

    People weren't even allowed to use the ArpaNet --> Internet for commercial purposes until the 1990s, when the Clinton administration (guided here by Al Gore, I believe) changed the rules. Before that you had to have some connection to a DoD contract to get a computer connected to the Internet at all.

    The author's real argument is that capital gains taxes should be reduced so that pre-IPO share profits are taxed less. That's pretty much a self-serving argument, and one that's unsupported by any serious policy evidence. Back when the peak tax rates were 49%, a 28% capital gains rate looked pretty good, and today, with a peak rate of 36%, even a 20% capital gains rate would still likely provide plenty of motivation for starting companies.

    In short, this article is as moronic and ignorant as those people who tell the Federal government to stay out of Medicare. Frankly, I expect better from The Register.

  31. Anonymous Coward
    Anonymous Coward

    What's the phrase?

    Attributed to mid-West farmers - 'Give us more money and stay out of our business'?

    Silicon Valley has profited enormously from US Government spending (particularly in defence, where special exceptions can be made to benefit US suppliers).

    It's also hilarious that the richest state in the US can't balance a budget.

  32. John Smith 19 Gold badge

    US govt sets up agency to *pick* and fund "winners"

    What could go wrong with *that* strategy?

  33. Anonymous Coward
    Anonymous Coward

    Hasn't he read "1984"?

    "...he criticizes the program for being ineffectual, for being heavy on optimism and light on technical understanding, and for crushing Internet freedom even as it seeks to advance it..."

    When senior government officials claim that they want to increase our liberty, and Congress passes laws with words like "freedom" in the title... keep a firm grip on your wallet and watch out for your liberties. They were never in greater danger.

    "The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.'"

    Even though it was said by Ronald Reagan (of all people), and even though there are actually 11 words, that is nevertheless a deep truth.

    1. John Smith 19 Gold badge
      Thumb Up

      @Tom Welsh

      "When senior government officials claim that they want to increase our liberty, and Congress passes laws with words like "freedom" in the title... keep a firm grip on your wallet and watch out for your liberties. "

      You might like to add "PATRIOT" to that list as well.

  34. Anonymous Coward
    Gates Halo

    What A Crock Of Bullshit.

    The development of computers and the Internet itself was mostly funded by the Pentagon.

    All this talk about "freedom" is doublespeak right out of Orwell, no matter which side it's coming from.

    The Valley has always been about money and power, and nothing else.

  35. Jamie Kitson

    Leave the technology to technologists

    Isn't that a bit like saying "leave the banking to the bankers" or "leave the arming to the armies"?

  36. YumDogfood

    "Secret History of Silicon Valley"

    I'm a bit late here, but this insightful talk (~1hr) is worth a view.

  37. Anonymous Coward

    One need only look at the number of Silicon Valley companies

    that derived a large % of their revenues from government or military sales, especially during their formative years:

    1. Intel

    2. Cisco

    3. International Semiconductor

    4. Fairchild

    5. HP

    Are all good examples of firms that did or still have a huge impact on the development of the Valley. Sure, a lot of the outright defense contractors like Lockheed, Westinghouse Marine, Loral and ITT have slimmed down or left the valley altogether, but there is still a lot of government spending helping business in Silicon Valley.

    Hand grenade, because I think that's about the only piece of military kit that doesn't have something from the Valley in it....

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