Californian Ideology

The Myth of the Free Market
Track 5

Yet, almost every major technological advance of the last two hundred years has taken place with the aid of large amounts of public money and under a good deal of government influence. The technologies of both the computer and the Net were invented with the aid of massive state subsidies. For example, the first Difference Engine project received a British Government grant of £17,470 - a small fortune in 1834. From Colossus to EDVAC, from flight simulators to virtual reality, the development of computing has depended at key moments on public research handouts or fat contracts with public agencies. The IBM corporation built the first programmable digital computer only after it was requested to do so by the US Defense Department during the Korean War. The result of a lack of state intervention meant that Nazi Germany lost the opportunity to build the first electronic computer in the late '30s when the Wehrmacht refused to fund Konrad Zuze, who had pioneered the use of binary code, stored programs and electronic logic gates.

One of the weirdest things about the Californian Ideology is that the West Coast itself is a creation of massive state intervention. Government dollars were used to build the irrigation systems, highways, schools, universities and other infrastructural projects which make the good life possible. On top of these public subsidies, the West Coast hi-tech industrial complex has been feasting off the fattest pork barrel in history for decades. The US government has poured billions of tax dollars into buying planes, missiles, electronics and nuclear bombs from Californian companies. Americans have always had state planning, but they prefer to call it the defence budget. All of this public funding has had an enormously beneficial - albeit unacknowledged and uncosted - effect on the subsequent development of Silicon Valley and other hi-tech industries. Entrepreneurs often have an inflated sense of their own 'creative act of will' in developing new ideas and give little recognition to the contributions made by either the state or their own labour force. However, all technological progress is cumulative - it depends on the results of a collective historical process and must be counted, at least in part, as a collective achievement. Hence, as in every other industrialised country, American entrepreneurs have in fact relied on public money and state intervention to nurture and develop their industries. When Japanese companies threatened to take over the American microchip market, the libertarian computer capitalists of California had no ideological qualms about joining a state-sponsored cartel organised by the state to fight off the invaders from the East!

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