One of the frustrations when discussing economics with a liberal is simply getting them to except the basic tenets of reality. What I so dismissively refer to as frustration, is really the urge to bang my forehead as hard as I can into a brick wall while simultaneously placing my wet and salted fingers into the nearest electric socket. Often, the debate will take one of a very few turns, my favorite among them is what does a government actually produce.
One of the basic differences between the Austrian and Keynesian schools of thought is which is more important to a nation’s wealth, its aggregate spending or its total productivity. I agree with the former group, the Austrians, who will tell us that wealth is not dependent on what is spent, but on what a society actually creates, meaning its productivity. Believe it or not, I am often able to get my adversaries to accept this premise, but the breakdown occurs when we discuss what is created by governments.
Governments you see, produce nothing. That is not the same as saying that they accomplish nothing, the two statements are different. Governments accomplish certain very limited things, and to date I see no way to take those things from their fat and bloated hands. National defense, rule of law, maintenance of our currency, provision of a set of rules to promote transparency and prevent fraud are included in that very limited set of responsibilities. Out side of that, the government has shown a unique ability to screw up everything else it touches. Every thing else the government involves itself in is paid for only by its ability to destroy wealth, which means to forcibly confiscate the fruits of the labor of its citizens. Those roads and bridges offered up as this wonderful infrastructure that was magically created by our government, was only built due to the government’s ability to hire private construction companies and to pay them off with wealth confiscated from private citizens, who they then denigrate as being ungrateful members of the 1% class of, “rich,” people.
Sooner or later during this turn of our debate, I’ll get what the liberal often feels is the ultimate atomic bomb of debate lobbed in my direction. Government is responsible for creating the internet. What will follow this is a smug look of ultimate debate ending victory. I will answer with a quick, “baloney,” which provokes an odd combination of surprise, incredulous disbelief, arrogance, and doubt. For a single solitary moment, I’ll get to glimpse into the eyes of someone who has just realized, and for the first time, that their atomic bomb may have turned out to be a fizzle.
If your are interested in how the internet really started, then click the link I provided at the beginning of this sentence. It will take you to a Wall Street Journal article that gives an accurate description of how private enterprise was able to create the internet, only after our government mishandled the technology for the better part of 4 decades. The internet came about because once the government took itself out of the way of private enterprise, property rights, risk/reward ratios, ingenuity, an entrepreneurial spirit, and every other component of the free market system was able to follow Adam Smith’s invisible hand to the greatest creation of wealth ever seen in human history.
It is true that DARPA began networking computers, and did so well ahead of the private sector. It is also true however that private enterprise began networking computers independently of the government’s efforts. In 1970, Gene Amdahl of Sunnyvale, California, began selling his Amdahl 370 computers to private businesses located near college campuses across the country that had top tier systems engineering departments. He was able to show other companies who wanted to use computers for their own businesses how they could save a fortune by buying smaller mini computer systems of their own, rather than a main frame, and use a remote connection to the larger main frame computer for the bulk of their computing work. He was a visionary, and with a bunch of these mini hubs of computing power spotted throughout the country. One example was Compuserv in Columbus, Ohio. He sold Compuserv 3 Amdahl 370′s, and then sold Univax PDP 11′s to AT&T, Bank One, Battelle, Ross Labs, Worthington Industries, etc. What we had thanks to Gene Amdahl’s vision was a growing network of private enterprises connected to a central web of computing power, capable of talking not only with the hubs, but with each other. It took no more than a decade for the individual hubs to connect to each other, and for DARPA to begin using the larger system as well.
Yes, certain aspects of formatting and programming were accomplished by the Department of Defense, but their contributions languished at the hands of governmental ineffectiveness for a very long time. The internet was developed in spite of the U.S. government, and not as a result of it. This particular piece of misinformation bothers me for a few reasons. One, while it is so egregiously wrong, it is repeated back to me as though it came from the Gospel itself. Two, it completely disregards the accomplishment of free enterprise and those people who choose to embrace all that is possible within the free market system. Gene Amdahl brought the internet to people capable of affording a mini frame computer, mostly large businesses, and Steve Jobs brought the internet to private home users, or folks who could afford a micro computer. Three, and perhaps most important, it gives credit for the single greatest wealth creation in human history to the very entity which did everything possible to prevent that creation from occurring in the first place. Believing that this was a government creation is in fact dangerous thinking.