Skip to main content

(hyperlinked version available at http://bit.ly/...)

On Monday, Bloomberg News estimated that Mark Zuckerberg, Facebook's 27-year-old founder, will be worth about $21 billion based on his company's forthcoming initial public offering. Although he won't qualify (yet) for a slot among the planet's richest 20 people in the Bloomberg Billionaires Index, Zuckerberg will still enjoy iconic status as an entrepreneur of mythic proportions. Indeed, the Wall Street Journal credited Facebook with creating "a new way of living," and hailed the company—thought to be worth $100 billion—as a "prototypical American success story, complete with technological brilliance and a fair amount of drama." Bill Keller of the New York Times similarly "marveled" at Mark Zuckerberg's "imagination and industry."

But does Zuckerberg deserve all this money? To what degree does his shrewd business idea—rather than the conditions that allowed it to happen—“deserve” credit for creating this enormous bounty? Some obvious questions: Where would he be without the Internet? Or the computer? Or all the many other publicly financed technologies that made Facebook possible? Certainly, he “deserves” something, but how do we gain perspective on the bounty created, on the one hand, by public investment; and on the other, by smart entrepreneurs who run off with the lion’s share of the benefits of such investments?

Take the Internet itself: The first large-scale computer network, the ARPANET, was launched in the late 1960s by the Department of Defense. Between the mid-1980s and the mid-1990s the National Science Foundation spent $200 million to build and operate a network of regional supercomputing hubs called the NSFNET. Connected to the ARPANET, this network established Internet access for nearly all U.S. universities, making it a civilian network in all but name. The rest was history.

Much else of Silicon Valley's enormous wealth also originates from taxpayer investment. Indeed, the Mark Zuckerbergs of the world might still be working with vacuum tubes and punch cards were it not for critical research and technology programs created or financed by the federal government after World War II which led to semiconductors, solid-state electronic devices, integrated circuits and computers.

Even more powerful, but less often realized, is the role of socially created knowledge in general—including the long, long historical development that produced advanced mathematics, modern chemistry, physics, metallurgy and the many specialized fields that over the last century have led to the technologies and information systems that are the precondition of today’s computer and Internet realities. Mark Zuckerberg and an equally intelligent individual working 30 years ago might have the same human capital and might work with the same commitment, risk and intelligence. But the individual working 30 years ago simply did not have the fruits of society’s general, slowly built "stock of knowledge" to be able to develop and market a social-networking platform.

The popular, conventional view of technology is one in which progress is viewed as a sequence of extraordinary contributions by "great men" (occasionally "great women") and their heroic innovations. But historians of technology have carefully delineated the incremental and cumulative realities of how most technologies actually develop. In general, a specific field of knowledge builds up slowly through diverse contributions over time until—at a particular moment when enough has been established—the next so-called "breakthrough" becomes all but inevitable.

Often, many intelligent people reach the same point at virtually the same time, for the simple reason that they all are working from the same developing information and research base. The next step commonly becomes obvious (or if not obvious, very likely to be taken within a few months or years). We tend to give credit (and often a vast fortune!) to the person who gets there first—or rather, who gets the first public attention, since often the "real" first person may not be as good at public relations as the one who jumps to the front of the line and claims credit.

Thus we remember Alexander Graham Bell as the inventor of the telephone even though, among others, Elisha Gray and Antonio Meucci got there at the same time or even before him. Both Newton and Leibniz developed versions of the calculus at roughly the same time. If Bill Gates hadn’t "invented" the MS-DOS operating system, someone else would have invented a similar system—and, in fact, Gary Kildall did. Few recall that Campus Network, the social Web site of Columbia University student Adam Goldberg, predated Zuckerberg's Facebook, and in many ways was more sophisticated. Other forgotten innovations include the precursor to Siri, the latest iPhone's conversational personal assistant, CALO (Cognitive Agent that Learns and Organizes), which was developed by a California company called SRI International with a five-year, multimillion-dollar Pentagon grant.

At a broader level, "nearly 90 percent...of current GDP was contributed by innovation carried out since 1870," in the estimate of leading economist William Baumol. He points out that even "the steam engine, the railroad, and many other inventions of an earlier era still add to today’s GDP." Nobel Prize-winning economist Robert Solow has calculated that nearly 90 percent of the growth in productivity in the first half of the 20th century can only be attributed to "technical change in the broadest sense," while the supply of labor and capital—what workers and employers contribute—appeared almost incidental to this massive technological "residual." It is clear that before anyone is a "talented" entrepreneur or a "menial" laborer, or anything in between, most of the economic gains that get distributed to individuals in a given year or period are derived from technological and other contributions inherited from the society of the past, not created by them in the present.

Put another way, the current technological contributions that produce huge rewards for the fortunate few are a mere pebble placed atop a Gibraltar of historically received science and technology that makes the modern additions possible—a  mountain of knowledge often paid for by the public.

An obvious question arises from these facts: if most of what we have today is attributable to advances we inherit in common, why, specifically, should this gift of our collective history not more generously and broadly benefit all members of society? Today’s distributive realities are hard to ignore: Mark Zuckerberg is already within the highest echelon of the wealthiest 400 Americans, who collectively own more wealth than the bottom 60 percent of the country combined.

Current elites, William Gates Sr. points out, disproportionately reap the harvest of what is inherently a collective investment; he urges that their estates be taxed accordingly. The late Herbert Simon, winner of the 1978 Nobel Prize in economics, similarly proposed that this sort of "patrimony" be subject to large-order taxation. Particularly appropriate uses might be to support educational and research institutions that generate and pass on knowledge at all levels; to offer tuition relief; to expand opportunities for college education; and to provide much more generous underpinnings for low- and moderate-income citizens.

Gar Alperovitz, author of America Beyond Capitalism, is Lionel R. Bauman Professor of Political Economy at the University of Maryland and co-founder of the Democracy Collaborative. Connect with him on Twitter or Facebook.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  You can call (0+ / 0-)

    Zuckerberg one of the winners in a Capitalistic society, along with the oil/gas companies, Congress, the health industry and banks.

    You really want to win the game of Capitalism because if you don’t your real life will suffer.  It is painful to be broke.

    It really isn’t a game the 99% can win.  It is now a game of 'How long you can last?'

    I don't care how much they earn, but I do care they don't leave enough for the rest of us to have a decent life.  

    They seem to want to terrorize us.

    •  Are you feeling terrorized (1+ / 0-)
      Recommended by:
      lcj98

      by Mark Zuckerberg?

      •  To be honest (0+ / 0-)

        I think Facebook is a terrible place.  I signed up thinking I would get a pen name.  I didn't and not only that I mispelled my name on purpose when signing up to Facebook.  Now that mispelled name has popped up all over.  This tells me that he shares my info.

        Also it hooks into my other programs somehow.

        They send your name to others asking them to join on your facebook as if you are doing the asking, when you are not.

        Some of my family are posting on there and I tried to give it a shot because of that.  There is no reason we couldn't blog with our friends and family and use pen names.

        I have friends and in laws who are republican and I don't dare say anything politcal because they are on there, too.

        I ended up cancelling my subscription.  

        Zuckerberg is making his money from advertisement on Facebook.  He is making it honestly, but when you get down to it, every dime he makes from advertisement means another dime we pay for the same advertised goods.  

        Mark is green and doesn't seem to have any respect for privacy.  

      •  One important (0+ / 0-)

        thing that I left off is that it is dangerous.

        People put their birthdays and pictures of their babies.  Since they use their real names, it doesn't take much to figure out where they live.   I mean you can look them up on anywho.

        It seems it could be a great place for pedophiles and thieves.

        •  There are willing victims on there, (0+ / 0-)

          but they don't know they are.

          It could be a great place for pedophiles to learn things you would never want them to know like everything about your babies and children.  It could also be a good place for identity theft.

          I have never minded giving my real name when signing up and even my address, then using a pen name.  

          In this era it is dangerous when you have mentally ill people who hate Democrats and other people to let them know anything about you.  

          I would not have said this 3 years ago, but there is a lot of evil out there that we should protect ourselves from.  Facebook needs a privacy policy.

          The least Zuckerberg can do is put a warning about how dangerous it is to put your info online and also let people use pen names.

          People could still locate old friends the same way that an adopted child gets in touch with their real parents.  

  •  In the words of Clint Eastwood... (1+ / 0-)
    Recommended by:
    SquirrelWhisperer
    Little Bill Daggett: I don't deserve this... to die like this. I was building a house.

    Will Munny: Deserve's got nothin' to do with it.
    [aims gun]

    Little Bill Daggett: I'll see you in hell, William Munny.

    Will Munny: Yeah.
    [fires]

    I presume the theory of "deserves" is all about making the case that someone else (the government) deserves it even more. What a crock of shit.
    •  Calm down there, old fellah. We're just talking (1+ / 0-)
      Recommended by:
      Liberaltarian

      about a fair tax system.  Of course you could try arguing that the present one is perfect.

      Where are we, now that we need us most?

      by Frank Knarf on Tue Mar 13, 2012 at 01:24:35 PM PDT

      [ Parent ]

    •  What a great argument! (1+ / 0-)
      Recommended by:
      Liberaltarian

      Not.

      Mark Zuckerberg did nothing that warrants giving him control over that amount of resources. I agree with the diarist that most of the people we allow to control vast amounts of resources do not deserve those resources. They could not have achieved what they did without the rest of us, and those that went before. If you feel differently, then make a case. You may think you don't need to, that your case is obvious and doesn't need to be stated, but you would be wrong about that.

      We need to revive that "windfall profits" tax we used to have, because some folks, like the Zuck, feel perfectly comfortable leaching off the rest of us and not giving back.

  •  Yeah, just TRY to take that money from their (4+ / 0-)

    grubby little hands.  They are busily working on legislation (via our congress critters) to keep even more of their money.  They want us to have none and they have all.  That is the only distribution they want to hear about.

  •  Great book": The Self-Made Myth, by Brian Miller (1+ / 0-)
    Recommended by:
    Liberaltarian

    and Mike Lapham, with a forward by Bill Gates, Sr.  They work for United for a Fair Economy and Responsible Wealth.

    I'm reading it now.  It details how rich people didn't get that way on their own.  A lot of the book is interviews with the rich saying that luck and public infrastructure played a large role in their doing well.

  •  Of Course He Doesn't Deserve It. (1+ / 0-)
    Recommended by:
    Liberaltarian

    No one does.

    How I long for the return of the 94% top marginal tax rate.

    6/24/05: Charlie the Tuna Creator Dies En lieu of flowers, please bring mayonnaise, chopped celery and paprika.

    by LunkHead on Tue Mar 13, 2012 at 02:21:34 PM PDT

  •  the key point to me is the rich (0+ / 0-)

    need to pay their fair share of taxes.  "Fair share" includes helping to pay for all those things the diarist references that made those riches possible.

    Scientific Materialism refuted here

    by wilderness voice on Tue Mar 13, 2012 at 02:30:53 PM PDT

  •  Some things are just luck (0+ / 0-)

    and his was. He helped put together a site and managed to be the leader of a site that went viral.

  •  Profits should go to the users (0+ / 0-)

    as they're the ones who actually made Facebook worthwhile (and profitable by looking at/clicking ads).

    Join the fight for student power on campus: ForStudentPower.org

    by Liberaltarian on Wed Mar 14, 2012 at 07:59:41 AM PDT

    •  Al Gore (0+ / 0-)

      as a senator pushed to have an information highway.  Before we had to spend about $8 an hour to the phone companies to use our computers, plus we had to pay an ISP.  He made using the phone lines free for computers.

      The taxpayers and posters have made it a great place to go.  Where would Zuckerberg go without the computers that have been created by developers and their enablers?

      I don't care how much people earn, but those who take so much money from the economy need to pay it back in the form of taxes to make our country whole again.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site