The Code: Silicon Valley and the Remaking of America, by Margaret O’Mara, is an extraordinarily important and highly readable book.
It examines the relationship between the U.S. government and Silicon Valley at a time when that relationship seems under great stress. We see Washington gearing up to target Big Tech for its violation of personal privacy and the widespread dissemination of hate and lies through social media. The Trump Administration bears particular animus toward Amazon because founder and CEO Jeff Bezos owns the Washington Post, which has been critical of Trump. For its part, Big Tech seems dismissive of Washington’s role in promoting technological development. Worst of all, to me, is that some in Big Tech prefer to work with the Chinese government rather than the American government. At a time when we are facing a massive technological challenge from China, Washington and leading technology companies ought to be collaborating in creating winning strategies.
O’Mara makes it clear that Silicon Valley owes its very existence to massive research and development spending by the federal government starting in World War II. She writes that the tech leaders who have become household names, from Steve Jobs to Mark Zuckerberg, “were not lone cowboys, but very talented people whose success was made possible by the work of many other people, networks, and institutions. Those included the big-government programs that political leaders of both parties critiqued so forcefully, and that many tech leaders viewed with suspicion if not downright hostility. From the Bomb to the moon shot to the backbone of the Internet and beyond, public spending fueled an explosion of scientific and technical discovery, providing the foundation for generations of start-ups to come.”
This gets at the heart of the whole ideological argument about “industrial policy,” which has essentially paralyzed the U.S. government. I argue in my book, The New Art of War: China’s Deep Strategy Inside the United States, that we Americans need to develop a technology policy or a series of policies to respond to what China is achieving. Huawei’s roll-out of 5G wireless communications technology is just one example of how the Chinese are attempting to leapfrog the United States and all other major nations with Artificial Intelligence, quantum computing and other advanced technologies. But opponents of an industrial policy have always argued that the government should not pick winners and losers and that government spending for specific technologies represents “corporate welfare.” The political firestorm over Solyndra during the Obama Administration is a case in point.
O’Mara shows that there are right ways and wrong ways for a government to support the commercialization of new ideas. She writes that U.S. government money flowed “indirectly, competitively, in ways that gave the men and women of the tech world remarkable freedom to define what the future might look like, to push the boundaries of the technologically possible, and to make money in the process. Academic scientists, not politicians and bureaucrats, spurred the funding for and shaped the design of more-powerful computers, breakthroughs in artificial intelligence, and the Internet…”
So we should do a better job of defining how the federal government can best support technological development. The Obama Administration may have been a bit too aggressive and too specific in attempting to develop the lithium ion battery field. A123 Systems, the Boston-based maker of lithium ion batteries that received large scale federal funding, ended up going bankrupt—and being sold to the Chinese. This was an example of how NOT to develop a critical technology.
There is work to be done on all fronts but Silicon Valley’s psychology looms as one major barrier. O’Mara writes that U.S. military spending has been a major source of support for Big Tech. Yet many in Silicon Valley are openly dismissive of the Pentagon. O’Mara notes “a continuing irony: that some of those most enriched by the new-style military-industrial complex were also some of the tech industry’s most outspoken critics of big government, and champions of the free market. In the space-age Valley, the person embodying this contradiction was Dave Packard. In the cyber age, it was Peter Thiel.” In a particularly stinging line, she writes that “Thiel became a latter-day H. Ross Perot: a champion of free enterprise who was simultaneously reaping a great fortune from the government he disdained.” Thiel made millions by co-founding Palantir, a cutting-edge Big Data analytical company that relies on Defense Department business.
Hopefully, O’Mara’s book will show everyone the important web of connections between the U.S. government and America’s technology champions and help us get serious about responding to China’s state-subsidized technology offensive.
