The following article should be read by the entire "taxation is theft" crowd or people who argue that Bush's massive tax cuts for the wealthiest people in this country are actually fair. These people fail to recognize the role that tax dollar funded institutions help individuals create their wealth. So have a read and learn.
Published on Monday, August 23, 2004 by CommonDreams.org
Google Wealth Built on Uncle Sam's Shoulders
by Chuck Collins, author of I Didn't Do It Alone: Society's Contribution to Individual Wealth and Success
The news media and business sector have gone ga-ga about Google, as if its initial public offering were a new reality-TV show "Who wants to be a billionaire?"In Google's first days as a public company, we've already seen a flood of stories about how Google's founders Larry Page and Sergey Brin have joined the billionaires club just nine years after meeting as Stanford University graduate students. They are now both worth $3.8 billion, vaulting them into the top 20 of the Forbes 400, past Ted Turner, Steven Spielberg, and Donald Trump.
The New York Times editorial page writes that Google's "founders got very rich yesterday, and deservedly so." But all this talk is an opportune moment to reflect on how such extraordinary wealth creation is possible.
Google is a dramatic case study of the ways in which societal investment creates a fertile ground for private wealth creation. Taxpayer funded institutions, which enable a Google wealth explosion to occur, are unparalleled on the planet. Consider the role of public research, regulated market mechanisms, property rights protections and a wide range of public infrastructure that makes the Google story possible.
This is not to undervalue the creative contribution of the company's young founders and all their colleagues. But it is important to do a proper accounting of society's role in their good fortune. And it reminds us of the historical rationale for progressive taxation: to those whom society has facilitated great wealth, much is expected.
We've heard inspiring stories of Google's early venture capitalists, one of whom was in a hurry so just wrote them a check for $100,000. But we shouldn't forget the greatest venture capitalist the world has ever seen is not one of those demi-Gods who live on Sand Hill Road in Silicon Valley but Uncle Sam.
Google is a built on a foundation of taxpayer funded research and development. The company emerged out of the research and technology synergy of Stanford University and Silicon Valley. Google's owes its entire existence to the growth of internet technology, which was created by the U.S. Government's Advanced Research Project Agency with public tax dollars and nurtured through a continuing partnership of government, universities and industry.
Google's early investors are seeing their long-term equity investments dramatically appreciate. Why? When Google issued its IPO and became a publicly traded company, the global liquidity provided to old and new investors dramatically enhanced their personal wealth. This liquidity is worth some 30-50 percent of the value of newly public enterprise, according to IPO advisors.
How is this possible? A regulated global marketplace, with rules governing disclosure and accounting practices, is what gives investors the confidence they need to part with their money. The wealth possibilities are only as good as the social institutions that maintain the trust.
If you doubt this, consider how the accounting scandals behind Enron and WorldCom affected the market value of dozens of publicly-owned technology companies. Hundreds of billions of dollars in wealth vanished overnight. Wealth expansion depends on trust, credible institutions, access to information and independent oversight. Cook the books, shake the public trust, and the watch the wealth disappear.
It is rare but refreshing when we hear wealthy and successful people talk about society's contribution to their success. Warren Buffett, the second wealthiest man in America, reflects "I personally think that society is responsible for a very significant percentage for what I've earned. If you stick me down in the middle of Bangladesh or Peru or some place, you'll find how much this talent is going to produce in the wrong kind of soil, I would be struggling 30 years later, I work in a market system that happens to reward what I do very well, disproportionately very well."
In the field of scientific research, there is a tradition of recognizing the contributions of those who have come before, through acknowledgement and copious footnotes. Albert Einstein said "A hundred times a day, I tell myself that my inner and outer life are based on labors of other men, living and dead and I must exert myself in order to give in the same measure as I have received and am still receiving."
But these statements are unusual. Why is it so hard for the beneficiaries of wealth explosions to recognize society's role in their riches and understand the obligations that come with it.
One obligation is to give back to society through charitable giving. The founders of Google have already pledged a percentage of the company's stock to a foundation.
The second obligation, however, is to pay your individual and corporate taxes with gratitude for the privilege of doing business in this unparalleled marketplace. Rather than drilling the tax code for every possible loophole, it means paying back society so we can create the fertile ground the next Google to emerge.
"For all you budding Kasparovs out there, a team of cognitive scientists has worked out how to think like a chess grand master. As those attending this week's Cognitive Science Society meeting in Chicago, Illinois, were told, the secret is to try to knock down your pet theory rather than finding ways to support it - exactly as scientists are supposed to do."
So begins a very interesting article about how Chess Grandmasters use Karl Popper's method of falsification just like scientists. Here is a link to the original academic paper by Cowley and Byrne.
Ralph Nader and Peter Camejo make the argument that asking them not to run would be to abandon millions of voters whose ideas they represent.
In a February 2004 appearance on Meet The Press, Nader said to Tim Russert, "You'd never find that type of thing [resistance to a third party] in Canada or Western democracies in Europe. It is an offense to deny millions of people who might want to vote for our candidacy an opportunity to vote for our candidacy. Instead, they [the Republicans and Democrats] want to say, 'No, we're not going to let you have an opportunity to vote,' for our candidacy."
Thom Hartmann addresses this argument quite well. He points out that the Canada and the Western European democracies Nader is talking about have proportional representation rather than our winner takes all system. He argues that in the winner take all system we have, third parties mean less democracy not more. Hartmann gives the following example in support of his view.
A good example of this happened in the 2002 election in my state of Vermont, where the Republican candidates became Governor and Lieutenant Governor with 45 percent and 41 percent of the vote respectively because each had more votes than his Democratic or Progressive opponents alone. (Example: Republican Brian Dubie - 41%; Democrat Peter Shumlin - 32%; Progressive Anthony Pollina - 25%. The Republican "won.") The majority of Vermont voters selected liberal or progressive candidates, but conservatives are in charge of the state - the exact anti-democratic result that gave some of the Framers nightmares.
Nader may be right that a few million voters that support him would not be given a choice at the ballot that reflects their views. However, this discounts the fact that he will deprive even more people of success in their desire to get rid of George W. Bush in favor of John Kerry. So what's the best solution?
The simple solution is to institute IRV in the United States, a step that many communities across the country have already taken. But to do this at the national level will require the agreement and participation of at least one of the two major parties - which is why many Progressives are supporting the Greens and, at the same time, infiltrating and becoming active in the Democratic Party.It's similar to the strategy conservatives successfully used in the 1970s after the 1964 defeat of Barry Goldwater, when they proceeded to infiltrate and ultimately take control of the Republican Party and then bring Reagan to power. As progressives do the same with the Democratic Party - while still helping keep the Green Party and other progressive movements strong - we can then use the Democratic Party to push for IRV, re-enforcement of the Sherman Anti-Trust Act, an end to "corporate personhood," and other progressive and truly democratic reforms.
This year I am supporting the Democratic party with my financial donations and the Green Party with my voter registration with the Green Party and a vote for David Cobb as I live in the redest of red states. I will also support efforts for electoral reform.
"World chess champion Gary Kasparov is writing a six-volume series on fellow masters of the game. He's also a columnist with The Wall Street Journal. He speaks with NPR's Scott Simon about Bobby Fischer and other greats of the game."
Have a listen here
First read this post and watch the Ali G video. After you have done that return to this post and read it. The psychology of this situation reminds me of the Stanford Prison Study where some of the subjects were "prisoners" and others were "guards". They ended up having to stop the study early because the "guards" ended becoming sadistic toward the "prisoners". The conditions surrounding an act make a lot of difference. The "guards" were put in positions of authority and the "prisoners" were put in demeaning situations.
In this case the conditions were created by the greater tolerance for bigotry afforded to a guest to our country. The country music fans allow this man from Kazakhstan to sing "throw the Jews down the well" because perhaps he shouldn't be expected to know better. People join in because they have a few beers and its a catchy tune. No doubt there is some underlying bigotry coming out as well. Imagine if there had been a Jewish person in the audience.
As much as the "politically correct" terminology is annoying it serves an important purpose. If we allow demeaning terms to be used to characterize a group of people we are already on the way to creating the conditions where more odious behavior will be seen as acceptable. People have the idea that "politically correct" terms are meant to avoid offending someone or are polite terms we use if we have proper etiquette. This isn't the main purpose of "politically correct" language. (By the way, the term "politically correct" is horrible. It sounds like the sort of fascism it is trying to quosh. Better would be something like "politically aware".) The purpose is to avoid creating the conditions where bigoted behavior is seen as acceptable. It also plays the positive role of pointing out what we have in common rather than our differences. Terms like African-American or Latino-American acknowledge an ethnic heritage while keeping us aware of the fact that we are all Americans.
Finally, a little barb for some of my friends. Having "under god" in the pledge or "In God We Trust" on our currency goes a little way towards creating the conditions that make bigotry toward non-religious people acceptable. These things contribute to the fact that Atheist has a better chance of winning the lottery than being elected to public office.