Big Tech Succeeds Due to Innovation, Imagination, and Lots of Taxpayer Handouts
Renowned inventors and entrepreneurs such as Thomas Edison, Henry Ford, Walt Disney, and others were part of the tradition of American free-market revolutionaries who relied on independent determination, rather than taxpayer handouts, to overcome obstacles.
Oh, how times have changed.
Our American way of life has certainly – albeit incrementally and often quietly – crept toward socialism. The COVID-19 government handouts have catapulted us even further in that direction. Many Americans are losing sight of what it really means to be self-made and self-sufficient.
A generation of Americans are now being raised to believe that, when times are tough, Uncle Sam will be there to bail them out. Unfortunately, this includes some of today’s most notable entrepreneurs – particularly in the tech industry.
Elon Musk, Mark Zuckerberg, Jeff Bezos, and many other modern billionaires achieved much of their success by reaching into the pockets of American taxpayers.
In September, Musk’s new SpaceX project was applauded in some circles for launching the first space flight without government funding. That’s really stretching the truth. SpaceX wouldn’t even exist if not for billions of taxpayers’ dollars.
According to a 2019 report by The Verge, “During its first decade of operation, SpaceX operated off of $1 billion, and about half of that money came from government contracts from NASA.” “Musk,” the article pointed out, “notably thanked NASA for the agency’s support after SpaceX launched its very first Dragon cargo capsule to the International Space Station in 2012.”
A 2015 Los Angeles Times investigation found that Musk’s companies – Tesla, SolarCity and SpaceX – all benefited from a total of “$4.9 billion in government support.” CNBC reported at the end of 2020 that SpaceX’s Starlink won nearly $900 million in Federal Communications Commission subsidies to bring Internet service to rural areas. And, although Musk’s the world’s second richest man, Tesla received COVID-19 corporate bailout money, even as he tweeted against aid for individuals.
Musk is hardly alone. Other Big Tech leaders have long relied on taxpayer largesse to fuel their success.
In 2019, the Mises Institute compiled a list of government handouts and tax breaks pocketed by Big Tech companies. The authors found Amazon received $3.5 billion, Google devoured $766 million, and Apple snagged $693 million. Even Facebook managed to grab $333 million from taxpayers. Those amounts have doubtlessly skyrocketed in the years since.
In addition to enjoying handouts and tax breaks at the expense of the American taxpayer, tech giants have learned that success isn’t always dependent on being the best or the brightest. It can also come as the result of mastering the art of manipulating the government. Carefully spent lobbying dollars and well-placed friends in Congress have allowed some tech companies to operate as virtual monopolies in some cases and avoid paying for pilfering other companies’ copyrights in others.
The former instance was exhibited during testimony before Congress last year when the leaders of Amazon, Apple, Facebook, and Google faced questions from Rep. David Cicilline (D-RI), who chaired the House Subcommittee on Antitrust, Commercial, and Administrative Law.
When Cicilline asked about anti-competitive practices, The Atlantic wrote, he “reduced Google’s Sundar Pichai to mumbling incoherently about kettlebells; using specific examples, the subcommittee members Pramila Jayapal and Joe Neguse prodded Amazon’s Jeff Bezos into admitting instances of his company’s anticompetitive behavior.”
Yet, even with such admissions, no meaningful action has been taken to rein in Big Tech. Why? Fear apparently plays a big part. Bureaucrats and lawmakers certainly took notice when an executive branch appointee got in the way of Google’s attempt to sidestep copyright protections.
The search engine giant was reportedly behind the Obama Administration’s firing of Registrar of Copyrights Maria Pallante last October. It was the first time the Registrar had been dismissed in 119 years. Pallante apparently opposed Google’s efforts to weaken copyright laws responsible for protecting authors, artists, and musicians.
When Henry Ford started out, one of his first companies was one of around 60 up-and-coming automakers in America. It struggled to keep pace with competitors.
After two failed attempts, his third company, The Ford Motor Company, found success while most competitors fell by the wayside. Ford first produced the Model A, and then the famous Model T. Rather than depending on taxpayer bailouts or the use of nefarious means to eliminate government oversight, Ford simply worked hard to make better cars.
Let’s set the record straight: Musk, Zuckerberg, and Bezos don’t belong in the same breath as Ford and other self-made entrepreneurs. These Big Tech tycoons may be rich and famous, but unlike many of the moguls from previous generations, they’ve gained much of their wealth and success by manipulating government officials and ripping off American taxpayers.
Drew Johnson is a government watchdog columnist and technology policy analyst who serves as a senior fellow at the National Center for Public Policy Research.