Free Market Capitalism: The Greatest Lie Every Told

The Entrepreneurial State: Debunking Public vs Private Sector Myths

By Mariana Mazzucato

Anthem Press (2013)

Book Review

This book totally shatters the lie that the free market makes the US the world’s greatest economic power. Mazzucato leaves the reader with absolutely no doubt the exact opposite is true: the US became an economic powerhouse after World War II as a direct result of massive government intervention – more so than any country in history except for China.

As Mazzucato’s research ably demonstrates, capitalism doesn’t work without massive state investment in research and development because no private investor (ie neither banks nor venture capitalists) will risk investing in new technologies that require 15-20 years to produce returns.

Without massive state intervention, there is no economic growth – anywhere. This is why austerity budgets adopted by most of the industrialized world have been so damaging. According to Mazzucato, austerity itself is directly responsible for current global stagnation (with a decade of near zero growth). Moreover industrialized countries with the lowest level of state-subsidized research and development (Greece, Italy, Spain, Portugal) are the ones struggling the most economically.

The book mainly focuses on US programs that have financed technological research and development – via grants to universities and researchers, loans, loan guarantees, and subsidies. Not only does this funding support basic research (which venture capitalists almost never fund), but it also assists private corporations in commercializing these new technologies. She emphasizes that without strong support by alleged free market champion Ronald Reagan for massive state intervention (during the 1980s), there would have been no personal computer and Internet revolution the following decade.

The main federal agencies responsible for funding technological research and development (R&D) are National Aeronautics and Space Administration (NASA), Defense Advanced Research Projects Agency (DARPA)*, National Institutes of Health (funds research for nearly all new pharmaceuticals before handing them over to pharmaceutical companies), Small Business Administration, National Science Foundation (developed Google’s search algorithm), ARPA-E, and Department of Energy (helps private industry bring clean energy technologies to market).

Among other technological innovations made possible by federal R&D funding:

• nanotechnology
• biotechnology
• Tesla electric vehicle
• Apple computer, ipod, ipad, iphone, and SIRI (Apple bought SIRI from Stanford Research Institute aka SRI)
• the jet engine
• aerospace (space) technology
• semiconductors, hard drives, microprocessors, hard drive, and RAM technology making personal computers possible
• GPS
• lithium batteries
• fracking technology
• nuclear technology (still massively subsidized by the state in all countries that employ it)

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*NASA and DARPA were not only responsible for creating the Internet but for helping private industry to commercialize it.

 

 

Hidden History: The Close Link Between Silicon Valley, the Pentagon and US Intelligence

The Secrets of Silicon Valley: What Big Tech Doesn’t Want You to Know

Directed by James Corbett (2019)

Film Review

This documentary explores the hidden Pentagon and US intelligence role in the development of of Silicon Valley, the Internet and tech giants like Google and Facebook.

Corbett traces the rise of Silicon Valley to the 1946 appointment of Frederick Terman as the dean of Stanford engineering school. During World War II, Terman ran the top secret radio research lab at Harvard. There he supervised 800 scientists in researching microwaves, radar detection and jamming and other forms of electronics warfare. Eleven of these scientists accompanied him to Standford, where they immediately received Pentagon contracts for military projects.

ARPANET, initially funded by the Department of Defense, became known as the Internet in 1991 when it was officially privatized.

Over the years, other technologies that began as Stanford graduate student projects were spun off as private ventures. Examples include Oracle Integrated Cloud Applications and Platform Services, derived from Project Oracle, a vast CIA database project; SunSystems Financial Management Software, also based based on Pentagon-funded research; and Google, which started as a project funded by DARPA, the CIA and the NSA.

In-Q-Tel, the venture capital arm of the CIA, initially owned 5,000 shares in Google, which they sold in 2005. On their webpage, the CIA describes Google Earth as a CIA-assisted technology. A 2014 Freedom of Information Act Request indicates Google was (is?) part of a secret government project called Enduring Security Framework Initiative. The latter paid (pays?) the company to share data they collect on search engine users with US intelligence and the Pentagon.

Google’s founder and former CEO Eric Schmidt is now the chair of the Defense Efficiency Initiative. He’s also a member of the Trilateral Commission and the Bilderberg Group’s steering committee.

Facebook has a similar history of Pentagon and US intelligence backing. By a remarkable coincidence, Facebook was launched the same day (Feb 4 2004) that DARPA scrapped a proposed study to predict behavior by collecting massive amounts of data on subjects’ daily interests and activities.

Facebook received most of its startup funding from venture capitalists closely linked to the Department of Defense and US intelligence – including $12.7 million from Accel Partners, whose managing director previously served on the board of In-Q-Tel.

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*ARPA – Advanced Research Projects Agency – has since been renamed DARPA (Defense Advanced Research Agency).

 

 

What Silicon Valley Has Planned for Public Education

What Silicon Valley Has Planned for Public Education

Alison McDowell (2017

This troubling presentation concerns a well-advanced plan by corporate America to gradually replace public schools with 100% digital education. The attack on American schools is multi-pronged – with anti-public school forces closing schools, laying off teachers and neglecting crumbling infrastructure while stealthily increasing the availability of digital notepads, Chrome books and other digital platforms in existing schools.

Education Reform 2.0 would build on high stakes testing and school closures to replace teachers with digital learning platforms designed to incorporate “cradle to grave” tracking of students’ skill sets and online activity. Increasingly employers would rely on this information to determine suitability for employment.

The institutional backers of this digital revolution include some of the most powerful corporations and foundations in the US. Prominent names include the Gates Foundation, the MacArthur Foundation, the American Legislative Exchange Council (ALEC), Goldman Sachs, the Institute for the Future (offshoot of Rand Corporation), Amazon, Google, Dell (the company Snowden worked for), and Halliburton.

The US military is also involved and planning and development of 100% digital learning with Army Research and DARPA (Defense Advanced Research Projects Agency) assuming responsibility for the “behavior modification” (ie mind control aspects) that reward students for appropriate engagement with the digital platform.

McDowell describes how many schools across the US are already replacing class time with Skype sessions with Halliburton “mentors” and on-line math lessons with carton “peers.”

Proponents of 100% digital learning are working closely with focus groups to “market” this new technology that tracks and mind controls children to skeptical Americans who value their privacy.

At 38 minutes, McDowell shows a promotional film for “tracked online learning.” It explains how high school and adult learners are earning “edu-blocks for a variety of learning experiences (including reading books, volunteer work, watching videos and “teaching” skills to other learners. Also how companies are already using your ledger blocks to evaluate potential employees’ suitability for specific projects or even investing in their university education by paying their tuition. One edu-block enthusiast describes how participating in the online program is enabling her to reduce her student loan debt.

The ledger is designed to keep track of all the YouTube videos you watch and even all the texts you send (and delete).

The Early Internet Vision: Public and Free

Linux: Free Open Source Alternative to Microsoft Windows

Guest Post by Steven Miller and Satish Musunuru

(Part 2 of a five-part series on the corporatization of Internet surveillance.)

Back to the Future

Back in the early 1990s, the Internet was barely beginning. Everyone was dazzled about the possibilities of a universal communicator, where any could connect to any other individual or any other thing for free. The US Post Office was prepared to offer universal connectivity to everyone. Infinite global networking was on the agenda. The natural cooperative human instinct was in ascendency.

The basic elements of what would become the Internet had all been developed for free, outside of corporations, and had been given away to the public with no concerns for making private profit. The different technologies built upon each other through the efforts of a highly distributed network of engineers all over the world. Each piece built upon the foundation laid by another.

TCP/IP was created as a basic protocol to communicate between computers (3) and was available to everyone, although funded by ARPANET, which was a project of DARPA, which was and still is part of the Defense Department. These days DARPA is working on different technologies, like drones.

TCP/IP established the foundation on top of which came email, which uses protocols such as SMTP, POP and IMAP. The key thing is all these use TCP/IP for the actual transmission. HTTP which is the basis for the WWW also uses TCP/IP. So do Instant messaging and everything else we’ve come to enjoy using.

TCP/IP led to email and HTTP. Tim Berners-Lee, working at CERN, the European nuclear lab, tied the free software TCP/IP (for establishing domain protocols) to the free software for standardize common text for every computer – HTTP. augmented by the equally-free APACHE server, and created open public access for anyone through WWW protocols. A server stores information and sends it to multiple clients when they request it. This is what’s happening when we open our browser and go to weather.com. Then Berners-Lee released the web to the world as HTML markup language in 1989. This standardized web page building and linking. (4)

Suddenly computers anywhere could talk to each other. Soon the University of Illinois gave away MOSAIC – a free graphic interface. The open-source movement added Firefox – a free web browser. The basic open-source platform language LINUX spread around the world and is even grudgingly used by Microsoft.

Corporations for years had constrained the development of digital technology so they could make a private profit off selling privileged access to information. Berners-Lee designed the Internet so that it would be free:

“I had designed the Web so there should be no centralized place where someone would have to ‘register’ a new server, or get approval of its contents.”  (5)

The idea was to establish open peer2peer networks, where the computing power, and therefore the choices, resides at either end. The most popular search engines massive servers, on the other hand, keep that power in the center, and use algorithms to determine which sites are featured first.

Since a server is centralized, it opens the door to the notion of customers. At this point, the contours begin to change as corporations start figuring out this Internet thing and start releasing their own products as competitors to freely available open source products. Corporations moved in for the kill.

The next stage in this trend is in the development of the browser. MOSAIC was the open and free alternative. But Microsoft came along with its own closed Internet Explorer and started giving it away for free with Windows. Mozilla then developed a free and superior open-source browser. Corporations struggled to develop a browser superior to this, but it now carries the bulk of Internet traffic.

Why do corporations give hardware and software away for free? Because they see a lot more profit potential in getting other corporations and citizens locked into their ecosystems. The race is to become the platform. Apple has successfully done this with their complete line of hardware/software products, which are notoriously closed to external developers. Now corporations began to exert control.

Background and Notes

3)  http://en.wikipedia.org/wiki/Internet_protocol_suite

4)  Larry Lessig. The Future of Ideas. 2001 , p 52 – 57

5)  Lessig, op cit, p 44

To be continued.

Reposted from Daily Censored

photo credit: aid85 via photopin cc

Steven Miller has taught science for 25 years in Oakland’s Flatland high schools. He has been actively engaged in public school reform since the early 1990s. When the state seized control of Oakland public schools in 2003, they immediately implemented policies of corporatization and privatization that are advocated by the Broad Institute. Since that time Steve has written extensively against the privatization of public education, water and other public resources. You can email him at nanodog2@hotmail.com

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Satish Musunuru draws upon his training as an engineer and his experience as a professional in Silicon Valley to understand the relationship between technology and corporate capitalism and how it has brought us to the ecological and societal crisis we find ourselves in. You can email him at guruji323@hotmail.com