Does Mark Zuckerberg Really Deserve All That Money?
Photo Credit: cattias photos
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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.