Silicon Valley Goes from Libertarian to Keynesian | Hacker News Reader

Silicon Valley Goes from Libertarian to Keynesian

blogs.wsj.com

13 pointsgalactus17 comments

Better title: Silicon Valley Goes from Libertarian to Corrupt

The full quote: "Silicon Valley used to be libertarian, but we are all Keynesians now...Everybody is trying to stick their snouts in the flow of pork."

This isn't Keynesian economics, this is just corruption and opportunism.

Agreed [1]. But the two notions are inseparable really. To the extent that Keynesian economics demands that the government get involved at every turn to 'fix' things, the only possible outcome is corruption, corporatism, and (if you dare to use the word) fascism.

[1] though I prefer to hold the politicians responsible

But Keynesian economics doesn't demand anything of the sort. It suggests that, in a recessive economy, when monetary policy reaches its zero lower bound, temporary fiscal stimulus can make up the output gap.

We must not be speaking the same language. I read "monetary policy" and "fiscal stimulus" as "the government getting involved with the markets."

Now I would hate to conflate Keynesian economics with any one proponent, but John Maynard Keynes himself once half-seriously proposed that the government bury dollar bills in old mines so that the economy could be stimulated by people working to dig them up.

Right. It's the 'at every turn' in your original post, rather than 'under certain very specific conditions,' that I was objecting to.

Markets without government are usually more corrupt than markets with government.

You're living in a dream world to assume corruption won't happen. You have congressmen in charge of handing out billions of dollars, and who want to be re-elected. Congressmen are happy to send the pork in a specific direction for a bribe ^H^H^H^H donation to fund their re-election campaign.

The cost of lobbying is directly measurable: spending $X to lobby for advantageous results, and receiving $Y, where Y >> X. It's all downhill from there.

When did I make that assumption?

Yeah, but it's not just giving money to corporations and hoping for the best. It's actually creating valuable artifacts (e.g. roads, dams). Basically Keynes-ism (if that's even a word) works (or worked) because it made stuff people could use to make commerce easier. If the government is going to spend money it could, for example, massively upgrade the rail network.

Like many economic concepts, that only works in theory. In practice any "temporary" stimulus tends to become a permanent budget increase and then we're all worse off. Once federal government programs get started they develop constituencies and become near impossible to kill.

> But Keynesian economics doesn't demand anything of the sort.

If Keynesian economics is proposed as a policy involving humans, it can't honestly ignore how humans will actually implement it.

If someone came to you and said "we need to speed up our system so let's buy processors with bigger caches" and you knew that your system was such that bigger caches didn't help, would you really think highly of said proposer? Would it matter if he then demonstrated that the processors with bigger caches were faster on programs that you weren't interested in?

If Keynesian economics fails with the political class that we have, it doesn't matter how well it might work with a different political class. (I'm pretty sure that the political class that can successfully pull off Keynsian economics doesn't involve humans.)

I'm not sure it's hypocritical to go after this money. After all, paying taxes is not a choice. So you could say: I'm opposed to a plan where the government taxes and borrows to fund startups - but if this happens regardless of how I feel about it, I may as well get the benefit I can.

Right, tell that to the shop owners where you buy. Tell that to the small companies who won't make it in due to lack of connections.

If Google wants to foot the bill for Youtube, fine. But taxpayer money shouldn't be used in a gamble, IMHO. That's money collected from other businesses who pay.

I don't think there's any fundamental change here. Silicon Valley's traditional libertarian position is largely based on the fact that regulation of new technology tends to be Bad and Wrong. If there's money flowing, people in the tech industry will want to get a share as much as anybody else. In both cases, it's simple self-interest.

As an outsider, this is an obvious attack from Wall St. to Silicon Valley. Wall St. is getting bailouts about 100 times bigger without almost anything to show for them. Silicon Valley has no credit to pay for its growth.

I hope Silicon Valley wakes up and realizes it doesn't need Wall St. or the help of the US government. It would be great if something like a broad cyber-scrip currency shows up. Or some other way. I'm sure California will join in as they are insolvent already anyway, making it really scale.

Apparently by "Silicon Valley", the Wall Street Journal means VC's.

Technology is a legitimate engine of economic prosperity. I'm happy to see funding flow to this sector. Its just a shame that the government has inserted itself as a middle man, and a generally inefficient one at that.

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