Distributing
Our Technological Inheritance
by Gar
Alperovitz
Copyright
1994, Massachusetts Institute of Technology Alumni Association.
Technology Review (October 1994) Vol. 97, No. 7: 30-36.
Content:
Page
1 of 4
Introduction
A
VARIETY OF EXPERIMENTS ARE BUILDING ON THE NOTION THAT ALL
CITIZENS SHOULD SHARE IN THE BENEFITS OF A COMMON AND PRODIGIOUS
LEGACY.
Many
times a day," wrote Albert Einstein, "I realize how much my
outer and inne life is built upon the labors of my fellow-men,
both living and dead." The genius of an earlier era saw clearly
how contemporary knowledge and technological advance depend
to an extraordinary degree on the efforts of many contributors,
not to mention a continuing cultural investment in science
and numerous other areas of human endeavor. In fact, very
little of what we as a society produce today can be said to
derive from the work, risk, and imaginatio of citizens now
living. Achievements from earlier eras, including fundamental
ideas such as literacy, movable type, simple arithmetic, and
algebra, have become so integrated into our daily lives that
we take them for granted. What w accomplish stands atop a
Gibraltar of technological inheritance. Seemingly contemporary
transformations inevitably build on knowledge accumulated
over generations.
For
example, Richard DuBoff, an economic historian at Bryn Mawr
College, observes that "synthesizing organic chemicals...could
not have been done withou an understanding of chemical transformations
and the arrangement of atoms in a molecule. After 1880, this
led to the production of coal tar and its derivative for pharmaceuticals,
dyestuffs, explosives, solvents, fuels, and fertilizers, and
later petrochemicals.... By the early 1900s the new chemicals
were already becoming an essential input for metallurgy, petroleum,
textiles, and paper."
Present-day
entrepreneurs such as Bill Gates, one of the world's richest
individuals with a personal fortune estimated at $ 8 billion
and hailed as a technological genius for inventing software
for the personal computer, should therefore be seen as beneficiaries
of this long and fruitful history as well as of significant
public investment.
The
personal computer itself--without which Gates's software would
not be possible--owes its development to sustained federal
funding during World War II and the Cold War. "Most of the
'great ideas in computer design' were first explored with
considerable government support," according to historian Kenneth
Flamm in a Brookings Institution study. Now a specialist in
technology policy i the Department of Defense, Flamm estimates
that 18 of the 25 most significant advances in computer technology
between 1950 and 1962 were funded by the federa government,
and that in most of these cases the government was the first
buyer of new technology. For example, Remington Rand Corp.
delivered UNIVAC, the original full-fledged U.S. computer,
under contract to the U.S. Census Bureau in 1951.
The
government's shouldering of huge development costs and risks
paved the way for the growth of Digital Equipment Corp., which
created its powerful PDP line of 1960s computers. In turn,
Gates's colleague (and now fellow billionaire) Pau Allen created
a simulated PDP-10 chip that allowed Gates to apply the programming
abilities of a mainframe to a small, homemade computer. Gates
used this power to make his most important technical contribution:
rewriting the BASIC language, itself funded by the National
Science Foundation, to run Altair the first consumer-scaled
computer. And indeed, Micro Instrumentation and Telemetry
Systems, Altair's developer, could never have placed a microcomputer
of any variety on the market without the long preceding period
of technological incubation.
Thousands
of links in a chain of development--our shared inheritance--were
in fact required before Bill Gates could add his contribution.
But if this is so, why do we not reflect more fully on why
Gates, or any other wealthy entrepreneur, should personally
benefit to such a degree? If we admit that what any one person,
group, generation, or even nation contributes in one moment
of time is minuscule compared with all that the past bequeaths
like a gift from a rich uncle, we are forced to question the
basic principles by which we distribute our technological
inheritance.
Plainly
put, the way we allocate the benefits of present and past
economic activity that stem from this technological inheritance
is irrational and unjust The top one-fifth of U.S. society
receives approximately 50 percent of all income, including
interest, rent, and dividends. The bottom one-fifth--roughly
52 million people--makes do on less than 4 percent of such
income. Even more striking, a mere 1 percent of U.S. families
at the top reap as much income as the entire bottom 40 percent.
The top 1 percent also holds more of the nation's wealth in
the form of stocks, bonds, and real estate than the bottom
90 percent--some 232 million people.
Some
of this disparity stems from the fact that anyone who happens
to be lucky enough to work in an industry experiencing technological
advance may be highly rewarded simply by virtue of being in
the right place at the right time--as wer many ordinary workers
during Silicon Valley's boom years. Yet employees in industries
suffering from severe international competition, such as auto
manufacturing, lost their jobs during the same period despite
their hard work, risk taking, and personal merit. Such serendipitous
disparity is even more striking among residents of rich versus
poor countries: machine operators may b paid $ 17.85 an hour
in the United States but just $ 2.70 to run the same equipment
in Mexico, for example.
Our
technological legacy is also distributed unequally because
it is largely bestowed on the heirs of the privileged few.
Though economists differ on precisely how much current income
derives from inherited wealth, Harvard economist Lawrence
Summers, now undersecretary of the treasury, has estimated,
along with Laurence Kotlikoff of Boston University, that at
least 46 percent of today's accumulated wealth is directly
inherited--that is, goes to recipients because they were lucky
enough to have been born into the right family rather than
because of their own hard work or risk.
This
system is largely self-perpetuating: people with access to
money and the power that comes with it are in a position to
obtain more. The fortunes amassed by the industrialists of
one era beget generations of family wealth.
Besides
inheriting this wealth, children of the rich are able to go
to the best schools and turn connections into high-paying
jobs and further lucrative investments. A recent estimate
by economist Edward N. Wolff of New York University suggests
that over 70 percent of the growth in personal wealth since
1962 has resulted from initial holdings that have simply appreciated
in value.
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