cafeconomics

  From a valley in California to a science park in Hsinchu, the pattern repeats: the state absorbs the catastrophic risk no market will price, and calls it national security. Every country that has built a world-class technology industry from nothing tells itself a founder’s myth afterward—a romantic tale of visionary dropouts, suburban garages, intrepid venture capitalists, and free markets functioning precisely as introductory economics textbooks promise. Almost none of these myths survive rigorous contact with the historical record. Behind the celebrated entrepreneur, in every case worth studying, sits a government that spent years absorbing the existential risk no private balance sheet would touch. In each instance, sovereign planners utilized a military or national-security budget line as the funding vehicle, precisely because that was the sole pot of money in the national treasury not shackled to a quarterly commercial return requirement. This is not an ideological ...