Exactly 25 years ago, the British computer scientist Tim Berners-Lee (pictured) conceptually “invented” the World Wide Web—and set in motion a process that would rapidly make the online world an essential part of our daily lives.
By 1995, 14 percent of Americans were surfing the web. The level today: 87 percent. And among young adults, the Pew Research Center notes, the internet has reached “near saturation.” Some 97 percent of Americans 18 to 29 are now going online.
He didn’t invent the web to get rich. He released the code to his new system for free.
But others certainly have become rich via the Web. Some 123 billionaires today, Forbes calculates, owe their fortunes to high-tech. The top 15 of these high-tech billionaires hold a collective $382 billion in personal net worth.
Numbers like these don’t particularly alarm many of today’s economists. Their conventional wisdom holds that grand new technologies always bring forth grand new personal fortunes for the entrepreneurs who lead the way.
Internet kingpins encounter precious few public-interest rules that keep them from charging whatever the market can bear—and rigging markets to squeeze out even more.
In the 19th century, the coming of the railroads created wildly-wealthy railroad tycoons. In the early 20th century, the dawn of the automobile age created huge piles of cash for car makers like Henry Ford. Why should the internet age, mainstream economists wonder, be any different? A new technology gives rise to a new cohort of rich people. That’s the simple way of the world.
But epochal new technology doesn’t always automatically generate grand new fortunes. The prime example: television. TV burst onto the scene even more rapidly—and thoroughly—than the internet. In 1948, only 1 percent of American households owned a TV. Within seven years, televisions graced 75 percent of American homes.
These TV sets didn’t just drop down into those homes. They had to be designed, manufactured, packaged, distributed, and marketed. Programming had to be produced. Imaginations had to be captured. All of this demanded an enormous outlay of entrepreneurial energy.
But this outlay produced no jaw-dropping billionaire fortunes. That would be no accident. By the 1950s, the American people had put in place a set of economic rules that made the accumulation of grand new private fortunes almost impossible.
Taxes played a key role here. Income over $400,000 faced a 91 percent tax rate throughout the 1950s. Regulations played an important role as well. In television’s early heyday, for instance, government regulations limited how many commercials could run on children’s TV programming. TV’s original corporate execs could only squeeze so much out of their new medium.
And television’s early kingpins couldn’t squeeze their workers either. Most employees, from the workers who manufactured TV sets to the technicians who staffed broadcast studios, belonged to unions. TV’s early movers and shakers had to share the wealth their new medium was creating.
Today’s internet movers and shakers, by contrast, have to share nothing. In an America where less than 7 percent of private-sector workers carry union cards, online corporate giants seldom ever need bargain with their employees.
In our deregulated U.S. economy, meanwhile, these internet kingpins encounter precious few public-interest rules that keep them from charging whatever the market can bear—and rigging markets to squeeze out even more.
And taxes? Today’s internet billionaires face tax rates that run well less than half the rates that early TV kingpins faced.
We can’t—and shouldn’t—fault Tim Berners-Lee for any of this. He freely shared, after all, his invention with the world. “I wanted to build a creative space,” Berners-Lee observed in an interview a few years ago, “something like a sandpit where everyone could play together.”
Some people didn’t play nice.
Sam Pizzigati is the editor of Too Much: A Commentary on Excess and Inequality. His latest book is The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class.