Story Stream
recent articles

When Apple floated its shares in 1980, it was the biggest IPO since Ford Motor Company. A little less than 17 years later Apple was flirting with bankruptcy. So bad were Apple’s prospects that Michael Dell said the best approach would be to “shut it down and give the money back to the shareholders.” Success is ephemeral in dynamic economies, and Silicon Valley is the most dynamic of them all.

The challenging reality of technology always comes up when reading the great Peggy Noonan’s skepticism about the sector. As most readers are already aware, Noonan wants a pause decreed by the powers-that-be on Artificial Intelligence advances of the ChatGPT kind. Noonan believes that absent a pause, “something bad is going to happen” in the Eve bit the apple sense.

Noonan is clear that she doesn’t trust those “creating, fueling and funding” this remarkable leap that will multiply thought in the way that machines have multiplied effort. Which on its face requires the ultimate, shooting fish in the most crowded of barrels response along the lines of Noonan doesn’t trust the leading lights of technology, but she does trust political types to stop them? Except Noonan knows the people in politics. Enough said.

Still, the above response seems insufficient. Worse, it arguably shrinks those in the actual commercial arena whom Noonan wants to restrain.

To see why, consider her assertion about Bill Gates, Mark Zuckerberg et al that “on some level [they] think they are God.” If only. With Gates alone, it’s too easy to forget that by his own admission he was wrong exponentially more than he was right. Gates was late on internet search as Google reminds us, late on social media as Facebook reminds us, the eminently forgettable Zune stands out among product failures, not to mention that Microsoft plainly didn’t see the genius of smartphones until it was too late.

Notable about smartphones alone is that when Steve Jobs returned to rescue a dying Apple in 1997, investors turned up their noses. While Jobs might have thought he was God, investors felt differently only for Gates to save Apple with a $150 million cash infusion. Investors just weren’t sure if Jobs could go home again, and if he knew what to do once home.

That the future is opaque is something obviated by Bill Gates’s numerous misses, but also by the returns readers would have enjoyed had they purchased Amazon’s newly floated shares in 1997 (for years it was Amazon.org), not to mention had they bought and (unwisely) held Netscape’s newly floated (and much coveted) shares in 1995. And if Netscape doesn’t ring a bell that’s precisely the point.

From there, it’s essential to point out that the past is a lousy predictor of the future. Microsoft was said to be unbeatable before it was revealed as eminently beatable, including by those it saved like Apple. Oh yes, the very Apple that Michael Dell said should be shut down in 1997 is the world’s most valuable company in 2023 after re-inventing the very notion of the smartphone; one that then Microsoft-CEO Steve Ballmer dismissed as "niche." Did you the reader buy Apple shares when Jobs returned in 1997, or later, or at all?

Bringing it all back to the present, it seems the only people who know they’re not God are those Noonan believes think they are. They know. They know that success in the present is a horrid predictor of future success in technology. Zuckerberg, Gates et al are not only aware of how often they’ve been wrong, but they’re supremely aware of just how difficult it is to divine the future. Gods don’t feverishly invest in pursuit of tomorrow as Zuckerberg is, simply because Gods don’t need to. They already know. 

Still, Zuckerberg knows something that Noonan doesn’t, but should know about the AI future. Just as it wasn’t supposed to be Facebook atop the social media pyramid (MySpace was the "monopoly" in 2006, and it had backing from Rupert Murdoch) in 2023, odds are it won’t be Zuckerberg atop whatever technological pyramid sits before us in 2033. In other words, Noonan is calling for a pause on the future to restrain those trying to figure out what it will be, but business history powerfully suggests those “creating, fueling and funding” what’s allegedly ahead won’t be on top when the actual future is discovered. Evidence supporting the previous claim is their feverish investing. That’s yet again not a sign they’re at all certain about what will shape tomorrow. Assuming a “pause,” knowledge of what to actually pause would render that individual a billionaire in quick fashion.

In short, it’s a pretty safe bet that what’s drawn Noonan’s ire is not what we’ll be talking about a few years from now. It seems the only individuals who know this truth are the ones directing billions at a future that history says will render them yesterday's news.

John Tamny is editor of RealClearMarkets, Vice President at FreedomWorks, a senior fellow at the Market Institute, and a senior economic adviser to Applied Finance Advisors (www.appliedfinance.com). His latest book is The Money Confusion: How Illiteracy About Currencies and Inflation Sets the Stage For the Crypto Revolution.

Show comments Hide Comments