Roughly two years ago, Facebook announced plans to lead a consortium of companies creating a new digital token currency called Libra. The partners were to include major payment processors Visa, Mastercard, PayPal and Stripe, among others. However, strong opposition from financial regulators around the world led to its shelving.
Fast-forward to 2021, as global acceptance of cryptocurrencies has become more wide- spread. Facebook CEO Mark Zuckerberg has revived the Libra plan, rebranding the currency as Diem.
In separate news last year, Facebook announced the creation of an oversight board to review the company’s content decisions. Based in London and funded by Facebook with a $130 million trust, this board has been referred to as “Facebook’s Supreme Court,” which in May issued a ruling temporarily upholding the social media network’s ban on former President Donald Trump from using the service.
Consider another tech titan, Elon Musk of Tesla Motors. He scored big in the early internet boom with a few early ventures, most notably PayPal, acquired by eBay for $1.5 billion in stock in 2002. Musk owned only 11% of PayPal stock, but it was a pretty big payday. Today, the Tesla co-founder’s net worth is estimated to be $150 billion, including his holdings in Tesla, SpaceX and SolarCity Corp. That’s more than three times the gross domestic product of Jordan and nearly as much as Qatar’s GDP.
What is less widely known is that Musk’s companies have benefited from an estimated $4.9 billion in government support. As reported by The Los Angeles Times in 2015, this includes incentives, grants, tax breaks, discounted loans and environmental credits that Tesla has since sold to other companies.
In the third quarter of 2020, Tesla reported a profit of $331 million. The company said that it had sold $397 million in energy credits that same quarter.
Also noteworthy is that SpaceX counts the Pentagon and NASA among its largest customers, with multiple contracts worth hundreds of millions.
Yet another tech titan, Jeff Bezos, CEO of Amazon.com Inc., at times the richest man in the world and owner of The Washington Post, also has an interest in space. The Bezos-founded commercial spaceflight company Blue Origin, which envisions millions of people living in low-orbit space stations, also has benefited from NASA contracts.
Amazon Web Services, the company’s cloud-computing subsidiary, counts the U.S. government among its largest customers, notably the Central Intelligence Agency, which awarded AWS an initial $600 million contract in 2013.
Apple and Alphabet (Google) are other examples of corporate giants benefiting from government funding.
Besides topping every list of the world’s richest people, the CEOs of these companies have a lot in common. Their companies are all frequent targets of regulatory action around the world. They have interests in creating their own currencies, courts and space programs, too, which makes them more like sovereign nations than any traditional business structure.
Not only are they unpinned to any specific geography or national interest, they have proven resistant to many taxation, antitrust and even labor law norms. Businesses ought to be moored for the good of society. There are higher purposes than just the creation of personal wealth.
Virginia has a vibrant and long-standing tech sector. It, too, has largely relied on Dee Cee as a top customer. But compared with these global behemoths, our so-called “beltway bandits” are small-change pikers.
The role of government goes beyond facilitating the creation of immense private wealth. Government exists to serve the common good. Regulation has failed to keep up with technology. It is time for that to change.