Boris Johnson on Facebook and innovation

Boris Johnson has a wonderful way with words as he discusses the wonders of capitalism and why the British will never invent a Facebook. His explanation has many echoes for modern New Zealand too, where Labour and others constantly seek to destroy wealth.

As we gaze in stupefaction across the Atlantic at these spooling zeroes, we are forced to ask ourselves an embarrassing question: why isn’t Mark Zuckerberg British? There seems no reason in principle why we should not be equally blessed with the entrepreneurial drive that has produced Facebook, Google, Twitter and other such zillionaire-spawning companies. We have the right timezone for an international media giant; we speak the world’s language; our capital is one of the safest and most liveable big cities in the world. We have all sorts of geniuses installing themselves in the vicinity of Shoreditch’s Silicon Roundabout, and no less an authority than Wikipedia’s Jimmy Wales says that London is now the world’s best place for an internet start-up.

It is not as though we lack potential Zuckerbergs. Our universities are pullulating with brilliant young men in T-shirts who like playing Call of Duty and have slight difficulties with girls. We are fantastically fecund at coming up with new games and new apps. The very concept of the World Wide Web was devised by London-born Sir Tim Berners-Lee. So why isn’t there a British Facebook? Why aren’t these billions about to explode into the pockets of people in this country?

Well, to see the answer, you have to go back to The Social Network, the wonderful film about the birth of the company. It was about the war between Zuckerberg and the preppy Winklevoss brothers over the paternity of Facebook. It was a feud that began at Harvard, and in many ways the environment resembled Oxbridge – gowns, rowing, fusty old traditions, oak-panelled dining halls. And yet what struck me as deeply un-British, and unlike Oxbridge, was the maniacal determination of these undergraduates to get rich, the single-mindedness with which they set about it – and their unalloyed joy in success. Making money seemed to them a good thing, even a great thing, and these days it is not clear how widely shared that assumption is in this country.

Let us imagine a British Zuckerberg. He and his fellow billionaires would be the object not just of envy, but of resentment. There would be debates in Parliament, instigated by Ed Miliband, about the scale of his prospective wealth, and whether it was tolerable in a fair society. Wherever he lived, the British Zuckerberg would be tracked down by anti-capitalist protesters, and even now, in all likelihood, the pop-up tents would be appearing on his lawn. His new-found wealth, in short, would not be the subject of simple amazement. It would provoke amazement and a fair degree of rage; and that – to put it mildly – is not a climate that is conducive to wealth creation.

It is one thing to object to bonuses that are explicitly funded by the taxpayer. It is another thing to start attacking “Mammon” of any kind – because as my old schoolmate Ed Miliband has found, it is very hard to make a distinction between “good” enterprises and “bad” enterprises, between good money and bad money, between profit that is socially useful and profit that is not socially useful. In the general confusion, there is a danger that banker-bashing will metastasise into an all-round scorn for all varieties of money-making instinct – and I can’t believe that is in the economic interests of the country.

We need to stop wasting our energy in hating the disgusting affluence of the top 1 per cent, and we need to start doing more for the bottom 20 per cent. The poor and needy will always deserve help, in taxation and in philanthropy – but we can’t expect to generate either, on the scale of the Americans, if we continue to denigrate wealth-creators. In the US, unemployment is now falling sharply, in contrast to Europe and indeed to this country. Jobs are being created, not least because America is full of people who are not only scrabbling to be the next Mark Zuckerberg, but who know that if they make it they will receive admiration from their fellow Americans, rather than chippiness and disgust.

I have no idea whether the myriad Facebook investors are correct in their potential valuation of this company. I don’t pretend to grasp the economics of the web, which seems to me to be a colossal destroyer of value, reducing the price of text, music, images and voice telephony to virtually nil. But one thing is for sure. If the Facebook bubble bursts, the investors won’t blame Zuckerberg. They will shrug their shoulders and gamble on something else.

It’s called capitalism. It’s about ideas, energy, innovation and reward, and we need to remember that for all its defects, humanity has yet to come up with a better way to run an economy.

 


THANK YOU for being a subscriber. Because of you Whaleoil is going from strength to strength. It is a little known fact that Whaleoil subscribers are better in bed, good looking and highly intelligent. Sometimes all at once! Please Click Here Now to subscribe to an ad-free Whaleoil.

  • Totally agree – not. Umm why would anyone want to destroy wealth – you get tax from it! Oh wait there’s the issue, you don’t get tax from the wealthy – Ahh now I get it….!!  Well then solve the problem make the wealthy pay the same tax as everyone else – Tui Moment!!!

    • In Vino Veritas

      44 percent of households in NZ are net beneficiaries Neil. Which households then, pay the tax taken by then NZ Government? It certainly isn’t any households “earning” $50,000 or less. Your proposal that “the wealthy pay the same tax as everyone else” might well be accepted by the wealthy (whomever they are, you don’t seem to have any idea), since it would mean a zero tax rate.  

      • Anonymous

        Why do I, earning the gargantuan sum of $80,000 a year with a stay at home wife and two kids, owe something to some bum who left school at 15 and blames the world for his problems?

    • James Gray

      Of course you don’t really want to destroy wealth. You stigmatize it, which makes taking it away from the wealthy easier

    • onelaw4all

      The wealthy pay more tax.
      You are the weakest link.
      Goodbye.

32%