This article was originally published by George Ford Smith at The Mises Institute.
If you read enough commentary, you’ll find various versions of the idea that our ruination is the result of powerful private interests driving government decisions that benefit them at our expense. Simply put, rich guys can buy votes that favor them, and only them. In some cases, they augment their bribes with blackmail.
Does the problem lie with the billionaires or the government?
One way a person can become a billionaire is by providing people with a product or service they want. As various economists have pointed out, the money people use to acquire the product or service is like a vote cast. The votes can change overnight if the entrepreneur fails to deliver what people want at a price they can afford, or if a competitor offers something people perceive as better or cheaper.
This process of voluntary production and exchange is the free market in action. But security agencies are needed to keep this process free of coercion. Traditionally, this has been the government’s role as a protector of fundamental rights, but government as established is supported not through the voluntary choices of customers but through the legally authorized imposition of taxes. Unlike transactions with Walmart or Amazon, people who don’t pay taxes are subject to fines or incarceration.
If government stayed in the role of rights-protector the market might function smoothly. But it has never remained confined to that purpose. The idea of “protection” has expanded over time to become a lucrative racket. People have turned to government for favors, and legislatures have passed laws granting them to some but not to others, under the heading of protection.
Politicians don’t grant favors as gifts, they expect something in return, such as campaign donations. This has developed into a pay-to-play reality that companies ignore at their peril. When government possesses the power to reward and punish, cultivating political influence becomes as important as serving customers.
Microsoft—the company that spawned three billionaires and roughly 12,000 millionaires by 2005—has become one of government’s BFFs since it was awakened with an anti-trust suit in 1998. “Microsoft is bridging AI, data, and trust across the entire US Government,” it boasts on its Microsoft for US Government website.
What started as a couple of young hackers in the mid-70s writing a BASIC interpreter for a self-assembled 8800 Altair microcomputer they saw promoted in the 1975 issue of Popular Electronics, has become a virtual government agency along with other tech giants, including Google, Amazon, Oracle, Palantir, IBM, Cisco, and SpaceX. As companies grow, especially in the technology area, they tend to head in the government’s direction. If we want to know why, one reason might be the answer bank robber Willie Sutton gave when asked why he robbed banks, “because that’s where the money is.”
Government gets its money not from creating and selling advanced smartphones, or Mac OS knockoffs such as Windows, but from involuntary transfers known as taxation and Federal Reserve monetary policy that siphons purchasing power from Americans’ dollars for government purposes, such as war and surveillance. Theft and fraud are its means for acquiring wealth that others produce.
Whether it’s a ladder to climb a tree or a smartphone to call home from the tree, technology serves us if we let it. When government acquires technology with our money we’re giving it more power it hasn’t earned to increase control over our lives.
Apple’s War with the FBI
Apple is one company that does not always bow to government demands. In the aftermath of the terrorist attack in San Bernardino, California on December 2, 2015 that killed 14 people and wounded 22 others, the FBI acquired the iPhone 5C of one of the shooters, Syed Rizwan Farook:
The FBI soon encountered a major setback in this effort. Farook’s iPhone 5C had been locked with a four-digit password. As was standard on iPhones of this generation, ten failed attempts at guessing the password would automatically erase all the encrypted data on the phone. Additionally, the FBI could not bypass this feature due to the 256-bit advanced encryption standard (AES) used to protect data on this particular model of iPhone. AES is known for being extremely complex and nearly impossible to break; supercomputers would need hundreds of billions of years to guess the algorithms required to overcome this encryption.
When the FBI asked Apple to create software to unlock the iPhone, Apple CEO Tim Cook denied the request, saying it could be used to violate the privacy of other iPhone users. The Obama administration pressured Apple to comply, but Cook stood by his decision. In a letter to Apple customers, he urged them to support “personal privacy by opposing the FBI in this matter.” In mid-March of 2016, an unidentified company apparently provided the software to break the encryption, and the FBI withdrew its request.
[Apple] hoped to learn how the FBI had unlocked the phone so it could improve the security of its products, but the FBI confirmed it would not reveal this information, mostly because it did not own the rights to the technology.
As of 6/23/26, Tim Cook’s net worth is $2.9B according to Forbes, which, for some people, plants a bull’s-eye on his back. Tim Cook is not a Steve Jobs, but he did inherit a degree of institutional independence for which Apple is known. Though it is no longer a rabble-rouser, it was born in defiance of Big Brother to make a computer “for the rest of us.” See this.
Conclusion
Not all tech billionaires pad their net worth with government contracts or use their wealth to buy favors. But the option exists because government is a rogue organization within a free market. Security is needed, but not from an agency that steals from us legally. If we apply market principles to security providers, which we already do for private firms, tech billionaires would have incentives to serve us exclusively because we would be where the money is.
Read the full article here