The internet is commonly cited as a shining example of an innovation birthed from government-funded research and development (R&D). From TCP/IP to HTTP to HTML, the lineage of the internet is filled with government agencies and universities. I ran into this argument many times while debunking the idea that entrepreneurs in the private sector don’t innovate. As a believer that government funding is completely unnecessary, however, the case of the internet can’t be ignored or brushed aside. It must be addressed to remove the asterisk in the minds of skeptics.
Would the internet exist if the government hadn’t funded so much of the foundational R&D? I believe it still would. As Steve Fritzinger explains in How Government Sort of Created the Internet, the initial idea was not actually hatched at the Department of Defense’s Advanced Research Projects Agency (ARPA):
The idea of internetworking was first proposed in the early 1960s by computer scientist J. C. R. Licklider at Bolt, Beranek and Newman (BBN). BBN was a private company that originally specialized in acoustic engineering. After achieving some success in that field—for example, designing the acoustics of the United Nations Assembly Hall—BBN branched out into general R&D consulting. Licklider, who held a Ph.D. in psychoacoustics, had become interested in computers in the 1950s. As a vice president at BBN he led the firm’s growing information science practice.
In a 1962 paper Licklider described a “network of networks,” which he called the “Intergalactic Computer Network.” This paper contained many of the ideas that would eventually lead to the Internet. Its most important innovation was “packet switching,” a technique that allows many computers to join a network without requiring expensive direct links between each pair of machines.
Licklider took the idea of internetworking with him when he joined ARPA in 1962.
Had ARPA not hired Licklider – in other words, had the government not been in the business of funding research – it’s hard to believe the idea would have simply died, never again to find funding or interest. Licklider could have stayed at BBN, or moved to another private company, and continued to develop the idea there. The same goes for Ivan Sutherland and Bob Taylor, who continued developing the idea at ARPA. Perhaps they would have crossed paths with Licklider in some other way, or stumbled upon the idea on their own. As Bastiat taught us with his broken-window fallacy, one must not just consider the short-term “seen” effects, but also the long-term “unseen” effects. Had the government not consumed the money and resources (including people) in ARPA, how would it have been used? It’s short-sighted to conclude that the internet would not have been created, if not something even better.
“Okay,” a critic might retort, “even if I believe that, we’d likely have ended up with a much more fractured, closed internet with private companies hoarding control for maximum profit.” While its history would undoubtedly be different, it’s hard to imagine the internet being more closed off than it was under government control. Here’s Fritzinger once again:
For its entire existence the ARPANET and most of its descendants were restricted to government agencies, universities, and companies that did business with those entities. Commercial use of these networks was illegal. Because of its DOD origins ARPANET was never opened to more than a handful of organizations. In authorizing funds for NSFNET, Congress specified that it was to be used only for activities that were “primarily for research and education in the sciences and engineering.”
During this time the vast majority of people were banned from the budding networks. None of the services, applications, or companies that define today’s Internet could exist in this environment. Facebook may have been founded by college students, but it was not “primarily for research and education in the sciences and engineering.”
If anything, the internet succeeded despite the government keeping it restricted for 26 years (until 1995, when NSFNET was shut down and government involvement ended). It was the private sector that opened it to the masses and continued to innovate in the space:
This restrictive environment finally began to change in the mid-1980s with the arrival of the first dial-up bulletin boards and online services providers. Companies like Compuserve, Prodigy, and AOL took advantage of the home computer to offer network services over POTS (Plain Old Telephone Service) lines. With just a PC and a modem, a subscriber could access email, news, and other services, though at the expense of tying up the house’s single phone line for hours.
In the early 1990s these commercial services began to experiment with connections between themselves and systems hosted on NSFNET. Being able to access services hosted on a different network made a network more valuable, so service providers had to interoperate in order to survive.
So while it’s likely that the internet would still exist even if the government hadn’t funded so much of the foundational R&D, perhaps the more pertinent question is actually: Would the internet exist as we know it today if the government hadn’t gotten out of the way? Would we be streaming movies and shows on Netflix? Would we be shopping on Amazon? Would we be listening to music on Spotify?
Almost certainly not.