If you think long-term then you have no choice but to agree that one of the biggest concerns of our time is population control. Population simply has to balance to resources, and if it's not balanced actively it will be balanced passively - that is, through wars and famines.
China does population control through direct control - caps on the number of children people can have. That's incredibly efficient, but it takes a tyranny (not democracy) to pull it off. The West does population control a little differently. We broke down old religions and traditions (video here), and invented social movements of sorts to erode low-cost child rearing, and even the human desire to have large 'expansionist' families. Southern Africa, to further contrast, mostly does population control the ancient way - violence and famines.
Now the world is about to change dramatically, once again, and it will be a consequence of key infrastructural technologies. Namely driverless car technology, and ultra fast and universal Internet (5g). With these technologies we will quickly see the implementation of mobile robotics, where in theory nearly no-one will need to leave their homes to get anything done. The overall result will be an incredible level of streamlining in our production processes; the elimination of the need for institutional schooling (as we know it); and most critically very cheap food and cheap housing.
Now that's all very well and dandy, except for one thing. Cultures that are tuned to generate high fertility rates are then destined to explode in population as nothing will be holding them back, if their cultures do not critically change with our coming technologies. Africa and the middle east, Islamic nations, will sustain about 4 - 10 children per couple. This will lead to their exponential growth - rapidly dwarfing the Western and East-Asian worlds, where cultural life has become more about being a child than breeding a child.
So what does this mean? It means we're in for a global Islamic take-over via imbalanced fertility rates (see here). From there we risk a true Malthusian nightmare as there will be little resistance to exponential population growth, soon to exceed the carrying capacity of the earth in spite of modern and developing technologies.
Within this scenario, the world would see another concern. Once the globe is well over 50% Islamic, the fundamentalist-Islamic threat becomes serious. A radical minority (extremist Islam) can always dominate a not-so-radical majority, through shear ruthlessness alone. It happens. The following result could well be a global war, eventually turning the entire world into Saudi Arabia, or worse, which is in fact the ultimate objective of the fundamentalist-Islamic faith. The "global caliphate".
So what is my conspiracy hypothesis?
Well if we take it as given that our public politicians are basically like the Spice Girls (puppets who just do what they're told - driven by polls and special interests) then the powers that be, if they're long-range thinkers (they must be, I believe) may well take the population threat seriously and, for all we know, may be operating a plan to derail it. Because as politically incorrect as it is to say, turning the world into an extremist-Islamic empire is not a happy ending. That worst case scenario should surely not be allowed to eventuate, if we are to have compassion for the generations coming after us.
So adopt a pragmatic frame of mind: How do you break the Islamic world's back?
One way is to go to war with the Islamic world; through Africa, the middle east, and other Islamic areas like Pakistan. The purpose of the war (once won) would supposedly be to enforce Western controls in existing Islamic nations.
Those controls could be:
1. Pervasive information-based security systems to block the potential for Islamic radicalisation.
2. Anti-cult laws, which dictate that young children must be exposed to theology studies before their religious convictions becomes dictated by their parents.
3. The secure creation of safe-places to facilitate apostasy (the freedom to abandon your religious faith).
This would break down the Islamic fertility threat, as it would break down the faith system that would otherwise make other fertility-control initiatives impossible, or brutal.
Is this, very crudely, the game? Are we being primed for war against Islam, ultimately to the end of controlling global fertility? We were certainly primed to destroy Iraq, if you remember. Is the idea so irrational and improbable?
In New Zealand for example, due to the Christchurch massacre, it's fast becoming taboo to even question Islam out of fear of being associated with the "extremist right". This 'code of silence' threatens give a free pass to the development of Islamic radicalisation, which may in turn allow for extremist-Islamic revenge attacks in New Zealand and elsewhere. Tit-for-tat terrorism could prime the public sentiment for war, which could lead to what some believe to be an ultimate necessity - the necessity of breaking down the Islamic world's fertility, to bring them in line with the rest of us.
Conclusion
Just a hypothesis! Make no mistake I do not endorse war. It's just my wild speculation on how others might be thinking, and maybe powerful others. I have long been suspicious that so many public policy movements throughout the world point to [deliberate?] population control, in their effect, because that is exactly what they do.... Who knows what really goes on behind closed political doors. But it's ultimately true that population will need to be controlled (see here) and on a global scale, somehow or another. And I don't believe that the powers-that-be would have failed to think that far. It's just too obvious. How do we suppress the coming hyper-fertility of the Islamic world? The political question might be as simple as that. And doing nothing may not be an acceptable answer. Further relevant article: The Eugenics Question.
Post Note: New Zealand's new hate speech laws that are about to be imposed will be interesting. The included video below is not hate speech by any honourable standard, because the expression is strictly objective and the motive is entirely constructive. However, the government could claim that the video paints Islam in a negative light, and in turn threatens to offend Muslims and incite negativity towards Muslims, and is therefore hate speech and should be shut down. If so then this is exactly what radical Islam will want. They will be protected from serious criticism and in turn win a free pass to infiltrate New Zealand and do who knows what.
Conversely, hate speech laws may only work, in practice, to shut down truly hateful people who are not usually dangerous though ugly and abusive. This would in turn leave people who talk on the level shown in the included video alone. That would be the opposite of what radical Islam wants, because what that would do is legitimatise critics of Islam in the public eye, because mature critics are then not defamed by association with skinheads and the like. We will just have to wait and see how the hate speech game plays out.
As I have stressed so often, all we need for a driverless revolution to begin is for a tiny Twizy car to be able to send itself to the next customer; with the rider, at first, driving actively when in it. No serious safety concerns - we can easily do this today. So the driverless revolution should be a soon-to-be tomorrow revolution.
Replacing Uber, ride-sharing, eliminating most parking needs, the need for private ownership, and replacing conventional public transport except for where it's needed in high-capacity corridors.
However, we need to ask ourselves if the driverless systems of tomorrow--almost certainly dominated by either Waymo or GM--will form a natural monopoly, like Facebook? Once one system gains the dominant market, will it become the (virtual) exclusive system?
That's a big and pertinent question, because if New Zealand imports Waymo's driverless system, and it dominates 70% of land transport demand overnight (yes it probably will), then we risk exporting massive monopoly money to Waymo or GM for nothing, of which we cannot practically escape, because the nature of the "driverless Uber" format is to evolve quickly towards monopoly.
Solution? Probably the most practical thing to do, is to treat the system as a public utility. If it's going to be a natural monopoly then it might be best to make it public.
One model is for New Zealand to adopt Waymo's system as a franchise. Pay Waymo a fair royalty, and let New Zealand own and manage the system within their country, to the most practical degree possible.
In this scenario, New Zealand will not directly benefit from competition advancing driverless systems, but this does not have to be a concern. New Zealand is so small that its capacity to innovate with this kind of costly technology is limited regardless, and New Zealand can still, quite simply, observe winning forma's that other countries have developed and import those innovations as time goes on.
So that is my argument. New Zealand could be wise to own their own "KiwiRide" development, and work directly with Waymo today to develop New Zealand's roading infrastructure, to make Waymo work best for a New Zealand context. Again, if it's going to be a natural monopoly--and it probably will--then making it a public utility might well be the best way to go.
Included is a great video that highlights the point.
December 20, 2006
VIA: FedEx
Elisabeth Laurence
Bay Area Council
200 Pine Street,
Suite 300
San Francisco, California 94104
Dear Ms. Laurence:
Thank you for your invitation to be the "leader/champion" of the Global Competitiveness Initiative.
I have read carefully much of the information you gave me about the Bay Area Council (BAC), especially the "One Million Jobs At
Risk" analysis. I agree there is a substantial and important manufacturing base in the Bay Area that should be preserved and enhanced.
Currently, we are driving that manufacturing base away with bad policies. We have literally driven the silicon out of Silicon Valley.
However, I disagree with the position that we are in a state of dire emergency with only two years to fix these problems or lose our
competitive advantage. That dire-emergency method of scaring people into action is borrowed from politics. I deeply dislike politics
and all but a few politicians.
While we may both hold a similar view of the desired result - an economically competitive Bay Area, there may be certain issues, and
perhaps even some underlying philosophies, that separate my views from those of the BAC. While it is possible for people with
divergent views to work together toward a common overarching goal, it is less likely that those parties can work together if they
disagree on the specifics of how to achieve that end goal, and even less likely that they can work together when their basic
philosophies differ. Below, I give my perspective on some issues that may divide us.
The Light Rail in San Jose and the BART extension to San Jose are a clear waste of money that will not reduce traffic congestion in
the Bay Area. Anyone reading the government statistics compiled and analyzed by the Reason Foundation in Los Angeles, experts on
public transit (reference 1, attached), comes to understand quickly that neither Light Rail nor BART make sense for Santa Clara
County. The Light Rail system here is such a miserable economic failure (ref. 2) that the VTA blacked out the windows of its trains so
the public could not see that they are usually empty. There is a Light Rail stop directly between the headquarters of my company,
Cypress Semiconductor, and that of Cisco Systems. Despite the massive scale of Cisco; almost no one uses that train. In one informal
survey I took, there were only eight Cypress people (plant population: 950) using the system on a daily basis. My survey was quite
accurate: San Jose Light Rail has never exceeded its 1992 ridership, despite massive investments (ref. 2.1). It also has the lowest
ridership of any U.S. system (ref. 2.3) and accounts for less than 0.2% of passenger miles traveled in the area (ref. 2.5). Its ridership
could triple with no effect on Silicon Valley traffic congestion. Light Rail is both expensive and ineffective, yet we keep wasting
money on more tracks to carry more empty trains, relying on circular "Field of Dreams" logic: "If you build it, they will come."
Unlike business, which must account for its use of capital, Santa Clara County Light Rail is allowed to ignore capital expenditures and
merely meet its maintenance and operating costs to declare economic success. That it fails to meet even that minimal financial
criterion is no surprise to anyone who has studied Light Rail in other cities. At the time our Light Rail system was installed, most of
the approximately 20 Light Rail systems in the U.S., each created as a political stepping stone for local politicians, were economic
failures, unable to cover their incremental costs and missing their ridership projections dramatically (ref. 1.1, 1.2, 1.4). in most U.S.
cities, despite ongoing investments, ridership on public transit actually declined both in market share and even in absolute numbers
over the last 20 years (ref. 1.1, 1.2). Only New York (25%) and Chicago (11%) exceed a 10% share of market (ref. 1.3).
I believe that BART to San Jose would be an even bigger economic failure than the Light Rail, unfortunately for typical reasons: The
biased consultants hired by politicians have grossly overestimated ridership revenue, which, in turn, will never cover the project's
huge costs, which are much higher than those of Light Rail. The talk about a BART "Ring Around the Bay" is an aesthetically
pleasing economic folly. We are not Manhattan. We do not want to be Manhattan. Yet, ambitious and uncreative politicians continue
to foist Manhattan-style transportation on an area characterized by wide geographic distribution, a.k.a. "urban sprawl" (more on that
topic later). There are sensible forms of mass transportation, such as the commuter bus systems in Los Angeles and Seattle that pick
up suburban commuters in the morning on local busses, which turn into freeway express busses and then back into local busses to
drop off riders in business and industrial zones. These systems are highly cost-efficient because they use existing infrastructure
(freeways) and add only a modest amount of capital equipment (busses) to move a significant number of people. They would work
even better if the High Occupancy Vehicle (HOV) lanes on the freeways were converted to market-priced High Occupancy Toll
(HOT) lanes that would remain uncongested during rush hours (as in Orange County and San Diego).
The success of the L.A. bus system also makes it obvious why Silicon Valley commuters ignore our Light Rail transportation: Its
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master plan fails to recognize that commuting involves at least a three-legged trip, 1) to the train station from home, 2) from station to
station, and 3) from the train station to the job. Light Rail and BART solve only the station-to-station problem. A "good citizen" who
tries to use Bay Area public transportation must drive his or her car to the station anyway, pay a significant parking fee (if a parking
spot is available), then zoom from one station to the next, only to have to find yet another way to get to work from the end station. I
haven't even discussed the "irresponsible" 52% of all commuters (ref. 1.7) who stop for groceries or at Starbucks in the morning,
necessitating private transportation. This classic government disdain for customer service is why commuters mostly ignore public
transportation 'not only in San Jose, but most other cities that have sunk money into Light Rail (ref. 1.9). If the BAC is going to push
public transportation in the Bay Area, it needs to present new ideas that will pass the scrutiny of the engineers in the Bay Area who
see through the hyped-up claims used to justify multibillion-dollar taxes.
Let's stop demonizing the single-person commuter. As we get teary-eyed over the "economic miracle" of Silicon Valley, let's stop
insulting the very people who have created that miracle, namely those who, like me, drive to work by themselves every day. I do not
want to get on my bicycle, ride miles to the nearest train station, take one train, connect to another train, then ride my bicycle to work
on crowded and dangerous expressways. That's not a reasonable way to treat Me or my employees. Those who propose it will be
written off as environmental zealots or politicians with an agenda. If the BAC truly believes in free-market economics, it should show
respect for the commuters that have created the Silicon Valley economic miracle. We can obviously pay not only for the cost of our
commute, but also create enough wealth to pay over $100,000 in wages per employee, as we create new businesses with huge market
values. The transportation choices intelligent, successful individuals have made should not be disdained by arrogant politicians.
If the BAC wants to take the highly risky position of telling the people of Silicon Valley that it has a "better idea," then that idea needs
to be demonstrably better. That idea must offer a direct benefit to the people of Silicon Valley, not just a penalty for bureaucratically
determined "undesired behavior." For example, the commuter bus system in Los Angeles can offer a worker the luxury of a portable
desk during the morning commute. Furthermore, with his or her commute vehicle turning into a well-appointed bus, a worker can
enjoy the added economic benefit of owning only one vehicle. We should use the WIlFY (What's In it For You) argument to convince
intelligent, analytical people to change their lifestyle, not governmental badgering to force people to use poorly engineered
transportation systems.
Sometimes the best way to solve a transportation problem is simply to make the freeway wider. Did you know a freeway lane costs
only about 25%-50% to build per mile relative to Light Rail and carries 15 times more people? (Ref 2.3, 2.4.) The numbers are even
worse for BART. Did you know that the Long Beach-L.A. Light Rail, the country's busiest Light Rail line, carries the equivalent of
only one lane of freeway traffic? These statistics are shocking because the public has been fed only pro-train propaganda for years.
This year, SunPower, the solar cell company of which I am chairman, will manufacture solar cells that produce 65 megawatts of
power. Next year, that figure will double. The point is simply to establish that am a true environmentalist, one who uses his intellect
and capital to produce pollution-free energy.
Many of the so-called environmentalists of today are just power politicians, those who use often spurious environmental issues to
control the resources of others. They often win their political victories by championing the "rights" of various species, such as the redlegged frog, to foil the efforts of people to utilize their own property, or by forcing governments to spend money on ecologically
correct projects that make no economic sense. In most cases, the government accedes to the demands of this group that I label
coercive eco-topians. When politicians cave in this way, environmentalism ceases to be a science and becomes a secular religion: Cars
are bad. Freeways are bad. People who drive cars are bad. Houses that require a commute are bad.
We must turn ecology back into a science that respects property and human rights. While it is a political loser not to be "green," we
should focus on real ecological accomplishments to counter ecotopian scare tactics. For example, the Bay Area has very much cleaner
air than it has had at any time in the last 35 years, even as we are bombarded with the-sky-is-falling misinformation. The eco-topians
are noisy and get much free airtime from their brothers and sisters in the media. Politicians are afraid to challenge eco-nonsense as
such for fear of bad publicity. What does that mean to the BAC? if the organization bows to secular religious environmental beliefs,
rather than basing its policies on science and economics, its policies will soon be shown to be ideologically bankrupt.
In a decade or less, about the time it will take to implement a train-based mass transit plan, many of our current beliefs about
transportation already will have been obsoleted by technology. If we spend the next 10 years building the infrastructure and laws to
force commuters off the road, what will we tell them in 2015, when they reasonably want to drive their zero-pollution, 150-mpg cars
on the freeways to go to work? Even without electric cars, since 1970, as U.S. automobile vehicle miles tripled, air pollution, as
measured by the EPA, has been cut in half by better emission controls (ref. 1.11). Of course, if we have already invested billions in
trains, tracks to nowhere and "smart growth" developments by then, we will make up a political lie, such as, "Your car may get 150
mpg, but the plant that makes the electricity for it does pollute..." Silicon Valley engineers will answer that the plant producing power
for their cars has state-of-the-art pollution control equipment, produces one-third or less of the pollution per mile compared with the
cleanest of the old-fashioned Prius cars, and that their cars emit zero-pollution in urban areas where it counts.
We may also try to convince commuters to use trains because the 30 minutes per day they spend in their automobiles on the way to
work will get worse unless they take public transportation (a lie: the average commute time has been constant for over a decade).
Their response will be that while Government reports say they "lose" time commuting, they actually enjoy entertainment, make phone
calls to Eastern Time zones on their wireless headsets and listen to the news on podcasts as they commute. In short, they will tell us it
is none of our business what they do in their car on the way to work on a road that they paid for, and they will be right.
The view that our train system will become obsolescent while it is being built is not science fiction. I've already been in three different
automobiles that are powered by electricity, provide more than 100 mpg equivalent fuel efficiency, even in their prototype forms, and
will soon get as much as 20% of their "gas" from solar cells that charge their lithium-ion batteries in the parking lot. This revolution
will be occurring even as the iron is being laid for the BART tracks to nowhere, our 21st century version of the Maginot line. The
arguments for BART remind me of the generals who, during the Cold War, came to Congress every year to show satellite photographs
of the largest tank factory in the world, in Siberia. It worked to get funding for the generals, but not for the Soviet Union. By the time
they were ready to re-fight World War II with more, bigger tanks, the Soviet Union went broke, due to poor public investment policy
(more about the Politburo later). There are already more telecommuters than mass transit users in 27 of the 50 most populous urban
areas, Silicon Valley is notorious for obsoleting technologies. Why are we investing in 200year-old train technology that is already
being successfully attacked by electronics? We could do a lot more with half the money, if we invested it in communications and not
trains.
The "urban sprawl" that eco-topians hate is my backyard and that of my employees. Some of our employees live in San Francisco
because they enjoy the urban life and don't mind the long commute. Others have new families and want a backyard for their children,
away from the noise and pollution of transportation corridors. I live in Woodside, which was on the northern perimeter of the 30-
minute driving-radius circle I drew on a map when I began house-hunting in 1979. I do not mind my 30-minute commute, as I work in
my car (dictating this letter, for example) or just listening to news radio. In short, the free market is nowhere more evident—or
important in peoples' lives—than in the personal housing and commuting choices they make. Urban "sprawl" and its concomitant
commute are worldwide phenomena (ref. 1.6, 1.10) that reflect the typical choices people make worldwide as they become more
wealthy.
As the examples above illustrate, there is no such thing as "smart growth," as dictated by politicians and enforced by local zoning
czars. For example, it would be hypocritical for me to say—as I view my vineyard from the deck of my Woodside home—that
someone else needs 'smart" growth; that their house should be a small apartment next to the railroad tracks, because I believe ifs good
for the environment. I am unwilling to usurp the freedom of others to feed any eco-topian vision of urban perfection. After Light Rail
failed to achieve its projected ridership in most cities, local bureaucrats took the next step—using the building-permit process to force
people to live in smart growth ghettos next to the railroad tracks that carry the empty trains. (Look at any 20-year-old government
sanctioned apartment complex in the Bay Area to see the future of "smart growth.") This is what's happening now in San Jose.
Nationally, Light Rail typically doesn't get to 20% market share until population densities become five times higher than that of San
Jose (ref. 1.8, 1.9).
I consider the loss of property rights inherent in "smart growth" to be an evil on par with the current spate of Eminent Domain abuses,
but more insidious, because it does not produce the horror stories of retired couples being thrown out of their homes of 40 years, as
they are "condemned" due to the lack of an attached garage—and the pressing need for taxes from a new shopping mall. If the BAC
believes in free-market capitalism, as it claims, it will support free-market housing choices over the heavy hand of a central housing
authority, populated by hostile government bureaucrats, who literally dictate not only where to build houses, but how to build them,
what type of lights they must have in them and even what color they must be painted.
Centralized authority in the form of the Politburo of the old Soviet Union failed miserably, caused horrible .economic damage that has
yet to be remedied and put that country out of business. Of course, the Politburo put housing for workers near the giant Siberian tank
factory, it only made sense. Socialism and the collectivist controls that surround it have never worked as well as free markets—and
never will. If the BAC truly believes in free markets, it must not only say so, but it must act in a manner consistent with that belief,
even when it comes to suppressing its urges to force its own "good ideas" onto the citizens of the Bay Area. Being free inherently
contains the right to make a bad decision, even as a paternalistic and well-meaning government watches it happen without acting.
Silicon Valley was created by individuals making choices to promote self interest in a lightly regulated and completely unplanned
economy. There is no evidence whatsoever to indicate that any shift from a free-market economy to a more collectivist economy
would benefit Silicon Valley. Indeed, there is iron-clad evidence from the Fraser Institute, which was founded in part by Milton
Friedman, that the more free the markets are in any country, the better off its citizens are both in per-capita income and the growth rate
of that income (ref. 3.0-3.9). Consequently, the SAC should avoid forcing its views onto the market (a collectivist act), despite the
credibility of its experts or even the demonstrated business successes of the members of its leadership.
Consider the chain of wealth-building in Silicon Valley, as it might be described by a detractor trying to regulate the "excesses" of
Silicon Valley:
"Santa Clara Valley was once a pastoral and unpolluted place full of fruit orchards, most of which have been torn up and
paved over to make the parking lots of ugly, high-tech buildings. We used to buy fresh fruit at roadside stands on the side of
Highway 101, before Gilroy became part of the urban sprawl surrounding Silicon Valley. The money for those sprawling
industrial buildings came from an unabashed quest for profit. Local banks lent money at high interest rates to developers,
who, in turn, built the cheapest possible buildings, despite the fact that they charged very high rents for them. Eager to
preserve the small amount of Money given to them at high prices by venture capitalists, the executives of start-up companies
paid high rents rather than using their funding to build and maintain more socially responsible, artistically pleasing buildings.
The executives knew that if they could bring a new technology to the marketplace, they could score instant riches in a stock
market that has always been ready to dramatically overvalue companies that were really nothing more than products with a
corporate name. Ultimately, the only ones who made money were the developers, the venture capitalists, and the get-rich-
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quick executives, who even backdated their stock options to make more money. Silicon Valley white-collar workers did earn
salaries more than double the national average, but it helped them little, because they were chasing* housing prices that grew
even faster. And, as soon as the workers started to make too much money, the leaders of Silicon Valley replaced them with
immigrant labor or offshored their jobs. We should get our political representatives to pass laws to make sure that the
disgusting excesses of Silicon Valley are never repeated.'
The enemies of freedom, and therefore the enemies of capitalism, are defined by the statements above. They resent the wealth created
by Silicon Valley, even when that wealth is spread widely. The statements above are not just hyperbole; they are believed and actively
promoted by groups with significant political clout. They use securities laws, tax laws, environmental laws and zoning ordinances to
fight against Silicon Valley and its entrepreneurs with all of their energy.
Free market capitalism and socialism are irrevocable enemies. There is no such thing as a political compromise with a group that
fights for the demise of the economic system that created Silicon Valley.
Let me introduce you to some of the characters behind-a true version of the Silicon Valley story outlined above. The developer is John
Arriaga, who builds economical buildings for entrepreneurs. He allowed them to use their scarce funding to develop the new
technologies that changed the world, rather than putting up buildings to impress the architecture critic of the San Francisco Chronicle.
Because Arriaga served Silicon Valley well by providing ready-to-use, economical buildings, he made a lot of money, tens of millions
of dollars of which have been donated to Stanford University, one of the cradles of the brain trust of Silicon Valley. The entrepreneur
is T. J. Rodgers, who started Cypress Semiconductor because he thought he could bring his ideas about silicon chips to market and run
a company better than the companies he worked for. He knew that successful start-up CEOs could make a lot of money; but he still
holds most of the stock he received from his company. His company now employs 5,000 people, worldwide, and makes not only
silicon chips, but the most efficient, commercially available solar cells in the world. Despite their passion for technology, Cypress
employees have won the award for most food donated to the Second Harvest Food Bank 14 years in a row, and donated rehabilitation
centers and mobile prenatal care units to the Santa Clara Valley Medical Center. Where there is no wealth creation, there can be no
charity.
Among the immigrants that "took jobs" from native-born Americans were Vinod Khosla, an Indian venture capitalist who was one of
the founders of Sun Microsystems and Andy Grove, the Hungarian-born member of Intel's founding team. Khosla's and Grove's
companies created well over 100,000 high-paying jobs that helped build the economic foundation of Silicon Valley. The average hightech worker in Silicon Valley now earns about $100,000 per year.
Houses are so expensive not because of workers' salaries, but because San Jose has a low-growth policy that prevents the building of
new homes outside the "smart" growth areas dictated by local politicians (ref. 2.15). Many members of the Silicon Valley brain trust
have left the area, a disaster for the Bay Area economy, because of destructive eco-topian housing policies. My company maintains
R&D centers in Ireland, India and Oregon partly to offer our top R&D people a chance to stay with our company, but move to a place
where they can buy a house. Other high tech companies also pay to relocate high-tech employees out of the Bay Area, rather than lose
them. For example, Intel has huge R&D centers in Sacramento and Oregon. Some Silicon Valley workers and managers have chosen
to quit and start high-tech companies in new technology centers such as Austin and Colorado Springs. Those cities routinely talk
about their aspirations to become the next "Silicon Valley." Rather than over-regulating their nascent technology industry, the new
high-tech areas welcome new companies with streamlined regulations and even tax breaks. My company literally received a building
permit to build an entire wafer fabrication plant in Round Rock, Texas more easily than it did to build an employee gas station at our
San Jose plant (the employees love it). if other states continue to practice free-market capitalism, while Silicon Valley drifts toward a
regulated economy, their high-tech industries will grow and prosper, while ours will stagnate. it's that simple. And it's that hard. We
must stand up to the philosophical forces that oppose the free markets on which Silicon Valley was built. This battle is about
philosophy, not economics. The BAC must get on the moral high ground, reversing the traditional arguments that support free markets
because they produce good economic results.
We should not justify free-markets because of their economic benefits. Free-markets are morally right on their own. They also .happen
to produce excellent economic results because they provide human beings with the opportunity to make themselves better off. The
American dream is a result of freedoms partially conceived and implemented in England and brought to practical fruition by the U.S.
Constitution and Bill of Rights. We should be ardent in our defense of the rights of Americans, because that is the morally right thing
to do. The BAC should defend property rights, as it did in the case of the recent eminent domain initiative, but fails to do in its support
of smart growth. The BAC should visibly join forces with the ACLU whenever the rights of citizens are being trampled, and
scrupulously avoid trying to take away any of the rights of citizens itself. The "lithe guy" will side with business when he feels
business is on his side.
It is not clear that a philosophical consensus of CEOs can be achieved in the Bay Area, because of its extremely diverse base of
companies. The BAC power structure seems to be controlled by San Francisco-based companies that were created by pioneers 100
years ago and are currently maintained as icon corporations. On the other hand, the culture of Silicon Valley is about attacking the old
guard with new technologies brought to market by new leadership. Although my company, Cypress Semiconductor, is relatively
young on the scale of most San Francisco companies, I have watched the demise of 42 of the 59 U.S. semiconductor companies that
existed at the time of our founding in 1982. It is Only by our creation of seven internal start-up efforts (five of which came to no
consequence) that we have been able to remain among the 17 survivors. As the attached paper, "The Paradox of the Statist
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Businessman," by Theodore Forstmann and Edward Crane of the CATO Institute describes, the CEOs who preserve iconic institutions
have very different values from the would-be CEOs of Silicon Valley, who spend their lives working on creating economic upheaval
(ref. 4).
Planning, at least the type that picks technology winners and losers for deployment over a five-year timeframe, has become irrelevant,
if not counterproductive. Moore's law. guarantees that any company's most advanced silicon technology will be obsolescent in two
years and totally obsolete in four years. Furthermore, attempts to plan a technology progression are deliberately disrupted by waves of
new entrepreneurs who strive to invent better and lower-cost technologies on a faster timetable. Venture capitalists deliberately seek
out start-up companies with disruptive technologies, knowing that if they can obsolete the static plans of a big, slow-moving
competitor, they can make a huge profit, and serve mankind in the process. Does anybody believe that the emergence of Google left
unscathed the plans of any information technology company in the world? One of the reasons that the proud fathers of "Silicon
Prairie," "Silicon Forest," "Silicon Mountain," etc., have never really harmed Silicon Valley after more than 20 years of trying, is that
their use of Soviet-style, five-year plans and naive technology assessments will never compete effectively against the unbeatable
random chaos of the free market in Silicon Valley. They never had a chance, and still don't, unless we foolishly start creating our own
five-year plans.
Nanotechnology (a.k.a. nano-BS) is a classic example of how technological con men can dupe city fathers and government
bureaucrats into wasting millions of dollars, First, nanotechnology is not a technology per se, like silicon integrated circuit technology
or relational database technology or genome mapping technology. Nanotechnology refers to the direct manipulation of individual
atoms and molecules, something scientists and engineers have been doing for years. Most of the pictures in the BAC's glossy brochure
nanotechnlogy were of the useless, "Gee Whiz" type: a picture of atoms glowing in falsely applied color, forming a kanji
character, a picture of nanotubes forming a miniature American flag, etc. After the "Wow, we can now control atoms" section, the
brochure then describes some well-known material phenomena in a misleading way. For example, carbon nanotubes, made from one
of the cheapest and most abundant elements on earth, are claimed to be stronger than steel. While that may be true on an atomic scale
for laboratory samples, the authors neglect to say that the phenomenon has never been demonstrated on a macro scale in a useful
structure. Furthermore, even if the carbon were free, the preparation of even milligrams of nanotubes is very expensive. When I saw
the "world's smallest electric motor," I immediately thought what I would do if I were a venture capitalist talking to its inventor. I'd
say, "Turn it on and let me see it run." If I'm wrong about nanotechnology, the proof will come from a venture-funded start-up, not a
government project.
I have been involved directly with a carbon nanotube failure in the area of heat conduction (they also conduct heat better than
common materials) where the "super material" failed to replace common silicone grease. Nanotube transistors are touted as the future
of electronics, but nobody has demonstrated the ability to make even 10 transistors work together with even one-thousandth the
performance of the equivalent silicon integrated circuit. My company invested three years of R&D and over $50 million in magnetic
memories, another supposed break-through nanotechnology, according to the BAC brochure. Magnetic Random Access Memories, or
MRAMs, are claimed to have the potential to be the "universal memory" of the future in the BAC brochure, yet I know personally that
only one company (Freescale), after more than a decade of effort, and a quarter-billion-dollar investment, has brought MRAMs to
market. In practice, the Freescale MRAM is slower, burns more power and is an order of magnitude more expensive than the
equivalent silicon memory. It is highly unlikely that MRAMs will ever achieve an economic scale to support a single semiconductor
company, let alone an industry or geographical area. Furthermore, even an improbable MRAM success story would take a decade to
unfold, subjecting it to ten years of disruptive new ideas from Silicon Valley, one of which would probably prove fatal. We've
cancelled our MRAM project because we have already found what we believe to be a superior silicon-based alternative that doesn't
need those expensive layers of ruthenium, platinum, manganese and cobalt atoms that we deposited with a $7-million machine.
The point of this anecdote is that the BAC does not have the expertise or capability to tout technological ideas, even those backed by
very smart people in universities or in business. Government money is usually the "sucker money" that companies, even those with
long-term research programs like IBM, put into projects that did not pass their internal financial criteria for funding.
If nano-BS brings money, into our universities, it is worthwhile. Graduate students in our universities usually work on governmentfunded projects. For example, I spent part of my time in graduate school working on the high-voltage transistors used to drive the
transducers used in prenatal ultrasound imaging devices. While I never once considered doing that for a career, I did learn basic
transistor physics and fabrication while Working on this interesting project. Although the government or government-adjunct agencies
such as the BAC are foolish to pick winners and losers in the marketplace, there is value in bringing money into our universities, even
if it is earmarked for projects that have very much less economic value than their advocates would have us believe.
We should improve the economic environment in the Bay Area, a plan to raise the tide for all boats. Mostly, that means getting
government out of the way. High taxes and burdensome regulations harm Bay Area entrepreneurs. Our roads are crowded because the
government doesn't make them wide enough. We don't have enough homes, and therefore staggering housing prices, because the
government prevents us from building them with a myriad of costly regulations and outright prohibitions. And, when an entrepreneur
does succeed in today's environment, the tax burden in California, and particularly the Bay Area, is stifling. The Bay Area is much
more likely to lose its top technical talent to other areas because of high housing costs, commute hassles and high taxes than it is
likely to keep them with ineffective government programs. The best thing the BAC can do to improve the Bay Area economy is to
remove the mostly governmental road blocks that prevent our companies from being more competitive.
The lack of a guiding philosophy is evident in the BAC's view of taxes. While complaining about high corporate and income taxes in
California, the BAC supported yet another sales tax increase in Santa Clara County to extend BART, which included building an
absolutely useless $3-billion tunnel under Market Street in San Jose. As another example, while the BAC says in its "million-job"
report that Silicon Valley should encourage "capital intensive industries" to settle here, it mentions only fleetingly that California is
one of only three states in the union to impose a sales tax on manufacturing equipment. For manufacturing job creators like me, that
tax makes California a non-starter for capital investment. What CEO could justify paying an $82.5 million sales tax for the "privilege"
of creating jobs in a new $1-billion plant in Silicon Valley, when the alternative of zero taxes, and even subsidies, is commonly
offered by other states and countries?
We were once offered a wafer fabrication plant (fab) in California at almost zero cost, just for taking the burden away from the
company selling it. The fab was huge, necessitating our partnering with another company. I called up the CEO of a semiconductor
company in another state and told him of the great opportunity. His response was, "Not interested." After I reiterated to him that the
cost was zero to get a fab that cost over $200 million to construct, he said again, "Not interested." Then he said, "ABC." When I asked
him what "ABC" meant, he said, "Anywhere But California.' His company looked at California's regulatory burdens, environmental
legal maze, local and state taxes and that big message, the sales tax on investment, as a sign at the border saying, "Businesses not
welcome."
He is right. Over the past 23 years, I have had to abandon my personal goal of manufacturing everything in California, which Cypress
did from its inception in 1983 through 1992, when we began to move our manufacturing jobs out of state (first to Minnesota and
Texas, then to the Philippines, and now to Shanghai) to keep our company among one of the 17 survivors in our industry. During that
period, I personally invented and patented assembly and test robots for the purpose of making U.S. manufacturing economically
viable. Those robots are now operated in Manila, because I refused to pay a huge sales tax on our own invention in California. The
Silicon Valley Manufacturing Group, founded by David Packard to make Silicon Valley a more friendly place to manufacture has
renamed itself the Silicon Valley Leadership Group, as there is not much manufacturing here to support anymore, and it now favors a
sales tax on manufacturing investments.
About 15 years ago, then-assemblyman Willie Brown got a law passed authorizing a rebate for sales taxes on capital equipment
bought in California for the purpose of creating manufacturing jobs. The manufacturing sales tax should never have been levied, but at
least we expected to get our sales tax rebated when we invested another $30 million in our San Jose fab a few years ago. We requested
our rebate in a year when we had a loss and were not paying state taxes. When the rebate was denied, we took our case to the state tax
equalization board, which found in our favor. State Senator Carol Migden then made a public comment about companies that paid no
taxes but still took money from the government. in a response printed in the Sacramento Bee, I promised Ms. Migden that she would
never, ever, have to worry again about our taking money from the government, because our days of investing in California were over.
We would never subject ourselves or our shareholders again to public insults by an anti-business politician over a destructive tax that
never should have been passed. We have invested nothing more in our San Jose fab and will soon sell it, to complete the move of the
very last of our manufacturing facilities out of the state of California. With only a few exceptions, the silicon has indeed been forced
out of Silicon Valley.
I'm sure the BAC values an amicable relationship with Ms. Migden, but truly backing free markets means that one must sometimes
criticize the politicians who are among the primary enemies of the free market.
I believe passionately in freedom and free markets. I do not befriend those who attack my freedoms, nor do I compromise basic
freedoms for the fleeting benefits of political alliances. My guess is that I am therefore not a suitable candidate to lead the BAC's
global competitive initiative. But, at least you know where I stand.
T. J. Rodgers
President & CEO
Enclosures:
The Road More Traveled
Reason Foundation Data on Public Transportation
Frasier institute Study
The Paradox of the Statist Businessman
When the forestry industry plants pine trees, they plant three trees in the small space that will eventually only support one. Those three trees then fight it out for the territory, with the result being the strongest tree wins and takes the place of the other two. This is how the forestries ensure they grow only good trees.
Nature plays this heartless game constantly, with both plants and animals. It is what's necessary to ensure that a given species of life is kept strong and healthy, as a totality. And with this insight we can see the ruthless though maybe necessary function of over-breeding, which in turn means leaving youthful specimens to fight it out for survival, so to speak. It serves as a pruning exercise to resist biological herd-decay.
From here we can see the negative in stabilising human (or other) populations unnaturally; meaning, with direct fertility controls. We lose the pruning dynamic and in the process risk dysgenics, as the breeding pool no longer selects for the strongest specimens and instead breeds all specimens indiscriminately.
Is this a problem?
If we don't want future generations to quickly inherit weak genes that will no doubt compromise intelligence, longevity, and physical health and wellbeing, then logic tells us that humanity has a difficult question to confront. In fact a question that would be irresponsible for us to not confront.
If we're going to play the game of direct population control, and we do not want our species to progressively decay, then we must take the game further and impose eugenics - to some degree.
Today, in the industrialised world, we impose dysgenics in fact because we devote mass-resources to facilitating the fertility of the weak, and at the direct expense of the strong. This is because pure democracy allows this to happen. It doesn't matter how weak you are you can still vote for the welfare party at the ballot box.
To a degree we are already imposing a kind of voluntary eugenics. Women are free to dispose of their babies if they can recognise defects in the womb. And if women do not want their babies at all they can abort them at their convenience. As morbid as it might sound, abortion can help to reduce children born to loveless parents, and in turn reduce the neurosis and social dysfunction that would otherwise develop from that.
However, easy abortion is a black way of dealing with a profound social problem, and it inescapably degrades the inherent value of human life. If you can abort an unwanted baby - why not an unwanted adult? When is a human a human?, etc.
The real solution to this most difficult of all social problems will come down to fertility controls imposed by the state, to restrict the fertility of those who are not by any reasonable measure strong. It's painful because you cannot stop people from breeding without delivering the ultimate insult. However, reason tells me it's still a necessity because the costs of not doing as such are far worse, in fact bad enough to eventually ruin our species. Sooner or later we may agree we have no choice. Unless, of course, we prefer the natural method of eugenics, where we go back to over-breeding and killing each other.
