THE GOSPEL ACCORDING TO SILICON VALLEY Day 2
THE BELIEF “Regulation is always the enemy of progress.” So say the founders, investors, and executives who built the modern internet. They warn that government interference stifles innovation, kills jobs, and leaves society worse off. The free market, unshackled, is the only force capable of delivering the future.
THE PERFORMANCE This belief is performed with the cadence of a sermon. Marc Andreessen, co-founder of Netscape and now a venture capitalist, declared in a 2014 Wired essay that “software is eating the world,” and that regulators are the “zombies” standing in its way. His firm, Andreessen Horowitz, later published a manifesto titled “Regulation: The Silent Killer of Innovation,” arguing that government oversight is a “tax on progress.” The tone is apocalyptic: If we don’t act now, China will win.
Elon Musk, in a 2022 interview with The Babylon Bee, called regulation “a wet blanket on the fire of human potential.” Peter Thiel, in his 2014 book Zero to One, wrote that “competition is for losers” and that monopolies are the natural reward for true innovation—unless, of course, regulators break them up. The performance is always the same: a mix of urgency (“We’re in a race!”), inevitability (“This is how progress works”), and victimhood (“They’re coming for us”).
The origin story traces back to the 1990s, when Silicon Valley first clashed with Washington over encryption and antitrust. John Perry Barlow’s 1996 Declaration of the Independence of Cyberspace—“Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone”—became the movement’s founding myth. The belief was codified in the 2010s, as tech giants grew powerful enough to lobby against oversight while still presenting themselves as scrappy underdogs.
THE DOCUMENTED RECORD The internet was not born in a garage. It was built by the Defense Advanced Research Projects Agency (DARPA), a U.S. government program. The foundational technologies—packet switching, TCP/IP, the early ARPANET—were funded by taxpayer dollars, not venture capital. A 2018 report from the National Bureau of Economic Research found that “federal R&D spending accounted for nearly 70% of the foundational research behind the internet, GPS, and early AI.” The private sector commercialized these breakthroughs, but the breakthroughs themselves were public.
Even today, the most cutting-edge technologies rely on government support. The mRNA vaccines that saved millions of lives during COVID-19 were developed with funding from the National Institutes of Health (NIH). Moderna’s CEO, Stéphane Bancel, admitted in a 2020 Financial Times interview that “the NIH played a critical role in the basic science that made our vaccine possible.” Without public investment, the company would not have had a product to bring to market.
Regulation, too, has enabled progress. The Clean Air Act of 1970 forced automakers to develop catalytic converters, which reduced smog and saved an estimated 230,000 lives by 2020, according to the Environmental Protection Agency. The 1990 Americans with Disabilities Act (ADA) required digital accessibility, leading to innovations like screen readers and closed captioning—tools now used by millions, not just those with disabilities. A 2019 study in the Journal of Law and Economics found that “well-designed regulations can spur innovation by creating new markets and reducing uncertainty.”
The record shows that Silicon Valley’s most profitable companies have not just tolerated regulation—they’ve exploited it. Google’s dominance in search was cemented by a 2002 FTC investigation that cleared it of antitrust violations, allowing it to acquire competitors like YouTube and DoubleClick. Facebook’s growth was accelerated by the 2011 FTC settlement that allowed it to continue tracking users without explicit consent. A 2020 Wall Street Journal investigation revealed that Amazon lobbied aggressively against antitrust scrutiny while simultaneously using its market power to squeeze sellers—a practice that would have been illegal under stricter oversight.
The belief that regulation is the enemy of progress ignores the fact that progress itself is often the result of public investment and guardrails. The record does not support the claim that innovation thrives only in the absence of rules. It shows the opposite: that rules, when well-designed, create the conditions for innovation to flourish.
THE AUDIENCE This belief resonates with entrepreneurs, investors, and workers in the tech industry who feel that their success is fragile, that their achievements could be undone by bureaucrats who “don’t understand” what they do. It speaks to a legitimate fear: that the systems meant to protect society will instead smother the very things that could improve it.
There is also a deeper grievance here. Many in Silicon Valley see themselves as outsiders, even as they become insiders. They remember the early days of the internet, when it felt like a frontier, free from the constraints of the old world. The belief that regulation is the enemy of progress is, in part, a nostalgia for that freedom—a fear that the future will be decided by people who don’t share their vision.
But the belief exploits this fear by presenting regulation as a monolith, a faceless force that exists only to stop things. It ignores the fact that regulation is not a single entity but a collection of policies, some good, some bad, some necessary, some overreaching. The audience is not wrong to fear bad regulation. They are wrong to assume that all regulation is bad.
THE CONTRADICTION If regulation is always the enemy of progress, why do the most successful tech companies spend millions lobbying for regulations that benefit them? Why did Google, Facebook, and Amazon hire former regulators to shape policies in their favor? Why did Elon Musk accept $4.9 billion in government subsidies for Tesla, as documented in a 2021 Los Angeles Times investigation? The belief collapses under its own logic: if regulation is the enemy, why do the supposed enemies of regulation keep inviting it in?
THE THING THEY GOT RIGHT The tech industry is right to fear bad regulation. Overly prescriptive rules can stifle innovation, and bureaucratic inertia can slow down progress. The failure of the Federal Aviation Administration (FAA) to quickly approve commercial drone use, for example, delayed the development of delivery services that could have saved lives during the pandemic. The industry’s skepticism of government overreach is not without merit.
But the belief that all regulation is bad is a caricature. The real question is not whether regulation is good or bad, but what kind of regulation serves the public interest. The tech industry’s refusal to engage with that question—its insistence that any oversight is an attack—is what turns a legitimate concern into a dogma.
REMEMBER Silicon Valley’s claim that regulation is the enemy of progress ignores the fact that the internet, GPS, and mRNA vaccines were all built with public money and shaped by public rules.
This newsletter uses direct quotes, public records, court documents, and documented biographical fact. It does not make claims beyond what the record supports. Readers are encouraged to consult primary sources and reach their own conclusions.