According to President Obama, Google and Facebook owe their existence to the government.

“I believe in investing in basic research and science because I understand that all these extraordinary companies that are these enormous wealth-generators — many of them would have never been there;  Google, Facebook would not exist, had it not been for investments that we made as a country in basic science and research[…] I understand that makes us all better off.”

There are a few problems with this statement (which is aimed at attacking the Ryan budget plan).  First, the Advanced Research Projects Agency, predecessor to the Defense Advanced Research Projects Agency, initially seeded the internet.  One of the major criticisms of the left regarding Ryan’s plan is that the major area where he doesn’t cut enough (as opposed to too much everywhere else) is the defense budget.  Thus, if Obama’s logic is government = ARPA/DARPA and DARPA = internet and internet = Google/Facebook, then Obama has chosen, as his primary example of an area in which the government budget should not be cut, the one area in which his party says there aren’t enough cuts.  Second, his implicit assumption is that the internet would not have been created without ARPA.  Is that really credible?  With the advances in computing power and network communications it was almost inevitable the internet would be created, if not as quickly (see the French Minitel).  Third, by Obama’s logic credit for anything and everything is owed to the government.  He starts at research, but we can go back even farther.  For Google/Facebook to exist, you had to have ARPA, to have ARPA you had to have the Department of Defense, to have the DoD you had to have passed a law providing for its formation, to pass the law you had to have Congress, to have Congress you had to have founded the United States.  Ergo, all inventions and progress stem from government.  But why stop there?  To have the U.S. you had to have Britain, which had to have Romans, which had to have…

There is no doubt that the composition and character of the United States make possible the existence of a host of inventions and thoughts.  A stable democracy, with rule of law and a well functioning securities market are all undoubtedly, in part, responsible for the many wonderful things Americans produce.  Without such features, it would be much more difficult.  However, simply because the environment for individual innovation, which we provide, is a necessary precondition, that does not mean it is sufficient.  The idea that the federal government is responsible, in any direct and meaningful sense of the word, for companies like Google and Facebook is a fallacious notion.