Conclusion: Don’t Dismiss College Dropouts Delivering Alternative Weeklies
These Google guys, they want to be billionaires and rock stars and go to conferences and all that. Let us see if they still want to run the business in two to three years.
—Bill Gates on Google, 20031
Back in the 1970s, Roland Swenson dropped out of the University of Texas “to pursue a degree in rock ’n’ roll.” Austin is littered with musically inclined twenty-somethings. Yet by the age of thirty-one, Swenson was seemingly still stuck in his twenties as a proofreader and a deliveryman for one of those “alternative weekly” newspapers so popular with the college-aged.2 Most people grow up and grow out of the college lifestyle, but Swenson remained. Nothing about his career choices in his first thirty-one years signaled future success.
But people can surprise. In 1994, Kurt Warner was bagging groceries at a store in Iowa for $5.50 an hour after the Green Bay Packers cut him. Warner never gave up on being a quarterback, and the pursuit of his dream took him through the Arena Football League and NFL Europe, both now defunct. But his exploits in the minor leagues of professional football soon caught the eye of the St. Louis Rams, who eventually signed him. By 2000, Warner was the MVP of the NFL and had led the Rams to the franchise’s lone Super Bowl victory.3
In the late 1990s into the 2000s, Katherine Stockett was a functionary at various New York City magazine brands (I know, we were and still are friends) until she moved with her husband to Atlanta in 2003. She was a pretty, well liked, and witty woman, but no one I knew thought she was marked for global renown. When she wrote a novel about social tension in pre–civil rights movement Mississippi, she received, as she put it to me in an e-mail, over “SIXTY—6-0—rejections. From agents.” But, her persistence paid off. The Help became a bestseller, and the movie adaptation was a smash at the box office.
Back to Swenson: in 1986 he convinced his bosses to stage a music festival that they called South by Southwest, known nowadays as SXSW. Although it drew seven hundred attendees in its first year, it now draws more than seventy thousand, and Austin’s restaurants, bars, and hotels are packed each March for the nine-day festival, one of the biggest musical events in the country.
These stories are a reminder that not only is the future almost impossible to predict, but it is difficult to know who will shape it. Antitrust presumes the opposite of that truth—that what lies ahead is knowable.
If it is extraordinarily hard to tell which seemingly average people will one day receive global acclaim, it is just as hard to tell which of today’s success stories will become yesterday’s news. Antitrust laws are rooted in the fallacy that the present predicts the future. Swenson, Warner, and Stockett are living rebuttals to that foolish idea.
Antitrust law attempts to regulate the normal workings of a market in which an incalculable number of decisions are being made every moment. Any such enterprise must collapse under the weight of its myriad contradictions. “No one knows anything,” as they say.
Mark Zuckerberg was a student at Phillips Exeter Academy in 2000 and the billionaire founder of Facebook by 2010. In creating the world’s largest social network, Zuckerberg left some giant business conglomerates in his wake, including MySpace, a social network owned by media behemoth News Corp.
In a twist befitting the social media giant, Facebook purchased the messaging company WhatsApp for nineteen billion dollars in 2014. WhatsApp’s co-founder Jan Koum is a Ukrainian immigrant who, upon arriving with his mother in Mountain View, California, at the age of sixteen, lived on government assistance, including food stamps.4 As the Wall Street Journal’s L. Gordon Crovitz noted, WhatsApp was “a company few regulators had heard of.”5 Business moves fast, changes direction with great speed, and proves how exceedingly difficult it is to tell who will next rise to prominence.
Regulation is the economic equivalent of presuming the slower defensive backs of Appalachian State can regularly cover the much faster wide receivers of the University of Michigan. Actually, that is an understatement. Regulation presumes the coach of Appalachian State knows exactly where the ball will go on each down. Not many coaches know that, and if they did, they’d still need the dazzlingly talented players capable of covering the opposing receivers.
Just as Michigan will score with painful regularity on Appalachian State, so will the more talented in the world of commerce almost always remain several steps ahead of those who presume to watch over them. Even those who honestly feel Goldman Sachs, Coke, and Pfizer need government supervision need to recognize some incontrovertible truths. Powerful companies are already subject to the best regulators of all, competition and consumers. Moreover, those who aspire to the role of government regulator rarely have the skills necessary for even a passable job in the private sector.
Former BB&T Bank CEO John Allison likes to make the point that “while government can’t make us all equal, it can make us all small.” Indeed, government regulation and hostility to profit have left the talented exceedingly poor throughout the centuries. China has seen both the horrors of government-decreed equality and the staggering increase in wealth that occurs when government steps aside.
Regulation does not just routinely fail; it cannot work. What it can do, however, is weaken businesses by forcing them to pour their human and financial resources into compliance with government rules and regulations rather than let shareholders and customers profit. We must scrap the regulatory state not because we want business to run roughshod over the citizenry (it can’t), but precisely because we want business to train its full focus on serving the citizenry.