Given the amount of money Bill Gates has made, one would think he already understood how the private sector works. But his recent comments concerning green energy research and the public and private sector makes me think he has no idea what he’s talking about:
Yes, the government will be somewhat inept… But the private sector is in general inept. How many companies do venture capitalists invest in that go poorly? By far most of them.
Yes. Precisely. It is absolutely necessary for companies to fail in order to find out which models, methods, programs, etc. are successful. The failure of a majority of companies invested in by venture capitalists is actually the strength, not the weakness of the private sector. It weeds out the duds.
Bill Gates is correct in that most of the companies invested in by the government do not fail. Why? They’re not allowed to fail. This is not a good thing. No matter how bad a company or model is, the civil government can keep a dud alive indefinitely (I’m looking at you Chase, Bank of America, General Motors, the USPS, etc.). You would think that Bill Gates would understand that. Maybe he just feels guilty that Windows 8 sold so many units even though it was a befuddled piece of garbage, and he doesn’t want to see other private companies have the same success with such poor products. Who knows?
But one thing is for sure. The only way we are going to have real gains in green energy is if companies that don’t deliver are allowed to fail. Public sector investments don’t guarantee that. They ensure the opposite, in fact. An article in the Daily Signal lists 34 green energy duds the civil government has supported, but that number is likely even higher. When the public sector supports innovation, the taxpayer pays multiple times. It’s inefficient, corrupt, and inept. Somebody should tell Bill Gates.