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Re:Why Silicon Valley funds Instagrams, not Hyperloops by Florin_Andrei on Monday August 19, 2013 @01:52PM (#6238562)
Silicon Valley actually funded PayPal. Elon Musk made a boatload of cash from that, and used the mojo (part of it was his own cash, part of it was the reputation he built with PayPal which enabled him to raise more money) to jumpstart SpaceX and Tesla.

But anyway. I am going to say something VERY controversial. Think of it as Devil's Advocate, squared, on steroids. Here goes.

The article could be seen as a rebuke to the fundamental principles of capitalism. You could say capitalism doesn't scale - not to Hyperloop size anyway. Projects at this magnitude simply require that bigger powers get involved. E.g., the government. Sorry for using the G-word in such a refined milieu.

Quote from the article: "Unfortunately, the market does not reward cash flow because the market does not reward value and innovation. The market rewards exits." If that doesn't ring a bell, I don't know what does.

Another quote: "The next reason that we don’t have Hyperloop, but we do have Instagram, is that Fortune 100 companies have notoriously bad in-house R&D. Therefore, acquisitions are driving most of the innovation. " Again, this could be seen as further proof that profit-driven endeavors only innovate small-scale and short-term. Larger leaps are driven by different incentives (I could go on a ramble about the joy of making, but that would be preaching to the choir round these parts of town). And when it comes to truly fundamental research - well, that field is simply allergic to what they call "the industry" (a slightly derisive term, when used in this context); spend some time among theoretical physicists and you'll see what I mean.

When I was young, I've read an essay by a Russian scientist, who was arguing that the centrally planned economy allows for high-magnitude projects, precisely because large financial forces can be easily engaged at this scale. I can't say I entirely agreed with the article back then (a kid growing up in the Eastern Bloc, not really liking the system), and I would not support it indiscriminately now either.

But then there's the Hyperloop. Or any other large scale project like this. Does capitalism scale at this level? Seems like it doesn't - at least not the capitalism of the smartphone app ecosystem. Are there any built-in limits to capitalism? Looks like there are - the limits are the power and wealth of a single individual, whereas some things are too big for any given person (and yes, I am aware that multiple investors could get involved to fund this project, which merely makes the problem slightly less bad, but still leaves it laying in the gutter).

Bear in mind, as someone who grew up behind the Iron Curtain, I definitely do not advocate for the Five Year Plan economy. But I think these concerns are legitimate. And I don't have any answers. Maybe someone here does. Or someone "out there".

Anyway, that's all I had to say.

Re:Why Silicon Valley funds Instagrams, not Hyperloops by aufreak3 on Tuesday August 20, 2013 @12:52AM (#6241885)
It feels odd to lift this to a problem with an "ism" and ignore the people behind it. The problem I have with the original article is that it seems to think that innovation and markets consist of investors, entrepreneurs and nasdaq/snp.

So here I have a "theory 10" -

THE PEOPLE go "meh" when faced with something like Hyperloop, but are excited to tell their 500 friends what they had for lunch at the push of a button. Hence the investors go "who cares?" and hence the "entrepreneurs" go "hmm, I better think about more efficient lunch sharing".

People need to be told something like "folks we're going to throw $60B of your tax money (an amount that would rid the hungry part of the planet for 2 years) at a transport system that you won't even be proud of, won't be that much faster or safer than air travel" to get a non-meh reaction to hyperloop. Even then, fast travel between SF and LA is, perhaps, a solved problem according to common folks - just fly already. Heck, you don't even have an interesting view during the trip according to the proposed designs.

On the other hand, post after post on HN talks about cool materials, 3D printing, maker culture, break through science, etc. So funded innovation is happening, it would seem. Just not in the main news very much perhaps.

And here is a "theory 11" - the common folk may actually <shock!> be satisfied with the status quo? Innovators often talk about a persistent dissatisfaction with the status quo as motivation for their work. On the "eastern" side of the planet, this dissatisfaction itself would seem to be the one that needs addressing .. i.e. being happy and contented is not the problem, but the lack of them is.

Re:Why Silicon Valley funds Instagrams, not Hyperloops by aufreak3 on Tuesday August 20, 2013 @03:04AM (#6242212)
> an amount that would rid the hungry part of the planet for 2 years

I meant "rid the planet of hunger for 2 years"! What a typo!

Re:Why Silicon Valley funds Instagrams, not Hyperloops by YuriNiyazov on Monday August 19, 2013 @02:05PM (#6238654)
Except that the premise is wrong - capitalism most definitely scales at that level. The railroads across America that were built in the 1800's were not a mandate by the federal government, they were private enterprises.
Re:Why Silicon Valley funds Instagrams, not Hyperloops by craigyk on Monday August 19, 2013 @02:15PM (#6238708)
Am I crazy, or weren't the railroads heavily subsidized by the government? I think this heavy flow of public capital into a small number of hands created some of the "robber barons". In the long run it was probably the right call, as this kind of infrastructure spending and innovation doesn't happen without government involvement. Still, it's interesting to think how in the short-term it led to some pretty astounding income inequality. Maybe the issue is why didn't the government just build it themselves, sure it probably wouldn't have been built as efficiently as the worker level, but the overall cost might not having been much higher.
Re:Why Silicon Valley funds Instagrams, not Hyperloops by metricman on Monday August 19, 2013 @02:23PM (#6238740)
Yes, they were.

"From 1850-1871, the railroads received more than 175 million acres (71 million ha) of public land - an area more than one tenth of the whole United States and larger in area than Texas."

http://en.wikipedia.org/wiki/Pacific_Railroad_Acts

Re:Why Silicon Valley funds Instagrams, not Hyperloops by tapp on Monday August 19, 2013 @02:23PM (#6238741)
Yes, they were private enterprises... funded in large part by government bonds (e.g. Google "Pacific Railroad Act of 1862.")

Your example doesn't contradict the author's point, it supports it.

Re:Why Silicon Valley funds Instagrams, not Hyperloops by seeingfurther on Monday August 19, 2013 @03:43PM (#6239296)
Railroads were publicly funded. See the Pacific Railroad Acts 1862 & 64. They issued bonds... lots o bonds
Re:Why Silicon Valley funds Instagrams, not Hyperloops by johnny22 on Monday August 19, 2013 @02:20PM (#6238727)
they were given land and all sorts of lease rights by the goverment to do so.
Re:Why Silicon Valley funds Instagrams, not Hyperloops by jfoster on Tuesday August 20, 2013 @08:06AM (#6243111)
If you can't build a PayPal, what chance do you have of building a Tesla? It makes complete sense that only the already-proven entrepreneurs are the only ones being funded for the moonshots.