The Corporate State
Rent-seeking is the new venture capital model, Kleiner Perkins managing partner Ray Lane explained to an electric car-conference here Wednesday.
In an extraordinary speech, Lane laid out how market socialism can guarantee profits for politically connected VC firms like Kleiner -- far more preferable to the old model of "throwing a dart at a dart board," as Lane has put it. While Silicon Valley-based Kleiner made its reputation as a financier of tech startups like Netscape, Lane confided that they are inherently risky ventures in uncertain, fast-moving markets.
By contrast, Lane expressed admiration for communist governments like China and market-socialist economies like France where government determines new markets, thus providing a more certain investment climate for rent-seekers. With Kleiner partner Al Gore lobbying for federal mandates from wind to electric cars, Kleiner would be assured of a return on otherwise risky investments like Fisker Automotive, a California electric car company.
nom de guerre:
why not? following government-mandated procedures and profits seems to be doing *wonderfully* well for goldman sachs. (well, that plus the frontrunning.)
October 23, 2009, 2:18 pmmorganovich:
amazing the transformations we see as firms go from innovators and risk takers to "established".
once you get on top, you begin to behave just like the guy you displaced.
seems that, indeed, where you stand depends on where you sit.
"meet the new boss, same as the old boss"...
October 23, 2009, 2:54 pmMesa Econoguy:
What this Lane clown doesn’t get is that the economic circulatory system doesn’t function well without robust private capital markets, which are destroyed by government and their rent-seeking partners.
So that’s what we’ll try now, because the old way was bad, and government is by definition good.
All because evil Wall Street couldn’t control itself.
“No one knows what it’s like, to be the bad man….â€
October 23, 2009, 3:53 pmPeter:
Now if only the government would mandate attendance at public parks and tax those that don't attend at least once per year :)
October 23, 2009, 4:06 pmEric:
I can't explain exactly why, but this is probably the most chilling thing I've read in a long time. Maybe it's the fact that the author is the kind of person I would have expected to be on "our side," that is, the laissez-faire side. Or maybe it's the fact that he is so brazen about what he is saying. In the past, businessmen at least pretended that government action they favored represented some
kind of "public good," even though it was usually nonsense.
Now, apparently, rent-seekers just admit that rent-seekingis good business (if you can get it).
Just chilling.
October 23, 2009, 4:48 pmben:
This actually reads like something from the Onion. Its the total lack of a distinction the investor makes bewteen the two investment models. Rent seeking is just another investment with a (superior) risk/return. Ho hum.
Why is Obama doing this? I simply cannot believe how divorced from reality the Democrats have allowed themselves to become.
October 23, 2009, 6:09 pmMesa Econoguy:
Ben, in fairness, they have always been this way. This is nothing new under the sun.
Let’s not overstate their media-driven relevance.
October 23, 2009, 6:57 pmbrett adamson:
Why are government funds given to these electric SPORTS CAR companies with PRODUCTION OUTSIDE THE US?
October 23, 2009, 11:11 pmperlhaqr:
That's really disgusting.
October 24, 2009, 5:57 pmepobirs:
The amazing thing is that this statist wannabe made his fortune running Oracle Corp. for almost a decade. Oracle owes its success to its founding around a product that the conventional wisdom said couldn't be made to work on inexpensive small computers. If it were left up to government committees we'd still be doing everything on IBM mainframes and most innovation would die unexamined in a world where the government determined the winners and losers.
October 25, 2009, 4:46 amBlogDog:
A couple of years ago Forbes had an article about ethanol in which Vinod Khosla, described as a "venture capitalist," was going to government to get subsidies for his investments. Forbes subsequently published my letter in which I called this rent-seeking SOB a "venture socialist."
October 25, 2009, 5:16 amSeems like the behavior is getting more widely spread these days.
Allen:
market socialism? What's next, a monogamous orgy?
October 25, 2009, 11:37 amElliot:
It keeps amazing me that nothing is real but that saying makes it so. Otherwise intelligent people using common vocabulary to describe things that make us cringe. That's an old Monty Python method, (Well, there's some! rat in it.) As for the monogamous orgy, I'll take the latex consignment for that.
Related to this; Does it not seem that "The smartest one in the room, et al" seems to be using the wrong units? How big is this room? Are they completely alone in this vast space? can we get them a tiny space with some company? Please elaborate.
E
October 26, 2009, 10:41 ammoto mba:
I am surprised that people are surprised. Market socialism has been around for centuries. As i live in spain, you see this all the time.People making millons through government contracts, favoritism for (quick) licenses that otherwise could take years! Rather than compete in the "real world" it is more profitable and assured through the goverment. Some have heard of "eco-corruption" - in that regard the Italian mafia is a laggard.
Spain is numero uno in the world for eco-corruption. HUGE amounts of subsidies have gone for solar panels - made in china of course. And thus solar panal growth was in the thousands of a percent.Solar "farms" installed but not linked to a grid along with poor placemente just to get the funds.Cases of town mayors,council members investigated and jailed for wind farm corruption.
Gore,Ray and Perkins are corrupt opportunists to make a bundle having the government subsidize and garantee their INEFFICIANT companies. Carbon trading is another sham to swindle the public and obtain HUGE commisions while being the all powerful shadow state for redistibuting "wealth". Essentially Gore is sore for not being president.But he aims to govern through other means- and make himself a billionair at the expense of the public
November 22, 2009, 3:36 am