“The Wright Brothers Didn’t Make Money Off Of Aviation”

In defending modern-day billionaire technologists and the technology that enables their wealth and likely contributes to the wage stagnation of those with punier portfolios, Peter Thiel makes an argument to Ellen Huet in Forbes that doesn’t seem fair. He uses the Wright brothers as examples of inventors who didn’t profit from their innovation. Well, they didn’t become the 1903 equivalent of billionaires, that’s true, but there are reasons. While the brothers were (likely) the first to take air in a plane, they weren’t miles ahead of their competitors, so they weren’t able to grow one of Thiel’s beloved monopolies. They also weren’t very good businesspeople; Wilbur who was somewhat better at commerce passed away less then a decade after the historic flight. Orville wasn’t exactly left destitute, selling their company for enough money to build a giant estate and never need work again. They didn’t become billionaires despite being at the vanguard of aviation the way Gary Kildall didn’t become one even though he was at the forefront of computer software. It happens sometimes, but it’s an anecdote that doesn’t really speak to the macro. From Forbes:

“‘When you think about the history of innovation more broadly, the past 200 to 250 years, it’s a sobering fact how many inventors and creators of new things, how little they capture over time,’ Thiel said. ‘You have to create x dollars of value for the world and you have to capture y% of x. And in most cases y equals 0.’

The Wright brothers didn’t make money off of aviation, he pointed out, and even after the advent of the first factories and the beginning of the Industrial Revolution, much of the wealth was still held by the aristocratic classes in Europe. In Silicon Valley, a similar split can be seen between software and cleantech, Thiel said.”

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