[...] it is wise to be suspicious of those who claim to pursue selflessly the prosperity of others even as they pursue their own. [...]

[...] Silicon Valley investors and entrepreneurs taught the hackers to think of the people who used their products as assets to extract value from, rather than simple folk who through the kindness of programmers would learn about the infinite power of computers.

McCarthy’s grand vision for domestic computing was notable for being anti-commercial. He predicted that greater access to information would promote intellectual competition, while “advertising, in the sense of something that can force itself on the attention of a reader, will disappear because it will be too easy to read via a program that screens out undesirable material.” With such low entry costs for publishing, “Even a high school student could compete with the New Yorker if he could write well enough and if word of mouth and mention by reviewers brought him to public attention.” The only threat McCarthy could see to the beautiful system he was conjuring were monopolists, who would try to control access to the network, the material available, and the programs that ran there. McCarthy suspected that the ability of any individual programmer to create a new service would be a check on the concentration of digital power, but he agreed, “One can worry that the system might develop commercially in some way that would prevent that.” As, indeed, it has.

The way Terman saw it, the benefits to Stanford could flow in any number of ways. There were the significant payments from the government to cover overhead costs at the research labs; the expensive equipment donated by companies eager to encourage research related to their specific technologies; the experts from industry who, for similar reasons, became visiting professors in Stanford’s science departments, their salaries paid for in part by their employers; and, more broadly, there was the goodwill Stanford earned from alumni and faculty members who had achieved business success and would give back to the school with hefty donations. The happy coalition of academia, government, and private industry that Terman proposed has been called “the military-industrial-academic complex”; he preferred to call it “win-win-win.”

For our story, Terman’s role was vital. He laid the groundwork for a new relationship between a university and business, which proved particularly relevant when computer science was later shown to have the potential to extract fortunes from the American economy. Because of Terman’s ideas, improved techniques for indexing the Web (Yahoo), or searching the Web (Google), or sharing photos online (Instagram)—three among thousands of business-ready ideas developed on the Stanford campus—didn’t remain there as part of some free, public trust. (Google, in particular, seemed well on its way to a noncommercial future if not for the pull of Stanford’s entrepreneurism.) Instead, all of these start-ups were aggressively brought to market, where they have become central to our lives and hugely valuable assets.

Jane Stanford stepped up to keep the school afloat during this period of economic uncertainty, ignoring business managers who recommended that she allow the school to shutter until she could regain her financial footing. 25 Instead, she convinced the judge presiding over the claims against her husband’s estate to allow her to maintain the usual household expenses—$ 10,000 a month to operate three large homes with seventeen servants. She then petitioned the court to consider the Stanford faculty as her “servants.” By reducing her household staff to three, and expenses to just $ 350 a month, she was then able to direct $ 9,650 a month toward university salaries. In letters letters to President Jordan, Stanford made clear the depths of her suffering: “I have curtailed all expenses in the way of household affairs and personal indulgencies. Have given up all luxuries and confined myself to actual necessities.” Her visits to New York City, where the Stanford estate was being litigated, were an ordeal as well: “It is no pleasure to be on the fifth floor of the Fifth Avenue Hotel in a small bedroom opening on a court, economizing almost to meanness, when I have a sweet beautiful home to go to.”

Beyond the test’s dubious accuracy, there was a flaw in how the study itself was conducted over the years: Terman repeatedly intervened in the lives of his high-IQ subjects, often without their knowledge. He couldn’t help himself. He wrote them recommendations for admission to Stanford, gave small sums of money during tough times, and, in one case, helped a fourteen-year-old be placed in a good foster home rather than returned to his abusive father. (To be clear, Terman didn’t intervene to help any in the control group.) These intrusions by Terman made the study’s conclusions scientifically unreliable, to say the least: readers could rightly question if the geniuses outshone the control group because of their talents or because they had an influential guardian angel. For all its statistical charts and plots of standards of deviation, his work wasn’t science—it was advocacy. His dream was a society led by a hereditary class of super-intelligent beings. A beehive run by a few king bees.

When Fred Terman praised this system for bringing technical skill to big business in a 1956 address to engineers there were clear echoes of Lewis Terman’s ideas about ensuring that the smartest are in charge. “The idealists, the social planners, the do-gooders, the socialists and others of their ilk . . . called for better distribution of wealth,” Frederick Terman said, while engineers, working within the system of free enterprise, simply got it done, “making possible the creation of so much new wealth that redistribution was unnecessary.”

Young Gates certainly had chutzpah. He was writing to a bunch of excited young computer enthusiasts to object to the “theft” of a version of a program that was, to start, based on software created by academic researchers working on a federal grant and was created using “borrowed” time on a university computer that was also paid for by the federal government. The facts may not have been ideal, but Gates nonetheless succeeded in defining the question in a way that played to his advantage. He was insisting that programmers be paid and that computer owners recognize that professional software would make their machines ever more useful.

By the early 1990s, the last official barriers to business and commerce on the Internet were torn down through a combination of congressional legislation and new rules from the National Science Foundation, the organization that supported the Internet. The noncommercial status of the Internet was rooted in its history as a government-funded project operating mainly through universities and government agencies, but businesses were persistent in arguing that they belonged online as well. In 1993, the Internet became fully open for business with the passage of the National Information Infrastructure Act, which “clearly took the development of the Internet out of the hands of the government and placed it into the hands of the competitive marketplace.”