I Am John Galt (20 page)

Grudgingly, Microsoft finally hired its first lobbyist in Washington in March 1995 to begin countering the political threat to its survival. From now on, Gates wouldn't repeat the same mistake he made in 1994 when his reluctant capitulation signaled weakness to the scavenging hyenas who longed for a bite of the majestic beast. Next time, he would refuse to settle where other custodial-minded CEO pragmatists might cave in. For Gates, it was his company, and it was personal. He would fight any further government intrusions to the bitter end with all of his considerable might and intellect.

When the DOJ brought its antitrust suit against Microsoft in 1998, the case appeared to focus narrowly on a specific Internet browser issue. But it was much more than that. Apparently we like our capitalist system to produce success, just not too much of it. “We have people who think that we are more successful than any company should be,” Gates said.
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When called into a deposition by the government's hired gun, attorney David Boies, Gates stubbornly made his opponent fight for every inch. Gates said at the time, “I gave totally truthful answers. I have a great memory. When [Boies] would ask imprecise questions I would simply point out to him the imprecise nature of the question.”
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But Gates did not merely “point out”—he mocked, he argued, he stonewalled—with a chip on his shoulder bigger than a mainframe. To wit:

Boies:
Can you tell me, Mr. Gates, what question you're purporting to answer?

Gates:
Your last question.

Boies:
Do you know what it is?

Gates:
Could I make it as convoluted as you did? No.

In
Atlas Shrugged
, Henry Rearden finds himself on trial for a regulatory crime as trumped up as the one of which Gates was accused—and stonewalls just like Gates did. Rearden refuses to grant any legitimacy to the court by even answering its questions. Reardon tells the prosecutor,

“Your law holds that my life, my work and my property may be disposed of without my consent. Very well, you may now dispose of me without my participation in the matter. I will not play the part of defending myself where no defense is possible, and I will not simulate the illusion of dealing with a tribunal of justice.”

. . . “Are we to understand,” asked the judge, “that you hold your own interests above the interests of the public?”

“I hold that such a question can never arise except in a society of cannibals.”

Rearden gets away with it—the court is so flummoxed by his principled resistance that it lets him off with a suspended sentence. But it was only a temporary victory. There was more government intervention to throttle Rearden, and eventually it would destroy his business.

For Gates, there wasn't even a temporary victory. While clearly in the right, his performance had done him no favors in a courtroom more amenable to defendants who show deference to their persecutors, even when it's not deserved. In the end, such intangibles would be the deciding factors. Judge Jackson would decide the case not on objective legal arguments, but on his own whims based on the personalities and theatrics of the various witnesses and counsel in his court. More than once, he was seen to fall asleep at the bench during proceedings. He shouted at Microsoft witnesses and took over questioning from attorneys when frustrated by their approach.
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He rolled his eyes and shook his head in response to testimony. He held confidential press interviews during the trial in which he likened Microsoft to “drug traffickers” and “gangland killers.” His actions would later be declared by an appellate court to be “deliberate, repeated, egregious and flagrant” violations of the judicial code of conduct.
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The government, Gates told himself, had no real case. It would get nowhere. He was sure of it. And yet the government persisted. Gates was infuriated—and surprised—that instead of conducting their case purely in the legal arena, the Feds were fighting with PR tactics—“Call me naive,” Gates said. And the press, as far as he was concerned, ate it up.
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His own hometown paper, the
Seattle Post-Intelligencer
, would refer to Microsoft with the oft-repeated epithet “Evil Empire.”
24
Time
magazine reported on “Demonizing Gates,” citing the thousands of diabolical references to him online as “the Great Satan” and “Beelzebub.”
25
Newsweek
ran a story on Gates entitled “The Whiz They Love to Hate.”
26
Business Month
ran a doctored image of Bill's head on a muscle-bound body under the cover heading “Silicon Bully.”
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In the article one unidentified IBM executive said he would “like to put an ice pick in [Gates's] head.” The endless water torture of persecution would become too much for even Gates's inner fire to withstand. “It was in the press every single day,” says Bill's dad, William Gates Sr. “His own government, suing him, that's not chocolate sundae! He was concerned, he was angry, he was distracted from things he'd rather be doing.”
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Eventually, Bill Gates would settle with the government. In some sense it was a pragmatic business decision, and mostly a win for Microsoft. But in another sense it was a moral collapse—the victim himself granting a moral sanction to his tormentors—just what Henry Rearden said not to do, warning that “if we value our lives, we must not give it to them.” But when it was done, Gates went on strike, just like Henry Rearden finally did when he couldn't take the pain any longer. In 2000, Gates handed over operations to longtime business partner Steve Ballmer, who would shift the company's focus from playing hard to playing nice.

Ultimately in a sad diversion of his productive brainpower, Gates turned aside from creating economic value, and instead began to give away the value he'd created in the past. Gates and his wife endowed the Bill & Melinda Gates Foundation with billions in Microsoft stock, and now the world will just have to wait to see whether it will be better off with Gates donating his wealth to sponsor talk shows on National Public Radio, among other purposes, rather than keeping it at work building Microsoft.

Should Americans aspiring for a better life for themselves, their families, and their nation be proud that their government forced one of the most productive minds in history to stop producing? Here's how Gates would answer that question: “Americans should wish that every business was as competitive as the personal computer business,” he says.
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“This lawsuit is fundamentally about one question: can a successful American company continue to improve its products for the benefit of consumers?”
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Ayn Rand would agree, but she'd have another answer as well, operating on a philosophical level, rather than just a pragmatic one. Yes, the unfettered competition of pure capitalism does produce wealth. But even if it didn't, it is still the morally correct way for society to organize economic life. Rand once wrote, “Capitalism is a social system based on the recognition of individual rights . . . the only rational and moral system in mankind's history.”
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Without it we will all be poorer, no matter how much of his fortune Gates gives away to the poorest. Without it we will be less free, knowing that any of us smart enough and lucky enough to change the world the way Gates did will be targeted for destruction as Gates was.

A Hero from the Start

William Henry Gates III was born on October 28, 1955, to a family that was well off, although certainly not rich by the standards he himself would later set. His parents nicknamed their son “Trey”—a play on his name's suffix. It was a moniker that would stick among his family and close friends for the rest of his life. His father, Bill Gates Jr., was the first member of his own clan to graduate from college, as an honorably discharged Army lieutenant after World War II. Bill Jr. then went on to law school and later became a partner in a Seattle practice. Trey's mother, Mary, came from a socially prominent banking family. While comfortably wealthy, Trey's family disdained pretentious displays of affluence. Instead its focus was on substance, education, making a positive impact on the world, and focusing on creative production as opposed to a lust for money itself. It is a value system that young Bill would carry forward throughout his adult life.

Much has been made—mostly by spiteful critics—of Gates's privileged upbringing and supposed million-dollar trust fund as the origin of his eventual business success. The truth is that he bootstrapped his business endeavors from day one. And even if he hadn't, the world abounds with trust fund kids who created small fortunes by frittering away large ones.

Gates's biggest asset was not an inheritance, but an amazingly powerful mind supercharged by early access to leading-edge technology. Born at the dawn of the computer era, he experienced the synergy of high-octane experience coupled with strong mental horsepower that few could match. Yet while these initial benefits translated into a strong starting position, the race would prove to be long and arduous. Only Bill's sustained efforts of constant work, endurance, competitive drive, and obsessive focus would decide the winner.

Trey was an energetic child who learned to rock his own cradle and spent hours incessantly doing so. Later as an adult, Bill's characteristic rocking back and forth in his office chair and in the boardroom would become legend in the computer industry. While some explain the habit as bleeding off stress or a sign of intense mental focus, the rocking behavior is also associated with conditions along the autism spectrum
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—a classification that can include highly gifted savants.

The evidence that Bill's brain functions differently than most was apparent very early on. At age 7 he read all 20 volumes of the
World Book Encyclopedia
from beginning to end. At age 11, he could perfectly recite the entire Sermon on the Mount unaided and, according to his flabbergasted youth minister, displayed a deep understanding of its meaning well beyond mere rote memorization.
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In the fourth grade, his classmates labeled him “eccentric” for his oddball work habits that bordered on the obsessive. When assigned to write a four-page report, Trey would turn in 30 pages. On the playground, he played pickleball as though the fate of the world were at stake. A day at the swimming pool would turn into lap races. A jigsaw puzzle became a contest to see who could place the most pieces. While it may have seemed like eccentric behavior in grade school, looking back we might regard Bill's behavior as indicative of a fiercely competitive spirit and a drive to win. Even leisure activities weren't merely for relaxation—they were opportunities to push the limits of one's potential, to test, stretch, strengthen, and grow.

By the middle of 1968 the United States was retaking the lead in the space race against the Soviet Union. The Apollo moon landing, borne on the wings of newly developed electronic computing power, was tantalizingly close to fruition. Stanley Kubrick's epic
2001: A Space Odyssey
played in theaters nationwide, offering a believable futuristic vision featuring a sentient supercomputer named HAL 9000 as a central character. Amid these influences, Gates's high school, Lakeside, vowed to expose its students to this new world of computers. The only question was how to do it.

Early mainframe computers could be owned only by large corporations or government agencies. With footprints measuring in square yards, such systems cost millions of dollars to buy and support. Even with annual tuition at Lakeside at a relatively steep $5,000 per student, these sums were clearly out of reach. Instead, Lakeside purchased a relatively inexpensive teletype machine and remotely linked it to one of the several corporate mainframes in the area with spare capacity on a time-share basis—first from General Electric, then from a Seattle start-up called Computer Center Corporation, or C-Cubed. The machine on the other end was a PDP-10 mainframe manufactured by Digital Equipment Corporation and specifically designed with architecture to support multiple remote users.

The first time Gates sat at the Lakeside terminal and typed in a short command, he was thunderstruck. Just think—a hulking silicon-based intelligence formed of transistors and copper wiring, sitting in a building miles away, interpreted the electrical impulses he himself transmitted with his own fingers and then, without any carbon-based human intervention of any sort—
it responded!
This was like an open door to a whole new world of vibrant possibilities, a place where the very nature of physical reality was harnessed and coupled with abstract logic and mathematics to produce something useful and wondrous. He was hooked.

Bill and a handful of like-minded students began spending every minute of their free time in the computer room exploring the system while testing their own reasoning and problem-solving skills. Among these early adherents was an upper-classman named Paul Allen. Despite their age difference, Bill and Paul discovered an affinity in their love of computers and their insatiable appetite for knowledge. They soon became fast friends. It was the beginning of a partnership that, along with several other Lakeside classmates, would become the founding programmers core of the Microsoft empire.

Gates devoured everything he could find about computers, but the field was so new, so undocumented, that he and his fellow computer freaks had to mostly learn by doing. They poked and peeked, observing the results. They posed ad hoc problems to each other that they would then compete to solve. Bill taught the computer to play tic-tac-toe. He created a lunar landing simulation. He programmed the computer to play Monopoly and then had it run thousands of game scenarios to find winning strategies. In the process, he discovered things even the professional computer experts at the time didn't know. Perhaps it's not as romantic as the young Henry Rearden laboring in an iron mine at the birth of his career—but Gates's dedication and efforts as a youth were no less intense, and in any field that's what it takes to launch yourself toward the very top.