Do Tech Millionaires Deserve Their Fortunes?

“Merit really is such a very funny word.” Eric Schmidt, former CEO of software companies Google and Novell sais so. He continues: “I am not so sure if I understand entirely what that means.”

Schmidt, ex-chief technical development at Sun Microsystems (where he was involved in developing the Java computer language) is a bespectacled, gawky guy who is widely recognized as among the most trusted, thoughtful, and brilliant executives around in the high-tech world.

We’re having lunch at Atlanta’s Ritz-Carlton hotel and Schmidt says: “Did somebody say life is fair?” Schmidt says to me. “Who’s saying that we always get what we’re deserving? I did not start out to become rich or make any money at all. I just did my job and I really liked it. The money part showed up only afterward.

Ten all of a sudden, one day I was waking up and said to myself: ‘Oh really…I’m no longer middle-class.’ But does that mean that I have or don’t have any moral right to all of this wealth? In some way, all of this happened completely by accident in this life of mine. Now suppose all of it disappeared one day, I would be perfectly OK with that too.”

I wanted to bring Schmidt again to issues like merit or merely desserts. So I asked him if he thinks tech millionaires may be deserving of their fortunes. Well, he answered, “It’s true, without any doubt, that most people in the world of high-tech are making or have made their money by themselves. Inherited wealth and capital are just irrelevant in this world. Here, we are looking at wealth that really didn’t exist decades ago or even, in a few cases, not even five or six years ago.”

“One more factor that’s not that important in the high-tech world is the issue of discrimination. And by discrimination, I’m talking about the idea that people won’t get a job just because of what color your skin is.

I am not saying it doesn’t exist entirely, but it happens rarely. The most relevant question in this world is not what you’re looking like, who you are, or where you’re from, but what exactly is it that you’re capable of doing. And that really seems like a big change compared to some decades ago, when our world was a fantastic and wonderful place to be, but only if you were male and white.” See also this post about the accuracy of Moore’s Law.

But how about the folks who are left behind or left out in this high-tech universe? “Well, Schmidt says, I’m concerned about the so-called ‘digital divide.’ Rich folks can better take advantage of what’s going on in the digital world than poorer people; white folks might even use this to increase the way they’re leading over black folks.”

“Now, these issues are not only group differences. We can see, of course, huge differences as well in computer literacy between individuals. But the problem is not access,” Schmidt says, “the problem is that some individuals understand what to do and how to use the new technology better than others and some don’t get it at all. So online resources and the Internet can easily end up with an increased inequality since the skills required to benefit from it are distributed unequally.”

This New Economy, Schmidt says, is strongly biased to benefit from technology, and success in this rapidly-developing sector is requiring specific technical skills. This isn’t meaning that virtues such as hard work, drive, general intelligence, reliability, and so forth, do not matter. These virtues are still essential and helpful, but in the world of Digital Nomads, they are not sufficient anymore.

Schmidt continues: “Virtues like drive and general intelligence have always been and will always be basic requirements if you want to be successful in this country. What is different these days is that it really is so much harder to be successful when you’re not well educated and I mean extremely well! You really need to come up with the appropriate degrees and preferably from the right colleges and universities.”

Now why from the right schools? I asked. “Well, Schmidt continues, because universities like MIT, Stanford, and Harvard are belonging to a specific social network. Even when you’re a brilliant young entrepreneur who just went to one of our country’s no-name schools, you won’t be able to access these networks.

Believe me, these networks are counting for pretty much in this high-tech industry. I’ve been reading in several business papers and magazines that it seems like anyone may raise lots of venture capital to set up or expand their Internet company. Okay, yeah, surely right. Anyone can raise a lot of capital for an online venture or Internet company, but only if they happen to know the same folks that I do.” So be wise and get moving!