Shikha Dalmia to Vinod Khosla: Why Is An Entrepreneur Advocating Government Intervention?

Lynne Kiesling

In a recent Reason article, Shikha Dalmia writes an open letter to Vinod Khosla, entrepreneur and co-founder of Sun Microsystems. He’s now co-chair of a committee for the passage of Proposition 87 in California, which would create an oil extraction tax.

Shikha strikes a lot of the same notes that I did in my prior post about government innovation policy:

Some commentators have suggested that your support for Prop 87 is a rent-seeking move, meant to boost your recent investments in ethanol by debilitating competitors. I don’t buy that. Yet, the issue is, if ethanol has all the advantages you says it does—if it is renewable, cleaner, less volatile, more reliable, easily transportable etc.—surely you of all people could convince enough investors to cough up the $4 billion that Prop 87 would raise. Are you not turning to taxpayers because you don’t want to assume that kind of risk—and can’t convince fellow investors to either? That is hardly socially responsible. CEO Richard Branson recently volunteered to divert the entire $3 billion profits from his carbon dioxide-spewing Virgin transportation empire into alternative fuels aimed at combating global warming. He is putting his own money—not someone else’s—where his mouth is.

Indeed, in my view, private investors like you who are accountable to shareholders—or philanthropists like Branson who are spending their own money—are likely to do a far better job of picking winners among new fuel technologies. Entrusting a government board answerable to political interests, as Prop 87 is proposing, has a gobar-gas like odor to it.


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