The Code

by Margaret O'Mara

  7. Ajay K. Mehrotra and Julia C. Ott, “The Curious Beginnings of the Capital Gains Tax Preference,” Fordham Law Review 84, no. 6 (May 2016), 2517–36; “Capital Gains and Taxes Paid on Capital Gains, 1954–2009,” Department of the Treasury, Office of Tax Analysis, 2012, https://www.taxpolicycenter.org/statistics/historical-capital-gains-and-taxes, archived at https://perma.cc/BTM4-57DV. This was part of a broader business push against the New Deal that included the formulation of the rhetoric of “free enterprise”; see Lawrence Glickman, “Free Enterprise versus the New Deal Order,” paper presented at the “Beyond the New Deal Order” conference, Center for the Study of Work, Labor, and Democracy, University of California, Santa Barbara, September 24–26, 2015. Also see Kathryn S. Olmsted, Right Out of California: The 1930s and the Big Business Roots of Modern Conservatism (New York: The New Press, 2015); Kim Phillips-Fein, Invisible Hands: The Businessmen’s Crusade against the New Deal (New York: W. W. Norton, 2010); and Julia C. Ott, When Wall Street Met Main Street: The Quest for an Investors’ Democracy (Cambridge, Mass.: Harvard University Press, 2011).

  8. “Curb Urged on Loans: Speculation Hit by Bankers,” The Los Angeles Times, October 5, 1928, 2; “Capital Gains Tax,” The Wall Street Journal, November 8, 1930, 1; “Whitney Attacks ‘Excessive’ Relief,” The New York Times, February 27, 1935, 29. On Whitney, also see Mehrotra and Ott, “The Curious Beginnings.”

  9. “Tax Debate: Builders, Stock Brokers are Split,” The Wall Street Journal, January 30, 1963, 1.

  10. “Excerpts from Senator McGovern’s Address Explaining His Economic Program,” The New York Times, August 30, 1972, 22; James Reston, “The New Economic Philosophy,” The New York Times, January 31, 1973, 41.

  11. Quoted in Bylinsky, The Innovation Millionaires.

  12. “Pension Fund Trustees Get Jitters Over Liability Laws,” The Los Angeles Times, August 5, 1976, F15. On inflation during the decade, see Alan S. Blinder, “The Anatomy of Double-Digit Inflation in the 1970s,” in Inflation: Causes and Effects, ed. Robert E. Hall (Chicago: University of Chicago Press, 1982), 261-82. On ERISA, see Christopher Howard, The Hidden Welfare State: Tax Expenditures and Social Policy in the United States (Princeton, N.J.: Princeton University Press, 1997), 130–34.

  13. Pete Bancroft, “Reflections of an Early Venture Capitalist,” March 28, 2000, unpublished manuscript in the author’s possession.

  14. David Morgenthaler, interview with the author, June 23, 2015, Palo Alto Calif; Pete Bancroft, interview with the author, November 3, 2015, San Francisco, Calif.

  15. Jefferson Cowie, Stayin’ Alive: The 1970s and the Last Days of the Working Class (New York: The New Press, 2010); Michael Reagan, “Capital City: New York in Fiscal Crisis, 1966–1978,” PhD dissertation, University of Washington, 2017.

  16. U.S. Department of Commerce, The Role of Technical Enterprises in the United States Economy (Washington, D.C.: U.S. Government Printing Office, January 1976); Robert Wolcott Johnson, “The Passage of the Investment Incentive Act of 1978: A Case Study of Business Influencing Public Policy,” PhD dissertation, Harvard University Graduate School of Business Administration, 1980, 40–42.

  17. Pete Bancroft and the National Venture Capital Association, Emerging Innovative Companies—An Endangered Species, November 29, 1976, unpublished manuscript in the author’s possession, 1, 3.

  18. Benjamin C. Waterhouse, Lobbying America: The Politics of Business from Nixon to NAFTA (Princeton, N.J.: Princeton University Press, 2013).

  19. “Electronic firms seek broader political base,” The Los Angeles Times, November 15, 1981, quoted in AnnaLee Saxenian, “In Search of Power: The Organization of Business Interests in Silicon Valley and Route 128,” Economy and Society 18, no. 1 (February 1989): 40.

  20. Patrick McNulty, “They Shrugged When Pete McCloskey Challenged the President,” The Los Angeles Times, May 23, 1971, O24; Pete McCloskey, interview with the author, February 18, 2016, Rumsey, Calif.

  21. McCloskey interview; Reid Dennis, interview with the author, May 26, 2015.

  22. McCloskey interview.

  23. Ed Zschau, interviews with the author, June 24, 2015, and January 19, 2016, Palo Alto, Calif.

  24. Burt McMurtry, interview with the author, October 2, 2017, by phone; Kathie and Bob Maxfield, interview with the author, May 28, 2015, Los Gatos, Calif.

  25. Greenfield interview; David Morgenthaler and Reid Dennis, interview with the author, May 26, 2015, Palo Alto, Calif.

  26. Jimmy Carter, “Tax Reduction and Reform Message to the Congress,” January 20, 1978, posted by Gerhard Peters and John T. Woolley, The American Presidency Project, https://www.presidency.ucsb.edu/node/247763, archived at https://perma.cc/RXG7-F57W.

  27. Saxenian, “In Search of Power.”

  28. Zschau interview, June 24, 2015; Capital gains tax bills: Hearings before the Subcommittee on Taxation and Debt Management Generally of the Committee on Finance, United States Senate, Ninety-fifth Congress, second session, June 28 and 29, 1978, 269.

  29. McCloskey interview.

  30. William A. Steiger, testimony, Capital gains tax bills: Hearings.

  31. Barry Sussman, “Surprise: Public Backs Carter on Taxes: Roper Survey Shows Fairness Rated Above Tax Cut,” The Washington Post, August 6, 1978, D5.

  32. Clayton Fritchey, “Today’s ‘Forgotten Man’: The Investor,” The Washington Post, August 5, 1978, A15. Two years later, Massachusetts would follow suit, passing Proposition 2½—a measure that got a hefty financial push from the newly formed Massachusetts High Technology Council; see Saxenian, “In Search of Power.”

  33. Art Pine, “A Tax Break for the Rich in an Election Year?,” The Washington Post, May 21, 1978, A16; “Rich, Poor, and Taxes,” The Washington Post, June 2, 1978, A2; David Morgenthaler, testimony, H.R. 9549, The Capital, investment, and business opportunity act: Hearing before the Subcommittee on Capital, Investment, and Business Opportunities of the Committee on Small Business, House of Representatives, Ninety-fifth Congress, second session, February 22, 1978.

  34. Art Pine, “Capital Gains Remarks by Carter Draw Hill Fire,” The Washington Post, June 29, 1978, D12. For a comprehensive account of the bill’s passage, see Johnson, “The Passage of the Investment Incentive Act of 1978.”

  35. Greenfield interview.

  36. James M. Poterba, “Venture Capital and Capital Gains Taxation,” in Tax Policy and the Economy, vol. 3, ed. Lawrence H. Summers (Cambridge, Mass.: The MIT Press, 1989), 47–67.

  37. Ed Zschau, correspondence with the author, September 13, 2018.

  38. Memorial Services held in the House of Representatives and Senate of the United States, together with remarks presented in eulogy of William A. Steiger (Washington, D.C.: USGPO, 1979).

  ACT THREE

  1. The Man Who Shot Liberty Valance, directed by John Ford, written by James Warner Bellah and Willis Goldbeck, based on the story by Dorothy M. Johnson (Paramount Pictures, 1962).

  ARRIVALS

  1. Trish Millines Dziko, interview with the author, April 2, 2018, by phone; correspondence with the author, September 7, 2018; Trish Millines Dziko, interview by Jessah Foulk, August 8, 2002, “Speaking of Seattle” oral history collection, Sophie Frye Bass Library, Museum of History and Industry, Seattle, Wash.

  2. “Benjamin M. Rosen,” The Rosen Electronics Letter 80, no. 10 (July 7, 1980), Catalog No. 102661121, Computer History Museum Archives, Mountain View, Calif.; John W. Wilson, The New Venturers: Inside the High-Stakes World of Venture Capital (Reading, Mass.: Addison-Wesley, 1985), 109–11.

  3. Charles J. Elia, “Caution Increases on Semiconductor Issues Amid Signs of Slower Recovery by Industry,” The Wall Street Journal, November 4, 1975, 43; Regis McKenna, interview with the author, December 3, 2014, Stanford, Calif.; Merrill Lynch, August 1978, report in the possession of Regis McKenna.

  4. “From Little Apples Do Giant Orchards Grow,” The Ro
sen Electronics Letter 80, no. 21 (December 31, 1980), 10, Catalog No. 102661121, Computer History Museum Archives, Mountain View, Calif.; Rosen, “Memories of Steve,” Through Rosen-Colored Glasses blog, October 22, 2011, http://www.benrosen.com/2011/10/memories-of-steve.html, archived at https://perma.cc/9B2M-5462.

  CHAPTER 13: STORYTELLERS

  1. Display ad (Apple Computer Inc.), Wall Street Journal, August 13, 1980, 28.

  2. Philip Shenon, “Investment Climate is Ripe for Offering by Apple Computer,” The Wall Street Journal, August 20, 1980, 24.

  3. Ben Rosen, “The Stock Market Looks Ahead—to the Golden Age of Electronics,” The Rosen Electronics Letter 80, no. 15 (August 22, 1980), 1.

  4. “High Technology: Wave of the future or market flash in the pan?” BusinessWeek, November 10, 1980, 86–97; Moore quoted in Wilson, The New Venturers, 189.

  5. Carl E. Whitney, “Wall Street Discovers Microcomputers,” InfoWorld 2, no. 18 (October 13, 1980), 4–5; James L. Rowe, Jr., “Speculation Fever Seeping Through Wall Street,” The Washington Post, November 2, 1980, G1; Karen W. Arenson, “A ‘Hot’ Offering Retrospective,” The New York Times, December 30, 1980, D1.

  6. Ben Rosen, “Spectacular Year for Electronics Stocks,” The Rosen Electronics Letter 80, no. 21 (December 31, 1980), 1. Also see Sally Smith Hughes, Genentech: The Beginnings of Biotech (Chicago: The University of Chicago Press, 2011).

  7. Robert A. Swanson, oral history interviews by Sally Smith Hughes, 1996 and 1997, Regional Oral History Office, The Bancroft Library, University of California, Berkeley, 2001.

  8. David Ahl, Interview with Gordon Bell, Creative Computing 6, no. 4 (April 1980), 88–89, via Garson O’Toole, “There is No Reason for Any Individual to Have a Computer in Their Home,” Quote Investigator, https://quoteinvestigator.com/2017/09/14/home-computer/#return-note-16883-1 archived at https://perma.cc/5M5R-HQMA. At the time, the minicomputer market was $2.5 billion, and Digital controlled 40 percent of it. See Stanley Klein, “The Maxigrowth of Minicomputers,” The New York Times, October 2, 1977, 3. Arthur Rock, interviews by Sally Smith Hughes, 2008 and 2009 “Early Silicon Valley Venture Capitalists,” Regional Oral History Office, The Bancroft Library, University of California, Berkeley, California, 56.

  9. David Morgenthaler, interviews with the author; David Morgenthaler, oral history interview, 41; Brent Larkin, “Cleveland’s Quiet Business Visionary,” The Cleveland Plain Dealer, January 15, 2012, G1.

  10. William Bates, “Home Computers—So Near and Yet . . . ,” The New York Times, February 26, 1978, F3; Wayne Green, “80 Remarks,” column, 80 Microcomputing, January 1980, quoted in Matthew Reed, “Was the TRS-80 affectionately known as the Trash-80?” TRS-80.org, undated, http://www.trs-80.org/trash-80/, archived at https://perma.cc/3J2G-7J9X.

  11. Apple, “Personal Computer Market Fact Book” [c. 1983], 143, M1007, Series 7, Box 15, FF 1, Apple Computer Inc. Records, 1977–1997, SU; Regis McKenna, The Regis Touch: Million-Dollar Advice from America’s Top Marketing Consultant (Reading, Mass.: Addison-Wesley, 1985), 28.

  12. Regis McKenna, interview with the author, December 3, 2014.

  13. Tom Hannaher, “Selling Apple Personal Computing with Advertising,” Apple Computer Inc., 1983; “Personal Computer Market Fact Book,” 160–62.

  14. “Personal Computer Market Fact Book,” 141, 146. As internal marketing documents like this one reveal, Apple marketed exclusively to men until its expansion into collegiate markets around the time of the introduction of the Macintosh (1984). On Playboy placement, see Michael Swaine and Paul Freiberger, Fire in the Valley: The Birth and Death of the Personal Computer, 3rd ed. (Raleigh, N.C.: The Pragmatic Bookshelf, 2014), 253.

  15. McKenna, interview with the author, December 3, 2014.

  16. Steve Jobs presentation, ca. 1980, gift of Regis McKenna, Catalog number 102746386, Lot number, X2903.2005, CHM. Also see Kay Mills, “The Third Wave: Whiz-Kids Make a Revolution in Computers,” The Los Angeles Times, July 5, 1981, E3.

  17. Mills, “The Third Wave.”

  18. Esther Dyson, “My iXperiences with Steve Jobs,” August 26, 2011, Reuters MediaFile, http://blogs.re uters.com/mediafile/2011/08/26/my-ixperiences-with-steve-jobs/, archived at https://perma.cc/C9T3-L7WG.

  19. “Osborne: From Brags to Riches,” BusinessWeek, February 22, 1982, 82.

  20. Schenker, “A Different Scenario: Personal Computers in the 80’s,” InfoWorld 2, no. 6 (April 14, 1980): 11, Box 1, Liza Loop Papers, M1141, SU; Peter J. Schuyten, “Subculture of Silicon Technology,” The New York Times, May 10, 1979, D2.

  21. McKenna, The Regis Touch, xi.

  22. Alvin Toffler, Future Shock (New York: Random House, 1970), 29; Jobs quoted in Mills, “The Third Wave.”

  23. Christian Williams, “Future Shock Revisited: Alvin Toffler’s ‘Wave,’” The Washington Post, March 31, 1980, B1.

  24. “Tandy Radio Shack Assaults the Small Computer Market,” The Rosen Electronics Letter 80, no. 14 (August 8, 1980), Catalog No. 102661121, CHM; McKenna, The Regis Touch, 62.

  25. Ben Rosen, “Memories of Steve,” Through Rosen-Colored Glasses blog, October 22, 2011, http://www.benrosen.com/2011/10/memories-of-steve.html, archived at https://perma.cc/9B2M-5462.

  26. C. Saltzman, “Apple for Ben Rosen: Use of Personal Computers by Securities Analysts,” Forbes 124 (August 20, 1979), 54–55; Stratford P. Sherman, “Technology’s Most Colorful Investor,” Fortune, September 30, 1985, 156.

  27. Adam Osborne, speech at West Coast Computer Faire, March 15, 1980, audio recording, Dan Bricklin’s Web Site: www.bricklin.com, archived at https://perma.cc/EWM5-JVF7.

  28. The Rosen Electronics Letter, August 8, 1980, 14, Catalog No. 102661121, CHM.

  29. McKenna, interview with the author, December 3, 2014; Shenon, “Investment Climate is Ripe for Offering by Apple Computer”; Whitney, “Wall Street Discovers Microcomputers,” 4–5.

  30. Arthur Rock interview, “Early Bay Area Venture Capitalists”; “Making a Mint Overnight,” Time, January 23, 1984, 44.

  31. William M. Bulkeley, “In Venture Capitalism, Few Are As Successful as Benjamin Rosen,” The Wall Street Journal, November 28, 1984, 1.

  32. Frederick Golden, “Other Maestros of the Micro,” Time, January 3, 1983; “The $1795 Personal Business Computer is changing the way people go to work,” Osborne Computer Corp Ad, Byte 7, no. 9 (Sept 1982), 31.

  33. Inc., October 1981.

  CHAPTER 14: CALIFORNIA DREAMING

  1. Ronald Reagan, announcement of presidential candidacy, November 13, 1979, https://www.reaganlibrary.gov/11-13-79, archived at https://perma.cc/E7CL-GL47.

  2. Quoted in Haynes Johnson, “The Perils of Paradise,” The Washington Post, October 19, 1980, G1.

  3. David Ignatius, “Political Evolution: Sen. Hart Seeks to Blur Left-Right Stereotypes in His Reelection Bid,” The Wall Street Journal, August 20, 1980, 1.

  4. Paul Tsongas, Testimony before the Senate Small Business Committee on the Elimination of the Capital Gains Differential, June 2, 1986, Ed Zschau Papers, Box 51, FF “Capital Gains II,” Hoover Institution Archives, Stanford, Calif. (HH).

  5. Bob Davis, “Future Gazers in the U.S. Congress,” The Wall Street Journal, June 7, 2000, 3; David Shribman, “Now and Then, Congress Also Ponders the Future,” The New York Times, March 14, 1982, E10.

  6. Katie Zezima, “Ex-Gov. Edward J. King, 81, Who Defeated Dukakis, Dies,” The New York Times, September 19, 2006, B8.

  7. Elizabeth Drew, “The Democrats,” The New Yorker, March 22, 1982, 130; William D. Marbach, Christopher Ma, et al., “High Hopes for High Tech,” Newsweek, February 14, 1983, 61.

  8. Editorial, “Jerry Brown on the ‘Reindustrialization of America,’” The Washington Post, January, 14, 1980, A23; George Skelton, “Gaining Attention by Snubbing Tradition,” The Los Angeles Times, October 17, 1978, A1; Skelton, “Waiting in Wings for 1980,” The L
os Angeles Times, November 8, 1978, B1.

  9. Doug Moe, “35 Years On, Recalling ‘Apocalypse Brown,’” Wisconsin State Journal, March 27, 2015, https://madison.com/wsj/news/local/columnists/doug-moe/doug-moe-years-on-recalling-apocalypse-brown/article_1b614603-1d07-51b7-a984-9b793fecf730.html, archived at https://perma.cc/C9KS-2594; Wayne King, “Gov. Brown, His Dream Ended, Returns to California,” The New York Times, April 3, 1980, 34; Raymond Fielding, The Technique of Special Effects Cinematography, 4th ed. (Burlington, Mass.: Focal Press, 2013), 387–88.

  10. Johnson, “The Perils of Paradise.”

  11. Rowland Evans and Robert Novak, “David Packard Gets on Board,” The Washington Post, May 11, 1975, 39; Margot Hornblower, “Gold-Plated Panel Set to Raise, Spend Millions for Reagan,” The Washington Post, July 10, 1980, A3; Debra Whitefield, “Business Leaders Jubilant; Wall Street Has Busiest Day,” The Wall Street Journal, November 6, 1980, B1; Tom Redburn and Robert Magnuson, “Stung by Tax Bill, Electronics Firms Seek Broader Political Base,” The Los Angeles Times, November 15, 1981, F1.

  12. Tom Zito, “Steve Jobs: 1984 Access Magazine Interview,” Newsweek Access, Fall 1984, reprinted at The Daily Beast, October 6, 2011, https://www.thedailybeast.com/steve-jobs-1984-access-magazine-interview, archived at http://perma.cc/A3W8-T4Q9; “InfoViews,” InfoWorld, November 10, 1980, 12.

  13. Whitefield, “Business Leaders Jubilant”; Ken Gepfert, “Defense Contractors Hail Reagan Win but Can They All Share in the Spoils?,” The Los Angeles Times, November 30, 1980, F1; Nicholas Lemann, “New Tycoons Reshape Politics,” The New York Times, June 8, 1986, Section M, 51. The Democrats’ loss of the Senate came in the wake of a $700,000 ad blitz by National Conservative PAC (NCPAC), brainchild of former Nixon operative and lobbyist Roger Stone, whose later presidential campaigns included both George Bushes, Bob Dole, and Donald Trump. Warren Weaver Jr., “Conservatives Plan $700,000 Drive to Oust 5 Democrats From Senate,” The New York Times, August 17, 1979, 1; “Attack PAC,” Time 120, no. 17 (October 25, 1982), 28.

  14. Both Tsongas and Hart quoted in Lawrence Martin, “Shift to Right in U.S. Begins to Hit Home,” The Globe and Mail, November 8, 1980, 1. “Carter Told Major Threats Are Democrats,” United Press International, May 4, 1977, wire service story.