Hackers, War and Venture Capital

In my previous post of this series, I discussed the role of military funding in the formation of a ‘genealogy’ of university laboratories, their projects, and staff which produced the conditions for hacking during the 1960s and 70s. As I drafted that post, I found myself drifting into a discussion around the role of venture capital but I have split that discussion into this final post below so as to highlight another important aspect in the study of the role of the university in the development of hacker culture.

Levy (1985) points to the arrival in 1959 of the TX-0 computer as a seminal moment in the history of hacking. The computer had been donated by the Lincoln Laboratory to MIT’s Research Laboratory of Electronics (RLE), the original successor of the Rad Lab and today, “MIT’s leading entrepreneurial interdisciplinary research organization.” Similarly, Eric Raymond points to the arrival at the RLE of the PDP-1 computer in 1961 as the moment that defined the beginning of ‘hackerdom’. Notably, at that time the RLE shared the same building as the Tech Model Railroad Club (TMRC), the legendary home of the first hackers. The history of hacking is understandably tied to the introduction of machines like the TX-0 and PDP-1 just as Richard Stallman refers to the demise of the PDP-10 as “the last nail in the coffin” for 15 years of work at MIT. Given the crucial significance of these machines, a history of hacking should include a history of key technologies which excited and enabled those students and researchers to hack at MIT in the early 1960s. To some extent, Levy’s book achieves this. However, in undertaking a history of machines, we necessarily undertake a social history of technology and the institutions and conditions which reproduced its development and in doing so we reveal the social relations of the university, the state and industry (Noble, 1977, 1984).

The birth of Digital Equipment Corporation

In 1947, the US Navy funded MIT’s Servomechanisms Lab to run Project Whirlwind to develop a computer that tracked live radar data. The Whirlwind project was led by Jay Forrester, leading systems theorist and principle inventor of magnetic core memory (the patenting of which was marked by a dispute between MIT and the Research Corporation resulting in the cancellation of MIT’s contract with the Corporation).

MIT’s Lincoln Lab was set up in 1951 to develop the SAGE air defence system for the US Air Force, which expanded on the earlier research of Project Whirlwind.  The TMRC hackers’ first computer was a TX-0 from the Lincoln Lab with its use of a cathode-ray display borrowed from the SAGE project’s research into radar. Though large by today’s standards, the TX-0 was smaller than Whirlwind and was one of the first transistor-run computers, designed and built at MIT’s Lincoln Lab between 1956-7 (Ceruzzi, 2003, 127). Much of the innovation found in the TX-0 was soon copied in the design of the PDP-1, developed in 1959 by the Digital Equipment Corporation (DEC).

DEC was founded by Ken Olson and Harlan Anderson, two engineers from the Lincoln lab who had also worked on the earlier Whirlwind computer. Watching students at MIT, Olsen had noticed the appeal of the interactive, real time nature of the TX-0 compared to the more powerful but batch operated computers available and saw a commercial opportunity for the TX-0. Soon after they established their firm, they employed Ben Gurley, who had worked with them at the Lincoln Lab and designed the interactive display of the TX-0 which used a cathode-ray tube and light pen. It was Gurley who was largely responsible for the design of the PDP-1. DEC is notable for many technical and organisational innovations, not least that it permitted and encouraged its clients to modify their computers, unlike its competitor, IBM, which still operated on a locked-down leasing model. DEC’s approach was to encourage the use of its machines for innovation, providing “tutorial information on how to hook them up to each other and to external industrial or laboratory equipment.” (Ceruzzi, 2003, 129) This not only appealed to the original TMRC hackers but appealed to many of its customers, too, and led to DEC becoming one of the most successful companies funded by the venture capital company, American Research and Development Corporation (ARD).

The birth of venture capitalism in the university

ARD, established in 1947, is regarded as the first venture capital firm and was “formed out of a coalition between two academic institutions.” (Etzkowitz, 2002, 90). It was founded by the “father of venture capital”, Georges Doriot, then Dean of Harvard Business School, Ralph Flanders, an Engineer and head of the Federal Reserve Bank in Boston, and Karl Compton, President of MIT. ARD employed administrators, teachers and graduate students from both MIT and Harvard. The motivation for setting up this new type of company was a belief by its founders that America’s future economic growth rested on the country’s ability to generate new ideas which could be developed into manufactured goods and therefore generate employment and prosperity. This echoed the argument put forward by Vannevar Bush that following the war, “basic research” should be the basis for the country’s economic growth and both views confirm the idea/ideology that innovation follows a linear process, from basic research which is then applied, developed and later taken into production. However, whereas government was funding large amounts of R&D in universities, the founders of ARD complained of a lack of capital (or rather a model of issuing capital) that could continue this linear process of transferring science to society.

ARD funded DEC after Olsen and Anderson were recommended by Jay Forrester. This led to an investment of $100,000 in equity and $200,000 available in loans and within just a few years DEC was worth $400m. This allowed ARD to take greater risks with its investments: “The huge value of the Digital Equipment stock in ARD’s portfolio meant that the relatively modest profits and losses on most new ventures would have virtually no effect on the venture capital firm’s worth.” (Etzkowitz, 2002, 98). ARD’s success marked the beginning of a venture capital industry that has its origins in the post-war university and a mission to see federally-funded research exploited in the ‘endless frontier’ of scientific progress. It led to the development of a model that many other universities copied by providing “seed” capital investment to technology firms and the establishing of ‘startup’ funds within universities. Most recently, we can observe a variation of this method by the ‘angel investment’ firm, Y-Combinator, which specifically sought to fund recent graduates and undergraduate students during their summer breaks.

Y-Combinator and the valorisation of student hackers

A proper analysis of Y-Combinator in the context of the history of hacking, the university and venture capital is something I hope to pursue at a later date. In this current series of posts discussing the role of the university in the ‘pre-history’ of hacker culture I want to flag up that Y-Combinator can be understood within the context of the university’s role in the venture capital industry. Just as academic staff have been encouraged to commercialise their research through consultancy, patents and seed capital, in its early stage, Y-Combinator sought to valorise the work of students by offering its ‘summer founders programme‘. Similarly its founder, Paul Graham, has often addressed students in his writing and discussed the role of the university experience in bootstrapping a successful start-up company. Graham’s on-going articles provide a fascinating and revealing body of work for understanding the contemporary relationship between students, the university, hacking and venture capital. In this way Y-Combinator represents a lineage of hacking and venture capital that grew out of the university but never truly left because despite recent claims that we are witnessing the demise of higher education as we know it, the university as a knowledge factory remains a fertile source of value through the investment of public money and the production of immaterial labour, something that Vannevar Bush would be proud of.

Series conclusion

This is the last of a series of six posts on the role of the university in the development of hacker culture. These posts are my notes for a journal article I hope to have published soon which will argue, as I have done here, that the pre-history of hacking (pre-1960) is poorly documented and that much of it can be found in an examination of the history of American higher education, especially MIT.

As an academic who works in a ‘Centre for Educational Research and Development’, and who runs various technology projects and works with young developers, I am interested in understanding this work in the context of the trend over the last decade or so, towards ‘openness’ in higher education. Ideas and practices such as ‘open education‘, ‘open access‘, ‘open educational resources‘ (OER) and most recently ‘Massive Open Online Courses’ (MOOCs) and ‘open data‘, are already having a real impact on the form of higher education and its institutions and will continue to do so. My work is part of that trajectory and I recognise that the history of openness in higher education goes back further than the documented last 10-15 years. It is well known that the early efforts around OER, OpenCourseWare and the concurrent development of Creative Commons licenses owes a great deal to the ‘open source’ licensing model developed by early hackers such as Richard Stallman. I hope that in these posts I have shown that in turn, the free and open source software movement(s) was, in its early formation, a product of the political, economic and ultimately institutional conditions of the university. Richard Stallman felt compelled to leave the academy in 1984 as he found that “communism”, a foundational ethos of science as famously described by Merton (1973), was by that time little more than an ideal that had barely existed at MIT since the Great Depression.

This points towards a history of openness in higher education that is rooted in hacker culture and therefore in the commercialisation of scientific research, military funding regimes and the academy’s efforts to promote a positive ideology of science to the public. Stallman’s genius was the development of ‘copyleft‘, in the form of the GPL, which was very influential in the later development of Creative Commons licenses used (and partially developed) in higher education. Through the growth of the free and open source software movements in the last 25 years, the academy has been reminded (and as participants, reminded itself), that the ideal of communism in science forms the basis of a contract with society that can still be achieved through the promotion of openness in all its forms. However, in hindsight, we should be cautious and critical of efforts to yet again valorise this new agenda in science through calls to adopt permissive licenses (e.g. CC-BY, MIT, ODC-by) rather than Stallman’s weapon of scientific communism: Copyleft.

The role of the university in the development of hacker culture


A PDP-10 computer from the 1970s.

The picture above is of a PDP-10 computer similar to that found in universities during the 1970s. The PDP-10 was developed between 1968-1983 by Digital Equipment Corporation (DEC) and is a useful point of reference for looking backwards and forwards through the history of hacking.  The PDP-10 (and its predecessor the PDP-6) were two of the first ‘time-sharing‘ computers, which among other significant technological developments, increased access to computers at MIT. Hackers working in the MIT Artifical Intelligence Lab (AI Lab) wrote their own operating system for the PDP-6 and PDP-10 called ITS, the Incompatible Timesharing System, to replace the Compatible Time Sharing System (CTSS) developed by MIT’s Computation Centre. Richard Stallman, who Levy describes as “the last true hacker”, was a graduate student and then AI Lab staff system hacker who devoted his time to improving ITS and writing applications to run on the computer. Stallman describes the Lab during the 13 years he worked there as “like the Garden of Eden”, a paradise where a community of hackers shared their work.

However, this period came to a bitter end in 1981, when most of the hackers working with Stallman left to join two companies spun off from the Lab. Four left to join Lisp Machines, Inc. (LMI), led by Stallman’s mentor, the ‘hacker’s hacker’, Richard Greenblatt, while 14 of the AI Lab staff left to join Symbolics, Inc. a company led by Russell Noftsker, who was Head of the AI Lab for eight years and had hired Stallman. (Noftsker had taken over from the original Director, Marvin Minsky, who worked on MIT’s DARPA-funded Project MAC, which later became the AI Lab). For a while in 1979, Noftsker and Greenblatt discussed setting up a company together that sold Lisp Machines, but they disagreed on how to initially fund the business. Greenblatt wanted to rely on reinvesting early customer orders and retain full control over the company while Noftsker was keen to use a larger amount of venture capital, accepting that some control of the company would be given up to the investors. Greenblatt and Noftsker couldn’t agree and so set up companies independent of each other, attracting most of the ITS hackers in the AI Lab to the extent that Stallman’s beloved community collapsed. With maintenance and development of ITS decimated, administrators of the AI Lab decided to switch to TOPS-20, DEC’s proprietary operating system when a new PDP-10 was purchased in 1982. A year later, DEC ceased production of the PDP-10 which Stallman described as “the last nail in the coffin of ITS; 15 years of work went up in smoke.”

Lisp Machines went bankrupt in 1985 while Symbolics remained active until the end of the Cold War when the military’s appetite for AI technologies slowed down and subsequently the company declined. One more thing worth noting about these two AI Lab spin-offs is that within a year of doing business, Stallman and Symbolics clashed over matters of sharing code. Having been deserted by his fellow hackers, Stallman made efforts to ensure that everyone continued to benefit from Symbolics enhancements to the Lisp Machine code, regularly merging Symbolics code with MIT’s version, which Greenblatt’s company used. Stallman was acting as a middle-man between the two code bases and the split community of hackers. Like other MIT customers, Symbolics licensed the Lisp Machine code from MIT and began to insist that their changes to the source code could not be redistributed beyond MIT, thereby cutting off Greenblatt’s Lisp Machines, Inc. and other MIT customers. Stallman’s efforts to keep the old AI Lab hacker community together through the sharing of distributed code came to an end.

In an essay by Stallman, he writes about how this was a defining moment in his life from which he resolved to start the GNU Project and write his own ‘free’ operating system. In 1984, Stallman left his job at MIT so as to ensure that the university didn’t have any claim to the copyright of his work, however he remained as a guest of the AI Lab at the invitation of the Director, Patrick Winston, and still does so today. If you are at all familiar with the history of free software and the open source movement, you will know that Stallman went on to develop the General Public License in the late 1980s, which has become the most popular open source license in use today. Advocates of open education will know that the GPL was the inspiration for the development of Creative Commons licenses in 2001. Arguably, the impact of spinning off Lisp Machines and Symbolics from the AI Lab in 1981 is still being felt and the 18 hackers that left to join those divergent startups can be considered as paradigmatic for many hackers since, conscious of whether they are working on shared, open source software or proprietary software.

Everything I have described above can be easily pieced together in a few hours from existing sources. What is never discussed in the literature of hacking is the institutional, political and legal climate during the late 1970s and early 1980s, and indeed the decades prior to this period that led to that moment for Stallman in 1984. In fact, most histories of hacking begin at MIT in 1961 with the Tech Model Railroad Club and, understandably, concentrate on the personalities and development of an ethic within the hacker community. What is never mentioned is what led to Greenblatt and Noftsker deciding to leave that ‘Garden of Eden’ and establish firms. What instruments at that time encouraged and permitted these men to commercialise their work at MIT? Much of what I have written above can be unravelled several decades to show how instrumental the development of higher education in the USA during the 20th century was to the creation of a hacker culture. The commercialisation of applied research; the development of Cybernetic theory and its influence on systems thinking, information theory and Artificial Intelligence; the vast sums of government defense funding poured into institutions such as MIT since WWII; the creation of the first venture capital firm by Harvard and MIT; and most recently, the success of Y-Combinator, the seed investment firm that initially sought to fund student hackers during their summer break, are all part of the historiography of hacking and the university.

Over the next few blog posts I will attempt to critically develop this narrative in more detail, starting with a discussion of the Bayh-Dole Act, introduced in 1980.


I’ve linked almost exclusively to Wikipedia articles in this blog post. It’s a convenient source that allows one to quickly sketch an idea. Much needs to be done to verify that information. There are a few books worth pointing out at this introductory stage of the narrative I’m trying to develop.

The classic journalistic account of the history of hacking is by Stephen Levy (1984) Hackers. Heroes of the Computer Revolution. I found this book fascinating, but it begins in 1958 with the Tech Model Railroad Club (chapter 1) and doesn’t offer any real discussion about the institutional and political cultures of the time which allowed a ‘hacker ethic’ (chapter 2) to emerge.

Eric Raymond’s writings are also worth reading. Raymond is a programmer and as a member of the hacker tradition has made several attempts to document it, including the classic account of the Linux open source project, The Cathedral and the Bazaar, and as Editor of the Jargon File, a glossary of hacker slang. Again, Raymond’s Brief History of Hackerdom, begins in the early 1960s with the Tech Model Railroad Club and does not reflect on the events leading up to that moment in history.

Another useful and influential book on hackers and hacking is Himanen (2001) The Hacker Ethic. Himanen is a sociologist and examines the meaning of the work of hackers and their values in light of the Protestant work ethic.

Tim Jordan’s 2008 book, Hacking, is a general introduction to hacker and cracker culture and provides an insightful and useful discussion around hacking and technological determinism. Like Himanen, Tim Jordan is also a sociologist.

Stallman’s book, Free Software Free Society (2002), offers a useful direct account of his time at MIT in chapter 1.

Sam Williams’ biography of Stallman, Free as In Freedom (2002), later revised by Stallman in collaboration with Williams (2010), is essential reading. Chapter 7 ‘A Stark Moral Choice’, offers a good account of the break up of Stallman’s hacker paradise in the early 1980s.

E. Gabriella Coleman’s book, Coding Freedom. The Ethics and Aesthetics of Hacking (2012) is an anthropological study of hackers, in particular the free software hackers of the Debian Linux/GNU operating system. Coleman’s book is especially useful as she identifies hackers and hacking as a liberal critique of liberalism. This might then be usefully extended to other movements that hackers have influenced such as Creative Commons.