Patterico's Pontifications

3/19/2015

My Hopefully Final Response to Dan Gillmor on Net Neutrality: Why I Trust the Market Over Government, Every Time

Filed under: General — Patterico @ 7:44 am



Dan Gillmor and I have been having a debate about Net Neutrality, and there is one more point I would like to make. First, the links to what we’ve said so far:

I think we have recognized many points of agreement, and Dan summarizes those in his latest:

We agree there is currently no genuinely free market in providing Internet access. We agree that it would be great if a free market did exist, and support various measures that would help get us there. And we agree that government, in the form of the Federal Communications Commission, has behaved badly in the past. There’s more, but those are the highlights.

All correct. Gillmor also correctly identifies our main remaining point of disagreement: “We continue to disagree, firmly, on whether government can play a positive role in helping to ensure free speech on the Internet.”

I think it’s fair to summarize Gillmor’s argument as follows: the real problem is “Big Anything.” Gillmor sees both Big Government and Big Business as part of the same blob of Big Whatever. He believes citizens can band together to fight Big Whatever, and it doesn’t matter too much whether that pushback takes the form of consumers spending money elsewhere (in the case of Big Business) or voters voting for other politicians (in the case of Big Government). It’s all pushback. Indeed, he thinks that in some ways Big Government can be less dangerous than businesses, because (he says) the First Amendment protects us from government interference with content, while no similar principle constrains business.

Gillmor has indeed hit upon the crux of our disagreement. Now we’re getting somewhere. I think this is worth responding to in some detail, because I believe that, for the Net Neutrality crowd, the distrust of corporations is at least as great as the distrust of government. I want to discuss why I think this is completely wrongheaded, and symptomatic of a dangerous attitude that invites government regulation when market competition would be better.

The argument comes down to this: in a free market system, consumers’ ability to fight Big Business by choosing to spend money elsewhere is vastly superior than voters’ ability to fight Big Government by voting for someone else. Let’s look to public choice theory for some of the reasons, which (as you will see) are largely interrelated.

First, there is the issue of whether the actor is informed. Now, obviously consumers are not always as informed as they could be. However, when you compare an important purchase to an important election, a consumer’s incentive to research his purchasing options is much greater than a voter’s incentive to research politicians or political issues. Consumers mulling over a new computer or car or iPad are much more likely to spend time looking over resources containing detailed reviews and specifications about competing products, as compared to the time the typical voter spends researching a candidate. Part of the reason is that a purchase costs money. A vote costs nothing but the time it takes to cast.

Second, and related, is the issue of whether your action will have an effect. This can be expressed in terms of the existence and immediacy of incentives to make a good choice, and disincentives to make a bad choice. It is related to the first issue, because the lower your incentive to research, the less informed you are likely to be.

When you choose to spend your dollar on Product A vs. Product B, this has an immediate and undeniable effect on your well-being. You personally enjoy the benefits of your selected product, or feel the ill effects of its shortcomings. If your computer runs like a dream, or if your car is a lemon, these experiences provide immediate and concrete feedback to your dollar-spending decision. True, your one dollar or purchase will not make or break a company, but the incentive to reward good products and punish bad ones is clearly strong, and those strong incentives add up collectively.

For a voter, by contrast, your feedback is weak and sometimes nonexistent. If your preferred candidate (the one for whom your voted) loses, you will never feel the consequences of your choice, good or bad. If your preferred candidate wins, he has no obligation to live up to his promises. And in any event, even if he does, some of the promises he carries out may offend you, unless you happened to agree with him on every single issue.

This is not a situation that incentivizes being an informed voter.

Let’s compare apples to apples to show how stark the difference in incentives truly is. Imagine the following scenario:

You go to a store to buy a product for your company. Your company does not know you are the one making the purchase, so you will never be held accountable if the purchase turns out to be bad. Your purchase will cost you nothing, personally. Any effect the product’s quality has on your life will be so indirect that you will rarely think about it. The store policy is that you may not get the item you choose. If you do happen to get the item you choose, there is no guarantee it will work.

How much research are you going to do for that purchase, compared to the research you will do on a product you are buying for yourself?

Voters are also aware that, unless the election is tied and their vote breaks the tie — which never, ever, ever happens — their vote is utterly and completely meaningless. So voters rationally conclude it’s pointless to vote — and if they do, they rationally conclude that it is pointless to become informed.

All this leads to a pretty dismal reality. No company can consistently provide bad products and survive for long. But politicians can offer the same bad service, year in and year out, and people will routinely show up and vote for the least bad option. There is no real choice and your act has no effect.

So the free market wins out as regards your ability to effect change and your ability to be informed. But meanwhile, what about the supposed benefits of the First Amendment? Gillmor tells us that companies are not bound by the First Amendment (which is true) while the government is.

Me, I don’t trust the courts to protect my rights to free speech. Call me cynical, but that’s where I am. We live in a country where free speech rights have been violated by government since the very founding of the nation, with regularity and impunity. Yes, the First Amendment has protected us at times. Other times, it has not — just ask Eugene Debs.

I’ll take the market, thanks very much.

P.S. One final note: Gillmor says:

I like a lot of what libertarians say, but their free-market philosophy seems to go something like this: There’s really no such thing as a monopoly. Even if there is, the market will cure it. Even if the monopoly is so entrenched that the market takes decades to respond, that’s not our problem. Even if the market never responds, we’re all dead in the long run.

I believe there is no such thing as a monopoly in the free market, which is not the same thing as saying there is no such thing as a monopoly. Companies granted government privileges can be made monopolies. They cannot be taken out by competition, at least not anywhere near as easily as companies that do not enjoy special privileges from the government. Find me a company that, without government privileges, built and maintained a stranglehold on a market, limiting supply and driving up prices in a lasting fashion . . . and I’ll show you a unicorn.

I’ll have an easier time holding my end of that bargain than you will in holding up yours.

I thank Dan for the discussion.

49 Responses to “My Hopefully Final Response to Dan Gillmor on Net Neutrality: Why I Trust the Market Over Government, Every Time”

  1. Ding.

    Patterico (9c670f)

  2. he is much more trusting of government than people who have been paying attention

    happyfeet (a037ad)

  3. The lesson here is that the cable companies are so unbelievably terrible that government enforced net neutrality is the lesser of two evils (the ideal is net neutrality outside of government control as we had before). There is certainly a risk that the government will abuse its authority over the internet. But there was not even one shred of doubt that the cable companies would abuse their power if given it. For example, they promised not to throttle internet speeds (i.e. they’d create so called fast lanes but not slow lanes), but Comcast has shamelessly extorted Netflix by throttling its service.

    Eric (9bc338)

  4. Actually, Netflix approached Comcast and requested special service. Comcast wasn’t throttling Netflix service.

    And if Comcast wasn’t granted monopoly cable rights, customers would abandon them in droves.

    JWB (6cba10)

  5. There is another reason why your ability to signal your disapproval is much better with the market than with politicians, and that is focus. With politicians, their range of action are great, and they will decide many, many issues that come before them. However, you don’t get to vote on each individual action or vote. You have to vote for the whole politician. And while his/her stance on any one issue may be totally unacceptable to you, if all their other stances are in line with your values, and their competitor is less in line, you will likely vote for that politician, despite their view on that single issue. With the market, each purchase represents a “vote” on that product, and only that product. You are not required to purchase every product that company makes or offers. Thus, if you love the cable company’s entertainment package, but feel their ISP is too expensive or sub-par, you can purchase that from a competitor, and your signalling is focused only on that single product.

    prowlerguy (3af7ff)

  6. > No company can consistently provide bad products and survive for long

    You’d think that. But the *customer service* provided by telecoms is notoriously terrible, and has been for as long as I’ve been aware of the concept of customer service. This is possible because the telecoms are monopolies – and while some of that is the result of government intervention, it’s also true that the infrastucture costs create such a high barrier to entry that it’s very difficult for new players to enter the field, and the ability (absent government intervention) of property owners to refuse to allow telecoms to lay new wire across their property makes the situation for new entrants even harder.

    My experience is that, everywhere I have ever lived, there is no functional competition between high speed internet carriers. They aren’t monopolies, but there is so little competition, and the costs of entry are so high, that they function very much like monopolies.

    So I don’t trust the market to work, because the market *doesn’t* work the same way in low-competition situations that it does in high-competition situations.

    aphrael (34edde)

  7. JWB – Comcast’s customers would only abandon them in droves if there were somewhere else to go. In order for there to be somewhere else to go, someone else would have to (a) have the money to lay competing cable and (b) have the ability to force property owners to allow them to lay that cable for a sufficient price, OR (c ) have the ability to use the existing cable.

    (a) limits the number of potential entrants to a very small pool. (b) and (c ) require some form of government intervention.

    aphrael (34edde)

  8. http://knowmore.washingtonpost.com/wp-content/uploads/2014/04/isp-speed.png

    See if you can’t guess when Netflix agreed to pay for improved performance. And you are correct, the moment my area finally got a competitor to Comcast I switched immediately. It’s a shame everyone doesn’t have this option.

    Eric (9bc338)

  9. Choosing how to spend my vote is like choosing which cable TV ‘bundle’ to buy. The bundle is really too big, and includes a bunch of stuff I would actually pay MORE to AVOID having. As a father, for example, even though I want a TV service bundle that has a “family” channel, I do NOT want it packaged to average out by including a “porn/adult” channel.

    But in voting, even though I want, say, “social conservative” family-friendly politicians for some,even many, things in the political bundle, I do NOT want their input on other things. Like say “Common Core”. In fact, any federal influence over local schools is just as awful, in my view, as having porn on my family living room TV. Keep that crap away from my kids!

    But I only get one vote, and I only have two basic bundles on offer. Both bundles have way too much crap. And I wind up, if spending the vote at all, voting for the smidginly least-worst.

    But I have several dollars, and there are lots of options. I can, (and do) opt clear out of the cable-TV bundles on offer. I have instead lots of VHS tapes picked up at the thrift stores, and only a few less DVDs. I have NetFlix and the free-version of Hulu. I have parental controls set on the home LAN router and the kids are monitored while surfing YouTube.

    I LIKE having my ISP carry NetFlix. I’d pay more, if necessary, to have the last mile of service upgraded to give me the ULTIMATE “a la carte” video delivery service. I have no particular problem with the ISP charging both me AND NetFlix a (slight) premium to give me the control and choice about what sorts of data is delivered to my kids in my living room.

    It seems to me that Net Neutrality takes that control away from me and hands it off to appointed officials 1500 hundred miles away, who are only answerable once in awhile to politicians to whom these appointees, and their responsibilities, are secondary. (Behind climate change, for example. Frankly, what my kids watch and learn is to me more important than whether overnight winter time temperatures average higher or not over the past or next few decades.) Spending my dollars gives me my choice. Voting, absolutely, not so much.

    Pouncer (ed0078)

  10. “Comcast’s customers would only abandon them in droves if there were somewhere else to go. In order for there to be somewhere else to go, someone else would have to (a) have the money to lay competing cable and (b) have the ability to force property owners to allow them to lay that cable for a sufficient price, OR (c ) have the ability to use the existing cable.”

    GSM, 4G, … the sale of old analog frequency to new users for digital uses…

    What is the technical difficulty in setting up “broadcast” towers on the old TV channels with very limited service areas to provide two-way digital communication for a competing ISP in a neighborhood now only served by twisted pair and cable-coax? How much more bandwidth (if any) is on the old TV channel than in current CDMA or GSM cellular bands?

    Seems to me that restricting the discussion to “cable” is inherently short sighted.

    Pouncer (ed0078)

  11. Why do we use the term monopoly, when it just changes the entire terms of the debate. This is not a monopoly, in any real sense of the word. Not having lots of choices is not the same as a monopoly. The FCC’s own data suggests that competition, while not as expansive as some may desire, is not the driving factor for this. And the idea that increased govt interference will increase competition and reduce costs and barriers to entry is pure folly.

    JD (86a5eb)

  12. #10 asked “What is the technical difficulty in setting up “broadcast” towers on the old TV channels with very limited service areas…”

    I don’t know about the technical difficulty, but you can bet your ass the FCC would make it take 10 years to accomplish! Oops, make that 20, now.

    Ray Van Dune (3b6539)

  13. There is some backstory here.

    Netflix had another motive to push “Net Neutrality.”

    Because Netflix was then rolling out its own network, Open Connect, to bypass the public network in favor of direct tie-ups with last-mile providers like Comcast,Verizon and AT&T. This largely ignored story has been told in detail by a disparate group of analysts and lawyers including Dan Rayburn,Larry Downes,Jonathan Lee and Fred Campbell. Netflix effectively engineered a slowdown of its own service in late 2013 by relying on an intermediary with inadequate capacity, then waved a bloody shirt in pursuit of the direct-connection deals that today allow Netflix to distribute its content more efficiently and cheaply.

    They were not being “injured.” They had a deal they were negating and they wanted more pressure to make the deal. Instead, they blew up the internet.

    Netflix had been happy to flog the net-neutrality meme while negotiating these agreements, Mr. Wells indicated, and then unhappy when the FCC took its rhetoric seriously and imposed sweeping Title II regulation.

    And no wonder: Netflix can hardly be in favor of anything that curbs its own freedom to run its business as it sees fit. Yet the FCC’s “reclassification” of the Internet as a public utility potentially does exactly that.

    I don’t like TV so I am not unbiased but millions of people with kids have no TV by choice. Friends of mine in Tucson have raised three boys with a TV connected only to video games. The boys are grown now. One is a Marine officer applying to flight school. One is finishing an engineering degree and plays classical piano and the third is a college freshman.

    The last I heard there were two satellite TV companies and DSL offered an alternative to cable, in addition to several cable options where I live, including Verizon and AT&T which have ISP service via fiberoptic, the latter with community wireless.

    Mike K (90dfdc)

  14. Why the rush to government to solve the competition problem? Government already has those tools and is frantically not using them.

    Comcast too big? Don’t let them buy up Time-Warner. Even if this does not remove local competitors, it concentrates industry power.

    AT&T too big? Don’t let them buy DirecTV. This actually removes a competitor in many markets AND concentrates industry power.

    Local cable company franchises a problem? How did that happen? Oh, yes, local and state governments.

    But this is the classic case of government failing it’s job and then turning around and asking for yet more power to do the job it has failed at. Why should we believe that more power is the answer? Clearly in the case of local cable franchises, less power would be a good thing.

    If they have to intervene, they should recognize that government is a blunt force, incapable of quick response or fine control. It should only be used in a macro sense; a club not a scalpel. Separate the wires from the content. Allow cities to build fiber (so long as they offer to share or co-build with private parties) but require them to lease out the bandwidth to private parties without respect to content.

    But no. The one big commission with the single point of influence and graft is what we get. Which only helps those people with money and power. Like Comcast and Apple.

    Kevin M (25bbee)

  15. Mike K–

    And with cell prices coming down/bandwidth going up, more people are finding phone streaming an option.

    Kevin M (25bbee)

  16. Pouncer–

    The problem with two-way systems is that the inbound channels all come to one point and have to be differentiated. Outbound, each receiver only wants one stream, but inbound you have to get them all.

    Cell sites do this mostly by small cell sizes (this is the whole “cellular” idea), allowing them to keep the number of open inbound channels to a dull roar, and even then the signal processing at the cell site is amazingly complex. A broadcast tower covering a wide area doesn’t really work due to cacophony.

    And even this is disregarding the problem with lower VHF frequencies having less bandwidth.

    Kevin M (25bbee)

  17. “[I]n a free market system, consumers’ ability to fight Big Business by choosing to spend money elsewhere is vastly superior than voters’ ability to fight Big Government by voting for someone else.”

    Yup. Exactly.

    Doesn’t mean consumer choice is a magic bullet: Apple continues to thrive, despite my refusal to ever buy or pay for any Apple product as my protest to their long-standing anticompetitive tying practices, restraints of trade, DRM-support, and, most lately, outright conspiracy to fix e-book prices. My principled stand is made easier, though, and more effective, because competition provides remedies — reasonable alternatives (cross-elasticity of demand) at lower prices (like my last couple of Android-based smartphones, for example).

    I don’t want the government to shut down Apple. I’m happy for the technologies Apple has helped pioneer; I also acknowledge the freedom of other consumers to spend their dollars with Apple despite its thorough-going anticompetitive nastiness. I’m well aware that Google and Amazon and other technology giants also butter their own bread and look out for their own interests, not because they love consumers and competition, but because they’re out to make a buck themselves.

    But — except for the blatant price-fixing, which has been clearly illegal under American law for over a century (whether it ought be or not) — I’m not eager for the government to regulate Apple, Google, Amazon, or anyone else who wants to compete for my discretionary-spending dollars.

    Beldar (fa637a)

  18. > Comcast too big? Don’t let them buy up Time-Warner. Even if this does not remove local competitors, it concentrates industry power.

    I’m in favor.

    > AT&T too big? Don’t let them buy DirecTV. This actually removes a competitor in many markets AND concentrates industry power.

    I’m in favor.

    > Local cable company franchises a problem? How did that happen? Oh, yes, local and state governments.

    I don’t see a method to avoid local cable monopolies for the reasons I’ve already expressed. Although it’s worth investigating having publically owned physical infrastructure with rules that require open access to different service providers. That would reduce the startup cost substantially.

    aphrael (34edde)

  19. “You’d think that. But the *customer service* provided by telecoms is notoriously terrible, and has been for as long as I’ve been aware of the concept of customer service. This is possible because the telecoms are monopolies – and while some of that is the result of government intervention, it’s also true that the infrastucture costs create such a high barrier to entry that it’s very difficult for new players to enter the field, and the ability (absent government intervention) of property owners to refuse to allow telecoms to lay new wire across their property makes the situation for new entrants even harder.”

    That is such outdated thinking that one doesn’t know where to start. As far as customer service, start with JD Power. New wire? Gotta be kidding.

    Colonel Haiku (2601c0)

  20. Colonel – new wire is essential in a market like NYC. Wireless signal is *terrible* at penetrating buildings in this environment. There are parts of my apartment where I can’t get GSM signal and a wireless router in one part of my 600sf apartment can’t be picked up reliably in another.

    The needs of different markets are different.

    aphrael (34edde)

  21. try a carrier that can provide a solution, e.g., your own home antenna.

    Colonel Haiku (2601c0)

  22. The monopoly argument I always find interesting considering the FCC, created in 1934 to regulate telephone companies led to the AT&T monopoly in 1984. So over 50 years of regulation and we got a monopoly out of it. What’s the point of the FCC regulation if they can’t prevent the very thing they’re tasked with preventing (under the monopoly argument).

    I also think it is interesting how Net Neutrality advocates complain about the cable companies like Comcast, Time Warner, and Cox. They are not the entire market for ISPs in the United States and they have been under FCC regulation the entire time. They engage in uncompetitive behavior with respect to each other and the only area where they still face competition is with internet access!

    Then comes along Tom Wheeler, a former lobbyist for those companies and he’s the “good guy” at the head of the FCC that decides to put the cable providers in check? Yeah right.

    Dejectedhead (68bf09)

  23. Colonel Haiku – (a) that’s not terribly useful for broadband, (b) what makes you think the owner of the building will allow every apartment unit to mount an antenna?

    aphrael (34edde)

  24. Just point out california’s government to disprove gillmor’s position. What a mess! And voters don’t seem to be able to fix it.

    Jim (84e66d)

  25. he thinks that in some ways Big Government can be less dangerous than businesses, because (he says) the First Amendment protects us from government interference with content, while no similar principle constrains business.

    Really? Then where was the First Amendment when Obama was using the IRS to suppress his opposition? Where was the 1stA when Hillary attempted to use the FBI’s resources to investigate those who opposed Bill Clinton?

    The government is only stopped from such when it gets exposed, and when the media isn’t looking to expose them, then they get away with all manner of abuses. Notice how little attention the media has paid to the followup stuff that’s been revealed about the whole IRS thing with Lois Lerner’s “backups”… which apparently have always existed except most people have forgotten about it now, so, as a story, it’s got to regain “traction”, which is generally not easy, esp. when the media is in the tank for you already.

    IGotBupkis, "Si tacuisses, philosophus mansisses." (225d0d)

  26. Liberals should trust government more, and with good reason. It rewards them ideologically by supporting their liberal agenda, as well as financially.

    DRJ (e80d46)

  27. ask your congressman for help, aphrael. Or get a wireline phone or use VOIP provided by your ISP. Your personal situation shouldn’t dictate public policy.

    Colonel Haiku (2601c0)

  28. or ask your building owner for a solution. or move to a better location.

    Colonel Haiku (2601c0)

  29. In my opinion, net neutrality principles are not at issue. It’s the FCC employing Title II that’s the problem. You can’t use laws that originated to govern the railroads and then modified to address the price of a rotary dial telephone to govern an industry and technologies that are changing as fast as these are.

    Colonel Haiku (2601c0)

  30. > ask your congressman for help

    > Your personal situation shouldn’t dictate public policy.

    Wouldn’t my Congressman’s help be in the form of changing public policy?

    aphrael (34edde)

  31. You’ll have to ask your congress critter. I’m assuming you’re really desperately searching for a solution, have run out of all possible technological options, and aren’t just going Milhouse on me.

    Colonel Haiku (2601c0)

  32. do you understand this is not about improving service or prices, this is about control of the most free communication network in history,

    narciso (ee1f88)

  33. Try a aluminum foil hat.

    mg (31009b)

  34. http://www.usatoday.com/story/news/nation/2015/03/19/police-woman-cuts-baby-from-moms-womb/25008471/

    A woman, Dynel Catrece Lane, lured a preganant woman to her home via a craigslist ad for infant clothes, then assaulted the victim and cut the baby from her womb. The Colorado authorities are in a quandary what crime to charge Lane with. The mother is expected to recover from her injuries, but the child is dead.
    They don’t want to call it murder, because that would tend to indict the State Democrat Party’s whole campaign platform in the upcoming election cycle.

    Right now they are hovering around calling it practicing medicine (abortion) without a licence. – No. I didn’t make that up!

    papertiger (c2d6da)

  35. Colonel Haiku – right now I have cable internet, provided by the residential housing office at the private educational institution where my husband is getting his phD.

    My point isn’t to gripe for myself. My point is to discuss the public policy problem arising from the fact that *as a matter of practice* telecoms are not a competitive market place – a public policy problem which arises not just from government intervention but from the inherent nature of the infrastructure. I’m using the city in which I live as an example of the situation.

    My point further is that if I am asking my Congressman for help, I am asking for public policy to be altered to suit my needs. Isn’t that *exactly* what you said I shouldn’t do?

    aphrael (34edde)

  36. Government -is- a monopoly. It’s true that in this country we live under a recursive set of governments (federal, state, county, township, city, HOA …) and they may sometimes disagree about a decision, they are always agreed that -they- should make both the decision and which layer will make the decision; the decision maker is not ever the voter(s). (Other than that government officials are supposedly citizens.)

    htom (4ca1fa)

  37. Telecoms are very much operating in a competitive atmosphere, aphrael. Not sure where you’re getting your info from. You have a number of wireless providers to choose from and there just isn’t much demand for residential wireline, plain old telephone service. You can’t use Voice over IP? Not sure I uderstand where you’re coming from. What is your issue?

    Colonel Haiku (2601c0)

  38. 6. …But the *customer service* provided by telecoms is notoriously terrible, and has been for as long as I’ve been aware of the concept of customer service. This is possible because the telecoms are monopolies – and while some of that is the result of government intervention, it’s also true that the infrastucture costs create such a high barrier to entry that it’s very difficult for new players to enter the field…

    aphrael (34edde) — 3/19/2015 @ 8:23 am

    Absent government interference someone would have come up with a way to deliver telecom service that did away with the expensive infrastructure.

    But the FCC owns the airwaves.

    Steve57 (88b05c)

  39. The EPA has banned 80% of wood burning stoves, is trying to ban my barbecue grill (if you were my neighbor, aphrael, you’d be invited) and wants to monitor how long I spend in the shower when I stay at a hotel.

    The Department of Education is invading the bedroom, insisting that spontaneity and passion be replace by “affirmative consent” rules, i.e. not without government consent, and I’m supposed to be worried about the tyranny of the free market?

    Steve57 (88b05c)

  40. Official government approved body condom.

    http://www.wolfhazmat.de/interspiro/Trellchem_HPS.jpg

    The Department of Education is mandating that it be available for sale at every student union if the college receives federal funding.

    To try to get buy-in, the DoE is insisting it be marketed under the name “The Fun Suit.”

    It comes complete with a HUD that displays each section of the government approved intercourse contract, a recording device and a camera, and it doesn’t allow you to proceed unless you accept the terms of use and then manually or verbally prompt it to go to the next screen.

    Anyone who could have any objection is worse than Hitler and in favor of rape culture.

    Steve57 (88b05c)

  41. City/County governments love the cable revenue. They get fees and taxes paid to them to do almost nothing. Locals that take over the infrastructure would have to maintain it, improve it, do customer service calls and tech support etc. They’d soon be making internet even less affordable.
    Sean Penn would probably like to see a good Hugo Chavez Venezuelan style nationalization…

    steveg (794291)

  42. There is another reason why your ability to signal your disapproval is much better with the market than with politicians, and that is focus. With politicians, their range of action are great, and they will decide many, many issues that come before them. However, you don’t get to vote on each individual action or vote. You have to vote for the whole politician. And while his/her stance on any one issue may be totally unacceptable to you, if all their other stances are in line with your values, and their competitor is less in line, you will likely vote for that politician, despite their view on that single issue. With the market, each purchase represents a “vote” on that product, and only that product. You are not required to purchase every product that company makes or offers. Thus, if you love the cable company’s entertainment package, but feel their ISP is too expensive or sub-par, you can purchase that from a competitor, and your signalling is focused only on that single product.

    Yeah, that’s the point I was trying to make when I said:

    If your preferred candidate wins, he has no obligation to live up to his promises. And in any event, even if he does, some of the promises he carries out may offend you, unless you happened to agree with him on every single issue.

    I thought about taking a whole paragraph to spin this out, with the analogy to a store that offers a basket of goods, some of which you want, some of which you don’t, and some of which you can’t even see. But I was running out of time to get to work, and the post was already long.

    Patterico (9c670f)

  43. You’d think that. But the *customer service* provided by telecoms is notoriously terrible, and has been for as long as I’ve been aware of the concept of customer service. This is possible because the telecoms are monopolies – and while some of that is the result of government intervention, it’s also true that the infrastucture costs create such a high barrier to entry that it’s very difficult for new players to enter the field, and the ability (absent government intervention) of property owners to refuse to allow telecoms to lay new wire across their property makes the situation for new entrants even harder.

    My experience is that, everywhere I have ever lived, there is no functional competition between high speed internet carriers. They aren’t monopolies, but there is so little competition, and the costs of entry are so high, that they function very much like monopolies.

    So I don’t trust the market to work, because the market *doesn’t* work the same way in low-competition situations that it does in high-competition situations.

    Take government interference out of the equation, and the other problems you mentioned could be readily addressed.

    Patterico (9c670f)

  44. You make it sound so simple, Patterico. Yes, for every monopoly I can name you can point to some government charter, or eminent domain, or other such thing. That is merely an extension of the reality that every “free enterprise’s” existence is made possible by a policeman on the corner.

    There is no free market. The invisible hand could not exist without the mailed hand of government. It’s all very well to say that the butcher slices you a sandwich for his own self-interest so he’ll get your tuppence. What is not said is that without the shadow of the headman’s axe, he’d as soon slice your throat for it. People who argue “free market” are kids in a heated swimming pool, with padded sides and plenty of life preservers and lifeguards, who want to play water polo during the fifteen minute adult swim.

    AT&T and Comcast got their dominance in the cable market with heaps of help from the government. Now the government wants a bigger cut of their racket. The question is, now that Big Bill Thompson is no longer mayor, should Mayor Cermak let the Capone and Moran mobs keep shooting it out or would it be better for the citizens of the City of Chicago if the City started issuing liquor licenses, protected the licensees, and arrested the bootleggers? Or is it even that? Maybe it’s just should the City control the alcohol content and number of drinks to the customers?

    nk (dbc370)

  45. nk,

    You have a very Hobbesian outlook. That said, I agree on the need for minimal government, to protect us from aggression from without and within. (I am part of that minimal government, and I think my role is necessary!)

    I think you and I clearly don’t see eye to eye, however, on just how much government is necessary. I want it to be the absolute minimum necessary to avoid anarchy.

    Patterico (9c670f)

  46. We’re not that far apart in that I think the FCC is obsolescent, if not altogether obsolete, and that the federal bureaucracy (including the civilian contractors and reserve components in the military) could be reduced by two-thirds to the great benefit of present and future generations. I do not favor Net Neutrality. But more as a nuts and bolts question and less as a matter of government philosophy.

    nk (dbc370)

  47. How soon we forget:

    Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather.

    We have no elected government, nor are we likely to have one, so I address you with no greater authority than that with which liberty itself always speaks. I declare the global social space we are building to be naturally independent of the tyrannies you seek to impose on us. You have no moral right to rule us nor do you possess any methods of enforcement we have true reason to fear.

    Governments derive their just powers from the consent of the governed. You have neither solicited nor received ours. We did not invite you. You do not know us, nor do you know our world. Cyberspace does not lie within your borders. Do not think that you can build it, as though it were a public construction project. You cannot. It is an act of nature and it grows itself through our collective actions.

    You have not engaged in our great and gathering conversation, nor did you create the wealth of our marketplaces. You do not know our culture, our ethics, or the unwritten codes that already provide our society more order than could be obtained by any of your impositions.

    You claim there are problems among us that you need to solve. You use this claim as an excuse to invade our precincts. Many of these problems don’t exist. Where there are real conflicts, where there are wrongs, we will identify them and address them by our means. We are forming our own Social Contract . This governance will arise according to the conditions of our world, not yours. Our world is different….

    John Perry Barlow, 8 Feb 1996

    Kevin M (25bbee)

  48. Part of the problem with “Big Anything-Else” vs “Big Government” is that every single time there’s a conflict between the two, the flow of money, power, and favors is seen as the solution by the leaders of both power structures.

    This means that sporadically things like the Anti Trust laws pass … but they just end up as another useful tool for extortion.

    Put things in place that automatically prune Monopolies and near-Monopolies without interfering in sanely run companies.

    I have two that are linked.
    1) Make a more automatic bailout process, so it isn’t “How to loot government 101″ every single time it happens.
    2) A Corporate Death Penalty. The name is key.

    Megacorps Bankruptcy: Add an entirely new chapter of bankruptcy law for “Megacorps” where the definition pretty much encompasses every “Too Big to Fail” company – all members of “Big Anything-Else”.

    Rule 1: The entire executive tier fired. All contracts that result in ‘stuff’ going to executives, cancelled. Retirement packages cancelled. If someone is absolutely essential, I want to hear their argument from the perspective of “You have to let me back in there to save…” rather than the “You can’t get rid of me, don’t try” perspective.

    Rule 2: The company broken into no fewer than five pieces. If you were “Too Big to Fail” then you were “Too Big”. And now you’re too big and asking for a bailout -> how about we make you -smaller- first? Yes, this can be trickier than it seems, but the ‘rough cut’ can be Solomon-esque.

    Rule 3: Instead of finding a ‘Bankruptcy Trustee’, find FIVE. Each one gets a slice. No one gets paid more than a pittance, but they get “five year out” or “ten year out” share option packages as the vast majority of their pay. Allow horsetrading between the trustees where they attempt to focus -their- company on some viable strategy.

    Rule 4: Now you can add the bailout money if you need to. You might not need to – just the ‘breaking contracts’ part is sometimes enough for a company to become solvent. But if the company was regarded as too big to fail, then it’s either relatively vital in its own right, or employs a boatload of people.

    Both AT&T and Standard Oil basically went through a breakup somewhat like this. It clearly doesn’t mean ‘every slice lives’, but I’d much rather have -one-fifth- of Washington Mutual bought up by a random company versus “Gosh, only a tiny number of banks can digest that -whole-, how about we make one of them much larger?” Or perhaps a slice fails entirely. A 20% cut is better than total failure, and if the 20% cut is Too Big to Fail in its own right, well, rinse and repeat.

    The key bits are: The movers and shakers (the ones driving the corporate ship aground) are the punished, the field level staff and customers generally are not.

    Corporate Death Penalty:
    The biggest cases always run into the problem of “Well, a -proper- fine for this behavior would either kill the company outright or cause the slow lingering death of significantly overpriced crud.” Because fines are inevitably passed to the consumer, regardless of the legalese (because money is fungible).

    So: … In cases of outrageous corporate guilt (over, above, and besides the -individuals- guilty), pass the whole thing through Megacorps Bankruptcy. The movers and shakers (who set up the disastrous and criminal policies) are punished, and the field level staff and customers are not.

    Alan S. (6e4e96)


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