There's a little article on Wired expressing sorrow that the Google Nexus One is not the revolutionary device it could conceivably have been. The problem isn't with the phone itself, which is great, but the fact that you can't use it anywhere but T-Mobile.
It basically sounds right to me, but there isn't a lot that Google can do about it: the problem is with the telecoms, of course. Author Ryan Singel does end up pointing the way to the real solution, which is for the FCC to impose the Carterphone decision on the cell networks. The Carterphone decision helped mightily to spur the deployment of the modem, and hence of the Internet itself. A similar decision regarding the cell phone networks could only work to the greater good of society, while the cellphone networks would just have to find other ways to increase their profits (and I'm sure that there are other, more productive ways) than by exploiting their market power.
Sunday, January 10, 2010
Saturday, January 9, 2010
Elinor Ostrom and Collusion
I was just reading a short summary of Elinor Ostrom's work on management of common resources. According to the description, she examines how communities of autonomous actors manage to avoid the tragedy of the commons without erecting a resource management organization that can establish formal rules of usage and punish violators with the backing of the State.
It occurs to me that her work might have some application to the issue of corporate collusion. A common market, served by a group of oligopolists, can be seen as a common resource. Certainly price collusion to "manage" this resource for the extraction of larger profits would be something that needs to happen without direct State support, to say the least. I wonder if Ostrom's work gives us any additional information about the feasibility of price collusion.
I have to say that I am a little amused by what seems to me to be a contradiction in the responses of some free market leaning economists to Ostrom and her work. In general, such economists are dubious about the ability of corporations to effectively collude on price fixing for any serious length of time. The pressures and temptations of individual self-interest will always lead such conspiracies to collapse. And yet when the same problem is framed, as Ostrom frames it, as the ability of people to manage their affairs without state intervention, then we find that there are indeed mechanisms that will provide for the long term success of group collaboration over the temptation to cheat.
Update: Bruce Yandle, publishing in the libertarian journal The Independent Review, manages to argue that firms which collude to control common resource extraction will simultaneously be effective in their efforts to conserve the controlled resource, and be ineffective in their efforts to charge monopoly prices for the controlled resource. Actually, I use the word "argue" loosely in regards to monopoly prices; Yandle pretty much just states that efforts to raise prices will be ineffective. I believe that for many libertarian economists, the futility of collusive price-fixing is regarded as being too well-known to bear repeated explanation.
It occurs to me that her work might have some application to the issue of corporate collusion. A common market, served by a group of oligopolists, can be seen as a common resource. Certainly price collusion to "manage" this resource for the extraction of larger profits would be something that needs to happen without direct State support, to say the least. I wonder if Ostrom's work gives us any additional information about the feasibility of price collusion.
I have to say that I am a little amused by what seems to me to be a contradiction in the responses of some free market leaning economists to Ostrom and her work. In general, such economists are dubious about the ability of corporations to effectively collude on price fixing for any serious length of time. The pressures and temptations of individual self-interest will always lead such conspiracies to collapse. And yet when the same problem is framed, as Ostrom frames it, as the ability of people to manage their affairs without state intervention, then we find that there are indeed mechanisms that will provide for the long term success of group collaboration over the temptation to cheat.
Update: Bruce Yandle, publishing in the libertarian journal The Independent Review, manages to argue that firms which collude to control common resource extraction will simultaneously be effective in their efforts to conserve the controlled resource, and be ineffective in their efforts to charge monopoly prices for the controlled resource. Actually, I use the word "argue" loosely in regards to monopoly prices; Yandle pretty much just states that efforts to raise prices will be ineffective. I believe that for many libertarian economists, the futility of collusive price-fixing is regarded as being too well-known to bear repeated explanation.
Wednesday, December 16, 2009
Net Neutrality and Freedom of Speech
Randolph J. May of the Free State Foundation has an editorial in the Washington Times, arguing against Net Neutrality. That's not surprising in itself; judging from its list of publications, the Free State Foundation essentially exists to argue against Net Neutrality and government regulation of telecoms for any cause. I suspect that if Comcast started selling Soylent Green made out of displaced Third World farmers, the Free State Foundation would argue that we shouldn't try to regulate it. They would assure us that consumer choices in the free market will bring this abhorrent practice to an end, or at least reduce it to its efficient, optimal level.
I believe it is Mr. May's determination to argue for telecom freedom in all cases that accounts for the poor quality of his arguments. I happily concede that there are situations where you can make a really excellent argument for expanding the freedom of action for corporations. But if you keep trying to put forward the same solution to every problem that comes along, then you inevitably start using weaker and weaker arguments to justify yourself. If you are Mr. May of the Free State Foundation, your reasoning will actually reach the point of declining returns, which brings us to his piece for the Washington Times.
I have several bones to pick with this editorial, but I'll confine myself to May's main point: the notion that Net Neutrality regulations somehow violate the freedom of speech of the massive telecom corporations that provide Internet access services (ISPs).
Net Neutrality says that if you are in the business of selling data transmission over the Internet, you have to sell it to everyone who is using it for legal content. Which is to say that Net Neutrality regulation lays down some rules for how ISPs conduct their business, and thereby interferes with how the ISPs run their business. But regulating how an ISP runs its business is completely different from violating the ISPs freedom of speech.
Let's try some analogies. If you are a stationer selling paper, commercial law currently requires you to sell your paper to anyone who wants to buy it, regardless of what your customers intend to write on the paper. The law here is clearly telling you how to run your business, and you may not like that, but is the law violating your freedom of speech? Not at all. The stationer's ability to express him or her self is in no way reduced by letting other people express themselves freely on the paper they buy. For another example, look at the telephone companies, who are legally required to sell telephone service to everyone without regard to what everyone intends to say over their telephones, or who they intend to say it to. Again, this regulation is a clear imposition of control on how the phone companies run their business, but have the phone companies had their freedom of speech violated? Nope. The ability of telecom executives to preach the evils of Net Neutrality is not reduced in any way by my ability to call my friends on the phone and make fun of telecoms.
Mr. May is trying to conflate freedom from business regulation with our Constitutionally protected freedom of speech. These two freedoms are clearly different things, but Mr. May falsely tries to make them sound like the same thing. I assume that his motives are political. Most Americans have a gut-level instinct to fight in defense of the freedom of speech, while very few of us have any instinct to fight for the right of stationers to tell us what we can write on the paper we've purchased, or to fight for the right of telecom companies to tell us who we can talk to on the phone. More to the point, very few of us have any enthusiasm for giving ISPs like Comcast and AT&T the right to tell us what web sites we can visit on the Internet or make available on the Internet.
The Internet has always been open and free, but the major ISPs intend to change that. Lead by Comcast, they want the Internet to be like cable television, where the ISP not only delivers the data to you, but also decides what data is available and at what price. Instead of paying a flat fee to go anywhere you want on the Internet, the ISPs will offer you a dizzying array of "plans" for Internet access. You'll choose the Family Basic Internet Access plan, or the Sports Plus access plan, or whatever combination of web sites and services the ISP thinks it can use to twist your arm for more money. And the amount that the ISP charges you to access some site like Google or Pandora or Facebook will partly depend on what kind of kickbacks Google and Pandora and Facebook end up paying to the ISPs. The ISPs want to get paid at both ends. In their New Internet World Order, you'll need to watch your Internet "anytime minutes" carefully, and avoid twittering during "premium hours" which are chosen to match the times when you most want to twitter. And hey, if Facebook or MySpace seems sort of expensive in the new system, you'll doubtless find there is some new social networking site (that is completely owned by your ISP) that is much cheaper. At least at first.
Happily, most Americans who stop to think about the issue come to the conclusion that the Internet works best as an open transportation system, like roads and highways. Instead of letting corporations try to make money off the roads, we see the logic of keeping the system equally open to everyone. We don't want the owners of the transportation system, whether those owners are the government or massive corporations, telling us where we can go based on what will increase profits for the owner of the transportation system. We like to make our own decisions about where we go based on what will increase profits for ourselves. Amazingly enough, the economy seems to work pretty well with that kind of transportation system. And the economy has grown leaps and bounds with that kind of Internet.
Once you get past the smokescreens like corporate "freedom of speech" being violated, you see that the entire fight against Net Neutrality is precisely this effort by the telecoms/ISPs to increase their income and profits by imposing control on what we can do on the Internet. Strangely, Mr. May does not mention this.
There is so much more I could make fun of in Mr. May's editorial (it really is a bad piece of thinking) but this is enough for now. I'll go ahead now and post this to my blog without worrying about getting my ISP's approval of the content, or whether I have enough anytime minutes, or whether Blogger is part of my ISP's "Blog Site Premium Access Package" or whether Blogger will still be part of the package next month. I won't worry about any of that. And Net Neutrality regulations to preserve my freedom to post do not limit, infringe on, reduce, or deny anyone's freedom of speech in the slightest.
I believe it is Mr. May's determination to argue for telecom freedom in all cases that accounts for the poor quality of his arguments. I happily concede that there are situations where you can make a really excellent argument for expanding the freedom of action for corporations. But if you keep trying to put forward the same solution to every problem that comes along, then you inevitably start using weaker and weaker arguments to justify yourself. If you are Mr. May of the Free State Foundation, your reasoning will actually reach the point of declining returns, which brings us to his piece for the Washington Times.
I have several bones to pick with this editorial, but I'll confine myself to May's main point: the notion that Net Neutrality regulations somehow violate the freedom of speech of the massive telecom corporations that provide Internet access services (ISPs).
Net Neutrality says that if you are in the business of selling data transmission over the Internet, you have to sell it to everyone who is using it for legal content. Which is to say that Net Neutrality regulation lays down some rules for how ISPs conduct their business, and thereby interferes with how the ISPs run their business. But regulating how an ISP runs its business is completely different from violating the ISPs freedom of speech.
Let's try some analogies. If you are a stationer selling paper, commercial law currently requires you to sell your paper to anyone who wants to buy it, regardless of what your customers intend to write on the paper. The law here is clearly telling you how to run your business, and you may not like that, but is the law violating your freedom of speech? Not at all. The stationer's ability to express him or her self is in no way reduced by letting other people express themselves freely on the paper they buy. For another example, look at the telephone companies, who are legally required to sell telephone service to everyone without regard to what everyone intends to say over their telephones, or who they intend to say it to. Again, this regulation is a clear imposition of control on how the phone companies run their business, but have the phone companies had their freedom of speech violated? Nope. The ability of telecom executives to preach the evils of Net Neutrality is not reduced in any way by my ability to call my friends on the phone and make fun of telecoms.
Mr. May is trying to conflate freedom from business regulation with our Constitutionally protected freedom of speech. These two freedoms are clearly different things, but Mr. May falsely tries to make them sound like the same thing. I assume that his motives are political. Most Americans have a gut-level instinct to fight in defense of the freedom of speech, while very few of us have any instinct to fight for the right of stationers to tell us what we can write on the paper we've purchased, or to fight for the right of telecom companies to tell us who we can talk to on the phone. More to the point, very few of us have any enthusiasm for giving ISPs like Comcast and AT&T the right to tell us what web sites we can visit on the Internet or make available on the Internet.
The Internet has always been open and free, but the major ISPs intend to change that. Lead by Comcast, they want the Internet to be like cable television, where the ISP not only delivers the data to you, but also decides what data is available and at what price. Instead of paying a flat fee to go anywhere you want on the Internet, the ISPs will offer you a dizzying array of "plans" for Internet access. You'll choose the Family Basic Internet Access plan, or the Sports Plus access plan, or whatever combination of web sites and services the ISP thinks it can use to twist your arm for more money. And the amount that the ISP charges you to access some site like Google or Pandora or Facebook will partly depend on what kind of kickbacks Google and Pandora and Facebook end up paying to the ISPs. The ISPs want to get paid at both ends. In their New Internet World Order, you'll need to watch your Internet "anytime minutes" carefully, and avoid twittering during "premium hours" which are chosen to match the times when you most want to twitter. And hey, if Facebook or MySpace seems sort of expensive in the new system, you'll doubtless find there is some new social networking site (that is completely owned by your ISP) that is much cheaper. At least at first.
Happily, most Americans who stop to think about the issue come to the conclusion that the Internet works best as an open transportation system, like roads and highways. Instead of letting corporations try to make money off the roads, we see the logic of keeping the system equally open to everyone. We don't want the owners of the transportation system, whether those owners are the government or massive corporations, telling us where we can go based on what will increase profits for the owner of the transportation system. We like to make our own decisions about where we go based on what will increase profits for ourselves. Amazingly enough, the economy seems to work pretty well with that kind of transportation system. And the economy has grown leaps and bounds with that kind of Internet.
Once you get past the smokescreens like corporate "freedom of speech" being violated, you see that the entire fight against Net Neutrality is precisely this effort by the telecoms/ISPs to increase their income and profits by imposing control on what we can do on the Internet. Strangely, Mr. May does not mention this.
There is so much more I could make fun of in Mr. May's editorial (it really is a bad piece of thinking) but this is enough for now. I'll go ahead now and post this to my blog without worrying about getting my ISP's approval of the content, or whether I have enough anytime minutes, or whether Blogger is part of my ISP's "Blog Site Premium Access Package" or whether Blogger will still be part of the package next month. I won't worry about any of that. And Net Neutrality regulations to preserve my freedom to post do not limit, infringe on, reduce, or deny anyone's freedom of speech in the slightest.
Saturday, December 5, 2009
Another Reason for a Public Internet
I was just looking at all of the commentary on the Free Press website about Comcast's proposed acquisition of NBC. Lots of people are concerned about the merger, and lots of people are opposed to it, as am I. So there are lots of impassioned calls for the FCC to step in and stop this thing.
But I can't help think how much simpler, cleaner, and, gosh darn it, more libertarian this could be if we just nationalized Comcast and ATT and ran the Internet as a public service like the roads. Nobody has to call on the government to step in and keep the highway system from buying Burger King, or Quick Stop. Everyone can operate along the roads free of fear that the road network itself will become a competitor and choke off business. Why not apply the same admirably clean and simple solution here?
All of the current issues about net neutrality and universal access, about the limits and flaws of intrusive government regulation, would go away if we just ran the Internet backbone as a publicly owned and operated service. Why am I not hearing this from any of the commentators?
But I can't help think how much simpler, cleaner, and, gosh darn it, more libertarian this could be if we just nationalized Comcast and ATT and ran the Internet as a public service like the roads. Nobody has to call on the government to step in and keep the highway system from buying Burger King, or Quick Stop. Everyone can operate along the roads free of fear that the road network itself will become a competitor and choke off business. Why not apply the same admirably clean and simple solution here?
All of the current issues about net neutrality and universal access, about the limits and flaws of intrusive government regulation, would go away if we just ran the Internet backbone as a publicly owned and operated service. Why am I not hearing this from any of the commentators?
Thursday, December 3, 2009
Libertarian Economics Comic Book
For those of us who enjoy both economics, the political fringes, and comic books, I present "How an Economy Grows and Why It Doesn't" by Irwin A. Schiff. It's just more standard, free market economic pablum, but it comes with pictures so that makes it more entertaining. But how come I don't run into any socialist comic books on the Internet?
Friday, November 27, 2009
Re-Forestation and Lumber
NPR published a story about encouraging the use of forests as carbon sinks to mitigate global warming. I did a paper about this back in an undergraduate class in environmental economics, but the interesting development is the use of re-forestation in carbon offset markets. Offset markets provide a relatively non-bureacratic way of putting the technique to use, compared to the massive, direct government program I contemplated as an undergraduate.
I'm surprised that we don't hear about more efforts to improve the carbon-sequestering benefits of building with wood. It seems reasonable that if wood can be modified into some long-lasting form suitable for truly large buildings, then we can sequester lots of carbon in our buildings. Under a straight forest sequestration plan, I'm sure that there is an upper limit to how much carbon can be sequestered per acre of forest. But if the trees are eventually converted into super-lumber for building purposes, then the same acre can potentially provide much more sequestration through an endless series of tree harvests.
I'm surprised that we don't hear about more efforts to improve the carbon-sequestering benefits of building with wood. It seems reasonable that if wood can be modified into some long-lasting form suitable for truly large buildings, then we can sequester lots of carbon in our buildings. Under a straight forest sequestration plan, I'm sure that there is an upper limit to how much carbon can be sequestered per acre of forest. But if the trees are eventually converted into super-lumber for building purposes, then the same acre can potentially provide much more sequestration through an endless series of tree harvests.
Tuesday, October 6, 2009
Why You Should Die Next Year
Funny article about the end game for the Republican tax "reform" of 2001. Articles about taxes that are both informative and fun are rare.
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