As regular readers know, I frequently deride those who continue to put their faith in a creed of deregulation despite empirical evidence that this is not suitable to all occasions as worshipers of of the “gods of the marketplace,” after the Rudyard Kipling Poem The Gods of the Copybook Heading (with a fine sense of irony that Kipling would be closer ideologically to the folks I criticize). This leads some to imagine that I am “anti-market” or “pro-regulation” or some other ideology that places process over outcome, rather than a pragmatic sort who believes that the job of public policy is to use all available tools to achieve the goals of prmoting the general welfare, securing domestic tranquility, etc., etc.
I recently came across an illustration of the difference in, of all cases, a collection of Darwin Award Winners (Darwin Awards Iv: Intelligent Design for anyone that cares). The book contains the tale of a “winner” who was a passionate anti-government type who refused to wear a seat belt in protest against mandatory seat belt laws. A car he was in in skidded and flipped over. The the driver and one passenger who were wearing seat belts survived. Our protesting friend was thrown from the car and died.
It occurred to me that this story nicely illustrates the difference between those who favor a free market approach and worshipers of the Gods of the Marketplace. A smart Libertarian may believe that the government has no right to order people to wear seat belts. But, evaluating all the evidence of how seat belts save lives, will voluntarily wear a seat belt even if not required. After all, it would be foolish to put one’s life at risk simply because the government wrongly orders people to do what you think makes good sense.
But an ideological driven soul, indifferent to empirical evidence and elevating process over substance, refuses to wear a seat belt because the government says you should, and therefore wearing a seat belt must be the wrong or inefficient result and believes it the positive duty of all anti-government believers to refuse to wear seat belts.
Now go read the dissenting statements of McDowell and Tate in the Comcast decision, the McCain Tech Policy, or any of a dozen or so speeches by elected representatives or pundits who get their economic education from reciting bumper stickers about free market economics they don’t understand. Then ask yourself, are these guys actually evaluating the evidence and accepting the result? Or are they driving with their seat belts off?
Stay tuned . . . .
The fundamental flaw by many in trying to state that the free market is broken as it relates to telecommunications is because we have never had it in our lifetime. Ever since the Willis Graham Act of 1921 no direct competition between carriers has been allowed. That is changing, slowly, but on a sunk cost of investment it is still the case. There are cases where regulation is required. You really can’t operate in the wireless space without clear delineations of operational use of the bands even given the promise of spread spectrum technologies. Somebody had to play traffic cop in that space and at the time the govt was the sole provider that could fulfill that function. One could make the case that ICANN could fulfill that role today, possibly at a cheaper rate than the Feds.
What has changed this is the realization that a huge shared competitive market with interoperable standards yields more riches than separate inoperable systems. Common standards reduce costs, open markets, even lower the barriers to entry for other players. Yes there are gate keepers. But increasingly those keepers are not governments or PTT’s but hardware and software companies who build the infrastructure we now use.
I agree that one is a fool to not wear a seat belt today. But I would point out that it was the Big 4 (GM, Ford, AMC, Willis) that pushed for the legislation. All 4 agreed that seat belts work but they were caught in the classic prisoner’s dilemma — the first of the 4 to cheat would have a competitive advantage. The seat belt law was passed at their insistence to level the playing field not in spite of it.
Bottom line — Some regulation for an orderly market is needed but it is becoming apparent that governments may not be the best way to achieve it.