Every year or so the net neutrality debate seems to come back into the public discourse. I personally rallied against both the SOPA and PIPA bills that were proposed in congress back in 2012. But today our society wrestles with the question again. There is a current move in the FCC to potentially undo some Obama era regulations that supported the government’s role in protecting net neutrality.
Since that time I’ve been exposed to new political ideas and particularly looked deeply into libertarian philosophy. With this in mind a friend recently messaged me.
Wondering what’s your libertarian take on net neutrality? It seems to me like in this case, less regulation (smaller government), means less opportunity for an open and balanced marketplace. Does the government play a similar role in the market with other utilities like water and electricity?
I think this is a great question because it illustrates a common pattern in our current political debates. Here, we have the offer of a government solution to a problem. But can we also ask who caused the problem? The free market, I guess we assume. Well, no. That would seem to be an incomplete explanation. Is it a part of the conversation, at least, that Comcast, Verizon, and AT&T, the villains in this story, have been the recipient of billions, billions with a ‘b’, billions of dollars of subsidies from the US government in recent years? So already I’m super skeptical. And already I’m thinking down different lines than the current political debate. It doesn’t make any sense to me to have the people that caused the current problem, that empowered these so called monsters, to also be offering the new solution. Doesn’t it seem very possible that the subsidies were a solution to a problem in the past that we are feeling the repercussions of now? And if we try this government solution now, it will have some horrible repercussions in the future?
None of this is surprising to me. For me, it constantly comes back to the same principles.
Here’s the principle: human behavior involves risk.
This doesn’t seem too crazy. Basically, human behavior involves risk because we cannot predict the future. We can predict the future better than worms, but worse than a all intelligent super computer. Thus, with our current technology, there is no way to get around this. There is no person, or persons that we can put in charge that will remove risk from our choices.
So then the more important question is, how do we deal with the consequences of failure? When people make choices and they turn out to be wrong, how does our system deal with these consequences?
This is the metric on which I asses our options.
When we choose government solutions, we are choosing two things.
1. We are centralizing the consequences of our failures.
When we chose to “regulate the banks” by the federal government, we had not removed any risk from the banking system. Rather, we had centralized it. In centralizing the risk, we will no longer have random small banking failures, but rather the consequences of failure will build up and be felt at once in one large nationwide collapse — I give you the 2007 banking failure.
2. We are choosing the Kickstarter model for product decisions.
With Kickstarter, you buy based on the promo video. The actual product that you will buy has not been built yet. That’s the point of Kickstarter — it’s some new innovative idea that they want you to support. The product owner tells you about the product idea they have, they tell you about themselves and hopefully if you like them and the product idea, you back the project. You give them the money now, and then they send you the product once it’s built. I’d say this is a great system for new experimental ideas and I’ve gotten some cool products from Kickstarter. But is this a way to run a country? There’s one huge problem with the Kickstarter model — it encourages lying. The better salesman you can be, the more convincing you can be, the more charismatic you can be, the better you can sell. All the incentives point towards overpromising and underdelivering. Thus the meme, all politicians lie. Why do all politicians lie? Because it makes them more successful! With the government, you have to choose the leader based not on their actions, but based on their future promises. The alternative to Kickstarter is an Apple Store. You don’t buy an iPhone based on the promised features, you can walk into a store, hold a phone in your hand, test the features, and then decide if you want to buy.
Again, let’s compare the consequences of failure. Think to the current Black Lives Matter movement. What is their gripe? Police brutality and unfair treatment of Black People. What are their demands? More accountability for police officers. How has that played out in the court cases involving controversial shootings? I would bet the movement has not been happy with the results. Let’s explore an obvious possible reason why. When the government police employees face “accountability”, to whom do they answer? A government court system and laws written by government bureaucrats. Also, good luck switching to an alternative policing force.
Let’s investigate a free market counter example. Remember that asian man who was dragged off a United flight a few months ago? Well, the next day, the next day, delta’s stock price dropped by a billion dollars. One Billion Dollars. Did that provide any accountability? Well, within a week Delta had announced that they had settled with the man in question and had changed their seating policy to now offer up to $10,000 to a client that would need to be bumped from a flight. And this person wasn’t even shot or killed, he only got a bloody nose!
So that is my free market vs government rant, but let’s bring this all back to the original net neutrality question. 1. It’s hard to offer an obvious free market solution to a government distorted market. 2. That being said, let’s try to address the issue anyway. Basically, I would say, yes, I believe free markets and competition would solve the net neutrality issue better than a government regulated system. As stated above, giving the control to the government wouldn’t have solved the problem, it would only move the control from the cable companies, to the government. But clearly the government could either 1. make choices that benefit the people in government and not the masses, or 2. try to make good choices for the masses and just stink at it, or 3. become corrupted by the very people that they are supposed to regulate. And if you study the history of government action, all three negative outcomes are very common.
So again, how would the free market solve this issue? Well, that’s very hard for me to clearly spell out. If you asked someone in the 1800’s, “If not the slaves, then who would pick the cotton?” they would be very hard pressed to come up with an answer that describes the way we currently do it. But our current mechanized free market solution is both more efficient, and more moral than slavery.
Still, let’s at least try to guess. 1. If there was real competition in the market, then consumer desire could regulate. If the masses really do want net neutrality and one ISP was going to go against this, they would be put out of business due to unpopularity. But you could ask, how would we get competition for a product that has such incredible overhead cost? Again, the answer here is hard to precisely articulate because the answer depends on innovation and most likely technological innovation. But I definitely believe it’s possible even in the face of most of culture saying it’s impossible. I’d say simply imagine 20 years ago asking how a startup could ever compete with a company as big as GM. And especially in a market such as automobiles that require such incredible startup cost!? Well, Tesla was founded in 2003 and in less than 15 years it has become worth more than GM. So yes, I believe that the free market and innovation can work in even seemingly hard fields.
Still, still, I’ll even try to speculate. As a free market guy and a libertarian, I’m very fond of decentralized systems. If you create a system without a centralized choking point, then there isn’t a central point that can be controlled by a nefarious corporation or government. Internet mesh networks are an exciting prospect that offer to connect large masses of people simply by depending on the people themselves. As with any technology, there are challenges with mesh networks, but I bring it up to at least show that there are options.
I think the US highway system is actually a great example. This is something that was highly subsidized by the US government and I think most people would say was a huge success. But I would contend that you can’t compare the outcome to an alternative of nothingness. But rather we can compare this outcome to potential other outcomes. Yes, the government was successful in quickly setting up a large national highway system. And clearly this system has benefits. But it also has tradeoffs. For one, when was the last innovation in road technology that you remember? By contrast, in what free market industry does the technology stay nearly unchanged over the course of decades? It’s very possible that if the highways were more controlled by free markets we would have far superior road technologies by now. They could potentially be faster or safer or more efficient or all of the above. I would content that it’s also not a given that national highways were necessarily the best solution to the problem. There are always alternatives to every solution — rail based technologies, air based technologies, subterranean, and even telecommuting. Research and investment into these technologies were all distorted but the government pushing one particular solution. There are also tradeoffs to every solution, and with our highway system, we’ve also inherited an incredible amount of noise, danger, and natural land that has now become paved. So the question to any particular problem is not “can the government offer a solution” but rather, “over the long term, what is the best mechanism to solve an ever changing landscape of problems with resources that have alternative uses?”.
So yes, we’re in a shit spot right now with these cable companies, so what do we do? Continue to patch it with the system that got us into this situation? I say no. Let’s use the force of the government only to stop things that require force — let’s stop murders and let’s stop other countries from invading us. But should we entrust politicians to run the technical systems that our entertainment lives and businesses run on? No, absolutely no way. Should we use the force of government to run charity? No, that doesn’t make any sense. Should we use the force of government to educate our children. No, that doesn’t make any sense either.
I think there is an incredible moral and effectiveness basis to allowing people the freedom for life, liberty, and the pursuit of happiness. That is unless they try to take away that freedom from someone else, then yes, let the government step in. But if a particular company is doing something dumb with their product, should the government step in? No, let them do the dumb thing and suffer the free market consequences. But what if the government put this company in a unique position of power? Well, I’m not sure what to tell you there, it looks like you screwed yourself. So, do you want to pull off the band-aid now, or later?
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