Sender: "Craig A. Johnson" <•••@••.•••>
On 14 September Kurt Guntheroth wrote:
> "Free market" capitalism has the same advantage as the internet; distributed
> control. Nobody makes central decisions about load or content on the
> internet. Nobody makes central decisions about price in the market.
>
What, pray tell, is "distributed control?"
The statement is cruelly ironic in that increasingly, it will be the
"market" that makes decisions about "load" and "content" on the Net.
That's what AT&T/BBN, MSN, MCI/Delphi, etc. are all about. So, we
will have entities not only controlling content, but "making central
decisions about price" as well.
Lest you think otherwise read some of Gordon Cook's latest posts on
the coming move from a Net "best effort" service business/pricing
model toward a resource-based model with differential charges for
different services.
Internet founding father and MCI Net wizard Vint Cert is talking
about "differential charges for...different classes of service,"
while still trying to hang on to a "best efforts" model which is
"rather flat while showing more sensitivity for the high resource
services."
While Cerf opposes pricing by the packet, there is no question,
according to Cook and others that an Internet world where charging
for resources consumed, the type of process used, and the size of the
pipe is in the offing.
> This single essential property enables freedom like no other. To
> one extent or another, government always threatens choice because
> it centralizes power and authority. But in the free market, only
> individual buyers and sellers agree on price. And on the
> internet, only content providers and content viewers agree to share
> information. No one stands between, saying "this you may know and
> this you may not."
Gee Kurt, have you read any of the proposed telecom deregulation
legislation lately? I think Exon, Coats, Dole, Grassley, Hyde, and
a host of others would heartily agree with you on your free market
riff but they don't seem to apply that to content. Hmm, wonder why.
As for your statement that "in the free market only individual
buyers and sellers agree on price," this is so patently false that
it is barely worth rebutting.
As Dorothy K. Dean wrote on 16 September, "Have you ever heard of
monopolies?"
But, perhaps you belong to the von Hayek-George Gilder-Peter Huber
school and flatly refuse to admit that oligopolies and concentration
of economic power could even lead to "market distortions," not to
mention market domination.
All the microeconomic garbage you learned from Samuelson doesn't
apply here Kurt. There is no "Pareto optimality," demand and supply
depend on forces much larger than "seller and buyer," and
"uncertainties" and "intangibles" which most economists,
particularly of the Chicago school, refuse to regard as real. These
"unseen" forces often rule the market.
On this you could do no better than to read Kenneth Arrow and George
Stiglitz.
For the policy side I recommend you take a look at Charles
Lindblom's _Politics and Markets_ . Though dated, is still the best
book written in the current period on the ways that politics and
markets commingle and interact with each other.
Hint: The concept of "power" is key.
> It is this essential property that we must safeguard, both in the
> real world and in cyberspace. In the real world we must fight to
> prevent a single buyer or seller from dominating the market,
> because then they alone dictate price. And in cyberspace, we must
> fight to prevent a single authority from dictating content, for
> then they alone dictate the terms of debate and control what
> knowledge we may have.
It's not a question of "single buyers and sellers" and "single
authorities." That's just silly neo-classical pap. There's nothing
"single" about it; oligopolists stand behind and define the "market"
and "authority."
Craig
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