Straight to the point

[unixronin]

I don't believe I have yet seen a more succinct summary of the "Net Neutrality" issue than the one Illiad posted today.

Comments

[ithildae.livejournal.com]

All I can say is that your economics professor disagrees strongly with my economics professor.

This lends itself, in its purest implementations, to small, dynamic businesses with ever-changing profit models, innovation, and egalitarian opportunity.

And this is how we got the Robber Barons of the railroads? Standard Oil? AG groceries? Wall*mart? Micro$oft?

Capitalism also lends itself to winners and losers in acquiring capital. The winners will tend to increase scale for greater economies, to continue acquiring capital. That can mean buying companies in the same market space. That can also mean blocking competitors from access to the market. Eventually, there is no one else to buy, the barriers to entry are too great, and there is no one left in your market segment. That equals monopoly.

Your definition depends on simple access to markets by the public and business playing by the rules. Unfortunately, there are always a few willing to "bend" the rules for greater profit. That will distort the proper function of the market to efficiently allocate resources.

Regulations that protect access to markets are needed to maintain optimal resource allocation. Movements to block market access, or limit choice of product (usually done by companies) limit the proper function of the market.

Perhaps the RIAA or MPAA are not good examples. Try big oil. They are still giving money to politicians. They are not getting much return on that investment right now. Politicians are elected by people. When money from some sources becomes a negative, it will not matter how much there is of it, it will be refused. (Abramoff) The system is not perfect, but it does still work.

[apotheon.livejournal.com]

And this is how we got the Robber Barons of the railroads? Standard Oil? AG groceries? Wall*mart? Micro$oft?

Of course not. Weren't you paying attention? We got those things by way of governmental interference in what would otherwise be a free market economy. Corporate consolidations of power depend implicitly upon legislative support.

Capitalism also lends itself to winners and losers in acquiring capital.

Market economies are not zero-sum games.

Your definition depends on simple access to markets by the public and business playing by the rules.

Actually, it depends on the absence of externalities imposing arbitrary advantages for increased consolidations of collective economic power. The only "rules" that need be followed for things to work effectively in a free market economy are the very economic laws that define them.

One of the big problems I run into with having discussions about economics and capitalistic economic systems online is the widespread inability to differentiate between "corporation" and "business", both definitionally and functionally. I mostly blame this, in current circumstances, on the Republican Party's at least semi-intentional conflation of "business" with "corporation".

When money from some sources becomes a negative, it will not matter how much there is of it, it will be refused.

Uh, what? Are you trying to say that when the political currency gained from campaign contributions from such organizations is outweighed by that gained from counteracting sources, politicians will alter their approach? Well, yeah. If that's what you're trying to say, that's damned near a tautology — and pretty much exactly what I said, in more flippant terms.

[ithildae.livejournal.com]

I have been paying attention. You make all your claims from the standpoint that the only things that can truly distort markets are government regulations and restrictions. I find that position to be silly and naive. Markets are. ultimately, human systems. Greed can, and often does, distort markets.

Adam Smith defined "common goods". They are needed to allow markets to function properly. I claim that a market is there to efficiently allocate resources, not generate wealth for any particular entity. Access to markets is an example of a common good. Common goods need to be protected against predatory practices by people participating in markets.

The original discussion was a plan to restrict access to markets, and a bill to stop that practice, called "net neutrality". The providers are almost universally monopolies in their areas.

You also assume that the law of diminishing returns is universal. I claim that increasing returns are possible. That will distort markets. (I claim that Micro$oft is an example of an increasing returns model.)

I further claim that when there are negatives attached to politicians taking money from some sectors, they will not accept that money. The Jack Abramoff brouhaha where several at risk representatives returned money is a good example. Big oil will not get any breaks this year, no matter how much they spent on politicians. Money is not the only governing factor in Washington.

I can place things in pure economic terms, but most people cannot follow it and the rest just don't care. Markets are driven by humans for human ends. It is quite reasonable to attribute broad human emotive factors to the explanation of market behavior. (Usually greed and fear.)

The bottom line is that I can't agree with your premise, so you arguments make no sense to me.

[apotheon.livejournal.com]

You make all your claims from the standpoint that the only things that can truly distort markets are government regulations and restrictions.

Not quite. What distorts markets are imposed externalities that attempt to "regulate" or "restrict" market forces. I tend to use government as the canonical example of this, often in concert with corporations, but in general it's consolidated power structures in the generic that can have this sort of effect.

Greed can, and often does, distort markets.

That's patently absurd. So-called "greed" is in fact part of what defines markets. Without the impetus toward profitability, market economies wouldn't exist. In fact, any form of trade for mutual benefit wouldn't exist. Far from a distorting influence, "greed" is a foundational component of the market.

I claim that a market is there to efficiently allocate resources, not generate wealth for any particular entity.

A market isn't "there to" anything. A market arises from free interactions for mutual benefit. Are you sure you know what "market" means, as a formal term of economics?

Common goods need to be protected against predatory practices by people participating in markets.

I find that laughable, though from another perspective I suppose it might look merely mistaken. Individuals need to be defended (not "protected", so much, though now I'm nitpicking) against predatory practices — not "common goods". A "common good" is a widely beneficial circumstance, not a thing that is harmed by predation.

One of the nifty things about (free) markets is that they are self-correcting. One of the unfortunate things is that they do not exist in a vacuum. The goal of government, in relation to the economy, should consist solely of insulating the economy against imposition of unbalancing externalities and the effects of individual predation. The sort of mass economic predation we get to see in the real world on a daily basis are the somewhat-direct result of consolidations of economic power made possible by the government becoming, itself, an imposer of unbalancing externalities.

The original discussion was a plan to restrict access to markets, and a bill to stop that practice, called "net neutrality". The providers are almost universally monopolies in their areas.

. . . and, in principle, I agree with ilcylic on that score. I'm not entirely sure I agree enough to actually cheer for one side or the other, however. The first problem is that, as you say, monopolies (created in large part by the state of corporate law in the US) control infrastructure that these proposed "net neutrality" measures are meant to address, and can (and probably will) conceivably leverage monopoly power to engage in anticompetitive practices, direct price-gouging, and so on. The second problem is that legislating against it is almost certainly doomed to failure in terms of producing any kind of positive outcomes except in the most narrow and superficial manner, and even that will be balanced by very real negative countereffects. It's a lose-lose situation. Thus, while in principle I agree that "net neutrality" legislation should not be enacted in any way, in practice I find it difficult to summon the motivation to give a hot damn since we're screwed either way.

The correct (and politically "impossible", at this point) course of action would be to start kicking the legs out from under the legal supports that provide fertile ground for monopoly organizations such as the telcos to exist in the first place, then watch them crumble in the face of competition. Sure, it'd be like waves throwing themselves at a rock face at first, but erosion works, and has the benefit of not destabilizing what we hilariously call our market economy through traumatic paradigm shifts.

[to be continued . . .]

. . . continuation:

[apotheon.livejournal.com]

You also assume that the law of diminishing returns is universal.

When did I do that?

I claim that Micro$oft is an example of an increasing returns model.

Actually, Microsoft is on the ropes in a number of interesting ways right now. It's also an interesting demonstration of my points to note what Microsoft is trying to use to fight this: legislation. (Note: I watch Microsoft for a living — I'm an IT industry analyst and freelance professional writer of IT industry related materials. That's meant to be an indication of the fact that I am in fact aware of the example in some detail, not an appeal to authority fallacy.)

I further claim

Have you been on a debate team? This isn't a dig at your or anything like that. I'm just curious. Your use of the term "claim" sounds suspiciously like formal debate language. Coming from more of a symbolic logic background myself, I don't usually state my claims in such a manner, but I'm familiar with the technique.

It is quite reasonable to attribute broad human emotive factors to the explanation of market behavior.

That makes perfect sense, and in fact seems to directly contradict your earlier use of the term "greed". Aggregate behavior as a result of individual motivation is an intrinsic part of a market economy, not an externality that can distort normal market behavior.

[unixronin.livejournal.com]

The correct (and politically "impossible", at this point) course of action would be to start kicking the legs out from under the legal supports that provide fertile ground for monopoly organizations such as the telcos to exist in the first place, then watch them crumble in the face of competition.

That certainly sounds like it would be the ideal solution (though there are simple technical issues of physical plant to consider, as well). However, as you point out, it's politically impossible at present. A "Net neutrality" bill may be the best we're going to get, right now.

[apotheon.livejournal.com]

I agree, which really bothers me, because I also think it may be the worst we're going to get — perhaps simultaneous with being the best, or perhaps instead. It's going to be bad, in any case, whether it's less bad or more bad than doing without.