Just before the Q&A session, I identified an interesting parallel, and I wanted to get the speakers to comment on it. Unfortunately, my question came out as a rambling mess, and Ms. Cohn even thought I was trying to make some connection to current events. (You’ll see why that’s silly, since the “events” in question have been part of explicit philosophic debate for centuries at least.)
So here’s the parallel that I was trying to draw:
Those on the capitalist side of the argument over wealth and income inequality often well know one of the fallacies committed by the other side: namely, that by focusing on interpersonal comparisons and wealth *gaps*, they completely miss that under (unregulated) capitalism, everyone is better off in *absolute* terms. So while *relatively* speaking, the poor are getting poorer, in *absolute* terms, the poor are getting richer and the rich are getting richer. And as the capitalist side knows, it’s because the rich keep doing what got them rich in the first place (working hard, innovating, being committed to success and prosperity, having perseverance), and the poor keep doing what they’re doing. And of course, it’s only under this kind of system that the poor even have a chance at bettering their station, but that’s a different discussion.
In essence, this problem is just another instance of the well-identified (by Objectivists, anyway) phenomenon of second-handedness: people focus on how they compare to others rather than how well off they are in reality, in absolute terms, compared only to their prior and potential future circumstances. (And economists have known this phenomenon for some time too–they know all too well how futile it is to try to make interpersonal comparisons of valuation in objective terms–they even joke about the fictional unit of utility, the “utol”.)
The resolution, of course, is to change the framing of the discussion to what the political structure must be in order to enable everyone to achieve as much success and prosperity as they choose–as far as their abilities and ambitions will take them. Not coincidentally, this leads to the most absolute wealth creation in a society overall, as well as the greatest amount of wealth created by each individual who chooses to achieve it.
(There is a related point here about how even the poor are better off among people who are fabulously more wealthy than they are than among people who are the same or poorer (assuming in both cases that they themselves are the same)–and this is because they are capable of trading for more valuable goods with the richest producers than with those who are poorer.)
So the analogy to Net Neutrality is as follows:
Advocates of Net Neutrality *regulation*, aside from arrogating themselves to the status of central planners, oftentimes rationalize their positions by “looking out for the little guy”, who is often the consumer–or the starving startup entrepreneur being squeezed out by the Googles, Apples, and Microsofts–or the publisher of a controversial blog–or any other such variant. As the argument goes, if we allow the big players, including the Verizons and Comcasts, to do price discrimination and forge special deals for prioritized traffic with the content providers, it’s going to create terrible barriers to entry for the little guys, since they will have to suffer with slower internet. (Oh, and what’s wrong with people paying for the quality of service they want and get? We do this sort of thing in every industry, from package delivery to dining to air travel.)
Is this starting to sound familiar? It’s not like there’s only so much bandwidth (just like there’s not only so much wealth), and it’s not like the slowest internet connection available–in absolute terms–has been decreasing over time. Like the wealth disparities discussion above, as time goes on, as the Verizons and Comcasts are left free to make fabulous profits and invest in more innovation and greater bandwidth (so that they can make even more profit!), the slowest available internet access continues to become faster and faster.
I’m young, but I remember 9.6 kbps dial-up modems. If my *phone* has only that much bandwidth available today, I consider it to have no internet connection at all.
Today, the slowest typically available internet access is on the order of a few Mbps, while the fastest available (let’s say for residential purposes) is in the hundreds of Mbps in some areas. (And in several Asian countries, it’s in the several Gbps range.) So in ye olde days, the difference may have been between 9.6 kbps and (let’s be generous) 56.6 kbps. So that’s a factor of about 100 (or 1000) today versus about 6 before. So we have huge gaps today, both in absolute terms and in relative terms, and yet today’s slowest few Mbps is tremendously faster than yesteryear’s fastest 56.6 kbps. My point is: Who cares about speed gaps? The fact that some other guy can surf the web or put content out there even a billion times faster than I can does not change what I am able to do with what I am able to pay for–which is almost immeasurably more than what I could do just a decade or two ago no matter how much money I had!
Here’s where the advocates of Net Neutrality regulation say “But we didn’t need regulation then–the internet was de facto neutral. Now, the greedy telecommunications corporations want to squeeze every penny they can out of everybody involved.” To which I reply–well duh corporations are trying to make a profit. Bandwidth is a huge value to pretty much everybody in the industrialized world, and figuring out pricing schemes for it is not easy, and is a very legitimate form of innovation: the promise of profits are what bring the best, brightest, and most technologically innovative into the field in the first place, and it’s what allows them to make a return on their investment so they can turn around and reinvest that money into further innovation. (Or did you think profits are kept in the form of a pool filled with gold coins to dive into and swim around in, a la Scooge McDuck?)
I’m not a central planner, so I don’t know whether the best policy is to have so-called “neutrality” (whatever that means–which is a different discussion altogether) or to have vigorous discrimination on a variety of bases. What I do know is that (1) from a certain perspective, it’s none of my business–I need to worry about myself and my contract with my ISP and not any contracts down the line, and (2) it’s certainly not for the government to coercively impose that neutrality on the Verizons and Comcasts of the world, since that only creates market distortions and inhibits all the innovation that the Net Neutrality advocates are always clamoring about (oh yeah, and it’s a violation of private property rights!).
(It’s like monopolies–I don’t necessarily know whether it’s good or bad for there to be a monopolist in a particular industry, since that depends on a number of market factors. But I do know that if the government attempts to coercively establish or break up monopolies, it’s a sure recipe for disaster.)
So here’s the parallel, restated:
Just as with the issue of wealth gaps, we should be focused on creating conditions that allow for everybody to increase their absolute level of wealth (instead of trying to ensure that everybody has the same level of wealth, even if it’s small), so too on the issue of Net Neutrality, we should be focused on creating conditions that allow for the innovation of ever-increasing amounts of bandwidth for everyone (instead of trying to ensure that the little guys have as much bandwidth as the big players).
And there’s a name for those conditions: laissez-faire capitalism.