Recently, the "government" (specifically the FCC and our current speech happy administration) declared 'Net Neutrality' helps the state "mandate" for increased bandwidth. "Net Neutrality" is a nice term which masks nationalism, but really is a decree that if YOU build any infrastructure your competitors can use it at any price set by the government. (wave good bye to incentives, and say hello to a new fleet of well paid lobbyists now landing inside the beltway). I recently read a dim bulb from the LA Times (Hazlitt I believe) in a piece about "how government created the Internet" which, besides from being completely untrue and juvenile, was used to defend a claim that "not everything goverment does is bad!" How inspiring!
While the US goverment, that is DARPA (defense technology spending), gets credit for funding research that lead to the pioneering work by Dr. Len Kleinrock in wide network packet protocol, that was where the research grant left off. When it comes to the Internetand all we use it for, it is a classic case of capitalism -- of innovation, copycats, efficiency improvement, competitive situations and oligopolies (mostly by delivering superior products) and most of all it is a case of progress created by capital seeking the profit motive. No profit motive = no investment (of $ or talent) = no progress.
I struggle why that is so hard to get for many. However, MR, a well-known serial entrepreneur based in San Diego CA recently had the following post in an email thread which sums it up well, at least in the telecom industry....
"Just to comment on the "Obama mandate" of faster bandwidth comment. We're getting faster bandwidth every day along with faster processors, bigger storage, and better online services. There isn't a bandwidth provider who doesn't have a plan to dramatically increase bandwidth pipes. The free market is bringing this to us not a government mandate. The government will just slow down the process and make it more expensive and they surely don't deserve any of the credit for improvements in these areas."
"I know the free market and capitalism ain't fashionable but I hope people on this list have the intellectual independence to avoid the ridiculous sentiment that the government (which produces nothing) can improve the state of our nation if we only appoint a few hundred more czars who champion a few more laws declaring that everyone is a millionaire, gets 1GB net access to their home and has unlimited free health care. "
"-- MR"
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Reaping What You Sow
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The economic policies that the Obama Administration has implemented through
legislation, and countenanced by appointing Timothy "Weak Dollar" Geithner
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13 years ago
When did 'profit' become such an ugly word and misunderstood concept? And how is it that we can live in the one society that has benefited most from a capitalistic approach and not understand capitalism at all? It seems that the government can attack any industry (drug companies, insurance companies, oil companies, etc) by pointing out that they are motivated by 'profit' (boo, hiss). Doesn't the average American realize that almost all of the drugs that exist to increase our lifespan and quality of life are there solely because it was profitable to invest in research and create them? The irony is that are people today writing and blogging about the evils of a profit driven system that would probably be deceased if creating amazing new life-extending drugs was not a profitable business (Michael Moore, perhaps?) And what about the insurance companies? Insurance has to be a profitable business for insurance companies to exist. Which of course is the true market destroying threat behind any type of government funded public health insurance option. If the government (the universe's largest non-profit organization) offers health insurance they won't have to worry about being profitable...why should they? They obviously have no problem spending more than they have and running on a huge deficit. So in the "public interest" they will offer free or almost-free health insurance and undercut every other insurance company out there. Soon, the average insurance company won't be able to compete with the public option and still make a decent profit, so they will opt to take their business talents to a more rewarding industry and close their doors. Soon, there will be less and less insurance companies...until, all we have left are the government-tun public option and a handful of government-subsidized 'private' companies to keep up the myth of private health insurance. That is the real threat of any 'public' option. Once you drive the profit out of an industry, you drive out innovation, talent and, eventually, the industry itself.
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