[governance] Hmmmm... Google: "Internet Freedom!"... (from taxes?

[Riaz K Tayob]

It is one thing to claim this in fact and then generalise the principle 
that markets "do best". The same cannot be said for eg on the railroad 
revolution in the US - which enjoyed massive subsidies. In many 
developing countries, regulation that fixed the number of operators 
ensured a mix of competition and oligopoly to fund the high 
infrastructure entry costs by limiting the number of entrants. In other 
areas, other publicly established infrastructure was utilised as well 
(in some countries to improve coverage, UCTAD recommends intervention - 
sharing of infrastructure costs like cell masts).

In the US railroad revolution the sharing of these fixed infrastructure 
costs (from taxes) in this way improved American economic performance. 
If one used neoclassical economics to judge the impact of the 
transformational railroad, the result is that it "only" improved US 
economic performance by 3 to 4%. This was such a major change in the US 
economy (it integrated the US as a single market - a huge increase in 
scale).  Contrary to the ahistorical writing of history by neoclassicals 
, the American economic system in its formative years was radically 
different from neoclassicals- rather following Alex Hamilton, Richard 
Ely, Daniel Raymond, Frederich List... Then, the understanding was that 
low cost infrastructure enhanced economic performance/production. 
Nowadays, the neoclassicals believe that "free" infrastructure is bad, 
and to improve competitiveness things must be privatised or private - 
the tollbooth economy.

Arguments against regulation, as the neoclassicals do, actually reduce 
democractic choices about how markets can be shaped and structured - and 
how plastic they are - which is no wonder that oligopolists/monopolists 
love the arguments on "free markets" because what while what may be 
"true" in theory is very beneficial to them in fact. In some of these 
markets the market is too violent and perhaps the possibility of looking 
at the functioning of the extant reality - oligopolistic market 
structures: which are not going to disappear with neoclassical utopia of 
perfect competition just around the corner if we only would liberalise 
and deregulate more and faster.

While perhaps not directed at Mueller per se, but it would take much 
more to deal credibly with an economic theory (or its prescriptions - 
neoclassical) after a financial crisis which for it is a theoretical 
impossibility: i.e. it cannot happen. But it did.

So the neoclassical jingle of leaving it to markets is controversial. 
Markets do work, and when they do they should be left well alone. But do 
markets always work? Well that simply depends...


On 2012/12/03 08:29 PM, Milton L Mueller wrote:
>
> Just so you know: competition and liberalization have done more to 
> extend telecom infrastructure to the largest number of people than any 
> social equity program. Taxes and subsidies (at best) pick up the 
> margins/ high cost areas, the really poor, but the real work is always 
> done by the market. At worst, taxes and subsidies keep monopoly 
> incumbents in place, prevent new technologies from emerging, and raise 
> costs.
>
> *From:*michael gurstein [mailto:gurstein at gmail.com]
>
> I would be the first one to argue for a transparent, net neutral, open 
> access, free speech Internet but I'm also for an inclusive Internet in 
> a decent socially equitable environment with proper schools, and 
> healthcare, and an adequate physical and social infrastructure for 
> all, not just for the rich (or those in rich countries) and that means 
> that companies, like everyone else has to pay their fair share.
>
> Greed is greed and the best way to keep from paying taxes as you have 
> pointed out, is to make sure that there are no laws/regulations in 
> place to require you to pay taxes.
>
> M
>
> *From:*governance-request at lists.igcaucus.org 
> <mailto:governance-request at lists.igcaucus.org> 
> [mailto:governance-request at lists.igcaucus.org] *On Behalf Of *Milton L 
> Mueller
> *Sent:* Monday, December 03, 2012 6:36 AM
> *To:* governance at lists.igcaucus.org 
> <mailto:governance at lists.igcaucus.org>; 'Dominique Lacroix'
> *Subject:* RE: [governance] Hmmmm... Google: "Internet Freedom!"... 
> (from taxes?
>
> Suresh, I think the debates are related. Now it is not just ETNO and 
> the old telecom incumbents who want to grab a share of the new wealth 
> being generated by over the top internet services, it's national 
> governments as well.  So what is new here? Governments want to tax 
> whatever they can for their own (political) self-interest, while 
> businesses (and most citizens) want to reduce their taxes as much as 
> possible.
>
> What's interesting is  how un-selfconsciously the Dominiques and 
> Gursteins of the world assume that more taxation = always better for 
> society. Not a shred of critical perspective on the governments' 
> demands for more revenue. And as usual, Gurstein approaches the debate 
> by attaching labels ("Reaganomics") rather than mounting a serious 
> argument.
>
> Do governments have some kind of right to these revenues? If so, what 
> is the basis? If so, what is a reasonable rate of taxation? How are 
> these revenues used? How do they benefit the internet users who 
> generated them? Might be good for you all to contemplate the answers 
> to some of those questions. The implication of your statement is that 
> more taxation is always better. You don’t have to be a supply-side 
> economist to understand that taxation can reach a point of diminishing 
> returns and that it can destroy economic activity as well as help 
> sustain social services. Please, a more intelligent perspective on this…
>
> Some Internet companies can escape taxes because their activities 
> aren't linked to territories. Others are linked to countries and pay 
> full taxes.
>

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