[governance] Hmmmm... Google: "Internet Freedom!"... (from taxes?
Riaz K Tayob
riaz.tayob at gmail.com
Wed Dec 5 15:42:14 EST 2012
My point, in case you missed it was that one cannot generalise about
markets (from the specific proposition that holds in ICTs to a general
outlook), as I understood your post.
Markets work well under certain conditions, and can be made to work
better in an enabling environment where "market failures" exist (and
"market failure" is too commodious a term, when used as an exception to
the rule of markets work best, a nuance I am sure you would appreciate).
Even the neoclassical World Bank admits (after horrendous ideological
implementation of privatisation - markets are best) that private
ownership does not always improve performance.
There are varieties of institutionalism (e.g Douglas North, the
Ptolemite imho) and there are also those that hold that markets are
created, and intensely political and/or structured by law and "habits".
My evidence in point is that oligopolistic arrangements particularly as
regards mobile in developing countries were also conducive to ICT
diffusion. This is/was a political decision, also helped by low barriers
to market entry in related sectors. And it also simply will not do to
forget that the telecoms shebang was financed by a huge tech-bubble -
that points to Institutional indicators that something was not quite right.
Of course, given current circumstances of a financial bubble and
currency wars, the creative destruction of capitalism in ICTs was far
preferable. Not quite even the theory of second best...
On 2012/12/05 10:01 PM, Milton L Mueller wrote:
>
> Riaz, on economics: I am not a neoclassicist but an institutionalist.
> But of course you don't know the difference, do you?
>
> Let's not have an ideological debate. It is uninteresting to me. Let's
> have a relevant, factual one. Take a look at the facts about telephone
> penetration in any society that had a state-owned monopoly before and
> after competition was introduced in the 1990s or before. If there is
> some specific point you want to make about market failures and how
> specific policies helped to overcome them, make it.
>
> On 12/04/2012 02:38 AM, Riaz K Tayob wrote:
>
> 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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