[governance] a reality check on economics

Sun May 20 00:10:09 EDT 2012

Milton

The first problem of your 'reality check on economics' is that it is 
basically extreme neo-liberal economic thinking-  let markets decide, 
least regulation is the best. The deregulation (repeal of glass-steagall 
for instance) as well as inadequate regulation of the financial markets 
is accepted as an important cause of the crash of the financial markets 
- and unfortunately while some sections of society made billions, the 
costs are being borne by others, most of who had no connection with the 
causes. In the case of the Internet, which is a global phenomenon, we 
have no meaningful / democratic global regulation structures/processes 
yet. Which given the huge concentration of power is a dangerous 
situation and one which is no longer tenable. American regulation should 
not take the place of global regulation (remember wikileaks and paypal 
etc etc which is one of the cases the joint civil society statement/ 
background note highlights). And here I am quite aware of your concerns 
about American domination as well... (one point of agreement!!).

Your text book definition of monopoly is not useful or relevant in this 
debate - if you believe that the large transnational IT corporates do 
not have huge market power (and use it to their advantage) then your 
ideology is clouding your vision of reality. Can I seriously not use 
google search engine or facebook? have you bought a computer where the 
manufacturer agreed to debundle windows operating system? what is my 
negotiating power as a consumer vis-a-vis these companies. Most of us 
blindly click on the 'I accept' button to become users, what is the 
inference from this for the relative power of the corporate and 
consumer?  And where we dont have monopolies in many cases we have 
oligopolies, this makes your belief of perfect competition in free 
markets a myth.

Neoliberal economics (aka market fundamentalism) is discredited and a 
failure and is no answer to our challenges in IG - it is infact the 
problem...

This does not mean (and sometimes you are eager to make this conclusion) 
that IT for Change is for the other extreme - Socialism or complete 
government control over the markets. I don't think anyone is making that 
argument. So your point about the failure of publicly funded search 
engines is superfluous.

As economists agree, we are all mixed economies and we need to find the 
truth somewhere in between.  The Internet itself gives us some new 
powerful methods for framing the processes for such regulation / policy 
making and while we debate the best way global democracy can be 
furthered, laissez faire is no option, and harmful as a governmental 
take-over of the Internet.

regards,
Guru

On 17/05/12 20:35, Milton L Mueller wrote:
>
> The “geopolitical influence” of the US and Europe is quite different, 
> since all major Internet corporations –in fact monopolies in their 
> respective domain- are American : Google, Cisco, Microsoft, Apple, 
> Facebook, e-Bay …  Nowhere in the APC statement these monopolies are 
> addressed despite the strong links they have with Internet governance.
>
> */[Milton L Mueller] The dialogue on enhanced cooperation is becoming 
> polluted with simplistic and inaccurate economic nostrums. /*
>
> */May I request that the word “monopoly” be used with at least some 
> attention paid to its actual meaning? /*
>
> */From the MIT Dictionary of Economics: “a firm is a monopoly if it is 
> the only supplier of a homogenous product for which there are no 
> substitutes and many buyers.” This definition can be made less 
> restrictive by relaxing the assumption that there are no substitutes, 
> to include imperfect substitutes. /*
>
> */But even so, none of the firms cited above are monopolies. None. 
> Some have varying degrees of market power in specific sectors, but 
> none are close to being _global_ monopolies. Apple, for example, does 
> not even surpass Samsung in its share of smartphones./*
>
> */I am also curious to know what is going on when people group the 
> regulation of equipment manufacturers (Apple, Cisco) under the rubric 
> of “internet governance.” Same for computer operating systems. /*
>
> */Moreover, I wonder whether the people who think UN-based 
> institutions are an appropriate response to market power in the ICT 
> sector have done their homework. There are powerful, well-resourced 
> antitrust and economic regulatory agencies in the U.S., Europe, and 
> various other countries in Latin America, Asia and elsewhere. The 
> operate under specific laws, not under a theory of resentment (that’s 
> a good thing), laws which have evolved for decades and which have 
> established precedents and bodies of research behind them regarding 
> the nature of market power, the impact of regulation and antitrust 
> intervention on innovation and consumer welfare, etc./*
>
> */Moreover, it’s not like these firms are running amok. There have 
> been in the recent past, or currently are underway, serious tangles 
> with Microsoft, Intel, Google, Apple, and Facebook on various issues 
> involving their market power* - by antitrust authorities, privacy 
> regulators and consumer protection regulators. Have our agitators made 
> a case that these entities are incapable of doing their jobs? If so, 
> how would the political economy of regulating big business improve at 
> the global level – or would it get worse? /*
>
> */Is the absence of European companies in the list of globally 
> competitive firms, Mssr. Fullsack, due to some cosmic injustice, or 
> simply to the over-regulated, protectionist, nationalist structure of 
> European Internet and ICT markets, which does not produce globally 
> competitive firms? Why is it that tens of millions in subsidies for a 
> European search engine haven’t produced anything? Might it be because 
> consumers decide for themselves what is a better service and that 
> people don’t care much whether a service provider is American, 
> European or Chinese as long as they can use their own language? /*
>
> */Could there be some serious engagement with these issues and, 
> perhaps, a little more knowledge and a lot less populism? The idea 
> that some vague notion of “governance” is going to save us from any 
> and every problem in the internet economy sounds to me like the 
> fulminations of wannabe politicians seeking power for themselves and 
> not interested in actually solving problems./*
>
> */(*Note the absence of Cisco from that list – the equipment mfring 
> biz is highly competitive and Cisco is declining in market share, flat 
> in revenue, and considered “on the ropes” by stock investors for the 
> past 2 years). Huawei, on the other hand…/*
>
> *//*
>
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