[governance] reality check on economics

[Milton L Mueller]

> -----Original Message-----
> have not researched it myself, that in many areas in Asia and Africa,
> and perhaps some in the Americas and Europe, large parts of the
> population are captive of one company or another, i.e some of these
> companies get local monopoly, for some definition of local.

[Milton L Mueller] Well, that's a very important distinction. How you define a market very strongly affects what level of competition is found to exist in it. But of course it is true that there are localized monopolies. 

I am surprised by Guru's conclusion (below, in response) that the answer to local monopolies is global regulation of business. Let me try to concretize for Guru what this means. Let's say there is a cartel or monopoly of some kind over telecom equipment production for the international market in an Indian state. That monopoly - if indeed it has monopoly power - is likely to be politically popular and politically protected locally. (Need I remind you of the controversy over allowing multinational retailers into India's cartelized local scene?) That is, the monopoly profits that are being made can easily be directed to local politicians, may create higher than market wages for the local workers and higher local tax revenues. 

If the consumers of these services, who pay too much, are diffused all over the world, and the suppliers/beneficiaries of market power are concentrated locally, then yes, it is unlikely that local political and regulatory institutions will respond properly. 

So, we need global institutions. 

We do have institutions for global regulation of business now. One of them is called the World Trade Organization, which tries to prevent national governments from discriminating against foreign entrants. But somehow, I get the feeling that the WTO is not too popular among the economic populists calling for global regulation of Internet businesses. But, maybe I am wrong, perhaps Parminder has discovered (belatedly) the virtues of neoliberal economic policies and is seeking to expand these benefits to the Internet domain. 


> >
> > The question i have then, beyond the regional/local problem of
> countries etc that allow such local capture, is there a global way to
> help with this.  I think there may be, and thus it is worth discussing.
> Except for a very few companies, and these rather incompletely, most
> companies do not make social ethics a high priority and thus will take
> market power whenever they can, by whatever means they can get it.
> Unfortunately, it is only regulatory frameworks that stop most companies
> from this sort of behavior.  So what can be done at a global level to
> keep local/regional monopolies from happening.
> >
> > avri
> >
> Avri,
> 
> I think you have begun a useful thread of thought - the need for global
> regulation of business. This is an extension of the national regulation
> of business, to a global space as the Internet, and much required. The
> lack of global regulation has led to so many abuses of market power and
> political power.
> 
> My question for you is - in the processes of framing national
> regulation, would you have the concerned companies "on an equal footing"
> as with the other stakeholders, wherein a verizon or google can veto any
> definition of net neutrality other than theirs. Or is it that each
> stakeholder group has an important yet distinct role  - and that of
> business is certainly to forward arguments for their practices and
> provide any expertise... but business given their very nature/need to
> maximise their shareholder wealth cannot be expected to protect public
> interest or 'make social ethics their priority' as you put it. What is
> the implication of this for defining the nature of MSH?
> 
> You must be familiar with the ALEC lobbying efforts in USA, and the
> impact on US regulation in the past few years. How can we ensure
> regulation/policy making to be based on negotiation of perceptions of
> public interest? What would be the implications of allowing powerful
> corporates 'equal place' at the policy table? How would it work?
> 
> regards
> Guru
> 

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