Jamie Boyle & Paul Jones on the Open Internet, Generativity, and Competition

by on October 6, 2010 · 6 comments

Last week, I had the pleasure of discussing net neutrality with James Boyle, a Duke Law Professor and the co-founder of the Center for the Study of the Public Domain, and Paul Jones, the director of ibiblio, on WUNC’s The State of Things radio program. Our hour-long discussion touched on a number of important tech policy topics, and I highly recommend giving the show a listen (download the MP3 here) if you’re interested in hearing the insights of two very thoughtful scholars and critics of cyber-libertarianism.

I’m a big admirer of Boyle and Jones, who’ve both done a lot of excellent work studying copyright and public domain in the information age. While I don’t share their views on the merits of net neutrality regulation — or, perhaps, of government regulation in general — there’s much common ground between us on many issues, including intellectual property, free speech, and government surveillance.

For folks who don’t want to spend an hour listening to our discussion, I’ve typed up a brief summary of the questions we attempted to tackle in our discussion and the various arguments we raised. My apologies if I’ve mischaracterized any arguments or statements  — if you want to know what was actually said, go listen to the whole interview!

  • What role should government play in regulating the Internet? I argue its proper role is to enforce voluntary arrangements (Terms of Service) and, when appropriate, enforce civil judgments against firms that have broken their promises. Boyle, on the other hand, argues that government should enforce not only contracts but also net neutrality rules because last-mile Internet service is a natural monopoly and consumers often don’t understand what they’re getting, which means that socially desirable contracts aren’t likely to emerge. I respond by citing Thomas DiLorenzo’s critique of the natural monopoly hypothesis and pointing out that government has obstructed ISP competition by allocating spectrum inefficiently and imposing excessive costs on wireline ISPs through burdensome rights-of-way and franchising rules.
  • Why did Google retreat on its commitment to net neutrality in joining with Verizon to exempt wireless services from neutrality regulation? Boyle argues it’s because Google realized the future of communications is mobile and believed it needed to compromise with Verizon (America’s biggest wireless carrier). Jones points out that the Google-Verizon proposal isn’t a business agreement, but a compromise designed to address the conflicting interests of various stakeholders. I argue that Google recognized that government discrimination among competing business models and platforms is a greater danger to consumers than provider discrimination, and that real innovation occurs when we allow ‘walled gardens’ such as the iPhone to co-evolve with open platforms like Android — the “Yin and Yang” of innovation, as Bret Swanson puts it. Boyle argues that proprietary platforms and exclusionary deals between content and service providers hinder disruptive innovation and digital generativity. He cites the financial crisis as an example of inadequate regulation resulting in bad outcomes that might have not have occurred had there been greater oversight.
  • Does collusion among large, powerful Internet corporations help or harm consumers and innovation? Jones cites Adam Smith’s The Wealth of Nations in arguing that, without government regulation, mega-corporations will collude and carve up the marketplace, hindering innovation and progress. I argue that leaving companies free to try to “carve up markets” actually spurs beneficial competitive responses and promotes destructive market entry, even if the process isn’t always pretty. I argue that the forces arrayed against today’s major companies–competitors, consumers, suppliers, downstream partners–make it impossible for any entity or group of entities to engage in any truly abusive practices without suffering harsh punishment.
  • Will entrepreneurs and innovators even be able to get off the ground if corporations have unlimited control over Internet applications and content? I argue that government policies, such as the DMCA’s anti-circumvention provisions, are a major part of the problem because they distort natural market outcomes and prop up bad business models. Boyle agrees that these provisions are seriously problematic, calling DMCA a “lawyers’ full employment act.” He points out that many of the most important innovations of the last couple of decades — Google, Facebook, Twitter, and so forth — came about precisely because of the Internet’s openness and dynamism. I argue that the openness that characterizes the Internet is indeed desirable in many ways, but that voluntary institutions can offer open platforms without being forced to do so by government. I point out that network operators who hinder the value of the content that traverses their pipes do so at their own peril, and that infrastructure and content companies actually have a symbiotic relationship, rather than an adversarial one. Jones argues that because many ISPs are also content companies, they have an incentive to privilege their own content at the expense of competing offerings. I point out that consumer demand for Internet video outlets (i.e. YouTube and Hulu) deters providers from slowing down Internet-delivered content. Boyle argues that the continued existence of the open Internet is crucial in ensuring that the ‘walls’ that enclose walled gardens don’t grow too tall.
  • Shouldn’t we treat the Internet like a public utility — a road on which all can travel? I argue that treating the Internet like a public utility, like we already treat roads, raises the dilemma of the tragedy of the commons. I point out that many private roads already exist today without the ‘tollbooths’ that neutrality advocates fear. Jones points out that the real tragedy is one of unregulated commons which lack adequate rules. Boyle argues that the economics of physical property (scarce goods) cannot readily be mapped to networks and calls the Internet a “comedy of the commons” (borrowing from Carol Rose). I argue that government-run commons have a poor track record, from highways to the wi-fi band, and that the success of network industries requires smart investment and innovation that government isn’t well-equipped to deliver. Boyle argues that not all resources must be owned if they’re to be efficiently utilized, citing the emergence of free trade with India and China in the 1700s and the subsequent collapse of state-chartered trading monopolies. Boyle argues that tomorrow’s “next great thing” may never emerge if the openness of today’s Internet isn’t enshrined in regulation.

  • Tsydnor

    Ryan, this is Tom Sydnor. I have read most of Jamie Boyle’s work. He is definitely a leading Free-Culture-Movement law professor, and very good writer who is generally savvy enough to avoid the rhetorical excesses of shrieking demagogues like Lessig. Nevertheless, I am really disappointed to see you link to Boyle’s Bipolar Economics article. Had Boyle not signed his name onto an amicus brief “defending” the defendants in MGM Studios, Inc. v. Grokster Ltd., (who had already committed what can only be described as the listigation analog of seppuku (see note 1)), Boyle’s most laughably incompetent moment would occur in that column.

    In it, Boyle accused the entire profession of economics of suffering from bipolar disorder. Last I checked, if you are going to accuse many people of mass insanity, you had better ensure that you have a rock-solid basis for your accusations. Otherwise, you end up looking like the cow in the Far Side, cartoon who tells her psychiatrist that it’s not her—it’s the rest of the herd that is insane….

    Boyle made himself look worse than the cow. His ditzy thesis was that economists must be nuts to believe both that that governments will rarely prescribe the correct remedy for antitrust violations, but will generally adequately define the scope of the private property rights that are an indispensible predicate to what economists call “market competition.” Boyle sneers that professional economists must suffer from bipolar disorder to maintain both beliefs simultaneously.

    Oddly, I have no difficulty perceiving the perfectly sane distinction that purportedly eludes the erudite Professor Boyle.

    Indeed, it is simple. When a government tries to prescribe antitrust remedies, it must guess what outcome would have emerged from a dispersed of dispersed, consensual private exchange that had NOT been affected by the practical coercion inherent in the unlawful abuse of market power. In other words, the government must try to discern the “right answer” that the market would have produced. Divining this sort of first-best answer by imagining what tomorrow would have looked like had today and yesterday been different ranges somewhere between difficult and impossible. After all, if economists could look at yesterday and today and divine their implications for today, then stock-market prices would be predictable.

    By contrast, when a government defines property rights, it does so because it does not believe that it can use its knowledge of yesterday and today in order to prescribe the optimal outcomes of tomorrow’s trades: Governments define property rights in order to let producers and consumers find mutually beneficial outcomes and experiment with the terms of exchange.

    The enquiry underlying a government’s effort to define the scope of a property right is thus much narrower: Under what circumstances is bilaterally consensual exchange on terms agreed to privately more likely to produce better results, over the long run, than the coercion inherent in mere taking or governmental price-fixing? Given the track record of the latter two options, this task is manageable, and governments performing it can use well-known factors to guide their decision-making (transaction costs, search costs, appropriability, public-good characteristics, tendencies toward natural monopoly, etc). Consequently, Boyle’s accusations of bipolar disorder succeed only in making him look like a reckless, pompous ignoramus.

    More broadly, Boyle is really arguing that you would have to be insane to think that private market exchange could produce better results, over the long run, than centralized governmental command-and-control because the government must play a role in either process (in one case, specifying the best outcome, in the other, defining the private-property rights that let individuals specify their own outcomes). Somehow, it never occurs to Boyle that during most of the 20th century, humanity divided the world roughly in half and subjected this thesis to empirical testing. The results were consistent and unequivocal.

    That is why I find Professor Boyle a generally less-than-thoughtful critic of both “cyber-libertarianism” and the use of market mechanisms generally.

    –Tom

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  • Tsydnor

    Ryan, this is Tom Sydnor. I have read most of Jamie Boyle’s work. He is definitely a leading Free-Culture-Movement law professor, and very good writer who is generally savvy enough to avoid the rhetorical excesses of shrieking demagogues like Lessig. Nevertheless, I am really disappointed to see you link to Boyle’s Bipolar Economics article. Had Boyle not signed his name onto an amicus brief “defending” the defendants in MGM Studios, Inc. v. Grokster Ltd., (who had already committsed what can only be described as the litigation analog of seppuku (see note 1)), Boyle’s most laughably incompetent moment would occur in that column.

    In it, Boyle accused the entire profession of economics of suffering from bipolar disorder. Last I checked, if you are going to accuse many people of mass insanity, you had better ensure that you have a rock-solid basis for your accusations. Otherwise, you end up looking like the cow in the Far Side, cartoon who tells her psychiatrist that it’s not her—it’s the rest of the herd that is insane….

    Boyle made himself look worse than the cow. His ditzy thesis was that economists must be nuts to believe both that that governments will rarely prescribe the correct remedy for antitrust violations, but will generally adequately define the scope of the private property rights that are an indispensible predicate to what economists call “market competition.” Boyle sneers that professional economists must suffer from bipolar disorder to maintain both beliefs simultaneously.

    Oddly, I have no difficulty perceiving the perfectly sane distinction that purportedly eludes the erudite Professor Boyle.

    Indeed, it is simple. When a government tries to prescribe antitrust remedies, it must guess what outcome would have emerged from a dispersed of dispersed, consensual private exchange that had NOT been affected by the practical coercion inherent in the unlawful abuse of market power. In other words, the government must try to discern the “right answer” that the market would have produced. Divining this sort of first-best answer by imagining what tomorrow would have looked like had today and yesterday been different ranges somewhere between difficult and impossible. After all, if economists could look at yesterday and today and divine their implications for today, then stock-market prices would be predictable.

    By contrast, when a government defines property rights, it does so because it does not believe that it can use its knowledge of yesterday and today in order to prescribe the optimal outcomes of tomorrow’s trades: Governments define property rights in order to let producers and consumers find mutually beneficial outcomes and experiment with the terms of exchange.

    The enquiry underlying a government’s effort to define the scope of a property right is thus much narrower: Under what circumstances is bilaterally consensual exchange on terms agreed to privately more likely to produce better results, over the long run, than the coercion inherent in mere taking or governmental price-fixing? Given the track record of the latter two options, this task is manageable, and governments performing it can use well-known factors to guide their decision-making (transaction costs, search costs, appropriability, public-good characteristics, tendencies toward natural monopoly, etc). Consequently, Boyle’s accusations of bipolar disorder succeed only in making him look like a reckless, pompous ignoramus.

    More broadly, Boyle is really arguing that you would have to be insane to think that private market exchange could produce better results, over the long run, than centralized governmental command-and-control because the government must play a role in either process (in one case, specifying the best outcome, in the other, defining the private-property rights that let individuals specify their own outcomes). Somehow, it never occurs to Boyle that during most of the 20th century, humanity divided the world roughly in half and subjected this thesis to empirical testing. The results were consistent and unequivocal.

    That is why I find Professor Boyle a generally less-than-thoughtful critic of both “cyber-libertarianism” and the use of market mechanisms generally.

    –Tom

    ” rel=”nofollow”>

  • Ryan Radia

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  • Tsydnor

    Ryan, this is Tom Sydnor. I have read most of Jamie Boyle’s work. He is definitely a leading Free-Culture-Movement law professor, and very good writer who is generally savvy enough to avoid the rhetorical excesses of shrieking demagogues like Lessig. Nevertheless, I am really disappointed to see you link to Boyle’s Bipolar Economics article. Had Boyle not signed his name onto an amicus brief “defending” the defendants in MGM Studios, Inc. v. Grokster Ltd., (who had already committed what can only be described as the litigation analog of seppuku (http://www.copyright.gov/docs/mgm/mgm-grokster-brf-04-480.pdf see note 1)), Boyle’s most laughably incompetent moment would occur in that column.

    In it, Boyle accused the entire profession of economics of suffering from bipolar disorder. Last I checked, if you are going to accuse many people of mass insanity, you had better ensure that you have a rock-solid basis for your accusations. Otherwise, you end up looking like the cow in the Far Side, cartoon who tells her psychiatrist that it’s not her—it’s the rest of the herd that is insane….

    Boyle made himself look worse than the cow. His ditzy thesis was that economists must be nuts to believe both that that governments will rarely prescribe the correct remedy for antitrust violations, but will generally adequately define the scope of the private property rights that are an indispensible predicate to what economists call “market competition.” Boyle sneers that professional economists must suffer from bipolar disorder to maintain both beliefs simultaneously.

    Oddly, I have no difficulty perceiving the perfectly sane distinction that purportedly eludes the erudite Professor Boyle.

    Indeed, it is simple. When a government tries to prescribe antitrust remedies, it must guess what outcome would have emerged from a dispersed of dispersed, consensual private exchange that had NOT been affected by the practical coercion inherent in the unlawful abuse of market power. In other words, the government must try to discern the “right answer” that the market would have produced. Divining this sort of first-best answer by imagining what tomorrow would have looked like had today and yesterday been different ranges somewhere between difficult and impossible. After all, if economists could look at yesterday and today and divine their implications for today, then stock-market prices would be predictable.

    By contrast, when a government defines property rights, it does so because it does not believe that it can use its knowledge of yesterday and today in order to prescribe the optimal outcomes of tomorrow’s trades: Governments define property rights in order to let producers and consumers find mutually beneficial outcomes and experiment with the terms of exchange.

    The enquiry underlying a government’s effort to define the scope of a property right is thus much narrower: Under what circumstances is bilaterally consensual exchange on terms agreed to privately more likely to produce better results, over the long run, than the coercion inherent in mere taking or governmental price-fixing? Given the track record of the latter two options, this task is manageable, and governments performing it can use well-known factors to guide their decision-making (transaction costs, search costs, appropriability, public-good characteristics, tendencies toward natural monopoly, etc). Consequently, Boyle’s accusations of bipolar disorder succeed only in making him look like a reckless, pompous ignoramus.

    More broadly, Boyle is really arguing that you would have to be insane to think that private market exchange could produce better results, over the long run, than centralized governmental command-and-control because the government must play a role in either process (in one case, specifying the best outcome, in the other, defining the private-property rights that let individuals specify their own outcomes). Somehow, it never occurs to Boyle that during most of the 20th century, humanity divided the world roughly in half and subjected this thesis to empirical testing. The results were consistent and unequivocal.

    That is why I find Professor Boyle a generally less-than-thoughtful critic of both “cyber-libertarianism” and the use of market mechanisms generally.

    –Tom

  • Ryan Radia

    Tom, it’s Ryan Radia here. (I wish it were possible to identify oneself without having to type out a sentence prefacing each blog comment!)

    First, and for the record, I’m not an adherent of the free culture movement – though I’m sympathetic to several of its public policy objectives – and I certainly don’t agree with everything Jamie Boyle has written about intellectual property.

    In the case of Bipolar Economics, however, I think Boyle raises an interesting and thoughtful argument. To be sure, defining (and enforcing) property rights is one of the few legitimate functions of government. But Boyle's critique focuses on how “we” (a term he does not appear to define) think about intellectual property, rather than physical property. This distinction is crucial. The exercise of defining rights over physical property is generally far less prone to error than defining rights over intellectual property. You’re completely right in stating that the economics of property rights in physical property are now well understood.

    Importantly, by contrast, the economics of property rights in intellectual property are not particularly well understood. While there is a large and growing body of scholarship that examines the complex economic questions that surround intellectual property, many key questions remain unresolved—and tough new questions seem to pop up each time we turn another “cybercorner.” In Richard Epstein's 2006 PFF paper, “Why Libertarians Shouldn't Be (Too) Skeptical About Intellectual Property,” he articulates this point with his usual brilliance.

    Boyle’s thesis in Bipolar Economics seems to be that pro-market academics tend to underestimate the challenges of designing an intellectual property protection regime that maximizes social welfare. Perhaps Boyle overstates his case – numerous law and economics scholars have published countless articles analyzing the economics of intellectual property in great depth – but, in my experience, it’s also true that many advocates and scholars who purport to believe in “free markets” tend to be overly eager to expand the scope of intellectual property rights without first carefully and critically gathering and assessing the empirical evidence. I find this tendency to be deeply troubling; after all, the harmful social consequences of overprotecting intellectual property can be just as serious as those of underprotecting it.

    Boyle’s comparison between antitrust and intellectual property does seem a bit strained, but I do think we’d be better off today if the Tom Hazletts of the world had applied their rightful skepticism towards antitrust to laws expanding the scope of intellectual property protection. It’s my understanding that the enactment of the DMCA (which includes anti-circumvention provisions that Boyle and I both find very troubling) was largely devoid of any serious economic analysis exploring the law’s implications for social welfare.

  • Mwendy

    Ryan, Mike Wendy here (to keep the theme going). I have to say that I do not share Jones' or Boyle's point of view on the free culture, etc. stuff. They were at the forefront of working to impose FLOSS on governments through law, rule or regulation, denying merit-based choice just to advance their social movement (pushing classic doublespeak – we promote more choice by limiting it – the “it” being proprietary software). They are also intimately involved with Groklaw and Paula Jones (whoever / whatever that entity might be). In fact, a couple years ago, on trying to find Paula Jones (what was I thinking?), I had one of the odder conversations I have ever had in my entire life (not just in the policy world) with Paul Jones, who just couldn't answer one question straight. Needless to say, I do not share your same high opinion of the duo.

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