In his debut essay for the new Agglomerations blog, my former colleague Caleb Watney, now Director of Innovation Policy for the Progressive Policy Institute, seeks to better define a few important terms, including: technology policy, innovation policy, and industrial policy. In the end, however, he decides to basically dispense with the term “industry policy” because, when it comes to defining these terms, “it is useful to have a limiting principle and it’s unclear what the limiting principle is for industrial policy.”
I sympathize. Debates about industrial policy are frustrating and unproductive when people cannot even agree to the parameters of sensible discussion. But I don’t think we need to dispense with the term altogether. We just need to define it somewhat more narrowly to make sure it remains useful.
First, let’s consider how this exact same issue played out three decades ago. In the 1980s, many articles and books featured raging debates about the proper scope of industrial policy. I spent my early years as a policy analyst devouring all these books and essays because I originally wanted to be a trade policy analyst. And in the late 1980s and early 1990s, you could not be a trade policy analyst without confronting industrial policy arguments.
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I’m going to close out my series of essays about Tim Wu’s new book, The Master Switch: The Rise and Fall of Information Empires, by discussing his proposed solutions. In the first five essays in the series, [1, 2, 3, 4, 5] I’ve critiqued Wu’s look at information history as well as his use of terms like “market failure,” “laissez-faire” and “open” vs. “closed.” I argued there’s a great deal of over-simplification, even outright distortion, in his use of those terms throughout the book.
Anyway, let’s run through the basics of the book once more before getting to Wu’s proposed solutions. By my reading of
The Master Switch, Wu’s argument essentially goes something like this:
- Information industries go through cycles. After a period of “openness” and competition, they tend to drift toward “closed,” corporate-controlled, anti-consumer models and outcomes.
- The resulting “monopolists” then block much innovation, competition, and free speech.
- Consequently, “the purely economic laissez-faire approach… is no longer feasible.”
- Moreover, information industries are more important than all others (“information industries… can never be properly understood as ‘normal’ industries”) and even traditional forms of regulation, including antitrust, “are clearly inadequate for the regulation of information industries.” (p. 303).
- Thus, special rules should apply to information-related sectors of our economy.
Again, I’ve challenged some of these assertions in my previous essays, specifically, Wu’s incomplete history of cycles and the fact that he greatly underplays the role of governments in “locking-in” sub-optimal market structures or, worse yet, creating those structures through misguided public policies or regulatory capture. Wu discusses some of those factors in his book, but he tends to regard them as secondary to the inquiry, whereas I believe they are crucial to understanding how most “closed” or anti-competitive scenarios develop or endure. Instead, Wu simplistically suggests that “the purely economic laissez-faire approach… is no longer feasible,” even though no such state of affairs has ever existed within communications or media industries. They have been subjected to varying levels of indirect influence or direct control almost since their inception.
Regardless, what does Tim Wu want done about the problems he has (mis-)diagnosed? Continue reading →
Berin has already done a fine job tearing apart this latest effort by 10 activist groups to break the Internet by imposing burdensome regulation or punishing legal liability on Internet operators for the crime of trying to deliver relevant advertising to users that can actually pay for the content and services given away to users for free. To that, I would add my deep disappointment that the Electronic Freedom Foundation (EFF) choose to join this cabal. After all, the other members of the coalition are frequently heard calling for regulation of one variety or another. But EFF always prides itself on supposedly avoiding online regulatory schemes. That’s what makes it so surprising that they chose to jump on this bandwagon for an Internet industrial policy in the name of “protecting privacy.”
EFF’s embrace of regulation is particularly inconsistent given their excellent filing in the FCC’s “Child Safe Viewing Act” proceeding this summer. As I’ve previously noted, this proceeding raises the specter of “convergence-era content regulation” with Congress authorizing the FCC to look into “advanced blocking controls” for “wired, wireless, and Internet” platforms. EFF’s comments rightly stressed dangers of expanded content controls or Internet regulation, and noted the many “less-restrictive means” available to the public that provide compelling alternatives to government regulation: “Blocking technologies are widely available in the market and do not require further government support.” And EFF has been instrumental throughout the years of making the case in courts for applying the less-restrictive means test and strict scrutiny when it comes to government efforts to regulate speech.
Why, then, does EFF take the diametrically opposite position when privacy concerns enter the picture? Continue reading →
A coalition of ten self-described “consumer and privacy advocacy organizations” today demanded legislation that would restrict the collection and use of data online for customizing advertising based on Internet users’ interests. I’ll have more to say on this but here are my initial comments:
These so-called “consumer advocates” are actually anti-consumer elitists. Not only do they presume that consumers are too stupid or lazy to make their own decisions about privacy, but they ignore the benefits to consumers: more relevant advertising plus more and better content.
Advertising has been the “mother’s milk” of media in America since colonial times and the future of media depends on the ability of publishers to replicate that revenue model online. Micropayments, donations, subscriptions alone simply can’t fund a vibrant marketplace of ideas. Only personalized advertising can sustain publishers through the Digital Revolution.
Regulatory advocates haven’t demonstrated any harm to consumers that would justify such sweeping preemptive regulation. By strangling funding for new media, such regulations would amount to an “Industrial Policy” for the Internet. Instead, policymakers should focus on educating consumers and empowering them by promoting development of better privacy management tools.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.