Network Neutrality — Without Regulation 351
boyko.at.netqos writes "Timothy B. Lee (no relation to Tim Berners-Lee), a frequent contributor to Ars Technica and Techdirt, has recently written 'The Durable Internet,' a paper published by the libertarian-leaning CATO institute. In it, Lee argues that because a neutral network works better than a non-neutral one, the Internet's open-ended architecture is not likely to vanish, despite the fears of net neutrality proponents, (and despite the wishes of net neutrality opponents.) For that reason, perhaps network neutrality legislation isn't necessary — or even desirable — from an open-networks perspective. In addition to the paper, Network Performance Daily has an interview and podcast with Tim Lee, and Lee addresses counter-arguments with a blog posting for Technology Liberation Front."
human nature (Score:5, Insightful)
Re:human nature (Score:1, Insightful)
And the worst thing is that many of those so-called libertarians favor the government in the current individual freedom issues we're having (eg: the Patriot Act) and when it comes to 'impose freedom' to other nations.
Oh, wait... (Score:3, Insightful)
$traceroute slashdot.org
traceroute to slashdot.org (216.34.181.45), 30 hops max, 40 byte packets
1 10.100.56.1 (10.100.56.1) 17.348 ms 17.801 ms 18.228 ms
2 10.220.17.1 (10.220.17.1) 3.171 ms 3.270 ms 5.564 ms
3 * * *
4 * * *
5 * * *
.....
28 * * *
29 * * *
30 * * *
The gist (Score:3, Insightful)
There's also a nice helping of "The government is the worst monopoly of all, and we should never allow them to pass laws to restrain the actions of near-monopolies, because hey, the market will work it out!"
In other words, we should trust that despite the massive amount of money and energy the companies controlling our "tubes" are putting into fighting network neutrality legislation, they won't ever abuse the privilege to screw us if we just leave things the way they are. But if they are not allowed to screw us, that's when we have to worry about monopolistic behavior!
Color me unimpressed by the overwhelming force of logic there...
Re:In Other News... (Score:4, Insightful)
The life of the law (Score:4, Insightful)
"The life of the law has not been logic; it has been experience. The law embodies the story of a nation's development...it cannot be dealt with as if it contained the axioms and corollaries of a book of mathematics." - Oliver Wendell Holmes, Jr.
It is for this reason that the internet will continually be subject to attack. It is a public resource and history has taught us that public resources must be managed, regulated, rationed, and controlled. People here on slashdot and in the technical community believe that the internet is different, that it should not be subjected to the same restrictions that are placed on other public utilities like the roads, electricity, or other infrastructure. But our community is ignoring hundreds, arguably thousands, of years of human history which has inevitably converged towards the same result -- Public resources must be managed resources.
This is an unpleasant truth, and an unpopular one. We're terrified, in many cases rightly so, of the government coming in. But witness what the lack of government regulation has done. When the internet was first opened to the public, there was no commercial interest, but as commercial interests moved in there was no central governing authority. And so a myriad of organizational nightmares have evolved in every aspect. The DNS system has factured, with lawsuits and international pressure abounding. Peering agreements between large ISPs have become power battles that have sometimes resulted in significant fractions of the network being inaccessible to the whole, or degrading performance. We have governments erecting giant firewalls, and the thousand cultures of the world now battle for control over what goes in to their part of the network. Everybody has their own ideas, and it is now little more than anarchy. And none of these battles is concerned about performance, democracy, or the other ideals that net neutrality activists advocate.
We were so scared of the government that we let corporations come in and seize control of the infrastructure. Now the future of the internet is a question of economics, not idealism, and corporations are battling and lobbying to become the largest and most powerful. Consolidation is happening in the ISP market in every country in the world. And as that consolidation continues to occur, and fewer players are in the market, it will bias ever more heavily towards control and regulation... But it will be a control based on economics favorable to the corporate interests, not the users, not the private citizens.
It's time to admit that we need government involvement. It's time to sit down at the negotiating table and decide what the fairest way to ration and regulate this resource is. That's the only consideration of the law, and it's best we do it soon before these corporations become so entrenched that only the most desperate of solutions will bring relief. And once we decide what we, as a country, want to do with this resource, then we need to set about making treaties with other countries to bring some level of regulation to a global level.
This is going to happen. It has to happen. The only consideration now is how to guide this process toward a fair outcome.
Corporations cannot self-regulate. (Score:5, Insightful)
Surveying the wreckage of the credit crisis, Alan Greenspan says he made one very big mistake.
The free-market cheerleader and former maestro of the U.S. Federal Reserve Board conceded yesterday that he wrongly thought banks had an inherent interest in shielding their institutions and their shareholders from risk.
That assumption turned out to have been dead wrong as financial institutions brought the banking system to the brink of failure in recent months after loading up on exotic mortgages and risky derivative products such as credit default swaps.
"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," Mr. Greenspan bluntly told a U.S. congressional committee exploring the role of regulators in the financial crisis.
"Something which looked to be a very solid edifice and, indeed, a critical pillar to market competition and free markets did break down.
"And I think that ... shocked me. I still do not fully understand why it happened."
The staunch belief that banks could manage their own tolerance for risk underpinned Mr. Greenspan's aversion to heavy-handed banking regulation during his record 18-year tenure at the helm of the Fed.
Mr. Greenspan was an early devotee of author Ayn Rand, whose 1957 novel Atlas Shrugged inspired a generation of libertarian thinkers who believe in the right of individuals to live entirely for their own interest.
Re:human nature (Score:5, Insightful)
I challenge you to show me an unregulated market where the government doesn't have its hands in it in some way. Go ahead...I'm waiting.
And WTF? libertarians support the PATRIOT act or unilateral action against sovereign nations? you know some funny libertarians, and I'm glad I haven't met them.
Comment removed (Score:3, Insightful)
Re:The CATO institute? (Score:5, Insightful)
Since this comment was made by ValuJet, I'm going to stick my fingers in my ears and shut my eyes and scream "nyah nyah nyah" and hope that I don't hear anything that disagrees with my existing biases.
I call BS... (Score:3, Insightful)
There are enough cases, eg, NebuAdd, NX-domain wildcarding, P2P traffic disruption, where the ISP gains a large net benefit from behaving in a non-neutral manner, and as high-bandwidth ISPs are a duopoly at best for most individuals, unless you can reveal their practices AND the threat of regulation & marketplace rebellion, the net becomes unneutral.
Remember, the "market will take care of itself" was also promulgated by CATO in respect to Wall Street, and we know how well that worked out.
Re:In Other News... (Score:5, Insightful)
Our recent meltdown is due to regulations that encouraged bad loans. Our future meltdowns will be due to the assumptions by banks that they don't need to be responsible because the government will step in with billions of dollars to bail them out if anything goes wrong.
It's silly to blame the current mess on lack of regulation when the banks, financial lenders, and mortgage provides were regulated.
Re:In Other News... (Score:0, Insightful)
You do realize that there were still regulations on the banking industry?
The only problem was that these regulations were FORCING banks to take risky loans.
If banks were allowed to act in their own best interest, they would have. Sadly, the Democrats (and Barney Frank in particular) refused to allow the banks to act in their own self interest.
And, thanks to the economy collapsing, the nation has decided to throw the power to the very people who caused the collapse in the first place. McCain worked hard to prevent it, and he got thrown by the wayside in favor of a very well-spoken but completely unknown and inexperienced candidate.
Look at the market after it learned Obama had won: it completely tanked. There's a reason for that.
You can't call this a failure of the free market, because we don't HAVE a completely free market. It's further proof that ANY regulation causes MASSIVE problems.
Re:human nature (Score:5, Insightful)
It's a good thing that the human propensity to seek power and do evil only exists when that human works at a company, and never when that human works in government.
We're really lucky this is the case, since if someone in government were ever corrupt, they could fine you speciously, jail you without trial or due process, seize your home via eminent domain, or just plain kill.
Re:human nature (Score:3, Insightful)
And the worst thing is that many of those so-called libertarians favor the government in the current individual freedom issues we're having (eg: the Patriot Act) and when it comes to 'impose freedom' to other nations.
What? Way to build up some straw man libertarians that are completely against everything a small-L libertarian stands for. Those people are simply not libertarians.
Re:human nature (Score:3, Insightful)
And the worst thing is that many of those so-called libertarians favor the government in the current individual freedom issues we're having (eg: the Patriot Act) and when it comes to 'impose freedom' to other nations.
Umm, what?
From the Internet Encyclopedia of Philosophy [wikipedia.org] and quoted on the Wikipedia Libertarian page [wikipedia.org]:
Libertarians are committed to the belief that individuals, and not states or groups of any other kind, are both ontologically and normatively primary; that individuals have rights against certain kinds of forcible interference on the part of others; that liberty, understood as non-interference, is the only thing that can be legitimately demanded of others as a matter of legal or political right; that robust property rights and the economic liberty that follows from their consistent recognition are of central importance in respecting individual liberty; that social order is not at odds with but develops out of individual liberty; that the only proper use of coercion is defensive or to rectify an error; that governments are bound by essentially the same moral principles as individuals; and that most existing and historical governments have acted improperly insofar as they have utilized coercion for plunder, aggression, redistribution, and other purposes beyond the protection of individual liberty.
Methinks you're confusing Libertarians with some other group. Either that or deeply confused.
Net Neutrality Law is Necessary (Score:3, Insightful)
The article is just full of utter nonsense that should be clear to anyone knowing anything about the internet. The ONLY way to gaurantee that ISPs will not censor the net is to gaurantee that they dont, in the only truly enforceable way, with law. It is all too easy for the ISPs to implement hardware and software that will restrict access to or impede access to certain content. The consumers, given the near monopoly position of the ISPs, would have little other choice than to put up with this. It could also be that only exorbitantly priced service tiers would offer unrestricted access to the internet, meaning access to the full internet would only be available to a small, wealthier segment of the population. Furthermore, even though an uncensored common carrier, whether it is postal or electronic, is essential to free speech, I am unsure if enough consumers would realise the great importance of this to take demand a change of their ISPs behaviour. ISPs of course can just reject that request and leave consumers without recourse.
Net neutrality can only be assured, adn free speech therefore, with it being required by law and ISPs being recognised for what they, as common carriers and that they should be required to carry all information over their networks unmodified. To allow otherwise is to open the door to censorship, and to make these corporations the functional equivalent of the Chinese government, blocking whichever sites which suit them. This would have an effect exactly equivalent to government censorship that it should be considered the same as government censorship.
Net nuetrality is also unnecessary for the ISP. They claim it is needed to raise revenue to maintain the network. This is utterly incorrect as they can use bandwidth tiers to do this. Speed and performance levels should apply without discrimination to all content flowing over the network.
Net neutrality is to protect consumers rights and free speech rights, by assuring every person can access all information made avialable on the internet and publish their own content which can be accessed to anyone else, without it being blocked.
We can expect conservative organisations to be prejudiced against the interests of free speech and the people and to be high biased towards large corporate interest whom they represent and who finances them. They are highly ideologically biased to an approach which endangers individuals freedoms in favour of large corporations, by dismantling the voice of the people, our democracy, and removing all restrictions from corporations which turns them into an unelected plutocracy which takes the functional role of a totalitarian government. I oppose totalitarianism in the form of corporation or government, often either which are different in name only, and therefore I oppose censorship of the internet by corporations or government, and I support Net Neutrality laws passed by our democratic government to assure that ISPs are not permitted to block access to content.
Re:human nature (Score:5, Insightful)
The key to arguing for the pure libertarian point of view is that whenever you're presented with an example of the market failing, you figure out some minor way in which it is regulated, and blame that for the failure rather than the lack of stronger protections.
For instance, if a monopoly becomes abusive, it's not happening because they are unregulated and haven't been restrained from anti-competitive practices, it's because the tax system has made it impossible for smaller companies to effectively compete with the monopoly. Or maybe it's that the minimum wage has increased the cost of the monopolist's labor to the point where they must charge abusive prices in order to stay in business.
Or if a financial industry falls all over it's ass by making stupid bets left and right, it's not that the industry went wild taking on too many risks, it's that entitlement programs sent them the...uhh...implicit message that they should...lend money to people that will never pay it back..?...yeah, something like that! Maybe. Oh wait, I meant Sarbanes Oxley, err maybe the Fed's meddling...whatever, the specific reason doesn't matter, just say it forcefully enough and people will lap it up!
It's a neat trick, actually - any time one element of your preferred extremist approach turns out to fail, you simply claim that it's because the whole thing must be implemented at once, and any deviation from that can bring the whole house of cards tumbling down.
Unfortunately it's also exactly the same philosophical bullshit that Communists have been arguing since their first failed attempts at Utopia. I'm really getting tired of people failing to understand that balance is necessary in all things, including the level of regulation...I even tend to lean libertarian on a lot of these issues, as I don't think much government meddling is usually a good thing, but the tendency to pretend that there are no situations where it's appropriate seems just as deluded as the idea that the government should control everything. We should be pushing to roll back the right regulations, not abolish them wholesale without considering that some of them may actually be helping us.
Re:The gist (Score:1, Insightful)
Ya, that's why I can't take libertarians. For individuals, their ideas work... but once you create a legal fiction that blocks most liability for individuals, things break down. Individials leading their private lives should be left alone; corporations need to be closely watched.
Re:In Other News... (Score:1, Insightful)
Um I'm pretty sure Freddie and Fannie don't have much to do with credit default swaps or whatever all the other crazy, leveraged debt instruments that absolutely NO ONE can figure out now.
And I'm pretty sure those are what got us into this mess.
And by "pretty sure" I mean not sure at all, except for the fact that your theory where regulation FORCED banks to provide enough bad loans to COLLAPSE THE ECONOMY is ludicrous.
BTW, don't banks and such have something called 'lobbyists?' Don't they donate something called 'money' to politicians? As a result, isn't the U.S. one of the most regulation-free developed economies in the world?
Oh, those poor banks. All that money and all those politicians in their pocket, and they still had NO CHOICE but to follow EVIL REGULATIONS (cause companies NEVER break the law - *cough*Enron) and cause a RECESSION.
Yeah, clearly regulation is to blame.
Comment removed (Score:3, Insightful)
that's insane (Score:3, Insightful)
the meltdown is due to human psychology. i did not know you needed regulations to create panic and fear. i suppose if we had no regulations, the very concepts of panic and fear would disappear?
fact: an unregulated market is subject to times of irrational exuberance, and times of panic and fear. there is absolutely no prerequisite to these truths, and no escaping them. the only way to save ourselves form the excesses of irrational excitement or hysteria is regulation
if you don't believe or understand that, you ar ein some sort of denial and choking on some massive propaganda
Net Neutrality Law is Suicide (Score:2, Insightful)
Net neutrality is to protect consumers rights and free speech rights, by assuring every person can access all information made avialable on the internet and publish their own content which can be accessed to anyone else, without it being blocked.
Your crazy if you think that is what the government will actually do. Look at the direction those same governments have gone so far with respect to civil liberties and freedom of speech. You want to hand the keys to the entire communication infrastructure over to them and say, "promise to do the right thing, okay". You will be delivering censorship on a silver platter, in a more augmented and frightening way. Large corporations can become corrupt, that's inherent in human nature, but there are steps you can take to combat them. Large governments, tend to become tyrannies and removing them typically requires lots of people to die. On an unregulated Internet we are free to write our own applications, encrypt communication and take our own steps to work around greedy, short sited ISPs. Once the government is involved, you will either be a terrorist or pedophile if you do so. Think about it because once you hand it over you will never get your truly free Internet back again.
Greenspan is a liar (Score:4, Insightful)
Greenspan was one of the people responsible for changing regulations that led to this crisis. Once he became FED chairman in the 1980's he started circumventing the Glass-Steagall Act of 1933.
http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html [pbs.org]
In 1933, Senator Carter Glass (D-Va.) and Congressman Henry Steagall (D-Ala.) introduce the historic legislation that bears their name, seeking to limit the conflicts of interest created when commercial banks are permitted to underwrite stocks or bonds. In the early part of the century, individual investors were seriously hurt by banks whose overriding interest was promoting stocks of interest and benefit to the banks, rather than to individual investors. The new law bans commercial banks from underwriting securities, forcing banks to choose between being a simple lender or an underwriter (brokerage).
In August 1987, Alan Greenspan -- formerly a director of J.P. Morgan and a proponent of banking deregulation -- becomes chairman of the Federal Reserve Board. One reason Greenspan favors greater deregulation is to help U.S. banks compete with big foreign institutions.
In December 1996, with the support of Chairman Alan Greenspan, the Federal Reserve Board issues a precedent-shattering decision permitting bank holding companies to own investment bank affiliates with up to 25 percent of their business in securities underwriting (up from 10 percent).
Late 1999:
After 12 attempts in 25 years, Congress finally repeals Glass-Steagall, rewarding financial companies for more than 20 years and $300 million worth of lobbying efforts. Supporters hail the change as the long-overdue demise of a Depression-era relic.
Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant. The previous year, Weill had called Secretary Rubin to give him advance notice of the upcoming merger announcement. When Weill told Rubin he had some important news, the secretary reportedly quipped, "You're buying the government?"
Greenspan was the major player in repealling the legislation which would have kept this mess from ever happening. It is very doubtful that Greenspan didn't know why Glass Steagall was enacted in the first place.
Of course he is going to plead ignorance. He doesn't want to get put behind bars and flogged by the masses by admitting he is a criminal.
Re:human nature (Score:5, Insightful)
Government regulation of markets is essential. Even Adam Smith knew that markets need regulation to stay free. Without regulations, markets quickly devolve into oligopolies.
Re:In Other News... (Score:5, Insightful)
Please elaborate - what exactly were the banks coerced into doing that they didn't think was in their self interest? Because everyone that I know in the industry was thrilled to be offering easy loans to anyone and trading CDOs left and right, mainly because they saw massive returns on their investments while the housing market was booming, not because some Democrat held a gun to their head and told them they had to.
I know a lot of people that were in the middle of this, and many that are now unemployed as a result, and I have yet to hear any of them seriously claim that this was caused by anything but a bunch of risky and difficult to price assets spiraling off each other and running things into the ground...
Oligopolies? (Score:5, Insightful)
You could call the US market an "Oligopoly."
But that's understating the case.
In >80% of the US market currently, the customer is functionally given three choices: Dialup, Monopoly ISP (Cox, Comcrap, AT&T, etc), or NOTHING. They don't have a "choice" at all.
For example: no DSL is built to my home. Verizon can't/won't build out FiOS because, they claim, they don't "own the physical phone lines" so while I could switch to them as my phone provider, they have no ownership/authorization to push FiOS. Functionally, I am limited to Dialup, Comcrap, or NOTHING and even the dialup companies are dying fast.
The 'net cannot stay neutral WITHOUT legislation when you have big companies like Cox and Comcrap that have monopoly status over far too many of their customers. Hell, that's how we got this fucking-stupid "250 GB" traffic cap setup as well.
In an actual competitive market, the customer can go to the best provider. In a monopoly market, the customer is inevitably given the "choice" of either crap service or no service. Unfortunately, government regulation to protect consumer rights (which was signed away by both Clinton and Bush, little by little) is necessary because otherwise the market devolves into monopoly control everywhere, and the only "competition" happens on the fringe edges where you might have two big mostly-monopolies trying to horn in on each other's monopoly turf.
Re:human nature (Score:5, Insightful)
Ah yes, the good old libertarian cop-out. If a free market fails, find some tiny little bit of government involvement, and blame that. If a free market succeeds, take credit and ignore any government involvement.
Re:human nature (Score:5, Insightful)
I challenge you to show me a large bunch of people where you don't get a form of government within a few years - whether it's a dictatorship or otherwise.
Similarly given a large market, you will get some form of regulation whether you like it or not.
What people should worry about is not "lots" vs "little" regulation. What they should worry about is good vs bad regulation. With Laws (like code), quality not quantity matters more.
If greedy corporations have the most say in the writing of regulation, the Public are unlikely to get good regulation, after all the creation of regulation that benefits the Public is not going to be one of their top priorities.
If the Public prefer to vote for politicians/legislators who got the most money from greedy corporations, it should be no surprise what is likely to happen...
A thought experiment (Score:3, Insightful)
Which would you rather have?
1) A bunch of large corporations dueling it out amongst themselves, with the ones who gain and maintain the largest market share being the most successful.
2) A bunch of large corporations dueling it out amongst themselves, with the ones who gain and maintain the ears of the most powerful government officials being the most successful.
Yes, companies will abuse their positions in the name of greed. There is no way around that. When you get government involved, however, you're simply raising the stakes. Sure, you can vote out the current crop of greedy politicians who favor the corporations, but you're still stuck with the bad laws they made because it's a hell of a lot easier to pass a bad law than to repeal one. Libertarians think that it's better to pass no law than a bad law.
Additionally, as other posters have done, I challenge you to point to some concrete examples of the free market failure you believe is so rampant. (You might want to avoid pointing to the Great Depression, as that has been debunked before and will no doubt be debunked again should you do so.)
Re:human nature (Score:3, Insightful)
I've seen that a lot in this thread.
What we commonly think of as "unregulated" has been shown to, in reality, still be regulated in some way.
So, despite the fact that removing some of the regulation made things worse, the idea is that removing all of it would have avoided the problems?
And the belief that a completely unregulated market will solve, or avoid, all sorts of problems is so deeply held completely in spite of the fact that, according to the proponents of this ideology, such a market has never been seen in all of human history?
Re:human nature (Score:2, Insightful)
Re:In Other News... (Score:4, Insightful)
Yes, it definitely was the CRA, passed back in 1977. It was a secret time bomb. It magically didn't cause problems for 25 years, but then *BOOM*, it wrecked the economy by forcing banks to give loans to poor people.. Er, even though most of the fishy loans went to middle class people.. in the last five years.
Okay. You sure convinced me. Blame Carter!!!
you're ignorant of history (Score:3, Insightful)
go study the banking panics of the 1800s
panic sets in, feeds off itself, and destroys the entire marketplace
your comment is in direct contradiction to established historical fact
what is wrong with you free market fundamentalists?
a little regulation HELPS. it can do nothing but help. let go of your bizarre irrational fear and your cult-like approach towards free markets. you're not logical or reasonable in your approach, you're like arguing with a creationist: you've taken a single act of faith: that a completely free market is always good, and in spite of all common sense and reasonable evidence to the contrary, you will not let go of your religious deathgrip on a fundamentalist absolutist concept
the best market is a sandbox: free within certain parameters, regulated when the marketplace swings to extremes
go ahead, dispute that. i expect you to. you're not a reasonable person, you're a member of a fundamentalist religion, beyond the reach of reason
no, a completely free market is not a good thing, it is a stupid thing
Re:Corporations cannot self-regulate. (Score:2, Insightful)
Re:neutral network works better??? (Score:4, Insightful)
Choosing a car analogy was the right thing to do, but it's the wrong analogy.
The roads are neutral in a very important way: any appropriately licensed driver is permitted to drive any appropriately registered vehicle on any public road suitable for the physical form of the vehicle. There are no public roads on which you may drive a U-Haul truck but not a Ryder truck.
Similarly, I want the internet to be neutral, in the sense that it doesn't matter where a packet comes from or where it's eventually going. ISPs are welcome to charge more for different levels of service. I'm not going to complain about reasonable levels of packet shaping, such as cutting down on P2P to allow VOIP through at low latency. The problem is if I have to pay more to get Google packets rather than Yahoo's.
If there were enough competition going on, we could let the market sort itself out. However, most people have limited choices in broadband providers (I'm very lucky; I've got three choices), and it's not like I can start my own last-mile internet service, getting easements and rights-of-way to run my own lines. For most people, if one or two providers do something they don't like, the only other choices are dial-up or satellite.
Re:Libertarians love censorship (Score:3, Insightful)
Okay! That was trolling, this is arguing.
First, the free market has well known failure modes: natural monopoly, where the marginal cost of entry into the market increases dramatically after the initial entry. Roads, sewers, electric and phone lines are a great example. Information asymmetry is another, and externalities are the third.
Second, money is power, and power can be used to oppress. A free market is a similar choice mechanism to a democracy, except that in a free market, it is one dollar, one vote. The more money you have, the more you can use your money to change the parameters of the market.
Third, choice. A free market does not provide real choices. It provides the illusion of choice. And where it does provide real choice, it seeks to hide the real differences in those choices, making picking the better item or service difficult.
Fourth, Destruction of intrinsic motivations. A competitive market destroys intrinsic motivation to do something. For instance, go to a bar and ask all the women if they will sleep with you. You may get lucky. Now, same thing, except offer to throw in ten dollars. You will strike out every time, because you have destroyed intrinsic motivations.
Fifth, duplication of effort. A competitive market requires duplication of effort where a socialist system does not. Each company must repeat the efforts of all other companies in a given market, instead of sharing effort.
Sixth, closed communication channels. In a competitive market, innovations aren't shared as freely as they could be in a socialist system, because that would be giving away advantage.
Seventh, waste and mismanagement. A competitive market develops its own special kinds of parasites, who add nothing of value to society yet make a lot of money. Advertisers, for instance. Or the insurance industry. These people are professional manipulators, con artists, gamblers and frauds, yet they are richly rewarded in a capitalist system.
Eight, real world examples. No company is set up internally as a free market system. None. If the free market is so great, why don't companies organize themselves that way internally?
There's plenty more where that came from, but lets see if you can refute even one of these points before I bring out the big guns.
Re:In Other News... (Score:3, Insightful)
The banks were not forced to provide such loans. The Community Reinvestment Act can only be blamed for a very tiny percentage of the subprime loan market. What really sparked the boom was the realization on the part of banks and other mortgage originators that very few buyers of mortgage securities actually scrutinized the mortgages that are in the tranches. As long as the default rate stayed underneath the modeled default rate, no one cared that the fundamentals were unsound.
As for Fannie Mae and Freddie Mac, what happened was that they were trying to compete with other subprime lenders and therefore relaxed their own lending requirements. Fannie Mae and Freddie Mac did not pull private industry into this mess; rather, it was quite the opposite.
Re:Oligopolies? (Score:3, Insightful)
The competitive ISP market you desire will arise on its own in the next five years because of smarter, more effective broadband technologies. At the heart of this is spectrum, which erases the rules of the game as they existed up until now and replaces them with conditions far more conducive to entry (and exit).
Laying a wire to each home is really, really expensive on a per-household basis. Verizon has spent upwards of $1,000 per home to add FiOS. Building completely from scratch is even more costly.
But wireless is a whole different story. Sure, you've got to have base stations, which require backhaul, but the costs involved there are much more bearable than those involved with old-fashioned overbuilding.
To see why wireless broadband is such an important vehicle for broadband competition, consider Wi-Max. It's already giving DSL a run for its money in Baltimore, because it offers reliable throughput of 3Mbps down/2Mbps up for $25 a month, with no strict usage limits. Of course, Wi-Max isn't the end-all of wireless, but merely a stopgap until Long-Term Evolution really takes off.
LTE will completely change the game when it starts getting widely deployed in a couple years. After the 700mhz band is vacated in a couple months, T-Mobile, Sprint, Verizon, and AT&T will all work on building out LTE networks, which will offer at least 10Mbps for the same price as a typical home broadband connection.
Six to eight ISP choices may not mean as many choices as we have for burgers, but it's still a lot of competition, especially compared to what we have now. And it is surely enough to ensure that ISPs can't get away with the heavy-handed tactics that have angered so many of us recently.
It wouldn't surprise me if by the time Congress finally gets around to regulating ISPs, the whole justification for regulating them in the first place is no longer logically valid.
Re:human nature (Score:3, Insightful)
Re:human nature (Score:3, Insightful)
No, that's not how to argue against libertarians, it is how to criticize their refutations of your arguments against them. The "straw-man" comment is not accurate, as it is a common libertarian claim that any perceived problem with the free market is actually a problem with the regulations already in place, and that the free market would function fine if only it were less regulated. Which, as if on cue, is exactly what you are arguing when you say...
And yes, I absolutely do. Why? Because it was profitable for quite a long time to make those loans, and whenever something is profitable over a long enough period people will leverage the hell out of it; conveniently enough, the government lifted the cash requirements on the biggest banks a few years back, which is what let them push all the way up to 30-1.
Now, you may continue to argue that the reason it was initially profitable was due to the cheap money, and that's due to the Fed's existence, and so on. And you may even be right - regulation is a tricky beast, and it's very hard to say which regulations can stand on their own and which ones must either stay or go in groups.
But again, the problem with that argument is that the ultimate conclusion tends to be that in order to avoid any mess, we would need to have practically no government whatsoever, which is as unrealistic and unproductive as suggesting that for communism to work we'd need a totally benevolent ruling government in power with control over everything. Neither one is going to happen, and either one might work (who knows? Nobody's ever actually seen either in practice...). In the libertarian "utopia" in order to avoid bubbles and crashes like this one we'd still need to rely on the free market to somehow keep firms from leveraging up the way they like to, and I've still yet to hear a plausible mechanism that would keep them from doing that (clearly their fear of potential failure is not enough to do it - to a certain extent they were doing the right thing, particularly from the individual traders points of view, since they walked away with several years of enormous bonuses before they lost their jobs, and it was probably a net win for many, if not most of the traders).
Or on the other hand we could just suggest that the government limit the leverage ratios like they used to, and require that anyone dealing in CDOs have enough cash on hand to deal with the obligations. Yes, it might be paternalistic, but as we've seen, these things spread far beyond the companies themselves since our whole country runs on credit, so if the banks can't be trusted to accurately assess their own risks, we are within our rights to set some limits for them. To me that seems like a much more practical and straightforward solution than ripping the system that we have to shreds, which won't happen anyways.
BZZZT! REALITY GROUND ERROR! (Score:3, Insightful)
Really, you think "wireless broadband" will be the savior? It's got more problems than wired (latency issues, distortion/signal strength issues, materials penetration issues, interference issues).
And if that weren't enough, if anything "Wireless Broadband" is already MORE restricted than wired (DSL/Cable/FiOS) offerings. For example, both Verizon and AT&T cap you at FIVE GB. Your own example (Wi-Max) sneakily enters into underlying "service provider" agreements [computerworld.com] to pull the same stunts.
Again: a FIVE GB [dslreports.com] cap, even when advertising their service as "unlimited." Use anything over that, and they cut your account instantly (while insisting, of course, that if you want to get out you have to pay them severance charges).
"Wireless broadband" is not your savior.
Re:human nature (Score:3, Insightful)
I challenge you to show me an unregulated market where the government doesn't have its hands in it in some way.
It doesn't exist. What libertarians don't grasp is that it CANNOT exist. Libertarianism is utopianism similar to anarchism (in practice, it's nearly identical) and equally foolish.
I used to be a libertarian. I grew out of it.
Re:human nature (Score:3, Insightful)
Let's have a libertarian utopia in some alternate universe, and put all the libertarians there. You and I will stay in this one so we can continue to eat in restaurants that have to meet health codes.