seeking knowledge and laughter, putting a bullseye on inaccuracy


Businesses Need Anti-Monopoly Policies from Government

A James Fallows article in The Atlantic, "Made in America, Again, reminds us of the paramount importance of government policy with regard to monopoly and market power. Any one or a few massive market players can ruin the market for innovation and small business, which is one of the reasons government should seriously focus on preventing any one or a few entities from growing too large.

When Liam Casey took me through his Highway1 incubator for hardware start-ups in San Francisco, I spoke with 10 (mainly) young entrepreneurs who each hoped to set up a small hardware company somewhere in the United States. Not one of them volunteered tax or regulatory concerns as playing big parts in his or her go/no-go decisions. What they did want was a streamlined system to get their products into customers’ hands. To that end, they were concerned with things like the structure of retail distribution, especially the huge investment in inventory required to get their products carried in big-box stores. “Boring-seeming practical details make a big difference for these start-ups,” James Manyika told me. “If I am a small manufacturer doing something interesting, my chances are much better if I happen to be in physical proximity to a larger company, or to a network of experienced people who can help me get to scale.”

The Birth of the Web

I recently finished You Say You Want a Revolution by Reed Hundt, Chairman of the FCC during Clinton's first term and the beginning of the second term. It is a fascinating and apparently candid account of how the Federal Communications Commission made decisions and dealt with the politics of DC. Beware that Hundt clearly has an ego and point of view -- one would expect nothing less from anyone in that position.

It was a fascinating time - the transition from heavily regulated cable to the birth of the Internet for the masses. It was a transition we were not destined to make merely because Sir Tim Berners-Lee invented the world wide web. Cable companies and the AT&T behemoth wanted to use advances in communications technology to build a network they would control... one where people and businesses would undoubtedly have to ask permission in order to innovate, creating new applications and uses for the network. Perhaps the best feature of the modern Internet is that no one needs to ask permission to create eBay, twitter, or stream Netflix movies... though if Comcast had its way to day, Netflix would certainly have to beg its permission to do that.

At any rate, I found this book quite believable in how the Commission operates and how real decisions are made in DC. Without some of the important decisions that are detailed in this book, we would not have the Internet we do today. That said, some of the decisions could have been better decided... but then Chairman Hundt was no dictator but rather a sort of team leader with some rather petulant teammates who were more interested in themselves than serving the public. Some things just don't change...

The Battle for America's Future: Inches

James Fallows, one of my favorite writers, penned "How America Can Rise Again" in the Jan/Feb issue of The Atlantic. Having recently returned from three years in China, he asks if America is borked (it appears to be) and how we can fix it.

This snippet captures an interesting generational point of view:

“When I was growing up, these bridges and roads and dams were a source of real national pride and achievement,” Stephen Flynn, the president of the Center for National Policy in Washington, who was born in 1960, told me. “My daughter was 6 when the World Trade Center towers went down, 8 when lights went off on the East Coast, 10 when a major U.S. city drowned—I saw things built, and she’s seen them fall apart.” America is supposed to be the permanent country of the New, but a lot of it just looks old.

When I think of the space program, Challenger is more "real" to me than Neil Armstrong's moon walk. That said, anytime I think about these issues, I remind myself that every generation thinks history is coming to an end and things are worse presently than before. We tend to forget that science has kicked Polio's ass as we fixate on the lack of a cure of AIDS or cancer.

Ultimately, we need to wrestle with how many resources we want to put into being the best damn country on the planet. Clearly, we would rather imagine we are awesome at health care than actually be awesome at it. This is also true of broadband, the key utility of the future. To a certain extent, it is childish to focus so keenly on comparing ourselves to international peers - something I think Fallows deals with smartly:

But whatever their popularity or utility in other places at other times, falling-behind concerns seem too common in America now. As I have thought about why overreliance on this device increasingly bothers me, I have realized that it’s because my latest stretch out of the country has left me less and less interested in whether China or some other country is “overtaking” America. The question that matters is not whether America is “falling behind” but instead something like John Winthrop’s original question of whether it is falling short—or even falling apart. This is not the mainstream American position now, so let me explain.

First is the simple reality that one kind of “decline” is inevitable and therefore not worth worrying about. China has about four times as many people as America does. Someday its economy will be larger than ours. Fine! A generation ago, its people produced, on average, about one-sixteenth as much as Americans did; now they produce about one sixth. That change is a huge achievement for China—and a plus rather than a minus for everyone else, because a business-minded China is more benign than a miserable or rebellious one. When the Chinese produce one-quarter as much as Americans per capita, as will happen barring catastrophe, their economy will become the world’s largest. This will be good for them but will not mean “falling behind” for us.

We will do well when others do well. If China falls into turmoil, we will likely suffer more than if China surpasses us in a variety of measures. As long as people want to move here (and we continue encouraging immigration - which is how we continue to get the best scientists in the world), we will be fine.

Though we previously only found the will to invest in science when we were scared shitless of the Soviets, we can choose to invest in science again even without a boogeyman (though we could also justify it because a few Islamic terrorists have returned the right-wing to the bed-wetting tendencies it exhibited during the Cold War). Unfortunately, the larger problem we have is that our political system is failing us. The sound bite society naively believes government must shrink and operate like a business. This naive view totally fails to recognize that government and business have fundamentally different aims and that America thrived when government acted like government and businesses acted like businesses.

Today the economically important technologies include genomic knowledge, information technologies like the Internet, and the geospatial information, from the GPS network, that is built into everything from dashboard navigators to the climate-change-monitoring systems that measure the size of glaciers or extent of forests. Private companies now create the jobs and wealth in each field, but public funds paid for the original scientific breakthroughs and provided early markets.

It couldn’t have been otherwise, Atkinson says. The scale of investment was too vast. The uncertainty of payoff was too great. The risk that profits and benefits would go to competitors who hadn’t made the initial investment was too high. The difference between promising and dead-end technologies was too hard to predict—especially decades ago, when work in all these fields began. So each started as a public program: the Internet by the Pentagon, the Human Genome Project by the National Institutes of Health, and the GPS network by the Air Force, which still operates it. The government could not have created Google, but Google could not have existed without government efforts to establish the Internet long before the company’s founders were born.

Unfortunately, this naive view is vastly overrepresented in both our media and government by loud voices that are amplified by corporations all too happy to foment conflict to maximize their advertising revenues. Add to this our political system, described smartly as thus:

In their book on effective government, William Eggers and John O’Leary quote a former deputy mayor of Los Angeles, Michael Keeley, on why the city is out of control. “Think of city government as a big bus,” he told them. “The bus is divided into different sections with different constituencies: labor, the city council, the mayor, interest groups, and contractors. Every seat is equipped with a brake, so lots of people can stop the bus anytime. The problem is that this makes the bus undrivable.”

What do we do about it? We need to fight for inches. To use a football metaphor, our history focuses on improbably massive touchdown runs and successful hail-mary passes. But that is a disservice to how change happens. Change happens in the inches (as my friend Jim Baller, recently reminded me) - as noted by Al Pacino:

So we need to educate ourself, our friends, and our neighbors. We need to organize. We need to win an inch.

Lessig Video: Fixing Congress

Sure it has been 3 weeks since I wrote anything on the blog. I been busy - big report at work, spring sports in photography (and what a spring for it!) and wedding planning.

But I found something well worth watching in its 1 hour entirety: a great presentation by Larry Lessig. If it is too long for you, watch it in chunks of time you would have used reading my ramblings if I were posting any...

He spends a lot of time explaining how we got to where we are technologically. He details some key government interventions preventing bad behavior by companies. And he goes on to explain why the government no longer seems interested in intervening when companies screw us over and basically retard the progress of all people. It isn't _all_ about broadband.

Markets, Competition Require Good Government

I just picked up "Free the Market: When Only Government Can Keep the Marketplace Competitive" by Gary L Reback. It starts with this quote by George Will (from this column):

It will remind everyone -- some conservatives, painfully -- that a mature capitalist economy is a government project. A properly functioning free market system does not spring spontaneously from society's soil as dandelions spring from suburban lawns. Rather, it is a complex creation of laws and mores...


Why a Public Health Care Option?

One of the key sticking points in the health care reform debate is whether we need to have a public option, and if so, what rules will govern it. Some argue that a public option is absolutely necessary because they have ideological view that something as important as health care should not be run solely by profit-maximizing companies.

For those who do not share that belief, I just finished a convincing piece in The New Republic that explains why not all countries need a public option but that the history of the U.S. suggests we do - a short, pragmatic argument that I find rather convincing. I like this snippet, but it does not do justice to the full (but rather short) article.

In principle, effective government regulation can curb this behavior. In practice, insurers have demonstrated an uncanny ability to circumvent regulations. Just ask the senior citizens duped by deceptive marketing of Medicare supplemental insurance over the years, or the many working-age Americans who bought private insurance on their own and filed a claim, only to have their carriers rescind coverage retroactively after deciding there was some hidden preexisting condition in their distant medical histories.

TNR has featured a lot of health care commentary and coverage - the current issue (July 1, 2009) features a number of articles about health care reform that are interesting and recommended to those following this important issue. For those who are following it very closely, check out the Treatment, a new blog specifically about health care from TNR.

Syndicate content