Staggering ignorance
March 21, 2008 – 5:05 pm by JohnIn this week’s issue of Nature, John Browning reviews Nicholas Carr’s latest book, The Big Switch. I like reading Nicholas Carr’s blag, Rough Type, for its insights and commentaries on the computer/technology industry and its future.
This post isn’t really about Carr or his book or his blag or the future of technology. It is about a statement made by the reviewer Browning of staggering economic ignorance. A major thesis of Carr’s is that computing and information technology will come to resemble the electricity industry in that they will be “relentlessly commoditized and served up by giant companies” (in the words of Browning). Almost as a side note, Browning says this:
Larger producers of electricity traditionally generate it more cheaply than smaller ones, resulting in a tendency for monopoly, which is why it is heavily regulated.
Are you fucking kidding me?! Large monopolies are regulated because they are monopolies? I didn’t think it was possible to think that. This dolt is clueless about the nature of the marketplace and the State’s interventions into its workings. He is willfully ignorant of the history of economic intervention in the Western world—in the history of the world! If he had made the slightest effort to pick up some knowledge from a half-decent economist at some point in his life—a newspaper column, a book for laymen, a speech, perhaps (but doubtfully) even a textbook—he surely would have learned that governments create monopolies. Governments prop up big businesses, favor them, give them free loans of tax money, protect them from lawsuits, and help them to out-compete, squash, and even outlaw (yes, outlaw) competition. I have tried to convey this message in my blag posts about the telecommunications industry and lending/investing companies (e.g., Bear Stearns) and will continue to decry examples of such monopolizing, competition-stifling, and impoverishing by the State.
I will not categorically refute his assumption that large electric companies can produce large amounts of electricity for cheaper, but I seriously doubt the ability of a large monopoly to do much of anything more cheaply than several smaller companies in non-State-assisted competition in the long run. Short run, maybe. John Browning and millions, perhaps billions, of other people continue to go through life avoiding, denying, or simply ignoring the fact that the State hinders economic competition and technological advancement, it promotes the emergence and flourishing of large businesses (especially monopolies) at the expense of small businesses, and it gradually but persistently suppresses more and more freedoms as it grows. It does these things because every single action, and in fact the very existence, of the State are, by definition, coercive and therefore disruptive of the natural interpersonal relationships and transactions that make up civilization.