By Tom Silver
Recently, I’ve been considering the parallels between regulation of the world wide web and regulation of the economy. Though public debates surrounding internet regulation have simmered down for now (remember that whole SOPA thing?), they will no doubt resurface in the future. Meanwhile, debates surrounding economic regulation are only becoming more intense as we approach the election. As someone who spends copious amounts of time surfing the web, I’m firmly opposed to any monolithic legislators dictating the content I can post and see. However, like most Americans, I believe that the government should play at least some role in regulating the economy. Is this a double standard? To answer this, I’ll compare and contrast these two institutions at a fundamental level, and discuss my rationales for taking these seemingly opposing positions.
In many ways, the internet is the ultimate free market. Anyone can be a producer, with opportunities to post original content on Twitter, YouTube, deviantART, SoundCloud, and Blogger just to name a few. On sites like these, anyone can also be a consumer — the only qualification is an internet connection. The amount that tweets, videos, art, music, and blog posts are viewed (or “consumed”) is thus largely based on their quality. A wealthy businessman and a twelve year-old from Detroit have an equal chance of hosting a popular blog or uploading a viral video. The internet seems to have achieved near-perfect social mobility. Sites like Reddit, where content is added and then ranked by millions of users, might even be considered capitalism in its ideal form.
An even playing field seems to exist naturally on the internet, where no global moderators put limits on content production or consumption. A rash conclusion to draw would be that completely deregulating the economy would lead to equal opportunities for all, but would that actually be the case? The answer is unequivocally no. Even in The Wealth of Nations (1776), the proverbial bible of capitalism, Adam Smith recognized that leaving monopolies unchecked would be detrimental for consumers and the economy as a whole (Book I, Chapter 7). Additionally, corporate tactics such as predatory pricing and collusion prevent new small businesses from entering the market, thus decreasing competition. Most economic debates today surround not whether the government should regulate the economy, but how much regulating the government should do beyond preventing these basic natural drawbacks of capitalism. Why, then, does a free market seem to work on the internet?
I propose that the first quality of the internet that helps make a true free market possible is its effortless navigability. There are no obstacles between products and consumers; every public website in the world is just a click away, and they are rarely limited in occupancy. To understand the power of these features, consider a world where at the push of a button, you could teleport to any destination. I’m not talking about if everyone in our world suddenly had this ability, but if from the beginning of mankind, every human was able to teleport. Additionally assume that every public space is able to hold crowds of millions, as is the case for major social websites today.
Disregarding how much fun it would be to teleport, imagine how much faster our society would have progressed in this scenario. News would have traveled instantaneously, and inventions would have been immediately shared around the world. Thinkers would have quickly gathered in the intellectual capitals of the world, where so many ideas would be shouted that only the best ones would be remembered and further explored. People with similar interests would have freely congregated and collaborated. Communication and transportation would never have been an issue, and society would have been able to focus on improving agricultural methods, studying sciences, and enjoying hobbies.
Later in this theoretical society’s development, the ability to teleport would play a major role in industrial and post-industrial economies. First, everyone would have access to the best education; students would teleport to the best schools at all grade levels, and teleport back home in time for supper. This extreme physical mobility would lead to substantially better social mobility. Second, workers would respond to job offers regardless of their locations, and jobs would be filled by the best possible candidates. Thus, although there would have been increased competition, there would also be increased efficiency, leading to more development and more job opportunities for all.
Teleportation would clearly enhance the free market and render many types of government regulation unnecessary. However, effortless navigability does not single-handedly do away with adverse effects of unrestricted capitalism. Thus leads to the second major quality that sets the internet apart from the economy: the disconnect between popularity and purchasing power. In a market economy, popular producers can use the wealth they obtain from selling their goods and services to purchase more goods and services. In contrast, popular producers on the internet cannot turn page views into the ability to personally view more pages. Everyone on the internet constantly possesses equivalent purchasing power, regardless of whether they contribute content. This prevents an impassable gap from forming between the popular, high-output bloggers (analogous to the bourgeois) and the lesser-known tweeters (the proletariat).
The third and final distinguishing characteristic of the web lies in the nature of its content. With few exceptions, content is produced by one person or a small group of people. This content is usually produced for entertainment purposes, and comes in the form of an article, picture, music file, or video clip. Each of these has a very ephemeral value to consumers; at best, people will watch a video half a dozen times. Because of the infinite demand for fresh content and the solitary nature of its production, monopolies will never exist on the internet. No frequent internet user would ever be satisfied with reading the articles of one blogger or listening to the music of one artist. That would defeat the purpose of the internet.
Because of these three fundamental qualities, the internet is able to achieve an even playing field without any regulation. Its navigability, lack of real currency, and perpetual demand for novel content set it apart from a real capitalist economy. After considering these foundational disparities, it is clear that regulating these two entities should not be considered in the same vein. The views that the internet should remain unregulated and the economy should remain regulated are conclusively not in opposition.
A final note on the subject: The only regulation that might one day be beneficial online would ensure that the economy does not get woven into the world wide web. Companies limiting content or automatically redirecting users to their sites would surely damage the integrity of the internet.