Archive for August 30th, 2010

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WSJ review of The Enlightened Economy

August 30, 2010

Lynne Kiesling

I recently recommended Joel Mokyr’s The Enlightened Economy and mentioned that I was going to have a more lengthy discussion of it soon. I still have things I want to say about it, but Trevor Butterworth fills some of the void with his review in the Wall Street Journal. Butterworth has some pointed (and I would argue accurate) criticism of modern economics and the overly materialist and anti-scholarly focus of economic theory; he also doesn’t spare policymakers when he notes that

… its perceptive examination of the birth of economic prosperity holds many arresting insights for our fraught economic times, where freedom is increasingly associated with government regulation and politicians appear all too-willing to accommodate new varieties of rent seeking.

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Klein’s review of The Wealth of Networks

August 30, 2010

Lynne Kiesling

I like Peter Klein’s review in the Independent Review of Yochai Benkler’s The Wealth of Networks. Apart from giving a good overview of the Benkler work, Peter offers some original insights that are worth thinking about. For example:

To ensure open access to the networked economy, Benkler favors a public-ownership network infrastructure, loose enforcement of intellectual property rights, subsidized R&D, and “strategic regulatory interventions to negate monopoly control over essential resources in the digital environment” (p. 21).

This approach has some problems. First, although information itself cannot be “owned,” the tangible media in which information is embedded and transmitted are scarce economic goods. Information may yearn to be “free,” but cables, switches, routers, disk drives, microprocessors, and the like yearn to be owned. Such innovations do not spring from nowhere; they are the creations of profit-seeking entrepreneurs that consumers or other entrepreneurs purchase to use as they see fit. Of course, private property can be nationalized. Federal, state, and local governments can ownbroadband lines as they own streets and highways, or they can treat network infrastructure as a regulated public utility. If these resources are to be treated as public goods, then what about computers, iPods, and cell phones? Are these gateways to the Information Superhighway also part of the digital commons? If individuals can own cell phones, can they sign contracts with service providers to deliver whatever content is mutually agreed upon? Content providers and consumers are free to terminate their agreements if they are unhappy. In this sense, a private-property regime allows as much “autonomy,” in the libertarian sense, as a commons-based system. Moreover, if one takes into account the problems of collective ownership, about which Benkler is largely silent, the case for the commons becomes even more problematic.

There he articulates clearly one of the aspects of Benkler’s arguments that has always bothered me, but I couldn’t pull together clearly enough. Here he does. Peter also makes some observations about Benkler’s definition and concept of liberty and about the endogeneity of culture and opinion that are thought-provoking. A worthy read.

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