Net Neutrality is not about freedom

This post is addressed to all the proponents of net neutrality on the grounds of the freedom of choice of the consumer. But net neutrality has nothing to do with freedom.

The principle of net neutrality is that internet service providers should treat all content equally so that the consumers choice of content is not influenced by the speed at which that content is available.

Let me rephrase that principle without changing its meaning. Internet service providers should not be allowed to contract with content providers on mutually beneficial terms with regards to the speed at which the content will be made available to consumers.

Rephrased like this, it is clear that the principle is not about protecting the freedom of the consumer but about restricting the freedom of the service or content providers to spend their money as they see fit.

Proponents of net neutrality claim that its violation will make it more difficult for startups to compete with bigger companies because they do not have the money to pay the service providers for preferential treatment. That is true. All of the following is true too.

Startups do not have the money to pay great salaries. So how about pay package neutrality? Companies should not be allowed to pay more to attract employees because higher salaries influence the choices of employees.

Startups do not have the money to buy large offices. So how about office size neutrality? Companies should not be allowed to have more spacious offices because spacious offices influence the choices of employees and even of clients.

Startups do not have the money to purchase expensive routers and server farms. So how about infrastructure neutrality? Companies should not be allowed to have redundant server capacity.

Startups do not have the money to purchase advertisements on television. So how about air-time neutrality? Companies should not be allowed to spend more than a certain amount on advertisements.

Startups do not have the money for expensive quality control. So how about quality neutrality? Companies should not be allowed to spend more that a certain part of their budget on testing.

All of these absurd examples indicate the absurdity of the principle of net neutrality. The internet is nothing more than servers, routers, cables, spectrum rights etc. All of these are privately owned and privately maintained. Decisions on the use of these resources rightfully belong to the owners of these resources. That is what freedom means.

Like all violations of freedom, the principle of net neutrality hurts the profitability and efficiency of the most successful producers. And that hurts all of us.

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Extract from Discovery of Freedom

Here is a fascinating extract from Rose Wilder Lane’s Discovery of Freedom

The bows of ships had always been bowls. They floated, they rose to the tops of waves; they stayed on the surface of water. They were safe. The Rainbow’s bow curved inward; the prow was as sharp as a knife. It would cut into the water; with wind in the sails it would drive headlong to the bottom of the sea. Sailors looked, and backed away. Sail, on a thing like that? straight to Davy Jones’s locker?
Griffiths did not intend this ship to rise on the waves. Every rise and fall was a loss of speed. He designed the Rainbow to slice straight through the waves and keep going, fast.

Independence? day

Another anniversary of India’s independence is approaching. And there are children on the streets, at traffic signals, selling paper flags to anyone who wants to celebrate the occasion. Wonder what they do on other days? They sell a lemon and two (or is it more?) chillies tied with a string to anyone who wants to ward off evil spirits. So what exactly are we supposed to celebrate? Independence? Whose independence? From whom? More than 60 years ago, thousands of people gave their lives to achieve political “independence”. What did they achieve? They replaced British rule with democracy. Some of the British rulers were doubtless oppressing a people willing to be oppressed. But others were rendering a service – the white man’s burden. After “independence”, India’s government was led by men of the second kind – British educated socialists who resented the white man’s burden because they wanted to make it their own. They were men with a “noble” purpose; to teach the uneducated masses how to live – by taking control over their lives. These men had “noble” dreams, but their dreams were not dreams of what they would do with their lives; they were dreams of what they would do with other people’s lives. That meant that no one else would be allowed to dream. This was supposed to be independence. Inevitably, this “independence” has produced the worst kind of dependence imaginable. The politician is dependent on the poor, the uneducated, the superstitious, the irresponsible and the incompetent for their votes. And it is in his interest to let them remain as they are. And these people are dependent on the politician for favors or promises of favors. This dependence is the essential and defining feature of the kind of unchecked democracy that India’s leaders established after independence. The modern intellectuals call this dependence “corruption”. But the manifestation of the essential nature of a system is not corruption. Unchecked democracy is corrupt to begin with.

There is no such thing as political independence. The concept of independence is properly restricted to the realm of a person’s mind. A man’s thoughts, wishes, desires can be independent – of the judgements of other people. Like all virtues independence applies to individuals, not to a collective. And like many other such concepts, this one too has been stolen by collectivists to disguise their true goals. What the Indian political leaders fought for was not independence – of any kind. What they fought for was sovereignty – the state of affairs when a country is governed by people of the same race, religion or culture that have historically occupied it. There is nothing particularly desirable about sovereignty as such. Some of the most oppressive places in the world to live in suffer from sovereignty. It does not matter whether a country is governed by natives or not. What matters is the system of government.

The proper socio-political goal is freedom, not some meaningless independence or a tyrannical sovereignty. Freedom to believe and express one’s ideas – without being censored by the government or by thugs (M.F. Hussain); freedom to marry the person of one’s choice – without being murdered by one’s family or community (honor killings); freedom to develop a technology and market it – without having to buy the rights to do so (3g auction); freedom to buy land and use it for any purpose – without having to rely on the government (Tata Nano); freedom to contract with people on mutually agreeable terms – without being tied by labor laws; freedom to spend one’s money as one chooses – without having it confiscated for subsidies and hand-outs; freedom to run a school – without having to declare it as a non-profit; freedom to start a political party – without having to swear by socialism…

When will India become free? I am not holding my breath (remember the lemon and chillies?). And I am not going to celebrate “independence” day either.

The scope of free will

I was debating the issue of anarchy and was directed to this article (pdf) by Prof. Moshe Kroy which highlights some fundamental differences between Rand’s philosophy and Rothbard’s including the scope of free will.

According to Rand’s theory of human freedom, man’s only fundamental freedom, the sole domain in which he is capable of being a “first cause”, the only realm where he can exercise absolutely unpre-determined choice, is his own consciousness. Man’s basic choice is between identifying the facts of reality through an act of consciousness, and evading the knowledge of these facts. This freedom does not extend to man’s decisions and actions: Your decisions and actions are the necessary product of your values and premises, Rand claims.

Rothbard’s theory of man, however, assumes another dimension of freedom in man: the freedom to make decisions, to originate action. For Rothbard values, and their hierarchy, are not the product of perception alone, though, clearly, his writing implies that awareness of the facts is highly relevant to your choice of values.

In Rand’s words (also look at the related concept of focus)

That which you call your soul or spirit is your consciousness, and that which you call “free will” is your mind’s freedom to think or not, the only will you have, your only freedom, the choice that controls all the choices you make and determines your life and your character.

In any hour and issue of his life, man is free to think or to evade that effort. Thinking requires a state of full, focused awareness. The act of focusing one’s consciousness is volitional. Man can focus his mind to a full, active, purposefully directed awareness of reality—or he can unfocus it and let himself drift in a semiconscious daze, merely reacting to any chance stimulus of the immediate moment, at the mercy of his undirected sensory-perceptual mechanism and of any random, associational connections it might happen to make.

Psychologically, the choice “to think or not” is the choice “to focus or not.”
(Emphasis mine)

I am not quoting Rothbard because I have not read his works. Aristotle The Geek has directed me to this article by Rothbard but the focus of that article is more on refuting determinism than the scope of free will.

How does one decide which theory is correct? The existence of a choice to focus or not (ranging from no focus to full focus) is immediately available to introspection. When I am solving a difficult problem, I am consciously choosing to be fully focused. When I try to go to sleep, I consciously suspend my focus. But does free will extend beyond that? Am I free to choose the object of my focus or the subject of my thoughts? Am I free to choose the outcome of my thoughts? I don’t think so.

Firstly, there are occasions when I get distracted. This is an indication – though not a proof – that I lack control over the object of my focus. There are occasions when I want to stop thinking about something but cannot. This is an indication – again not a proof – that I lack control over the subject of my thoughts. There exist such things as mental habits and character. These concepts would surely be meaningless if I were free to choose the outcome of my thoughts.

Secondly (and less importantly), one can apply Occam’s razor. The freedom of choice to focus is necessary to explain human behavior. It is also sufficient. Why assume a greater freedom without evidence – especially when free will sits uncomfortably with known physical theories? And until we discover physical theories that can explain free will, I don’t think this issue can be proved either way.

On these grounds, I agree with Rand’s position.

How is this relevant to anarchy? I will deal with that in a separate post.

Contradictory ideas

I recently had a couple of meetings with a senior banker. In the first meeting, during some light talk, he mentioned his support for a signature campaign for the stricter implementation of the PCPNDT act (which bans sex determination tests). In the second meeting, he mentioned how certain regulations recently imposed by the Reserve Bank of India are so oppressive that his bank can either comply with them fully or serve its customers well but not both. Presumably he does not like the regulations and wants them removed.

Both the PCPNDT act and the banking regulations are a violation of the right of individuals to freely contract with each other. The advocates of both justify them by claiming that they serve the “public good”. But recognizing this involves thinking in terms of principles. That is something that even the most successful businessmen seem incapable of. As another example, just read this piece on the budget in today’s Times of India by Narayan Murthy, the founder of Infosys. He starts off complaining about the fiscal deficit and then goes on to write that all the allocations in the budget are inadequate! Do these people ever bother to think?

If you make x private…

T.R. asks a question that begins with “If you make education private”

The question should be the other way round, “if you make education <i>public</i>…”
Education is just a service rendered by some people (teachers, school administrators) for others (students). Like any other service, it has to be paid for in some form. The default is (should be) for the service beneficiaries to pay the service providers. The default is <i>not</i> to have a service public. My point is that you are starting from a socialist framework (where everything is public). But that is not a natural framework to start with. A framework (when it is explicitly created by interactions of men) needs justification. Your question already assumes that there is some justification to have education be public.
You should start from the natural state of affairs, where education like other services is a private service. Now ask “Should this service be made public?” Immediately several questions arise: How is this service (education) different in principle from other services? What sort of differences require a service to be public? Who decides what these differences are? What happens in the case of a disagreement? Note that none of these questions arise when the service is private. Individuals make all the decisions themselves, with no physical force being used.

Suppose, for the moment, that you find the answers to these questions. Several other questions now arise. What constitutes a proper education? Should mathematics be a part of this education? Should astrology be a part of this education? Should religious teachings be a part of this education? What sort of clothing is acceptable for students (or teachers)? What costs are acceptable? What compensation is acceptable for the service providers? Should parents who do not accept the public answers to these questions be allowed to teach their own children? Should they then still be taxed? Note that I am not making up any of these questions. They are all actual issues that have come up at one time or the other. There have been petitions claiming that maths should be optional. There has been a court case regarding the inclusion of astrology. The issue of teaching creationism (or intelligent design) keeps coming up in the U.S. There are court cases in places like France, U.K and Turkey about scarves, turbans and burkhas. There are teachers unions in some places in India. I remember reading about a teachers association in the U.S. that does a lot of lobbying in the government. There is an active homeschooling movement in the U.S. I remember there was a proposition about tax credits for homeschooling parents (I don’t know if it was passed). Again, note that none of these questions arise when the service is private. If a parent does not like a particular school, he can choose another one or maybe not choose any school at all.

Once you think it through, it is obvious that any answers (no matter what political process is used to arrive at it) to these questions will involve the initiation of physical force against individuals. You might argue that I am mixing up examples from the U.S. (a developed country) and India (a developing country). That India needs public education (even if it involves some force) if it is to develop. Note that (in its somewhat credible form) this is a variant of the benevolent dictator arguement (For the democratic form, look at today’s frontpage of The Times of India). The problem with that arguement is it ignores man’s nature and the conditions required for progress. Why is India a developing country (despite decades of public education) while the U.S. achieved near universal literacy with mostly private schools (according to this article in Wikipedia – “The school system remained largely private and unorganized until the 1840s. In fact, the first national census conducted in 1840 indicated that near-universal (about 97%) literacy among the white population had been achieved.”)? The benevolent dictator arguement mixes up causes and effects. Freedom is the cause, progress (of which education is an indicator) is the effect (look at the history of Europe for example). The two cannot be interchanged. India will remain a “developing” country until people realize the value of freedom. Just compare the results of 60 years of public education and 20 years of limited economic freedom. Which of the two have caused progress?

Social planning

In a response to a forwarded post, a friend made the following argument (I am putting only its essence and in my own words, since I have not taken permission to make it public)

Market forces can produce outcomes that are worse off for everyone in the system. A social planner can, (in some cases at least) improve on the efficiency of the market. Pigouvian tax is an example.

In his response, he acknowledges that it might be difficult in practice for the social planner to obtain all the information required, but says that it would be very surprising if the social planners actions could never lead to efficiency improvement.

Consider the crux of the argument (emphasized above). There are three aspects to it that should be considered.

1) What are market forces? They are an abstraction that refers to all the judgements made by individuals interacting with each other under some conditions. If one is talking of a free market, these conditions are the absence of any coercion. Note that for the concept of coercion to be clear, a system of property rights (at the very least) needs to be in place (More on this in 3). If one is to prove the statement above (in a mathematical sense, which is what my friend meant), these market forces need to be modeled. This leads to 2.

2) How are choices evaluated? In actuality, every individual evaluates and weighs choices in a unique manner depending on the context of his knowledge, his hierarchy of values etc. This evaluation is neither necessarily rational nor quantitative. Yet if a mathematical result is to be obtained, both the evaluations and the decisions based on these evaluations need to be quantified. The evaluation (sometimes called “utility”) is quantified by assigning a monetary value to every “variable”. The decision making process is quantified by assuming that each individual acts to maximize utility (the sum of the monetary values of the results of all his choices).

3) What is the system? In actuality, the system is the set of laws that determine the kind of interactions that occur among individuals. In the model, this translates to assumptions that certain factors will remain constant over time.

Once these three aspects are modeled, one ends up with a set of equations that can be solved to determine what utility each individual will be able to achieve. The solution represents an outcome. In certain cases, feasible outcomes may exist that are better for each individual. (This usually happens when there are “externalities” which can be considered mathematically as non-linear effects). The most obvious problem with this argument is that it involves a huge number of variables, so man variables that no human (or computer) can solve the set of equations in any meaningful time. That however, is not my argument. My friend already acknowledges this fact and claims (plausibly) that in certain cases, a social planner may find an approximate solution that is still better than the free market one. My arguement is that: The fact that a (mathematically) feasible better solution exists, does not mean that it is possible to achieve in actuality. The reason is that the sort of actions required to achieve the feasible solution change the system (point 3) that was analyzed. In actual terms, such actions necessarily involve violating the property rights of individuals, thus changing the interactions between people, the monetary values they attach to different choices and the strategies they adopt to maximize their values. In plain language, attempts to achieve the “optimum” solution are lost in a host of unintended consequences. The information that says a better solution is feasible exists not with any single individual but with a vast number of individuals. To put that information to use, even if a social planner is able to approximate it, he needs to communicate it to all the people who will need to act on it. But force (and social planning is all about force) is a very destructive way of communicating. Successful communication is done with persuation and persuation is what the free market is all about.

Now consider a much simpler moral argument. Every value that man achieves is a result of using his mind. And the essential requirement for the mind to work is freedom. When man is free to act as his mind instructs him to do and is responsible for the consequences of his actions, his mind works the best. When he is forced to act against the judgement of his mind, his mind becomes passive and he loses the motivation to use his mind (something that never figures in a mathematical model). In the most fundamental sense of the word good, force can never be good for man.

In his response, following my post on propaganda, my friend clarified that what he meant by propaganda was a one-sided presentation of an idea that does not consider all sides of an issue. The moral idea (in the paragraph above) when supplemented with the practical arguments and all the evidence of the past century becomes a fundamental political principle. And there is no other side to the issue left. As I wrote in this post, as long as one is unsure of something and has not integrated ideas into principles, it is good to be circumspect and consider all pros/cons of all sides of an issue. But on issues on which it is possible to have relevant principles, there is only one side. Fundamental principles do not allow any evaluation in shades of gray. Whether I should be free to act on my own judgement or whether I should allow a social planner to force his whims on me or whether I should become a social planner myself is not an issue where I will weigh the pros/cons of the alternatives.

Finally for the sake of completeness, consider the Pigouvian tax/subsidy to correct for externalities. The first point to be noted is that most externalities go away when property rights are properly defined and implemented. And in fact a tax on pollution is actually quite close to what a property-rights solution to the “problem” of pollution would be. As for the subsidy on education, one can just look at the state of subsidised public education in the U.S. to see how it works. Externalities cause problems in model-based economics because they are non linear effects and most models are linear (eg, price = marginal utility) (for the simple reason that non-linear models are untractable). Man’s mind is not a linear device however, and a linear model does it no justice. Just think of the salesman who negotiates a price (= marginal utility?) or the investor who depends on a virtuous cycle where increase in supply creates a non-existant demand to recover his investment.

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