Governments have played a major role in the IT sector

[Lantern]

Contrary to what libertarians seem to think the government played an important role in the rise of the Internet and the IT sector in general. Here are just a few of the ways:

Government-funded research was important in creating the Internet:
ARPANET ,where the Internet began, was created by DARPA.
The NPL, funded by the British government, played a key role in developing the concept of packet-switching.
The Cyclades network funded by the French govenment was also influential in the design of the early Internet.
The world wide web was created at CERN which was funded by European governments.
Mosaic an early and important web-browser was created at the government-funded NCSA

Hardware: Much of the hardware running our electronic devices comes from East Asian countries like Taiwan and South Korea. These countries are not libertarian and the government played a huge role in setting up these industries. Arguably it has been one of the most successful examples of industrial policy and without it I doubt the cheap, really powerful hardware we use would have come so quickly.

Human capital: Many of the top engineers in the technology industry were educated at state-funded universities around the world including the US. For example many of the top computer engineers in Silicon Valley come from the IIT's which were created by the Indian government. State-funded institutions in China and Russia have played a similar role as has UC Berkeley in the US. Subsidized technical education around the world has increasad the supply of high-quality computer engineers which in turn has fueled the technology sector.

Competition policy: Many industries in the tech industry have massive economies of scale and network effects. Without competition policy these would end up being completely dominated by one or two companies which would have nearly full freedom to extend their monopolies. Antitrust policy can often seem clumsy in practice but I believe it has hugely beneficial deterrent effect on large companies preventing them from abusing their monopoly. In a world without competition policy, we would probably live in a technology world completely dominated by AT&T and IBM which would ruthlessly squash any company which posed the slightest threat.

I am sure there are plenty of other important public policies particularly when it comes to setting standards and ensuring openness. Not to mention the importance of military and space funding in the development of the computer industry.

The bottom line is that governments around the world have played a massive role in the technology sector. Without government intervention I don't believe we would have anything remotely like the Internet and technology industry we have today.

[Rhythmdvl]

No disagreement, but did you mean to post in this thread?

[Lantern]

No. I am not quite sure what that thread is about but this one is just about the government and the IT sector. I was skimming through the Libertarian Nations thread and I wanted to start a discussion on this tangent.

[TriPolar]

Why didn't I think of that? (I have no objections to a merger)

[Duckster]

A cite is needed for this, but it is my understanding the US Government is largest purchaser and user of IT products and services in the world.

[Bricker]

Originally Posted by Lantern

The bottom line is that governments around the world have played a massive role in the technology sector.

Agreed.

Without government intervention I don't believe we would have anything remotely like the Internet and technology industry we have today.

Not demonstrated by the OP. This is the fallacy of Hypothesis Contrary to Fact:

This fallacy consists of offering a poorly supported claim about what might have happened in the past or future if circumstances or conditions were other than they actually were or are. The fallacy also involves treating hypothetical situations as if they were fact.

"If it weren't for Marie Curie, we would know nothing about radiation today!"

[Rhythmdvl]

Originally Posted by Lantern

No. I am not quite sure what that thread is about but this one is just about the government and the IT sector. I was skimming through the Libertarian Nations thread and I wanted to start a discussion on this tangent.

Originally Posted by TriPolar

Why didn't I think of that? (I have no objections to a merger)

Great minds and all that (or grape mints, I don't know). Lantern, you may want to check out TriPolar's thread--he had the same notion as you.


I don't get how anyone can seriously argue that anything near a modern, industrialized state could evolve without substantial government intervention and subsidization. Take any industry and you can barely swing a cat without smacking poor Fluffy's head into some critical area that exists because of massive government involvement. I suppose you could handwave away some things (e.g., railroads were purely private, because the government had no right to the land it was granting in the first place) or daydream about some steampunk wet dream--but not if you harbor any hopes of being taken seriously.

The IT sector being created through purely private-sector action? Not even plausible in an Ayn Rayn fantasy.

[Lantern]

Originally Posted by Duckster

A cite is needed for this, but it is my understanding the US Government is largest purchaser and user of IT products and services in the world.

I don't know about this but I decided to have a look at the list of top supercomputers and it's completely dominated by government-funded institutions from around the world including public universities. It's a good indicator of how important the government is in cutting-edge research.

[Kimmy_Gibbler]

Originally Posted by Lantern

Contrary to what libertarians seem to think the government played an important role in the rise of the Internet and the IT sector in general. . . .

I agree, as most others in this thread. What is surprising is that so many IT departments are lousy with libertarians. And moreover, libertarian density is so bottom-heavy. That is, the lower on the totem pole, the more likely you'll find a libertarian. (At least in my experience.)

Originally Posted by Bricker

Not demonstrated by the OP. This is the fallacy of Hypothesis Contrary to Fact

No, I'm sorry but this is the Fallacy of Using Fallacies as Magic Spells. As your link points out, the Fallacy of Hypothesis Contrary to Fact requires that the claim be poorly supported. The OP lays out how government assistance made possible or accelerated research at critical junctures in IT development. This at least establishes a prima facie case that that government assistance played a significant role. You seem to think that just because you used Proper Noun Capitalization together with the word "fallacy," you have somehow dealt with the points raised in the OP. That is not the case. To meet your burden, you should adduce some particular facts that tend to show that the absence of government assistance at those points would not have retarded the progress of IT R&D.

Also two demerits for failing to use Latin or Greek.

[Lantern]

Originally Posted by Bricker

Not demonstrated by the OP. This is the fallacy of Hypothesis Contrary to Fact:
"If it weren't for Marie Curie, we would know nothing about radiation today!"

I am not sure what other evidence is needed. When the government massively subsidizes some activity you get a lot more than what the private sector alone would produce. In the last century the government has massively subsidized science and technology research. If it hadn't done this, far less research would have been conducted and the technology sector wouldn't be nearly as advanced as it is today.

Though the private sector has done some great research at places like Bell Labs its incentives to do basic science are pretty limited. In recent decades shareholders have put pressure on corporate labs to cut down on basic science.

[Rhythmdvl]

Originally Posted by Lantern

Though the private sector has done some great research at places like Bell Labs its incentives to do basic science are pretty limited. In recent decades shareholders have put pressure on corporate labs to cut down on basic science.

Would Bell labs have been Bell labs had it not been for government intervention? Around the turn of the century they argued for--and were granted--a monopoly on telephone service in exchange for regulation.

So again, someone arguing that Bell labs is any kind of an example (not that you are) is smashing his poor kitten's head against government intervention and subsidies that made the ostensibly private sector institution possible.

Ah, cite. Wiki, but a cite nonetheless.

[TriPolar]

Originally Posted by Bricker

Not demonstrated by the OP. This is the fallacy of Hypothesis Contrary to Fact:

Ok, first of all, are you saying Lantern doesn't believe that?

And assuming you simply object to the conclusion, if the word 'remotely' wasn't in that statement, would you have the same objection?

[Mr Smashy]

While I'm reluctant to even post here, since I'm not sure what you're arguing, I'd say that the Government contribution to IT is akin to building the interstate highways. You build the infrastructure, then (as a libertarian would say) you get the hell out of the way and let markets use them to produce stuff, raising the standard of living, paying taxes, and in general making people's lives better.

If you think of the interstates - they build them, then police them. They maintain them (sort of), they add regulations for use (speed limits, wide loads, HOV, etc). In IT, they facilitated the internet buildout, they develop and enforce standards, they operate CERT, they fund ICANN and other stuff, and they pass laws to beat down spammers and fraudsters.

[An Arky]

Well, in general, all this lovely capitalism wouldn't be flourishing without being able to operate in a stable, secure environment, which is largely the responsibility of, and thanks to, the big, bad government. Libertarians, on this point, at least, are about as grounded in reality as Puff The Magic Dragon.

[Deeg]

Originally Posted by An Arky

Well, in general, all this lovely capitalism wouldn't be flourishing without being able to operate in a stable, secure environment, which is largely the responsibility of, and thanks to, the big, bad government. Libertarians, on this point, at least, are about as grounded in reality as Puff The Magic Dragon.

Oy. Libertarians want a stable, secure environment with rights protected by the government.

[An Arky]

I haven't seen a lot of evidence of this. Oh, sure, it's mentioned in the abstract, but the proposed actions/inactions say otherwise. Libertarians seem to be tonedeaf to the law of unintended consequences, among a plethora of other things.

[John Mace]

Originally Posted by An Arky

Well, in general, all this lovely capitalism wouldn't be flourishing without being able to operate in a stable, secure environment, which is largely the responsibility of, and thanks to, the big, bad government. Libertarians, on this point, at least, are about as grounded in reality as Puff The Magic Dragon.

What is your evidence that libertarians don't support a stable government. Or is it your contention that only a "big, bad" government is a stable government? If so, then do you have a cite for that?

[gonzomax]

http://www.catalogs.com/info/gadgets...-internet.html The internet and computers were certainly got a huge push from the government.

[humanafterall]

Libertarians also want the Government to know what I'm doing in my bedroom at any given time. I'll tell them what I'm doing in my bedroom at any given time, but I won't say it here, so as to defend the possibly virgin eyes, but this should give you an idea: What is the sound of one hand clapping? lol.

[Lantern]

Originally Posted by Mr Smashy

While I'm reluctant to even post here, since I'm not sure what you're arguing, I'd say that the Government contribution to IT is akin to building the interstate highways. You build the infrastructure, then (as a libertarian would say) you get the hell out of the way and let markets use them to produce stuff, raising the standard of living, paying taxes, and in general making people's lives better.

If you think of the interstates - they build them, then police them. They maintain them (sort of), they add regulations for use (speed limits, wide loads, HOV, etc). In IT, they facilitated the internet buildout, they develop and enforce standards, they operate CERT, they fund ICANN and other stuff, and they pass laws to beat down spammers and fraudsters.

Funding highways, R&D and public universities goes well beyond the scope of strict libertarian principles. Libertarians would argue that all these things could be provided by the private sector which is of course true. However government investment can greatly accelerate the creation of infrastructure and research and this has played an enormous role in rise of the IT sector which is my point.

This is especially true for countries like Taiwan and South Korea. In the 1970's these countries were still quite poor and their corporations were far behind US giants like IBM. Without serious government investment and encouragement the private sector would not have made the massive investments which are needed to be competitive in computer hardware.

This is a good paper (pdf)which looks at the rise of the tech sector in Taiwan and the role of the government. Compared to South Korea the government played more of a facilitating role but it was still enormous and certainly beyond the scope of libertarian principles. Basically Taiwanese policymakers studied the Silicon Valley model and consciously set out to build a similar ecosytem with research universities and venture capitalists at Hsinchu Park.

The boldest attempts to imitate Silicon Valley were the establishment of the
Hsinchu Science-based Industrial Park and of a Taiwanese venture capital industry. The
National Science Council (NSC) sponsored the Hsinchu Science Park in 1980 to attract
foreign and Overseas Chinese investments in research-oriented companies. The Park was
located near two leading technical universities, National Chiaotung and Tsinghua, and
ERSO labs were moved to the area as well. In addition to actively recruiting Taiwanese
who were working abroad to return home, Government-owned banks offered to invest up
to 49% of the shares in joint ventures, and the Park Administration provided generous tax
incentives to qualified (research-intensive) firms, including a five-year tax holiday
followed by a maximum tax rate of 22%.

Both universities mentioned were public-funded and the ESRO was a government-funded research institute.

[Sam Stone]

This is a crazy argument - When governments consume anywhere between 30 and 60% of the GDP of a nation, OF COURSE they are going to be involved in markets. This is not proof of anything other than the existence of big governments.

And no one disputes that government research labs can produce new technologies and breakthroughs. Of course they can. The question is whether they are uniquely capable of this, or whether the free market would engage in research and development without government funding or direction. Simply stating the existence of big government programs is not an argument against libertarianism.

There's another logical problem here, which is that it's easy to make a case for government when you only consider the benefits and ignore the costs. In the other thread, some of us have provided evidence that government R&D actually displaces private R&D (i.e. private R&D spending has gone up when government R&D spending goes down), and the same pattern exists for charity.

There is one obvious case for government R&D, and I'm surprised none of you have bothered to make it - R&D that is very expensive, and for which no known market exists. The Large Hadron Collider, the Cassini Orbiter, Hubble, etc. There is much dissention among libertarians regarding this type of R&D - some would say, "hey, if people don't want to pay for it voluntarily, tough noogies." I'm a little less libertarian that others in this regard, and I think there is room for government-funded R&D in basic research where it's clear that no market-based solution exists.

The notion that the internet would not exist today without government just does not pass the smell test. In this case, there was clearly an increasing market demand for online services - they were was already a burgeoning market in it and big money was being invested. There's nothing magical about TCP/IP - it's just one protocol out of thousands. Had government never bothered with distributed networking at all, we'd still have an internet today - it would look different, and we don't know if it would be better or worse.

You could even make the case that government slowed down the growth of the public internet, because it created a network that was made available to government institutions and educational facilities, lowering market demand for such a network, and then dragged its feet on making it available to commercial interests. That created a parallel private communications industry - CompuServe, AOL, The Well, thousands of BBS's, modem companies like Hayes and US Robotics, etc. We'll never know where that industry might have taken us had those government networks not existed, because you can't know the path not taken.

The larger point made in the other thread though is that the initial backbones and protocols are not what 'the internet' is today. The real internet is the vast collection of web sites and services that have built up organically without any government direction at all. The internet today is largely the result of spontaneous order caused by a free market, not government planning. It is an example of a libertarian virtual society. Anyone can set up a web site. The barriers to economic engagement on the internet are very low. There is no government oversight 'protecting' internet users from each other. There's just a whole lot of voluntary transactions.

As for the market consolidating around large companies and becoming monopolistic - first of all, not all Libertarians oppose anti-trust laws. Second, this effect is grossly over-stated in most cases. IBM didn't lose its power because of anti-trust - it lost it because it didn't anticipate the micro-computer and minicomputer markets and bet the farm on the IBM 360, only do see its market share get eaten by companies like DEC and Data General and Honeywell and others, and then later by Apple and other small computer manufacturers.

Libertarians would also argue that the best examples of monopolistic power come from companies colluding with government, or from the government itself.

[Lantern]

Originally Posted by Sam Stone

And no one disputes that government research labs can produce new technologies and breakthroughs. Of course they can. The question is whether they are uniquely capable of this, or whether the free market would engage in research and development without government funding or direction. Simply stating the existence of big government programs is not an argument against libertarianism.

The point is that the IT sector in general has been massively subsidized by the government over the decades which has played a big role in its evolution and growth. The subsidies have existed on many levels: R&D, technical education,hardware etc. It's highly implausible that these subsidies merely displaced private sector spending. As a matter of basic economics, massive government subsidies for any good tends to increase the total supply. And the incentive for the private sector to do basic research from a purely profit maximizing point of view are quite weak. The glory days of Bell labs for example came in an era when the financial system was tightly controlled and shareholder pressure was much weaker. In recent decades, as noted above, shareholders have put pressure on corporate labs to do less basic research.

Also note that the government not only funds its own research it also subsidizes corporate research both directly and indirectly. Do you think that reducing subsidies for corporate R&D would increase corporate R&D? In a strict libertarian world we would probably have less corporate research along with much less government research. Without public universities around the world there would be far fewer computer science graduates. Without the public policy in Taiwan and South Korea, it's unlikely their hardware sectors would have risen so quickly and prices fallen so quickly. Arguing that the IT sector and the Internet would have come along at remotely the same pace requires a massive leap of faith.

As for the market consolidating around large companies and becoming monopolistic - first of all, not all Libertarians oppose anti-trust laws. Second, this effect is grossly over-stated in most cases. IBM didn't lose its power because of anti-trust - it lost it because it didn't anticipate the micro-computer and minicomputer markets and bet the farm on the IBM 360, only do see its market share get eaten by companies like DEC and Data General and Honeywell and others, and then later by Apple and other small computer manufacturers.

I don't think libertarians understand how much "market competition" as it exists today is a product of government intervention through competition policy. This is because in many industries, a single firm in a monopoly position will make more profits than the sum of the profits made by competing firms. If Boeing merged with Airbus it would face much less competition and therefore could charge higher prices. It would also gain economies of scale and be able to eliminate duplication. This merged firm would almost certainly make more profits than the sum of the two firms' profits today so shareholders would approve. It's competition policy which prevents these kinds of mergers from taking place (and of course in this case it was public policy which created Airbus in the first place). Without competition policy you would see a massive increase of monopoly power across many industries especially those with large economies of scale. After all it was exactly this kind of merger wave in the late 19th century which led to the formation of "trusts" and "antitrust" policy to restrain them.

In the IT sector, IBM would have never allowed their business to be undermined by the PC industry and others in the 80's in a world without competition policy. At the simplest they could simply have merged with their rivals like DEC to reduce competition. Against the fledgling PC industry they could have employed predatory pricing, financing it with profits from their other divisions. Probably they would used a combination of the two, threatening predatory pricing and also offering to buy rivals. With their massive clout they would have reduced their rivals' access to suppliers and distribution channels.

Without competition policy I bet large companies would be vastly more skilled at destroying upcoming rivals. There would be specialized courses offered in business schools on just the right mix of tactics to deal with upstarts. Big companies would hire specialists whose only job is to identify potential competition and neutralize it. IBM would never allow the likes of Microsoft, Apple and Intel to threaten them and the Internet itself would probably be a walled garden controlled by AT&T. When evaluating the effects of competition policy, what matters is not so much the stuff that makes the news as the stuff that is so flagrantly illegal that most companies don't even bother: like price fixing, or mergers between two dominant companies in an industry.


Finally you seem to be saying there are some libertarians who would accept government-funded R&D and competition policy. Fine but these are departures from libertarian principles and they are departures which have had a massive impact on the IT sector.

[An Arky]

Originally Posted by Deeg

Oy. Libertarians want a stable, secure environment with rights protected by the government.

Well, just for one example Ron Paul(on GMA, I believe) has proposed eliminating or at least severely curtailing FEMA. I think that's shortsighted and unhelpful in maintaining stability.

[An Arky]

Sorry, Deeg, that reply was in response to JM.

[Bricker]

Originally Posted by Kimmy_Gibbler

No, I'm sorry but this is the Fallacy of Using Fallacies as Magic Spells. As your link points out, the Fallacy of Hypothesis Contrary to Fact requires that the claim be poorly supported. The OP lays out how government assistance made possible or accelerated research at critical junctures in IT development. This at least establishes a prima facie case that that government assistance played a significant role. You seem to think that just because you used Proper Noun Capitalization together with the word "fallacy," you have somehow dealt with the points raised in the OP. That is not the case. To meet your burden, you should adduce some particular facts that tend to show that the absence of government assistance at those points would not have retarded the progress of IT R&D.

No.

If I said, as I did in my example, "If it weren't for Marie Curie, we would know nothing about radiation today!" and supported it with massive evidence about the signifcance of her contributions to radiation knowledge, I would not have met my burden or even established a prima facie case. I would have to further show that her contribution was unique in some way unlikely to have been duplicated by subsequent researchers.

There is no question that government assistance played a substantial role. I acknowleged that in the same post you quoted.

The question is: what evidence suggests that, absent government assistance, similar steps would not have happened via other factors? Failing to adduce that evidence is precisely the evil illustrated by the Hypothesis Contrary to Fact fallacy, and it is THAT claim that is poorly supported.

So in simple terms: yes, government assistance played a substantial role. But why should we conclude, if that role had not been played by the government, that private concerns would not have done something similar?

[Bricker]

Originally Posted by Lantern

I am not sure what other evidence is needed. When the government massively subsidizes some activity you get a lot more than what the private sector alone would produce. In the last century the government has massively subsidized science and technology research. If it hadn't done this, far less research would have been conducted and the technology sector wouldn't be nearly as advanced as it is today.

And you know this because.... ?

See, it's the if-then statement above I contend is unsupported. Why, if the government did not subsidize research, do you believe that far less research wqould have been conducted?

[gonzomax]

Originally Posted by Bricker

No.

If I said, as I did in my example, "If it weren't for Marie Curie, we would know nothing about radiation today!" and supported it with massive evidence about the signifcance of her contributions to radiation knowledge, I would not have met my burden or even established a prima facie case. I would have to further show that her contribution was unique in some way unlikely to have been duplicated by subsequent researchers.

There is no question that government assistance played a substantial role. I acknowleged that in the same post you quoted.

The question is: what evidence suggests that, absent government assistance, similar steps would not have happened via other factors? Failing to adduce that evidence is precisely the evil illustrated by the Hypothesis Contrary to Fact fallacy, and it is THAT claim that is poorly supported.

So in simple terms: yes, government assistance played a substantial role. But why should we conclude, if that role had not been played by the government, that private concerns would not have done something similar?

Because the didn't. A hell of a lot of our technology came through providing technology for the space program, and for military uses.Perhaps you believe that should be in corporate hands. Then of course we would not have a wide use. It would have only provided what returned maximum profits.
We would still be trying to get to the moon.

[Bricker]

Originally Posted by gonzomax

Because the didn't. A hell of a lot of our technology came through providing technology for the space program, and for military uses.Perhaps you believe that should be in corporate hands. Then of course we would not have a wide use. It would have only provided what returned maximum profits.
We would still be trying to get to the moon.

I agree that we never would have landed on the moon if private enterprise were the only player in the space race.

But I don't (yet) agree that the same thing is true for the Internet.

[Lantern]

Originally Posted by Bricker

And you know this because.... ?

See, it's the if-then statement above I contend is unsupported. Why, if the government did not subsidize research, do you believe that far less research wqould have been conducted?

Is this a serious question? In general if the government subsidizes something it increases the supply and if it withdraws subsidies it will reduce the supply. The subsidies in question are very large so it's quite reasonable to believe they have a large effect.

Beyond this general point, when it comes to research, governments often fund basic research where the commercial applications are not clear and which therefore the private sector does not have a strong incentive to conduct. At the same time this basic research complements applied research so that having done it and put the results on the public domain, it can form the basis of applied research. Less basic research very likely means less opportunities for applied research as well. Finally as mentioned, the governments also subsidizes corporate research thereby decreasing its cost and increases its quantity.

[gonzomax]

Originally Posted by Bricker

I agree that we never would have landed on the moon if private enterprise were the only player in the space race.

But I don't (yet) agree that the same thing is true for the Internet.

Seriously? If you note the concentration of the internet in corporate hands has resulted in slower speeds when compared to other industrial nations. I believe we are 17th in internet speed.
We gave the internet corporations a right to charge every single user an extra 5 bucks a month to upgrade the system. They pocketed it because without competition, they have no reason to innovate or to lower price or to upgrade, They didn't do it.
Our internet is slower, more expensive and in more obsolete technical condition when compared to places that actually have government input and competition.

[gonzomax]

http://cache.gawker.com/assets/image...009/10/raw.jpg Chart showing cost and speed of world internet. The government and competition are missing in our internet. It shows.

[Kimmy_Gibbler]

Originally Posted by Bricker

So in simple terms: yes, government assistance played a substantial role. But why should we conclude, if that role had not been played by the government, that private concerns would not have done something similar?

I don't know, Bricker. Isn't that precisely the thesis you're attempting to advance? Care to let us know when you'll furnish the least bit of evidence toward making that case?

Look, your so-called "Fallacy of Hypothesis Contrary to Fact" works both ways. You, after all, like the OP are trying to convince us of what the world would look like had the government not promoted IT research and development. The only difference between you and the OP is that one recounted the ways the government, a sui generis among actors (and this is why your Marie Curie analogy is inapt), actively made that research and development happen while you're apparently reduced to repeating, essentially, "Nuh uh!"