Government "Neutrality"

Wednesday, February 02, 2011

Over at Slate is a piece by Bruce Gottlieb called "The Myth of Government Neutrality," which discusses how what it calls "economic regulation" of communications media can influence availability and content in unanticipated ways.

The piece is worthwhile for some of the information it brings up in its slide show, but very frustrating due to its lack of clarity about the difference between legitimate functions of the government, such as copyright protection (including clear rules on fair use), and illegitimate interventions, such as the establishment of monopolies. Both have non-obvious effects on what we can get from communications media, and would regardless of how well our right to freedom of speech is protected by the government.

For example, I found the following point thought-provoking:

Why is it that, in the 1830s, the United States had roughly 1,300 newspapers, while Great Britain and Germany (both more populous) had only 369 and 23? Two reasons, both related to government. First, early American democracy extended the franchise more broadly than in Europe. More voters meant greater demand for information on politics. Second, the U.S. government subsidized newspaper's postal rates and lowered tax burdens. The conscious purpose was to ensure broad distribution of political media. In the 20th century, the United States would go on to lead the world in public education -- further expanding the audience for newspapers and magazines.
The above paragraph perfectly illustrates why I am ambivalent about this piece. I do not dispute that our form of government creates demand for news coverage and political commentary, but the comparison with Europe obscures the fact that newspapers became successful here despite taxation. Also, since subsidy money has to come from somewhere, whether postal subsidies actually increased the demand for newspapers is a debatable point. (The subsidies did, however, violate the property rights of the involuntary underwriters.)

I am not bothered just by the fact that the analysis of non-obvious effects of government regulation of news media suffers from a lack of clarity about which interventions are legitimate and which aren't: As a result of this lack of clarity, the danger of even regulation of content is made to look less serious to people who share many common misconceptions about the government's proper purpose. An advocate of government censorship can point to this article and say something like, "less regulation of content can be just as beneficial as less taxation," or, "freedom of speech is granted judiciously like the right to property: for the good of the republic." The propriety of government control of property and content -- or doing anything that isn't protection of individual rights -- is never questioned.

In fact, this article provides a great deal of information that could have shown the benefits of the government properly protecting the rights to freedom of speech and property, and the problems that improper government intervention can cause. For a similar reason (i.e., a lack of a consistent pro-capitalist perspective), it also failed to bring up other things the government should have considered that could have resulted in even better availability and content. For example, consider the "three" options considered by the government for distribution of a new type of property, the airwaves:
(1) nationalize the system (like the BBC),

(2) give licenses to local nonprofit entities (a bit like public radio today), or

(3) give licenses to commercial entities affiliated themselves with national broadcasting chains.
Entirely omitted is what should have been done: (4) auction them off as private property.

Finally, government regulation of the economy at the expense of protection of individual rights is always done on the basis of some consideration that wrongly supersedes individual rights. That is, some other standard is used to justify government policy, including distribution of resources and distribution of content. This fact alone is what makes a myth of government "neutrality." The idea of a redistributionist government being impartial about anything is baloney. An economics professor once gave me a simple, elegant example:
You're in a dictatorship and want to give a speech. You have to give it somewhere, but a bureaucrat tells you that the auditorium you'd like to use is "needed" for something else. You have no other recourse since there isn't private property. You never give your speech, and yet the government never explicitly censored it.
The problem isn't that we should learn to recognize and accept the fact that a government that runs everything isn't neutral: It's that our government shouldn't be running everything.

-- CAV


Kyle Haight said...

I've become convinced that as it is used in current political discourse the term "regulation" is an anti-concept, intended to obliterate the concept of limited government. People use 'regulation' to refer to any government action, with the result that opposing regulation per se makes one into an anarchist. And since anarchism is obviously wrong, we're left trying to distinguish between "good" and "bad" regulations with no principles and no standards other than range-of-the-moment pragmatism -- which as we know is no standard at all.

In economics, the issue should always be framed in terms of the correct principle: is the government respecting individual rights in the realm of production and trade, or not?

Gus Van Horn said...

I mostly agree. I'd say that when it isn't used that way on purpose, confusions makes it as good as being used for that purpose.

Roberto Sarrionandia said...

I suspect landmass has much to do with the newspaper statistic.

Newspapers tend to cover things geographically. A town of a few hundred people warrants one local paper, a town of a few thousand still only warrants one.

In fact, if you take number of papers per capita in each city (or geographical market) - it seems likely that underpopulated towns would have a higher concentration of newspapers.

Michael said...

I think the confusion arises because of misunderstanding the difference between initiatory force (regulation) and retaliatory force (law).

Gus Van Horn said...


That is an excellent point. Now that you mention it, England is about the size of Alabama, in terms of area.

That's a confounding variable at the very least.


That is true.