It’s amazing how many economics professors are prepared to ignore economics when they want to make some political point. Such is what has afflicted Diane Coyle in her call for a publicly – read taxpayer – funded Facebook and Google. She’s simply forgotten or ignored all she knows about economics in order to push her pet theory. Which is, roughly enough speaking, that there should be something like the BBC, funded like the BBC, with the same great and the good running it as with the BBC, to compete with Facebook and Google:
The writer, a former vice-chair of the BBC Trust, is Bennett Professor of Public Policy at the University of Cambridge
That explains the why easily enough, doesn’t it? Having tasted those BBC lunches who wouldn’t argue that they should get another bite at said cherry cake? But, you know:
Maybe there is a more direct approach: let us build public service digital corporations that offer better services to consumers.
Apparently Professor Coyle thinks there is a shortage of venture capital in the computing industry. Anyone think that someone able to provide better services won’t gain financing? In which case, why do we need that publicly funded option?
The need to sell advertising is at the heart of the toxic behaviour of many of the social media companies.
The need to levy and collect taxes is at the heart of the toxicity of publicly funded alternatives. Who pays will change from those doing so voluntarily to all doing so involuntarily. As all economics professors know this is a reduction in human wealth. Quite apart from, or over and above, the inefficiency of the proposed management and design. We know that taxation has costs. And sure, sometimes it’s worth them too. But could we see some evaluation of that perhaps, or of it being true here?
An alternative provider with a different business model would compete on the quality of its service rather than — as now — the number of clicks.
As above, a better service will gain funding anyway, why the public option?
It is time to try a mixed economy in those digital markets whose products are in fact classic public goods, such as search and social media. It is more likely to be effective than the other policy options we have.
Seriously? Something that is obviously excludeable is now a public good?
As I say, it’s amazing how much economics a professor can forget when they’ve a policy to push. As is said elsewhere of this, it wouldn’t work anyway:
And here’s what Andreessen Horowitz tech analyst Benedict Evans makes of the idea, via Twitter:
No, the objection to a “publicly funded alternative to Google and Facebook” is not that it’s unfair competition – it’s that it would squander public money on something with absolutely zero chance of working . . . Something fascinating in trying to work out how many layers of misconception you can have to think that you can wave a ministerial wand to create another Google.
Ya know? How many highly motivated, highly funded and highly compensated people have managed to create a better Google? And we’re to give the job to bureaucrats?