Thursday, March 30, 2006

Pull in case of market failure

This Slashdot article makes an interesting case for the need for advocacy groups, from a pro-market and libertarian perspective. It's focus is on opposing the email fees being levied by certain large service providers, but I think the logic can work elsewhere. The meat:

And this is why groups like EFF and Peacefire are rallying against pay-per-mail. We don't protest bad ideas. We protest bad ideas that could cause harm because by their nature, the marketplace will not kill them. Think about it: if AOL announced that they were going to start charging $100/month for dial-up, would we care? Would MoveOn send out e-mail warnings to its AOL subscribers? Would the EFF start a coalition against it? No, because users will abandon AOL over something like that, and the marketplace will kill it. But people don't abandon their provider over wrongly blocked e-mail if they don't even know it's happening. And thus pay-per-mail could become a de facto standard because it's invisible to customers.

If Microsoft released a new version of IE with huge ugly buttons that were hard to understand, would civic-minded groups and public advocates complain? No, because that problem will sort itself out through browser competition. It's when Microsoft releases features that have bad implications for user privacy and security, that civic groups and experts complain loudly -- because most people can't assess the privacy and security risks of using their browser, and so the marketplace alone won't solve that. (Microsoft knows this, of course, which is why they have sometimes released features that have bad implications for users' privacy and security, but they never made the buttons big and ugly.)

I think these kinds of examples are useful in showing that markets, even if they do some good, aren't a total solution to all problems. It should at least be obvious that advocacy groups serve an important purpose in providing access to otherwise hidden information. Rather than being accused of market distortion, I think such interest groups ought be given credit for this necessary augmentation.

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