Adam Thierer nicely dissects a bunch of really sloppy arguments by Tim Wu, author of a new book on information industries called The Master Switch. (Scroll down to the comments section.)
Libertarians do NOT believe everything will be all sunshine and roses in a truly free marketplace. There will indeed be short term spells of what many of us would regard as excessive market power. The difference between us comes down to the amount of faith we would place in government actors versus market forces / evolution to better solve that problem. Libertarians would obviously have a lot more patience with markets and technological change, and would be willing to wait and see how things work out. We believe, as I have noted in my previous responses, that it’s often during what critics regard as a market’s darkest hour that innovation is producing some of the most exciting technologies with the greatest potential to disrupt the incumbents whose “master switch” you fear. Again, we are simply more bullish on what I have called experimental, evolutionary dynamism. Innovators and entrepreneurs don’t sit still; they respond to incentives, and for them, short-term spells of “market power” are golden opportunities. Ultimately, that organic, bottom-up approach to addressing “market power” or “market failure” simply makes a lot more sense to us – especially because it lacks the coercive element that your approach would bring to bear preemptively to solve such problems.
For Adam’s comprehensive six-part review of the book, go here.
