Thursday, November 18, 2010

Television, Phones, and Freedom

On Sunday the Chronicle ran an article that illustrates, at least in part, a practical benefit of freedom. The development of Internet television is creating concern among broadcasters and cable companies, who fear that they will lose viewers. Prior to this innovation, cable television created similar concerns for broadcast television.

In a free market, an individual can offer any product or service that he chooses. The voluntary choices of consumers will determine whether he succeeds or fails.

In a regulated market, an individual must meet the arbitrary mandates of government officials. His success depends partially on his ability to satisfy consumers and partially on his ability to satisfy government bureaucrats. And often the latter is more important than the former.

When I was a child we had 3 choices when it came to television. Because the airwaves are "public property", the government regulated (and still does) their use to promote the "common good." The result was a lack of choice for consumers and the stifling of innovation.

Cable provided (and still does) a way to escape the regulatory burden of the FCC. Because they are not using "public property" cable companies do not need to comply with many FCC regulations. This freedom allows cable companies to offer a wide variety of programming, and the success or failure of these companies depends upon the voluntary choices of viewers.

Today, Internet television is expanding the choices available to consumers. Companies such as Google and Apple have identified an opportunity and are acting according to their judgment.

Government regulations are often defended because alternatives to the status quo cannot be imagined. For example, few can imagine how electricity or water might be provided on a competitive basis. Such industries, it is argued, are "natural monopolies" and should be regulated to protect consumers from gouging.

For decades this argument was made to "justify" regulation of phone companies. Cellular technology--which could not be imagined just a few years ago--has made that argument moot. Even with regulations restricting their actions, entrepreneurs developed alternatives that others could not envision. The same is occurring with television.

It wasn't that long ago that cable television and cell phones were considered luxuries. Today, their availability and affordability make them almost necessities. This development did not occur because of government regulations, but in spite of them. When men are free to act according to their own judgment, they will find innovative methods for providing the products and services that others desire and value.

It is impossible to predict what innovations men would develop if they were free do so. We cannot imagine how water, electricity, roads, and a myriad other services would be provided if men were free to innovate and act according to their judgment. But our lack of vision does not justify stifling the creativity and ingenuity of Thomas Edison, Henry Ford, or Bill Gates. Instead, we should stay out of their way. Not only will we enjoy the practical benefits, it is the moral thing to do.

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