NetworkEconomics

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Discussion

I’ve got 3 concrete “network economies” that are pinging my head, now:

  • the Internet & phone company price tiering stuff that we’re all hearing so much about
  • CPUs and computation - Intel making deals with Skype so that it’ll run better on Intel chips (entirely artificially)
  • now the credit card networks

I don’t understand yet why I call these things “networks,” and I may well be using the wrong phrase.

It strikes me that we are seeing a similar motion in all three cases, and it’s one I would like to understand.

The sooner we can understand it, probably the better.

What appears to be the case is that the people who own the roads, whether they be computation, voice signals, electronic transactions, or bandwidth, are colluding to jack up prices. Further, it appears to be very difficult for people to make new roads, who are not part of the established network. The network operators are claiming that they will be delivering us faster or cheaper access, and that if the government runs a system, it’ll end in miserable failure. Instead, it appears that there is no difference between the network operator and a monopoly, since nobody else seems to be able to break into the market. They do not seem to be extending greater benefits; Rather, it appears that they feel they have maximized their reach, and are now constricting, pulling, squeezing in for themselves.

Given the choice between two monopolies, the one run (or at least influenced) by the government, and the other run by some insanely wealthy corporation, I’ll take the one run by the government: At least we have some control over it.

I’ve spoken with self-proclaimed Libertarians, and they seem to be of the mind that “well, mesh wireless is going to save us, so it’s okay.” I find this reasoning less than heart-warming.

Speaking sincerely: I don’t know what I’m talking about. I’m just sensing pattern, and coming with what is on my mind.

If anyone knows how to really clarify this for me, or what I’m seeing, or what I imagine I’m seeing, I’d appreciate it.

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