Virulent Word of Mouse

April 9, 2011

Six myths about the Internet

Filed under: Internet economics and communications policy,Short observations — Shane Greenstein @ 3:29 pm

On April 7th, 2011, I had the great pleasure to deliver the Tullock Lecture at the Law School for George Mason University.  After discussing it with the organizer, Tom Hazlett, the talk became focused on a number of provocative and (partially) entertaining themes. Hazlett suggested the talk’s title, which was “The Mythology of Networks.” Here is an ad for it.

As the talk took shape, I found myself with far more material than I had time to present. I had to boil it down, so the talk became focused on “the six myths of the Internet”.  A myth is an economic metaphor that contains a grain of truth, but misleads. An economic metaphor is a short story or aphorism that provides guidance about the key features of a situation.

There are more than six myths, to be sure, but six was as much as I had time for. And the talk just seemed to coalesce around the six that informed aspects of a big question, namely, this big question:

Was the Schumpeterian competition that blossomed in the commercial Internet a fortuitous accident or not? Can government policy for commercializing technology nudge, encourage, and recreate it in other settings?

The six myths frames this blog post. In a moment the post lists the six myths of the Internet. After that the post will list my (tentative) rewriting of each of the myths to make them less misleading.

That will frame the question: What are your favorite myths and how would you rewrite them?

Anyway, here we go. Here are my six myths:

  1. The gov’t funded the Internet to design a network that could survive nuclear war.
  2. It was cheap and easy to transition the Internet from government to commercial management.
  3. Government funding accelerated the arrival of the Internet.
  4. Openness made the commercial Internet more innovative.
  5. The commercial Internet is like a highway.
  6. The Internet led to the death of distance.
If you are curious, here are PDFs of the slides explaining each of the myths. Here is a recording of the talk too. But I digress….
Back to the main topic. Here are my (tentative) corrections to these six myths. These are tentative because I am very open to suggestions. If you have a better idea, please feel free to say so!
  1. The Internet’s invention involved a collective effort from many participants, initially nurtured through government funding.
  2. The commercial Internet faced the dual challenges of monopoly and rent-seeking.
  3. Government funding can and did shape the direction of innovation in inter-networking technology.
  4. Open structures can enable challenges to leading firms, and this did matter during the Internet’s commercialization.
  5. The commercial Internet involves shared use and partially shared governance of some of its components at the transport layer.
  6. Urban leadership shapes the economic geography of the Internet’s impact.
What other myths would you add to this list? How would you fix them and turn them into useful economic metaphors? Suggestions are welcome!

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