Google and Government

This is a pretty interesting interview with Eric Schmidt of Google.  I am running out the door and don't have time to excerpt it, but in short, Schmidt is quite critical of the ability of government to intelligently regulate technology.

His solution is telling.  There is nothing here about reducing the power and scope of government, despite his clear and concise description of its consistent structural failures.  His solution:  more power for my guys.  That way, when Washington plays its game of sacrificing the less connected in favor of the well connected, we will do OK.

I am working on this concept for my next Forbes column vis a vis the Occupy Wall Street movement.  The OWS folks seem incoherent to us, because, in short, they complain about people having unfair power over them and then their solution is ... to give other people more power.   I have reconciled this in my mind with a cold war analogy.  Everyone accepts the arms race as a fact, and so the only way to survive is to have more nukes than the other guy.  The only way to deal with power, is to get more power for my side.

Frankly, its time for disarmament.  As a retailer, I get irritated with credit card processors, but I understood when Congress was considering regulation of interchange fees that giving the Feds the power to set credit card terms, rather than the banks, was not going to make things any easier, just shift the costs from more to less favored constituencies (and consumers are always the least favored constituency).

More later as I sort this out in my head.


  1. Rich:

    Thanks for pointing this out. Over the last few weeks I have been putting together some ideas concerning big corporations and government regulations. My sense is that large companies generally do not oppose regualtions which affect their entire industry. The big companies can afford to absorb the added costs and then pass them along to consumers. Start ups attempting to challenge those companies in the market though are greatly affected by the costs. Thus, the regulations aid the big companies by stifling competition. Makes perfect sense. If I were a CEO, this would definitely be part of my strategy as long as I had politicians willing to write the regulations.

  2. morganovich:

    scmitt is just dissembling once again.

    google is free? what a laugh.

    it's nothing like free.

    "if you are not paying for a good or service, you are not the customer, you are the product".

    google users ARE the product, not the customer.

    they are parsed, sliced, diced, and sold advertising and sold as advertising data in dozens of ways.

    google's customers are advertisers.

    users of the search engine and gmail are the product that the paying customers buy.

    schmitt knows this and is being extremely disingenuous, just as he told users sensitive about their privacy that "if you don't want anyone to know about it, you shouldn't be doing it" having just finished trying to sue media outlets for covering his messy divorce.

    he is nothing like a a free market proponent. schmitt is in favor of big government and regulations when they benefit him, and opposed when they don't.

  3. Barbara Lamar:

    One problem is a lack of imagination, an inability to think things through. It's been so long since an unregulated economy existed that people don't even consider it as an option. For example, people point at the deregulation of savings & loans in the 1980's as proof that deregulation does not work. They don't think it through enough to realize that it didn't make sense to have FSLIC insurance and deregulation simultaneously. Therefore, the S&L deregulation was not a fair test.

    Given a situation in which large parts of the economy are hampered by gov't regulation (both overt regulation and regulatory tax laws), one's only real choice is to try for favorable regulations. I wish people would be less hypocritical about it, though.

    Another problem is the two-party political system, in which one has to accept unpleasant package deals. There are many things I do not like about the current administration, but I'm terrified of Tea Party theocrats.

    Another problem is that not enough information is available to make good political decisions. For example, the best reason I can think of for U.S. activity in Iraq, Afghanistan, etc. is George Friendman's explanation (see The Next 100 Years). He says that the goal of the U.S. is not to win wars or even battles, but rather to keep things stirred up so that no one group gains too much power in that part of the world. When you look at it like that, it makes perfect sense. But of course politicians cannot say this to the young people they expect to do the stirring up, at the risk of life and limb, and to the parents. The control of mineral supplies and ocean shipping lanes is not emotionally appealing as a motive for risking life & limb. Am I getting off topic here? How does this relate to government regulation of domestic manufacturing and service businesses? I'm certain international and domestic policies are related at the philosophical level. Taking an empirical look ... throughout history, whenever a government has become an empire, that is to say, whenever an elite group of rulers of one state has exerted its power to control other states, the same elite group has always exerted it power to control the residents of their own states. I cannot think of even one example where this has not been true.

  4. Joseph Hertzlinger:

    There's a common assumption on the Left: The amount of government is approximately constant. As a result, political controversies can never be about the amount of government but only about who gets to be in charge.

    This explains their beliefs that deregulation goes along with fascism, that anarchism goes along with socialism, or that corporations and property rights are necessarily creatures of government. It might even explain their belief (during the Cold War) that "Amerikkka" was just as totalitarian as the Soviets.

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