As much as people like to think that capitalism and the ‘free market’ are such wonderful things, taken to their logical conclusion would be disastrous for everyone. The end result of any truly successful capitalistic system is for one man to own everything and everyone else to be his slave. We have seen that in Standard Oil, in bad old IBM, in pre-breakup ‘Ma Bell’ and we are seeing it again.

As Lord Acton, expressed in 1887:

“Power tends to corrupt, and absolute power corrupts absolutely.”

People and by extension the companies they run have a tendency to degenerate into vehicles for extracting the maximum profit in the minimum amount of time and to hell with the consequences. While ultimately an unsustainable proposition, the collateral damage can be substantial. We’ve been reminded of this with the recent ‘crash and burn’ of our financial markets and the current depression in the States.

One of the primary purposes of the government is to regulate, to temper, the worst excesses of capitalism. To provide a basic level of protection for its people. In other words to provide the rules for the game of economic activity and enforce them to the betterment of society as a whole. If that means that a small number of people at the top have a little less so that the rest of the people suffer a little less, then they are doing their job.

Unfortunately America has joined many other countries in forgetting this. Of course the ironic part is that the current state of affairs is ultimately self defeating. In the drive for just a couple of million more _this_ quarter we’ve completely destroyed the virtuous cycle.

Virtuous Cycle:
Workers make decent money ->
Money available to spend ->
More things bought ->
More factories, etc, needed to make more stuff ->
Workers making even more money ….

and round and round it goes. The people who run the companies make a tidy sum through out. A little less in the short term, but sustainable and so total profits are much higher over time.

What we are stuck in is the vicious cycle.

Vicious cycle:
Workers make less money ->
Less money available to spend ->
Less things bought ->
Less factories, etc, needed ->
Workers make even less money, or laid off ….

and round and round it goes. The people who run the companies may make a larger amount in the short term, but it’s unsustainable and so the entire economy sinks into recession, depression and collapse.

What I find sadly amusing is that the people in charge know this, even if it’s on a subconscious level. We gotten to the point that we aren’t even involved in actually making things anymore. That’s the fiction that is intellectual property. We are buying and selling ‘ideas’. Perhaps it is more accurate to say that the people in power are using the law to force other people to pay them for imaginary things. What’s a patent but the right to use an idea. What’s copyright, the right to make a copy of something yourself. It’s not like people are fighting for the right to have someone else make them more copies of something for free. They just want to be left alone to use what they have as they see fit, without hurting others. As if that isn’t bad enough, but now they want you to pay them if you want to sing a song that you composed based on another song you heard. They want to get paid for things you’ve built or created yourself.

Intellectual property is about transferring money from people who do stuff, who make stuff, into the pockets of people who don’t.

But enough about the larger problems, the view of what happens when government regulation runs amuck.

In this particular instance, Net neutrality legislation is needed, desperately. Not the false, short sighted, let those in power strangle the golden goose just a little tighter, mess we’ll probably end up with, but real long term forward looking play field leveling legislation.

Things it needs to contain;
1. Networks are a natural monopoly, anyone should be able to compete over the same wires. If you don’t want to be in the moving bits business then get out of it. Compete by offering the most reliable, fasted network at the most reasonable price.

2. People should get what they are paying for. No ‘up to’ language, no fuzzy ‘acceptable use policy’, no talk of ‘bandwidth hogs’. You should expect that people will use what you are selling them. If you sell them a 6MB connection then don’t complain if they actually use 6MB.

3. Treat every destination equally. Everyone’s a server, everyone’s a client. The reason the internet’s been such a boon is the availability of practically anyone to be seen, to develop innovative applications, to speak and be heard.

4. If you are going to ‘prioritize’ certain types of packets over others, then that has to be the user’s choice _not_ the company that’s providing access. No Comcast favoring their video over some other internet video site. No AT&T favoring their VOIP over a third party VOIP. Especially no favoring company A’s content over company B’s just because company A’s giving the ISP a bucket of money.

5. If you’re an ISP, your customer’s data is just that, their data. No snooping, deep packet inspection, or other sleazy manipulations to _monetize_ their information. You want to do something, it’s strictly _opt_in_. If you can’t convince people to sign up then it probably isn’t important enough to them.

That would be true beneficial Net Neutrality legislation.