Streetwise Professor

This piece by John Thornhill on net neutrality epitomizes why I despise pretty much any opinion piece in the FT: it oozes pompous stupidity:

In a world that corresponds to economists’ assumptions of perfect competition and rational actors, we would not need net neutrality rules. But until that happy day arrives and goodwill, peace, and free chocolate ice-cream descend upon the earth, then we should defend this necessary principle.

And a bit later:

It is better to enforce equal access with some exemptions, as in India, than to allow a handful of ISPs to discriminate between users in far-from-perfect markets. [Emphasis added.]

There’s a name for this particular foolishness–“the Nirvana fallacy”–coined by the great Harold Demsetz almost 50 years ago:

The view that now pervades much public policy economics implicitly presents the relevant choice as between an ideal norm and an existing “imperfect” institutional arrangement. This nirvana approach differs considerably from a comparative institution approach in which the relevant choice is between alternative real institutional arrangements.

Perhaps there was an excuse for falling for the fallacy in 1969.  But decades post-Demsetz, it is embarrassing to see someone proudly flaunting the fallacy on the pink pages of the FT.

Perfection is not an option in this fallen world.  One has to make choices between flawed alternatives–that’s what Harold meant by “a comparative institution approach.”  What is particular bizarre is that in the paragraph just preceding what I quoted, Thornhill seems to understand this:

In truth, the arguments over net neutrality involve complex trade-offs and are a matter of broader societal choice. But that public debate is often based on partial information, corrupted by corporate lobbying, and mangled by dysfunctional political systems.

But never mind that! This particular regulation–which is certainly based on “based on partial information, corrupted by corporate lobbying [e.g., by those paragons of virtue Facebook, Google, Twitter, Netflix] and mangled by dysfunctional political systems”–is preferred to alternatives, because the alternatives are imperfect.  To call this a non sequitur hardly does it justice.

It is also amusing to see India–which has a dismal history of regulatory failure–held up as some paragon.  Absent some assertion that this is the exception that proves the rule, India’s adoption of net neutrality should be taken as more of a warning than an exemplar.

This is all twaddle.  And supercilious twaddle at that.

And that, my friends, is the FT in a nutshell.