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The Limits of First Principles

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"The Limits of First Principles"

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(cc photo by smith)

Cato’s Jim Harper rounds up a few links on the AT&T/T-Mobile merger and concludes “the federal government should not try to manage the development of the communications marketplace.”

Of course the Cato Institute isn’t allowed to reach any other conclusion. But what does this mean? The federal government has to have some kind of policy vis-à-vis the electromagnetic spectrum. As with monetary policy and intellectual property policy, I see this as an issue that a lot of right of center people want to resolve through first principles (small government, free market) but where the first principles don’t really get you anywhere. You could have the government do nothing, which would mean there are no exclusive spectrum licenses and everything is wide open. Or you could have the government marketize everything, which would mean you auction everything off to exclusive owners. But either way, that would be a choice and in making the choice you’d be “managing” the development of the communications marketplace. And so once the government is in the business of managing the development of the communications marketplace, there’s no obvious reason why it should be all or nothing. Why not auction some and some some unlicensed? Why not conditional auctions?

These are answerable questions, just like there are answers to questions about how copyright policy should work and how the country should manage its currency. But they’re just not questions that can be resolved by consulting the Gospel According to John Locke or intoning “government bad, markets good.”

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