Don’t be silly. You wouldn’t give up the Internet for the rest of your life for one million dollars, and it would still be a bad bet at one billion dollars, assuming you still have some years left on this mortal coil. (And if you didn’t, what good would the money do you anyway?) Ted Balaker produced this video for the Fund for American Studies to demonstrate how technology, innovation, and the free market works to provide a higher standard of living enjoyed by nearly everyone in society — and how government intervention and control interferes with that process:
The free market, says Cox, creates a huge gap between what consumers would be willing to pay for Internet access and how much it actually costs.
It’s cheap to get online and getting cheaper all the time. We see the same pattern with many other products. Take the cell phone. When it first arrived in the 1980s, the cell phone had no apps, no music, and no Internet access–it was pretty much a brick with buttons. Yet that brick cost about $4,000, and that’s why only the super rich could afford them (think Gordon Gekko in Wall Street). Today, it takes only about 40 bucks to walk home with an iPhone.
Turns out capitalism has its own built in welfare transfer system.
“When a new product comes out we all get in line for it,” says Cox. “The wealthiest people are in the front of the line and they pay the highest price for the worst version of a product.” Real life Gordon Gekkos buy the products when they’re expensive, and that lets the rest of us enjoy the cheaper, better versions.
Even in a lousy economy we all enjoy things, from smart phones to aspirin to air conditioning, that weren’t available to the world’s wealthiest people just a short while ago. And if we have access to something like the Internet, something that’s worth so much to us, we just might be richer than we realize.
In short, we need people with lots of disposable income to become early adopters and drive the demand that eventually makes technology accessible to everyone. The cell phone demonstrates just how much that process has accelerated. Thanks to the government-protected AT&T monopoly, mobile phones were almost nonexistent until the 1980s. When competition opened in the Ma Bell breakup, investors and innovators jumped into the market. Cell phones didn’t just get smaller, they got a lot cheaper very quickly and began to displace pagers within a decade. Now they’re so ubiquitous that nearly everyone can own one, even if it’s just a cheapie pre-pay phone. Most cell phones now carry broadband Internet access capability, which allows for massive access to the public. The more people use the Internet, the more important it becomes to be connected to it.
But as I noted above, this question isn’t really about the Internet. It’s about whether one understands the power of free markets to deliver higher standards of living through innovation, crowd sourcing, and risk-taking, and how government control stymies progress and wealth creation. Be sure to watch it all.