Archive for January, 2012

The name of the game is free information. In a time when the government threatens to censor the interent, and information from companies about their products are held back from consumers, we must consider how access to free and open information is essential to our wellbeing, even if we are looking at the world through the narrow view of neoclassical economics.

Neoclassical economics is the current leading school of thought in economics. It is the type of economics that every student learns in economic classes these days no matter how progressive the rest of their education institution may be.  It is the basis for current day free market ideologies, mainstream economic theory and also government policy regarding hot topics like the budget deficit, what to do about unemployment… basically any policy that the government enacts is based on neoclassical economic thought.

BUT neoclassical economics itself is based on a few assumptions, some of which are so generalizing or so uninformed that they negate the rest of economic theory and remove it from actually informing us about the real world.

For example it is based on the idea that every human being is completely individualistic, selfish and will make decisions based solely on their utility, a fancy way of saying their preferences towards what will make them happiest. An individual’s utility, or happiness, is not actually a measurement of happiness at all however. It’s not based on anything that makes me happy at least (spending time with friends and family, doing things that are rewarding, etc..) In fact this measurement of happiness is not really based on anything at all except the idea that we will always consume as much as possible and that this is what will make us most happy in life. Utility is essentially a measurement of our preferences to different combinations of goods that will make us the most happy. Remember, you will always consume as much as possible because this is what makes you rational. Also, every human being is rational 100% of the time in neoclassical economics.

Neoclassical economics is based on another  underlying assumption: that all consumers are fully informed. Fully informed meaning you know everything about the products you might buy and about all the other alternatives that are on the market and just how much they all cost. So for example when you go to the store to buy a new pair of shoes you would know exactly how those shoes were made. You would know that they are made in a sweatshop by someone making X amount of pennies an hour and you would know exactly what the carbon footprint of those shoes would be. You would know exactly how unsustainable and socially irresponsible it is to be buying products that come from halfway around the world at such a low cost. You would also know about all the other shoes you could buy, where you could buy them and at exactly what cost to you. But clearly this is not the case in real life because we do not know where our products come from, how they are made or what the alternatives are. Sometimes even if you search for years for this information you cannot find it. Take for example the commodity chain of your cell phone, people have been trying to figure out exactly where that nasty little metal, coltan, was sourced from. Imagine that economic theory assumes that we know, and have always known, this for as long as coltan was being mined in the Congo.

The internet allows sites to report on commodity chains, materials that go into products, conditions in which they were produced, and their environmental impact. Without the internet this information would be extremely difficult to find. In an age when companies are not required to report any of this information to consumers who are interested, and are allowed to in fact hide it from consumers, it is essential that this information remains free to access on the internet. It is concerning that the US government is moving to censor the internet because while the government is in the pocket of corporations this information, or the sites that provide this information, could come under attack.

If an underlying assumption of all economic models assume that all individuals taking part in the market already have all of this information, then from a neoclassical economists perspective surely this information should be at the very least available for any interested consumer to view on the internet.

This is why even neoclassical economists should support open access to information on a free internet.

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