Logistics and Telecom Deregulation
By Arnold Kling
Two more comments on the importance of private sector drivers of economic growth and inequality vs. policy drivers.
First, I forgot to mention logistics as a driver of growth. Fed Ex and Wal-Mart represent that.
Second, people keep talking about telecom deregulation. If by that you mean the 1996 Telecom Act, then I’m skeptical. That act was drafted before the Internet took off. My sense is that a lot of it was irrelevant before the ink was dry on the signatures, and that a lot of it utterly failed (CLEC’s, anyone?).
On the other hand, you might mean the break-up of AT&T, which as I recall was driven by a judge. I’m inclined to concede that this one was a big deal. As of today, if you put AT&T back together, it would not matter so much. We have cell companies. We have cable.
Ultimately, I think that the technology, particularly the steadily increasing advantage of packet-switched networks over circuit-switched networks, did much more than regulatory policy to shape the current environment. But one might argue that without spectrum auctions and the AT&T breakup, the deployment of the technology would have languished.
On the way packet-switching crept on circuit-switching, there is a classic paper by Hal Varian and Jeffrey MacKie-Mason– I believe it’s this one.