Tech­nol­ogy will trump ‘Boot­leg­gers’ men­tal­ity

The Covington News - - OPINION - SCOTT RAS­MUSSEN COLUM­NIST To find out more about Scott Ras­mussen and read fea­tures by other Cre­ators Syn­di­cate writ­ers and car­toon­ists, visit www.cre­

In re­cent weeks, I’ve writ­ten about how the “Boot­leg­gers and Bap­tists” dy­namic cor­rupts reg­u­la­tory pol­i­tics. Bruce Yan­dle de­vel­oped this con­cept decades ago. He ob­served that Prohibition be­came re­al­ity be­cause Bap­tists wanted peo­ple to stop drink­ing while the ban on legal al­co­hol put money in the Boot­leg­ger’s pock­ets. The do-good­ers suc­ceeded only be­cause the money-grub­bers joined their ef­fort.

By sell­ing il­le­gal liquor, the Boot­leg­gers also un­der­mined what the Bap­tists were re­ally try­ing to ac­com­plish. That’s the sad re­al­ity of reg­u­la­tory pol­i­tics. The re­form­ers lose, and the prof­i­teers laugh all the way to the bank.

Yan­dle is fairly pes­simistic about where this is head­ing. I have a more op­ti­mistic view. The rea­son for my op­ti­mism was ar­tic­u­lated by Marc Landy and Marty Levin of the Gor­don Public Pol­icy Cen­ter: “Reg­u­la­tion has re­peat­edly proved un­able to sti­fle in­no­va­tion.”

The schol­ars ac­knowl­edge that reg­u­la­tions can slow in­no­va­tion down and im­pose real harm. For ex­am­ple, the In­ter­state Com­merce Com­mis­sion was es­tab­lished in 1887 as the na­tion’s first reg­u­la­tory agency. It was sup­posed to en- sure rea­son­able rates for rail­road ser­vice on equal terms for all cus­tomers. In prac­tice, it pro­tected cor­po­rate boot­leg­gers by keep­ing trans­porta­tion costs high for ev­ery­one. But even­tu­ally, as Landy and Levin note, “trucks, au­to­mo­biles and air­planes placed re­lent­less pres­sure on rail­roads to lower rates and im­prove ser­vice.”

The same thing hap­pened in the 1990s when telecom­mu­ni­ca­tions reg­u­la­tions were de­signed to re­duce com­pe­ti­tion and pro­tect a few large cor­po­ra­tions. How­ever, the devel­op­ment of cell phones thwarted the reg­u­la­tory regime. More op­tions be­came avail­able; the cost of plac­ing a call plum­meted; and the world of smartphones and tex­ting took over.

But it’s more than aca­demic that con­vinces me the boot­leg­gers will lose out in the long run. I’ve ex­pe­ri­enced the re­al­ity of tech­nol­ogy tri­umphs in my own life.

Like all baby boomers, I re­mem­ber a time when there were only three TV net­works. Noth­ing, so it was thought, could shake their dom­i­nance. But satel­lite tech­nol­ogy changed ev­ery­thing, and dozens of ca­ble net­works took ad­van­tage of the open­ing.

Then, just when it looked like noth­ing could stop the ca­ble in­dus­try, the In­ter­net ar­rived and changed things all over again. That change also shook up the world of print jour­nal­ism.

Look­ing back, it’s hard to be­lieve that reg­u­la­tors used to worry that tele­vi­sion sta­tions and lo­cal news­pa­pers had too much in­flu­ence in their com­mu­nity. To­day, there are count­less on­line sources to pro­vide lo­cal com­mu­nity in­for­ma­tion. Now, rather than wor­ry­ing about whether TV sta­tions and news­pa­pers have too much in­flu­ence, many ob­servers doubt they can even sur­vive.

Cor­po­ra­tions lured by the prom­ise of short-term prof­its to be skimmed from the po­lit­i­cal process lose sight of the fact that their real long-term value comes from serv­ing cus­tomers.

In­no­va­tors, on the other hand, look to the fu­ture with a fo­cus on solv­ing to­mor­row’s prob­lems. When that fu­ture ar­rives, the boot­leg­gers can’t keep up. That’s hap­pen­ing all around us to­day as tech­nol­ogy in­no­va­tors are on the verge of re­mak­ing foun­da­tional in­dus­tries in­clud­ing health care, ed­u­ca­tion, au­to­mo­biles and banks.

Why am I op­ti­mistic? Three rea­sons: aca­demic re­search, per­sonal ex­pe­ri­ence and the re­al­ity all around me. Amer­ica’s best days are still to come.

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