Which technologies?
The QWERTYUIOP keyboard, the eventual victory of VHS over Betamax, word processing software and countless other standards became the basis for spreading technologies. Governments had no involvement. So what determines whether a technology merits a legal framework?
It’s to do with government needing the new facility, and being able to do something about it.
Two key factors
Look at the technologies that have had a legislative boost to their prospects listed in this section and two commonalities emerge:
Government has facilities the new technology needs. When motor vehicles started to increase everyone wanted a logical road network. That required access to land. Government is a huge landowner and can authorise compulsory purchase to stop individual owners of small parcels of real-estate blocking a new Interstate. A legislative framework that envisages a national road network brings these facilities into use across the country to create a coherent network. No company can do this.
Government had a need to grow usage quickly. The telephone clearly could serve the whole of continental USA by the 1920s. If it did that would be good for the economy and spread of population. But the existing suppliers had no need to move out of upscale, urban, customers; that’s where the money was. The legal framework gave one company new benefits in return for wiring up the whole country. The overall economy benefited. It’s government’s job to grow the economy, not that of individual technology start-ups.
Passing the test
NEMs passes both these tests. Government needs the most efficient markets possible for trading resources for precise periods of time. That’s because:
- Government is the biggest potential buyer in many of these markets (public service provision is one example)
- It’s the taxpayer who picks up the tab when individuals can’t earn as much as they need to support themselves. Anything that increases economic activity should be a priority for governments.
Government has all sorts of facilities that would enhance a general system of e-markets. It can bestow official underpinning across hundreds of sectors, access to public sector spending as a pump-primer and interfacing into the state’s mechanisms for establishing qualifications. Entitlement to drive a car on public roads, work with children and countless other activities all come from government bodies. The benefits awarded to NEMs by government, and the accompanying demands on behalf of users, are outlined in our section about the legislation to create NEMs.
Limiting the application
It’s important to separate out the parts of the Internet to which the above two tests apply. NEMs is not a social networking facility, a provider of general websites or one of dozens of other Internet facilities we take for granted. The two rules above only apply to one small corner of cyberspace: markets for bringing small resources into the economy. Government has little to offer, and the potential to do lots of damage, if it seeks to influence other parts of the Internet.
Even so, governments shouldn’t rush to create a legal framework. Do it right and they will encourage a new resource to develop that anyone can use, or not, in whatever way they wish. There will still be plenty of other e-markets apart from NEMs. But, as with past frameworks, any action by government will raise understandable concern about creating a potential monopoly.
