it’s a target. Author-based rather than content-based editing is bad policy. The Web should always be the sort of place where you can find troubling and challenging material. It should accommodate stuff too controversial for the mainstream media. Because YouTube is a commercial enterprise, it has no obligation to present everything or to protect anything. But as it folds itself into the pervasive entity known as Google—which increasingly filters the Web for us—we need to find ways to pressure it to be more inclusive and less sensitive.48
MARKET FAILURES AND PUBLIC FAILURES
Google walked into its regulatory role out of opportunity and necessity. The Internet in the late twentieth century was too global, too messy, and too gestational to justify national or international regulation.49 Some illiberal states, such as the People’s Republic of China, chose to step in and aggressively perform those regulatory duties either through direct action or through proxies in the quasi-private sector.50
In the more liberal world of the United States and—to a lesser extent—Europe, a presumption that market forces can best solve problems and build structures so dominated political debate from about 1981 onward that even considering the possibility of state involvement in something so delicate and new as the Internet was implausible.51 After the recent collapse of the corrupt and disastrous command-and-control economies of Eastern Europe, it was difficult to propose a way of doing things that fell between the poles of triumphant market fundamentalism and incompetent, overbearing state control. Of course the market had survived and thrived. There seemed to be no other mechanism that could deliver positive results to a diverse, connected world.52 The notion of gentle, creative state involvement to guide processes toward the public good was impossible to imagine, let alone propose.
This vision was known as neoliberalism. Although Ronald Reagan and Margaret Thatcher championed it, Bill Clinton and Tony Blair mastered it. It had its roots in two prominent ideologies: techno-fundamentalism, an optimistic belief in the power of technology to solve problems (which I describe fully in chapter 3), and market fundamentalism, the notion that most problems are better (at least more efficiently) solved by the actions of private parties rather than by state oversight or investment.53 And it was not just a British and American concept. It was deployed from Hong Kong to Singapore, Chile, and Estonia.54 Neoliberalism went beyond simple libertarianism. There was, and is, substantial state subsidy and support for firms that promulgated the neoliberal model and supported its political champions. But in the end the private sector calls the shots and apportions (or hoards) resources, as the instruments once used to rein in the excesses of firms have been systematically dismantled.55 Neoliberalism may have had its purest champions in the last two decades of the twentieth century. But it’s still with us, and harming us, today.56
Our dependence on Google is the result of an elaborate political fraud, but it is far from the most pernicious result of that fraud. Google has deftly capitalized on a thirty-year tradition of “public failure,” chiefly in the United States but in much of the rest of the world as well. Public failure is the mirror image of market failure. Markets fail when they can’t organize to supply an essential public good, such as education, or have no incentive to prevent a clear harm to the public, such as pollution. Market failure is the chief justification for public intervention.57 For instance, market actors don’t envision sufficient financial returns to justify investing in the production of children’s educational television, folk festivals, or opera. If a society wishes to enjoy the benefits of such productions, then it must subsidize them with public funds. The U.S.
government justified the creation of the Corporation for Public Broadcasting in 1967 to correct for precisely these market failures.58
Public failure, in contrast, occurs when instruments of the state cannot satisfy public needs and deliver services effectively. This failure occurs not necessarily because the state is the inappropriate agent to solve a particular problem (although there are plenty of areas in which state service is inefficient and counterproductive); it may occur when the public sector has been intentionally dismantled, degraded, or underfunded, while expectations for its performance remain high. Examples of public failures in the United States include military operations, prisons, health-care coverage, and schooling. The public institutions that were supposed to provide these services were prevented from doing so. Private actors filled the vacuum, often failing spectacularly as well and costing the public more than the institutions they displaced. In such circumstances, the failure of public institutions gives rise to the circular logic that dominates political debate. Public institutions can fail; public institutions need tax revenue; therefore we must reduce the support for public institutions. The resulting failures then supply more anecdotes supporting the view that public institutions fail by design rather than by political choice.
The most lucid example of public failure in recent years involves the role of private firms in the relief efforts after Hurricane Katrina hit the southern coast of the United States in 2005. After the hurricane wiped out large sections of New Orleans and much of coastal Louisiana and Mississippi, state and federal relief efforts were slow and ineffective. Officials had not planned for massive evacuations and medical relief, despite ample warnings. In addition, poor engineering and maintenance and years of general underfunding and neglect had left much of New Orleans vulnerable to breeches in the essential levees intended to protect the city from high water. Under President Bill Clinton in the 1990s, the Federal Emergency Management Agency (FEMA) directorship had been raised to a cabinet-level position and had been held by an acknowledged expert in disaster management. Every major disaster in those years was handled deftly. Once President George W. Bush assumed control, he appointed as head of the agency former campaign staffers who had no training or experience in disaster relief. In addition, Bush moved FEMA out of the cabinet and into another new agency, the Department of Homeland Security. The failures of FEMA to help people stranded and left homeless are well documented and deeply troubling. Ultimately, 1,836 people lost their lives in the hurricane and subsequent floods. More than 60,000 people were stranded in New Orleans during the flooding. Bush publicly commended the director of FEMA for the job he was doing, even in the face of his obvious ineptitude. The public sector failed, and it failed by design.59
In contrast, the American department store company Walmart managed to use its wealth, inventory, distribution networks, and logistical expertise to deliver water and supplies where FEMA could not.60 The American private sector in general greatly assisted many thousands of people by donating labor and funds to the relief and reconstruction effort, even though these efforts were often poorly coordinated. As a result, market fundamentalists used the designed failure of the public sector to argue that it should be structured to do less in future emergencies.61 Such arguments occur in other areas of public policy as well, as citizens in the United States witnessed during the efforts to pass an economic stimulus package and comprehensive health-care reform legislation in 2009. The very hint of government involvement was enough to disrupt rational debate over policy.
Public failure has had two perverse effects on politics and policy. First, it has corroded faith in state institutions, effectively precluding arguments for their extension or preservation (in the United States, anyway). For example, President Barack Obama apparently considered that proposing a Canadian-style, single-payer health-care system would be completely unpalatable to the American public and powerful health-care interests. So he quickly and publicly dismissed the idea early in 2009, reversing years of endorsing such a system’s proven success in Canada and many other places.62 In the United States any suggestion of regulation or public investment must be couched in the language of the market if it is to be taken seriously.
The second pernicious result of public failure is the rise of assertions of “corporate responsibility.” As the state has retreated from responsibility to protect common resources, ensure access to opportunities, enforce worker and environmental protection, and provide for the health and general welfare of citizens, private actors have rushed in to claim the
