Witness the Freest Economy: The Internet

An MP3 audio file of this article, read by Floy Lilley, is available for download.

One of the few places in the world not yet plagued by government intervention is the internet. Although some governments in certain parts of the world have infiltrated the activities of the internet to varying degrees, it remains the closest thing to a purely free economy that we can identify in the modern world.

On the internet, the beautiful aspects of human nature manifest themselves, and we see individuals and companies maximizing their talents and resources for reasons of profit, pleasure, altruism, and mere progress in itself. Given that the government neither inhibits the activities of the internet nor props up or favors any particular actors or individuals, perhaps we are witnessing the closest thing to a free market that man has ever witnessed.

Although many consider the America of the 19th century to be the closest thing to a purely free market, in fact, congressmen constantly acted in favor of certain individuals, leading in some cases to monopolistic advantages. Ironically, at the end of the century the government intervened in an attempt to break up monopolies.

So here we are in a worldwide web that connects people from all parts of the world, allowing them to exchange whatever they want with one another. It is the essence of a free market: voluntary exchange. There is no use of force or coercion on the internet. No higher authority effectively controls or dictates the way that we spend our time online or the activities that we partake in. Although some legal obstacles inhibit people from accessing certain sites and materials, given the lack of regulation or enforcement by a higher authority, users are easily able to circumvent these restrictions and achieve the things that they want.

As it evolves, we begin to witness the endless potential that exists within the internet and the unquantifiable benefits it provides to society. Although the internet currently represents freedom from both a civil and a social perspective, I shall examine it from a economic perspective.

Arguably, the human race has seen more progress and innovation through the use of the internet in the past 20 years than through the use of any innovation known in the history of mankind. As we reflect back over the last 20 years, we see thousands of amazing success stories. We see entrepreneurs from all different economic backgrounds and classes making full use of their skills, ideas, and passions. We read about success stories such as Facebook and Google, where very young people have been able to generate massive wealth while providing a cheap, convenient, and valuable new tool for everyone across the globe to enjoy. This is the beauty of a system free from government intervention.

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In turn, their Chinese competitors bring increased competition to both Google and Facebook, creating incentives for them to improve their own products and continue to innovate. This example closely resembles capitalist Americans emulating European technology in the 19th century or Japanese entrepreneurs emulating Western technology during the process of their development.

Do patent protection laws truly promote greater and faster innovation? Some companies and individuals are able to avert these government-imposed rigidities online. And the success of this less-inhibited marketplace demonstrates the lack of need for patent protection laws.

If patent-protection laws, taxes, and legal-tender laws were completely eliminated from the internet, we would then see a purely free market. Although this is not foreseeable given the world’s current political system, we can still continue to enjoy the advantages of this relatively unfettered aspect of modern society.

Technological advancements benefit society for many obvious reasons. In an unfettered marketplace, innovation reduces costs for businesses and hence prices for consumers. For example, in the past, some families spent several hundred dollars every few years just to update their encyclopedia set, even though all of the content in these encyclopedias was publicly accessible; the encyclopedia companies merely compiled the information into a more concise format.

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October 20, 2009