This is getting ridiculous. It's been three weeks of highly public complaining/pseudo-analysis about Google Reader. Now it's 'critical public infrastructure', on par with public transit systems.
Can we have a reality check? It's an RSS reader. It was really good. Now it's shutting down. Nobody relies on it to get to work so they can feed their children. Building a replacement doesn't require digging tunnels, buying trains, hiring drivers. The economic argument is interesting, but I'm wondering if this wins for 'Most Hyperbolic Google Reader Shutdown Article'.
"Nobody relies on it to get to work so they can feed their children."
That isn't true but why it isn't true is not immediately obvious. Google reader drives a ton of traffic, what that means in real terms is that there are a huge body of people who don't have time to regularly visit a blog, but they do have time to look quickly at what 10 or 15 blogs have recently posted. Thus they discover where there is an interesting article on "your" blog and visit. That is how it drives traffics to otherwise poorly visited blogs. It is more effective than G+, Organic Search, and Facebook in that regard.
Those bloggers that benefit from this feed do feed themselves and possibly their family on income they get from their writing either in ad-clicks or affiliate links.
When Reader goes away, a number of those blogs will be hurt, and those people will be scrambling to find other ways to drive traffic to their sites.
Now this will also hurt Google because there is a crap ton of AdSense for Content advertising on those blogs, and I expect that what use there had been of Blogger will drop below the 'minimum sustainable point' and so Blogger too will get tossed into the spring cleaning trash bin. Now its probably not noticeable (much) the last time we (Blekko search engined) looked through the blog crawls in depth Google was the dominant ad network provider on those blogs, but they do something like 3.7B$ of revenue in 'Partner sites' [1] per quarter and 1% of that being tossed out the window is only 37M$ per quarter (or about 150M$ for the year) isn't a huge loss for them but its going to hit a number of their "partners" quite sharply.
Unlike sites which are bogus flick-n-click ad reapers these folks are actually trying to use the system in the way it is supposed to work, they write quality content and Google helps them monetize it.
The thing that few people "get" about Google isn't that they are a search monopoly (they aren't) it is that they are an advertising monopoly (which they are). They are synonymous with "internet advertising" and having dealt with a lot of advertising partners, they all seem to end up re-selling Google's ads in one way or another. Its like having three different pizza restaurants but only one kitchen.
I'm hopeful that this will create opportunities for actually new advertising networks to appear> We'll have to wait and see though.
>Nobody relies on it to get to work so they can feed their children
I don't think anyone uses that as the criteria of what should be made public. People rely on car companies and grocery stores to get home and feed their children, but economists aren't fighting to make those public. And federal parks are hardly critical infrastructure but I don't know many people who complain that they are public.
The article is written from a purely theoretical economic perspective, it's not a real proposal, so it's worth addressing it from that perspective. Krugman's argument is basically that there are certain products that add global value but cannot exist without people being forced to pay for it. Many economists - not all - agree this is a good criteria of what should be made public (infrastructure and research would fall in this category). It's hard to imagine that web services could fall under this, but I suspect a lot of people forget that the internet is still in its infancy and companies like google have been able to subsidize loss-creators through insanely high profits. That won't last, google is already scaling back, and the result may be a global destruction in value.
(To be clear I don't want to see things like google reader made public for idealogical reasons, and I think you and most people are the same way, but I think that's out of the scope of addressing Krugman's point)
It's not the RSS reader. It's the open publishing ecosystem.
Most clients point to Reader as the central feed aggregator. Most publishers point to Feedburner as the central publisher.
Google seized the commanding heights with Feedburner and Google Reader and captured all the publishers and the clients, and now they're killing the ecosystem.
I don't see why they couldn't have integrated Reader into Plus without killing the ecosystem. Twitter, Facebook, LinkedIn are moving into news aggregation, and Google is killing a successful news aggregation system.
I don't understand their strategy, but it's seems sort of like, we want everyone on G+ and we don't care how heavy-handed we look or how early adopters feel, and we don't want an open ecosystem that people can use to pipe content into Twitter and Facebook.
You seem to be responding emotionally to something you're tired of hearing about topically, not the substance of this piece which doesn't suggest any of the things you seem to feel it does.
It's about economics, particularly as they apply to something with fixed-to-increasing costs but with users for whom the value has a fixed upper limit and is declining based on the intensity of their usage. There's a lot more here than complaining and pseudo-analysis. It's a Nobel Prize winning economist talking about pricing models as they apply to usage/cost/scale!
It's important to note that he's not actually suggesting the government take over Google Reader, just giving an economics-based viewpoint on Google's situation. Combined with the linked article, it makes for good reading.
The NYT tends to have really good articles, but some of their columnists are so off the wall I can't figure out how they keep their jobs. Being a columnists gives the writer a self reinforcing celebrity factor then they just stick around way longer than they should.
Probably it is correct that Google dropping Reader will hurt some people's businesses. In the last week I went through a lot of hassle moving my blog from Blogger to Wordpress (which I have more control over). Would Google ever drop Blogger? Probably not but who knows. I also stopped using GMail as my primary business email service. I recently blogged about the 5 Google services that were terminated that affected my customers' and my businesses.
I like to use free services from Google, Twitter, and Facebook, but I certainly don't want to rely on them for business.
An analogy: my family likes to support small local businesses. For web services, hosting, etc., I prefer using companies that I pay fairly for services and who support me.
Well, the people the shutdown affects are also the people most likely to write articles. Everyday people may not get much out of Google Reader, but neither do they follow hundreds of sites looking for a good story to write like journalists do.
A good deal of useful thinking involves models, and I don't particularly understand the anger that results.
Google isn't a monopolist in this situation either, but it is useful to understand pricing dynamics where there is no competitor. It sheds light on price discrimination with coupons, for example.
Krugman mischaracterizes the article[1], since it does not claim that Reader was crucial infrastructure, but he doesn't argue that it is crucial infrastructure himself either. They both talk about the dynamics of a product that has network effects and becomes a public good.
We generally know from cognitive sciences how we economize in situations like having a reliably knowledgeable colleague. This has served as a counterpoint to the silly arguments about how Google is making us stupid, but nevertheless says that the specialization in our expertise that it facilitates has Google search's continued availability as a vital component.
The original article talks about whether discontinuations will cause users to be more cautious about adopting services that create dependencies, and whether it will inhibit the success of new ones that involve network effects.
>Google wants us to use its services in ways that provide it with interesting and valuable information, and eyeballs. If a particular Google experiment isn't cutting it in that category, then Google may feel justified in axing it.
>But that makes it increasingly difficult for Google to have success with new services. Why commit to using and coming to rely on something new if it might be yanked away at some future date? This is especially problematic for "social" apps that rely on network effects. Even a crummy social service may thrive if it obtains a critical mass.
Anyway, the important issues aren't perfectly typified by Reader, but it is a situation people are familiar with at this moment. Personally, I think it is worth thinking about why more of the shuttered projects haven't been sold off or at least open sourced like Wave. Combine that with profitable businesses that are acquired for the talent, then neglected to death, and it sounds like a lot of effort is being needlessly trashed.
It is not difficult to imagine that if books.google.com were able to give even more liberal access to its library, that struggling municipalities would be even less willing to fund their libraries. This hypothetical would be unambiguously good for the world if it lead to more access to information, but one can also imagine that this hypothetical could also lead to a dependency that was itself vulnerable.
There are a lot of things that won't lead to the end of civilization, but they can still be nevertheless worse than an alternate outcome.
Are you really surprised that someone like Krugman would argue
"seems hard at this point to envision search and related functions as public utilities, but that’s arguably where the logic will eventually lead us."
That is the "logical conclusion" for people of his ilk.
And I'm not surprised by the first comment that I found on the article:
It is the height of capitalist folly to insist that a profit-seeking corporation is the right form of organization for operating facitilites that become essential global public utilities.
Why of course. This guy is just random article commenter, but you know your average, hardcore leftist thinks the same way. Facebook must come under UN or some other quasi-governmental control. It needs to be controlled. Well, duh...
Warning to people reading the comments before the article:
This article is not calling Google evil, it's examining the economic and social incentives of maintaining a public utility as a for-profit company and as a society. I tend to think that putting scare quotes around words in headlines is really condescending behavior from headline writers, but threads like this remind me that I'm not an authority of headline writing.
And for the people arguing that Krugman is an ignorant big government fraud for claiming that Google Reader is a public utility - Mr. Johnson's water pump on the corner that half of the people on the block use is a public utility. It's economic analysis, not a communist grab for your guns, or a socialist power play to keep capitalists from doing whatever they want to do, whenever they want to do it.
edit: hadn't refreshed in a while before replying. This comment is mischaracterizing the level of discourse in this thread now:)
This is the fundamental problem with modern liberal economic thinking:
>>First, it’s a well-understood though not often mentioned point that even in a plain-vanilla market, a monopolist with high fixed costs and limited ability to price-discriminate may not be able to make a profit supplying a good even when the potential consumer gains from that good exceed the costs of production. Basically, if the monopolist tries to charge a price corresponding to the value intense users place on the good, it won’t attract enough low-intensity users to cover its fixed costs; if it charges a low price to bring in the low-intensity user, it fails to capture enough of the surplus of high-intensity users, and again can’t cover its fixed costs.<<
Sure, it's well understood that certain people want others to provide a service that certain people find very valuable, but aren't willing to pay for. That doesn't mean that service must be provided by the government when private parties refuse to provide it.
In 2003, I wanted an online store where I could purchase all of my pet-related supplies. This would make me, and society, far more productive because we would not have to spend time going to the pet store and purchasing those products. We could all then spend that extra time being productive. Potential consumer gains exceeded production costs.
Unfortunately, actual consumer gains did not exceed pets.com's production costs. So it died. And guess what? It turns out that when a company learned how to properly structure, supply, and support such a service at the right price, people were willing to pay for it, and thus actual consumer gains exceeded actual production costs.
The government didn't have to step in and supply this vital service to its citizens. Some of the smarter citizens figured out how to do it, at assuredly a fraction of the cost of whatever government program might have been implemented.
Note: before you claim that pets.com failed for some other reason, please stop. I picked it as an obviously frivolous example. You can substitute most other recent government programs if you’d like.
His argument is not that it costs more to run Google Reader than there is benefit, so we need the government to run it. His argument is that the benefit to society of Google Reader is greater than the cost to society of Google Reader. Outside of a free market, it is better for society to have Google Reader. Unfortunately, there is no price structure that allows Google Reader to exist as a for-profit service. The market is inefficient, and the government should step in to fix this inefficiency. Therefore, it might be useful to run some services like Google Reader as government services.
I think that Google Reader should not be government-run, but he raises a larger point. There could be some internet services that would be better run by the government, and we don't really have any today. I don't think we can dismiss that possibility. I can't think of any sites like that right now, though.
> Ryan Avent, who argues that Google has been providing crucial public infrastructure...
Krugman proceeds assuming that were true, but it's not. There are plenty of free alternatives to Google Reader. All this proves that old saying; never pick a fight with someone who buys ink by the barrel.
Krugman is such a faux-expert, that is way overhyped. He clearly doesn't understand the technology very well, and he seems to be confusing RSS, the protocol, with Google Reader the app. And even then, RSS is not a "critical public infrastructure" that the government should maintain or whatever. It seems like he's just fishing for (more) fame/hits here, as there was no reason for him to write about this.
Exactly. None of Google's free products amount to anything close to "crucial public infrastructure".
Google Apps could be critical for a lot of businesses, but they're charging for that now, and presumably making money.
Now, Internet ISPs, on the other hand, might fall under the category of "crucial public infrastructure" and could probably use some government oversight.
A relevant point of concern: Google Drive isn't actually downloading documents.
Maybe someone's already brought this up, but I just tried Google Drive's desktop application for the first time. It downloads what amounts to a shortcut that's a text document with a link to the file on Google Docs.
The benefit of syncing is lost--you don't have a copy of a usable file you can open in another program or save somewhere. Even Microsoft's SkyDrive downloads real documents made in the web version of Office.
I can't figure out what you mean about the benefits of syncing being lost, because the data is clearly synced. However, I can explain the "shortcuts" you're referring to. Those are for native Google Docs, which don't have a universal representation in other applications (they're tied to remote or locally stored web state) unless you explicitly chose to export to another format. Whereas Microsoft's SkyDrive is just raw MS Office Documents.
The tradeoff between the two is that with Docs you get real-time editing and collaboration, but if you want a real local copy you'll need to target a specific export format. Whereas SkyDrive always keeps a local copy, but it requires you to explicitly save and resolve conflicts if you want to collaborate with another user.
Of course, if you want to you can just use Google Drive as a dumb file syncing mechanism without real-time collaboration or online editing. You just don't use Google Docs and tell Drive not to convert files to Docs on upload.
The files on my Google drive are actual files, which I proved to myself by disconnecting from the internet and viewing them. Maybe there is a problem with a specific Google app?
I don't think it's fair to call Google "evil", but maybe I'm cynical because I spend a lot of time reading about banks, insurance companies, the mainstream media, walmart, lobbyists, drug companies, private prisons, garment factories, weapons manufacturers, gun dealers, patent trolls, the recording industry, and so on.
It's remarkable how little economics has to say about Google, their motivations, and outcomes. There's nothing wrong with trying to fit new information into existing models, but think of it this way: if you were a fly on the wall for Goog's decision on Reader, would it bear any similarity to this model?
What is the alternative explanation? Reader evidently needed a very non-trivial amount of resources to maintain and didn't have anywhere near the amount of users to justify it. I lament that they couldn't keep it going, but even the guy who started the project inside Google said he and people working on it felt like its days were numbered from the outset.
After reading the article several times it seems to me that it has nothing to do with Google. The idea that a company that can't price discriminate and isn't able to make a profit to provide a useful good is interesting. Words like 'Evil Google' and 'Monopolist' are just added fluff for link bait.
"in the long run that's a problem for Google. Because we tend not to entrust this sort of critical public infrastructure to the private sector. Network externalities are all fine and good to ignore so long as they mainly apply to the sharing of news and pics from a weekend trip with college friends. Once they concern large swathes of economic output and the cognitive activity of millions of people, it is difficult to keep the government out. Maybe that deterrent will be sufficient to keep Google providing its most heavily used products. But maybe not.
I find myself thinking again of the brave new world of the industrial city, when new patterns of interaction led to enormous changes in economic activity, in culture and personal behaviour, and in the way we think. We upgraded ourselves, in terms of education, hygiene, and social norms, to maximise the return to urban life. And the history of modern urbanisation is littered with examples of privately provided goods and services that became the domain of the government once everyone realised that this new life and new us couldn't work without them"
That depends ... BBC get the job pretty well as a publicly financed utility. So a search that is focused on quality and not ads supported by levy on broadband with transparency in ranking and inclusion, with prohibition of censorship ... may not be such a bad thing after all. Search is important.
Although I would just create an IP law that forces the corporation to put the source code and assets in public domain on the abandonment of a service when it gathers above some usage and traction. Someone will pick it up if the interest is enough.
P.S. I am ready for the downvoting that will ensure.
Step 1: Over a period of say three months, slowly increase the average response time of the product.
Step 2: Listen to people complain that load time is getting unbearably slow
Step 3: "Oh, we'd love to fix this problem but because of $random_infrastructure_issue, and because we've got most of our developers working on Android, we think it's time to shut the product down. After all, it was getting old and slow, right?"
Maybe this is a dumb question, but why wouldn't Google simply sell Reader to some consortium, public or private group to continue running it? In terms of money, shutting Reader down would get them less money than selling it, as long as the price is greater than the cost of transferring the infrastructure. However, maybe it will incur liabilities for Google?
"Nobody relies on [mail delivery, a national highway system, telephones, wireless spectrum, police, libraries, etc] to get to work so they can feed their children."
Necessity for sustenance or transportation does not drive the need for something to be a public utility. I think we are really talking about the tragedy of the commons. This has been a political and legal debate for centuries. The private market is not able to maximize the average utility of citizens in every market and AND earn profit.
Krugman lost it a long time ago. The final nail in the coffin was when he wrote that it actually was a good idea to mint a $1 trillion coin to dodge the legislation preventing to raise the U.S. debt ceiling.
If you're into economy at all you should know that disciples of Friedman did predict the precise situation the eurozone is in right now (including Spain unemployment, the Greek default, Italy and France struggling) before the first euro even circulated... Meanwhile Keynesians have never been able to predict anything more than two or three years before they happened.
Keynesians are ultra-short sighted but politicians loves them because they're basically telling them what they want to hear: more state intervention, create even more money (the $1 trillion coin was just ultra rubbish, really), etc.
His whole book "End this recession now" is a gigantic pile of shit.
The situation ain't good because of the Keynesian doctrine and yet these people want to do more of what does obviously not work: let's print more money.
I never had much sympathy for Keynesians but honestly since he wrote about that $1 trillion coin I've entirely lost interest.
Advocating for a $1 trillion coin is a recognition that, if interest rates are effectively 0%, there is no difference between short-term government debt and government-issued currency. Minting a coin is just a hack for the Executive to get around Congress's restriction on issuing debt.
I'm not sure what you're trying to get at with your Euro rant, bu Krugman has been calling the Euro a bad idea since at least 1998. http://www.pkarchive.org/global/tag.html
"Google... a monopolist with high fixed costs and limited ability to price-discriminate"
Google is not a monopoly and neither was Google Reader. Krugman is intentionally disingenuous here to further his argument.
Krugman knows Google isn't a monopoly. He doesn't care. He's always trying to push the same narrative with his blog: Big corp is evil so government should step in and save the day! For anyone familiar with his blog, his agenda is extremely transparent at this point.
Where does Krugman state that Big corp is evil? Are you talking about banks?
Krugman doesn't state that Google is a monopoly and he certainly isn't disingenuous here. He's just using the Google Reader situation and an article by Ryan Avent as a hook to make an interesting economic argument about monopoly markets with a certain cost and consumer demand structure.
BTW, building a competitive search engine is arguably associated with relatively high fixed costs, and any social site is hugely affected by network effects. These are both traits that can lead to natural monopolies.
Thank you for identifying that Krugman is both an economist and an ideologue. HN readers identify closely with the former so they often ignore or excuse the latter.
I think Google search is close to a monopoly, and so was Google Reader. Search is pretty much synonymous with Google. Apparently Google has 67% market share, but I'd guess that most people not using Google just use Bing or Yahoo! because that's the default in whatever browser they have. http://searchenginewatch.com/article/2244472/Google-Once-Aga...
[+] [-] alanctgardner2|13 years ago|reply
Can we have a reality check? It's an RSS reader. It was really good. Now it's shutting down. Nobody relies on it to get to work so they can feed their children. Building a replacement doesn't require digging tunnels, buying trains, hiring drivers. The economic argument is interesting, but I'm wondering if this wins for 'Most Hyperbolic Google Reader Shutdown Article'.
[+] [-] ChuckMcM|13 years ago|reply
That isn't true but why it isn't true is not immediately obvious. Google reader drives a ton of traffic, what that means in real terms is that there are a huge body of people who don't have time to regularly visit a blog, but they do have time to look quickly at what 10 or 15 blogs have recently posted. Thus they discover where there is an interesting article on "your" blog and visit. That is how it drives traffics to otherwise poorly visited blogs. It is more effective than G+, Organic Search, and Facebook in that regard.
Those bloggers that benefit from this feed do feed themselves and possibly their family on income they get from their writing either in ad-clicks or affiliate links.
When Reader goes away, a number of those blogs will be hurt, and those people will be scrambling to find other ways to drive traffic to their sites.
Now this will also hurt Google because there is a crap ton of AdSense for Content advertising on those blogs, and I expect that what use there had been of Blogger will drop below the 'minimum sustainable point' and so Blogger too will get tossed into the spring cleaning trash bin. Now its probably not noticeable (much) the last time we (Blekko search engined) looked through the blog crawls in depth Google was the dominant ad network provider on those blogs, but they do something like 3.7B$ of revenue in 'Partner sites' [1] per quarter and 1% of that being tossed out the window is only 37M$ per quarter (or about 150M$ for the year) isn't a huge loss for them but its going to hit a number of their "partners" quite sharply.
Unlike sites which are bogus flick-n-click ad reapers these folks are actually trying to use the system in the way it is supposed to work, they write quality content and Google helps them monetize it.
The thing that few people "get" about Google isn't that they are a search monopoly (they aren't) it is that they are an advertising monopoly (which they are). They are synonymous with "internet advertising" and having dealt with a lot of advertising partners, they all seem to end up re-selling Google's ads in one way or another. Its like having three different pizza restaurants but only one kitchen.
I'm hopeful that this will create opportunities for actually new advertising networks to appear> We'll have to wait and see though.
[1] http://investor.google.com/earnings/2012/Q4_google_earnings....
[+] [-] rm999|13 years ago|reply
I don't think anyone uses that as the criteria of what should be made public. People rely on car companies and grocery stores to get home and feed their children, but economists aren't fighting to make those public. And federal parks are hardly critical infrastructure but I don't know many people who complain that they are public.
The article is written from a purely theoretical economic perspective, it's not a real proposal, so it's worth addressing it from that perspective. Krugman's argument is basically that there are certain products that add global value but cannot exist without people being forced to pay for it. Many economists - not all - agree this is a good criteria of what should be made public (infrastructure and research would fall in this category). It's hard to imagine that web services could fall under this, but I suspect a lot of people forget that the internet is still in its infancy and companies like google have been able to subsidize loss-creators through insanely high profits. That won't last, google is already scaling back, and the result may be a global destruction in value.
(To be clear I don't want to see things like google reader made public for idealogical reasons, and I think you and most people are the same way, but I think that's out of the scope of addressing Krugman's point)
[+] [-] RockyMcNuts|13 years ago|reply
Most clients point to Reader as the central feed aggregator. Most publishers point to Feedburner as the central publisher.
Google seized the commanding heights with Feedburner and Google Reader and captured all the publishers and the clients, and now they're killing the ecosystem.
http://www.zdnet.com/embrace-extend-extinguish-how-google-cr...
I don't see why they couldn't have integrated Reader into Plus without killing the ecosystem. Twitter, Facebook, LinkedIn are moving into news aggregation, and Google is killing a successful news aggregation system.
I don't understand their strategy, but it's seems sort of like, we want everyone on G+ and we don't care how heavy-handed we look or how early adopters feel, and we don't want an open ecosystem that people can use to pipe content into Twitter and Facebook.
[+] [-] spinchange|13 years ago|reply
It's about economics, particularly as they apply to something with fixed-to-increasing costs but with users for whom the value has a fixed upper limit and is declining based on the intensity of their usage. There's a lot more here than complaining and pseudo-analysis. It's a Nobel Prize winning economist talking about pricing models as they apply to usage/cost/scale!
[+] [-] martythemaniak|13 years ago|reply
[+] [-] IanDrake|13 years ago|reply
Don't get riled up, this was a piece by Paul Krugman. He thinks government should own /control / regulate everything.
[+] [-] AJ007|13 years ago|reply
[+] [-] mark_l_watson|13 years ago|reply
I like to use free services from Google, Twitter, and Facebook, but I certainly don't want to rely on them for business.
An analogy: my family likes to support small local businesses. For web services, hosting, etc., I prefer using companies that I pay fairly for services and who support me.
[+] [-] lnanek2|13 years ago|reply
[+] [-] Samuel_Michon|13 years ago|reply
On March 13, Google announced it's killing Reader; that's 10 days a go. http://googleblog.blogspot.nl/2013/03/a-second-spring-of-cle...
I know I'll be complaining about this for quite some time to come.
[+] [-] rz2k|13 years ago|reply
Google isn't a monopolist in this situation either, but it is useful to understand pricing dynamics where there is no competitor. It sheds light on price discrimination with coupons, for example.
Krugman mischaracterizes the article[1], since it does not claim that Reader was crucial infrastructure, but he doesn't argue that it is crucial infrastructure himself either. They both talk about the dynamics of a product that has network effects and becomes a public good.
We generally know from cognitive sciences how we economize in situations like having a reliably knowledgeable colleague. This has served as a counterpoint to the silly arguments about how Google is making us stupid, but nevertheless says that the specialization in our expertise that it facilitates has Google search's continued availability as a vital component.
The original article talks about whether discontinuations will cause users to be more cautious about adopting services that create dependencies, and whether it will inhibit the success of new ones that involve network effects.
>Google wants us to use its services in ways that provide it with interesting and valuable information, and eyeballs. If a particular Google experiment isn't cutting it in that category, then Google may feel justified in axing it.
>But that makes it increasingly difficult for Google to have success with new services. Why commit to using and coming to rely on something new if it might be yanked away at some future date? This is especially problematic for "social" apps that rely on network effects. Even a crummy social service may thrive if it obtains a critical mass.
Anyway, the important issues aren't perfectly typified by Reader, but it is a situation people are familiar with at this moment. Personally, I think it is worth thinking about why more of the shuttered projects haven't been sold off or at least open sourced like Wave. Combine that with profitable businesses that are acquired for the talent, then neglected to death, and it sounds like a lot of effort is being needlessly trashed.
It is not difficult to imagine that if books.google.com were able to give even more liberal access to its library, that struggling municipalities would be even less willing to fund their libraries. This hypothetical would be unambiguously good for the world if it lead to more access to information, but one can also imagine that this hypothetical could also lead to a dependency that was itself vulnerable.
There are a lot of things that won't lead to the end of civilization, but they can still be nevertheless worse than an alternate outcome.
[1] http://www.economist.com/blogs/freeexchange/2013/03/utilitie...
[+] [-] unknown|13 years ago|reply
[deleted]
[+] [-] sultezdukes|13 years ago|reply
"seems hard at this point to envision search and related functions as public utilities, but that’s arguably where the logic will eventually lead us."
That is the "logical conclusion" for people of his ilk.
And I'm not surprised by the first comment that I found on the article:
It is the height of capitalist folly to insist that a profit-seeking corporation is the right form of organization for operating facitilites that become essential global public utilities.
Why of course. This guy is just random article commenter, but you know your average, hardcore leftist thinks the same way. Facebook must come under UN or some other quasi-governmental control. It needs to be controlled. Well, duh...
[+] [-] pessimizer|13 years ago|reply
This article is not calling Google evil, it's examining the economic and social incentives of maintaining a public utility as a for-profit company and as a society. I tend to think that putting scare quotes around words in headlines is really condescending behavior from headline writers, but threads like this remind me that I'm not an authority of headline writing.
And for the people arguing that Krugman is an ignorant big government fraud for claiming that Google Reader is a public utility - Mr. Johnson's water pump on the corner that half of the people on the block use is a public utility. It's economic analysis, not a communist grab for your guns, or a socialist power play to keep capitalists from doing whatever they want to do, whenever they want to do it.
edit: hadn't refreshed in a while before replying. This comment is mischaracterizing the level of discourse in this thread now:)
[+] [-] javert|13 years ago|reply
Claiming that X's property is a "public utility" _is_ a power grab.
[+] [-] unknown|13 years ago|reply
[deleted]
[+] [-] liber8|13 years ago|reply
>>First, it’s a well-understood though not often mentioned point that even in a plain-vanilla market, a monopolist with high fixed costs and limited ability to price-discriminate may not be able to make a profit supplying a good even when the potential consumer gains from that good exceed the costs of production. Basically, if the monopolist tries to charge a price corresponding to the value intense users place on the good, it won’t attract enough low-intensity users to cover its fixed costs; if it charges a low price to bring in the low-intensity user, it fails to capture enough of the surplus of high-intensity users, and again can’t cover its fixed costs.<<
Sure, it's well understood that certain people want others to provide a service that certain people find very valuable, but aren't willing to pay for. That doesn't mean that service must be provided by the government when private parties refuse to provide it.
In 2003, I wanted an online store where I could purchase all of my pet-related supplies. This would make me, and society, far more productive because we would not have to spend time going to the pet store and purchasing those products. We could all then spend that extra time being productive. Potential consumer gains exceeded production costs.
Unfortunately, actual consumer gains did not exceed pets.com's production costs. So it died. And guess what? It turns out that when a company learned how to properly structure, supply, and support such a service at the right price, people were willing to pay for it, and thus actual consumer gains exceeded actual production costs.
The government didn't have to step in and supply this vital service to its citizens. Some of the smarter citizens figured out how to do it, at assuredly a fraction of the cost of whatever government program might have been implemented.
Note: before you claim that pets.com failed for some other reason, please stop. I picked it as an obviously frivolous example. You can substitute most other recent government programs if you’d like.
[+] [-] teebs|13 years ago|reply
I think that Google Reader should not be government-run, but he raises a larger point. There could be some internet services that would be better run by the government, and we don't really have any today. I don't think we can dismiss that possibility. I can't think of any sites like that right now, though.
[+] [-] michaelwww|13 years ago|reply
Krugman proceeds assuming that were true, but it's not. There are plenty of free alternatives to Google Reader. All this proves that old saying; never pick a fight with someone who buys ink by the barrel.
[+] [-] mtgx|13 years ago|reply
[+] [-] pseut|13 years ago|reply
[+] [-] jasonhanley|13 years ago|reply
Google Apps could be critical for a lot of businesses, but they're charging for that now, and presumably making money.
Now, Internet ISPs, on the other hand, might fall under the category of "crucial public infrastructure" and could probably use some government oversight.
[+] [-] mkr-hn|13 years ago|reply
Maybe someone's already brought this up, but I just tried Google Drive's desktop application for the first time. It downloads what amounts to a shortcut that's a text document with a link to the file on Google Docs.
The benefit of syncing is lost--you don't have a copy of a usable file you can open in another program or save somewhere. Even Microsoft's SkyDrive downloads real documents made in the web version of Office.
[+] [-] justinschuh|13 years ago|reply
The tradeoff between the two is that with Docs you get real-time editing and collaboration, but if you want a real local copy you'll need to target a specific export format. Whereas SkyDrive always keeps a local copy, but it requires you to explicitly save and resolve conflicts if you want to collaborate with another user.
Of course, if you want to you can just use Google Drive as a dumb file syncing mechanism without real-time collaboration or online editing. You just don't use Google Docs and tell Drive not to convert files to Docs on upload.
[+] [-] michaelwww|13 years ago|reply
[+] [-] calhoun137|13 years ago|reply
[+] [-] pseut|13 years ago|reply
[+] [-] mwsherman|13 years ago|reply
[+] [-] spinchange|13 years ago|reply
[+] [-] MilesTeg|13 years ago|reply
[+] [-] mkr-hn|13 years ago|reply
[+] [-] spenrose|13 years ago|reply
http://www.economist.com/blogs/freeexchange/2013/03/utilitie...
"in the long run that's a problem for Google. Because we tend not to entrust this sort of critical public infrastructure to the private sector. Network externalities are all fine and good to ignore so long as they mainly apply to the sharing of news and pics from a weekend trip with college friends. Once they concern large swathes of economic output and the cognitive activity of millions of people, it is difficult to keep the government out. Maybe that deterrent will be sufficient to keep Google providing its most heavily used products. But maybe not.
I find myself thinking again of the brave new world of the industrial city, when new patterns of interaction led to enormous changes in economic activity, in culture and personal behaviour, and in the way we think. We upgraded ourselves, in terms of education, hygiene, and social norms, to maximise the return to urban life. And the history of modern urbanisation is littered with examples of privately provided goods and services that became the domain of the government once everyone realised that this new life and new us couldn't work without them"
[+] [-] unknown|13 years ago|reply
[deleted]
[+] [-] skc|13 years ago|reply
[+] [-] bhauer|13 years ago|reply
Oh I know. Search as a public utility.
[+] [-] venomsnake|13 years ago|reply
Although I would just create an IP law that forces the corporation to put the source code and assets in public domain on the abandonment of a service when it gathers above some usage and traction. Someone will pick it up if the interest is enough.
P.S. I am ready for the downvoting that will ensure.
[+] [-] unknown|13 years ago|reply
[deleted]
[+] [-] gcr|13 years ago|reply
Step 1: Over a period of say three months, slowly increase the average response time of the product.
Step 2: Listen to people complain that load time is getting unbearably slow
Step 3: "Oh, we'd love to fix this problem but because of $random_infrastructure_issue, and because we've got most of our developers working on Android, we think it's time to shut the product down. After all, it was getting old and slow, right?"
Step 4: Feel justified about their decision
[+] [-] bmmayer1|13 years ago|reply
[+] [-] EGreg|13 years ago|reply
http://www.change.org/petitions/google-please-sell-us-google...
[+] [-] kaa2102|13 years ago|reply
Necessity for sustenance or transportation does not drive the need for something to be a public utility. I think we are really talking about the tragedy of the commons. This has been a political and legal debate for centuries. The private market is not able to maximize the average utility of citizens in every market and AND earn profit.
[+] [-] arbuge|13 years ago|reply
Solution: Evil Google. Googling the title in news and clicking that gets you in without paywall limits.
[+] [-] lazylizard|13 years ago|reply
[+] [-] martinced|13 years ago|reply
If you're into economy at all you should know that disciples of Friedman did predict the precise situation the eurozone is in right now (including Spain unemployment, the Greek default, Italy and France struggling) before the first euro even circulated... Meanwhile Keynesians have never been able to predict anything more than two or three years before they happened.
Keynesians are ultra-short sighted but politicians loves them because they're basically telling them what they want to hear: more state intervention, create even more money (the $1 trillion coin was just ultra rubbish, really), etc.
His whole book "End this recession now" is a gigantic pile of shit.
The situation ain't good because of the Keynesian doctrine and yet these people want to do more of what does obviously not work: let's print more money.
I never had much sympathy for Keynesians but honestly since he wrote about that $1 trillion coin I've entirely lost interest.
He lost it.
[+] [-] jorgeortiz85|13 years ago|reply
I'm not sure what you're trying to get at with your Euro rant, bu Krugman has been calling the Euro a bad idea since at least 1998. http://www.pkarchive.org/global/tag.html
[+] [-] dreamdu5t|13 years ago|reply
Google is not a monopoly and neither was Google Reader. Krugman is intentionally disingenuous here to further his argument.
Krugman knows Google isn't a monopoly. He doesn't care. He's always trying to push the same narrative with his blog: Big corp is evil so government should step in and save the day! For anyone familiar with his blog, his agenda is extremely transparent at this point.
[+] [-] _stephan|13 years ago|reply
Krugman doesn't state that Google is a monopoly and he certainly isn't disingenuous here. He's just using the Google Reader situation and an article by Ryan Avent as a hook to make an interesting economic argument about monopoly markets with a certain cost and consumer demand structure.
BTW, building a competitive search engine is arguably associated with relatively high fixed costs, and any social site is hugely affected by network effects. These are both traits that can lead to natural monopolies.
[+] [-] badgar|13 years ago|reply
[+] [-] teebs|13 years ago|reply