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Monday, February 15, 2010

Pubs: an apology for neo-classical economics

In the final chapter of the book, I compare pubs to the open Internet:
"Just like Speaker’s Corner, the open Internet is by no means the only, or – some might say – the most important place for public opinion to be formed (see darknets - ed.), but it has so far been more or less guaranteed free and open to those with a computer and ISP. In physical space, there are private members’ clubs and working men’s clubs, Methodist chapels and Friendly Societies, professional associations, country and golf clubs, Freemasons and Opus Dei all have their place, but it is the open public space that gives legitimacy to all these private or semi-private spaces: it is the guarantor of free speech for the others. That all sounds rather grand and pompous, so let us bring it down to Earth for this conclusion. Let us compare this populist but technologically enabled space, the Internet, to one of its forerunners. Lets go to the pub.
"British public houses are – as we saw in the common carriage discussion in Chapter 2 – granted special rights and given special duties, primarily that to accommodate all-comers who so request. How does the Internet currently resemble a pub? It has its share of gaming and gambling, of queuing and noise, of public lounge and saloon, of the snug (in certain areas), of spam, of video, of music, of piracy (those smuggled CDs), and of course many people of a religious persuasion are convinced it’s a den of vice – it certainly is a place to meet romantically (or otherwise). It has its private privileged alternatives – the members’ club, the nightclub with its VIP room, the other more private spaces with their reserved tables and guest lists. It is related to the coffee houses which provided the first insurance (Lloyds) and stock market speculation in London. It is a place for all people and all seasons. It is also the place for debate and conflict, even violence and police response. More libel is committed in an evening’s ‘character assassination’ in a local pub than in a year of a newspaper, hence the popularity of the widest viewed English language soap opera, ‘Coronation Street’ and its ubiquitous gossiping in the ‘Rovers Return’ pub. The pub is monitored in several ways: first the police license its hours and services; second, police make (somewhat) random visits to check on activities; third, publicans in the United Kingdom often install video cameras to film the entrance. Furthermore, popular pubs have security guards on busy evenings. You might say that the surveillance is as methodical here as on the Internet. We accept these measures of surveillance – though both cameras and security guards (who are now licensed by a regulator to ensure they are fit and proper persons) as well as some licensing authority decisions continue to grate. 

"Pubs, like ISPs and Internet content providers, have complex economic value chains which constantly threaten the independence of the local public house. Parliament has continually intervened in the past twenty years to ensure that the ideal of the public house, the common carrier, as a public space, is maintained with at least some defence against the tyranny of the economics of scale and scope that tend towards the concentration of pubs with brewers in vertically integrated national or even multinational conglomerates." 
Sadly, I was right in intent but wrong in fact - Parliament through its Select Committee has tried to save pubs from the big pubcos, but as every edition of Private Eye reveals, with less and less success. The competition regulator, the Office of Fair Trading, just treats pubs with neo-classical indifference and maintains it has no compelling evidence of market failure. It does not care about their heritage and common carrier past, it cannot not account for that.
Is the subjugation of local pubs to multinational enterprise to be the fate of the open Internet with the network economic regulators so in intellectual vogue?

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