Networks and Economies

I was reading about the new 'economic stimulus' in the US, and I was suddenly struck by something.

Just yesterday, you were complaining about the whiners on NANOG. The transition to IPv6 is not going as smoothly as could be hoped. Naysayers could (and do) say that it's a failure. And there are all these people who pop up on NANOG with nothing constructive to say--they just want to bitch about this and that, about how hard it is to transition, about how there are no incentives, etc. I think you put the whiner-to-reasonable-person ratio at 6-to-4?

There are even suggestions that IPv6 itself is a failure, and ought to be scrapped. It boggles your mind, right? The only other options are to use a bunch of really ugly hacks, which will cause the Internet to have brain damage, and just screw things up terribly, or to start from the drawing board and redesign something new, which is futile and gratuitously unnecessary. IPv6 is a fine design, a great design, and it's about as backwards compatible as can be hoped.

So, you feel like shouting: stop whining, start being constructive, and let's get this transition started! Start with yourself; make constructive suggestions!

Alright, now...why did I think of this while I was reading about the state of the economy? Because it struck me that I feel very much the same arguing with you about the economy as you feel reading NANOG.

It's all very well and good to raise your eyebrow, lower your voice, and say in an ominous tone, "Some people would say, since free-market capitalism got us into this mess, why are we trying so hard to get back to it?" But, well, what's your better idea? You don't have one. Neither does anybody else. I run into that a lot on the internet--boingboing.net in particular is pretty left-leaning, and they're constantly pointing out the shortcomings of the, er, System, and rumbling about what a mess it is, and how it's doomed to fail. What do they suggest as a replacement...? Well, see, they're not positive yet, but it's got something to do with everyone eating organic food from gardens in their back yard, bartering in goods without money, loving their neigbours, and maybe playing the ukulele a lot...

The Network vs The Economy
Hey, also, something just struck me. You know how you'd like a network to be free, open, end-to-end, unrestricted? How you'd like to yell, in response to firewalls, NATs, and proposals to restrict DNS, "The network isn't the place for that! Solve your own problems where they're caused, don't try to pass the buck!  You don't understand, there are side effects, there are consequences to fucking with the network like this!" A good, free, open, functional network just feels right. You get the impression that it's smooth and efficient, and everybody is benefiting. You can give hard examples, too. "Look, VoIP just works! I can access my computer from anywhere!  Routing is dead simple!  Hooray!"

Well, here's my claim: economists feel almost identically about the market. It's a similar system; it's a network of it's own. The reason that economists are always ranting about free and open markets is the same--not even similar, the same--reason that you and I want to see free and open computer networks. Less friction; more efficiency. Fewer bottlenecks. Freedom and equality! Think about how those terms apply in a computer network, and then transfer them directly to the market. Everyone must have equal pay (bandwidth, latency)? No. Everyone has, in some sense, the ability to form a connection with anyone else? Yes.

There are hard examples here, too. A bunch of poor women in India start up a thriving portable photo business! Median income in India doubles overnight! African artists selling their goods on the internet, worldwide! China's population is now 1/3 middle-class! A bunch of hodge-podge privately owned delivery services join forces and take on FedEx! Poor people pool their money in a coop to lend to new business ideas! Think of your potential as a poor person in...well, anywhere...now, as opposed to 50 years ago. Between open markets and open computer networks (they work hand-in-hand...) you can, with a little imagination, do great things! You couldn't, before...

Now look at all the problems you (we) have with the economy, and try to see them in a new light. Government corruption? Exploitation of one group by another? Patents and copyright? Bad mortgages, banks misbehaving, 'toxic assets' and terrible investments? Lack of public oversight? Are these 'market' problems (think 'network problems')? Or are the problems (in network terms) on the edges? At the nodes? When you say that capitalism has failed, that the market has to be drastically altered through government intervention, are you making the economic equivalent of the "DNS is too free! We must restrict it to fight against Windows worms!" argument? Maybe the problem is that the core nodes of the US economy was running the organizational equivalent of Windows. Heh.

Really. Maybe if you replaced a few critical nodes (banks, etc) with more sane, careful, well-maintained nodes (think: DNS root nameservers) the economy would be a hell of a lot more stable.

Being as you're a network guy, I think I could probably convince you that there is, in a way, one perfect computer network. The Internet is definitely as close as we've come to it, but it's not quite there. What would the one perfect computer network look like? Well, it would allow any device in the world to connect to any other device, using a common, standard protocol, in a free, open way, unfettered by restrictions, addressing or namespace problems, firewalls, rate limitations, physical location, etc.

That perfect computer network is essentially the same as the 'free market' that economists get dreamy-eyed about. Any entity--person, company, corporation or coop--can interact--trade, barter, invest, hire--with any other entity on the planet, free of restrictions, tariffs, regulations, etc. Strikingly similar.

(I'm having fun with this metaphor; it's got a lot of life to it...)

Interesting note: Money, in this metaphor, fills the role of the Internet Protocol. It is the thing that all parties can understand. Any person (er, entity) on the market can interact with any other because they have a way of communicating, something they can use to interact that makes sense to all parties: Money.

And now I have a way that I can explain why I think bartering is a terrible idea, without resorting to, "that's moving backwards! And it's inefficient!"

Imagine I said, The internet is unfair and stupid! I have a better plan for a new system. The idea is this:


 * Every pair of applications will need a custom protocol to communicate--we scrap IP
 * Each host can only talk to it's immediate neighbours--no routing
 * If you do want to talk to a host to which you do not have a direct connection, you must manually negotiate a route (this translates into: If you want something from somebody, and they don't want something from you, then you must find a middleman who is willing to trade what you have for what your target wants--almost certainly taking a cut in the meantime.  Call that high latency caused by the cost of translation)

Great! We've solved all the problems with the internet! It's now much more fair; no more super-rich sites stealing all the traffic! (Man, that's not even right...think of pre-internet networks)

Incidentally, these ideas are trying (horribly) to fight a real problem with many complex networks: The Rich Get Richer. There are better ways to fight it (progressive taxation, for one).

Tariffs are easy to understand, in this model, and it becomes easier to see why economists hate them. Take the Shaw network, right? Well, they really like internal traffic; it's better, cheaper, and simpler for them. Well, then, why not add a bit of artificial latency at all the edges of the network? Outgoing and, particularly, incoming traffic is slowed down a bit, entirely artificially. This encourages people to stick to their own network. People and companies with sites and servers on the Shaw network heartily approve! But, in the big picture, the network suffers.

This fits very closely with the classic argument for free trade: In the network metaphor, it's better for all network users when two big networks peer freely. ("But why? Can't you find everything you need on your local network?  Surf Shaw!  Buy American!")

There are big differences, of course. People are more tied to the market than computers are tied to the network (they depend on it to live...what if the internet was also the only source of power?). Still, I claim that economists feel the same sort of purity, the same sense that there is a correct way for a market to work. They resent interference in the market in the same way you resent interference with the network.

Er...and note that there are economists and other 'experts' who don't see it that way at all. Just like in networking...heh, 'security experts'. The free-market types think (I've heard them say it) that those people just don't get it.

On that note: http://www.youtube.com/watch?v=JfdRpyfEmBE

You've heard of Milton Friedman, I'm sure. Now see him not in the context of a sellout corporate schill, but as a passionate (economic-equivalent-of-a) network engineer, making many of the same arguments you yourself make with regards to computer networks.

I think now that I am in a position to say what sort of arguments seem to me to be interesting and meaningful, and which seem to be ridiculous:


 * The nodes of this network are fucked up, and ought to be replaced! Amen, brotha!  Or at least, I'm willing to listen carefully as you point out the bad nodes and make suggestions on how to improve them.  For example:
 * There are banks and other financial institutions which are critical and central to the network, but which have been behaving very irresponsibly! They ought to be...
 * ...broken up and distributed, for fault tolerance!
 * ...publically owned and managed!
 * ...more heavily regulated!
 * Corporations have run amok, and are behaving psychopathically! They ought to be...
 * ...forbidden in favour of privately-owned companies!
 * ...more heavily regulated!
 * ...watched carefully by citizen watchdog groups!
 * ...made to be responsible through their shareholders!
 * The network has obviously failed! Unfairness is rife, the system is unstable, etc!  We need to scrap it in favour of something new, as soon as we come up with something better!
 * You're off your rocker. I see this as equal to "we need to replace the internet!"