Oct 24, 2011 2:31 PM GMT
On why and how regulation kills jobs - especially in America's fastest growing industries.
Eric Schmidt, executive chairman of Google, gave a remarkable interview this month to the Washington Post. So remarkable that Post editors preceded the transcript with this disclosure: "He had just come from the dentist. And he had a toothache."
Perhaps it was the Novocain talking, but Mr. Schmidt has done us a service. He said in public what most technologists will say only in private. Whatever caused him to speak forthrightly about the disconnects between Silicon Valley and Washington, his comments deserve wider attention.
Mr. Schmidt had just given his first congressional testimony. He was called before the Senate Judiciary Antitrust Subcommittee to answer allegations that Google is a monopolist, a charge the Federal Trade Commission is also investigating.
"So we get hauled in front of the Congress for developing a product that's free, that serves a billion people. OK? I mean, I don't know how to say it any clearer," Mr. Schmidt told the Post. "It's not like we raised prices. We could lower prices from free to . . . lower than free? You see what I'm saying?"
An absence of consumer harm didn't stop senators from offering some improbable recommendations. Among them: that Google replace its algorithm with a panel of experts to ensure "fair" search results. As Google tries to improve the relevancy of its search results for consumers, some sites inevitably come up higher and some lower in the results. The losers now lobby Washington.
"Regulation prohibits real innovation, because the regulation essentially defines a path to follow," Mr. Schmidt said. This "by definition has a bias to the current outcome, because it's a path for the current outcome."