Tuesday, October 04, 2011

Undercutting Industry

Stephen H. Foerster write, on OER-forum:
     > The logic is that it's inappropriate for government to undercut private industry. 

There are many cases where it is appropriate for government to, as you say, 'undercut industry'. For example:

- industry could make lots of money building roads and bridges and changing tolls, but government does this (usually without tolls) because it's a lot more efficient

- industry could make lots of money offering health care, but in many nations (such as Canada, my own nation) government provides these services, because it's more efficient, and many people could not afford commercial health care

- private industry would make a lot of money offering primary and secondary school, but government offers this service to ensure a proper quality of education and to ensure all can attend

- industry makes money delivering letters and packages, but government also provides a postal service, because industry will not serve remote regions at reasonable rates

- private industry offers security and protection services, and would make a lot more money if not undercut by public police and fire services, but government provides these to ensure everyone in society is protected


It can be appropriate for government to 'undercut industry', and these are cases in which industry cannot or will not provide services at reasonable rates to all segments of society.

It is arguable that (a) academic and educational publishing is an essential service that ought to be available to all segments of society, and
(b) private industry is not able or willing to offer these services to all segments of society at a reasonable cost.

In such a case, it is reasonable for government to 'undercut industry' in order to ensure that the benefits of the educational system reach everyone in society.

Indeed, I would go further and argue that in some cases the government ought to block industry participation in some markets where industry participation is harming, rather than serving, the public interest. One such case is industry participation in academic publishing, where government-granted monopolies over the distribution of government-funded academic and educational materials are resulting in severely limited access to educational and academic materials.

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