Lots of Google bashing lately. Most of it is bog standard enmity toward BIG, the dingbats even liken Google to Microsoft and Wal-Mart in a sort of guilt by association ruse since they are all, well, BIG. The wing nuts have been nibbling Google for some time now to little effect but the opening of a Google portal in China, which was then subject to PRC regulation, has provided a new wedge for the wing nuts to hammer.

There's also a not-entirely-bogus counterargument, that Chinese citizens with access to a censored Google are still more powerful, relative to their government, than Chinese citizens with no Google at all. Though this claim seems a bit, er, convenient, it may still have a grain of truth to it. The experience of empowerment that the Internet provides seems to affect people in ways that go beyond specific issues, and make them less tolerant of bossiness elsewhere; the more Chinese surf the Web, the more will have that experience. Maybe. It's possible. After all, plenty of people made similar arguments in favor of "constructive engagement" with the Apartheid regime in South Africa, and against sanctions designed to force an end to its racist policies.

Is political censorship of a search engine anything like the racist policies of apartheid? Only for very small values of "like". I think we should object such racism is trivialized by comparing it to far less significant moral failings as if they were equivalent. Censorship is bad, but a different kind of bad.

The lesson for the rest of us is that Google's dominant position in several fields is probably a bad thing. We don't generally trust companies to possess the kind of multi-market dominance that Google has enjoyed for several years; trust in Google based on the notion that it was "different" seems to have been misplaced. Many people will no doubt start looking for other companies to provide things they want, hoping that competition will provide a degree of discipline that conscience has not. In my experience, that's usually a more reliable constraint.

This is foolish. Useful competition comes from alternative products and services that are desirable. Google became big by being competent, and the only competition that benefits society comes from real competitors, those who have a good idea and the ability to implement it. This sort of sour grapes and envy competition that allows incompetent competitors to remain in a market that they can't otherwise survive in does not benefit society. It happens, but it isn't admirable. Society would be better off if those also rans folded to make room for new entries into the market. And this will happen eventually just as in every market dominated by some champion. Remember when it was IBM that the nuts loved to loathe?

I think my take on the issue last June is still valid.

Social software and search tools are inherently subversive to totalitarian governments. There's no benefit to the Chinese people to delay access to these tools while grandstanding about nits. Opening China to information flows, even when censored to filter out selected content, is the objective. The rest will follow.

I suspect that all the principals are fully aware of this and so proceed with indifference to critics who fail to grasp the larger issues. Even the Chinese government must be aware of these dynamics. It may be that this is the smartest, fastest way to open China to political freedom in that some of the flare ups and crackdowns may be avoided. Political activists who thrive on destruction and chaos are thwarted somewhat, but social and cultural evolution will proceed any way. . .

One line of analysis distinguishes economic liberty from political liberty to argue that the ChiComs have avoided the mistakes of others, such as the Soviets, by first increasing economic freedom rather than political freedom. The expectation is that the Chinese will arrive at full political and economic freedom before the Russians, and won't have all the economic and social problems that have plagued the Russians and the deformed x-Soviet Republics. It's an interesting argument because it still isn't clear that things will one day come out well for the x-USSR which tried the reverse and has had such questionable results.

The behavior of Microsoft, Yahoo and Google is consistent with that approach and will hasten the evolution of political freedom by advancing economic freedom and P2P communication. Making these services available quickly, even though it took political concessions, is smart.

Update:

Uncle Milt says it too [via A&L Daily]

NPQ | China has registered tremendous growth since 1979 through what might be called a “market Leninist” model, or an “authoritarian free-market system” like the Pinochet government you advised in Chile. Can this model last?

Friedman | No. The same thing will happen in China that happened in Chile. Political freedom will ultimately break out of its shackles. Tiananmen Square was only the first episode. It is headed for a series of Tiananmen Squares. It cannot continue to develop privately and at the same time maintain its authoritarian character politically. It is headed for a clash. Sooner or later, one or the other will give.

If they don’t free up the political side, its economic growth will come to an end—while it is still at a very low level.

The situation is not all bleak. Personal freedom has grown greatly within China, and that will provoke ever more points of conflict between the individual and state. There is a new generation that is educated and travels abroad. It knows firsthand the alternatives out there. So, the authoritarian character is softening somewhat.

Hong Kong is the bellwether. If the Chinese stick to their agreement to let Hong Kong go its own path, then China will also go that way. If they don’t, that is a very bad sign. I’m optimistic.

NPQ | What impact has the Internet had on freedom and markets?

Friedman | It has had a tremendous effect. Look at what has happened in China. People can talk to each other, and the government, despite its best efforts, can’t control it.

The Internet also moves us closer to “perfect information” on markets. Individuals and companies alike can buy and sell across borders and jurisdictions wherever they find the best match of supply and demand. Undoubtedly it has reduced the possibilities of taxation. Why should I buy something here if I can buy it from a company in Japan or England or Brazil with a lower tax?

The Internet is the most effective instrument we have for globalization. . .

The great virtue of a free market is that it enables people who hate each other, or who are from vastly different religious or ethnic backgrounds, to cooperate economically. Government intervention can’t do that. Politics exacerbates and magnifies differences.

Update:

Becker and Posner seem to agree, but say it all better. Becker (pretending the be Google CEO):

. . . does not the entry of Google into China even under these restrictive terms contribute to the tidal wave of freedom that is overwhelming the Chinese government?