In The Master Switch, Tim Wu argues that four leading communications industries have historically followed a single pattern that he calls “the Cycle.” Because Wu’s argument is almost entirely historical, the cogency of its claims and the force of its policy recommendations depends entirely on the accuracy and completeness of its treatment of the historical record. Specifically, he believes that industries begin as open, only to be transformed into closed systems by a great corporate mogul until some new form of ingenuity restarts the Cycle anew. Interestingly, even taken at face value, many of the episodes described in the book do not actually follow the Cycle. More importantly, a review of the broader historical literature on these industries reveals that the actual patterns are far more complex and interesting than the Cycle thesis suggests. Indeed, the theoretical literature identifies a number of supply-side, demand-side, and institutional factors that can cause industries to follow a wide range of patterns with respect to openness. The book also largely overlooks the role of advertising and the nature of the government intervention, which can create characteristic distortions and can introduce actors that can serve as counterweights to the industry moguls on which the book focuses. A complete assessment of openness also requires engaging the rich theoretical and empirical literature examining the tradeoffs inherent in open, modular architectures. A more nuanced exploration of variations across these industries and their fit with the hypotheses suggested by the theoretical literature would provide greater insight into the forces that shape and reshape industries over time than would forcing the histories of these four industries to fit into a single, Procrustean pattern.
Decherney, Peter; Ensmenger, Nathan; and Yoo, Christopher S., "Are Those Who Ignore History Doomed to Repeat It?" (2011). Faculty Scholarship at Penn Law. 394.
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