Marketcraft and the Digital Economy

The digital economy appears to provide the closest thing to the frictionless perfect markets of economic theory to date. Yet it actually requires more extensive and intensive regulation than other markets do—not less. Prosperity in the digital age hinges on “marketcraft,” which includes all the things governments do to make markets function and flourish, ranging from areas such as antitrust to intellectual property rights. The term marketcraft transcends the conventional juxtaposition of governments versus markets and identifies market governance as a core function of government comparable to statecraft. The digital economy turns the logic of free markets on its head because it reveals how open, competitive, and dynamic markets require extensive government regulation. Free markets are not so much liberated from government, but rather liberated by government. Of course, this need for regulation applies to market governance more broadly, but the digital era…

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