The web search engine powerhouse, due to censoring activities of the Chinese government, moved operations of their Chinese-language services to Hong Kong, where users can search and download information uncensored by the government. This action comes shortly after cyber-attacks against the company believed to be aimed at collecting information on local human rights groups took place (Branigan, Jan 13). However, many also believe (me included) Google’s action was more strongly influenced by their principles of information freedom. Because of this action, Google has done it again. In this intricate act of principle and defiance, Google has not only re-established themselves as a leading innovator, as well as one of the strongest entrepreneurial centers in the world, they have provided economic benefit for the Chinese population, as well as the rest of the world, by acting to bypass this censorship.
After all, in the past 12 years, Google has achieved success of which many companies (Or, rather, individuals within companies) can only dream. Started in 1998 by Larry Page and Sergey Brin, two Stanford grad students, Google now grosses roughly $180 B in market capital, according to MSN Investing (MSN Investing). This success can only have occurred because Google offered something to people that no one else before had offered them. That something is stated right in Google’s mission statement: “to organize the world's information and make it universally accessible and useful” (Look for yourself). The keyword here, I believe, is useful; in those 12 short years, Google has developed a system of indexing information unmatched on the internet today. Even the advertising displayed on the engine webpage, the sole source of their tremendous profits, is designed to reflect the relevant information pertaining to particular search parameters. However, it is the terms universally accessible that may be the driving force behind the company’s radical action. In Google’s list of “Ten Things we know to be true,” True Thing #8 summarizes an almost philosophical standpoint:
“The need for information crosses all borders.”(Google's True Things)
It is exactly at this point that abiding by moral stance and operating under economic principle coincide. The standpoint to supply information “across borders” exemplifies a solid understanding of the network of information that exists around us. And, of course, who better to know about this network than the mighty Google?
In his Individualism and Economic Order, F.A. Hayek explains that the nature of information, specifically information upon which economic decisions are made, is dispersed amongst the minds of all people, and cannot be compiled into one place or body. In this way, the information that each person knows about is unique to him alone:
Practically every individual has some advantage over all the others because he possesses unique information of which beneficial use might be made, but of which use can only be made only if the decisions depending on it are left to him or made with his active co-operation. (Hayek, pg. 80)
The censorship put in place by the Chinese government effectively puts a limit on the breadth and detail of such a network. With less access to the network, decisions of an economic nature are hampered. Google, by moving operations to Hong Kong and sidestepping government censorship, allowed the information network to remain whole and strong, by allowing more pages to be accessed and more individual perspectives of information to be voiced.
There is little doubt that the Chinese government is slightly perturbed about this action by Google, even to the point of removing Google’s ability to use the “Google.cn.com” domain name. Even before the action took place, the U.S. State Department was notified as to Google’s intentions. So why would Google do such a thing, putting their stake in the Chinese market at risk, and cause international strain?
Why, that’s what entrepreneurs do! The function of the entrepreneur not only innovates and satisfies unmet desires, but also serves to, for lack of a better word, “fix” the economy when it…well….breaks. Why would the economy “break”? When government, ignorant to economic process, intervenes in such processes.
And now we wait and see the results. Speaking from a purely speculative point of view, it may come to be that, if Google is removed entirely from the Chinese market, there is a tremendous void of information available to the Chinese population: The best search engine was kicked out, and other companies would not challenge the government like Google did! For the time being, however, Google has still proven themselves both morally and economically. Way to go, Google; What will you do next?
Reference: Hayek, F.A. Individualism and Economic Order. 1948. University of Chicago Press, Chicago, IL