Free Markets, Free People

control


Two new concerns for the freedom of the internet

One is domestic and the other is international.  On the domestic front we’re again confronted with “good intentions” being horribly and oppressively executed via a bad law.

Wending its way through Congress right now is legislation called the “Stop Online Piracy Act” or SOPA.  The intention is obviously laudable.  As “piracy” is usually defined, i.e. the theft of copyrighted material, it is certainly a function of government to attempt stop and or prosecute theft.

The problem isn’t found in the intent of the law, as I said.  It’s in how it would be executed – the regulations it must spawn to meet the law’s requirements. 

Stephen DeMaura and David Segal write about the effect it would have on political campaigns (their particular focus), but it certainly doesn’t take much to translate that effect onto blogs and many other types of websites.  Read through the scenario they outline that demonstrates a possible effect on a political campaign and then think blogs:

Here’s a plausible campaign scenario under SOPA. Imagine you are running for Congress in a competitive House district. You give a strong interview to a local morning news show and your campaign posts the clip on your website. When your opponent’s campaign sees the video, it decides to play hardball and sends a notice to your Internet service provider alerting them to what it deems “infringing content.” It doesn’t matter if the content is actually pirated. The ISP has five days to pull down your website and the offending clip or be sued. If you don’t take the video down, even if you believe that the content is protected under fair use, your website goes dark.

The ability of any entity to file an infringement notice is one of SOPA’s biggest problems. It creates an unprecedented “private right of action” that would allow a private party, without any involvement by a court, to effectively shut down a website. For a campaign, this would mean shouldering legal responsibility for all user-generated posts. As more issue-based and political campaigns utilize social media to spread their message and engage supporters, a site could be targeted not only for the campaign’s own posts but also for well-meaning comments from supporters.

It doesn’t take a particularly bright person to see how this sort of a law could be used in a broader sense to kill freedom of speech via frivolous attacks on a site’s content.  If QandO embarks on a campaign against a particular politician, for instance, and uses content that it deems to be “fair use” (and may indeed be fair use in a legal sense as well), all it takes is one person anywhere, whether they have a real interest or standing in the case, to file a complaint about “infringing content” and we’re gone unless we remove it.  Whether justified or not, the ISP is left in a position of having to enforce removal or face the cost of a lawsuit (whether a lawsuit is ever intended over the claim or not).  They will obviously move to protect their interests and that means dropping the so-called offender like a hot rock.

It would effectively chill free speech. 

As DeMaura and Segal note, there’s an alternative bill sponsored by Rep. Darrell Issa:

The Online Protection & Enforcement of Digital Trade Act would create a process for rights holders to protect their property that wouldn’t shut down entire sites over a small amount of copyrighted material. This legislation helps to solve copyright infringement while protecting the vitality of the U.S.-based Internet sector — an industry that has contributed 23 percent of the growth in world gross domestic product and has revolutionized the way we live.

Attack real on-line piracy?  Yes.  Do it with terrible law?  No.  SOPA should not see the legislative light of day.

Problem two?  The UN and other countries around the world want to have the ability to more directly control more of the internet.  Robert McDowell of the FCC lays it out:

The 193-member International Telecommunications Union (ITU), a U.N.agency, will meet in Dubai next December to renegotiate the 24-year-old treaty that deals with international oversight of the Internet. A growing number of countries are pushing greater governmental control and management of the Web’s availability, financial model and infrastructure.

They believe the current model is “dominated” by the U.S., and want to “take that control and power away,” Mr. McDowell said. China and Russia support the effort, but so do non-Western U.S. allies such as Brazil, South Africa and India.

“Thus far, those who are pushing for new intergovernmental powers over the Internet are far more energized and organized than those who favor the Internet freedom and prosperity,” he said.

The reason, of course, is fairly straight forward – cash and control:

While growth of the Internet has exploded under a minimal regulatory model over the past two decades, “significant government and civil society support is developing for a different policy outlook,” according to an analysis by lawyers David Gross and M. Ethan Lucarelli on the legal intelligence website www.lexology.com.

“Driven largely by the global financial troubles of recent years, together with persistent concerns about the implications of the growth of the Internet for national economies, social structures and cultures, some governments and others are now actively reconsidering the continuing viability of liberalization and competition-based policies,” they wrote.

So the plan, apparently, is to wrest control from the US via this treaty:

A bad treaty – which would need the support of only a bare majority of U.N.members to pass and which the United States could not veto – could bring “a whole parade of problems,” Mr. McDowell said.

The U.S. and other Western democracies would likely “opt out” of the treaty, he predicted, leading to a “Balkanization” of the global information network. Governments under the treaty would have greater authority to regulate rates and local access, and such critical emerging issues as cybersecurity and data privacy standards would be subject to international control.

Mr. McDowell said the treaty could open the door to allowing revenue-hungry national governments to charge Internet giants such as Google, Facebook and Amazon for their data traffic on a “per click” basis. The more website visitors those companies get, the more they pay.

And, as we’ve watched so many times, a vital and growing market would suffer government intrusion and probable decline:

In 1988, when the treaty was signed, fewer than 100,000 people used the Internet, Mr. McDowell said. Shortly after it was privatized in 1995, that number jumped to 16 million users. As of this year, it is up to 2 billion users, with another 500,000 joining every day.

“This phenomenal growth was the direct result of governments keeping their hands off the Internet sphere and relying instead on a private-sector, multi-stakeholder Internet governance model to keep it thriving,” he said.

Mr. McDowell attributed the massive growth of the Internet to freedom.

“So the whole point is, the more it migrated away from government control, the more it blossomed,” he said.

Freedom?  Blossoming?  Growth?  Can’t have that.  It must have government control and, by the way, contribute much more in revenue than it is now.   Massive growth without significant contributions to government is just unacceptable in this day and time.  And freedom?  Anathema to the cult of government.  

The servant has become the master and masters instinctively try to gather more and more power to themselves.

This is just another in a long line of examples.  The result, of course, will be to cripple something that has been one of the few growth sectors in the global economy.  Government greed and the belief of elites that they must control everything via government will eventually kill this proverbial golden goose.  Instead of trying to enable more growth, they’re embarked on a campaign to limit and control any growth such that it provides increased revenue for government.  Whether it is best for the citizens or economy of the countries so inclined is apparently irrelevant to the quest for more control and cash.

Freedom should be on the march, but instead, we continually see examples of it on the decline.  The UN is one of the main culprits in that decline.  It is a global organization in search of more power.  Under the guise of global democracy, it is involved in killing freedom as it attempts to gather more and more power to itself.  It is as obvious as the nose on your face that global governance is its ultimate goal.  It can’t do that without exercising more control through willing members and generating more income from which it can demand a share. 

To the control freaks and authoritarians out there, the internet is a horrifically dangerous thing.  It provides much too much freedom for those they would control.  Consequently they seek to wrest that control away.  The UN is the perfect vehicle to provide the cover of legitimacy for such a power grab.

Again, here’s a treaty that has no business seeing the light of day.  However, if I had to guess, it will pass.  And freedom will take another giant step backward.

~McQ

Twitter: @McQandO


Socialism In America

Perhaps the time has come to be perfectly frank. We Americans live in a socialist country. In point of fact, we have for quite some time, even though private property has a long, continuing and still revered position in our society. To be sure, we aren’t an entirely socialist country, but instead a mixed one that teeters between the two extremes of collectivism and freedom (i.e. socialism and capitalism). In the past century or so, however, the scale tipped noticeably toward the socialism side, and we are now at the point where capitalism is not the dominant force. Of course, there are many who will disagree with my assessment.

Conor Clarke, for example, offers the following to dispel notions that we have become a socialist country:

Government vs. Private Ownership

Government vs. Private Ownership

Conor explains:

Have you heard that the United States is headed toward socialism? Jonah Goldberg says it is. Alabama Senator Richard Shelby says it is. Phyllis Schlafly says it is. Richard Viguerie says it is. The Republican National Committee says it is. We must be getting pretty close.

[...]

The hot-pink portion of this pie chart is the percentage of listed American business assets that have recently been nationalized by the American government (ie, General Motors). Obama’s version of socialism is so sneaky you can hardly see it!

(And there is some reason to think this actually overstates the portion of the corporate landscape that’s been nationalized, but more on that at the end of the post.*)

While the chart above would appear at first glance to be pretty dispositive of the issue (if the federal government owns so little, can we really be socialist?), it actually begs a huge question. If the segment of the economy effectively nationalized in the past several months is so vanishingly small, why is it necessary for taxpayers to fund trillions of dollars to save it? We’ll come back to that.

Next, Jon Henke observes:

NOTE: The fact is, American has always had a mixed economy, as do all modern, developed economies. The question is not one of category – capitalism or socialism? – but of degree.

[...]

Obama is not socialist. But he is more comfortable with centralizing economic power. As that centralization proceeds, the focus of public interest will shift from “how do we fix the immediate economic problems?” to “how do we fix the problems we created when we tried to fix that temporary problem?” That is when the pendulum can swing back towards decentralization and individual empowerment.

Jon takes a more organic view of the subject. That is, he posits the governing structure of the US as subject to the tolerance of the polity for centralized control of the economy. In his view, just because Obama “is more comfortable with centralizing economic power” that does not mean that we have become a socialist nation. Instead, we are merely experiencing a swing of the political pendulum towards socialism that will inevitably swing back towards the capitalism node. Left unsaid is how often that pendulum has swung away from socialism in the past 100+ years. More importantly, Jon’s assertions beg their own question — i.e. how “comfortable” must a politician and/or the populace be with centralized power before we can safely label it socialism?

In addition to the above, another line of argument is sure to be made (if it hasn’t been already) that we cannot possibly be a socialist country because private property has not been outlawed and the people as a whole do not own and control the means of production. Truly, this is the argument that Conor attempts to support with his graph (not that Conor necessarily agrees with that argument, just that he is holding up evidence that would tend to suggest socialism is not at hand). Essentially, although socialism comes in many forms, a primary ingredient is that the state (on behalf of the people) have dominance over the means of production instead of private concerns. The most extreme form, of course, is where all private property is abolished and the state decides what will be produced, by who, when and how much. Much milder versions such as social democracy exist today that, while they allow private property and much more freedom than, say, Stalinist North Korea, maintain a firm grip over the economy as a whole. Is there any doubt that Germany is a socialist country for example? The question then is, where does America fit when it this spectrum of socialist possibilities, if it fits at all?

At bottom, the problem with these sorts of arguments is almost always definitional. If I start arguing that communism never works and use the Soviet Union as an example, someone is sure to pipe up “that wasn’t real communism” followed by a neat explanation how Lenin and Stalin perverted what the true communists wanted in order to seize power for their own means. In order to avoid that annoyance, let’s at least agree on the dictionary definition of socialism:

An economic system in which the production and distribution of goods are [owned and] controlled substantially by the government rather than by private enterprise, and in which cooperation rather than competition guides economic activity. There are many varieties of socialism. Some socialists tolerate capitalism, as long as the government maintains the dominant influence over the economy; others insist on an abolition of private enterprise. All communists are socialists, but not all socialists are communists.

The definition above comes from the The American Heritage® New Dictionary of Cultural Literacy, Third Edition, and I think sums up the idea nicely. The one thing missing is the word “ownership” which, I expect, someone will insist upon, so I’ve inserted the words “owned and” into the definition. As luck would have it, this is the very concept that I think is missed by almost everyone who discusses whether or not we are a socialist country.

Specifically, what is the difference between ownership and control? Looking again to the dictionary, here is a good legal definition of “ownership”:

“one’s exclusive right of possessing, enjoying, and disposing of a thing.” 72 So. 891. The term has been given a wide range of meanings, but is often said to comprehend both the concept of possession and, further, that of title and thus to be broader than either. See 139 N.W. 101. See fee simple.

The primary concept behind ownership is that of exclusivity, such that if I own real property, for example, I can by right exclude all others. Without the ability to exclude, my “ownership” is something less than complete and the use, enjoyment and alienation (a fancy word for selling, trading or giving away) of property is limited.

To illustrate the idea, consider that you own a piece of real property (Blackacre) which is rich with gold and silver mines, oil, and an abundance of flora and fauna. In short, it is a little slice of heaven and it is all yours. Or at least it would be if were not for the fact that the flora are mostly designated as protected, the fauna are all listed as endangered, and the mineral deposits are tightly regulated, all to the extent that you cannot make any real use of your land except to look at it from a neighbor’s yard in humble admiration for its splendor. Not only are you prevented from drilling or mining on your property, you cannot even build a house or structure of any kind because that might disturb the protected species. The rules and regulations governing Blackacre are so ominous, that you can’t even sell it without first offering it to the government for a price it will set in its own arbitrary discretion. Furthermore, just on the other side of Blackacre is the Pacific Ocean fronted by a lovely beach, to which the law declares access must be allowed for the public, and there is nothing you can do to prevent them from traipsing across your wonderland. In short, you may own Blackacre in title, but you have very little, if any, control.

Of course, at least here in America, the laws and regulations aren’t quite that strict. And the vast majority of people would agree to at least some controls over private property to prevent the owners from harming other property or people (e.g. pollution, building setbacks to prevent fire, etc.)[ed. - let's ignore Coasean bargaining for now, shall we?]. At some point, however, those restrictions on the owner’s use become so burdensome as to effectively deprive the owner of any real control. The same can be said for the ownership of capital, which can be anything from money to a large factory for building tractors. When the government sets up enough rules and regulations affecting the use and enjoyment of that capital, the fact that ownership is nominally in private hands does not somehow render that government as something other than socialist.

Now, getting back to our definition of socialism, which is more important, “ownership” or “control”? To my mind, this isn’t even a close call. Without control, ownership is next to meaningless. Therefore, if the state has the ability to control the means of production (a.k.a. capital), whether directly through ownership, or indirectly through law and regulation, I contend that such state should be deemed socialist.

Think of a scale that measures the owner’s rights in her own property and how, with each new government missive, that ownership indication drops a little more. Where the state’s intervention becomes intolerable will be different for each person, but from a definitional standpoint, that intervention represents socialism. When the scale registers a significant enough intervention into the owner’s rights, socialism becomes the prevalent factor in the control of property, and private, capitalist “ownership” is either dulled or altogether neutered. Again, without the ability to control that capital, ownership is a meaningless concept that should be left out of the conversation.

Accordingly, when Conor suggests that we are not a socialist nation because the government only owns an almost immeasurable portion of the corporate assets of this country, I suggest that he use a new measurement. Specifically, one that measures the amount of control that “owners” have over their property/capital/etc. That graph would look significantly different in my estimation.

Furthermore, when Jon states that Obama is not a socialist, he’s just comfortable with centralizing economic power, I ask that he consider what ways centralizing power (i.e. control over the means of production) is not socialist, and that he provide a few examples for clarification. Also, if the pendulum is going to swing back towards more decentralization (i.e. less control over capital), how far back would it have to go before most people could be reasonably certain that we are not, in fact, a socialist nation? How far back does he think it would have to go, or is his contention that the pendulum simply hasn’t swung into socialist territory? In considering those questions, I’d ask that the concept of control, rather than titular ownership, be the dominant factor in deciding where the state stands vis-à-vis socialism.

As I see it, we’ve been living with socialism in this country for a very long time. The only difference has been one of degree and magnitude. Its pervasiveness has ebbed and flowed over the decades, but American’s tolerance for it has grown substantially, even if many of us don’t like to call the governance we desire “socialism.” Unfortunately, that’s exactly what it is, and it’s only going to become more prevalent and intrusive. After all, why would anyone who is comfortable with centralizing economic power stop it? They’ll just call it something else and move on with asserting they’re control until one day you’ll be gazing longingly at Blackacre from the public beach, because that’s the only place where you can legally see it.