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Vision of the Anointed book coverBerin recently encouraged me to re-read Thomas Sowell’s The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy, which I hadn’t looked at since I first read it back in 1995 or 96.   I’m glad I did since Sowell’s work has always been profoundly influential on my thinking (especially his masterpiece, A Conflict of Visions) and I had forgotten how useful The Vision of the Anointed was in helping me understand the reoccurring model that drives ideological crusades to expand government power over our lives and economy.

“The great ideological crusades of the twentieth-century intellectuals have ranged across the most disparate fields,” Sowell noted in the book.  But what they all had in common, he argued, was “their moral exaltation of the anointed above others, who are to have their different views nullified and superseded by the views of the anointed, imposed via the power of government.” (p. 5)  These elitist, government-expanding crusades shared several key elements, which Sowell identified as follows:

  1. Assertion of a great danger to the whole society, a danger to which the masses of people are oblivious.
  2. An urgent need for government action to avert impending catastrophe.
  3. A need for government to drastically curtail the dangerous behavior of the many, in response to the prescient conclusions of the few.
  4. A disdainful dismissal of arguments to the contrary as either uninformed, irresponsible, or motivated by unworthy purposes.

You can see this model at work on a daily basis today with our government’s various efforts to reshape our economy, but I think this model is equally applicable to debates over social policy and speech control.  In particular, the various “technopanics” I have been writing about recently fit this model. (See 1, 2, 3, 4, 5).  For example, consider how this plays out in the debate over online social networking:

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By Adam Thierer, Berin Szoka, & Adam Marcus

IE logoAs noted in the first installment of our “Privacy Solution Series,” we are outlining various user-empowerment or user “self-help” tools that allow Internet users to better protect their privacy online-and especially to defeat tracking for online behavioral advertising purposes.  These tools and methods form an important part of a layered approach that we believe offers an effective alternative to government-mandated regulation of online privacy.

In some of the upcoming installments we will be exploring the privacy controls embedded in the major web browsers consumers use today: Microsoft’s Internet Explorer (IE) 8, the Mozilla Foundation’s Firefox 3, Google’s Chrome 1.0, and Apple’s Safari 4. In evaluating these browsers, we will examine three types of privacy features:

(1) cookie management controls; (2) private browsing; and (3) other privacy features

We will first be focusing on the default features and functions embedded in the browsers. We plan to do subsequent installments on the various downloadable “add-ons” available for browsers, as we already did for AdBlock Plus in the second installment of this series. Continue reading →

Honolulu Hapa

by on December 19, 2008 · 12 comments

“Damn their lies and trust your eyes. Dig every kind of fox!” I here sing one for the freedom to mix it up as you and your honey alone see fit:

http://www.youtube.com/v/JTcHzGbBoe0&hl=en&fs=1

“Hapa” means “mixed race” in Hawaiian. Skin-tone mash ups have profoundly enriched my life, first with the Honolulu Hapa herself and then with our own little hapas. Honolulu Hapa celebrates coloring across the lines, knocks racism, and gives a shout-out to Loving v. Virginia, 88 U.S. 1 (1967)—the case where the U.S. Supreme Court struck down anti-miscegenation laws as unconstitutional restraints on personal liberty.

As with the prior four songs I’ve posted in this recent series (Take Up the Flame, Sensible Khakis, Nice to Be Wanted, and Hello, Jonah,), Honolulu Hapa comes with a Creative Commons license that allows pretty liberal use by all but commercial licensees, who have to pay a tithe to one of my favorite causes. Honolulu Hapa aims to help Creative Commons, an organization that helps all of us to mix—and remix—it up. Unlike those other songs, however, Honolulu Hapa adds a special ‘unrestricted use” term effective on June 12, Loving Day.

With Honolulu Hapa, I conclude my recent series of freedom-loving music videos. Like it or not, though, I’ve got more music-making plans. Next, I’ll record some good studio versions of those (and perhaps some other) songs. Eventually, I’d like to release a fundraising CD, one that might help out some good causes. Silly? Yeah, I guess so. But it does add another data point in support of my hypothesis: Freedom has more fun.

[Crossposted at Agoraphilia and Technology Liberation Front.]

Tim Lee has been taking some heat here from Richard Bennett and Steve Schultze about various aspects of his new Net neutrality paper. I haven’t had much time this week to jump into these debates, but I did want to mention one important portion of Tim’s paper that is being overlooked. Specifically, I like the way Tim took head-on some of the silly free speech arguments being put forth as a rationale for net neutrality regulation. As Tim notes in the introduction of the paper:

Concerns that network owners will undermine free speech online are particularly misguided. Network owners have neither the technology nor the manpower to effectively filter online content based on the viewpoints being expressed, nor do profit-making businesses have any real incentive to do so. Should a network owner be foolish enough to attempt large-scale censorship of its customers, it would not only fail to suppress the disfavored speech, but the network would actually increase the visibility of the content as the effort at censorship attracted additional coverage of the material being censored.

I think that’s exactly right and, later in his paper (between pgs 22-3), Tim nicely elaborates about the “Herculean task” associated with any attempt by a broadband provider to “manipulate human communication.” Not only is it true, as Tim argues, that “no widescale manipulation would go unnoticed for very long,” but he is also correct in noting that the public and press backlash would be enormous.

Again, I agree wholeheartedly with all these sentiments, but I think Tim missed another important angle here when discussing the unfounded fears about corporate censorship and the misguided attempts to use free speech as a justification for imposing net neutrality regulations.

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The Federal Communications Commission began a broad inquiry of intercarrier compensation in 2001 and now it may finally be getting around to acting on it on Nov. 4 while everyone’s thoughts are on something else.

This is about 12 years overdue. Congress in 1996 foresaw that implicit phone subsidies were unsustainable and ordered the FCC to replace them with a competitively-neutral subsidy mechanism. Due to political pressure, regulators have failed to complete the job.

Intercarrier compensation refers to “access charges” for long-distance calls and “reciprocal compensation” for local calls. A long-distance carrier may be forced to pay a local carrier more than 30 cents per minute to deliver a long-distance call, but local carriers receive as little as .0007 cents per minute to deliver calls they receive from other local carriers.

Once upon a time, before fiber optics, there were significant distance related costs. Now distance isn’t a major factor.

The high access charges remain only because the recipients, typically small and mid-size phone companies serving sparsely populated areas, have successfully lobbied regulators and legislators to keep them.

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The ‘D’ Word?

by on September 19, 2008 · 13 comments

Barack Obama argues that John McCain “hurt everyday workers with his longtime support for deregulation,” according to Politico .

Thomas Frank adds,

There is simply no way to blame [the failure of several large financial institutions], as Republicans used to do, on labor unions or over-regulation. No, this is the conservatives’ beloved financial system doing what comes naturally. Freed from the intrusive meddling of government, just as generations of supply-siders and entrepreneurial exuberants demanded it be, the American financial establishment has proceeded to cheat and deceive and beggar itself — and us — to the edge of Armageddon. It is as though Wall Street was run by a troupe of historical re-enactors determined to stage all the classic panics of the 19th century.

But as Steve Forbes points out, the “easy-money” policy of the Federal Reserve helped financial institutions pile up debt and bad assets.

 According to former FDIC Chairman William M. Isaac,

The biggest culprit is a change in our accounting rules that the Financial Accounting Standards Board and the SEC put into place over the past 15 years: Fair Value Accounting. Fair Value Accounting dictates that financial institutions holding financial instruments available for sale (such as mortgage-backed securities) must mark those assets to market. That sounds reasonable. But what do we do when the already thin market for those assets freezes up and only a handful of transactions occur at extremely depressed prices?

The answer to date from the SEC, FASB, bank regulators and the Treasury has been (more or less) “mark the assets to market even though there is no meaningful market.” The accounting profession, scarred by decades of costly litigation, just keeps marking down the assets as fast as it can.

This is contrary to everything we know about bank regulation. When there are temporary impairments of asset values due to economic and marketplace events, regulators must give institutions an opportunity to survive the temporary impairment. Assets should not be marked to unrealistic fire-sale prices. Regulators must evaluate the assets on the basis of their true economic value (a discounted cash-flow analysis).

If we had followed today’s approach during the 1980s, we would have nationalized all of the major banks in the country and thousands of additional banks and thrifts would have failed. I have little doubt that the country would have gone from a serious recession into a depression.

Easy money and mark-to-market are not deregulatory policies. They are examples of government intervention with unfortunate consequences.

The nature of unfortunate consequences is always unpredictable; the inevitability of unfortunate consequences, never so.

Easy money was supposed speed the transition from the dotcom and telecom bubbles to prosperity, and mark-to-market was so we would not have to suffer from similar speculative bubbles in the future. Yet here we have another burst speculative bubble.

According to Frank,

Thanks to the party of Romney and McCain, federal work is today so financially unattractive to top talent that it might as well be charity work. It’s one of the main reasons — other than outright conquest by the industries they’re supposed to be overseeing — that our regulatory agencies can’t seem to get out of bed in the morning.

France attracts its best and brightest to government service, but most of us don’t want to be like France — at least not in all respects. Although it is hard to fail in France, it is also hard to succeed.  

Maybe blaming the regulators is like the blame the messenger proverb. Perhaps the problem isn’t the regulators; it is regulation itself.

Although regulation always seems brilliant in theory, it usually fails in practice. Either it doesn’t work, it spawns corruption or both.   Or it backfires, as it did here.

TCS Daily on June 18 ran an essay by me on regulatory policy. I excerpt thus:

In a sense, both models – market and regulatory — are flawed. But there is a difference. For every theory contending that markets fail, there is usually an answering argument that they tend to self-correct. Once, economic theory worried that markets would fail to fund “public goods” like lighthouses—until more careful economics revealed markets doing exactly that. More theory pointed to the evils of monopoly. But in reality a monopolist reaping substantial profits is a big target, with every entrepreneur looking for a substitute good or service. Many of the markets’ self-correcting mechanisms are simple Darwinism. Poor investors and badly run businesses lose (their own) money until they go under. Technology and other factors that bring change keep even established firms on their toes. In contrast, self-correction is not a common response to regulatory failures. There is no good explanation for how an agency or a system of rules can be designed to systematically succeed or self-correct.

I can’t let the week end without calling attention to  a Bloomberg article on Republican outrage over the FCC’s cession to Google’s petition for “gaming” the spectrum rules.

At Tuesday’s House Energy and Commerce Subcommittee on Telecommunications and the Internet, Molly Peterson reports that:

Rep. John Shimkus (IL) asked whether Google had “duped” the FCC by bidding primarily to trigger the open-access rules. FCC Chairman Kevin Martin said the agency wasn’t duped, adding that the rules weren’t designed to prevent any company from bidding. “My goal was to make sure that whoever won the C-block had an open platform,'” Martin, a Republican, told the House telecommunications subcommittee.

The 463 blog smartly caught the irony of a company playing the game too successfully:

The only right thing for Google to do is to begin to shut down it’s overly effective Washington operation. They are clearly operating on a level that is unfair to all those telecom giant DC neophytes.

But here’s the real takeaway. Google’s public policy pitch was a crafty and bold maneuver. By asserting public interests, Google convinced the FCC to skew the spectrum rules to favor Google’s ad-based business model over competitive models that receive revenue from monthly subscriptions or operating networks. Continue reading →