Archives: December, 2011

North Korea: Kim Jong-il’s Death and the Coming Succession Struggle

North Korea’s “Dear Leader” Kim Jong-il is dead. There is now no prospect of negotiating and implementing a new nuclear agreement with the North in the near future. The so-called Democratic People’s Republic of Korea is likely to be consumed with a power struggle which could turn violent. Washington’s best policy option is to step back and observe.

After his stroke three years ago, Kim anointed his youngest son, Kim Jong-un, as his successor. However, the latter Kim has had little time to establish himself. The previous familial power transfer to Kim Jong-il took roughly two decades. There are several potential claimants to supreme authority in the North, and the military may play kingmaker.

Some observers hope for a “Korean Spring,” but the DPRK’s largely rural population is an unlikely vehicle for change. Urban elites may want reform, but not revolution. If a North Korean Mikhail Gorbachev is lurking in the background, he will have to move slowly to survive.

During this time of political uncertainty no official is likely to have the desire or ability to make a deal yielding up North Korea’s nuclear weapons. The leadership will be focused inward and no one is likely to challenge the military, which itself may fracture politically.

Nor is China likely to play a helpful role. Beijing views the status quo as being in its interest. Above all else, China is likely to emphasize stability, though it may very well attempt to influence the succession process outside of public view. But China does not want what America wants, preferring the DPRK’s survival, just with more responsible and pliable leadership.

Washington can do little during this process. The United States should maintain its willingness to talk with the North. American officials also should engage Beijing over the future of the peninsula, exploring Chinese concerns and searching for areas of compromise. For instance, Washington should pledge that there would be no American bases or troops in a reunited Korea, which might ease Beijing’s fears about the impact of a North Korean collapse.

Most important, the Obama administration should not rush to “strengthen” the alliance with South Korea in response to uncertainty in the North. The Republic of Korea is well able to defend itself. It should take the steps necessary to deter North Korean adventurism and develop its own strategies for dealing with Pyongyang. America should be withdrawing from an expensive security commitment which no longer serves U.S. interests.

Kim Jong-il imposed unimaginable hardship on the North Korean people. However, what follows him could be even worse if an uncertain power struggle breaks down into armed conflict. Other than encourage Beijing to use its influence to bring the Kim dynasty to a merciful end, the United States can—and should—do little more than watch developments in the North.

Pension Problems — for Rick Perry and the Taxpayers

At the Huffington Post I write about the news that Rick Perry is currently collecting both a salary and a pension from the taxpayers, and about a worse pension claim by a former Maryland governor. But I note that the real problem for taxpayers is not a few governors’ pensions but rather unfunded liabilities in the trillions facing state and local governments. And I suggest why legislators let pensions get so out-of-control:

Why do pensions get so lavish? A 2009 study by the Cato Institute argued that in negotiations between elected officials and government unions, nobody really represents the taxpayers. Elected officials are far more responsive to organized interests like unions than to the unorganized citizen-taxpayers. In effect, the principal-agent problem that analysts of the corporation worry about is far worse in government because it is very difficult for taxpayers to control their theoretical agents, the elected officials and appointed managers of government.

Whole thing here.

How Would SOPA Be Used?

Proponents of the Stop Online Privacy Act (SOPA) and its Senate counterpart PROTECT-IP often affect incredulity that anyone would “defend piracy” by describing their valiant attempts to stamp out “rogue sites” as a threat to free speech or innovation. Recording Industry Association of America head Cary Sherman, for instance, recently insisted to The New York Times that the bills are “specifically designed to focus on the worst of the worst sites whose model is predicated on theft.” This would be more convincing if the content industries weren’t so clearly continuing their long, proud tradition of making aggressive and overbroad copyright claims that would impede speech and innovation.

In the 80s, Universal Studios famously sued Sony to block the sale of Betamax VCRs, which could be used to “facilitate” the infringement of copyrights in shows and movies aired on broadcast television. Blocking VCR sales, of course, might also have strengthened the market position of the DiscoVision laserdisc system being developed by MCA, Universal’s parent company. The Supreme Court eventually vindicated Sony, but Universal did manage to persuade one lower court to rule in their favor. If SOPA’s blocking provisions could be implemented in the physical world, every VCR (and maybe every Sony product) would have stopped working after that first favorable ruling, until Sony could meet the burden of proving its innocence in a U.S. court. Of course, under a rule like that, consumers might have been wary of buying a VCR in the first place.

And today? It’s the Universal Music Group heading to court, after using a dubious copyright claim to take down an embarrassing video in which pop stars sing the praises of the site Megaupload. Megaupload, you see, is a file locker site, and the recording industry has made it crystal clear that it’s at the top of the industry’s list of “rogue sites” that should be targeted under SOPA. Indeed, when the content industries talk about why SOPA is needed, they invariably cite file lockers generally as the very epitome of a “rogue site.” It is, therefore, a little awkward to have their own artists pointing out the obvious: File lockers can be used by pirates to share infringing files, but also host an enormous amount of perfectly legitimate content, uploaded by users who would be effectively silenced (and cut off from their own files) if the entire site were blocked. Similarly, the recording industry thinks copyright gives it the power to veto cloud-based music storage services, which serve as a kind of virtual hard drive from which users can remotely access and play their own legally purchased and uploaded music. It’s a great convenience for consumers—but the labels think they can use copyright to stop it unless they’re paid a cut.

We might also look to some of the seizures of U.S.-registered sites by Immigration and Customs Enforcement. The sports site Rojadirecta—registered in the U.S. but based in Spain—was seized on the theory that linking to infringing video of sporting events hosted elsewhere on the Internet is enough to trigger forfeiture, even though Spanish courts have repeatedly ruled that such conduct (however shady it might seem) is legal in Spain. As lawyers for the government argued, invoking the very same statute that would provide the basis for SOPA censorship:

“[A]ny property used … in any manner or part to commit or facilitate the commission of an offense [such as criminal copyright infringement]” is subject to forfeiture…. Moreover, it is “[i]rrelevant whether the property’s role in the crime is integral,essential or indispensable,”… and a single incident of facilitating criminal activity is sufficient to trigger forfeiture.

The government further notes that they’re not directly charging Rojadirecta with criminal infringement (nor indeed do they ever have to bring such charges), which means no need to meet that pesky “beyond reasonable doubt” standard—or even “probable cause”. All the government needs for forfeiture, they assert, is a “reasonable belief” that a domain is being used to “facilitate” criminal infringement. This despite the fact that, in the context of obscenity laws, the Supreme Court has held that “Mere probable cause to believe a violation has transpired is not adequate to remove books or film from circulation.” Now, Rojadirecta’s business model is certainly shady, and maybe they’re even guilty of criminal infringement. But are we really comfortable with an entire domain, including vibrant discussion forums that clearly enable protected, non-infringing speech, being blocked pursuant to a “reasonable belief” standard, forcing the company to hire U.S. lawyers and prove their innocence to win the right to speak to U.S. users?

Then there’s the case of Dajaz1.com, a hip hop blog seized for over a year by the government for hosting infringing music files. Except it turned out that those files had actually been provided by PR firms, working for the music labels, who hoped blogs like Dajaz1 would circulate them to create buzz for up-and-coming artists.  Oops!

As legal scholar Jason Mazzone has amply documented, the use of dubious copyright claims to chill legitimate speech is depressingly common. The voting machine manufacturer Diebold has tried to use copyright to shut down whistleblower sites that published internal e-mails highlighting security vulnerabilities in software that could determine the outcome of elections. The Church of Scientology has similarly invoked copyright to stifle criticism. In Russia, political opposition groups are routinely raided under the pretext of searching for copyrighted software. Research suggests that most copyright takedown claims to search engines like Google are issued by companies targeting their competitors, and that nearly a third of takedown notices under the Digital Millennium Copyright Act lack a clear basis.

I could easily fill a dozen long blog posts with examples, but let’s cut to the chase. Major movie studios and music labels draw a lot of water in D.C.: The fact that a bill as massively unpopular as SOPA is even being seriously considered, let alone likely to pass, is proof of that. They will effectively control which foreign domains the Justice Department chooses to block directly, and shop around for friendly judges amenable to rubber-stamping orders in civil litigation that require payment providers and ad networks to cut off disfavored sites.  The likely targets are their competitors, whether the copyright claims are valid or not. Sites like YouTube that provide entertaining user-generated videos are one less reason to pony up for the next lackluster Adam Sandler movie. Sites that give musicians a way to gain exposure to fans and market their albums without giving a cut to the increasingly redundant middleman threaten to make the labels  obsolete.  And if open platforms invariably end up hosting some infringing content uploaded by users? Well, that’s as good a pretext as any for shutting down the competition.

Why do critics of SOPA worry that the bill will threaten legitimate speech and innovation?  Because its supporters have spent three decades providing overwhelming justification for that fear at every opportunity.  If I may end by making a bit of “fair use” of the genius of former Smiths front-man Morrisey:

He was a sweet and tender hooligan, hooligan

He said that he’d never, never do it again

And of course he won’t, oh, not until the next time

Empowered with the ability to threaten blocking of entire domains, I’d rather not see what the copyright hooligans do “next time.”

Published: So What If Corporations Aren’t People?

Six months ago, I wrote about a law review article I had just co-authored with former Cato legal associate Caitlyn McCarthy regarding corporate rights post-Citizens United.  Well, now it’s officially published, in The John Marshall Law Review.  Here’s the abstract:

Corporate participation in public discourse has long been a controversial issue, one that was reignited by the Supreme Court’s decision in Citizens United v. FEC, 130 S. Ct. 876 (2010). Much of the criticism of Citizens United stems from the claim that the Constitution does not protect corporations because they are not “real” people. While it’s true that corporations aren’t human beings, that truism is constitutionally irrelevant because corporations are formed by individuals as a means of exercising their constitutionally protected rights. When individuals pool their resources and speak under the legal fiction of a corporation, they do not lose their rights. It cannot be any other way; in a world where corporations are not entitled to constitutional protections, the police would be free to storm office buildings and seize computers or documents. The mayor of New York City could exercise eminent domain over Rockefeller Center by fiat and without compensation if he decides he’d like to move his office there. Moreover, the government would be able to censor all corporate speech, including that of so-called media corporations. In short, rights-bearing individuals do not forfeit those rights when they associate in groups. This essay will demonstrate why the common argument that corporations lack rights because they aren’t people demonstrates a fundamental misunderstanding of both the nature of corporations and the First Amendment.

Go here to download “So What If Corporations Aren’t People?”

Kim Jong-il Is Dead

The AP and others are reporting that North Korean leader Kim Jong-Il has died at the age of 70. This has long been expected, but what comes next is unclear. The best case scenario would be a smooth transition to new leadership, one that is committed to opening up North Korea’s ossified political system and reforming its decrepit economy. That is unlikely, however. If a power struggle ensues, the North Korean people will be caught in the middle. The countries with the most at stake in the event of a complete collapse of the DPRK – especially South Korea and China – should take the lead in helping the North Koreans to sort out their future.

Vaclav Havel, RIP

Vaclav Havel, the playwright who led the Velvet Revolution that ended communism in Czechoslovakia, has died at 75. At a conference in Prague in 1995, Cato research fellow Stanley Kober drew on Havel’s writings to discuss civil society, the spirit of humility, and the case for limited government. He quoted Havel on the essential quality of a free government:

I am in favor of a political system based on the citizen, and recognizing all his fundamental civil and human rights in their universal validity, and equally applied. The sovereignty of the community, the region, the nation, the state–any higher sovereignty, in fact–makes sense only if it is derived from the one genuine sovereignty, that is, from human sovereignty, which finds its political expression in civic sovereignty.

Although Havel sometimes found himself at odds with his successor, Vaclav Klaus, on the extent of the market economy, Cato vice president Jim Dorn related Havel’s commitment to markets at a conference in Shanghai in 1997:

Though my heart be left of centre, I have always known that the only economic system that works is a market economy, in which everything belongs to someone–which means that someone is responsible for everything. It is a system in which complete independence and plurality of economic entities exist within a legal framework, and its workings are guided chiefly by the laws of the marketplace. This is the only natural economy, the only kind that makes sense, the only one that can lead to prosperity, because it is the only one that reflects the nature of life itself.

Vaclav Havel helped Czechoslovakia make the transition from one of the most repressive Communist regimes to one of the most successful post-Communist countries. RIP.