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Technology and Privacy
Is Cato Asleep at the Switch on Copyrights and Patents?
In today’s installment of Cato Unbound, Dean Baker calls libertarians to task for their failure to take a more skeptical stance toward the government‐granted monopolies we call copyright and patent protections:
Their enforcement efforts have required terrorizing people for making unauthorized copies of copyrighted material. In a recent case, a single mother was fined several hundred thousand dollars for allowing her computer to be used to download 24 songs over the web. The entertainment industry has gotten the government to prohibit the production of electronic devices because they had inadequate protection against duplicating copyrighted material. They had a Russian computer scientist arrested when he visited the United States because he gave an academic lecture that explained how an encryption lock could be broken. They even went after the Girl Scouts for singing copyrighted songs without permission.
The extraordinary abuses that we see every day as a result of patent protection for prescription drugs and copyright protection should be sending libertarians through the roof, and perhaps it does. But, where are the libertarians’ research programs on alternatives to patents for financing drug research or alternatives to copyrights for financing creative and artistic work?
My area of expertise is information technology policy, so I haven’t written much about pharmaceutical patents, but as a Cato scholar I’ve certainly spilled plenty of ink criticizing the excesses of copyright and patent law as it applies to information technology. Here is the study I did in 2006 criticizing the Digital Millennium Copyright Act, which was responsible for putting that Russian computer scientist in jail. Here is an op‐ed I wrote for the New York Times last year pointing out that software patents have become an impediment to innovation in the software industry. Here is an article I wrote this summer for Reason magazine pointing out the problems the DMCA is creating for music consumers. And I’ve done dozens of posts at the Technology Liberation Front criticizing the recent expansion of copyright and patent restrictions. For example, in 2006 I did about 20 posts examining various software patents and pointing out how they were impeding progress in the software industry.
Moreover, we’ve written extensively about methods for producing creative works without copyright protection. These include free software, selling advertising, catering to core fans, selling security, and selling services. Cato published an excellent study in 2006 about the rise of “amateur‐to‐amateur” culture, which largely thrives outside the constraints of copyright. The growth of these alternative approaches to content creation suggests that in the future, copyright is likely to be less, rather than more, important than it was in the 20th Century.
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Diseconomies of Scale vs. Network Effects
I was very interested to read Roderick Long’s opening essay for this month’s Cato Unbound. Long draws a distinction between genuine free markets and policies such as corporate welfare and protectionism that favor the interests of incumbent businesses at the expense of the general public. Almost all libertarians draw this distinction, of course, but Long suggests that many libertarians too readily classify as “free market” policies that are more properly regarded as corporate welfare.
What caught my eye about Long’s article was his claim that in a genuinely free market, businesses would be significantly smaller than they are today. He points out that large, hierarchical businesses are subject to many of the same inefficiencies that plague government bureaucracies. The executives of the largest corporations cannot possibly have enough knowledge to make good decisions about the thousands of different projects various parts of their companies are undertaking, and so it’s inevitable that large companies will suffer from inefficiencies greater than those that afflict smaller firms.
I think this is an important point, and indeed is a theme that runs through my own work. For example, one of the key arguments of my Policy Analysis on network neutrality, which Cato released on Wednesday, is that the Internet’s success depends on the fact that it isn’t owned or managed by any single entity. Back in the 1990s, when the Internet was competing with proprietary online services like AOL and Compuserve, the Internet’s lack of centralized control turned out to be its most important strength. The hierarchical decision‐making processes of the AOL and Compuserve companies simply couldn’t keep up with the spontaneous order of millions of Internet users acting without central direction.
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Tim Lee on “the Durable Internet”
Tim Lee released an excellent new Policy Analysis today. The Durable Internet: Preserving Network Neutrality without Regulation is a must‐read for people on both sides of the debate over network neutrality regulation.
What I like best about this paper is how Tim avoids joining one “team” or another. He evenly gives each side its due — each side is right about some things, after all — and calls out the specific instances where he thinks each is wrong.
Lay readers may be challenged by some of the concepts in the paper, but there’s no time like the present to familiarize oneself with the basic infrastructure of our future economy and society.
Tim makes the case for treating the “end‐to‐end principle” as an important part of the Internet’s fundamental design. Tim disagrees with the people who argue for a network with “smarter” innards and believes that neutrality advocates seek the best engineering for the network. But they are wrong to believe that the network is fragile or susceptible to control. The Internet’s end‐to‐end architecture is durable, despite examples where it is not an absolute.
Tim has history lessons for those who believe that regulatory control of network management will have salutary effects. Time and time again, regulatory agencies have fallen into service of the industries they regulate.
“In 1970,” Tim tells us, “a report released by a Ralph Nader group described the [Interstate Commerce Commission] as ‘primarily a forum at which transportation interests divide up the national transportation market.’ ” Such is the likely fate of the Internet if its management were given to regulators at the FCC and their lobbyist friends at Verizon, AT&T, Comcast, and so on.
This paper has something for everyone, and will be a reference work as the network neutrality discussion continues. Highly recommended: The Durable Internet: Preserving Network Neutrality without Regulation.
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Macho Sauce Gives Cannon a Run for His Money
Here’s an interesting video in which the economics of health care are described in slightly more vernacular language than my colleague Michael Cannon would typically use. I venture to say that the presenter makes the eminently capable Mr. Cannon look quite staid.
This is a conservative, of course, and not a libertarian. Much of what comes after the first two minutes is off the mark in my opinion. But it’s good entertainment and it carries some good messages about how socialized medicine is a policy that’s best regarded as somewhat infelicitous.
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More Unwelcome Big‐Think from Donald Kerr
Donald Kerr, principal deputy director of national intelligence, created a stir last year when he opined about “privacy” in a way that redefined the concept as congenially to the intelligence community as possible.
I put it this way in a critique at the time:
“If you’ve identified yourself to your ISP,” he appears to think, “you’ve identified yourself to me.” The folks in his world may think that way, but that’s not the way the rest of us look at it, and it’s not consistent with a sound interpretation of the Fourth Amendment or life in a free society.
Now he’s back at it with “cybersecurity.”
Walter Pincus of the Washington Post reports on two recent Kerr speeches that have “called for a radical new relationship between government and the private sector” in this area:
One approach would have the government take equity stakes in companies developing technical products, in effect expanding the practice of In‐Q‐Tel, the CIA entity that invests in companies.
Another proposal is to provide the same protective capabilities applied to government Web sites, ending in .gov and .mil, to the private industry’s sites, ending in .com, which Kerr said have close to 98 percent of the nation’s most important information.
* * *
“We have a responsibility … to help those companies that we take an equity stake in or those that are just out there in the U.S. economy, to protect the most valuable assets they have, their ideas and the people who create them,” he said.
The government‐ownership‐of‐private‐assets train is rolling out of the station and Kerr wants his agency to be on board. But he’s wrong. It’s the responsibility of private owners to secure their assets.
This is big‐think we do not need. Just like with his contortion of “privacy,” Kerr would upend the roles and responsibilities of government and the private sector by giving government an ownership stake, for “cybersecurity” reasons or any other.
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Government Data Mining: The Need for a Legal Framework
Indiana University law professor Fred Cate writes with characteristic thoroughness and organization in his article “Government Data Mining: The Need for a Legal Framework,” published in the Harvard Civil Rights‐Civil Liberties Law Review this summer.
Here’s a snippet from the abstract:
The article describes the extraordinary volume and variety of personal data to which the government has routine access, directly and through industry, and examines the absence of any meaningful limits on that access. So‐called privacy statutes are often so outdated and inadequate that they fail to limit the government’s access to our most personal data, or they have been amended in the post‑9/11 world to reduce those limits. And the Fourth Amendment, the primary constitutional guarantee of individual privacy, has been interpreted by the Supreme Court to not apply to routine data collection, accessing data from third parties, or sharing data, even if illegally gathered.
Professor Cate spends a good deal of time on the Supreme Court’s pernicious “third party doctrine,” which exempts information shared with a third party (think of ISPs, banks, etc.) from Fourth Amendment protection. This rule was bad when it was written and it grows worse and worse as we move our lives further and further online.
Oh, there are details from the paper I would have treated differently. He mistakenly says the 9/11 terrorists used false ID. (Fraudulently gotten, yes. False identities, no.) And he omits the Federal Agency Data Mining Reporting Act of 2007, passed as §804 of the Implementing Recommendations of the 9/11 Commission Act of 2007 (Public Law 110–53). But these are trivial issues with a paper that is excellent overall.
(I note with pride and pleasure that he cites the Cato Policy Analysis “Effective Counterterrorism and the Limited Role of Predictive Data Mining,” which Jeff Jonas and I wrote.)
Poking around among the Internets to confirm this and that detail, I found this post saying that Professor Cate authored much of a recent report called “Protecting Individual Privacy in the Struggle Against Terrorists.” It’s also very good stuff.
Fred Cate is doing good work.