Topic: Telecom, Internet & Information Policy

Sunstein, Hayek, and Wikipedia

University of Chicago law professor Cass Sunstein may not be among libertarians’ favorite thinkers, but Sunstein is, in his own way, a strong advocate of individual liberty and free markets.

Hayek fans will enjoy Sunstein’s op-ed in today’s Washington Post, in which he describes how individuals are using computer-age technology to aggregate information. A snippet:

Developing one of the most important ideas of the 20th century, Nobel Prize-winning economist Friedrich Hayek attacked socialist planning on the grounds that no planner could possibly obtain the “dispersed bits” of information held by individual members of society. Hayek insisted that the knowledge of individuals, taken as a whole, is far greater than that of any commission or board, however diligent and expert. The magic of the system of prices and of economic markets is that they incorporate a great deal of diffuse knowledge.

Wikipedia’s entries are not exactly prices, but they do aggregate the widely dispersed information of countless volunteer writers and editors. In this respect, Wikipedia is merely one of many experiments in aggregating knowledge and creativity that have been made possible by new technologies.

Sunstein’s op-ed goes on to discuss intriguing experiments with events futures, which should delight Cato friend Robin Hanson:

But wikis are merely one way to assemble dispersed knowledge. The number of prediction markets has also climbed over the past decade. These markets aggregate information by inviting people to “bet” on future events — the outcome of elections, changes in gross domestic product, the likelihood of a natural disaster or an outbreak of avian flu.

War of the Amateur Education Analysts

Here’s Apple’s Steve Jobs on education policy:

“I believe that what is wrong with our schools in this nation is that they have become unionized in the worst possible way,” the Apple CEO told a school-reform conference in Texas on Saturday. “This unionization and lifetime employment of K-12 teachers is off-the-charts crazy.”

But it’s not a news story.  This is from a column by Wired’s Leander Kahney, who goes on to say: 

Jobs knows a lot about schools; he’s been selling computers to them for more than 30 years. But don’t you love it when a billionaire who sends his own kids to private school applies half-baked business platitudes to complex problems like schools? I’m surprised Jobs didn’t suggest we outsource education to the same nonunion Chinese factories that build his iPods.

It’s amazing to see a thoughtful technology writer heap derision on education reform as if the innovation and creativity in the highly competitive technology field somehow can’t happen elsewhere.  Schools have “complex problems” … .  Designing and marketing consumer electronics is pat-a-cake?

Luckily, Tim Lee is on the case.  Writing at Technology Liberation Front, he says:

In his conclusion, Kahney chalks up our poor educational performance to “enormous economic inequality and the total absence of social safety nets.” I wonder if it’s occurred to Kahney that one of the major contributors to economic inequality is our quasi-feudal education system, in which access to a good school is tied to your parents’ ability to purchase a home in a good school district (or to afford tuition at a private school)? The whole point of school choice is to give low-income parents the same opportunities that wealthier parents now enjoy—to send their children to the school that works best for their own child. If Mr. Kahney is concerned about inequality, supporting school choice should be a no-brainer.

Collins’ Confusion

A couple of weeks ago, I went up to Maine to speak about identification issues at a community meeting in Augusta.  This was the night before the state legislature voted overwhelmingly to reject the REAL ID Act. Maine’s bold step catalyzed a nationwide rebellion, and states across the country are now passing resolutions to reject REAL ID.

Along with that resolution, the Maine legislature will be moving a bill that specifically prevents the secretary of state from spending any funds to comply with REAL ID. A real one-two punch.

Now, here’s a little inside baseball: The resolution was introduced by the Democratic Majority Leader of the Senate, Libby Mitchell, and the bill was introduced by Republican Representative Scott Lansley. As can happen, Republicans were a little concerned that the Democrat-introduced resolution would eclipse the Republican-introduced bill in this Democrat-majority legislature. But Mitchell and Lansley got together to be the lead co-sponsors of each others’ measures. Maine is doing the kind of bipartisan cooperation that is so rare in Washington, and Republican Lansley stands to get proper credit for his leadership on this issue.  But …

Along comes U.S. Senator Susan Collins, Republican of Maine, who this week confounded things by introducing a bill to defend and support the REAL ID Act. Her bill would give the DHS two more years to coerce states into implementing this national ID, and it would fiddle around the edges of the rulemaking process. Delaying implementation helps a national ID go forward in a big way because it gives the companies and organizations that sustain themselves on these kinds of projects time to shake the federal money tree and get this $11 billion surveillance mandate funded.

It’s all very confusing. First of all, Senator Collins’ move to support REAL ID faces right into a headwind known as “the will of the people of Maine.”  The state legislature overwhelmingly voted to reject REAL ID. Senator Collins, famous seeker of compromise, appears to be compromising not among the differing interests of her voters, but among the interests of her voters and the interests she hears from in Washington.

Secondly, Republican Collins is crossing up state Republican leaders like Scott Lansley and muddying the party’s message at home. Someone is looking out-of-touch. (Hint: It’s not Scott Lansley.)

The famously moderate Collins is backing a law that is most strongly favored by immoderate anti-immigrant groups.

Here’s what is most bizarre: Collins is moving to support REAL ID even though it stripped out identification provisions in the Intelligence Reform and Terrorism Prevention Act that she is widely credited with crafting!

Senator Collins may be confused. I know I am. Unfortunately, her move to protect REAL ID has attracted some support. Senator Collins should disavow this bill as a blunder, or explain her conversion to support of the REAL ID Act and a national ID.

Senate Homeland Security and Governmental Affairs chairman Joe Lieberman called the drivers license provisions of REAL ID “unworkable“ when it was attached to a military spending bill and rammed through the Senate without a hearing or vote. The passage of an additional two years will make them no more workable.

Some Sensible Thoughts on the REAL ID Act

Today I’ll be testifying on the REAL ID Act in a state legislature for the second time in two days. In the morning yesterday, I spoke to the Government Operations Committee of the Utah House of Representatives, along with the Committee’s Chairman Glenn Donnelson (R-North Ogden). His resolution to reject the REAL ID Act was passed unanimously by the committee and sent to the full House.

Mid-day, I flew from Salt Lake City to Boise, Idaho to speak on a panel about REAL ID convened in the capitol building by Representative Phil Hart (R-Athol). Today, Hart’s resolution opposing REAL ID will be heard in the House Transportation and Defense Committee.

Among the people on yesterday’s panel in Boise was Bill Bishop, Director of the Idaho Bureau of Homeland Security. You might think that a homeland security guy would support REAL ID. He doesn’t. Knowing full well he might be making it harder on himself the next time it comes time to getting grants from the U.S. Department of Homeland Security, he laid out his opposition to REAL ID.

Along with his philosophical objections to a national ID, he pointed out its practical weaknesses as a security tool. You can nail down the identity of everyone and you’ll be no better off in preventing something like a terrorist attack. And as soon as you come out with a highly secure, highly valuable ID like the REAL ID, the hackers and forgers will go to work on faking it or corrupting someone in order to get it. It’s a good security practice to diversify your protections rather than creating a single point of failure like the REAL ID Act does. You might make yourself less safe if you rely on a uniform ID system for your security.

What frustrates me about this kind of guy (I say, tongue firmly in cheek) is that I had to study security and risk management for a couple of years before I understood these concepts well enough to put in my book. The Bill Bishops of the world just kinda know it. Not fair.

Summarizing REAL ID’s utility as a national security tool, Bishop said: “I don’t believe in the Easter Bunny, I don’t believe in Santa Claus, and I don’t believe in the Lone Ranger. Which means I don’t believe in silver bullets.”

We ought to take advantage of this kind of wisdom, and the obvious benefits of local knowledge - maybe by coming up with some kind of decentralized governmental structure. I don’t know how you would do that. Just putting an idle thought out there.

‘Net Wars — Does It Matter?

In a scintillating previous post about telecom regulation, I gave a brief overview of the “net neutrality” fight. Net neutrality may be a fringe issue, but the politics surrounding it are very heated. And here’s the funny thing: I’m wondering if, from an economic perspective, the fight is of any real importance.

Let’s assume that Congress adopts net neutrality and prohibit the ISPs from charging fees to content providers. The ISPs would instead turn to their subscribers for additional revenue. The fear among net neutrality critics is that the ISPs will jack up rates equally on all users, whether a YouTube devotee or the little old lady who just uses the Internet to check e-mail and read the paper. But I seriously doubt that would happen — instead, the ISPs would likely target their heaviest broadband users with ”premium service” fees in exchange for consistent fast service. (Such differentiation already exists in the cost and quality differences between dial-up and broadband.) So, if I’m right, the YouTube devotee will have to pay extra in order to keep enjoying his favorite website.

Now, suppose Congress doesn’t adopt net neutrality, and the ISPs start mailing invoices to the broadband-intensive Web content providers. The content providers would likely respond by charging subscription fees to their visitors. So, in this scenario as well, the YouTube devotee will have to pay extra in order to keep enjoying his favorite website.

Notice: If I have this figured right, then no matter what Congress does, heavy bandwidth users will ultimately pay for the necessary Internet capacity expansion. The question is, on which bill — the ISP’s or the content provider’s — will the cost actually appear?

From a public policy perspective, there is an accompanying question: Would it be more efficient for that cost to appear on the ISP bill or the content provider’s bill? A priori, I see no reason why one would be more efficient than the other. Hence my wondering if this fight really matters.

This is not to say that we shouldn’t care that Congress may stick its nose into this issue. Politicians don’t have a strong reputation for enhancing efficiency and consumer welfare when they intervene in the marketplace. Indeed, I’d argue that Congress’ interest in net neutrality is prima facie evidence that neutrality would not be efficient or welfare-enhancing. But then, I’m a bit of a cynic.

Boston Tea Party? REAL ID Party!

Our nation has many gentle rivalries. As a northern California native, I have always known that I’m slightly superior to our friends in So Cal. (LA-LA land’s ignorance of our disdain validates it wonderfully, by the way.)

Maine people have a similar feeling toward their neighbors in Massachusetts (even while they root for Boston’s professional sports teams). This is among the things I enjoyed discovering this week as I traveled to the far northeast for some lively discussion of the REAL ID Act.

On a panel I was privileged to join at a community center in Augusta Wednesday night, George Smith, executive director of the Maine Sportsmen’s Alliance, stood to share his opinion of our national ID law and what Maine should do about it. A Norman Rockwell painting come to life, he spoke with all the directness (and accent) of a lifelong Mainer. Summarizing, his message was this: They had their Boston Tea Party. Let’s have a REAL ID Party!

All the spirit and independence that makes me so proud of Americans — without sparing that family rivalry for even a minute!

The result of George’s work — along with the Maine Civil Liberties Union and a bipartisan consensus of the state’s political leaders — was near unanimous passage of a state resolution refusing to implement REAL ID. Maine is now the first state to reject the REAL ID Act, and the tide against the bill is beginning to run. 

(For some equally stirring rhetoric in defense of liberty and against a national ID, here’s New Hampshire Representative Neal Kurk (R-Weare) on the REAL ID Act last year. New Hampshire is one of many states likely to join Maine in rejecting a national ID.)

I have tried to supply the intellectual arguments for rejecting a national ID in my book, Identity Crisis: How Identification is Overused and Misunderstood. I was pleased to offer Smith and a number of Maine’s political leaders copies of the book. 

Hear That? It’s the Sound of a Nation Constricting

Beginning today, citizens of the United States, Canada, Mexico, and Bermuda are required to present a passport to enter the United States when arriving by air from any part of the Western Hemisphere.

This new restriction on local international travel is part of the “Western Hemisphere Travel Initiative.” Tightening up on travel documentation was a recommendation of the 9/11 Commission that Congress passed into law in the Intelligence Reform and Terrorism Prevention Act of 2004.

To downplay the consequences of this new travel restriction, a Department of Homeland Security press release points out that over 90 percent of U.S. citizens, 97 percent of Canadians, and just about all Mexicans and Bermudans flying to the United States over the past week arrived with passports. But this means that fully 10 percent of Americans who currently travel overseas this way are going to be at least inconvenienced, and at most dissuaded, from doing so.

It’s hard to quantify what a marginal restriction on travel like this means, but let’s try:

As early as January 1, 2008, the new restriction may apply to citizens entering the U.S. from the Western Hemisphere by land or sea. Air travelers are probably more likely than land or border crossers to have passports so let’s assume that 10 percent of all American border crossers lack passports.

To get a rough idea of what this means, in 1999, there were approximately 300 million roundtrips between the United States and Mexico and the United States and Canada, the vast majority of them same-day trips. Let’s assume 250 million of them were U.S. citizens. If 1% of these trips don’t happen (10% of current non-passport holders) because of the new Western Hemisphere travel restrictions, that’s 2.5 million cross-border trips forgone each year, along with the commerce, goodwill, and freedom those trips would have entalied.

What price freedom? Well, let’s make it 10 bucks. At that price, using these strictly back-of-envelope estimates, WHTI costs $25 million per year (not counting the cost of administration). The net present value of a $25 million annual expenditure is $500 million (at a 5% interest rate). In other words, more than half-a-billion dollars (a low estimate) worth of freedom and commerce goes down the drain starting today.

It would be worth every penny if it improved our national security by a similar margin. Alas, it does not.

The reason why requiring passports at borders provides so very little security boils down to the fact that identity does not reveal intention.

In our daily lives, we use identity to assure ourselves of the bona fides of others - neighbors, coworkers, stores, and restaurants, for example. But terrorists and hardened criminals are not similarly constrained by the social and legal pressures we can bring to bear on our law-abiding neighbors.

You could have perfect knowledge of who everyone is - lock down everyone’s identity with a mandatory cradle-to-grave biometric tracking system - and you would still not prevent crime and terrorism. I have carefully analyzed the utility of identity for security in my book, Identity Crisis.

Terrorists can defeat an identity-based security system either physically or logically. They can enter the country someplace other than a border crossing for example - and the half-billion expendture on WHTI is 100% wasted. A logical evasion of identity-based border security is to enter the country legally, not having participated in terrorism planning or acts before. This was the technique used by al Qaeda with most of the 9/11 terrorists.

Checking passports at the border of the country is what security expert Bruce Schneier correctly calls “security theater.” It may make you feel safer, but it doesn’t make you safer. It does corral law-abiding citizens into the habit of showing ID as they go about their business, and it puts information about law-abiding travelers into government data stores for who-knows-what future use.

With the travel restrictions going into effect today, America does not get safer, just smaller.