Ideology and Critical Infrastructure Protection

I recently received a pair of reports on critical infrastructure protection in the mail, and have now had a chance to read them. Both are written by Kenneth Cukier, reporter for The Economist. They are well-written, thought-provoking, balanced, and blessedly brief. They summarize a roundtable and a working group convened by an organization I had not heard of before called The Rueschlikon Conference.

One is called Protecting Our Future: Shaping Public-Private Cooperation to Secure Critical Information Infrastructures. The other is Ensuring (and Insuring?) Critical Information Infrastructure Protection. They focus on an important question: How do we make sure that the facilities of our networked economy and society survive terrorists acts and natural disasters?

I want to come back to the ‘compliment’ I gave both papers: “balanced.” The first report finds, among other things, that we should “harness the power of the private sector” and “use market forces” to protect critical information infrastructures. It notes that Wal-Mart had 66% of its stores in the region of Hurricane Katrina back in operation 48 hours after the storm. It also notes how, with electrical lines downed by Katrina, BellSouth’s backup generators had kicked in. When fuel supplies ran low, government officials confiscated the fuel being trucked in to keep them running. Yet, for reasons I cannot discern, the report maintains that “public-private cooperation” is what’s needed rather than getting the public sector out of the way.

The second report finds that the marketplace is insufficient to protect critical infrastructure because it lacks proper incentives. It also finds that the insurance industry can create a market for security. It’s got to be one or the other. The “balance” of these reports becomes more and more just contradiction.

A telling line can be found in the second report: “[O]ne person expressed skepticism that relying on the market to solve [critical information infrastructure] security would work, since it seemed to fall too neatly into the modern ideological mantra that markets solve all problems.” In other words, a conclusion in favor of market solutions was avoided because it might further validate markets as a problem solving tool.

The uncomfortable search for “balance” in these otherwise good reports may reflect an ideological preference for government involvement – despite the harm that did in the case of Hurricane Katrina.

It is insufficient, of course, to identify ideological bias (or anti-ideological bias?) in the reports. I did find them useful and interesting, and they inspired a few thoughts that I think deserve more exploration:

  1. Anti-trust law thwarts communication among companies responsible for infrastructure protection. Rather than convening so many government work-groups, the root of the problem in anti-trust law should be addressed.
  2. Government secrecy is one of the things undoubtedly keeping the insurance industry from having the confidence to insure against terrorism risk. Thus, it does not promulgate better terror-security practices among its insureds, and a valuable tool in the struggle against terrorism lies on the shop floor. Rather than subsidies, the government should give the insurance industry information.
  3. People interested in these issues should attend or watch Cato’s upcoming forum on John Mueller’s book Overblown: How Politicians and the Terrorism Industry Inflate National Security Threats, and Why We Believe Them.

Is the White House Worth More than a Wii Console?

On government radio Friday, a panel of journalists were bemoaning the high cost of politics. The two leading candidates for president in 2008 might end up spending $500 million each — a billion-dollar election, the pundits wailed in italicized outrage.

It would be nice if politicians and special interests didn’t think it was worth half a billion dollars to gain the most powerful office in the world. But it is. The president not only has the power to bomb people, invade countries, hold citizens in jail without a lawyer, burn down churches, and strongly influence policy on issues ranging from abortion to youth unemployment — all of which might cause opinionated citizens to contribute money to political campaigns — he or she also plays a huge role in allocating $2.8 trillion a year of federal spending to favored clients, not to mention tweaking government regulation to help or hurt a candidate’s friends.

In Saturday’s New York Times, lefty journalist Tom Edsall gloats over the Republican-leaning interest groups who can expect to bear the brunt of Democratic wrath:

Topping the Democratic hit list are the G.O.P.’s closest corporate allies, including the oil and gas industry, student loan companies, and the pharmaceutical manufacturers known as Big Pharma. The list is much
longer… .

In many cases, Democrats can exact reprisal against companies that financed the Republican revolution and won special legislative favors in return … with the same avoidance of public scrutiny.

A billion dollars for the presidency? Coincidentally, that’s just about what Nintendo will take in on the 4 million units of Wii it intends to sell in the last five weeks of 2006.

Genetic Engineering: The Eugenics of Tomorrow?

I received a request today to comment on the possible dangers of genetic engineering. Michael Crichton’s latest book, Next, explores some of the horrors eugenics could bring, such as the mixing of animal and human DNA. Here are some of my thoughts:

Isaac Asimov, another great science fiction writer, said, “If knowledge can create problems, it is not through ignorance that we can solve them.” 

It is impossible to estimate, let alone know, the balance of good or evil that scientific knowledge will bring. In everything humans do, they are daunted by the principle of unintended consequences, but the answer is not to stop looking for answers. The pursuit of knowledge is the only true path to improving the human condition, yet there are almost as many views on what knowledge should be pursued as there are pursuers. The answer is to proceed cautiously, allowing small steps and small corrections, so with time the truth will show itself.

The best way to ensure caution is to keep government out of the pursuit of knowledge, whether scientific or otherwise. In the private sector, endeavors are supported only by those who believe they are ethical and worthwhile. The more extreme and outlandish the idea, the less likely it is to receive support. When mistakes are made on a small scale, they have small scale effects. Governments, which are run by individuals no less fallible than the rest of humanity, are influenced by bad ideas as much as by good ones. But, unlike the individual mad scientist with a small group of supporters, government mistakes loom larger than life — its policies affect the lives of whole populations.

In the beginning of the 20th century, eugenics was touted as the answer to all of humanity’s problems. Great scientists such as Alexander Graham Bell and Carol Campbell Brigham at first supported eugenics, as did every U.S. president between 1901 and 1933. Many people all over the world worked hard both in their private lives and through government policy to implement its principles. 

Individuals had their own ideas about improving the human gene pool by marrying only superior specimens of humanity. If the eugenics movement had resulted in nothing more than discriminatory marriage practices, the word “eugenics” wouldn’t represent anything more than a silly fad. The reason eugenics has become almost synonymous with mass sterilizations and genocide is because governments got involved.

Genetic engineering may be the answer to many of humanity’s problems or it may be the next eugenics. Let’s keep government out of science and let the advances and mistakes take place in small steps so that humanity can learn from scientific successes and failures on a realistic scale. Only with government intervention do potential mishaps become disastrous tragedies.

Debbie Hammons for President!

I’m not kidding. Ms. Hammons, a Democratic state legislator from Worland, WY, this week made a bit of a splash in fly-over country by questioning a $2.2 million annual tax break for investors considering building a type of coal-gasification electricity plant in her state. 

“When is it an incentive and when is it a subsidy?” she asked. ”What if we create a false sense of commercialization?” 

It would appear from the press account that nobody there seems to have any idea exactly what she’s driving at.

Anyway, good questions, Rep. Hammons. Are you sure you’re in the right line of work?    

Zimbabwe Ignores Milton Friedman’s Advice

Before he passed away last month, Milton Friedman had the satisfaction of seeing many of his free-market policy ideas and economic insights vindicated by real-world events. 

A story in today’s Financial Times from London offers a clear, yet tragic, illustration of Friedman’s famous maxim: “Inflation is everywhere and always a monetary phenomenon.” 

Zimbabwe’s erratic and despotic President Robert Mugabe has wrecked the country’s economy during his quarter-century in power by flouting virtually every free-market idea Milton Friedman advocated, including sound monetary policy. One result has been rampant inflation. According to the FT, Zimbabwe’s finance minister “admitted that inflation—1,070 percent in the year to October—was excessive, blaming money supply expansion of more than 1,000 percent.” 

Just as Professor Friedman would have predicted!

Get Toyota’s Hands Out of Your Wallet!

The president of Toyoto operations in North America, Jim Press, thinks that his giant auto company deserves U.S. taxpayer handouts. 

Actually, that’s not quite right. Toyota is already getting hefty subsidies from U.S. taxpayers courtesy of federal tax credits (up to $3,600) afforded to buyers of hybrid powered cars. The 2005 Energy Policy Act, however, limits the number of car buyers who can take advantage of the tax credit to 60,000. The act also cut back on the size of the credit for the Prius from $3,150 to $1,575 as of October 1. Other Toyota hybrids — such as the Camry — have seen tax credits reduced to $775–$1,300. 

Mr. Press said in a speech this week to the Electric Drive Transportation Association that it’s time for Uncle Sam’s stinginess to come to an end. ”By encouraging consumer support for a promising new technology, our government is supporting innovation and investing in our nation’s future.” 

Well, that’s one way of putting it. Another might be: “By subsidizing people who buy Toyota products — products manufactured by one of the largest privately held corporations in the world — our taxpayers are supporting Toyota employees and stockholders at a time when GM and Ford are on economic life support. Thank you America!”

President Bush, as you might expect, is all for this. If he’s ever said no to a corporate handout, it’s escaped my attention. The Congress, however, has been reluctant to inflate the corporate welfare checks any further — at least, so far. It will be interesting to see if all the red-faced populist rhetoric against Republican coziness with K-Street will have any bearing on how the Democrats deal with Toyota’s demand for even bigger and more obnoxious handouts.

Look, I have nothing against hybrid powered cars. There are even a number of Cato staffers who drive them. It’s just that, personally, I don’t like being forced to pay for someone else’s car. But that’s just me.  

Muggles Aren’t The Only Rent-Seekers

I confess: I’m a big fan of J.K. RowlingsHarry Potter series. One of the reasons (OK, not one of the bigger reasons, but still one of the reasons) is the books’ wonderful cynicism about government and politics.

Consider Rowlings’ most recent update of her website, in which she announces the December ”Wizard of the Month”:

Laurentia Fletwock
1947 – present
Celebrated breeder and racer of winged horses. Has campaigned for tighter restrictions on broomstick use.

I guess muggles aren’t the only rent-seekers.