Regulatory Cacophony

One of the goals of The Technological Liberation Front is to reverse the perceived dangerous trend in over-regulation. This is an admirable goal that everyone, even me, could agree with. While the majority of posters call for less regulation to foster the free market system; there is also a whisper that our country needs to take a "strong stance" to protect so-called intellectual property.

Adam Thierer expresses the viewpoint of most posters with: "One of the reasons that so many of us here take issue with proposals to expand regulation of communications, broadband, and media markets is because we have studied the horrendous inefficiencies of economic regulation in practice. We oppose regulatory proposals not because of a “blind faith” in free markets, but because we understand that even when markets stumble they correct themselves quicker and more efficiently than regulatory systems do."

But then when the necessity to protect so-called intellectual property is raised there are vague references to undefined entities obligated to protect so-called intellectual property. Drew Clark writes: "Nations ranging from Brazil to Brunei to Russia are failing to properly protect the intellectual property assets of US companies and others, and international organisations are not doing enough to stop it, seven IP attachés to the US Foreign and Commercial Service lamented recently." (emphasis added). Reading between the lines this is a clear call for greater regulatory involvement by government, not less.

For example the US Chamber of Commerce (as Drew writes) has provided some clarity by calling for the appointment of: " “a well-qualified undersecretary and director” - with a nine-point list of job qualifications - and also to “enhance organisational management” and “improve the retention of patent examiners.” This has the look, feel, and smell of regulation.

Essentially we are left with a logical disconnect concerning the concept of regulation. Certain agencies such as the Federal Communication Commission and the Federal Trade Commission are routinely villified as "bad" because they regulate business in the name of the Public Interest but then we do a conceptual 180 deggree turn when a "good" government regulatory agency is needed as a private police force for the benefit of business. In recognition of this trend, TechDirt writes "Senate Wants to Send US Copyright Cops to Foreign Countries".

In conclusion, the goal of deregulation is being usurped by a call for more special interest regulation to protect businessess. Regulation, should be for the creation of a "level free-market playing field" not as a means of favoring special corporate interests. Essentially, we are seeing the emergence of Corporatism. Under Corporatism the government is essentially reduced to being a lacky of corporate interests. A nation of, by, and for the corporation.

On Regulation

Our financial system is imploding. As a crowning insult we have the Bernie Madoff ponzi scheme. These unprecedented market failures naturally raise the issue of the interrelationship of the free market and regulation. Before going further Larry Kudlow discussed (video) "Regulation Overhaul" on CNBC. If you listen, you will actually here Larry (a free market anti-regulatory advocate) say that deregulation is not the answer since we need the rule-of-law for financial stability with Steve Moore responding "Geez I never thought I would see the day Larry were you would trounce the Wall Street Journal"!!! (Quote more or less accurate)

Back to developing the theme of this post. In the face of this financial debacle the call of many free market advocates has been for less regulation! Mimicking this call, Tim Lee wrote "Real Regulators" at the Technological Liberation Front, in regards to net neutrality, "Too many advocates of regulation seem to have never considered the possibility that the FCC bureaucrats in charge of making these decisions at any point in time might be lazy, incompetent, technically confused, or biased in favor of industry incumbents." What is bothersome is that Tim's comment is a sample representative of the blind repetition of a tired dogma that refuses to really examine why a free market failure occurred. The whine is that it always the fault of regulation. This is not a demonstration of the rationale thinking that our free market is supposedly founded upon.

In my response to Tim's post I wrote:

Usually, the claim is made that the consumer will quickly discover the abuse and that market pressures will reign in companies so that they will once again operate within the idyllic principles of the free market. The anecdotal evidence unfortunately is that this is a naive and utopian concept. The Madoff affair scheme has evidently gone on for decades and the automotive industry has been failing for decades. In fact, the automotive corporate executive have apparently been operating their companies in an "incompetent, technically confused" manner. Now, in the "best" traditions of the free market, these corporate executives are now groveling to the government to bail them out of their incompetence. So the executives of our automotive and financial industries who have claimed to operate on free market principles, instead of accepting responsibility for their failed actions now want socialism.

Those who always seek less regulation should take a long hard look in the mirror. True, regulations can be implemented badly, the regulators may be dishonest, they may not truly understand what they are regulating. The existence or non-existence of regulation does not cause anyone to behave badly. The corporate executives who have brought our economy down did it in a purposeful and willful manner. It is time that the finger of blame be pointed at them.

Not only should the finger of blame be pointed at them, but they need to realize that if we are to live in a civil society that they need to have a degree of social responsibility. The Madoff affair is a prime example of what happens when one can avoid regulation and is not constrained by social responsibility. Those who mindless whine about regulation need undertake some deep soul searching self-criticism.

Great Net Neutrality Debate II

Evidently a Wall Street Journal article sparked a variety of posts related to Network Neutrality. One post was at the Technology Liberation: "Front, Bandwidth, Storewidth, and Net Neutrality", which in turn referenced the testimony of George Gilder before the Senate Commerce Committee in April 2004. What intrigued me with the narrative, was the following narrative.

Although American companies invented almost all the technologies crucial to the Internet, we have fallen behind many other nations in the deployment of these technologies.

The U.S. now ranks eleventh internationally in residential "broadband" access. Using the FCC’s silly 200-kilobit-per-second definition, some now say that 25 percent of American homes have broadband. But by the standards of Asia–where most citizens enjoy access speeds 10 times faster than our fastest links–U.S. residences have no broadband at all. U.S. businesses have far less broadband than South Korean residences. South Korea, for instance, has 40 times the per capita bandwidth of the U.S. Japan is close behind Korea, and countries from China to Italy are removing obstacles to the deployment of vDSL, fiber-to-the-home, and broadband wireless networks.

Asian broadband also proves there was no Internet "bubble." Today, Korea runs over the net between a three and five times larger share of its economy than we do. Riding the bus to work, Koreans watch television news and exchange video mail over their mobile phones. They enjoy full-motion video education and entertainment in their homes. Many of the dot-coms that failed in America due to the lack of robust broadband links are thriving in Korea. Consider that by this time next year Verizon Wireless’s 38 million customers will enjoy faster Internet access via their mobile phones than through their Verizon DSL connections to their homes. Only the most severe disincentives to invest could have yielded such a result, which defies the laws of physics. The American Internet "bubble" was actually a crisis of policy.

The purpose of George Gilder testimony was to establish how America is falling behind due to "oppressive" regulation. The problem with the narrative is that it is logically flawed since Mr. Gilder has not delved into why the Asian internet is better than the US internet. One can't simply say that regulation in the US has made our internet "bad" when compared to the Asian internet. For all I know, the Asian internet could be even more regulated than the US internet. Or they have better network managers than we do? Mr. Gilder has simply overlooked these potential reasons.

The narrative, to me, is logically flawed in another manner. If the technology exists, it can be deployed. If it is not deployed then the corporate leaders have made a willing choice not to use it. I would say this is similar to regulations imposing automobile emission standards. The US auto industry said it couldn't be done and whined to Congress. The Japaneses called in their engineers and did it. Now, because they have failed to adapt the American automotive industry is facing bankruptcy.

If the Asian internet is better then the US internet, we need to examine what they are doing and then adapt that technology so that we will have a better internet. Effective corporate leadership means adapting, not whining to Congress for special breaks such as bailouts or less regulation. If our corporate leaders talk free market principles, they should live it through competition.

I also provided this comment at the Technology Liberation Front.

Two Quickie Comments

Against Monopoly has posted a Tom Toles cartoon which exactly expresses my feelings on how we are "solving" our credit crises. We have to create more credit so that people can once again buy products that they are not able to pay for.

In typical corporate fashion, General Electric has issued a disingenuous press release. The press release states: "The Company also announced that it will no longer provide specific quarterly EPS guidance. Instead, the Company will provide a full-year operating framework with detail in the industrial and financial businesses. The Company remains committed to high levels of disclosure and transparency, and will continue to report all of its quarterly segment details." So GE is committed to operating in a transparent manner by not disclosing anticipated earnings information.

Hollywood Remakes Science Fiction Classics II

So if Hollywood should be making "new" movies instead of re-hashing "old" content, the question naturally arises as to what stories are "ripe" for being made into a movie(s). Below are some suggestions. Each of these series consists of 3 or more books (except for Smith), so Hollywood should be able to get a log of mileage out of them.

1. C.J. Cherryh - Downbelow Series.

2. Jack Chalker - Well World Series and Soul Rider Series.

3. Jack Vance - The Dying Earth Series, The Demon Princes Series, Alastor Series

4. A. Bertram Chandler - The Rim World Series

5. Cordwainer Smith - The Rediscovery of Man

Several years ago, I did attend a discussion where Orson Scott Card talked about the studios wanting to make Ender's Game into a movie. Evidently that fell through due to artistic differences. Card believed that the changes proposed by Hollywood would diminish his story. Clearly we need to protect the integrity of any stories that are brought the big screen.

As an aside, Jack Vance should receive the Noble prize for literature.

Any more suggestions?

Hollywood Remakes Science Fiction Classics

The Los Angeles Times has several articles on Science Fiction. One of the features is a photo gallery of "13 upcoming remakes of Hollywood sci-fi classics". The purpose of Hollywood of course is to provide entertainment. Remakes of popular movies may be sure fire hits. But I have a question, why are remakes being made instead of making movies based on stories that have not been filmed?

Of course, that does not mean that new content is not being produced. As I was writing this a commercial came on the TV regarding the Chronicles of Narninia: Prince Caspian.

Could copyright have anything do with the lack of written content moving to film? That licensing a written story for movie production is now too complex and expensive? I don't know. This is pure speculation on my part, but I would think that Hollywood would be craving new content rather than recycling old content.

Any thoughts?

Imaginary Property Rights

For the past several years I have been following the debate on so-called intellectual property on the Gripe Line (now silent), Technological Liberation Front, TechDirt, and Against Monopoly. As I have read the posts a comon theme began to appear. The concept of "Sale" is being depreciated.

Normally when one buys a product, such as a car, the seller transfers his/her property right to the buyer. However, with the growth of personal computers which allows content to be easily copied and transferred, we have seen the emergence of so-called intellectual property. Those who support the concept of intellectual property assert that the creators of content perpetually own the content and that those who "buy" the content are simply "leasing" or "licensing" the content, which leaves the buyer with no property rights concerning how the content may be used.

The current trend of property rights aggrandizement by those promoting s0-called intellectual property rights appears to be coming under increased scrutiny. Ubersoft recently ran a very humerus panel of cartoons: "Grand Unified Interconnected Litigation Theory". This series of cartoons explores how end user license agreements (EULA) essentially strip the consumer of any rights and allows the content creators to essentially abuse the consumer at the content creators whim.

TechDirt recently published "Creation Does Not Equal Ownership". The article details that the simple act of creation does not confer perpetual ownership to the creator. In that article Mike Masnick wrote, more eloquently than I, "Despite their claims of being property rights supporters, they are actually the opposite. They are trying to deny property rights to any recipient."

"Creation Does Not Equal Ownership" is a followup an article by Stephen Kinsella: "Objectivists on the PRO-IP Act". Kinsella writes "Notes Johnson, "the creator of a piece of intellectual property owns the product of his work." His argument? "If a baker bakes a loaf of bread, he therefore owns it." And likewise, for "music, movies, software." But note the mistake here Johson makes: "If a baker bakes a loaf of bread, he therefore owns it." The "therefore" is the giveaway: he says this because he thinks of the creation of the loaf as the act that gives rise to ownership. Then this leads to the analogy with other created things, like music. But creation of the loaf is not the reason why the baker owns it. He owns the loaf because he owned the dough that he baked. He already owned the dough, before any act of "creation"--before he transformed it with his labor. If he owned the dough, then he owns whatever he transforms his property into; the act of creation is an act of transformation that does not generate any new property rights. So creation is not necessary for him to own the resulting baked bread. Likewise, if he used someone else's dough--say, his employer's--then he does not own the loaf, but the owner of the dough does. So creation is not sufficient for ownership."

Mike Masnick goes on to write: "Exactly. Creation alone does not grant property rights if none existed prior to that transformation. I would even take the argument a step further. Even if you own something due to the fact that you created it, once you have given away or sold that product, you no longer have ownership of it -- and claiming you do actually removes property rights from the lawful owner."

Those who advocate so-called intellectual property are attempting to deprive the consumer of being able to acquire property rights to products that they have legally bought. Furthermore, those who advocate so called intellectual property are asserting an imaginary property right that they do not even posses. It is time for the consumer defend their property rights by fighting back.