May 5, 2009

"Google is to privacy and respect for intellectual property rights what the Taliban are to women's rights and civil liberties." (*). Willem Buiter's declaration is remarkable for painting two importants facts into a single vivid picture. That Google has become the dominant monopolist yet refuses any attending burden has by now escaped no one but the US and EU regulators. Very few however have made explicit the link between copyrights and privacy, least of all the political powers paid for by pronaocracy.

Whether Willem Buiter will be heard better than me is debatable. Look no further than the masterly understatement provided by Samuel Brittan in his summary of what capitalism is about (**). "Businessmen do not in practice always welcome competition". In other words capitalists are hell bound to escape from the market discipline.

As Samuel Brittan perceptively adds, "the perennial problem [...] is the concentration of producer interests, which makes for successful lobbying, and dispersion of consumer and general citizen interests, which are therefore more difficult to organize". So while "producers" and consumers may be as little inclined to pay for what they can steal, producers have the edge in pushing for laws to extend copyrights and punish piracy and against laws to protect privacy.

Ideally the lawmakers' task is to influence microeconomics agents so as to reach desirable macroeconomic goals. Quite a challenge isn't it? Micromégas looked down on human beings as so many social insects (1). Voltaire's intended slight may be blunted by Dr. Dornhaus' opinion that these are "the most interesting creatures evolution has produced". The real issue remains. Entomologists are far today from predicting the behavior of an ant colony from the behavior of individual ants. As reported by Adele Conover (***), Anna Dornhaus "anesthesized 1,200 ants, one by one, and painted them" to better "[analyzed] 300 hours of videotape of the ants in action". Such patience and modesty are luxuries power can ill afford.

This is why I am skeptical when told "the doughty governor of the Bank of England" takes lessons from prominent zoologists. It may be "one of the hottest new trends in the modern banking jungle" as Gillian Tett puts it (****) but trendy truths tend to mask inconvenient gaps in knowledge. Turn bankers into fleas and subprime borrowers into rats if you must. Yet can zoologists best La Fontaine and his "The Animals sick of the plague" (2)?

Prudence however is opened to new perspectives. While the scale gap between the ant and the ant colony is yet to be bridged, such analogies do offer insights into human societies. Take Dr. Dornhaus' approach for instance. To identify each individual insect and record every one of its move may sorely tax her resources. On the Internet it's a cinch. But wait. Aren't two analogies better than one? Leave zoology aside and take up quantum mechanics. Each observation modifies the system observed. While Dr Dornhaus' setup may be benign enough, who would dismiss the influence of Google, Facebook and national governments on Internet users?

Observing individuals as if they were ants strip away their privacy and undermine the "minimum of trust" Samuel Brittan reckons to be necessary for capitalism. Given my defense of our data rights, no wonder Mervyn King prefers the company of tamed zoologists to mine. Even worse. Power makes measurements to take measures and, in a social setting, measures magnify measurement mistakes. Whether in the name of profit or security, the few who are misclassified will share their grievance, or their sheer luck as the case may be, with the many who know their turn may be next.

Decentralization is one measure which avoids the pitfalls of pattern recognition. Like privacy though, it requires to establish a framework of responsibility, what Samuel Brittan calls "the rule of the law". Contrast it with the rulers' law of a pronaocracy. If you torch the building you have insured, it's a crime. If, as Gillian Tett points out (*****), Morgan Stanley bankrupts the company on which it took credit default swaps, it's smart.

Micromégas left Earth behind in disgust. Pity we cannot so easily escape the zoo of our own creation.

Philippe Coueignoux

• (*) .......... Google's power, by Willem Buiter (Financial Times) - May 1, 2009
• (**) ........ A catechism for a system that endures, by Samuel Brittan (Financial Times) - May 1, 2009
• (***) ...... To Fathom a Colony's Talk and Toil, Studying Insects One by One, by Adele Conover (New York Times) - April 28, 2009
• (****) .... A timely lesson for bankers from the birds and the bees, by Gillian Tett (Financial Times) - May 2, 2009
• (*****) .. Tale from the land of Borat is a lesson for the world at large, by Gillian Tett (Financial Times) - May 1, 2009
• (1) see the text of Micromégas, by Voltaire in French
• (2) see the text of The Animals sick of the plague, translated in English from La Fontaine