January 24, 2012

Pity John Gapper. He pines for Norman Rockwell's model of a democracy, where earnest citizens freely contribute their thoughts to the common good. He, himself, illustrates the painter's famous illustration (1). In the wake of a Wikipedia blackout denouncing US anti-piracy bills (2), here he stands in print if not in person, warning us about "the tactical victory" achieved last week by the Internet industry over the Hollywood forces.

"The blackouts were a dramatic gesture but curbing piracy does not "destroy the Internet as we know it". It would be wiser for Silicon Valley to cut the histrionics and help to fashion a decent law" (*).

John Gapper implies there is such a thing as a public interest measure. However this is not true in a pronaocracy, when lobbies treat the legislative process as the continuation of economic competition by other means. As they gauge any law and regulation against their sole benefit, a "decent law" would have to make Pareto proud and hurt no private interest. Is such a feat possible? They call economics the dismal science for a reason.

John Gapper's words of wisdom may be wishful, they are not misleading. He leaves us in no doubt he is describing a fight among feuding lobbies whose feudal estates sit in the "Silicon Valley" and "Hollywood" respectively. Could this be a commentator's personal opinion? Subject to stricter standards of objectivity, David Gelles reports "an unconventional lobbying campaign by technology companies and their supporters has scuttled work on proposed legislation to combat online piracy" (**).

Inversely I fault the New York Times copy editor for titling his paper's dispatches on the same topic "Public Outcry Over Antipiracy Bills Began as Grass-Roots Grumbling" . "The protest grew out of a [...] grass-roots movement", wrote Jenna Wortham (***). Unless my English fails me, isn't "Occupy Wall Street" (3) a more typical example? Could an initiative started, in Jenna Wortham's own words, by "respected venture capitalists like Fred Wilson and Paul Graham" be truly called "grass-roots"? Would venture capitalists be "respected" if they remained among the 99%?

Technology and warfare have always evolved hand in hand. With blog sites and social networks quick to unleash populism, new lords can rouse their serfs and restive barons stir greater lords into action with unheard of efficiency. Give Jenna Wortham credit for documenting these dynamics.

Isn't the link between money and politics even stronger? "New campaign finance laws are upending US politics", write Richard McGregor and John Dunbar (****). Listen now to Christopher J. Dodd, Hollywood's hired hand. Per Michael Cieply and Edward Wyatt (*****), he "would welcome a summit meeting between Internet companies and content companies, perhaps convened by the White House, that could lead to a compromise". Are decent public laws but treaties between private parties, the US President a convenient if dispensable tool, Congress a mere rubber stamp?

What if some modern Richelieu crushed the crippling influence of a selfish nobility? John Gapper may disagree but the issue is nothing less than the nature of the Internet. Which legal model should be adopted for this newest of communication systems, the letter, the phone exchange or the postal card? The first is private, mail tampering a crime. The second is also private, but judges may authorize the police to listen in. The third is public.

In theory, Internet providers and private pirates should prefer the first two solutions, which shield them from liabilities. The "postal card" model fits content providers, who want to force Internet providers to police their pipes, and corporate pirates, who need consumers to reveal their profiles.

Corporate pirates themselves, Internet providers cannot in practice back the "letter" model but nor can they stomach the "postal card" one in view of the costs of exercising censorship over millions of users, despite or perhaps because of, China's example.

So far the pronaocratic compromise in the United States holds the Internet to be public but does not impose the full attendant responsibilities on service providers. This creates an Augean Agora which favors pirates of all persuasions. Still, by condemning Grokster, the US Supreme Court placated content providers with a hook designed to catch service providers whose business model indirectly rests on copyright violations by users.

This is the charge led against MegaUpload. Ben Sisario reports it is backed by "private e-mails of Megaupload's operators [...] to show they were operating in bad faith" (******). The police clearly prefers the "phone exchange" model, assuming judges cooperate for national security's sake (4).

The charges against the current compromise are threefold. First it does not satisfy the content providers, but then nothing will until they realize information has moved from being a product to being a service, as in the time of Shakespeare and earlier bards.

Second it exposes the hypocrisy of a legal system for sale where pirates are protected when barons, punished when serfs. Having belabored that point in the past, I call my only witness. ""Piracy rules," tweeted Rupert Murdoch angrily". He also "accused President Barak Obama of pandering to "Silicon Valley paymasters"". Isn't there a mirror in his penthouse? Methinks histrionics rules too.

Third it flies in the face of globalization, nationally mandated filters the only way to starve "mass piracy through foreign rogue sites". John Gapper is right to urge we give a second look to cutting off payments and advertisements to foreign sites, as requested by Hollywood paymasters. Shouldn't the United States stop all money and data transfers to and from fiscal paradises? The financial industry too is prompt to abuse location arbitrage.

The pronaocratic challenge to the common good is thus compounded by the obvious absence of a world governement. Fighting these two obstacles is indeed the bottom line of Martin Wolf's excellent prescription to solve the crisis of capitalism (*******) (5).

Martin Wolf is too realist not to be pessimistic. "Will that be feasible? Not in the near future." Inaction however is dangerous. Isn't the US Congress fast becoming a Polish parliament? In the XVIIIth century Sejm, any magnate could veto any law he did not like (6). What started as a democratic measure to insure "decent laws" slowly paralyzed the nation when Poland faced ravenous neighbors.

US neighbors are benign. The Potomac is far from the Vistula. Who cares about the XVIIIth century? Who reads the Declaration of Human Rights?

Philippe Coueignoux

• (*) ............. Halt the Silicon Valley histrionics, by John Gaper (Financial Times) - Jan 19, 2012
• (**) ........... Lobbying scuttles US piracy laws, by David Gelles (Financial Times) - Jan 21, 2012
• (***) ......... Protests Started Before Widespread Media Attention, by Jenna Wortham (New York Times) - Jan 20, 2012
• (****) ....... Legal flaws give free rein to super-Pacs, by Richard McGregor and John Dunbar (Financial Times) - Jan 17, 2012
• (*****) ..... A Call for a Hollywood-Silicon Valley Summit Meeting, by Michael Cieply and Edward Wyatt (New York Times) - Jan 20, 2012
• (******) ... U.S. Charges Popular Site With Piracy, by Ben Sisario (New York Times) - Jan 20, 2012
• (*******) . Seven ways to fix the system's flaws, by Martin Wolf (Financial Times) - Jan 23, 2012
• (1) see Norman Rockwell's Freedom of Speech painting in the wikipedia
• (2) see the English Wikipedia blackout in the wikipedia
• (3) see Occupy Wall Street in the wikipedia
• (4) last minute break: the US Supreme Court ruled out GPS tracking by the police outside the strict terms authorized by a search warrant.
• (5) he writes of "plutocracy". My neologism pronaocracy simply broadens the possession of money into the ability to pump money into politics.
• (6) see the Liberum veto in the wikipedia