Im-Politic: A Solution to the Big Tech Misinformation/Censorship Quandary

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algorithmic amplification, antitrust, Big Tech, censorship, competition, Constitution, Facebook, free expression, free speech, Im-Politic, internet, journalism, Mainstream Media, misinformation, monopoly, news media, Section 230, social media, tech, Twitter

Don’t look now (a heckuva way to begin a piece of writing!), but I may have come up with one solution to the incredibly complex and just as important national dilemma over regulating how gargantuan social media platforms like Facebook and Twitter handle Americans’ speech rights.

First, let me stipulate that I’m anything but an expert on the Constitution, law and regulation of any kind (except maybe in the international trade field), or technology of any kind. But maybe I know enough to have produced a plan that’s outside-the-box enough to break the various legal and political and philosophical logjams that have left the nation with a status quo that seems to satsify no one, but that’s anchored in reality.

In addition, the thoughts below were prompted by a very stimulating panel discussion involving genuine experts in all these fields that took place this past weekend at a wide-ranging policy conference held by the Intercollegiate Studies Institute. (I spoke on a separate panel on China.) So my ideas aren’t coming from completely out of the blue.

The nub of the problem is that Americans across the political spectrum are furious with the platforms’ speech policies, but for radically different reasons. Those to the left of center blast them for posting what they view as misinformation. Their conservative counterparts claim that right-of-center views are too often censored – typically because they’re bogusly accused of spreading misinformation.

All sides seem to agree that the platforms’ practices matter greatly because, due largely to their algorithmic amplification powers, they have such power to turn material viral that they’ve achieved the massive scale needed to become a leading  – and often the leading – way in which Americans receive news, opinion, and other forms of information that affect politics and public policy. But towering obstacles stand in the way of pretty much every proposal for reform advanced so far.

For example, their status as private companies would appear to block any move to empower government to influence their speech practices. Antitrust specialists disagree strongly as to whether they’re now monopolistic or oligopolistic enough under current or even proposed legal standards to warrant breaking up. The companies themselves of course deny any such allegations, and contend that if they needed to downsize, they wouldn’t be able to compete effectively around the world with foreign counterparts – especially those from China. Some have proposed turning them into public utilities, but opponents call that a great way to stifle any further innovation.

So here’s my idea: Turn the platforms into a new type of entity that would be subject to a new body of regulation reflecting both the distinctive importance of free expression in American life and the distinctive (and indeed predominant) role that the platforms now play in enabling individuals and organizations both to disseminate material, and (stemming from an aspect of free expression rights that’s often overlooked, but that’s now unquestionably vulnerable due to the main platforms’ sheer scale and reach) to reach their potential audiences. One possible name: Electronic Speech Companies (ESCs).

As history demonstrates, there’s nothing unusual about the federal government organizing private business into different categories for tax purposes, and there’s nothing unusual about government at any level regulating such businesses with an unusually heavy hand because of their outsized role in providing vital goods and services. That should be clear from the long-established policy of creating utilities. So I don’t see any Constitutional problems with my idea.

I agree that government’s price-setting authority over utilities can stymie innovation. But ensuring that these entities don’t curb free expression any more than (legally) necessary (see below) wouldn’t require creating such authority. I’d permit these ESCs to charge whatever they want for their services and to make money however they like (including selling users’ personal information – which does raise problems of its own, but which are unrelated to the speech issue). As currently required by the controversial Section 230 provision of the Communication Decency Act of 1996, they wouldn’t be able to disseminate any content that’s already illegal under federal criminal law, intellectual property law, electronic communications privacy law, or (most recently) criminal and civil sex trafficking law.

I’d also make them subject to current libel law – which means that plaintiffs would need to prove that false and defamatory information had been spread maliciously and knowingly. Could this rule mean that now-incredibly clogged U.S. courts would become more incredibly clogged? Sure. So let’s also set up a separate court system to handle such cases. Since a dedicated tax court system already exists, why not?

Frivolous suits could be reduced with “loser pays” requirements for court costs. The Big Tech defendants would doubtless still hold a huge advantage by being able to hire the very best legal minds and driving those costs up by dragging out proceedings. But a number of legal non-profits have emerged over the years to help the little guys and gals in these situations, so maybe at least the potentially most important and promising suits wouldn’t be deterred by financial considerations.

What the ESCs wouldn’t be permitted to do is bar or delete or modify any content, or any users, on misinformation grounds. Advocates of continuing to permit and even further encourage or require such practices argue that the platforms’ vast scale requires greater discretionary and often required authority along these lines in the name of any number of good causes – election integrity, public safety, national security, etc. (See, e.g., here.)

But three counter-arguments are more persuasive to me. First, I can’t imagine developing any legal definition of misinformation (as opposed to libel or other well-established Constitutional speech curbs) that would be genuinely neutral substantively and that therefore wouldn’t be easy to abuse massively – and to the great detriment of our democracy’s health, due to the platforms’ scale.

Second, that’s no doubt why such regulations have absolutely no precedent in U.S. history, despite past periods and instances of intolerance dating from the passage of the Alien and Sedition Acts of 1798.

Third, if the ESCs are going to be held liable for disseminating etc misinformation, what excuse will there be to maintain protection for the rest of the news media? I’ve spent much of my multi-decade career in policy analysis finding instances that would unmistakably qualify. Not that ongoing and arguably worsening conventional media irresponsibility is any cause for complacency. But would a government remedy for such an intrinsically nebulous offense really result in a net improvement?

Individual victims of ESC censorship would, however, need remedies for these forms of cancellation, and as with libel and slander, a special court system could handle accusations, using the aforementioned provisions aimed at leveling the legal costs playing field. The Justice Department could file its own suits, too, and some seem likely if only because its own inevitable political sympathies are bound to shift as power in Washington changes hands over time. This prospect, moreover, should help keep the ESCs on their best behavior.

The big danger of my proposal, of course, is that misinformation would keep appearing and metastasizing online, and spreading like wildfire offline due to the ESCs’ extraordinary reach. That can’t be a healthy development. But it’s surely an unavoidable development for anyone valuing any meaningful version of free expression and its crucial corollary – the marketplace of ideas. For empowering a handful of immense ESCs to restrict misinformation threatens to narrow greatly and even fatally the competitive essence of this marketplace.

Throughout U.S. history, Americans have relied on these dynamics, and the common sense of the public, to crown as winners the best ideas and the benefits they bring, and declare as losers those that have either caused or threatened serious dangers. Is anyone out there prepared to deny seriously that the results, though imperfect, have been historically excellent, that the potential for improvement remains just as impressive, or that any alternative yet proposed looks superior? If not, then I hope you’ll consider this ESC plan at least a promising framework for ensuring that these digital giants don’t become the ultimate arbiters.

(What’s Left of) Our Economy: Progress!

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American Affairs, antitrust, Barack Obama, competition, Financial Times, free trade, Jobs, John Maynard Keynes, Martin Wolf, production, Project Syndicate, Robert Skidelsky, stimulus, stimulus package, tariffs, The New York Times, Trade, trade deficit, {What's Left of) Our Economy

I hope you’ll all forgive me for an exercise in self back-patting that (I hope) you’ll read through the end. But the two instances described here of leading economics commentators expressing support for highly unconventional trade policy positions I’ve taken for years are simply too striking to pass up. Even more eye-opening: They appeared within a week of each other!

In chronological order, the first came courtesy of Martin Wolf, the Financial Times columnist who’s more-than-the-average pundit because he boasts both considerable policymaking experience and serious academic chops. As those two bios make clear, he’s also been a strong (though not completely uncritical) supporter of the standard free trade and globalization policies that decisively shaped the entire world economy, including America’s positions, for decades until the CCP Virus’ breakout. (Or did the turning point come with the financial crisis of 2007-08? Oh, well – no need to settle that question right now.)

That’s why I was so amazed to see in his column this past Tuesday the observation that the United States “gains many of the benefits of trade through internal specialisation” essentially because it’s “a large country with a sophisticated economy and diverse resources….”

Wolf’s point may not sound like much. But it not only contradicts the long-standing conventional wisdom – and rationale for supporting the freest possible global trade flows – that emphasizes (1) the centrality of international specialization for maximizing the prosperity of all individual countries and indeed the entire world, and (2) the imperative of exposing national economic activity to global competition in order to force domestic industries continually to improve quality and lower costs.

Wolf has also echoed (unwittingly, no doubt) my own argument that, whatever the validity of these ideas for most countries, there’s no reason for Americans to place any special value on them.

The reason? As I explained in an article in the Summer, 2019 issue of the journal American Affairs, the greatest possible degree of international specialization is advantageous and even crucial for the prosperity of most individual countries because they lack the ability to provide for a critical mass of their essential needs at affordable cost, let alone generate progress.

Any number of reasons or combination of reasons could be responsible. They might lack vital raw materials. Even if they’re wealthy and/or technologically advanced, their domestic market alone might be too small for most forms of economic activity aside from subsistence farming to achieve the scale needed for efficient and therefore relatively low-cost production. Alternatively, this domestic market could be inadequate because most of their people are too poor to be satisfactory customers.

In addition, because they’re so small, inadequate domestic markets have been considered incapable of generating enough competitive pressure needed to force their own producers to keep improving quality, innovating, and to maintain reasonable prices.

Conventional trade thinking has held that these problems could be overcome by individual countries (1) focusing on turning out the goods and services they could provide most efficiently (interestingly, whether in world-leading fashion or not), and (2) selling them where they were in greatest demand (because of other countries’ shortcomings) in exchange for what they themselves required.

Even better, such free trade would continually maximize the efficiency, and therefore the wealth, of all countries, as well as create the conditions for sustainable progress by requiring efforts to enter new, more promising industries to meet global competitive standards.

My own article, however, emphasized that the United States isn’t like most other countries. In fact, it’s uniquely blessed with both the size, the variety of resources, and the economic and social dynamism to supply nearly all its needs and wants from within. In the words of that 1980s inspirational song, in economic term, the United States “is the world.’

As a result, Americans have no inherent need to keep their home markets open, or open them wider, in order to secure adequate supplies of goods and services. And if they’re unhappy with the levels of competition their companies face, because of the country’s gargantuan scale, their best bet for maximizing such competition is resuming the vigorous enforcement of antitrust laws – which, as I documented, had long been largely neglected.

Wolf didn’t accept the policy implications I drew concerning these insights about America’s economic distinctiveness. But since he evidently accepts the basic proposition, it’s legitimate to ask why not.

The second example of a leading economic authority making one of my central points came yesterday on the Project Syndicate website. That in itself is pretty remarkable because, as I’ve previously suggested, Project Syndicate is best described as a digital op-ed page for globalist elites. Just as remarkable, and gratifying, the author of the post in question is Robert Skidelsky, a veteran British politician and venerable academic who’s best known for a highly acclaimed three-volume biography of John Maynard Keynes, the most influential economist of the 20^th century and a scholar whose work still shapes much global economic thought and policy.

According to Skidelsky, one of two major gaps in President Biden’s economic proposals – and especially his stated desire to rebuild manufacturing in America – is its failure to impose tight curbs on imports. Without a plan that Skidelsky (and its originator) calls “compensated free trade,” the author writes that domestic industry won’t be “built back better.”

That’s already nearly identical to arguments I make all the time. But what I found most intriguing was Skidelsky’s principal rationale: America’s still towering trade deficits are bound to permit too many of the job- and production-creating benefits of Mr. Biden’s stimulus spending to drain overseas.

That’s virtually identical to the case that I and a colleague made early during the recovery from the previous U.S. recession. Unfortunately, then President Barack Obama apparently didn’t see our New York Times article, because he ignored the continuing growth of the deficit, and partly as a result, the rebound he presided over was the weakest in American history.

I’m hardly above wishing to have gotten some credit for these ideas.  But progress on the economics of trade (as opposed to the ongoing U.S. policy departures from free trade absolutism bemoaned by Wolf) has been so slow to develop that I’ll take it in whatever form it comes – and of course be keeping an eye out for more.           

(What’s Left of) Our Economy: How a U.S.-China Huawei Tech Disaster Unfolded

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5G, antitrust, AT&T, Bell Labs, China, espionage, Huawei, Lucent, national security, networking, offshoring, privacy, semiconductors, surveillance, tech transfer, technology, telecommunications, {What's Left of) Our Economy

It’s hard to think of a worse mess that Washington has gotten the country into than the loss of global leadership in advanced telecommunications knowhow to China. With the world on the cusp of a transition into the so-called 5G standard, the United States boasts exactly zero companies capable of creating complete networks based on this technology, which will increase by orders of magnitude the speed with which individuals, organizations of all kinds, and governments can send and receive digital information, and thereby bring much closer all kinds of game-changing breakthroughs. In particular, 5G can enable the creation of truly “smart” electronic networks that will greatly boost the efficiency of public transportation and energy infrastructure, healthcare, manufacturing, and so much more. (Here’s a good primer.)

Even worse, the world’s pace-setter in terms of both quality and price is Huawei, and Chinese entity with unusually close ties with China’s dictatorial and belligerent government.  Moreover, its lead over its other two 5G competitors (Finland’s Nokia and Sweden’s Ericsson) is enormous. Huawei’s dominance matters a lot because the advent of an effectively networked world also means the advent of a world in which hacking becomes much more dangerous – and the power to hack will translate into decisive strategic and economic leverage. Just think of the possibilities of national security and economic spying alone, let alone the implications for everyone’s privacy. And because of Huawei’s 5G leadership, Beijing holds entirely too many of these cards.

All is by no means lost yet. In particular, Huawei and other Chinese technology entities still rely heavily on U.S.-based companies for state-of-the-art parts and components – especially semiconductors – along with software. But thanks to 5G’s vast potential alone, Americans can’t assume that, before too long, China won’t be able to use it to cut into their lead in these information technology manufacturing and services sectors.

So how did this dangerous U.S. failure come about? When I first briefly answered this question posed by a Twitter follower, I emphasized the U.S.’ reckless pre-Trump administration China policies. These both greatly incentivized Americans businesses to offshore production and jobs to the People’s Republic even in the advanced manufacturing sectors in the public was assured the United States would always maintain matchless superiority, and turned a blind eye to China’s practice of extorting cutting edge knowhow from these U.S.-based firms in exchange for access to China’s huge and potentially huge-er market.

But as the author of an article last year focusing on the weird – and arguably perverse – relationship between recent American trade policies like these, and recent American antitrust policies, I was especially grateful to this Financial Times article for reminding me that the latter helped create this disaster as well.

Here are the key passages explaining the lack of a US telecom equipment manufacturer capable of producing the full-range of 5G kit:

“To understand how this came about, it is necessary to go back to the mid-1990s when the US passed a Telecommunications Act that weakened US champions such as Lucent Technologies by enticing a flurry of new entrants into the market. With its profit margins under pressure at home, Lucent targeted sales in a fast-growing Chinese market to prop up a flagging share price.

“But Chinese authorities insisted that all foreign equipment makers would — as the price of admission — be obliged to hand over technology and knowhow to state research labs and business partners. One by one, the chief executives of the largest telecoms equipment companies trooped through Beijing in the early 2000s pledging to localise their technologies and production bases.”

Neither American Presidents nor Congresses displayed any serious interest in the consequences. Yet submitting to China’s blackmail failed even to save Lucent. In 2006, it found itself in desperate straits, “and was sold to a French rival, leaving North America without a heavyweight telecoms equipment player. The company that was once the technology champion behind Bell Labs is now part of Finland’s Nokia.”

My trade/antitrust article focused on the bizarre situation that had prevailed in the pre-Trump decades, during which the U.S. leaders from both major parties seemed hell-bent on maximizing the competition faced by U.S.-based businesses from foreign economies (via offshoring-friendly and similar one-way trade deals and policies) even as they seemed equally determined to reduce the domestic competition faced by U.S.-based businesses by greatly weakening antitrust enforcement.

The Financial Times article shows that exceptions periodically appeared to this indulgent antitrust policy. But more troubling, it indicates that no national security or even global economic competitiveness considerations (and of course the two are closely related) ever significantly affected antitrust policy. That’s an indictment just as serious as simple neglect or actual encouragement of ever greater levels of corporate concentration.

It’s important to point out, moreover, that this telecommunications disaster’s roots run much deeper. Specifically, the federal government began back in 1949 to pressure AT&T’s ancestor Bell Telephone, which had dominated American telecommunications from its 19th century beginnings, to divest it manufacturing and research and development activities on the one hand from its services activities. And this even though that research arm, Bell Labs, invented the world’s first semiconductor device – the transistor.

First AT&T and then Lucent made plenty of their own mistakes, too. It’s a really complicated story, though, and two good short accounts can be found here and here. Nonetheless, clearly the voices in Washington during these decades that might have been encouraging a more comprehensive strategy to preserve U.S. dominance – or even competitiveness – in this crucial technology were way too weak. And now, for the near-term future in any event, the nation is dependent for this knowhow on a distant regime whose benign intentions can by no means be assumed.

Making News: Speaking at a D.C. Conference Today on Antitrust and Trade Policy

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antitrust, competition, free trade, globalization, Im-Politic, monopolies, monopoly, The American Conservative, The American Prospect, Trade

I’m pleased to announce that I’m scheduled to speak this morning at a conference in Washington, D.C. on the increasingly weird relationship between American trade policy and American antitrust policy.

The overall event focuses on the troubling rise of monopolies and oligopolies in general in the U.S. economy in recent decades, and is co-sponsored by The American Conservative and The American Prospect – two magazines pretty far apart on the political spectrum.  My own presentation will draw on my article earlier this year on the subject in the summer issue of American Affairs.  (Yes, yet another political publication!).

If you live in the D.C. area, the event will be taking place at the National Press Club downtown starting at 11 AM.  If not, I haven’t yet found anywhere where the conference can be seen live on-line.  But if I do before I actually mount the rostrum, I’ll try to send it out.  And of course, once a link to any video is posted, I’ll let you know ASAP.

In the meantime, wish me luck, and keep checking in with RealityChek for news of upcoming media appearances and other developments.

Making News: Major New Trade & Antitrust Article Now On-Line…& 3 Podcasts!

Tags

American Affairs, antitrust, Breitbart News Tonight, China, competition, i24News, Making News, monopoly, tariffs, The John Batchelor Show, Trade, trade war

I’m pleased to announce the publication of a major freelance article tying together two so-far generally separate areas of American economic policy.  Featured in the Summer issue of American Affairs, it makes the case for using trade policy to reduce the levels of foreign competition faced by U.S. businesses and workers, and using more vigorous antitrust policy to replace them with higher levels of domestic competition.  Here’s the link.

In addition, the podcast of three China trade war broadcast media interviews from last Tuesday night are now on-line.  Click here for the link to the relevant segment on John Batchelor’s nationally syndicated radio show; here for the link to my interview on Breitbart News Tonight (you need to scroll pretty far down before seeing my name); and here for my appearance on Israel’s i24News television network.

For the latter, two more steps are necessary – click on “Download” to receive an mp4 file that you can then open up.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.