About Tony Curzon Price

Tony Curzon Price was Editor-in-Chief of openDemocracy from 2007 to 2012, where he is now contributing editor and technical director. He blogs at tony.curzon.com

Articles by Tony Curzon Price

This week's editor

Rosemary Belcher-2.jpg

Rosemary Bechler is openDemocracy’s Editor.

Constitutional conventions: best practice

Anthony Barnett's "What Next?" - grainy recording

From The BigChill, Kings Cross, London. 26 Mar 2009

I tried out my first iPhone audio blog on Anthony's "What next?" proposal earlier this evening to the Convention on Modern Liberty post-event party. Turn up the volume and get close to the speakers -- next time I'll try and be closer to the speaker:

Listen!

Blogs, truth and power at the Foreign and Commonwealth Office

 

I went to a fascinating meeting at the UK Foreign and Commonwealth Office on their "digital diplomacy" initiative. The ambassadors are blogging -- you can see them aggregated here.

You might think that encouraging blogging at all levels by the foreign office would be a marketing disaster waiting to happen: surely someone was going to put a foot into a pretty well-laid trap very soon. How can "our man in Lisbon" (blogging here, in Portuguese) avoid being drawn into a debate on the state of the PIGS or the Portuguese criminal justice system that will reflect badly on the brand --- UK Plc, mostly --- he is promoting and representing?

Well, the question answers itself: it is not for nothing that he is "our man". Actually, the FCO has always needed a culture of "presumption of competence" because representatives were sent many days' travel away from any check on their power. Delegation had to be real. So there is almost no institution in the world (the Catholic Church springs to mind as a contender for that title) more suited to showing off its organisational discipline under decentralisation than the old imperial foreign ministries.

The result of all this is fascinating. Read John Duncan, for example, on Arms Treaty Negotiations. Remember that it was the failure of the chemical and biological weapons negotiations that left the door wide-open for the accusation that Saddam possessed weapons of mass destruction. A working treaty here could have prevented the Iraq war. Will the sort of transparency that comes from this sort of blogging raise these issues to the level of importance they should have?

Ian Brown, from the Oxford Internet Institute, raised the question of how an Ambassador's blog could be authentic. Surely they're just shilling for her Majesty's government, even the blog from news-poor Zimbabwe?

This is obviously the big question for government use of new media. Just as technology allowed disintermediation of finance---and so all the excesses that we are now paying for---so that disintermediation is now hitting the production of knowledge. And we don't want to happen to knowledge what happened to money ...

My own take on this is that there are two views of the business of knowledge making: you are either trying to influence outcomes, or you are trying to "speak truth to power". In the new media, you can't afford to pretend to be doing the one when you're doing the other. The FCO cannot - just cannot - speak truth to power, because it is power. But it can transparently and authentically try to influence.

The bigger question of whether there is anyone left who has the legitimacy to speak truth rather than simply seek influence is a big question for our time. Like the analogy with finance, we now operate, as it were, without a gold standard. Beware, therefore, the inflation of all claims.

 

Three Kings, Clerkenwell, London. Thursday Mar 19 2009

openDemocracy's quarterly London meeting. Bill Thompson led a discussion on journalism, the web and civil liberties. About 30 people made it - many people who had met online as part of the publishing and research volunteer-group, but never in the face -- great human moments, that knowing yet not-knowing someone.

Bill talked of the good old days -- when the guardian website was a computer on Bill's desk, and when he was its sys admin, webmaster, editor-in-chief and coder. He argued that the "good web" --- the liberating forces of the free-flow of information --- necessarily develops along-side all the abuses of technology, including State abuses. Bill's solution to privacy issues: radical transparency.

The discussion turned to "what is journalism-- or whatever you want to call what openDemocracy does -- for in a world where the technology and organisations we're creating can be used for authoritarian means. "Speak truth to power" was Bill's reply. Rosemary and Anthony were not completely satisfied with that: what about making a self-conscious, self-understanding society?

The formal meeting broke up, and I look forward very much to the next get-together.

 

Clearly easing

There is a lot of confusion about quantitative easing, especially now that the US has joined the UK in trying it. The usually clear Robert Peston has finally given up trying to understand. This is from his blog entry: 

Needed: globally coordinated bank nationalisation

We need a globally coordinated bank nationalisation. It has long been clear that a globally coordinated stimulus plan is needed. And despite the parlous performance of Europe at last week-end's G20, it is clear that there is broad agreement that the IMF needs to be strengthened in its ability to coordinate emergency financial rescues.

But the need for coordinated bank nationalisation is only becoming clear through the continuing bonus scandals. Edward Liddy, CEO of AIG, gave the game away in his testimony to congress: “We have to continue managing our business as a business - taking into account the cold realities of competition for customers, for revenues and for employees."

So here is the logic. The US taxpayer has to prop up AIG (or the UK taxpayer RBS --- do the substitutions yourselves) because its gambling on house loans have gone bad; those bets were made with the big banks --- Goldman, Deutsche, etc --- who are all, in one way or another, currently benefiting from the extraordinary measures of central banks to keep them cash-solvent. So billions go to AIG that go straight to the others too big to fail.

Hundreds of millions of those billions go to employee bonuses. What kind on leverage do these gamblers have on their blighted employers? Well, if they weren't at AIG looking after attempts to keep the level of payouts low on the bad bets that they made---they have intimate knowledge of the complicated positions the institution holds---they would be at one of the counterparty banks managing the opposite side of the positions. Those who had the expertise to lose trillions find themselves with the bargaining power yet again.

So the taxpayer not only has to shovel cash at banks too big to fail through insurers too big to fail, but, held up by its employees, AIG has to keep shovelling cash at them too. No wonder popular resentment and populist sentiment is high. When Geithner's lame response is that whatever is paid in bonuses will be docked from AIG's next bail-out, who does he think he is fooling?

There really is only one sensible way out of here: a globally coordinated nationalisation of large parts of the global financial sector. Only once the employees no longer have the opportunity to hold-up the taxpayer will the bonus circus stop. Every banker needs to be thinking: "My alternative to working for the US government at Goldman's is to be working for the German government at Deutsche or the UK government at Barclays."

Mind-changing facts

A short version of this review appeared in the March 09 Spectator Business

If there are silver linings to the economic crisis, one has to be enjoying the clarity, poise and judgement, delivered six times a month, of Martin Wolf's Financial Times commentary. "Fixing Global Finance", completed just after the September 2007 collapse of Northern Rock, provides his dense and fascinating account of a bursting global economy, one of such teetering imbalances--especially China's massive dollar savings and the US's corresponding domestic borrowing binge--that catastrophe is the background drum-beat of the lucid analysis. Wolf's knows that "something will need to give." And, as we now know, give it has, again and again.

Wolf's "savings glut" account of the build-up to crisis is that the huge excess of production over consumption (saving) in China, East Asia and the energy-rich Gulf since 97/98 (and especially during 02-07) entailed an offsetting excess of consumption over production (borrowing) elsewhere. Between 2002 and 2007, this borrowing mostly came from US households who took out mortgages against the apparently rising value of their houses. We now know the tragic next act, even if it was not yet clear to Wolf when he finished "FGF".

The exact mechanism and logic of this chain makes up much of the analysis of the book. East Asia was traumatised economically and politically by the Asian crises of 97/8 when they suffered a sudden flight of foreign capital; their emerging economies suffered sharp recessions; governments and corporations, owing dollars but earning devalued local currencies, found it very painful to avoid default. Domestic consumption had to fall dramatically, taxes had to be increased. To avoid such social disruptions, these countries together with quick-learning China and newly flush Russia protected themselves by accumulating dollar reserves (making it less likely that a run on the currency would snowball into a currency crisis). This meant maintaining low currencies, enforcing cross-border capital controls and "sterilising" trade surpluses--essentially making sure that the dollars earned by exporters would not turn into domestic liquidity and inflation. There are echoes of this deep diagnosis of the crisis in the calls, for example from Obama's Treasurer Geithner, that China show more currency flexibility.

Wolf is very sympathetic to the nations that sought insurance in this way. His hope is for a time when each country is sufficiently trusted to borrow in its own currency and therefore does not suffer the mood swings of the fickle global hot money flows. But as things have turned out, we have become focused now on the other half of the mechanism: how did this huge new pool of global savings turn into the financial crisis that continues to unfold? China's exporters earned dollars from US consumers and a great proportion of these probably went straight back to the US as investments in US Treasury bonds. US interest rates therefore remained extremely low after 2002 without the dollar depreciating. With a strong currency, cheap borrowing and a financial sector highly motivated to create new borrowers, US households went on their binge. Worse than that, pension funds and other wealth managers who had been used to an easy professional existence promising their clients safe returns of 5% now had to become creative to deliver in a world of long run Treasury bond rates of 3%. Conjured by nothing more than a strong desire for its existence, leverage made alpha, alpha made up the shortfall of "risk-free" returns, these returns made asset prices rise, and so leverage could increase again and keep the infernal cycle going. We now know that there is nothing more dangerous to wealth than creativity in its managers.

Given the savings glut, could things have gone better? Wolf repeats that the alternative to the US household borrowing binge would have been a deep US recession that would have reduced the Chinese surplus through a destruction for the demand for Chinese goods and so very painfully reduced the US trade deficit. Institutionally, the US Federal Reserve's double mandate of ensuring price stability and full employment made the binge inevitable, argues Wolf. But now we know the denouement, we ought to moderate that conclusion. If bankers had not thrown caution to the wind, the savings glut would still have existed, but the wishful conjuring of returns would not. Low interest rates should have encouraged productive investment rather than the satisfaction of a perverse fetishisation of home and SUV ownership. The reality of low interest rates should have led to increased provision of capital in pension funds and retirement accounts, not the convenient illusions of "risk-free" leverage. Who knows -- a responsible reaction form the financial sector might even have created domestic political pressure in the US for the kind of global macro-economic rebalancing that Wolf was recommending. To follow Wolf in saying that the alternative to binge was deep recession takes too much as fixed and tends to improperly exonerate the bankers.

But FGF is more than fascinating background for a proper understanding of the mess we're in. It tells of the start of a big moment of questioning for the beliefs of the "Good Liberal" -- the sort of position adopted by Wolf in his 2004 "Why globalisation works?" and well represented in his 2003 openDemocracy conversation on corporate power. The world viewed from the late 1990's was looking very promising -- the spread of free trade, rule of law and respect for contracts was lifting millions out of poverty. This may have upset Conservatives who see in progress only the destruction of cherished traditions, and also egalitarian social democrats who are always impatient for more justice, and faster. But the good liberal had a strong sense of being with the angels in wanting progress to raise the welfare of mankind, and with the "realists" in seeing disciplined, small government and profitable business as the best agents of change.

FGF sounds a first note of caution: the free-flow of hot capital has combined with the policy freedom of flexible exchange rates to create financial crises at a rate unimagined by the pioneers of open economy macroeconomics from whom Wolf learned his trade. Emerging nations have naturally sought insurance against these vicissitudes and created in the process the imbalances which may yet rock global capitalism to its core. Wolf has lately, in his columns, become fond of quoting Keynes, and in particular this: "When the facts change, I change my mind. What do you do, sir?" One continuing fascination of reading Wolf is how far the change of mind will go. In FGF, we find a real sympathy for the notion of national autonomy. In his columns since then, Wolf has become anti-banker, pro-stimulus, pro-nationalisation. He has developed these positions this with all the honesty and clarity of someone looking for understanding, not effect.

His views are still--just--compatible with the views of the good liberal: we deviated from the Way but these extreme policy measures will return us to it. But the strain is showing. What if even extreme policy does not work? what if there are deep social reasons for the state that rich-world finance got into? or substantial political constraints to the development of the sorts of ideally responsible governments in emerging economies that Wolf sees as the cure to the fundamental imbalances? All these are now real questions for the good liberal. Wolf opens FGF with "Finance is the brain of the economy". So, as with a deeply sick mind, much may need to change to find balance again. Keep reading Wolf, with his great virtues of clarity and honesty, to catch a once attractive Twentieth Century creed in full mutation.

Drilling deep holes and making bombs

March 15th 2009. Join the Group Read. Chapters 14 and 15. Geothermal and Public Services

(Instructions on how to join are at the bottom of the original post)

It matters where the energy is: lots of heat just 100km under our feet doesn't help much although manufacturing earthquakes might, just a bit. We're not Iceland which can rely on geothermal heat closer to the surface to operate huge aluminium smelting plants. So we can (almost) forget geothermal. Public "services" like a well-equipped army or well-heated academics also consume. Maybe some demand should be counted as production if it can be sustainably avoided by our efforts?

Next week is the first chapter looking at the overall balance of demand to potential renewable supply.

Tides and Stuff - March 8, Chapter 14 and 15

March 8th 2009. Join the Group Read. Chapters 12 and 13. Tides and Stuff

(Instructions on how to join are at the bottom of the original post)

Tide farms, tide barriers and two-way tide pools sound very attractive. And they won't make the world stop turning. Unfortunately, even for the rather tide-rich British Isles, we can only really hope to cover something about equivalent to our lighting and gadget energy consumption this way. And the economics of building large installations are not yet clear. Stuff, on the other hand, is much less attractive. Just making and transporting it -- TVs, food, drink, packaging, cans, computers ... -- is our biggest single consumption category. Reducing the stuff-intensity of well-being seems like a good goal.

Modern Legitimacy

For at least the past thirty years, our state’s claim to legitimacy can be thought of as the marriage of Hobbes and Bentham. The first duty of the state is to deliver security through its monopoly of force and its second duty is to promote the good of all, however defined, and with whatever model of society the state might be using as a working assumption at any time. The basic deal has been: ”protect us, deliver our desires and we’ll play by your rules.”

Liberty, in this deal, was all encapsulated in the desires that would be fulfilled—as Cory Doctorow tweeted on Saturday: ”A generation has been habituated to seeking and finding liberty in consumption.” ”Protect us” has become a joke, as the state has waged wars it does not feel it can publicly justify and joined the ranks of the world’s torturers and destroyers of civil rights. The rules we are meant to follow have become legion, from laws to administrative orders to ”code-law”, the rules that are made by the industrial processing of information in the database state. And now, with the world economy collapsing, even the residual claim to deliver our simplest desires is in tatters.

Civic Religions

Rousseau ends his "Social Contract" with a characteristic mix of brilliance and brutality. It is obvious, for him, that society needs a civic religion: "The Sovereign must define a civic faith .. sentiments of sociability without which good citizenship is not possible." Anyone not wishing to sign up to these values should be banished, not on the grounds that they are bad, but just on the grounds that they are incompatible with the Sovereign will. Finally, anyone signing up but then behaving in an anti-social way can legitimately be put to death, argues Rousseau. By imposing banishment or death on anyone transgressing the basic values of sociality, Rousseau's democracies (he was himself banished in his youth from Geneva) certainly ensure their own legitimacy in the eyes of their (remaining) citizens.

The need for civic religion -- for a ritualised creation of emotional attachments to a social way of life --  seemed obvious to many nineteenth century progressives. Saint Simon and Comte founded their own; Hegel simply borrowed Christianity as his; John Stuart Mill recognised its importance; Walt Whitman thought that the political democracy of America needed to be mirrored in the American soul by an "inner democracy". Civic religion ensures affective, aesthetic, emotional attachment to a way of living--a sort of attachment which became suspect in itself to many ascetic modernists--but which, to judge from the Convention on Modern Liberty, is due for a political comeback.

For thirty years now, civic religion has been dominated by security and economy--a sort of fortresses and circuses approach: the supremacy of the economic, the choice of the supermarket, the private, home-owning self, the CCTV, war-on-terror delivered safety against terror, immigration, and other "others". Entertainment and news regularly feed the fears that need this security as a solution.

For Mike Edwards, at the Love and Liberty session of the Convention on Modern Liberty, the solution to insecurity is love, not fortresses. Was this the Hippy throwback session? When Lisa Appignesi asked the love panellists why the language of love was now appropriated by organised religion, the link between civic religion and the churches was made clear. The panellists stood their ground: love can work through civil society, mass movements, personal experimentation and culture.

The whole event was a collective ritual. In a moving speech to the full convention, Philip Pullman accused the modern British state of creating "institutional paranoia and furtive hatred". "A nation whose laws engender fear and suspicion cannot sustain delight". He delivered a homily on of the virtues of a nation, especially modesty: "Modesty would give a [nation] a proper sense of position in this world and remove the self-importance of politicians who think they are fighting an extensional war to defend western civilisation, when they are actually throwing their weight about in the bike shed like playground bullies."

The Convention provided a glimpse of the civic spirit that might infuse a politics that was neither obsessed with the market nor with a supposed war on terror. Given where we are--with "shock and awe" democracy exports discredited and the masters of the (old) financial universe in disgrace-- this now has a chance to be the politics that sets the tone.

Twittersphere and National Conversation

Twitter was abuzz with one-liners.

 

 

Twittersphere buzz

 

Perhaps most surprisingly was the last of these from the Twittersphere. Most of us were with 1200 other people, all listening to the same words in the same place -- there was a coming together of minds. But that last tweet showed that more was going on: the tweetstream of the convention, in all its UK locations, with the live-streaming on the web site gave mattwardman the sense of participating in this social ritual from his home. Scale that and politics must change.

But this is also the Tweet that got me thinking back to Brown's first days as Prime Minister, and openDemocracy's attempt to help with the ill-fated "national conversation". Anthony Barnett (founder and animating spirit of openDemocracy for much of our existence) has been fighting an authoritarian, technocratic view of politics for a long time (for example as director of Charter 88, the organisation that campaigned from 1988 onwards for a new constitutional settlement).

Anthony was in even more than usually buoyant mood when Gordon Brown delivered his first speech to parliament as Prime Minister. It was about the constitution. The anticipation in Anthony's post about it is clear:

...

But Brown then failed on his promise. The commitment to the public debate -- even the hint of a national convention -- just disappeared. (As Helena Kennedy asked on Saturday: "What is it with the water in the Home Office? Within no time, it turns decent folk turn into authoritarians".)

A few weeks after Brown's speech, I accompanied Anthony and a few others from openDemocracy's UK section, OurKingdom to meet officials at the Ministry of Justice. How could this new politics, with its promise of a national convention preceded by a national conversation, be helped by the Internet? MattWardman's tweet shows that something can work here.

Not that that would impress the Ministry of Justice, I imagine. When we met the Minister's officials, a few tired young people seemed to treat the strange demands of the Minister as cynical employees might another marketing campaign to tell us the Kool Aid is, believe it or not, actually good for us. "Internet? National conversation? The government of Britain has always done just fine without either ..." That is exactly what we'd expect from a culture of technocracy: the voter enjoys the state delivered by the rules expertly and wisely concocted by the Ministry. No need to bring the voter/customer quite so near the production of rules.

openDemocracy's OurKingdom did its bit in supporting the idea of a national conversation. We convened a debate on how the internet could be used to have a national conversation leading up to a national convention. It still makes for good reading:

 

 

When the government was going to support a national conversation

 

 

What Next?

There is a sense in which the Convention on Modern Liberty was the Convention announced but never delivered by Brown--or at least the start of it. It is what comes when you subtract a willing government from a process it launched. Brown would not deliver on his pledge, so another set of organisations had to step up. Participants and delegates to the convention are asking all over the web and the papers today "What next?" (and here and here). On the convention's self-organised social networking site, people from all over the country are meeting and asking what to do now.

 

 

The convention's social network

 

The "What next?" question is there because a national conversation started on Saturday that has not been given a point: it must establish its own purpose. We are seeing online participation that wants to become meaningful. Saturday showed that across the country and its ether, the on and off-line could come together in a surge of energy. In fact, Brown could have given no greater gift to the forces fighting the technocratic/authoritarian state than to deny power to a national conversation. It now has to become the change it wants to see. Saturday's coming together showed that the means are there: the on and off-line worlds complement each other, allow for both aggregation and dispersal, for both self-organisation and organisational action.

So, concretely, what next? Well:

What about me? I think I'll put the Constitution of South Africa onto the openDemocracy wiki as a starting point for Chuka Umunna's suggestion that we crowdsource the drafting of a constitution. Anyone want to help with the format conversion?

Group Read. Energy without hot air. Wave and Food

Feb 23 2009. Join the Group Read. Chapters 12 and 13. Wave and Food

(Instructions on how to join are at the bottom of the original post)

In which we learn that to get by on wave power you need to be very very insular -- that is, have a small number of people per unit length of exposed coastline (sounds like a nice place to me, but the British Isles don't fit the description) -- and also that our food habits, especially for red-blooded carnivores with meat-eating pets -- amount to more than half our driving habit in energy. There is a real energy case to be made for vegetarianism (approximately twice as efficient) and even more for veganism (another doubling).

What's love got to do with it?

Many of the sessions at the convention here today are about the state of our politics. We have had 30 years of governments who talk the talk of Liberty. They have presided over an era of centralisation, nannyism, a drip-drip erosion of civil liberties and a perpetual disregard for the spirit of democracy? What can we do about it?

In this context, a session on "Love and Liberty" may seem strange, almost an embarrassment to bring "love" into play at a political convention. The proposition we are exploring -- even proposing -- here is that "love", somehow understood, is a critical missing ingredient in our attitude towards the social and political world, and that without it we have no foundation for civil society or for the true flourishing of humanity that is at the heart of liberty.

Our four panelists will all bring a different interpretation of what that "love" is. For Mike Edwards, thinker, writer and development expert, there are personal attitudes and dispositions of care and friendship which can build mutually reinforcing cycles of political and personal change. Sheila Rowbotham, historian and philosopher of feminism, describes in her recent biography of Edward Carpenter a life that seeks to unite "inner" and "outer" democracy, making a politics out of the everyday experiences of work, sex, home and community. Marina Warner, cultural critic and feminist writer, highlights the importance of the imaginary and the aesthetic in shaping political possibility. Satish Kumar, a spiritual voice of ecology, brings the love of nature and the change of consciousness it requires to centre of building a good, just and sustainable world.

So what has love got to do with it?

For the very radical early nineteenth century Jeremy Bentham, a world ordered by the calculation of utility---the greatest good for the greatest number---is one that has at its core all the natural sympathy and egalitarianism that progress requires. Social problems become technical problems of calculation; society is a causal and computational nexus of utilities. Utility was a kind of civic religion.

However, the "short 20th century" was marked by the horror of the hubristic, dehumanising reason that this sort of technocratic view eventually produces. We should remember Hannah Arendt's view of totalitarianism: it is not evil that creates horror, it is action in the absence of thought. Much of the loss of civil liberty that forms a reason for our coming together can be seen as excused and caused by that view of politics as "the rational adminsitration of things" (in the words of Saint Simon, strange John the Baptist for the database state). Security and efficiency, all go with discretionary executive power.

We will be exploring the role of the emotional, affective, aesthetic, personal, cultural and dispositional in creating another sort of politics, one which really can deliver a modern liberty. There is a long tradition of the serious examination and analysis of "civic religion" -- of the types of consciousness that society must make possible in order to be a good, just and free society. From Rousseau through JS Mill, as well as later in the syndicalist and anarchist traditions, there is a sense that the emotional attachments to society matter to politics. This is what this session is about.

Who exactly is cleaning up?

The UK government has discovered its metaphor for the bail-out: the banks need to clean-up their balance sheets; the government is cleaning-up the financial sector ... the Augean metaphor should be suitably heroic.

But what is truly extraordinary is that it is the banks that are cleaning up, not the government. And the repeated failure of governement -- here and in the US -- to do the obvious right thing needs explanation.

Here is a good picture from Krugman representing the assets and liabilities of banks.

Here is what it says: the banks have some assets, mainly in the form of promises -- not very good ones -- to pay back some money with interest. Their extent is shown in the black bar at the top. They have liabilities: money they owe to others (debt) as well as shareholder funds.

The problem is that the black bar has shrunk so much that assets are probably smaller than the amount that banks are borrowing (debt, in red). That is a pretty good picture of a bankrupt institution. The shareholders have lost their stake and those who have lent money may have to fight it out for who gets what.

When banks are "too important to fail", it means that as the black assets continue to shrink, and as some of the debt in the red line comes up for renewal -- quite a lot of that red stuff was quite short term, so it "rolls over" (or doesn't) quite frequently -- the taxpayer has to step in to cover the funding gap.

That can happen in various ways. Direct lending; preference shares (a sort of hybrid between debt and shares); or Darling's current pet - the loss insurance scheme. Loss insurance makes it less likely that the black line will shrink further, so should, the thinking goes, encourage lenders into unforced lending to banks. The reason for that is instructive. If you lend to a bank that then runs out of money again, you risk a big loss. You put money into the venture in the past, your money is spent, so your negotiating position is gone. There is no contract -- pace the executive bonus contracts -- that someone putting money into a venture cannot demand to be rewritten.

So this is instructive. The Treasury's and Bank's insurance scheme is meant to work because investors fear the basic law of finance: new money trumps old.

But all the new money is either coming directly from, or contingent on, taxpayer funds. So why do we still have these banks at all? They are bankrupt -- and not just the ones who have taken public shareholders, also the others, benefitting from the various extraordinary central bank liquidity schemes -- so why are there any shareholders apart from us, the taxpayer? And if we owned the financial sector, what would we now be doing with it?

Already in October last year, I and others were warning that the time for recapitlisation was passed. I never expected that we would still now be tinkering with every conceivable repackaging of recapitalisation 4 months later. The advantage of temporary nationalisation, Swedish style, is that we cut through the endless wrangling over exactly how losses are going to be socialised. We accept that they are fully socialised, together with any future benefits. In a situation where month after month of insufficient measures simply makes the impact on the real economy worse, cutting through the bazaar haggling that the City is so good at makes sense.

This, just as much as Goodwin's £16m bonus for failure (Goodwin is the ex head of RBS, the biggest banking failure in the UK), needs explaining. In fact, they are related. The absence of a clean nationalisation program comes from a very disturbing alliance between bank management and government. We know how spectacularly bank managers and employees felt (and were) free from concern for shareholders. No surprise that they do not want a single activist shareholder with a different culture from them. It threatens their autonomy; it is a sort of parole regime. Goodwin's windfall, negotiated with the Treasury, shows the victory of the management over the new shareholder, but the political backlash must have Sir Fred feeling relieved he cleaned-up early.

More mysterious -- and more insidious -- is why the government has connived with bank management. Since the government has the cash the management needs to survive, why is there any negotiating power left with the banks at all?

The frightening truth is that the government does not want the responsibility for running finance. In April last year, I argued for "Responsible Recessions"---a regime in which economic policy is properly politicised, in which "responsibility hazard" (the desire for fault to be nowhere in any publicly accountable hands) is avoided. The failure of our governments to seize this moment to re-politicise economic policy is a sign of their fear and hatred of politics.

You can just imagine the Cabinet conversation. "We don't want to nationalise the banks, of course, because then everyone would think they could make a public, political claim on us. We would have to defend priorities. We would have to actually say that some project needed support while another did not. Do you imagine the nightmare that all that public thought and justification would require?"

So this is why the bank managers are cleaning up: you can trust them to exploit whatever negotiating power they have, and the fact they are doing so well against the government is a sure predictor of fear in the Treasury. The mess that is being made of the economy and Goodwin's $1m/year pension both have a common cause: Westminster's desire to avoid real politics.

Energy group read, Week 6

Feb 23 2009. Join the Group Read. Chapters 10 and 11. Offshore and gadgets

(Instructions on how to join are at the bottom of the original post)

Offshore wind seems intuitively a nice option for an island liuke Britain - out of the sight, a sort of power belt that you can see from high places on a clear day. The energy is indeed there - about as much as we use for our heating and cooling. But you'd need an aweful lot of turbines and a massive investment. (Would we then have to worry about the birds?)

What about our chargers and gadgets? There is a myth that they are responsible for the developing "power gap" -- all those new power stations we will need over the next 20 years as the big nuclear power stations are decommissioned. Well, it turns out to be quite small - about the same energy consumption we use for lighting.

Just like to repeat a big thank you to David MacKay who has been very supportive of this project, and to William Sigmund without whose amazing html and perl skills I do not think we would have had an online version to work with.

Week of Feb 9 on the front page

I've just completed my second turn on the front page rota, handing over to Kanishk tomorrow, who hands over in turn to David, who hands over to Tom, then Rosemary then Susan. The system is getting a little less hectic, both in terms of my own preparing for the weekbut also with all the sections on the site getting used to highlighting material that should be considered for the front page. The goal is to make a distributed publication with components all sharing a "family resemblance" that amounts to the openDemocracyy core brand and values. It requires a trade-off between control and freedom that proving exciting to experiment with.

The week had some excellent reflections on the Iranian revolution (I particularly liked this). We carried a lot of material on civil liberties---a current focus given our sponsorship of the Convention on Modern Liberty---for example these posts on the disturbing question of the UK as a torturing state, and a long, three part piece that I have been working on for a while about the relationship between technology and liberty (here, here and here). The Russia section is producing a lot of excellent material, for example distressing piece on the economy of the regions.

We had just under 110,000 page views this week on the main site - that excludes forums and the wiki (about 15,000 pageviews on top) but includes the sections. The most popular articles are shown in the picture here:

The liberty of the networked (pt 3)

Preamble1

This is the third and final section of "The liberty of the Networked".

In part 1 of this essay I used Benjamin Constant's characterisation of the modern, individualised liberties as being dependent on the republican liberty of collective self-determination to characterise the ways in which technology can be seen to be simultaneously freedom enhancing while also dauntingly threatening. Part 2 of the essay considers the specific ways in which freedom-enhancing characteristics can become pathological -- anomie and alienation are pathologies of private liberty; social tyranny is a pathology of collective self-determination. Technology offers them all new and frightening scope.

In this part, I look at the very Californian view of the web as a new medium for emergent, quasi-market phenomena. The analogy has its attractions--especially for analyses of the web--but the centralising dataphagous mechanisms driven by Web2.0 advertising business models should cause alarm in a way that markets themselves need not.

 

Contents

 

How are Web2.0 and market mechanisms different? Google or Wikipedia

There is a temptation to equate Web2.0 mechanisms with disaggregated markets. This is partly useful. For example, Google can be seen as a great auction for attention, with payment made in links (Curzon Price, 2008). Or Wikipedia can be seen as eliciting evolutionarily stable memes. (A mutation is a change in a Wikipedia article ...does it survive the environment of selection?).

But in other ways, the analogy misses important centralising features of Web2.0 services like Google. In the realm of attention, Google might also be thought of as the ultimate central planner. Google established its dominant position in search through its patent on the PageRank algorithm. In essence, PageRank counts a link to a page as a ``vote" for that page. These votes are weighted by the number of votes that a page itself receives. If a page that many people link to links to yours, that is considered an important vote of confidence. In signalling-theory terms, linking to another page is considered to be a costly and therefore meaningful signal of value. PageRank worked very well in the early days of the web, but its own dominance has reduced the meaning contained in each link as content providers self-consciously try to increase their page ranks. The number of links to pages are like bids into an auction, and the auction has become increasingly gamed.2

Just as prices work as allocative signals as long as costs are real, so links work as allocative signals in search rankings as long as they represent relevance.3 But the very existence of the mechanism undermines it, and does so much more than analogous ``market manipulation" does. Models of market manipulation show the cost inherent to flexing market power: buyers cut back on quantity consumed, entry is encouraged, etc. In the classic account of a English auction, it is even a dominant strategy to tell the truth about value (or cost, in a reverse auction) and be rewarded transparently for market power. The dominant strategy argument relies on precisely the self-limitation of the exercise of market power: push your luck too far, and you will end up buying something for more than you value it or not owning something you wished you had had. Scarcity continues to do its limiting work, even under market manipulation, and prices continue, therefore, to carry meaning. But the manipulation of ranking suffers no real scarcity constraint. Links can be invented at very low marginal cost, and at a cost which has no real relation to the relevance, to the genuine meaning, of the link. Search Engine Optimisation experts build ``link-farms"--web sites rented out for their potential to link to others. PageRank, predictably according to price theory, was very good at indexing the web before it became generally understood, and is now doing poorly. Google, instead, plays a complicated and obscure cat and mouse game hoping that its historical lead has enough natural monopoly in it to keep search working.

Google hoovers up the work of Stakanovite linkers and aggregates it by simple formula into tables of relevance whose quality is certainly questionable compared to the organisation of knowledge that preceded it (think of the search results from a good library compared to Google's). But, as in so many industrial processes, Google makes up in quantity what it sacrifices in quality against the old artisianal methods. More disturbingly, however, Google's business model encourages it to operate a Stasi-worthy accumulation of personal data. Google does not simply license search to people who demand search. It gives away search in exchange for the right to a small piece of users' screen real estate. It optimises the value of that real estate by knowing as much as it can about the property--what is the behaviour of its eyeballs.

Most markets are extremely decentralised.4 You can enter a market without registering with some central authority. This is a significant factor in the association of free markets with the freedom of the moderns. No centralising authority or registry is required; entry and exit are easy, etc.

But Google is different. It is much more like a formal exchange, and even then, it is not a simple bilateral match of trades. Google (in its search service) processes an input--"raw" web pages--and offers sorted web pages to the searcher. You cannot compete in the information economy without doing the equivalent of "registering" with Google: you make the web pages visible to its spiders, and usually further than that, you "sex them up" with (search engine optimisation) SEO to increase their salience to Google's algorithm. Google, in the sense of the behaviour that it elicits, has a huge degree of control over content on the Web. Entry into the information economy has a gatekeeper, registrar and rule-maker. No wonder Google needed to persuade us that it would "not do evil".

So although PageRank looks as if it is doing something market-like in its processing of information, it should probably be seen instead as the ultimate tool in the centralised processing of information. Google should be considered to be a "mechanism", in the sense of "mechanism design", and one that is at a particularly un-spontaneous, centralised end of mechanisms.5

Google's business model is to sell your screen-space to advertisers and swap you free-search in exchange. This strange barter economy is very common to Anderson's world of ``Free" (Anderson, 2007). But note that there is no fundamental reason not to split out those transactions: I could rent out my screen space through a third party, on privacy terms I could specifiy, while I could buy search services from a search provider. The hidden cost of the ``Free" lunch is, ultimately, Freedom.

Wikipedia, on the other hand, does not centralise personal information. We can think of Wikipedia in terms of costly signals: a change to a wikipedia entry is an effortful move ...it is like a mutation in genetics. Will the mutation survive? If it elicits others to overcome the cost barrier of making a counter-modification, it does not survive. Wikipedia is therefore mostly composed of ``evolutionarily stable statements".6

The evolutionary method is distributed in a way PageRank is not: on most articles, anyone can make a change, even anonymous users. Moreover, Wikipedia has no advertising revenue to optimise, and therefore has no particular interest in the systematic collection of personal information. Wikipedia is much more like the libero-genic market than Google--a background institutional framework that allows and encourages competing entry without any systematic monopolising of manipulating tendency of its own.

Although this characterisation is true of much of Wikipedia, it is not true everywhere. Some articles are locked. Here is a film about the details by my colleague Felix Cohen, showing the locking of the Israel entry.

 

 

Wikipedia: Stability, manipulation and locking.

 

These hard cases, of course, are an important part of the collective action of the Wikipedians. They are never more responsibly solicited than in cases of lock-down. The deliberation amongst the self-appointed elite is a great example of the freedom of the ancients that the web, at best, re-creates.

The similarities between Web2.0 services and markets: both filter information and create ordered rankings that help with choice; both take decentralised behaviour as inputs ...should not lead us to think that the most libero-genic characteristics of markets automatically flow from this. Centralisation of information is a business necessity for Google as it optimises click-through. Wikipedia is not data-phagous only because it does not have much of a business model beyond the highly Nozickian one of voluntary taxation.

 

 

Follow the money \ldots to the database

 

Whatever services can capture large portions of the data relating to who, what when, where and how about every habitual human activity will be sitting on an advertiser's dream. The commercial incentive to build large information collections is huge. As argued in Part 2 of the essay, these corporate databases pave the road to Kafkaesque and Orwellian tyrannies as surely as government data-phagy does.

 

Picking the battles

The forces of tyranny--whether social or technocratic--seem aligned to make the most of the power of technology. Should we disconnect from the cloud? come off the grid? return ourselves, if not society, to primitive innocence?7No. The hopeful potential for the network technologies exists, even when we recognise their power to help tyranny. Once the forces that tend technology towards unfreedom are identified, we can fight them in the right ways.

 

Kafka, Orwell, McNealy
The fight here has to be almost entirely political--our civil liberties need to be fought for against naturally power-loving technocracies. When a state can be trusted, we would want it to deploy surveillance responsibly. When it cannot be trusted--or is not trusted by crucial parts of society--then it must be stopped from using the power of surveillance. Of course, the task of creating trust-worthy states is huge and never-ending. a good place to start is to take a lesson from the freedom of the ancients: collective self-determination was a reality in Athens largely because of its scale. The gigantic states of today, made possible by their efficient use of technology, are not possibly the sorts of bodies over which anyone can feel they exercise determination.

De-gigantifying the state is a huge political task, and one that can certainly be helped by technology. Here are just a few links to organisations that are using information to ``shame'' states into better behaviour. FarmSubsidy.org collects all the information from different EU member countries about who receives what payments from the Common Agricultural Policy. Making the information easily available--for example showing how much the CAP benefits Nestle, large landowners etc--should make it harder to keep acting like this. Mwali Matu, at Mars Kenya catalogues the private interests of members of the Kenyan parliament to keep a check on corrupt legislation.

These positive uses of information technology against the might of gigantic states are small. Traditional political action--the support of campaigns to protect civil liberties, for example; or movements for the reform of political institutions, like the effort to re-localise much of our politics--has to be a large part of a sensible course of action. This is what the Convention on Modern Liberty is looking to achieve in the UK . Once we have trustworthy government, we can empower it with technology. Until that point, we should resist moves to the creation of the database state.

As entrepreneurs and consumers, there is much we should and could do. This is repeated from the section above:

Google's business model is to sell your screen-space to advertisers and swap you free-search in exchange. This strange barter economy is very common to Anderson's world of ``Free" (Anderson, 2007). But note that there is no fundamental reason not to split out those transactions: I could rent out my screen space through a third party, on privacy terms I could specifiy, while I could buy search services from a search provider. The hidden cost of the ``Free" lunch is, ultimately, Freedom.
In an environment where responsible citizens understand the dangers of dataphagy, there will be markets for liberty-friendly technologies.

 

Zittrain
In the fight to preserve the libero-genic nature of the Internet, the solutions proposed by Zittrain seem right. Prefer those solutions that rely for their incentives and organisation on the freedom of the ancients. Prefer Wikia to Google. Be a good digital citizen and do the equivalent of picking up the litter in public spaces--contribute to the properly decentralised web services. Use what means there are (for example anti-trust) to level the playing field against those whose business is, at heart, the centralisation of information. Putting this into practice has implications for us as users, as entrepreneurs and for public policy.
Sunstein
The Sunstein effect seems like a minor worry compared to the previous 2. Although communities may splinter online, the digital world offers opportunities for multiple overlapping identities. I can be ``admin" in the OpenDemocracy forums and ``bigtone" on kiteforum.com; TCP on twitter, and I can choose what people see of my activity on FriendFeed. My colleague David Hayes and his co-author Keith Kahn-Harris argue the opposite point in their very interesting "The politics of ME, ME, ME". They deplore the micro-fragmentation of politics and communities that the web has enabled, and they argue that this undermines genuine efforts of collective self-determination. The commentary on their article, somewhat paradoxically, advances the argument.

Walzer (1983) argued that the USA more than anywhere else practised an equality between overlapping spheres of justice. A fireman might not be a billionaire, but was certainly a valued firefighter ...For Walzer, the multiplicity of spheres gave rise to a ``complex equality" wherein lay the strength of American society. Online, the idea can be extended. Sunstein's narrowing of visions should be countered by the proliferation of identities. The Health Ranger is not only that ...somewhere else, he will be asking for technical help on how to get rid of a (computer) virus ...the beliefs, behaviours and people whom he finds in that role will have an effect on all his other beliefs. as digital citizens, we should always think of who we might be interacting with, of how this particular interaction might break through a Sunstein-barrier. The web is likely to re-inforce the trend that other forces of globalisation contribute to of multiplying our identities (Sassen, 2008).8

 

 

 

 

A call to action

 

Here is a final summary in terms of the freedom of the ancients and the moderns . The unfreedom of the moderns stems from the dangers of agency, dangers exacerbated by gigantism, itself permitted by technology. The unfreedom of the ancients comes from the tyranny of society, the absence of any notion of the rights of the individual against the group. If techno-society can combine that unfreedom with gigantism--maybe the rise of online nationalism in China is just that sort of a move--then freedom lovers must work to stop it. Technology empowers, but power is the raw material of both freedom and tyranny.

 

 

 

Bibliography

Anderson, C.: 2007, The emerging world of ``free'', Video.

 


Curzon Price, T.: 2008, Google's attention deficit disorder, openDemocracy .

 


Sassen, S.: 2008, Fear and strange arithmetics: when powerful states confront powerless immigrants, openDemocracy .
.

 


Walzer, M.: 1983, Spheres of Justice, Basic Books.

 


 


Footnotes

... 2)1
Many thanks to all the people who have commented on early drafts of this paper--Selina O'Grady, Graeme Mitchison, Victoria Curzon Price, Anthony Barnett, Jonathan Zittrain, David Hayes, Jeremy O'Grady, Stefaan Verhultz. This paper owes a great deal to a seminar funded by the MacArthur foundation in March 2008, "Credibility in the New News" in London. Many thanks to Kathy Im and Elspeth Revere for making that gathering and space for thinking possible. I presented a version of this paper to the Annual Meeting of the Mont Pellerin Society in Tokyo in September 2009. It was a personally emotionally charged occasion, being the child of two members of the society while feeling uncomfortable with most of the positions taken by its members. On the question of the authoritarian state, however, we were on common ground - at least at some level of abstraction.
...2
There is a second aspect to Google's operation which is less innovative but logistically very important. It needs not only to judge the ``worthiness" of a page through PageRank, but also needs to come up with a list of relevant pages to return for each query. This is done through statistical text-processing heuristics.
...3
One of the most troubling features of the subprime crisis has been that one of the most important prices in the economy--the price of risk--was found to have been set through processes that would almost surely vitiate against it being a reflection of real costs. This was the lesson of the layer upon layer of agency and regulatory failures. Getting the price of risk wrong has huge repercussions in the world of goods; getting the price of attention wrong--as is happening with Google today--has a similarly leveraged effect in the world of bits.
...4
Not exchange traded markets, but all others.
...5
Just like the mechanisms that were meant to produce "good allocations" in utility regulation, PageRank cannot of itself undo any deep forces towards uncompetitive and manipulative behaviour.
...6
The evolutionary process can, fascinatingly, be observed on Wikiscanner, the very brilliant piece of software built on top of Wikipedia by Virgil Griffith, a student at Caltech, lets you find out what anonymous Wikipedia edits have been made by which organisations. The subtle change in the Walmart entry, from a Walmart computer, describing its average wage rate not as ``20% less than other retail stores", but rather ``double the federal minimum wage," shows the kind of micro-mutation that lies behind the Wikipedia process.(Although Wikipedia does not centralise information, a trace of the identity of who has made the change is kept, allowing for a degree of control, for example to exclude consistently unhelpful contributions. Wikiscanner has taken advantage of that information to produce its information sleuthing service.)
...7
There is certainly a conservative current that has come to this sort of conclusion. Here we have the French conservative, Alain Finkielkraut and a commentary on his "worrying ecstasy".
...sassen2008.8
Mark Pesce has recently written about a "hyper-Sunstein" effect.
Fasten your seatbelts and prepare for a rapid descent into the Bellum omnia contra omnes, Thomas Hobbes' "war of all against all." A hyperconnected polityÑwhether composed of a hundred individuals or a hundred thousandÑhas resources at its disposal which exponentially amplify its capabilities. Hyperconnectivity begets hypermimesis begets hyperempowerment. After the arms race comes the war ...

 

Naturally, governments will seek to control and mediate these emerging conflicts. This will only result in the guns being trained upon them. The power redistributions of the 21st century have dealt representative democracies out. Representative democracies are a poor fit to the challenges ahead, and 'rebooting' them is not enough. The future looks nothing like democracy, because democracy, which sought to empower the individual, is being obsolesced by a social order which hyperempowers him.
Apocalyptic techno-visionaries are also always with us. The Sunstein effect is a slow and weak force, too little to be hanging this sort of apocalypse on.


Energy group read, week 5. Heat, hydro and light

Feb 14 2009. Join the Group Read. Chapters 7, 8 and 9. Heat, hydro and light

(Instructions on how to join are at the bottom of the original post)

We use about as much to heat and cool ourselves (in Britain) as we use to move around in our cars, while lighting uses only a fraction of that energy - especially using low energy fluorescent bulbs or the new generation of LED lights. Hydro-electric power in Britain, however, even with generosity from the wet Highlands, will only deliver about one third of the small amount of energy we use to light ourselves. How unfortunate that such accidental power-concentrators as mountains and streams are not more plentiful, and not just, maybe, for the energy benefits.

 

The liberty of the networked (pt 2)

Preamble1

In part 1 of this essay I used Benjamin Constant's characterisation of the modern, individualised liberties as being dependent on the republican liberty of collective self-determination to characterise the ways in which technology can be seen to be simultaneously freedom enhancing while also dauntingly threatening. The progressive tech-topians, recognisable today as they were at the start of the industrial revolution, do not see either how hyper-individualism might lead to an atomised, dominated subjection or how the new facility for community-making might generate the tyrannies of society from which modernity promised to liberate us. This second part of the essay elaborates on these dangers. A final third part will emphasise the inescapably political and collective task of preserving liberty.

 

Contents

 

The clouds gather

The story told by Zittrain (2008) and Benkler (2006) is of the netowrked computer as a tool of the freedom of the ancients. It is hard not to be taken up in the enthusiasm. The wired world enhances both the freedom of the ancients and the freedom of the moderns. How can we not be at the point that Mill thought the railway and the printing press had brought? The world, and not just England, can now become that mythical Athens that Mill so desired, surely?

Zittrain (2008), however, is not a Millian optimist. His very ambiguous title tells it all: ``The Future of the Internet (and how to stop it)". Stop what? The Future or The Internet? Zittrain (2008)'s is the forecast that, soon, the Internet could end up as the first "self-closing open system". The impetus for closure comes, for Zittrain, from the wrong-headed approach to solving the problems that open systems inevitably, he argues, throw up: 2

 

 

 

The self-closure of generativity.

 

Zittrain (2008) argues that companies will be tempted to ``lock-down" open systems in the face of malware, spyware and privacy breaches. Governments will be called on to regulate, imposing privacy laws (which they will exempt themselves from, naturally). The Internet will be balkanised as telephone companies create ``safe havens", networks that bar the use of peer-to-peer file-sharing, privilege one sort of traffic over another, and generally tether the appliances and software to avoid the ills and risks of openness. The game consoles and smart phones are a Trojan horse. Sony and Microsoft have designed their gaming platforms to be walled gardens of computing. The iPhone and other ultra-portable computers are an alliance of consumer electronics with telecoms monopolies, none of whom seem to want to make the business ``mistake" IBM made in outsourcing and opening the critical pieces of the PC.

This is a story of how the Internet moves from being a privileged domain for the freedom of the ancients to being a battleground for the libero-phobia of the moderns. He describes the tendency towards a move from the bottom left quadrant to the top right. Zittrain's own schema is of a move from ``emergent hierarchy" to ``top-down polyarchy" as a principle of organisation.

 

 

 

Keeping my distance from a useful taxonomy.

 

Zittrain's solution for countering this trend is to return, as often as possible and with as much imagination as possible, to the expert self-regulation that solved the Internet's problems in the past (Curzon Price, 2008). Before government regulation, let us find ``communitarian" solutions. Zittrain, for example, suggests that we try to address real privacy concerns in the same sort of way that the early web controlled crawlers with robots.

As we travel with phones, making payments, with store cards we leave a trace through the ether as surely as any click-trace through the web. Early on in the history of the web, automated services--for example indexing services--started crawling web servers automatically for information. How could a webmaster signal that content should not be indexed? For example, on openDemocracy.net, we want our editorialised articles to be indexed, but not our free-form forum discussions. When a Google search returns an openDemocracy address, we want it to be for a piece of content that we have vetted, as part of our brand management.

The solution to the problem--the creation of the robots.txt de facto standard--is described by Zittrain (2008) :

 

 

 

Controlling crawlers with robots.

 

This could be a template to decentralised, emergent, locational privacy protection. My own personal "robots.txt" could instruct cell-phone operators, ticketing agents, credit card companies, what information about my comings and goings was sellable and what not. I could specifiy who it could be shared with, and with what degree of anonymity. I would want my medical record available to hospital emergency rooms in extremis, but not to my employer, for example.We should as much as possible try to stop the accumulation of information by inventing the right expressive means to do so. Such ``easy wins" should not be passed over.

Zittrain (2008) sees the emergence of "robots.txt"-style solutions as the victory of hierarchic bottom-up organisations versus poly-archic top-down organisations (Curzon Price, 2008). His exhortation is that we should, wherever possible, look for solutions to information processing problems that live in the ``hierarchical / emergent" corner of his taxonomy.

 

The tyranny of society

The tendency of the Internet to move from ancient freedom to modern control is not the only worry with the ancient spirit of the modern networked technology. Constant was clear in identifying the tyranny of society that had also come with the freedom of collective, discursive self-determination. The counterpart to the freedom of collective determination is that the collective can call you to arms, ostracise you, even put you to death without recourse or rights. When the group is small and the community tight-knit, its power extends far beyond law, and can be a real source of oppression.

You won't need to remind Star Wars kid of this, still suffering depression (surely the modern form of exile) after the largest school-yard humiliation in history. The unfortunate boy filmed himself using the school video camera doing a Star Wars light sabre routine with a broomstick. A mixture of narcissism, hubris and, most of all, the dramatic irony for the audience of knowing that this person did not know he would be watched by millions ...He did not delete the sequence; some peers posted the video on the web; the public shaming of the notoriety may never leave him.

There are many other anecdotes which illustrate the way in which the recreation of tight community is also a loss of the protection of anonymity.3

 

 

 

Painfully learning the new rules.

 

Is this new tyranny of the wired communities a passing phase? Something that we will learn to navigate once the unfamiliarity of the new spaces passes?

When cameras became a cheap mass consumer good, just before World War I in the UK, there was a national privacy scare. Anyone was at risk of being captured in a private act. And the risk is with us still, of course, although a combination of copyright, libel and press-privacy laws allow us mostly to navigate the new contours of privacy. David Cameron, the leader of the UK's opposition, had to spend a good deal of family money to buy the copyright of a photograph taken of him during his student days as a member of Oxford's notorious Bullingdon club. Employers regularly check Facebook and MySpace to find the real person they are about to employ. In a mirror image of the Bullingdon club example, celebrities are exactly the people who cultivate their private lives as a business model: they generate monopoly private information in order to sell it to an eager public. There was an eighteenth century version of this trade: an enterprising late eighteenth century theatre entrepreneur in London took the muslin curtains off the boxes in his newly launched theatre. The mob crowded in, not so much to see the spectacle but more to rubber-neck at the much more attractive soap-opera of the wealthy in their boxes. But the business model was not right: the wealthy got nothing much from the sale of their privacy and left for more traditional venues. ``Hello" and ``OK" would perfect the model by buying monopoly access to the lives of the ``Pipol" [People] (as, in a lovely inversion of meanings, celebrities are known in France).4

The similarity between the patter on a facebook feed and the gossip of "Hello" is striking . It seems to me likely that the popularity of exhibitionism is quite likely in part due to the exhibitionism of our celebrity heroes. Their status is measured by the column-inches devoted to them, so the democratisation of print-space leads to a proliferation on ``micro-Hello" publications. Facebook is to ``Hello" as the academic blogosphere is to the opinion columns of the ``mainstream media". Doing what the stars do, be it intellectual or social, makes us all a bit more like them. The whole point of MySpace and Facebook is that they are public, and give each the opportunity to be a bit more like the role model in the abandonment of privacy. And just like the academic blogger versus the WSJ columnist, the main difference is the first do it for free.5

 

 

 

 

``Hello" is the Pipol's Facebook.

 

 

Poles apart

A closely related danger to freedom from the tyranny of community--possibly to the institutions of liberal democracy that have more or less upheld freedom for 150 years--is the argument made by Sunstein (2007) that the new facility for niche information provision also fragments communities, allowing each of us to live in narcissistic halls of mirrors where we face no great challenges to our views and opinions. There is the possibility of a radical communitarianisation of news and opinion that will eventually, argues Sunstein, undermine the ``broad tent" institutions that forced us as nations to seek compromise and agreement. This is a story of the Balkanisation of politics because the economics of the production of knowledge and opinion no longer forces us to share costs with those we might disagree with. Sunstein (2007) produces many examples of the danger. My colleague Felix Cohen made this short film about the community of "Vaccine Deniers" on YouTube to illustrate the danger. The power of the example, of course, comes from the potential public health externality created by the development of these credible but not belief-worthy communities.

 

 

 

Vaccine denial: echo chamber with externality.

 

Nozick (1974), in the ``Utopia" part of the book, considers what an individualistic approach to community-formation might be. He asks us, as a thought experiment, to consider a world in which each individual can will into being all other individuals; individuals so willed can either opt to stay in the world imagined by others, or exit to another world of their own willing; the process is imagined to continue until a stable configuration--if there be one--is found. If there is an equilibrium, then by construction we have a world in which ``none of the inhabitants of the world can imagine an alternative world they would rather live in" (Nozick, 1974)[page 299] which has the stability property of being arrived at in this Utopian way.

When wondering how far this Utopian construction might be from a feasible realisation, Nozick points to the limitations that include the fact that groups impinge on other groups; that it is costly to discover groups that one wishes to join, and one might stay in sub-optimal groups for fear of not finding a better solution; that communities might actually try to restrict the freedom of choice of members in order to perpetuate themselves.

The first and the last of these ``failures" of Nozick's individualistic communitarianism are the most troubling in the context of the re-communitarianisation of knowledge-making. The first is a concern, in our context, that the belief-making of one group will affect another group. The vaccine deniers are a case in point. Sunstein (2007) provides evidence that the last point is a danger: that the ``hall of mirrors" entraps people into solipsistic world views and amplifies the differences between groups.

 

 

 

Communities create poles.

 

Mark Hunter, a professor of media a INSEAD, argues that the commercial future of news is represented by both Rupert Murdoch and Michael Moore. Both of them know how to give an audience a sense of itself. The quickest way to do this is through polarisation, the exaggerated invention, even demonisation of the ``other". As the fixed costs of community creation disappear (a printing press, a distribution network), society can fragment into many non-communicating shards. The return to ancient Greece was not meant to also repeat the Peleponesian wars. Posner makes the argument that this communitarianisation of news might be a good thing: it avoids the dead-hand of orthodoxy stamping out the diversity of views that it is socially best to express, even if only to better monitor.6

The argument, however, relies on there being not-too-great a feedback between the encapsulation of a community in a publication, or blog, or forum, and the path that this community takes. The strength of the worry Sunstein raises comes from this dynamic effect: the types of communities you end up with are dependent on the technology used to keep them together and define them. The Rwandan massacre, for example, would not have been possible without Radio Mille Collines. The Kenyan violence of January 2008 was made possible by SMS.

 

 

 

Letting off steam?

 

There is a resurgence in the tyranny of the group just as there is in the power of collective self-determination. The two are inextricable. Liberal Whigs have to hope that re-communitarianisation does not have to be Balkanisation. It is as if the ``National" phase of the evolution of the just society was a dry-run for its global version. Re-communitarianisation, with global communications technologies, is part of the unpicking of the unitary Nation State, with the adherence to the tribe returning to many overlapping communities, some digital, and the functions of the State being spread both above and below the old Nations. The economics of community-making are an important part of this large-scale historical process. To make it a historical evolution, and not another return, we should keep our eyes open to the the new forms of the ancient social tyrannies.

 

Modern/Libero-Phobic: Kafka and Orwell

We have considered two types of danger so far--first, the privacy and Sunstein (2007) effects point to the transformation of ancient liberties into modern communo-tyrannies; second,Zittrain (2008) and Curzon Price (2008) point to the sliding from the new communo-freedoms to the modern stifling technocracies of government and other natural monopoly.

Possibly more dangerous than all of these are the forces that transform modern individualistic freedoms into the hyper-modern nightmares imagined Kafka (1925) and Orwell (1949). This is the story of the harnessing of technology into a database State. A little like nuclear power, so attractive in the 1950s and 1960s, accumulates waste that today appears to pose small risks of very large harm, so centralised databases are stockpiling a resource which has a small probability of becoming highly noxious.

The behaviour, identity, past and reputation of each us is now reproduced around large numbers of state-level and corporate databases creating dangerous concentrations of personally identifiable information (PII).7 The dangers are of two basic types, call them Kafka-esque and Orwellian.8

The Orwellian, in which the State accumulates information for direct purposes of control, is the most obvious and dramatic. Take the example of the hapless mechanic from Stoke-on-Trent .

 

 

 

An innocent's arrest and DNA forever more on the record

 

Darren's credit ratings, job prospects and life chances have been permanently affected by his record on the UK arrest and DNA databases. As technocracy would have it, this information gets shared between more and more government agencies and even in some cases to private sector subcontractors of government. Of course, the data also gets lost and may find its way into the public or criminal domain. The impacts on lives and liberty of such Orwellian events are clear, and our ability to influence through policy is also clear.

The UK, together with many states since the start of the ``War on Terror" (WoT) have increased the powers of surveillance available to it. There are real threats, and some surveillance is necessary to protect citizens. But it is important to understand the Orwellian habits that very naturally come to a State. Here is an example from Scotland:

In Falkirk, which used Ripa [the Regulation of Investigatory Powers Act] 380 times, citizens could be spied on for noise nuisance, littering, if they were suspected of driving a taxi without a licence, for breaching the smoking ban and if their expense claims were thought to be exaggerated.
(The Sunday Herald, July 18 2008)

Jozef K., the anti-hero of The Trial, never knows who is accusing him or what he is accused of. He has no control over the information that is disseminated about him or any means of recourse. The story of Jozef K. has become the archetypal story of alienation, one in which the modern atom has no understanding of the forces at work at him. The case of Mr Bunce , a story, with a somewhat happier ending, hints at a modern version of the story where the information and crime have escaped your control--it certainly shows a very concrete example that those who have nothing to hide might nevertheless be caught up in nightmarish information-traps. The police knock on the door. You are accused of having bought paedophilic pornography over the web. You are innocent, and unlike Joseph K. you certainly understand the accusation here, but what have you done that relates to it? Why are you being accused? What piece of information about your life has been disseminated which leads to this point?

 

 

A modern-day Job

 

Mr Bunce comes out of this sounding like a saint: his salary quartered, his family forgiven for disowning him ...but many others would remain more resentful.

Commercial databases are increasingly the repository for Privately Identifiable Information. The case of Yahoo's Chinese blogger debacle is an example of commercial data-gathering being put to State use.

 

 

Corporate and State databases cooperate, 1

 

Information flow from state to corporations is increasingly common. For example the UK government's "Tranformative Government" agenda includes offering corporate access to the National Identity database (for example, for background checks on criminality). Sub-contractors to government have ways of accessing data--where this can go from multinationals running IT systems to small operations running local authority wheel clamping services. The film of the useful UK Department of transport web page on Who we share information with and why provides a small glimpse into the complexity of the multi-way flow of information. Can every outfit identified as a worthy recipient of information be counted on here to have a careful, responsible attitude towards the data? How much will lead to stories like that of Darren, Bunce or Shi Tao?

 

 

 

What your driving says to whom (follow link to film)

 

What about Hobbes?

The accumulation of ever-more personal databases creates threats that are both Orwellian and Kafkaesque. A common response in this age of the War on Terror is that a Hobbesian state, one that takes seriously its duty to ensure the safety of its citizens, needs to employ the necessary means against an enemy that has found modernity's Achilles heal. An enemy that has learned to take advantage of the open society will prompt counter-moves from the primitve, Hobbesian state, that will close some of the loop-holes. Hence the justification for extensive surveillance as well as ``collateral damage" in innocent lives destroyed.

A report by the Mail on Sunday on CCTV surveillance by police in Shenzhen and Leeds illustrates the point. In Leeds, police prove the innocence of a supposed wife-beater with CCTV footage ...a petty thief is caught after the police thought they would have to let him go ...in Shenzhen, crime rates are down 10% and detection rates are up thanks to a state-of-the-art surveillance system. Here comes the downside:

anti-government demonstrators are identified and picked up for questioning -- and images of those still ``at large'' are posted on public information pillars ...9

The Hobbesian state has its attractions. But we have a sort of ``surveillance trap'': how to ensure that information is used only for the good purposes of fighting crime, and not for the bad purposes of manipulation and discrimination?

It is very hard for a modern mass state to carry out extensive Hobbesian information processing without also, to some groups, becoming Kafkaesque. Take the (hypothetical) example of a young male Muslim rounded-up in a terrorism prevention operation. He is innocent (known to him, unknown to us), and has been arrested because he is a friend of someone who is not. During interrogation, it becomes clear that the State has a huge amount of information about this person. He is eventually released without charge. He returns to his community knowing that the authorities follow him closely and that he is now on a national DNA database, and that his arrest is a fact viewable by all manner of official departments (and even private sector companies). When he does not get a job; when his mortgage is refused; when he is burgled ...a suspicion has to fall on the involvement of the state. Is this a state he is likely to cooperate with? is he likely to inform against a genuine threat that he knows about? The Kafkaesque State is the one that creates sub-cultures of mistrust in which real threats can find protection and thrive.10

We can view the Kafka effect as an externality of information acquisition. As long as the process of acquiring information generates "false positives"--cases where the informational inference is incorrect--then it will invite false positives in the other direction: inferences by the citizen that the state is involved in shaping outcomes even when it is not. So the often well-intentioned process of collecting information for Hobbesian purposes produces a side-product, the false positive, which creates a paranoid sensitivity. Philip K Dick offers a particularly gruesome twist to the basic plot in Dick (1956), where information processing by the state has got the point of forecasting and preventing crime. The Kafkaesque impact of information collection is pernicious: if a state gives you reason to believe that it is falsely and obscurely accusing you, then your trust in that state evaporates. Any Hobbesian justification for freedom-reducing measures should always account for the ultimately freedom-destroying loss of faith in the State that the Kafka effect produces.

Of course, the same piece of technology in Leeds is less of a worry than it is in Shenzhen, because civil liberties are more respected in England than in China. Trustworthy states should be allowed to take Hobbesian advantage of technology, and if we want more surveillance, we should start by making, through politics, more trustworthy states.

 

How Web2.0 technology contributes to the Kafka effect

We are building corporate databases of personal information on an unprecedented scale. Much of this is coming from the advertising-financed "free lunch" of Web2.0 technologies and services. The advertising model on which these services rely for information might in itself be benign despite the possibility of deep but hidden effects of advertising. However, there is the clear possibility that highly targeted advertising may contribute to a background belief in a Kafkaesque state. When my email offers me a link clearly suitable to my current state, I become habituated to the notion of being watched.

However, the databases it creates will themselves be irresistible to State agents. The psychological irresistibility of the free lunch is accumulating a large and risky liability -- like the promise of nuclear power "too cheap to meter" has created a stockpile of nuclear waste whose risk we will always have with us. It creates a datamine that acts a a magnet to states and organised crime. As I will argue in the conclusion, the worst of it is that the model that accumulates personal information in exchange for web services is not even necessary to provide the services that we are now enjoying for free.

To understand the process by which these databases are being accumulated, consider the ill-fated case of Gator . Gator was an application that offered to fill in web forms for you. Very nice functionality. But Gator also--and not very transparently--relayed all information about web surfing back to HQ. HQ knew the browsing history, purchase history, inferred sexual preferences, film tastes and much else about its users. The Gator client watched and told all that happened between keyboard and screen. Gator could have been much more malicious than it was with all this information. In fact, its team of crack statisticians applied themselves to the simple task of predicting which of an available number of advertisements a given user at a given browsing moment was most likely to click through. So, if I was booking a holiday to Hawaii--as I remember doing when I last had Gator installed in 2003--as soon as my flight was booked, Gator served me an offer for a condo and a car; Gator's statisticians had built up quite a profile of me, and could offer sun-suits for the children, prescription goggles for the snorkelling, a guide book and a bird-watching tour for my wife (how had they figured that one out?).

Gator was achieving click-through rates with its profiling that were ten times what Google could offer. Gator's accounts managers could offer corporate customers highly complex advertising campaigns: ``if a middle class mother has been looking at car web-sites and arrives at GM, make the home page from soft green tones and emphasise safety; if it is a rugged young male, serve up the Hummer ..." (pre-crunch, all this).

 

 

 

Friendly alligator

 

All inoffensive, even helpful, you might think. But it is easy to imagine some more problematic cases.11

The corporate databases that Web2.0 is creating can be agents of Kafka and Orwell effects just as much as government databases. Already today, the large web-sites have entire divisions devoted to dealing with the subpoenas served by courts. The information exists, and will be used in accordance with the laws of the land ...as Chinese bloggers have found to their cost.

 

 

 

The battle field

 

If our old liberties and rights did a good--though restricted--job in the late 18th Century, with State power where it was, they certainly need reinforcing with state power where it is today. In the UK, for example, Habeas Corpus has been restricted to a huge extent--police can hold suspects without charge for 28 days, moving to 42. And this in an environment where discovering information about suspects can be done at the cross-tabulation of a handful of databases. If it took 24 hours to charge a suspect in the past, the increased efficiency of information gathering would suggest that it should now take less time to charge, not more. It is hard to avoid the conclusion that the War on Terror has been a boon to the institutional interests of technocracy (see (Barnett, 2008)).

 

Coming next

How the logic of the Web2.0 free lunch will cause indigestibly large corporate databases of quasi-personally-identifiable information to be accumulated; the Kafkaesque effect of these; their Orwellian potential. And how to pick the battles ahead.

 

 

 

Bibliography

Barnett, A.: 2008, 42 days: ``an abundance of caution'', openDemocracy .


Benkler, Y.: 2006, The wealth of networks, Yale University Press.


Boiteux, M.: 1956, Sur la gestion des monmopoles publics astreints a l'équilibre budgétaire, Econometrica .


Curzon Price, T.: 2008, From zittrain to aristotle in 600 words, openDemocracy .


Dick, P. K.: 1956, Minority report, Fantastic Universe .


Hayek, F. A. v.: 1982, Law, Legislation and Liberty - A new statement of the liberal principles of Justice and Political Economy, Routledge and Kegan Paul.


Kafka, F.: 1925, The Trial, Project Gutenberg EBook.


Nozick, R.: 1974, Anarchy, State and Utopia, Basic Books.


Orwell, G.: 1949, 1984, Secker and Warburg.


Solove, D. J.: 2007, “i’ve got nothing to hide” and other misunderstandings of privacy, San Diego Law Review 44.


Sunstein, C.: 2007, Republic.com 2.0, Princeton University Press.


Zittrain, J.: 2008, The Future of the Internet (and how to stop it), Princeton University Press.


 


Footnotes

... 2)1
Many thanks to all the people who have commented on early drafts of this paper--Selina O'Grady, Graeme Mitchison, Victoria Curzon Price, Anthony Barnett, Jonathan Zittrain, David Hayes, Jeremy O'Grady, Stefaan Verhultz. This paper owes a great deal to a seminar funded by the MacArthur foundation in March 2008, "Credibility in the New News" in London. Many thanks to Kathy Im and Elspeth Revere for making that gathering and space for thinking possible. I presented a version of this paper to the Annual Meeting of the Mont Pellerin Society in Tokyo in September 2009. It was a personally emotionally charged occasion, being the child of two members of the society while feeling uncomfortable with most of the positions taken by its members. On the question of the authoritarian state, however, we were on common ground - at least at some level of abstraction.
...2
The parallel between Zittrain's worries about the Internet and Hayek's in the ``Road to Serfdom" are clear. In both cases, there is a call to action against specified dynamics from within that threaten all that is best about the system. The Great Depression provided the impetus for the sorts of government actions that Hayek thought would undermine the market economy, just as Zittrain thinks malware, spyware and the abuse of private information threatens the sorts of control that will undermine the open, creative, re-usable Internet.
...3
The relationship between anonymity and the freedom of the moderns is very strong. It has its counterparts in the modern notions of anomie and alienation. Hayek picks up on the relationship in his discussion of the exercise of market power through price discrimination:
It is probably not much of an exaggeration to say that almost all really harmful power [...] rests on this power of discrimination because it alone, short of violence, gives them [firms] power over potential competitors [...] Though the majority of people may still be better off for the existence of such a [discriminating] monopolist, anyone may be at his mercy in so far as the nature of the product of service makes aimed discrimination possible and the monopolist chooses to practice it in order to make the buyer behave in some respect in a manner that suits the monopolist [...] Since the power of the monopolist to discriminate can be used to coerce particular individuals or firms, [...] it clearly ought to be curbed by appropriate rules of conduct. (Hayek, 1982, Vol.IIl, page 84)
...4
However did the celebrities become ``les Pipols"? There is a real cunning of language in this appropriation--a recognition that there is nothing between celebrities and people except for celebrity.
...5
It brings to mind Keynes' joke that GDP falls when a bachelor marries his maid--what was previously recorded as a monetary transaction is now subsumed in the un-measured domestic economy. Similarly, every journalist replaced by an academic blogger lowers GDP without necessarily reducing welfare.
...6
There are real success stories of citizen journalism bringing to public attention stories that might otherwise have been covered or buried. The great pet food scare of 2007 may be the clearest example, (especially because it is an example so devoid of politics). All over North America, pet owner forums started reporting that their cats and dogs were ill. Forum and blog members thought this was all too much for coincidence, and traced the problem to a single Canadian manufacturer. The pet-owners did all the investigation and coordinated their work through their blogs. As Jay Rosen says, they moved from the demand side of news to the supply side. The old-media caught up with the story once the journalistic work had been done at the grass-roots, by these consumers turned producers.

In terms of political positioning, the technology here is a tool of negative freedom: consumers can aggregate information and protect their rights as purchasers against the previously superior informational power of the producer. This is an enhancement to the normal freedoms of civil, contractual relations.

...7
And quasi-PII--it is often possible to combine databases none of which have PII to, in the overlap of data, personally identify individuals.
...8
The important distinctions between the Orwellian and Kafkaesque abuses of information is made by Solove (2007)
...9
http://www.dailymail.co.uk/moslive/article-1027150/The-invasion-Far-Eastern-technology-poses-threat-privacy.html
...10
Just as Jozef K. was Jewish and felt anyway on the edges of Viennese society, a ready target of radicalisation, so those who come into contact with the most Kafkaesque aspects of our states are those likely to be close to today's radicalisable edges of society.
...11
Obviously, the profiling could be used for old-fashioned price discrimination. The old headache for tariff setters trying to implement Boiteux-Ramsey pricing (Boiteux (1956)) for utilities was how to achieve a ``separating equilibrium"--how to make sure that the simple set of tariff choices on offer would distinguish customers by their elasticity of demand. No such constraint with Gator's profiles, where the identity, or at least identity-type of a customer could be determined by the logs of browsing history. ``TCP is likely to click through for car hire, so don't offer the special deal ..."

(For the story, Gator was hugely profitable. It was nearly sold to Microsoft for large amounts, until Redmond, in its due diligence, broke off discussions. Gator changed its name, and now trades honestly as Claria).



Time for the taxpayer to make the rules

Tony Curzon Price (London, oD): Yvette Cooper says (Today, Radio4) that banks that need money from the taxpayer from now on will be subject to tight bonus and pay caps. The good news is that this is all the big British banks. The taxpayer has provided two types of capital to the banks in the last 18 months: cash in the form of share purchases (the "part nationalisations"), and there are some banks, like Barclays and HSBC who have avoided using this form of financing. But all of the banks have used and cannot survive without the second form: the swap of bad, illiquid assets for Treasury Bonds under the Special Liquidity Scheme. Under this facility, the taxpayer is taking on the risk represented by the bad assets. The banks would not today be standing without access to the liquidity we have underwritten. So, it would seem, those bonuses can be constrained from today according to Cooper's pronouncements.

Put some of those out-of-work bankers into Whitehall. Quickly.

Yvette Cooper says (Today, Radio4) that banks that need money from the taxpayer from now on will be subject to tight bonus and pay caps. The good news is that this is all the big British banks. The taxpayer has provided two types of capital to the banks in the last 18 months: cash in the form of share purchases (the "part nationalisations"), and there are some banks, like Barclays and HSBC who have avoided using this form of financing. But all of the banks have used and cannot survive without the second form: the swap of bad, illiquid assets for Treasury Bonds under the Special Liquidity Scheme. Under this facility, the taxpayer is taking on the risk represented by the bad assets. The banks would not today be standing without access to the liquidity we have underwritten. So, it would seem, those bonuses can be constrained from today according to Cooper's pronouncements.

Her next line of defense for doing nothing is that there are contracts, banks must respect the law and the obligations that they have entered into. If ministers are buying this kind of excuse from the bank lobby, we are in a worse spot than I imagined. Here is what happens when a financial institution extends credit to a risky company (I know, I've had it done to me): they look at all the contracts that the company has; if the money being pumped in looks as if it will leak out to unproductive uses, the investor will say: "OK, I will put in the capital, but you have to go and renegotiate those contracts. I am not funding the sale-force bonus pool when you have come to me cap-in-hand." What then happens is that the CEO calls in those with the offending contracts and says: "I know you were expecting this. I know it is hard. But if you don't drop your demand---or swap it for this and that---the whole company will go down. You have until this evening to tell me you'll accept the hair-cut." The star trader or big-shot saleswoman then thinks it through: "I can have a claim on a bust company, and the animosity of many colleagues; or I can sacrifice my claim..."

All this is a business commonplace of raising money when you're in a tight pass. Now, it sounds as if the banks are going to Whitehall and saying: "look, we have these contractual obligations ... you're not asking us to break these, are you? that would be breaking the law!" Please can we get some tough ex-bankers in Whitehall. The golden rule of finance is "Whoever has the gold makes the rules." We the taxpayers have the gold right now, but we are being taken for a collective ride and our politics is failing us. This is the time to make the rules. There is no excuse.

 

The liberty of the networked (1)

Does technology liberate or enslave? When Prometheus first started the industrial revolution, Zeus thought he had liberated humanity and should be punished for it. The tension between technology as empowering versus technology as sinister control continues. The web versus the database, liberation or tool of tyranny? The Convention on Modern Liberty of which openDemocracy is a sponsor, asks us to make the question of technology's social role central to our political thought and activity. The Convention is right that we must not patiently allow a new technological order to deeply rebalance tyranny and liberty.

This long essay, to be published in parts, tries to make sense of the libero-genic hope and potential of computer and communications technology in a framework that also makes sense of the dangers. I return to a an essay from the adolescence of liberalism - Benjamin Constant's 1816 "The liberty of ancients compared with that of moderns" - to argue that the liberating hyper-individualism of the web is also the source of its greatest dangers. It is now more urgent than ever for us to reclaim our ability to decide all together on our common futures: we need to exercise our collective freedom to preserve our modern liberty.

 

 

Contents1

 

Mill and Constant

 

Newspapers and railroads are solving the problem of bringing the democracy of England to vote, like that of Athens, simultaneously in one agora.
John Stuart Mill, de Tocqueville on Democracy, 1840, p165.(Mill, 1840)

Will the technology optimists always be with us? Each age of technology brings with it the hope that the ills of modernity will be cured. The railway that Mill pinned such hopes on also ferried troops to the front 75 years later for carnage on an unprecedented scale. The newspaper and other mass media that would bring Athens to England would also stir up the passions that ushered in the totalitarianisms of the the twentieth century. Is it different this time, with the Internet? It might be. But the forces of social and technocratic tyranny are well poised to turn the new networks into chains. This paper tries to describe the lay of the battlefield ahead.

When Mill hopes to bring Athens to England, he is pointing back to the basic dilemma of modernity expressed 30 years earlier by Benjamin Constant (Constant, 1816) in his analysis of the liberty of the ancients and the moderns.

Constant applauds the freedom of the moderns--the ability to get on with one's own life and projects without interference of the sovereign--but worries on two counts that we will miss the political freedom of the ancients:

  1. an instrumental reason: the private and individual freedoms that thrive in modern mass society are dependent for their continued existence on a proper, wise delegation of power to representatives of government. However the very desire to get on with our private affairs saps the will to hold power to account. The powerful will naturally take advantage of such political dis-engagement and our modern freedoms will eventually be undermined.2

     

  2. an intrinsic reason: participation in public life and collective decisions is part of the good life.3Participation in a free political realm--the common determination of collective goods and behaviours through discussion--is not just a means to private welfare, but itself a condition of a good life.

The issues identified by Constant are certainly with us still. Modernity in the West has hugely expanded the private realm of freedom, but the government of mass society has tended to destroy the meaningful exercise of self-determination in collective life--the ``freedom of the ancients".

John Stuart Mill expresses the refrain of the modern techno-libertarian. The railway and the printing press accomplish Constant's request that we need to find social organisations that merge the two freedoms.4The railway reduces distance; the printing press carries wisdom and discussion. The agora, the public forum in which the citizens of Athens participated in collective decision-making, is reconstituted in virtual form.5

Today we have the same question: are the Internet and the blogoshpere at last the solution to Constant's request that we cure mass society of its public-realm emptiness without abandoning the gains for individuals of Enlightenment modernity? Should we now see the Internet as essentially a technology of freedom? Will the freedom of the networked be, at last, the synthesis of the freedom of the ancients and of the moderns?

The alternative view is as desperate as this one is hopeful. Just as Mill saw the potential of the railway for freedom and self-realisation, Saint-Simon, keen to use the new technologies to replace the "government of men by the administration of things", prefigures a manipulative, bureaucratic attitude to mass society.6Will the new networked world be an instrument of Saint-Simonian technocracy or will it create an arena for Millian liberty? I will argue that liberty does not -- as it were -- come for free. It will not just drop out of the technological developments of the age. Every technology pits tyranny against freedom, and every technology requires the battle to be fought again.

 

Schema--The ancient, the modern and the networked

The dangers to freedom are summarised in the the top row of table 1. The ancients had no checks on the power of society; mores and law were fused. Here is Constant again:

Similarly ostracism, that legal arbitrariness, extolled by all the legislators of the age; ostracism, which appears to us, and rightly so, a revolting iniquity, proves that the individual was much more subservient to the supremacy of the social body in Athens, than he is in any of the free states of Europe today.
(Constant, 1816) Society gave power to the individual, but also had absolute power over including or excluding the individual. Collective power was bought at the cost of individual rights and certainties. One of the most troubling aspects of the wired world, with its assault on privacy and its technologies of manipulation, may recreate and amplify this aspect of the world of the ancients.

At the same time, centralised, personalised databases, whether they are governmental or civil, give bureaucracy great power over the individuals. These are modern concerns, classically expressed in Kafka (1925) and Orwell (1949). The industrial processing of information brings this modern abuse of power frighteningly within the reach of our states and companies.

 

 

Avoid the top, encourage the bottom.

The lower part of table 1 represents technology-optimism. The networked world offers a myriad of new opportunities for participating in collective spaces, some new and some old but newly enhanced by technology. Wikipedia has brought encyclopaedic knowledge-gathering into the public realm (openDemocracy is working at doing the same for news analysis and commentary); Flickr has brought photographers from all over the world into the creation of a public photo archive; YouTube hosts any number of niche communities that provide a public space for performance. In the digital age, Andy Warhol might have said, everyone can be famous to 15 people (Weinberger, 2002). This creates opportunities for the sort of socially rich, collectively oriented self-realisation and self-determination that Constant saw that modernity had destroyed.

At the same time, that quintessential freedom of the moderns, the expansion of the realm of unrestricted private choice is being expanded by new goods and services, some very cheap, many free, and many seemingly free (more later on the indigestion that the Web2.0 "free" lunch is likely to cause).

 

Arguments and Forces

 

 

Lines of battle. (The weight of the line represents my assessment of the scale of the danger)

The remainder of this article is an elaboration of the forces depicted here . Briefly, these are the effects I will cover:

Finkielkraut, Warner
These are all thinkers who have described the way in which technology is changing--sometimes for the worse, they claim-- our thoughts, individuality and identities. The tyranny of the group is moulding us as never before. These are interesting speculations, but I argue that they are not the fundamental vector of tyranny.
Sunstein (2007)
argues that the new economics of knowledge dissemination fragments society into non-communicating shards; solipsistic communities that grow apart and potentially find it increasingly hard to co-habit as any habit of compromise is lost. We thus are moving from the freedom of the moderns, with its ``broad tent'' political institutions like parties and newspapers, to an ``unfreedom of the ancient'' with its warring city states squaring up across the Peleponese.
Zittrain (2008)
sees that the Internet, once the fertile ground for all sorts of creative, ``generative'' communities organised on Athenian grounds and delivering the social goods of ancient freedom, is in danger of becoming the ``first self-closing open system" under the weight of insecurity, theft and other bad user experiences. Governments will be tempted to regulate, corporations will reduce the freedom of users that created the realm of pure possibility that the Internet briefly was.
Kafka (1925), Orwell (1949) and McNealy
Technology is being used to realise the nightmares of the database state. In some countries--China, Russia, Iran--the process is advanced. In the West, it has gone much further than most of us realise. These are not just government databases, but the use by governments, criminal organisations and some corporations of all sorts of overlapping databases of personal and quasi-persoanl information. We are building a world in which Jozef K.'s paranoia will become a natural state of mind for many. We are willingly contributing, in the name of convenience, security or out of sheer ignorance, to the databases that could be used to enslave us. Imagine the world of the Stasi as decribed in Donnersmarck (2006), with information willingly auto-submitted and efficiently processed.

 

 

Get over it!

 

Hope
In all this gloom is the hope, expressed in Net-Topians like Anderson (2007), Benkler (2006) and Lessig (2000) who argue for the transformative potential of the Internet. ``The Wealth of Networks" will allow for the fusion of the freedom of the old and the new: alienation and anomie, the diseases of the freedom of the moderns, will be banished by the flexibility and abundance of the virtual world; social tyranny, the disease of the ancients, is banished by the endless multiplication of identities and affiliations that we can now enjoy.

 

Modern/Libero-genic: cheap communication

, anthropologist for Nokia, says the cell-phone has come as close to being a modern cultural universal as money and keys. He explains this by the ultimate safety it provides, a fundamental component of the freedom of the moderns.

 

 

Keys, money, cellphone.

Chipchase ought to give more weight to the ability the cellphone has provided to move around mass society while never being more than a thumb-twiddle from our friends--the private realm of family and friendship has become portable.7

There have been previous massive changes in the cost and technology of disseminating information, and these have had profound effects on society and the progress of freedom.

In 1557, in reaction to the printing revolution introduced to the West by Gutenberg,8Pope Pius IV published the first Index Librorum Prohibitorum, the titles that printing had let into minds to corrupt them. Pius IV had it right that printing would revolutionise religion and fundamentally weaken the church, but had it wrong that he could stop it. Or take the mass-circulation dailies and weeklies that appeared in the nineteenth century after paper-making and steam presses cut the cost and time required to publish fast and in huge quantities. Governments quickly imposed selective taxes on printed material (like the Stamp Act of 1765, with the riots this caused in the Americas) designed both to raise revenues and silence sedition. They could do the first, in the short term, but not the second.

 

 

Net brain syndrome.

 

The printing press--the epoch that some are already calling the Gutenberg parenthesis--can be argued to have destroyed the authority of the Church, created the Protestant individual, made the industrial revolution and organised mass social movements. The technology of the press and later of broadcasting impose large fixed costs of production, so encouraged the development of mass markets.9

Changing production functions in the transformation of information are likely to be significant social events because knowledge is itself such an important input to the creation of social behaviour. We would expect the networked computer to have very broad social impacts--similar changes in the costs of ball bearings would be big news, but probably not socially transformative in the same way.

The almost zero fixed costs of information dissemination and retrieval; the almost zero marginal cost of serving an additional copy of the information--the first round effect of this is to create "The Long Tail": the micro-markets for informational goods and services that were previously ruled out by market-size constraints.

 

Ancient/Libero Genic: Every web site is a republic

The Internet itself has grown in an admirably Aristotelian way (Curzon Price, 2008). Intended from the beginnings of ArpaNet as a network so decentralised it would allow the basic functioning of government even after a targeted nuclear strike, the Internet invented rules for its operation as it went along. Experts who needed to get a job done formed ad hoc committees and established de facto standards. The Unix gurus who were the head of computer systems at the big American Universities, in the major research establishments and in a few early-adopting corporations formed an aristocracy of nerds who built an open, scaleable network architecture that became the Internet we know.

Zittrain (2008) tells the story of the development of this ``generative" technology. At every turn, the ad hoc groupings made decisions that maximised the flexibility of the network. The principles of experimentation, procrastination--``make constraining decisions as late as possible"--and contribution rule in this world. Academic institutions provide the "infant industry environment" in which systems that rely in their early stages on expert users all providing good will that allows the Internet to stabilise, open itself outwards and become the phenomenon of general scalability we saw in the 1990s.

There is a profoundly non-market aspect to this development of open systems. The market, with Compuserve, Prodigy and AOL tried to deliver closed, controlled and safe networks. The French State, with its Minitel, did the same. The American academe provided the world with a remarkable interconnected hierarchy of public goods--from the most basic protocols like TCP/IP to the machines that could operate the network (Stanford University Netowork, SUN) to the complex software that bundled all this together (Berkeley Standard (Unix) Distribution, a version of which this Apple still runs on today) and the millions of lines of useful code, much of it developed under the watchful eye of Richard Stallman, the austere high priest of the free software movement, at MIT, that provided end-user functionality.

This is (Zittrain, 2008):

The generative Internet and PC were at first perhaps more akin to new societies; as people were connected, they may not have had firm expectations about the basics of the interaction. Who pays for what? Who shares what? The time during which the Internet remained an academic backwater, and the PC was a hobbyistÕs tool, helped situate each within the norms of Benkler's parallel economy of sharing nicely, of greater control in the hands of users and commensurate trust that they would not abuse it.

That culture of expert-led generative development has extended into the domain of web applications with projects like Wikipedia. A self-selected and self-appointed group of under 5,000 editors, fact-checkers, conflict resolvers and coders have created a compendium that will rank with the Diderot's and d'Alembert's Encyclopedie as a great achievement of human culture. Under the aegis of open-access, transparency and the power of self-determination, Wikipedia is its own republic. It levies voluntary taxation from users; its aristocracy makes critical decisions about the common good. It gives away what it makes, since making it, and having it used and perceived as useful, is its own reward. Benkler (2006) finds in this sort of project ``The Wealth of Networks", and these are enabled in all sorts of new spaces by the technology of near zero cost information dissemination. openDemocracy, for example, has staked its ground as being the global Public Service provider of news analysis and commentary.

 

Coming next: Tyranny

So much for the good news. And it is very good. But in the next parts of this article, I will consider the threats to modern and ancient liberties posed by technology. Kafka, and Orwell in their distinct ways describe the worst of it. But Zittrain's and Sunstein's vectors are real and provide opportunities for the complex forces of modern tyranny.

 

 

 

Bibliography

Anderson, C.: 2007, The emerging world of ``free'', Video.

Benkler, Y.: 2006, The wealth of networks, Yale University Press.


Constant, B.: 1816, The liberty of ancients compared with that of moderns, Essay.

Curzon Price, T.: 2008, From zittrain to aristotle in 600 words, openDemocracy .


Donnersmarck, F. H. v.: 2006, Das leben der anderen, Film.

Kafka, F.: 1925, The Trial, Project Gutenberg EBook.


Lessig, L.: 2000, Code and other laws of cyberspace, Basic Books.


Mill, J. S.: 1840, DE TOCQUEVILLE ON DEMOCRACY IN AMERICA, Online Library of Liberty.
.

Orwell, G.: 1949, 1984, Secker and Warburg.

Sunstein, C.: 2007, Republic.com 2.0, Princeton University Press.

Weinberger, D.: 2002, Small pieces, loosely joined, Perseus Books.


Zittrain, J.: 2008, The Future of the Internet (and how to stop it), Princeton University Press.
.


Footnotes

... networked1
Many thanks to all the people who have commented on early drafts of this paper--Selina O'Grady, Graeme Mitchison, Victoria Curzon Price, Anthony Barnett, Jonathan Zittrain, David Hayes, Jeremy O'Grady, Stefaan Verhultz. This paper owes a great deal to a seminar funded by the MacArthur foundation in March 2008, "Credibility in the New News" in London. Many thanks to Kathy Im and Elspeth Revere for making that gathering and space for thinking possible. I presented a version of this paper to the Annual Meeting of the Mont Pellerin Society in Tokyo in September 2009. It was a personally emotionally charged occasion, being the child of two members of the society while feeling uncomfortable with most of the positions taken by its members. On the question of the authoritarian state, however, we were on common ground - at least at some level of abstraction.
...2
This is just the agency problem that the subprime crisis has made so familiar but applied to politics rather than finance. The gigantism of modernity--driven often by apparently genuine economies of scale--produces freedom-destroying loss of control. That loss of control should be factored as a cost into any analysis of the economies of scale that are justifying the move to gigantism. Technology can certainly be gigantisms's friend.
...3
Constant writes that human beings are called to ``self-development [...] and political liberty is the most powerful, the most effective means of self-development that heaven has given us. Political liberty, by submitting to all the citizens, without exception, the care and assessment of their most sacred interests, enlarges their spirit, ennobles their thoughts, and establishes among them a kind of intellectual equality which forms the glory and power of a people.'' (Constant, 1816)
...4
``Sirs, far from renouncing either of the two sorts of freedom which I have described to you, it is necessary, as I have shown, to learn to combine the two together". (Constant, 1816).
...5
Every technology seems to call forth its wild optimists. Here, for example, Arthur C Clarke on the telegraph and the satellite:
A hundred years ago, the electric telegraph made possible - indeed, inevitable - the United States of America. The communications satellite will make equally inevitable a United Nations of Earth; let us hope that the transition period will not be equally bloody.
Arthur C. Clarke, First on the Moon, 1970
...6
Constant anticipates the position:
From the fact that the ancients were free, and that we cannot any longer be free like them, [some thinkers] conclude that we are destined to be slaves. They would like to reconstitute the new social state with a small number of elements which, they say, are alone appropriate to the situation of the world today. These elements are prejudices to frighten men, egoism to corrupt them, frivolity to stupefy them, gross pleasures to degrade them, despotism to lead them; and, indispensably, constructive knowledge and exact sciences to serve despotism the more adroitly.
...7
I am told--and would love to find a reference--that Karl Popper thought that mass society would be civilised only once instant communication between any members became possible.
...8
Note, from Korea, and not from China as often mis-stated. The Chinese bureaucracy encouraged the printing of a small number of classic texts. These could be produced quite easily with fixed-type technology. It was the Koreans who first introduced moveable type, the invention which allowed the printer to re-use and re-assemble the plates used by the press. The Gutenberg revolution was one of movable type--just as Zittrain (2008) argues that the true revolution of the networked PC is its myriad, decentralised re-purposability, which he calls ``generativity".
...9
The capital costs of the Internet are huge too, but they are general purpose and, often by regulation, open access--the same telephone line is used for all the content that passed down it.

Group read, energy, week 4. Will solar energy let us fly to the sun in winter?

Feb 7 2009. Join the Group Read. Chapters 5 and 6. Flight and Solar

(Instructions on how to join are at the bottom of the original post)

Will solar energy technologies allow us to sustainably take those long-haul flights to get our winter dose of sunshine? On the way, we discover that flying intecontinentally once per year has an energy cost slightly bigger than leaving a 1 kW electric fire on, non-stop, 24 hours a day, all year, despite the fact that modern planes are twice as fuel-efficient as a single-occupancy car. It may be no surprise, therefore, that Airline businessman Michael O’Leary, CEO of Ryanair, has developed a Swiftian the solution to the problem: " The best thing we can do with environmentalists is shoot them."

Just like to repeat a big thank you to David MacKay who has been very supportive of this project, and to William Sigmund without whose amazing html and perl skills I do not think we would have had an online version to work with.

Solomon: wisdom or luck?

When Solomon became wise for suggesting a baby be split in two to settle a dispute, was he in fact just lucky?

"Lucky", say Avinash Dixit and Barry Nalebuff, the two jovial American business school gurus who have written the "Game Theorist's Guide to Success in Business and Life". The fake mother should have anticipated Solomon's trap. She should have protested as strongly as the real mother. With both women claiming to prefer a living child given to her rival to a dead child shared, his judgement should not have worked as a truth-extracting mechanism.

Dixit and Nalebuff go on to describe "the simplest of the devices that would have worked." Get ready for it. Solomon should announce that he will levy a substantial fine on whoever does not end up with the baby (if all goes well, the fake mother). The first woman is asked to either admit the baby is not hers or claim it is. The second woman is then offered the chance to challenge the claim and make a (monetary) bid for the baby or admit she is faking it. The first woman is offered the chance to concede, but she will have to pay a fine for lying, or to match the bid, in which case the rival pays the fine. It might take you a moment to think it through, but as long as the true mother is prepared to pay more than the false mother would ever be prepared to pay, then this scheme ensures that the first woman tells the truth in the first stage; the second woman tells the truth in the second stage and that no money ever has to change hands.

That, in Dixit and Nalebuff's book, would be the simplest proof of Solomon's sagacity. (Better still if he had generalised it to many women, many babies, repetitions, risk of slight malfunction and any number of other subtleties that fill the publication lists of academic economists ...).

I'll stick to history's judgement that Solomon was wise. He was a judge of character. He sized up the pair, and understood the simple women before him. He played a trick that worked in the circumstances. Indeed, if he had attended one of Dixit's or Nalebuff's business school game theory classes ("the most popular courses at Princeton and Yale," we are told), I think he would have flunked his historical opportunity to become the bye-word for good judgement. Solomon would instead have become the name for the King who loved his own cleverness, who baffled through counter-intuitive complexity and a penchant for paradox.

I co-founded the game theory consultancy company that shot to prominence by designing the auction for 3G spectrum that gave Gordon Brown a £25 billion windfall in 2001--and that was blamed by many for sinking the telecoms industry into a recession from which it has not really recovered. I did my PhD under one of the field's leading figures. I also once believed that Game Theory was the Way and the Truth.

But I have faith no more, and it wasn't just the plain absurdity of examples like Solomon's. Game theory was first developed by polymath Austrian John von Neumann and he elaborated the theory during the WW2 to help with tactical decisions. Since the North Atlantic sea route was the shortest, the German U-boat planners would know that it would be favoured by the Allies; so they would concentrate U-Boats on the Northern crossing; but the Allies, knowing this, would adopt the Southern route to avoid losses; but the Germans, knowing this, would deploy the U-boats to the Southern route ...and therefore the allies could safely use the Northern route. von Neumann developed a theory of tactics that showed us the way out of these circles. He showed that it was important to flip a coin to determine which route would be taken, and that the probabilities should be skewed to the pay-offs. It was a great and useful piece of mathematics. John Nash, the unfortunate schizophrenic anti-hero of ``A Beautiful Mind" showed that the insights of von Neumann can be expanded beyond situations of all-out war.

Application to commerce, where my profits depend on my rivals' behaviour, seems as natural an extension of game theory as business is a peaceful extension of war. But as a Game Theorist who went into business, I can attest that the tactics that Game Theory is good on are almost never critical. By some great piece of PR, Game Theory makes a claim to being the study of Strategy. But that is a pretence. Strategy consultants, for example, are people who try to understand businesses and markets from the inside. What drives the consumer? what is happening to technology? what are the characters and histories of the firms involved? what are the networks of influence. Why do we stop going to Starbucks? What influence does this have on the ecology of high streets? what can Starbucks do now? Will it go bust? Game theory does not answer these sorts of questions of strategy. Once your business judgement is made and your strategic goals are set, then you might pick the brains of one of those Yale MBAs who went to Nalebuff's course for tactical advice.

Even then, you should take any advice with the great pinch of salt that comes with Game Theory's terrible secret: the strongest prediction that it makes is that almost anything is possible in games that are repeated indefinitely. Take any ``Game theorist's guide to life" like this one, look up "Repeated Prisoners Dilemmas" in the index and discover how the author comes clean with the disturbing conclusion that it has no predictive value. Nalebuff and Dixit talk about "Tit-for-Tat", the rule of thumb that says that you should start out repeated interactions by being nice and from then on do as you are done by. If everyone follows this rule, the best collective outcomes are achieved. David Willets, the brainy Shadow Secretary of State for Innovation, Universities & Skills, has spoken lyrically on the Today program of the way that vampire bats are tit-for-tatting when they share blood, and suggested that this provides a philosophical basis for small government, local-community, compassionate Conservatism.

Quite apart from the associations that vampirism has for most voters, Willets should stay off the game theory. Tit-for-Tat is clearly not a good description of the world -- cycles of violence, war and revenge; group loyalties and hierarchies; coalitions of the strong ganging up on the weak ... these common facts of life are quite incompatible with Tit-for-Tat, in which everyone starts nicely, and you are never nastier than anyone has been to you. Nalebuff and Dixit's evasion strategy is to move from claiming they have a description and prediction of the world to hoping they have a prescription for the world. If your theory doesn't fit the world, try changing the reality. After all, this is a "Guide to Success" we are being offered.

Unfortunately, game theory has probably been quite successful at doing this, certainly amongst the MBAs who have been moving from the classroom to Wall Street. Game theory, I think, encourages the following four habits: 1) to look to extract maximum advantage from the rules you are subject to 2) to concentrate on the minutiae of play rather than think about your place in the wider constellation of the business world and society, 3) to always have foremost in your mind: ``what is the payoff?'' and 4) to treat most situations in life as limited and cut-off from all others. The relationship between these four habits and the financial crisis are pretty obvious: stretch every rule to its limits; don't worry about system-wide effects; ignore any general thoughts about the value of living a good life and measure success in the number of Ferraris you can afford. Game theory has, in a way, made a part of the world in its image--the world of finance--and we are now trying to rescue ourselves form it.

So where does this leave our ``Guide to success in Business and in Life''? Probably not as a must read unless you want to go into a few of the areas where Game Theory really has been useful -- competition law, running complicated auctions (usualy for the public sector or a monopolist like Google), utility regulation and military micro-tactics. And what about as a guide to life? The greatest blind-spot in Game Theory here is that the games you play and the way you play them change you as a person. Today's game and tactic changes the games and payoffs you will face tomorrow. Just as micro-planning does not work in the macro-economy, so life-planning cannot be built up from situational tactics. Squeezing out responsible politics from the economy is like trying to lead a good life without ethics.

The financial crisis is a crisis for economics too: why did the discipline fail to notice such a disaster on its watch? worse, has it contributed to the world that made the disaster possible? My prediction is that Game Theory and other studies in economic minutiae are going to loose their shine. Economic history and macro-economics will come out of the crisis well. But books like this will seem so pre-lapserian.

Globalisation, protectionism and social democracy in one country

Rachman vs. Toynbee on Globalisation, "Today"

Toynbee: "Gloablisation is good in that it has raised the poor out of poverty, for example in China. But the benefits in the advanced economies have been concentrated on the rich. To have the cake of globalisation and to eat it, we must make sure that its benefits are distributed much more equally. Then you will avoid the nationalist, protectionist sentiments that we see arising everywhere now."

Rachman: Sure ... but ... political pressures are killing the global fundamentals of free trade ... there is no political message that can counter these pressures ... we just can't make sense of the world anymore ...

That is because the economic crisis is revealing the basic and immense conflict between the nation and the the inter-nation. The inter-nation is the collection of all those interests that globalisation creates that are not contained, captured or represented by national institutions. Capital is one source of such interests, for sure. But so are the environment, security, many hybridised identities etc.

Here is what a Davos internationalist might have said to Toynbee a couple of years back:

"Redistributive policies are all very fine, but they do mean high taxation. And one way or another, nation states are in competition with each other over the cost of doing business. If a nation falls behind in that competition, it will have less and less to redistribute. If the UK taxes capital and the rich to make globalisation more acceptable to its losers, capital and wealth will find ways not to fall under the UK regimes."

The paradox proposed was this: if you make globalisation redistributively acceptable, you miss out on it; if you embrace it, it becomes socially unacceptable in the bad times. And a corollary is that the more rich nations protect themselves, the less export-led goodness there is for the poor nations.

The nation and inter-nation are in conflict here. Since 1945, we built social democracy in one country in the rich West, but it was not "real" social democracy---not accepted and internalised into our social beings in such a way that it survives the pressures and temptations of the inter-nation. Infant social democracy must now grow up, and this means rebuilding both the nation and the inter-nation.

 

"Energy without hot air" Group Read

Jan 30 2009, Chapters 3 and 4. Cars and wind
In which we learn that a car eats (the energy equivalent of) half a kilo five kilos of butter per day on a typical commute, and that although "Britain’s onshore wind energy resource may be “huge,” but it’s evidently not as huge as our huge consumption."

(click on image to get to book; read below to sign up to group reading)

 

Jan 16 2009, Chapter 2

 

Reading Chapter 2 this week-end. A short chapter that sets the goal of calculating in broad terms whether sustainable energy production can match current energy production. This is the big question of whether we face a massive environmental constraint or one that will require substantial but not life-changing modifications to life. David clears up important conceptual questions -- energy, power, entropy, efficiency.

Read below if you are just joining the group read and would like to equip yourself with the annotation tools.

Jan 7 2009, read-in kick-off

Energy is at the heart of two of the hardest social problems we face: environment and poverty. And the two pull in different directions.

Average energy use per person must rise, while total carbon emmissions must fall. Bringing 2 billion people out of misery and another 2 billion out of poverty will need huge increases in their energy use. But at the same time,  environmental constraints mean that carbon emmissions must fall.

To come to a responsible view on a great number of topics - from the response to economic crisis to bio-fuels; from climate change mitigation to transport policy - we need to have a solid grounding in the facts about energy. (See David's own list of questions at the bottom of this page).

This is why I have picked David Mackay's "Energy Without Hot Air" as a first text for openDemocracy's 2009 Group Reads. We'll feature about 10 pages per week and keep a running page of the commentary and questions and notes.

As before, we'll use diigo.com to do the annotations. You need to sign up for a diigo account and then join the "Energy group read" group. I usually find it easiest to install the diigo toolbar on my browser to add notes to online texts. You can also get the same sort of functionality by installing the diigolet button, which is somewhat easier to use and install.If you have any trouble with any of this, add a question to the comments on this page and we'll try to sort it out.

Once you have diigo set up, you can go to the online version of  "Energy Without Hot Air" and start reading, commenting and asking questions. When you come to a place in the text that is worth a comment or question (for example, here, on the text "This heated debate is fundamentally about numbers"), highlight the phrase and choose "Highlight" from the diigo menu. Once highlighted, mouse over the highlight and choose "Add sticky note" from the diigo menu. Type in your note or question and in the drop-down menu that defaults to "Private" make sure you select "od energy group read".

When you are reading  "Energy Without Hot Air" other people's highlights should appear, and you should be able to read their comments and questions by mousing over the text.You can also look at all notes on a page.

We're still experimenting with how these online group reads work. Last year, we ran group reads on Zittrain's Future of the Internet and on the G20 communique. They're fun, interesting and informative. Do join us!

Just like to say a big thank you to David MacKay who has been very supportive of this project, and to William Sigmund without whose amazing html and perl skills I do not think we would have had an online version to work with.

 

 

Sunday Jan 11 - handing over to Kanishk

I hand over front page duties to Kanishk next week, then David, then Susan, then Rosemary then back to me. Anthony will join in when the Convention is over.

Why the rota? The idea is that we all work on various parts of the site, commissioning, writing and editing. But bringing the front page together everyday requires thinking about all sorts of trade-offs and about the contribution of each part to the whole. There is no better way of making each part aware of the constraints of the whole by having many people take the reins for a period.

When I explained to a mathematician friend the basic constraints ofpublishing on oD - what capacity we have for articles on the front page; how many readers per day we have; how the various parts of the site develop their own readership, and I further explained that I thought everyone should have responsibility for a part of the whole - heclaimed that sharing in space and sharing in time should come to exactly the same thing. It would be as good to divide the front page into some number of zones, with each person with responsibility over "theirs" as to divide up the year into slots where each person would have responsibility. Clearly, he had taken the level to a level of abstraction too high - splitting in time still imposes the task of creating a unified whole, from quote to lead to which block goes where to pacing ... which a split in space of the front page would never have offered. Anyway, we're experimenting with the sharing through time rather than space.

I'm working hard with Julian to make the publishing process -- everything from picture research to sub-editing to creating shortened versions for syndication and preparing the emails for dispatch -- so standardised that we can start to expand the distributed network of helpers and volunteers. 

Between the rota and the volunteer-based publishing network, we're moving towards the goal of having a mechanism that will wikify the production of agenda-driven analysis.... 

 

Wed Jan 7 - Gaza, Economy, Greece

Today was pretty Gaza-dominated on the site again. Over in the forums, Gaza-related threads are getting very long and heated. Just asn an example, Iron Mike posted this one on Hamas being the blame for the war, and it now has 110 replies. I think that Avi Shlaim's devastating history of Israel's post-1947 treatment of Palestinians should be read by all those in that thread. It is very powerful to hear this story told by "someone who served loyally in the
Israeli army in the mid-1960s and who has never questioned the legitimacy of
the state of Israel within its pre-1967 borders."

We published on the economy too. Godfrey Hodgson celebrates the return of the economically powerful state, while Simon Zadek sees the hope for real accountability in capital allocation mechanisms. Simon links the solution of the financial crisis and the environmental crisis: both are failures to hold the powerful to account for all the consequences of their actions. I hope Simon is right. I feel that the solutions may be less technocratic than he seems to suggest---redesigning incentive systems is unlikely without a firm purpose, and that needs a strong, positive vision to take hold. On that, we could do better.

 There is a very moving story of vision in Jane Gabriel's interview of legend film-maker Theo Angelopoulos. He is interesting on the riots ... but also on the optimism of his own generation: 

"
I belong to an older generation, a generation that believed that
change was possible, that it was possible to change the world, that it
was possible to open up a new path. My generation believed that it was
possible not only to dream of a new world, but also to turn dreams into
realities. It didn't happen. I think we are all carrying the shadow of
disappointment and failure. "

 But read to the end. It is brimming with hope.

We have a huge amount of good material coming in. That's one thing crises do -- send thinking people to write. We don't have the capacity to transform all of it into publishable material. Hat tip to the volunteers in the publishing network without whom output would slow to a trickle!

Oh ... and yesterday's intruder on the Gaza box. He's now written suggesting some writers we might like to commission. That's an improvement in method :)

Thursday's FP, readership spike

Denis Dutton at Arts & Letters Daily featured Theo Hobson's very interesting Milton piece and we got the spike in readership that comes from Denis' selection. I have written about the ALDaily effect, over here in relation to the unbundling of editorial roles that is happening all over publishing. If you go to the comments on the Milton piece, the 15 from Sunday are, I assume, from amongst the followers of Denis' recommendations. They are articulate, intelligent, opinionated---just the sorts of readers we love to have. Thanks, Denis!

Our own unbundling had a slight hic-up today. First, I spent a good part of last night restoring 2 new computers replacing the stolen ones. (Digression: my laptop had a Time Machine on an external hard-drive in the house. I got a total clone of the computer that was stolen in hours. Selina's had key files backed up on Mac's iDisk which was much less smooth restoring. Of course, iDisk is somewhat safer in that it is off-site. The lesson is that we should always be backing up both on and off-site, both complete mirrors and critical files).

Then there was a big ModernLiberty planning meeting -- exciting things happening there, more news soon. And finally our twice weekly physical group get-together... So it was great that the publishing team got  Sophie Roberts'  piece on the disappearances of civil society and opposition figures in Zimbabwe. She tells the history of Zimababwe's first post-colonial "dirty war" againstZapu-supporters and analyses disappearance as a tactic of putting people in a place that is beyond law. People disappear, and, this way, so too does accountability.

Tomorrow -- the traditionalism of the French Socialist party, three scenarios for Somalia ...

Polymeme Feed

I added the Polymeme feed to the front page the other day. Polymeme was created by openDemocracy author Evgeny Morozov. It is Evgeny's own semi-automated news aggregator, and I had found myself selecting so many of Evgeny's stories in my "The World" entries that I eventually saw the web logic of this -- why not  spread the energy and just give Polymeme its own slot.

Evgeny has built a database of a huge number of sites and blogs which he has categorised into broad subject areas. Every day, his machine discovers which stories are being referred to by several of these sites. He then does a manual cull for the most interesting ones. The result is a very interesting and distinctively personal selection of news stories.

 

Wednesday Front Page - disrupted day

Yesterday's fron page plans did not all come together in time. There was the very nice surprise of having John Palmer's piece on the Irish referendum and the sureal spectacle of having Europe's leaders promise that they will not do any number of things that they never had the intention or the right under the treaty of doing. Palmer wonders whose victory it will be if the Lisbon Treaty does not get through before the UK Tories are in power with the ability to veto it.... Time is surprisingly short, and the Irish in a rather good negotiating position.

We did not have all the Stalin/Memorial pieces ready to go last night, and anyway it seemed as if the SWISH report and its extraordinary daglo picture --- this is described on flickr as a picture of a soldier concealing himself  with a smoke bomb after his vehicle is hit by an IED --- could spend a few more hours in the top slot. A strange notion of concealment ... maybe there is a metaphor there.

The Russian pieces should be ready to go tonight. The two together tell a very disturbing story. I hope that we see the Zimababwe article too.There has been very good discussion on Archibugi's Human RIghts piece - what exactly is the role of NGO's in improving governance?The immigration pieces we featured from OurKingdom last week continue to elicit important debate.

I had the nasty experience of having our house broken into last night. My laptop was stolen, as was Selina's (my wife's) ... So today has been a scramble of glaziers, police visits and all the while making sure that we do have backups of everything (and especially Selina's manuscript). I think we're going to be OK, but it is a long process getting the personal computing cloud back up and running.

Tuesday's front page

I'm doing front page duty this week -- essentially, I look at what articles we have either coming up or published in different areas on the site and chair the process by which we decide some get highlighted on the front page.

I loved the solar thermal power station that we featured as an example of the kind of green infrastructure that will make for a good Keynesian stimulus and good green policy in Ralf Martin's very sensible squaring of the budgetary / environmental circle. Talking of which, William Sigmund and David Mackay are working hard to get "Energy Without Hot Air"ready for a group read. The goal is to have Chapter 1 up before the holiday break so that we can get started on some reading/annotating. One thing I thought about the book is that all the examples and numbers relate to the UK - the point is to make it very comprehensible in everyday terms. I wonder what it would take to localise the book to other places ... Might be a project to think about as we read.

I think we will put the Paul Rogers SWISH report into the front page slot today. We had a discussion in the office yesterday over whether it was in any way in bad taste to frame these SWISH reports as coming from security consultants to Al Qaida ... The worry is that this paints a view of the world as run by amoral, besuited consultants, each working as desk-bound mercenaries, and suggests a amoral, or at least morally totally relativistic world. Kanishk argued persuasively that Paul's pieces are of such sober sense and sound judgement that there was no possible interpretation of this kind. Reading this one, I have to agree. 

We have an excellent piece about memories of Stalinism in the Russia section which we will feature on the front page. The piece makes it very clear the ways in which history lives in the present, and how the present will become history that will continue to reverberate in society. This, of course, is a theme that is clear in the SWISH reports too, with their reminder of the time scale and relationship to history that radical eschatological movements adopt.

There is a really good Zimbabwe unsollicited submission in the pipeline. I hope we can get that ready for publication soon.

Remembering the New Deal changes our deal

Harold Laski's 1934 assessment of FDR (hat tip Anthony) is full of echoes for Obama and 2009.

What is different today is that we are now so aware of the 1930s and the parallels. The New Deal invented the restoration of confidence as it went along. It was part of FDR's greatness that he got so much of this muddling blind progress right. But today, we had got used to Bernanke being the expert on the economics of the Depression when Obama appointed Christina Romer, also the expert, to chair the Council of Economic Advisers.

The self-consciousness means that there is a certain script-like feel to the unfolding of the crisis. The car makers ask for a bail-out; the government asks for symbolic humiliation and a business plan; pay-checks will keep being sent ... Little by little, year by year, fear will subside and the the government will slowly retreat.

But if we know this, then what do we need to fear? If the whole process is too script-like, the crisis may be wasted beacuse the period of fear is when public policy can  make change. The change will be slowly dismantled over generations after the fear is over, but, just as the 1930s legislation defined the broad outlines of consumer capitalism for us, so our policy changes over the coming years will define the context (and the countervailing ideology) for three generations of social development. Chicagoism needed Keynes; what we do today will determine the dominant counter-ideology of tomorrow.

Although Roosevelt was right that fear was fearful, that it needed to be conquered to re-establish some normality to the economy, he must also have known that only fear permitted a genuine, if not permanent, reallignment of interests.

Things to absolutely keep on the agenda: anti-poverty, international, green. Ford understood this in the green business plan it offered up to Congress, but was it only for show?

========
Highlights from the article

    • He is attempting a revolution by consent; and it is the latter term in his equation that is fundamental to the formation of a judgment.

    • In Europe and the Far East, in fact, force and unreason dominated the minds of men. Traditional values were in the melting pot; and, as in all epochs where basic changes are under discussion, panic and doubt and even persecution prevented any calm estimation of the effort Mr. Roosevelt had undertaken.

    • than the sober conservatism upon which they have been built.

    • a question as to whether Mr. Ickes and his colleagues can discover undeniable objects of beneficent expenditure.

    • For it cannot be too often insisted, as Mr. Keynes has so often emphasized, that capitalism, by the law of its psychological being, needs to be immensely more successful than any alternative economic arrangement if it is to retain the allegiance of a multitude which possesses political power. The disparities of its results are too irrational for any alternative attitude to be possible over any long space of time. And the changed temper was made the more inevitable by the crude optimism of its defenders in the era of Coolidge and Hoover. They had raised the expectations of the multitude to such dizzy heights that their failure to satisfy them was bound to result in a scrutiny of foundations.

    • We must not forget that the election of 1932 was the expression of nothing so much as a demand for this scrutiny by angry and bewildered men who had entered the Promised Land only to discover that it was a desert. In dealing with their discontent, President Roosevelt has shown high qualities of enterprise and courage; but those who doubt the wisdom of his effort ought to remember that unless he had shown those qualities the patience of the multitude would have been brought to breaking point. He is not a revolutionist pursuing some private Utopia by the light of an inner wisdom. He is the logical expression of social forces and could hardly have acted otherwise if he wished to retain the characteristic contours of American life.

Posted from Diigo. The rest of my favorite links are here.

That elusive Rusbridger Cross

TechCrunch reports on the continuing decline of revenues in US newspapers – down $5bn since the start of 2008 compared to 2007. Even online revenues are falling. The “Rusbridger Cross” that was meant to see online revenues rise to compensate for print declines, is looking compromised in the US market. All of this matters a great deal to journalism -- “quality” journalism has, I have argued, always been cross subsidised inside the newspaper. As the fat goes, so will the recipients of cross-subsidy.

I asked David Elstein, well-known media executive and watcher, how the US picture related to what was happening in the UK. Things are even worse here for the commercial sector, he says. Much of this is due to the BBC's dominance. All the more important to understand, then, what the BBC, by its nature, cannot do.

Here is David's reply in full:  

“The US position is largely reflected in the UK. Regional newspaper revenues are particularly hard hit, and companies like Johnston Press and Trinity Mirror have suffered massive drops in value (94% and 89% respectively). That is why Ofcom and the BBC Trust were so emphatic in rejecting the BBC's plan to add video to local news websites.

National newspapers are also suffering revenue declines, but are mostly shielded by parent company finances - even then, thousands of jobs are being cut, and some titles are vulnerable - notably The Independent, which has just run for shelter under Associated's roof. The recession is simply amplifying the long-term drift of ad revenue from print to on-line.

Advertiser- funded television is in serious trouble. Ad rates are back down to 1992 levels, but total ad revenue is still in decline, despite TV viewing levels being seemingly unaffected by online activity. However, much of this damage to ad revenues is self-inflicted. The CRR (Contracts Rights Renewal) mechanism that ITV invented five years ago in order to get the merger of Granada and Carlton through the competition authorities effectively torpedoed the commercial TV market-place. Put simply, it allowed advertisers to reduce their spend percentages committed to ITV (typically, 70% of total budget) year by year in direct relationship to ITV's reduction in delivery of commercial impacts (ie total number of 30-second spots viewed in commercial breaks) - an entirely predictable reduction in a world with ever-growing multi-channel viewing share.

ITV's suicidal policy at first appealed to competitors like Channel Four and five, imagining that revenue leaving ITV would turn up in their pockets, but what actually happened was that advertisers found that the impacts they had been buying from ITV at top of the market prices could be bought much more cheaply elsewhere - so revenue simply drifted out of TV.  In this, the UK was unique - all similar markets saw an average 22% rise in cost per thousand (CPT) over the last five years, whilst the UK suffered an 11% decline.  As I said, we are now back to 1992 CPT, but still cannot pull back the advertisers.

What adds to the pressure on ITV in particular is the guaranteed strength of the BBC, which prevents ITV from cutting its spend on programmes (till now, anyway - rumours are it will be cut by over 10% next year), so leaving it with the lowest operating margins of all similar operators in Europe and the US.

Commercial radio is in similarly poor condition, as the BBC inexorably increases its share of viewing off the back of a massively larger programming budget.

However much we love the BBC, it is increasingly hard to deny the displacement effect of the BBC's strength.  This was well-demonstrated by the 2005 Ofcom Public Service Broadcasting Review, which (without acknowledging such) showed that the high GDP territories with the highest GDP share spent on public broadcasting (the UK and Germany) had the lowest ratio of private spending on broadcasting (1:1), whereas the US, with low public spending, had an 8:1 ratio (ie 8 times as much spent on private broadcasting as on public).  Other West European economies filled the space in between, with a steadily corresponding increase in ratio as the proportion of GDP spent on public broadcasting declined.

In the UK, this effect is felt by commercial TV, local newspapers and commercial radio, and it is exacerbating the exogenous impact of online growth and economic recession.  All in all, a nightmare scenario.

Reputation for junckets

Belgian defense minister lashes out at blogosphere after having his juncket reported.

Shiller's 'no shill' solution

Robert Shiller was at London's ippr talking about the subprime crisis and another prescient book of his:

Of many fascinating things he said, three stood out:

1. that there should be publicly funded financial advisors who are not also selling products. As he said, only the rich get real advice about financial products. Imagine, he said, a world in which we had only drugs companies and no doctors ... This is what we have when it comes to financial health.

This is an application of Lessig's "no shill" principle---this times proposed by Shiller about our shillings:

 

2. a New Deal is not a return to the Old "New Deal": we have to realise that economic policy, especially in such extreme circumstances, works on animal spirits. And the new spirit that the New Deal ushered in cannot be ushered in by copying the policies. We need to implement policies -- including reflationary policies -- that make sense in the context of the next 100 years, not in the context of the next 100 days. Thinking about 100 days will not change the animal spirits ... indeed quite the opposite.

3. (... and this followed from a question I asked him prompted by "2"): Economists have to become more like Keynes: an understanding of animal spirits requires an understadning of sociology, history, psychology, and responsible economists are one who will integrate all of these in policy pronouncements. He said something like: "I did not become a theoretical physicist. Many economists wish they were theoretical physicists. I admire theoretical physicists. But our responsibility is to understand the wider world." Bloomberg apparently video'd the event. I'll post a link to it if I find it on the free side of their web site.

Since Shiller seems so good at timing his books with great prescience, I think it is important to know that he has a book with George Akerlof on Animal Spirits coming out in March that will be talking about sociology in economics. Now, we just need to work out why that will have been so prescient...

Energy Without Hot Air

David MacKay, physicist at Cambridge's Cavendish laboratory, has written and made available for download a wonderful looking book: Sustainable Energy: without the hot air. The whole PDF is here. Chapter 1 is here. The book goes on sale in early December here.

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