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Glenn Jacobs

The internet is the greatest marketplace the world has ever seen.  Using the web, one can buy or sell almost any product anywhere at any time.  But the power of the internet lies not only in its application as a commercial system, but also with the fact that it is a marketplace of ideas.  If one is so inclined, there is no end to the various ideas, perspectives, and concepts available on the net.  The internet is Gutenberg’s printing press magnified exponentially.

Because it has destroyed their monopoly on the control of information, the internet is the greatest threat that the Power Elite face, i.e. government officials and their minions in the media, academia, and big business (or, in many cases, visa-versa).

It is no mystery why authoritarian regimes restrict their citizens’ access to the internet, or why these regimes shut down the internet in times of crisis as is happening now in Egypt.  Control of information allows control of people.  Luckily, the internet is generally unrestricted and vibrant here in America.  Alarmingly, that freedom is under threat from recently introduced proposals ostensibly designed to provide a greater degree of internet security.

The idea that we must give up our liberty in order for the government to protect us is a dangerous illusion, a siren song.  The government cannot guarantee your safety, but it can undermine your liberty.  Despite the constant refrain from opinion-molders to the opposite, participants in the market are much better equipped and have much better incentives to provide a higher level of security than the government does.

In the free market if an entrepreneur fails, he pays the penalty.  In most cases, this penalty is the lose of his livelihood.  On the other hand, when the government fails, we usually hear cries that whatever agency was in charge needs more power and more funding so that it can get the job done in the future.  In some cases, entirely new agencies are created, and the officials who previously failed are put in charge of them.  Look no further than the aftermath of 9/11 for proof.  Instead of massive firings at the FAA and among the intelligence apparatuses, the Department of Homeland Security, and it’s multi-billion dollar budget, was created!

Not only does government intervention distort the behavior of entrepreneurs, it also distorts the behavior of consumers.  The consumer no longer thinks about security when making his decisions about which business to patronize.  For instance, no airline can now claim to be any safer than any of the other airlines since the government has assumed this responsibility.  The true level of demand for security is unknown because the consumer has no choice in the matter.  Airlines are discouraged from providing a higher level of security than their competitors because this would not give them a competitive advantage.  To the consumer, they are all the same.

Of course, this situation leads to dangerous complacency on the part of the consumer.  For instance, how many folks actually do research into the medications they are taking?  The FDA seal of approval is the only criterion on which most folks rely for judgements about the safety of a drug.  The same is true of the Transportation Security Administration.  The TSA’s procedures must be the best ones possible…they are the government, after all.

In addition, standardizing security procedures introduces a higher level of systemic risk than decentralized procedures.  If a hacker attacks Amazon, he must negotiate Amazon’s defenses.  If he attacks PayPal, he must negotiate PayPal’s defenses.  If he attacks eBay, he must negotiate eBay’s defenses, and so on.  Every target is going to be different, if only marginally.  That difficulty is removed if some sort of standardized system is imposed on everyone.

It is clear that the market provides better security than the government does, but it is unclear how controlling the internet falls under the purview of the federal government at all.  While the government certainly has the right to take its computers and networks off-line, how is it that it can claim that right for the internet as a whole, other than to assume that the government thinks that it owns the internet.

During the 1920s, the fledgling radio industry was in a similar position.  During the early years of radio, there was a perception that chaos ruled the airwaves.  Anyone with a radio transmitter could get on the airwaves and broadcast at any frequency he wished, drowning out the other folks who were broadcasting at that same frequency.  Using the scarcity of the radio spectrum as an excuse, the government stepped in and took over the airwaves.  Licenses were issued for the privilege of broadcasting at a designated frequency in particular geographic area.  Of course, these licenses became a tool with which politicians rewarded their friends and punished their enemies–it is not a coincidence that today the radio industry is dominated by a few very large companies.

It was not necessary to create the Federal Radio Commission to sort out the “chaos” of the airwaves.  It was simply a matter of applying property rights to the radio dial.  Whomever began broadcasting at a certain frequency in a specific geographic area owned that frequency in that area, and should have retained the right to utilize that space so long as he did not abandon it for a specified period of time, in which case it would once again be unowned property.  Anyone else broadcasting on that frequency in that area was trespassing.

Applying this solution, however, would not have given the government what it really wanted: ownership and control of the airwaves.  The same is true of the internet today.  Proposals to make the internet more secure are nothing more than veiled attempts to control the internet.  The internet “kill switch” would give the government the power to silence dissenting voices.  An official “internet ID” won’t protect you from fraud, but it will make it easier for the authorities to track your virtual trail.

The internet’s greatness lies in its decentralized, uncontrolled nature.  It is truly a free market of ideas.  Lets keep it that way.

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