METANOMICS: LIVE FREE AND PROSPER: GOVERNMENT’S PLACE IN VIRTUAL WORLDS AND ONLINE COMMUNITIES

OCTOBER   7, 2009

ANNOUNCER: Metanomics is brought to you by Remedy Communications and Dusan Writer’s Metaverse.

ROBERT BLOOMFIELD: Hi. I’m Robert Bloomfield, professor at Cornell University’s Johnson Graduate School of Management. Today we continue exploring Virtual Worlds and the larger sphere of social media, culture, enterprise and policy. Naturally, our discussion about Virtual Worlds takes place in a Virtual World. So join us. This is Metanomics.

ANNOUNCER: Metanomics is filmed today in front of a live audience at our studios in Second Life. We are pleased to broadcast weekly to our event partners and to welcome discussion. We use ChatBridge technology to allow viewers to comment during the show. Metanomics is sponsored by the Johnson Graduate School of Management at Cornell University and Immersive Workspaces. Welcome. This is Metanomics.

ROBERT BLOOMFIELD: Welcome to Metanomics. Today is the first of two sessions with an emphasis on policy matters. Next week we’ll be joined by behavioral economist, book author, and New York Times columnist Robert Frank, who often favors government regulations, mandates and progressive taxes despite thinking of himself as a Libertarian. But today we are joined by Adam Thierer, a more traditional Libertarian, senior fellow at The Progress & Freedom Foundation and the director of The Progress & Freedom Foundation’s Center for Digital Media Freedom. Adam works on communications, high tech, media policy and has been featured in the Wall Street Journal, Washington Post, New York Times, USA Today, Forbes, The Economist, Newsweek and just about, I guess, any other publication you can name that would cover such things. Adam, welcome to Metanomics.

ADAM THIERER: Well, thanks so much for having me.

ROBERT BLOOMFIELD: It’s great to have you. I’m looking forward to an interesting discussion. I’m sure that we will have a lot of commentary from people in our audience. So welcome, everyone who’s watching on the web at Metanomics.net or in Second Life at any of our many event partners. We’ll be tracking the text chat so please keep those questions and comments coming.

So, Adam, what exactly is your role at the Progress & Freedom Foundation, and what do you do as the director of the Center for Digital Media Freedom?

ADAM THIERER: Well, I am a senior fellow in policy matters here at the Progress & Freedom Foundation, and I cover a wide variety of high-technology policy issues that affect our digital economy, with a particular focus on the intersections of concerns about online child safety and free speech, with a particular focus on First Amendment freedoms and how they pertain to new digital environments, including Virtual Worlds.

ROBERT BLOOMFIELD: Great. Before we get into details, why don’t you just lay out for us your overall philosophy on the regulation of online privacy, child protection and related issues?

ADAM THIERER: Sure. Well, generally speaking, what we favor at the Progress & Freedom Foundation, the approach we’ve tried to adopt in all of our work, is that we favor parental empowerment or personal responsibility over most regulatory approaches to online free speech or online content and expression. So specifically, what we mean by that is that we would favor education and empowerment over regulation as the first and best way to go about dealing with various concerns about online child safety, content, expression, so on and so forth. My particular focus over the last couple of years has been building a giant inventory, if you will, of all of the various types of parental-control tools and methods, that are out there on the marketplace today, that can help parents or individuals take matters into their own hands, if you will, and better protect themselves, their personal information, their privacy, or their children when they’re online. So that’s the approach we take, what I call sort of household empowerment approach, and I believe that’s a superior approach to the sort of community standards approach that we’ve taken in America for many, many decades, or essentially called in Uncle Sam to play the role of surrogate parent or national nanny and make a lot of these decisions for us.

Luckily, as Americans have become more empowered to make these decisions for themselves, I think we can move government out of the way a bit more and allow people to express themselves freely online and elsewhere and to consume and watch and listen to and play with the things that they’re most interested in.

ROBERT BLOOMFIELD: Now realistically, of course, you know that government is going to get involved. I don’t know if we can quite say Uncle Sam is going to be a nanny, but I do get your point. So I assume that another big part of what you do at PFF is, I mean you may endorse and encourage these more personal empowerment approaches, but you must also be taking a very close look at the various regulations that are being proposed and trying to encourage people to move them into something they’re a little happier with. Is that right?

ADAM THIERER: That’s absolutely correct. What we try to do her at the Progress & Freedom Foundation is to outline a set of objectives or policy priorities that would steer away from regulatory preemption as the first default option and, again, towards more of an empowerment or educational based approach or solution to the concerns expressed by policymakers, parents or the general public. So for example, there’s been quite a bit of concern about child safety in social networking sites. The first order of business we argue is, let’s look at the facts: Are children unsafe in social networking sites? Are we at risk and somewhat [AUDIO GLITCH]?

And what we have found, after I’ve been on a number of taskforces on this issue and done a lot of studying on it, is that the concerns that many lawmakers have about, for example, online predators, predation if you will, is really actually a very, very small problem in the overall larger scheme of things. And that what the really big problem is more peer-on-peer activity: cyber-bullying, harassment, stalking, that sort of thing. So it’s always important to put things into perspective and ask ourselves if the regulations or solutions that are being put forward as sort of a technological silver bullet solution to concerns makes sense if they’re not commensurate with the actual harms that are out there. So that’s led to efforts by me and others to try to fight things like mandatory age verification or identity authentication before everyone goes online to various social networking sites or to virtual communities such as Second Life.

ROBERT BLOOMFIELD: Well, I have to say you’ve mentioned all of the sort of hot-button terms in the Second Life community. You started off with community standards, which Second Life has, and age verification, which is recently coming online, and so on. But before we get to all that, there’s a long history of these matters online. I’m wondering if you could just give us kind of a quick history lesson going back to the early regulatory moves and sort of walking us up to where we are in the present day.

ADAM THIERER: Sure, I’d be happy to. Well, basically, starting in the mid 1990s Congress tried to pass a variety of laws dealing with objectionable content online, namely indecent or quote/unquote “obscene content” on the internet. The first effort to regulate this was known as the Communications Decency Act or the CDA, which passed in 1996, as part of a major bill that Congress passed called the Telecommunications Act of 1996. The CDA basically again took a sledgehammer approach to try to regulate speech or expression online, saying anything that was indecent or obscene should essentially be banned. Well, that law was immediately challenged by the ACLU and a variety of other folks--The ACLU is the American Civil Liberties Union--they tried to block this and succeeded in blocking it from ever going into effect.

But Congress came back and very quickly passed another law called the Child Online Protection Act, which tried to require mandatory age verification of any site that had

adult-oriented content of an indecent or obscene nature or that was quote/unquote “harmful” to minors. Well, that led to another lawsuit, a lawsuit that lasted, believe it or not, ten years and went to the Supreme Court three times in the United States, and it was finally struck down basically for good or enjoined for good just earlier this year.

So what we have is a situation in the ’90s where Congress is very much trying to take, again, this sledgehammer approach to regulating the internet. Once that didn’t work, or was enjoined for Constitutional purposes, the Congress and many of our state lawmakers, state and local officials and state Attorneys General tried to take other approaches at regulating the internet. I already mentioned the age verification issue that’s out there. There’s questions about: Should the government mandate that everyone be authenticated before they go online to visit their favorite social network or their favorite Virtual World or even to engage in some online gaming on an Xbox or a PS3? There have been many lawmakers who’ve suggested that that has to be done. But how do you do it? And that’s not easy, and it also potentially invades our privacy to do so, so that hasn’t passed into law yet, but it’s still being considered.

There was also a law that was proposed just a couple of years ago in Congress, called the Deleting Online Predators Act. Again, this concern about predators online led to 415 Members of the House of Representatives voting in favor of a law that would have banned all social networking sites, however you define them, in publicly funded schools and libraries. Now luckily, that bill didn’t make it through our U.S. Senate in America and become law, but that’s the sort of threat that’s still out there.

And then most recently, we’ve seen legislative efforts aimed at addressing cyber-bullying or cyber-harassment online. Now at least here I would argue that Congress and other lawmakers are finally aiming at a more legitimate concern that’s always been with us. Right? This isn’t just something new to our Virtual Worlds, this has always been in the Real World. There’s always been bullying, unfortunately, and harassment. We do need to find ways to address it, but now Congress is debating two very different approaches, one that would actually criminalize it, including criminalize it for young kids and take sort of a “lock them up and throw away the key” approach versus a different approach which favors education, counseling and other forms of intervention to try to deal with that problem.

The point is, Rob, is that we’ve seen Congress and other lawmakers take many different cuts at internet regulation. For the most part, most of them have been stopped or haven’t been imposed yet, and therefore, the internet, social networking sites and Virtual Worlds, luckily in my opinion, so far have been kept free of meddlesome government regulation.

ROBERT BLOOMFIELD: I know the Federal Trade Commission is undertaking a little meddling. They’re doing a review of industry practices. I think it’s called On Child

Protection and Adult Content. What do you know about that? ADAM THIERER: Right. So just recently, the U.S. Congress, when it was passing its appropriations bill for the U.S. Federal Trade Commission, or FTC, included a few lines in the appropriations bill saying that, if the FTC was going to get their money this year, they were going to have to study the question of underage access to objectionable content within Virtual Worlds or virtual online communities. And this was something I think even caught the FTC staffers by surprise because it was buried in their appropriations bill. But there was a Member of Congress, and sometimes all it takes is one Member, in this case his name is Representative Mark Kirk--basically said he wanted the FTC to investigate if kids could access adult-oriented content or pornography within virtual communities or what other types of adult-oriented activities were going on that kids might see or hear.

And so the FTC is currently investigating this question, looking at not just Second Life, but dozens of other Virtual Worlds, taking a look in real time of what’s happening in these Virtual Worlds, taping it and then producing a report for the Commissioners at the Federal Trade Commission to consider what, if any, steps should be taken to address these concerns. I believe the report is due out before the end of the year, and the rumor that I’ve heard most recently is that we’ll see it the first week of December in fact. I’m not quite sure what’s going to happen there, but I have a feeling what the Federal Trade Commission is going to do is to essentially recommend a set of best practices or guidelines to various Virtual Worlds or virtual communities about how to address access to certain types of potentially objectionable adult-oriented content or expression.

ROBERT BLOOMFIELD: Well, interesting stuff. I guess that’s pretty much then where the regulations stand right now. Thanks for that background. I’d like to move on then to some of your writings, and in particular, you wrote a document, a 250-page guide Parental Controls and Online Child Protection: A Survey of Tools and Methods. So I guess this is really capturing what you laid out earlier, giving people the ability to use education and tools to protect themselves and their children. You have some Rules, Tools, Schools and Talk model of parental control. Can you walk us through that?

ADAM THIERER: Yeah, absolutely. Basically what I’m trying to do in this report is--let me take you back a step. After the first of my two children was born back in 2002, I decided I really needed to get serious, as a free-speech advocate, and sort of put my money where my mouth was, so to speak, and show the world that, yes, there was a way to deal with potentially objectionable content or expression without calling in government officials to regulate on my behalf or play the role of surrogate parent for us. And so I sat down and started putting together a compendium that at first was just only about 20 or 25 pages of various approaches or tools that parents could use to deal with objectionable content in a variety of platforms or context. And it has grown, as you mentioned, Rob, into a 250-plus page document that’s freely available online. I don’t charge any money for it.

It’s on our website at pff.org/parentalcontrols. Again, pff.org/parentalcontrols. People will find there this document, which I update every three to six months because of all the fast-moving changes in this space, both on the technology side and in terms of the response side what people are doing to address concerns. I address every major media and communications platform you can find. I start with the oldest, such as television and radio. I then discuss things like video games and Virtual Worlds. I also have a section on mobile media and mobile content and a huge section on internet and social networking services. And what I show in each and every one of those sections is that never before in human history has there been more ways for parents to deal with potentially objectionable content or expression that is out there in the world around them.

Now it is also true that technology continues to evolve at a very rapid pace, and that’s where the real challenge lies for a lot of parents, essentially just keeping up with developments that are going on out there. But I’m actually very bullish on technology to solve problems that technology creates. And so for example, when it comes to underage access to pornography online, the approach that a lot of people have taken in the past is using filtering technologies. You can filter out quite a bit of objectionable stuff on your personal computer or through your other workplace devices.

And now there is a whole new class of monitoring tools that allow you to watch what your younger kids are doing online, to see if they’re stumbling into sites they shouldn’t be looking at. There are also tools within the various operating systems that are on the market, tools that are embedded within your browsers, whatever browser you use there are tools. And many, many other tools. Even more exciting to me is the rise of sort of community self-policing, which refers generically to any and all efforts by various sites out there are services such as YouTube or MySpace and Facebook or even maybe Second Life, where the community comes together and sets some standards about what they think is and is not appropriate or flags certain types of content that they think is truly objectionable and offensive and deal with those problems in sort of a self-regulatory basis. And that, to me, even though I know that also can be controversial at times, it’s definitely preferable to having the government come in and set a “one size fits all” standard for all online communities and all online content sites.

So that, I think, is the approach I try to push forward in my book on parental controls and online child protection is that we can empower our very diverse citizenry with a diversity of tools and methods to make sure that they can set a standard that’s appropriate for them, their families and the communities they like to hang out in, be they online or off.

ROBERT BLOOMFIELD: You used a phrase that usually makes sense when we’re on talk shows, speaking in English, “our government,” but, of course, we’re in Second Life.

This is very international and just looking at Metanomics itself, I’m in the U.S. We’re actually owned by a Toronto-based company, and our broadcast company is in Australia. I know we have people in the audience from Germany, Belgium, India, so on and so forth, and so it certainly gets tricky cross-jurisdictionally. I wanted to ask you about this because I know that you just came back from a conference called Child Protection, Free Speech and the Internet: Mapping Territory and Limitations of Common Ground. That took place in Oxford and had people from all over the world there. And so I guess I’m just wondering were there any particular lessons you take away about differences in perspectives across the countries or how people are looking to solve the international aspect of this?

ADAM THIERER: Oh, absolutely, Rob. In fact, every time I visit Europe or other continents and countries, I’m struck by the different cultural visions and values and differences that basically really raise the question of how we’re going to deal with these things going forward for a borderless medium like the internet and for borderless virtual communities.

Let me give you just one concrete example. I’ve been in Europe many times over the past five or six years, and, every time I’m there, I usually get needled by some of my European friends or even by European policymakers about how we Americans are very Puritanical and a little bit backwards when it comes to matters of sexuality or sexual expression and how the Europeans just don’t understand why we get so worked up over these things, such as the famous Janet Jackson episode during the Super Bowl or other things and why we regulate all of this stuff obsessively. I have to admit it perplexes me at times too.

But then, in the same breath, my European friends will turn around and say, “But why don’t you Americans do something about violent speech or hate speech? We need to shut that down.” And, of course, we in America don’t really try to regulate violently themed media or content at all, and we don’t regulate hate speech. These things are fully protected by our First Amendment in the United States. So here you have two very, very different standards on either side of the Atlantic, with the Europeans being worried about violent media or violent content as well as hate speech, and we Americans being more obsessed with sexual themes or vulgarity.

Well, how in the world do you harmonize those values across borders for trans-border kind of sites online or services online that defy geography? This is, in fact, a topic of one of my seven books that I’ve written or edited. I edited a book called Who Rules The Net, and basically asked a bunch of academics and others to explore this question, and I’m sad to report we didn’t have a definitive answer. It’s a really, really tough question about how to deal with this, but my preference would be that we not allow sort of the internationalization or the international harmonization of these questions, or else what ends up happening is, you have what I would call a lowest common denominator regulatory standard. Which is to

say we end up regulating content according to whoever has the most sensitivity about it across the globe.

I would rather take the opposite approach and leave these online communities largely free to operate as they wish and only at the boundaries or the margins where there’s truly egregious behavior that crosses a line that everyone would agree on, for example, child pornography, where everyone in every culture and continent can generally agree we need to eradicate that. But on these other matters, I’d prefer to leave these communities free to police themselves online and not have, say, a United Nations for the internet or something like that, or for Second Life, God forbid.

ROBERT BLOOMFIELD: You chose an interesting example that I’m not sure I agree with on child pornography because, although, well, I guess if you’re talking about real photographic depictions of real human children, then I do agree. But, in fact, with the internet and with Machinima video, like we’re doing right now, it won’t be long until we have very photo-realistic depictions of people of all ages doing all sorts of things, which I understand right now would be legal in Japan, illegal in Germany and unclear in the United States.

ADAM THIERER: Yeah, it is unclear in the United States, but actually there was a Supreme Court case not too many years ago that dealt with this and said that virtual depictions of child pornography essentially are not unconstitutional, that they are protected by the First Amendment because basically, at the end of the day, no one was hurt. No real human being, physical human being or child was hurt in the production of these things.

Now I have to tell you I’m about as hardcore of a free-speech First Amendment guy as you’ll find, but that decision left me a little uneasy. And, even though I generally think I support that going forward, I think your point, Rob, is a really interesting and touchy one, which is, we’re talking about depictions right now that everyone can clearly see are not real human beings. These are avatars or other types of digitizations, digital renderings of these activities. That’s one thing. But what happens when it’s so photo-realistic that you cannot tell the difference between an actual human and a digital avatar? Well, of course, I think the first thing we’d say is, “Well, let’s explore this and see if it was a real human or not.” It is going to be tricky. At the same time, there is another question, which is: Is it equally as destructive on the human psyche or on criminal behavior, if you will? Will it create something in the minds of certain criminals that would facilitate Real World harms? I’m not saying I have a definitive answer on this. All I’m saying is that this is going to be something that virtual communities are going to struggle with increasingly, going forward, especially as the Virtual Worlds we see now online start to mesh with virtual reality technologies, and we start to have a projection of virtual life into the Real World, that’s when things are going to get really,

really interesting. I mean I’m just waiting for the day when I come home and see my son swashbuckling with Johnny Depp in Pirates of the Caribbean 10 in my living room, and Johnny Depp running virtual swords through my kid’s real neck, I’m going to probably be a little bit creeped out at first.

My first instinct isn’t to run to the government and say, “Ban virtual reality.” I’m sure it won’t be, but you can imagine that some parents will be very nervous about that. They’d be even more nervous if they come home and find Junior having an orgy with 14 naked women. So you can imagine that we’re going to have a real struggle with this, as a society, going forward. And I would hope we can find other solutions to this, other ways to deal with this besides a blanket prohibition because I never think that’s a good idea. But, nonetheless, it’s something to keep our eye on.

ROBERT BLOOMFIELD: Okay. So we’re right about at the halfway point of our session, and, when we come back, what I’d like to do is shift from free speech to discussions of privacy because I know that you see those as two sides of the same coin, which was an interesting idea and a new one to me. But right now we’re in our third year of broadcasting Metanomics, and what we’re going to be doing for each of our shows this year is to splice in a few excerpts of older discussions from our archives. So we will be back with Adam Thierer after this quick stroll down memory lane.

[VIDEO]

ROBERT BLOOMFIELD: With Metanomics now in its third season, we thought it’d be fun to take a look back at some of our past shows and guests, since September of 2007. With over 80 episodes to choose from, we chose some of the most interesting, engaging and occasionally contentious discussions. As always, you can see the complete episodes at Metanomics.net or on our iTunes channel.

ARCHIVE

METANOMICS: AV - CULTURATION

TOM BOELLSTORFF:  Now as to your other question, which is an extremely important question about what are the positive or negative aspects of the fact that I didn’t try and meet people in the physical world or interview them in the physical world. I think that talking about that as positive or negative sort of misses the point. The point is, when you do different kinds of research, you need to have different kinds of research questions. So if I was interested, let’s say, in how people’s physical world disabilities affect the ways that they use Second Life, then it would be helpful for me to meet people in the physical world, who, let’s say, have trouble moving their hands or typing and then looking at how that affects the way that they do things inside of Second Life.

However, if I’m interested in studying the culture inside of Second Life itself, meeting people in the physical world there’s not necessarily any harm in it, but to assume that any research project must always include meeting people in the physical world, it really misses the point of what happens in Virtual Worlds. It does a kind of violence to it. There is however many 25 or 30 people right now sitting around here in Metanomics. Some of us could be in Europe. Some of us could be on the East coast or the West coast or Midwest of the United States, but where we are right now is in this place, this Metanomics virtual place.

And, if we’re interacting in this place and saying things and doing things, there’s culture happening, and that culture is happening here on the Metanomics Sim. It’s not happening in Long Beach, California, where I’m sitting right now, in California, talking to you. If I were to fly to California, I wouldn’t be able to learn about what’s happening right now where I’m looking over at RobinG2, who looks like a robot, and looking at all these things that are happening inside of Second Life. And so as we move forward in this wonderfully growing field of research on Virtual Worlds, online games and all these kinds of things, I think we need to have multiple methods.

I think that there will be some cases where we’ll want to be talking to people in the physical world as well, that there will definitely be cases where not only is that impractical, like I can’t fly to 30 different countries and talk to everyone, but it would actually be denigrating or missing the point of what’s happening to the social interaction, the culture that’s happening inside of the Virtual World itself. So to me, it’s not positive or negative. It’s about different research techniques. They all cast different light on some common problems and issues.

DR. ROBERT YOUNG - MAY 13, 2009. FEDERAL INTEREST & SOCIAL SECURITY WITH DR. ROBERT YOUNG.

ROBERT YOUNG:  Well, I know that on security, we’re always the “no” men. We’re never the “yes” men. We’re always saying security. But I agree with Paulette that you’re forward-facing and some of the things that you’re talking about for doing some type of publicity or something like the Air Force trying to bring people in, that’s great. The issue is that people are having to do it day to day. They’re having to use Second Life, in their job, and they’re a federal employee, the recommendation that Paulette had said and what we’ve built at IRMC is an enclave. It’s a specialized area that will not bring the problems from Second Life and/or these Virtual Worlds onto our government systems which might

be your production government system doing your national war-fighter job or maybe doing IRS tax returns; I’m not sure what your job may be.

And Paulette’s agreement with the multi-agency, all of our problems are becoming multi because we’re so interconnected. Our networks have no boundaries anymore. So in order for us to make sure that we don’t have a problem that, say, DOD brings in, it doesn’t bleed over to your EPA and your FAA and your DOT. Some of the agents are doing exactly what you said. It’s all bound to the software, the client and the server, and, as Paulette had said, we have the HBSFO(?) [base?] security system in the Department of Defense. It’s actually locked down for a specific reason, to protect us to the best of its abilities again. And [going to be?] people on these systems doing these things, and the issue is, we have government people now, insiders, that actually are doing things that they’re not supposed to do. We know appropriate use of the network. We know appropriate function.

Our worry is that as they get into Second Life and these other 3D Virtual Worlds, that sometime they forget that they’re at work. They may accept something that they wouldn’t normally do in the other world. But it’s all down to the software and evaluating the code and evaluating what that server-client relationship, what it has allowed in and out. And as Paulette said: the ports, what ports are we opening, can we watch them closely. Can we monitor what’s going on in this Virtual World? And the identity management looks huge for Paulette and for everyone else. Am I talking to who I really think I’m talking to? Do you have a federated ID or some way to say that, yes, you are indeed speaking to Dr. Rocky Young. No one has taken over the avatar. No one is misrepresenting or social engineering you to get information out of you.

There’s so many ways to do social networking, and Paulette works through all of those at IRMC. And I just want to be person who says, “I want you all to go into these Virtual Worlds as security professionals, but I want you to understand the risks when you go into them and accept that risk that something could happen.” And, as long as you’re aware and you accept it, then you’re standing there when they reference it so that E-9/11 and these other, you know, the E-Pearl Harbor that may happen. We’re not saying, “Gee whiz! We never thought of this,” or, “Gee whiz! I had no idea this could happen.”

[END VIDEO]

ROBERT BLOOMFIELD: We’re back on Metanomics. I’m Rob Bloomfield, and I’m here with Adam Thierer of the Progress & Freedom Foundation. We spent the first half of the show talking primarily about free speech and protecting children from objectionable content and the like, but now we’re going to look at a related issue, which is privacy protection. And, Adam, I understand you see privacy protection as simply the other side of the coin of free speech. Can you spell that out for us?

ADAM THIERER: Sure. Well, when you think about it, when you have a regulation governing speech, sometimes the regulations can involve surrendering your privacy. So for example, the regulations that I mentioned that some had favored for the internet, such as mandatory age verification or identity authentication, would require a surrender of personal anonymity. You’d be forced to always reveal yourself at every virtual doorstep that you walked up to and knocked on the door. You’d have to say, “Here I am. This is who I am,” and you’d have to be credentialed. Well, that would require surrender of privacy so it’s obvious there how speech regulation or controls can entail privacy-related concerns.

But the flip side is often not appreciated as much, which is some privacy regulations or proposals essentially require people to stop sharing certain types of information or to not say certain things about certain peoples or subjects, and that’s really troubling to me as well. But these things are related.In a paper that a colleague and I at PFF wrote last year, called What Unites Advocates of Speech Controls and Privacy Regulation, my colleague, Berin Szoka, and I argued that many times when a [root/route?] animates movements to regulate these things is simply sort of an elitist belief that, one, people are sort of too ignorant or too busy to be trusted to make wise decisions for themselves and/or for their children, and, two, what also unites them in this elitist belief is that all or most people essentially share the same values or concerns, and therefore, a broader community standard or governmental standard should trump individual or household standards. So I’ve already talked a lot about that. I won’t impact that any further since I’ve already discussed it.

But the point is that we see our government today trying to aggressively regulate the internet both for speech-related concerns and privacy-related concerns, and these two themes come up again and again and again, the idea that people are too lazy or too stupid to make their own decisions or protect their own privacy or safety, and then secondly the notion that, again, someone else should make the decision for them because there’s some broader public interests or national interest involved.

ROBERT BLOOMFIELD: As the quintessential Ivy League elitist, even Volvo driving and

everything up until a few years ago, I hear the word “elitist,” and my ears prick up. So I do want to ask you a little bit more about that aspect of it.

ADAM THIERER: Sure.

ROBERT BLOOMFIELD: In that paper with Berin Szoka, you talk about Google Mail, Gmail as an example, sort of the quintessential example of a case--so this was way back in the day when, what, I think it was AOL was the biggest mail provider, and they were offering a pittance of memory. And Google comes out and says, “Hey, for free, you can get--” what then it was like a gig or something of storage space. And so a lot people just naturally said, “Hey, that sounds good to me,” and they chose it. Now Google uses contextual advertising, which concerned a lot of the elitists who effectively were arguing that, sure, you’re choosing it of your free will, but we’re smarter than you are, and we think you’re making the wrong decision. Isn’t it the case that sometimes they might be right?

ADAM THIERER: Well, look, I want to make sure I separate some things here. When I talk about the elitism that I’m concerned with is political enforced elitism, if you will. It’s the elitism from above, up on high, as opposed the elitist viewpoints of those and maybe, as you said, your Ivy League friends or academics or the Ivory Tower in general. I have no problem with that. I like the viewpoints of those academics and hearing from even privacy advocates about what their concerns are. I think those sometimes are valid, and sometimes they are legitimate things that we should be exploring. Whether we should enforce by law prohibitions based upon those concerns is an entirely different matter.

So to get back to the Gmail example you mentioned, we have to go back to the Dark Ages of 2004 when most of us were using AOL or maybe Yahoo! and getting very limited amount of email storage, ten megabytes or something, usually much less than that. I don’t know if you or any of our viewers out there remember, but back then you had to delete every other email for fear of them butting up against your buffer or your limit. And, all of a sudden, Gmail came along and offered at that time an astonishing gigabyte of storage, and it’s now up around six or seven gigabytes, I believe. And everybody’s offering more and more and more. The point is, at that point in time, Gmail said, “The quid pro quo here, the deal we’re going to make with consumers is, we’re going to give you this service and all this storage for free, but you’re going to have to accept some advertising around it.” Well, certain privacy advocates went bananas and said, “No, no, no, no. We can’t have that because people will be surrendering too much personal information.” Again, they’re sort of sheep. They’ll just go along with it and be led to the slaughter. My argument at the time and still today is that, well, this is a choice we should be allowed to make for ourselves. I’m willing to trade away some potential information about myself or at least be served up as contextual ads that basically can offer me this free service, which is something that we take it for granted that these email services do cost money, but we get

them all free.

And today, there’s nearly 150 million people around the world, who use free Gmail services, and that’s a steadily growing share, and yet there are some people who say we shouldn’t have access to it because of privacy concerns. So I’ll just say we have to accept the tradeoffs and understand that there is no free lunch out there. You have to understand that, if you’re going to take something for free, there might be something you give up. In this case, maybe it’s a bit of privacy or the annoyance of having ads accompany your email.

ROBERT BLOOMFIELD: So I guess my concern on this is twofold. I think the first one is that, although we can talk about it just being ads, well, actually I should say I don’t know what Google is doing with the data they have. Maybe they have a wonderful policy, but I know that I have a Google Gmail account, and I am probably not the only one of the 150 million who never bothered to read the little click-wrapped Terms of Service. For all I know they have rights to my firstborn child. Well, actually I know they don’t because we have a law against that. But, if we don’t have any laws on privacy, I don’t know what keeps them from having an inordinately one-sided agreement that they get all my data.

And to make it worse, what if I use my Cornell account, and I send you an email to your PFF account, but you forward that without my knowledge to your Gmail account, and now they’ve got information about me on Gmail. And, again, without regulations, I don’t know how I can trust my data to anyone because I certainly don’t want to have to write a contract with you saying you can’t forward to email accounts I’ve never even heard of and companies I’ve never heard of that might have intrusive privacy policies.

ADAM THIERER: Sure. So two answers to that: Number one, let’s keep in mind that Gmail and these other email services are services we voluntarily sign up for, and while it’s true that we don’t always read the EULAs, the end license user agreements or whatever else, the fact of the matter is that we can opt out of these systems anytime we wish. They’re free services. We don’t pay anything for them, and so let’s not lose sight of that fact, that we voluntarily walk into these exchanges.

But, number two, even after we’ve walked in voluntarily to these exchanges, we don’t necessarily need to accept everything that they ask from us. Start with advertising, which a lot of people find annoying, and yet it is the mother’s milk of the internet. I mean it powers so many sites and services, and it’s what keeps costs down, keeps services free online. So when we have ads that we don’t like, a lot of people accept them and just move on because they know they get their free stuff, but a lot of people, in fact tens of millions of people go out of their way to block ads and any form of intrusive banners or pop-ups that are on their screen or on the services they use.

ROBERT BLOOMFIELD: So this is along the lines of your tools argument: use the tools to protect yourself.

ADAM THIERER: Exactly. Applying the same model I apply in the child safety space, when you have a toolbox that includes a variety of tools in it that allow you to empower yourself and your family to take matters into your own hands, you can deal with these problems. And, in fact, the numbers are quite astonishing: tens of millions of people, who use Firefox, have made Adblock Plus the number one most downloaded privacy tool for the Mozilla Firefox web browser.

ROBERT BLOOMFIELD: I’m raising my hand, by the way. I’m one.

ADAM THIERER: There are people who download this every single day, and it’s just one of hundreds and hundreds of these privacy solutions that are out there to deal with these matters. And, if you want to go further, you can download the number three most downloaded service on Firefox is called NoScript, to disallow any sort of script that might show on the page in real time. Using just those two tools alone, you can end up blocking a significant portion of that which you would find annoying and/or intrusive.

You can also use browser controls in every major browser to block the acquisition of cookies that you might set by visiting websites. You can also use encryption technologies, and I could go on and on and on. The point is a lot of people don’t like having to use some of those tools, just as some of the people don’t like using them on their child’s safety or free speech front, but, at the end of the day, if they’re available and people can have access to them, what my argument would be is that that’s preferential to having the government come in and set the standards or the laws for us about how these technologies or tools work, if we have the tools within our grasp to do it for ourselves.

ROBERT BLOOMFIELD: A middle ground possibly comes from Chicago law professor Cass Sunstein and behavioral economist Richard Thaler, who I should point out was a colleague of mine for a number of years here at Cornell. They have a book called Nudge and a philosophy they call libertarian paternalism, libertarian because they’re trying to give as much freedom as possible, paternalism because they’re going to help out a little bit. I’m wondering how you feel about, for example, government stepping in and saying, “Look, we’re not going to outlaw this, that and the other thing, but we are going to require that, if you have intrusive privacy terms on your internet service, the default is that people opt out and they explicitly have to go through some work to opt into that.” So I’m wondering what you think of that.

ADAM THIERER: I’ve read and critiqued Professors Sunstein and Thaler’s books many

times. They’re brilliant scholars, and I can appreciate what they’re trying to do by changing incentives essentially and creating what they call a new choice architecture by setting defaults and incentives and rules in a different way. But the fact of the matter is that, at the end of the day, that, to me, sounds a heck of a lot more like actual old-fashioned paternalism than it does libertarian paternalism. Because, at root, what they’re saying is that someone, and that someone most notably would usually be governments or government regulatory agencies, should be changing defaults online or in devices and the way that they function before they’re even shipped to market or allowed to get out of the gates.

So I’ll give you an example of a little “nudge” that has been recommended by lawmakers both here and overseas. There are some people who believe we should have a different set of defaults on video game services or PCs that would not allow certain types of games to be played or sites to be accessed, that are rated a certain way. So for example, on an Xbox 360 or a PlayStation 3, it would come shipped to market with a standard that says nothing higher than E for Everyone can be played. Nothing rated over E for Everyone by the Entertainment Software Ratings Board which regulates video games. And no online Worlds can be visited as a default. So the default out of the box is essentially sort of a G-rated world except it’s an E for Everyone world in ESRB terms, and no Second Life or anything like that should be accessible through a PC. And some people say, “Why not make that the standard? Why don’t we nudge people in that direction, and then make them choose to opt out of that?”

ROBERT BLOOMFIELD: It sounds more like driving tackle than a nudge.

ADAM THIERER: Yeah, and indeed that’s what these often come out as. They’re very ham-handed approaches to trying to encourage people to do something that they want to do, which is very paternalistic, which is, they don’t want them to play certain games or access certain sites that they feel are objectionable to their values.

My alternative approach is exactly the opposite, which is to say, “Hey, let’s encourage these sites, these services, these devices to have embedded controls, embedded tools that allow parents and average folks to make these decisions for themselves when they want, how they want. But don’t make the decisions out of the box for them.

And that’s the distinction between Thaler and Sunstein and myself is that they want to nudge people in the direction of true paternalism and take a sort of more heavy-handed approach to saying, “Well, if you want to get to that other stuff, you’re going to have to take a lot of steps to get to it.” I take the opposite approach and say, “Let’s assume people are generally responsible and leave them to their own devices, but empower them with tools that can allow them to change their safety settings, their family settings, their privacy

settings, whatever else, when they want to.”

The other reason I feel this way and feel strongly about this is that, if you sent every digital device to market with free installed defaults that were quite restrictive, restricted to the sort of lowest level, you’re going to have a ton of people thinking you’ve crippled the product or that it’s broken. You’re going to have consumer complaint lines light up like Christmas trees the next day and saying, “Why doesn’t my Xbox play an R-rated movies or a Mature-rated video game?” Or, “Why doesn’t my PC let me access Second Life?” And somebody will have to walk you through the steps you take off restrictions that forbid you, out of the gates, from seeing that content or accessing that information.

ROBERT BLOOMFIELD: But isn’t the flip side of this that you have someone who doesn’t want their child to see content that they think is inappropriate for their child? They’re going to have to go out and get help to use those tools that you’re saying will empower them to limit what their kid see.

ADAM THIERER: Yes, indeed. I don’t deny that, Rob. That’s exactly what I’m saying. It’s called parental responsibility. I mean basically what I’m saying is that parents, once they bring a $300 video game console in the house or a thousand-dollar laptop, at that point in time, I expect them to take a couple of more steps to be responsible enough to figure out how to deal with things that they don’t want their kids to see. I know that there are some hurdles there. There are some homes that don’t have as much time. There are some homes or families that maybe need a bit more education. There are some tools that need to be more widely available or easier to understand.

These are challenges that we should absolutely face up to and deal with, both for child safety and for privacy. And companies and site administrators should absolutely make this process easier. A big part of the solution that I favor is a self-regulatory, self-policing approach where sites go out of their way and do their best to hand consumers these tools and educate them about these empowerment tools so that they know how to do this themselves. And I think some of the best success stories are emanating out of the Virtual World community and out of the video game world. I mean we have for traditional video games, for example, great ratings for content, and we have great site policies on Second Life and elsewhere for how to deal with objectionable content.

ROBERT BLOOMFIELD: I’d like to get to that in a second. I just want to say I think I know what Dick Thaler would say in response because he said this at a conference to a proponent of rational markets and efficiency. He said, “The difference between us is that you assume everyone is as smart as you are, whereas, I assume everyone is as dumb as I am.” Which is always a quote I thought was pretty entertaining.

ADAM THIERER: The problem with that is assuming that everyone is stupid leads to some really troubling results in terms of policy. It basically assumes that our government is really, really smart, and they can make these choices for us. And I think, if everybody’s as stupid as Richard Thaler is, I can’t believe anybody in the government’s smarter than him. He’s one of the smartest guys I know. I don’t necessarily think that they’re in a better position to make the choice for Richard Thaler or myself than anybody else. So I would say you have to think about what you’re asking your government to do when you make a judgment like that, saying, “Everybody’s stupid, and therefore, think for us.” Because that has really profound implications for a lot of things in this world and a lot of things in our online lives.

ROBERT BLOOMFIELD: We have time for one more topic, and I want to follow up on what you just talked about, which was what is going on in online communities in Virtual Worlds. One of our event partners here in Second Life, the Democratic Sims, I mean they actually have their own self-elected government and set their own terms of service and so on. Do you see that as being a long-term solution where people come into Virtual Worlds and self-select? And related to that, do you see a difference between people selecting--like Linden Lab sets their terms of service and community standards--do you see a difference between them making decisions versus the government or Linden Lab making decisions versus the actual residents of the World?

ADAM THIERER: Oh, absolutely, I see a difference, starting with the fact that you have the ability to exit Linden Lab and Second Life at any point you like and choose a different online community or Virtual World more to your liking and more in line with your particular values or desires. Whereas, we do not have that option, obviously, with our government. We’re sort of stuck with the one we’ve got, and, if government regulates and sets rules for all of us, it essentially forecloses the opportunity for different communities to develop that suit our values.

That being said, I can appreciate concerns raised by some people when certain companies, who grow very large, have very heavy-handed approaches or policies governing their communities. I think what’s really great about the new tools that are out there and the new strategies that are out there in these virtual communities is that people have been shown to rise up and make themselves heard in organized fashion. And that’s what’s really exciting to me what happens in Second Life when I hear about various groups that set up independent communities with different standards. Yeah, sometimes Linden Lab does come in, steps in and says, “Well, we won’t tolerate this or that,” but I think eventually Linden Lab has to be a good community steward and listen to the various sub-communities within the larger community.

This is why I like to use a phrase from my favorite modern political philosopher

Robert Nozick, who wrote about the idea of a utopia of utopias as the optimal form of government, the notion that, “There is never going to be any one central vision that should govern all society and create a utopia. It’s better that we have a system that allows many different utopias to flourish underneath an umbrella.” And that’s what I think is happening in Worlds like Second Life, at least I hope it will start happening more where you have a broad community of interests, and you allow different communities to develop within that broader one. That’s the same approach I take to the Real World government too.

ROBERT BLOOMFIELD: Okay. We’re going to have to leave it there because we’re running out of time, and I get the last word with my Connecting The Dots segment. But thank you for a fascinating conversation, Adam Thierer of Progress & Freedom Foundation. I hope we’ll hear from you again on Metanomics.

ADAM THIERER: Absolutely. It was really a pleasure to be here with you today, Rob.

ROBERT BLOOMFIELD: Okay. The title of today’s show was Live Free and Prosper, and our guest, Adam Thierer, provided a forceful and compelling defense of freedom and self-empowerment. Well, I’m going to use my segment of Connecting The Dots to argue the other side. That’s right, folks, I am going to argue against freedom. Well, no, of course not. Instead what I’m going to do is, I am going to argue against simplicity. H.L. Mencken famously said, "For every complex problem, there is a solution that is simple, neat, and wrong." And, for me, this captures the problem of libertarianism.

Let me start by saying that I can’t think of a better place to study libertarianism than Virtual Worlds. Communities like Second Life arose in a setting largely devoid of regulation. At our opening show on virtual goods and Second Life’s economy this season, founder Philip Rosedale sounded a strong libertarian note. The first words out of his mouth that day were, and I quote, “My role in Second Life’s economy is to keep my hands off it.”

On the other hand, freedom and self-organization hasn’t always worked out so well in Second Life. It was a little over a year ago that I connected the dots in a segment title Everything I Needed to Know About the Financial Crisis I learned in Second Life. Second Life’s free and unregulated financial markets quickly devolved into a series of bank failures that reflected some combination of excessive risk-taking, incompetence, outright fraud and pyramid schemes. Attempts at self-regulation, self-governance, repeatedly failed due to conflicts of interest, and so Linden Lab eventually came up with a very non-libertarian solution. They insisted that banks could operate in Second Life only if they showed evidence of Real World regulatory oversight.

My own philosophy on freedom and regulation is probably best described by the rather unpopular General Theory of the Second Best, which was formalized in the ’50s by Lipsey

and Lancaster, and brought into the regulatory sphere by legal theorist Richard Markowitz in the 1990’s. The basic idea is this: The foundation of neo-liberal economics is that, when markets are perfectly free of regulation, friction, externalities, transaction costs and other imperfections, they achieve the pinnacle of economic success, which economists call allocative efficiency, and that is also called the first best solution. Now, we all recognize that markets are not perfectly free of imperfections so what we strive for is what economists call the second best, the highest degree of allocative efficiency we can achieve, given the imperfections we can’t avoid.

The general theory of second best says this: If you have multiple imperfections in the market, then getting rid of only one of them doesn’t necessarily improve allocative efficiency. Now the theory turns out to be really pretty unpopular politically, even though it’s hard to disagree with because it doesn’t allow for simple arguments. A regulation that addresses an obvious problem, like pollution, doesn’t necessarily help because it might have unintended consequences that are worse than the problem we are trying to fix. And, by the same token, eliminating a regulation that stymies freedom doesn’t necessarily help because, even though you’re making people more free, getting you closer to that frictionless economy, that regulation might be essential to counterbalancing some other imperfection, and you’re worse off.

The bottom line is that we live in an imperfect world, and we’ll never eliminate all government regulation and other imperfections. The general theory of the second best tells us that we need to look at each regulation in all its messiness, in the context of the other regulations and imperfections we suffer with. So I’m not against freedom, I’m just skeptical of simple arguments. So those of you who want to maintain the highest degree of freedom in your virtual lives, your greatest degree of privacy, I applaud your sentiment.

But take a lesson from what Adam Thierer does when he’s not a talking head on a show like this. He is not just arguing for freedom because freedom is good, he’s laying out the mechanisms by which we can empower ourselves, the tools, the armaments that we need in order to get over the imperfections that we face. And, if you want to argue in favor of additional regulation, you’d better make sure you really understand exactly what implications they are going to have, and that’s going to be a big challenge in an environment that moves as quickly as high tech does.

So bottom line: I don’t believe people when they tell me that a new regulation will improve our lives, and I don’t believe people when they tell me that getting rid of an old regulation will improve our lives. At least I’m not going to believe them if their arguments are simple. I want their arguments to be messy, complicated and uncertain because, in the end, those are the arguments that are going to be least wrong.

Okay. Well, thanks so much for joining us this week. Join us next week for a very different take on policy and economics from Robert Frank, author of The Economic Naturalist’s Field Guide, Winner-Take-All Society, Luxury Fever and also author of an introductory economics textbook written along with Federal Reserve Chairman Ben Bernanke. It should be a very interesting discussion, and I hope to see you there.

Also, don’t forget you can see over 80 hours of Metanomics in our archives at Metanomics.net, and you can download them on iTunes. Bye bye. Transcribed by: http://www.hiredhand.comSecond Life Avatar: Transcriptionist Writerhttp://www.hiredhandtranscription.org