Archive for the ‘Political Economy’ Category

Defending Citizens United?

posted by Jay Kesten

My thanks to Danielle and her co-bloggers for inviting me to share some of my thoughts.  This is my first foray into blogging, and I’m thrilled to join you for awhile.  I’d like to start by discussing a current project, which examines the internal governance of corporate political activity.  Comments, suggestions and critiques are most welcome.

Corporate political activity has long been an exceptionally contentious matter of public policy.  It also raises a hard and important question of corporate law:  assuming corporations can and will engage in political activity, who decides when they will speak and what they will say?  In several cases, the Supreme Court has provided a relatively clear, albeit under-developed, answer:  ”[u]ltimately, shareholders may decide, through the procedures of corporate democracy, whether their corporation should engage in debate on public issues.”  (First Nat’l Bank of Boston v. Bellotti, cited with approval in Citizens United v. FEC).

This corporate law aspect of the decision has attracted substantial criticism alongside widespread calls for major reforms to corporate and securities laws.  Some argue that the Supreme Court misunderstands the reality of modern corporate law, insofar as shareholders have little practical ability to constrain managerial conduct.  Others question why political decisions should be made by either shareholders or managers, rather than some broader group of corporate stakeholders.  A third group claims that political activity is just another corporate decision protected by the business judgment rule.  Thus, empowering shareholders in this regard would improperly encroach on the board’s plenary decision-making authority.

Yet, despite these concerns, there may be pragmatic and normative merit to the Supreme Court’s approach.  In a current paper – “Democratizing Corporate Political Activity” – I present a case for shareholder regulation of corporate political activity through their power to enact bylaws.  I’ll describe the argument in more detail in subsequent posts, but, briefly, I present three normative justifications for this governance structure.  First, it may mitigate the unusual and potentially substantial agency costs arising from manager-directed corporate political activity.  Second, it may increase social welfare by: (i) reducing deadweight losses and transaction costs associated with rent-seeking; and (ii) making corporations less vulnerable to political extortion.  Third, if corporate speech can shape our society’s distributional rules, corporate law should not interpose an additional representative filter in the democratic process.  That is, we should not assume that investors – merely by purchasing stock in a public company, often through an intermediary such as a mutual fund – grant managers the unilateral authority to engage in political activity on their behalf.

With that said, I should be clear upfront that there are important challenges and objections to each of these arguments.  I will describe the main concerns as I proceed.

The next post will lay out the Supreme Court’s vision of corporate political activity, and explain why the shareholder bylaw power best fits the Court’s description of shareholder democracy in this context.

  March 30, 2013 at 7:57 pm   Posted in: Corporate Law, Legal Theory, Political Economy, Politics   Print This Post   2 Comments

Do Corporations Enjoy a 2nd Amendment Right to Drones?

posted by Frank Pasquale

An emerging, “solutionist” narrative about drones goes something like this:

Yes, we should be very worried about government misuse of drones at home and abroad. But the answer is not to ban, or even blame, the technology itself. Rather, we need to spread the technology among more people. Worried that the government will spy on you? Get your own drones to watch the watchers. Fearful of malevolent drones? Develop your own protective force. The answer is more technology, not regulation of particular technologies.

I’d like to believe that’s true, if only because technology develops so quickly, and government seems paralyzed by comparison. But I think it’s a naive position. It manages to understate both the threats posed by drones, and the governance challenges they precipitate.
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  March 24, 2013 at 1:19 pm   Posted in: Constitutional Law, Military Law, Political Economy, Privacy, Property Law, Technology   Print This Post   4 Comments

“Kicking the Tires” is not “Looking Under the Hood”

posted by Frank Pasquale

Celebrated in the tech press only a week ago, the FTC inaction (and non-explanation of its inaction) with respect to search bias concerns is already starting to curdle. The FT ran a front page headline titled “Europe Takes Tough Stance on Google.” Another story included this striking comment from the EU’s competition chief:

Almunia insists that the Federal Trade Commission decision will be “neither an obstacle [for the European Commission] nor an advantage [for Google]. You can also think, well, this European authority, the commission, has received a gift from the American authorities, given that now every result they will get will be much better than the conclusions of the FTC,” he said with playful confidence. “Google people know very well that they need to provide results and real remedies, not arguments or comparisons with what happened on the other side [of the Atlantic].”

In response to allegations of search bias, Google has essentially said, “Trust us.” And at the end of its investigation into the potential bias, the FTC has essentially said the same. One public interest group has already put in a FOIA request for communications between Google and the FTC. Consumer Watchdog has requested a staff report that was reported to have recommended more robust action. Will Google, an advocate of openness in government and the internet generally, hold firm to its professed principles and commend those requests?
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  January 11, 2013 at 10:28 am   Posted in: Antitrust, Cyberlaw, Google & Search Engines, Government Secrecy, Political Economy, Privacy (Electronic Surveillance), Technology   Print This Post   2 Comments

Schneier Calls Out Papers on How Terroristist Groups End

posted by Deven Desai

Bruce Schneier noted some research by Rand about How Terrorist Groups End. The abstract

Abstract: How do terrorist groups end? The evidence since 1968 indicates that terrorist groups rarely cease to exist as a result of winning or losing a military campaign. Rather, most groups end because of operations carried out by local police or intelligence agencies or because they join the political process. This suggests that the United States should pursue a counterterrorism strategy against al Qa’ida that emphasizes policing and intelligence gathering rather than a “war on terrorism” approach that relies heavily on military force.

likely rings true to many who question the use of drones etc. (The comments on Bruce’s page get into some of this point).

To me the fact that RAND put the paper out is interesting. I can never tell whether RAND or what RAND is about. It would seem that claims that RAND is only going to support the government’s goals might be challenged here. Also Bruce calls out the work of Max Abrahms who in 2008 and 2011 addressed these ideas as well. I urge you read the 2008 post and here is the 2011 abstract

The basic narrative of bargaining theory predicts that, all else equal, anarchy favors concessions to challengers who demonstrate the will and ability to escalate against defenders. For this reason, post-9/11 political science research explained terrorism as rational strategic behavior for non-state challengers to induce government compliance given their constraints. Over the past decade, however, empirical research has consistently found that neither escalating to terrorism nor with terrorism helps non-state actors to achieve their demands. In fact, escalating to terrorism or with terrorism increases the odds that target countries will dig in their political heels, depriving the nonstate challengers of their given preferences. These empirical findings across disciplines, methodologies, as well as salient global events raise important research questions, with implications for counterterrorism strategy.

Bruce was cool enough to include a link to the paper.

  November 15, 2012 at 9:57 pm   Posted in: International & Comparative Law, Military Law, Political Economy, Politics   Print This Post   6 Comments

In case you missed it, ISPs now have a 6 Strikes Plan, A Whiff of ICANN?

posted by Deven Desai

Ah yes the ever-vigilant Internet democracy must have been watching, or maybe it agreed to ISP policing for copyright sort of like Google’s decision to take down search results for copyright issues. Who knows? The Shadow? Anyway, ISPs are now going to monitor usage to police copyright scofflaws. According to Wired, it is a six strikes plan

backed by the Obama administration and pushed by Hollywood and the major record labels to disrupt and possibly terminate internet access for online copyright scofflaws. … The plan, now four years in the making, [will trigger with] four offenses, [participating] residential internet providers {including AT&T, Cablevision Systems, Comcast, Time Warner Cable and Verizon] [will] initiate so-called “mitigation measures” (.pdf) that might include reducing internet speeds and redirecting a subscriber’s service to an “educational” landing page about infringement. The internet companies may eliminate service altogether for repeat file-sharing offenders, although the plan does not directly call for such drastic action.

The action reminds me a little of Stanford University policy on file sharing where three strikes means you are shut out of Internet access and must pay $1,000 to reactivate. As more and more of life is online, I wonder about such a broad stroke for copyright violators. Then again some countries take away driver’s licenses for drunk driving. The U.S.A. is more lax on that front, I think. I am surprised to see that the Center for Copyright Information has a mix of members including Gigi Sohn; as Tim Lee put it “The picks suggest that the architects of the “Copyright Alert” system may be making a serious effort to strike a balance between the interests of copyright holders and the rights of users.”

Tim explained, however, that the board “has little direct authority over the Copyright Alerts system. The real power lies in the hands of the CCI’s executive board, which is stocked with content companies and ISPs.” He has some faith that the advisory roles give the noisy exit power to “public interest advocates like Berman and Sohn some leverage” who “can always resign in protest, giving the CCI a black eye in the press.” I am not so sure that anyone will give a damn in a way that can change the system even if such an exit is needed.

I also wonder whther this is a whiff of ICANN. Tim explained (he is rather good isn’t he?) that “The Copyright Alerts system will provide users with an opportunity to appeal “alerts” to an independent entity. That independent review process will be overseen by the American Arbitration Association. The AAA will train independent reviewers who will, in turn, hear appeals by individual users.” Given the numbers needed and the way ICANN and the UDRP has operated, I am again a bit wary of how this will all play out.

Given the folks involved, I hope my concerns do not pan out. But I would say keep an eye on this one before someone has to say “Help me Obi Wan, err Google? You’re my only hope.” They may not be up for the battle either.

  October 11, 2012 at 8:01 pm   Posted in: DRM, Intellectual Property, Political Economy, Politics, Privacy, Web 2.0   Print This Post   No Comments

The Correct Word is Desource, Not Outsource.

posted by Deven Desai

Everyone thinks jobs are being outsourced; they are, in fact, being desourced. When Mitt Romney claims he will create jobs, when Barak Obama claims the same, when Google, Apple, or Amazon assert they build out the economy, they all overstate. Worse, they ignore the reality that both manufacturing and service jobs are dying. Robots, artificial intelligence, and the new information-at-scale industries all but assure that outcome. The ability to build and sell without humans is already here. I am not saying that these shifts are inherently bad. They may even be inevitable. What we do next is the question. To answer that question, we need to understand the ways humans will be eliminated from manufacturing and service jobs. We need to understand what I call desourcing.

Focus on manufacturing is a distraction, a sideshow; so too is faith in service jobs. A recent New York Times article about Apple, noted that manufacturing accounts for only about eight percent of the U.S. labor force. And, The Atlantic’s Making It in America piece shows how manufacturing is being changed by robots and other automation. According to some, the real engine is service labor “and any recovery with real legs, labor experts say, will be powered and sustained by this segment of the economy.” That is where desourcing comes in. Many talk about the non-career path of service sector jobs. A future of jobs that have low pay and little room to rise is scary and a problem. Amazon explains why that world might be heaven.

The world of low wage, high stress service work is being replaced by automation. Amazon gave up its fight against state taxes, because it is moving to a model of local distribution centers so that it can deliver same-day delivery of goods. According to Slate, Amazon will spend more than $1 billion to build centers all over the U.S. and hire thousands of people for those centers. The real story is that like any company Amazon wants to reduce operation costs; it must automate or perish as Technology Review put it. It will do that, in part, by using robots to handle the goods. Self-driving cars and autonomous stocking clerks are the logical steps after ATMs and self-serve kiosks at movie theaters and grocery stores. I am always amazed at the folks who line up at movie theater ticket windows rather than use the kiosks. A friend said to me that we should walk up to the window to keep those jobs. It is a nice idea, but I think untenable. We all want to move faster and pay less. Welcome to desourcing.

Desourcing means reducing or eliminating humans from the production or service equation. Humans are friction points. More and more we can reduce those points of contact. We no longer need to send work to other humans.

There are many economic questions that are beyond what can be addressed in a short piece. But here are some ideas on which to chew. The returns from this approach are tremendous for the companies that desource. For example, by one account, Apple makes $473,000 per employee; yet “About 30,000 of the 43,000 Apple employees in this country work in Apple Stores, as members of the service economy, and many of them earn about $25,000 a year.” So we may satisfy our need for instant gratification as companies reduce their costs, but that money will go to corporate bottom lines. Whether it will really reach the rest of the economy is not so clear precisely because a smart company will invest in desourcing. I suppose at some point companies will have to realize that they need masses who can buy stuff. Yet I think some studies indicate that serving the upper end of the economy works better than serving the masses. In theory, a company may offer goods at lower prices but to do that, it will need lower production costs. And less workers means lower costs.

I am not saying I know what will solve this riddle. I offer desourcing, because I have not seen a satisfying answer to the issue. There may not be one; for we may be stil sorting what to do as the digital age takes full hold. As the computer science folks say in early training, “Hello world.”

  September 22, 2012 at 4:28 pm   Posted in: Economic Analysis of Law, Employment Law, Innovation, Political Economy, Technology, Web 2.0   Print This Post   6 Comments

Symposium on Madhavi Sunder’s From Goods to a Good Life, September 11-13

posted by Deven Desai

This week Concurring Opinions is hosting a symposium on Madhavi Sunder’s From Goods to a Good Life (Amazon) published by Yale Press which offers a preview. Madhavi’s work has pushed how many colleagues and I think about intellectual property. I am honored to organize this discussion.

I have more to say about the book, but to whet your appetites, I offer this quote:

The full cultural and economic consequences of intellectual property policies are hidden. We focus instead on the fruits of innovation—more iPods, more bestsellers, more blockbuster drugs—without concern for what is being produced, by whom, and for whose benefit. But make no mistake: intellectual property laws have profound effects on human capabilities…

The symposium will include contributions from Mike Carroll, Laura DeNardis, Brett Frischmann, Mike Madison, Mark McKenna, Frank Pasquale, Zahr Said, Lea Bishop Shaver, Jessica Silbey, and Molly Van Houweling.

  September 10, 2012 at 11:24 pm   Posted in: Culture, Cyberlaw, DRM, Economic Analysis of Law, Innovation, Intellectual Property, Political Economy, Symposium (From Goods to a Good Life), Web 2.0   Print This Post   7 Comments

Jobless Futures

posted by Frank Pasquale

The US economy’s long stall has confounded establishment economists. Many jobs aren’t coming back. Median wealth has declined by 39% over four years, even as GDP continues to grow (and that growth primarily benefits those at the top.) The “quantitative easers” seem content to print money for the same lords of finance and industry that got us into the current crisis. Some Keynesians have good ideas about infrastructure spending, but are blocked by political gridlock. Meanwhile, a golden remnant discerns salvation in a hard money-driven debt deflation.

On a personal level, the advice gets even more confusing. First, economists told workers to get more skills and education. A “skills gap” left much of America’s workforce unable to compete globally in information age economies. But then it turned out that college graduates were suffering in the current downturn, too. The solution: more education. But what about unemployed grad students? Finally, the economists had an answer: more of the right type of education. Science was the golden ticket. As Thomas Friedman never tires of opining, the geeks will inherit the earth.

Except, it seems, for the chemists and biologists. It turns out they might not be doing as well as even the despised lawyers. Here are some impressions from the Washington Post story “U.S. pushes for more scientists, but the jobs aren’t there:”

“There have been many predictions of [science] labor shortages and . . .robust job growth,” said Jim Austin, editor of the online magazine ScienceCareers. “And yet, it seems awfully hard for people to find a job. Anyone who goes into science expecting employers to clamor for their services will be deeply disappointed.” . . . Since 2000, U.S. drug firms have slashed 300,000 jobs. . . . [According to one laid-off drug developer,] “Very good chemists with PhDs from Stanford can’t find jobs.”

Perhaps labor economists like Claudia Goldin and Lawrence Katz will reassure us that Stanford chemists simply need to learn another skill, like end-to-end supply chain management or ventriloquism. Who knows what the magical market will need tomorrow?
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  July 8, 2012 at 9:22 am   Posted in: Political Economy   Print This Post   6 Comments

Amazon’s Pawns

posted by Frank Pasquale

I sometimes speculate at the end of my copyright class that, years hence, we’ll stop using a statutory supplement and just refer to the Amazon, YouTube, Facebook, etc. service agreements to find sources of legal authority. The cultural power of Google & Facebook gets a lot of media attention, and now Amazon is under renewed scrutiny. Wired highlights the business acumen of Jeff Bezos; Mac McClelland has told the story of the sweat it’s based on. Now The Nation is featuring an intriguing series on the company, with pieces by Robert Darnton, Michael Naumann, and Steve Wasserman (along with the slide show on 10 reasons to avoid Amazon). A few reflections on the series below:

1) Wasserman compiles an array of stats: according to the revised 2012 edition of Merchants of Culture, “in 2011 e-book sales for most publishers were “between 18 and 22 percent.” “Two decades ago, there were about 4,000 independent bookstores in the United States; only about 1,900 remain.” Publishers stand to be disintermediated, since too many have been “complacent, allergic to new ideas, even incompetent.” Amazon stands triumphant:

[By 2011], it had $48 billion in revenue, more than all six of the major American publishing conglomerates combined, with a cash reserve of $5 billion. The company is valued at nearly $100 billion and employs more than 65,000 workers (all nonunion); Bezos, according to Forbes, is the thirtieth wealthiest man in America

The aggregator has triumphed over the aggregated, and its own workers. As exposes revealed, “in one of Amazon’s main fulfillment warehouses in Allentown, Pennsylvania . . . employees risked stroke and heat exhaustion while running themselves ragged [and] [a]mbulances were routinely stationed in the facility’s giant parking lot to rush stricken workers to nearby hospitals.”
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  June 4, 2012 at 9:16 pm   Posted in: First Amendment, Google and Search Engines, Intellectual Property, Political Economy, Technology, Web 2.0   Print This Post   No Comments

Constitutional Limits on the Inter-State Market for Sovereign Territory

posted by Joseph Blocher

On Friday, I asked why there seems to be no inter-governmental market for sovereign territory, at least in the United States. Many of the thoughtful comments to the post suggested important political considerations that might prevent the market from clearing, particularly in the international context. I’ll try to address some of those considerations in my next post, but first I want to focus on the domestic context, and specifically on what limits the Constitution might place on inter-state sales of sovereign territory.

 

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  June 4, 2012 at 1:21 pm   Posted in: Constitutional Law, Economic Analysis of Law, Political Economy, Uncategorized   Print This Post   6 Comments

The Market for Sovereign Territory

posted by Joseph Blocher

I’m thrilled to be back at Co-Op, and I look forward to blogging about a few rough ideas that seem to be shaping up as summer research projects. The first of them starts with a story.

Once upon a time, sovereigns bought and sold themselves to one another. Specifically, they purchased sovereign territory. The United States, to take the easiest example, looks the way it does not just because of military conquest, but because of bold real estate deals, including most notably the Adams-Onis Treaty, the Louisiana Purchase, and the Alaska Purchase. Occasionally such sales were tied up with military action, as with the Treaty of Guadalupe Hidalgo, which ended the Mexican-American War, transferred the Mexican Cession, and committed the United States to pay Mexico $15 million “[i]n consideration of the extension acquired.”

Even within the United States, sales of sovereign territory were not unheard of at the time of the Founding. The Constitution’s Enclave Clause specifically refers to the federal government’s power to “purchase[]” and essentially govern “Places” within states. And the states themselves often altered their borders, sometimes for economic reasons. In 1784, for example, North Carolina ceded 29,000,000 acres to the federal government to help pay back the nation’s Revolutionary War debt–a generous but ill-fated gesture that led to the short, unhappy, and largely forgotten life of the State of Franklin.

Somewhere along the way, the market for sovereign territory seems to have dried up, at least as far as I can tell. To be sure, there is still an active market for proprietary interests in public land; the federal government, after all, owns approximately 30% of the nation’s land. But borders–sovereign territory, rather than property–do not seem to be for sale, especially domestically. Why?

 

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  June 1, 2012 at 9:09 am   Posted in: Constitutional Law, Economic Analysis of Law, Political Economy, Uncategorized   Print This Post   14 Comments

Why Do We Lack the Infrastructure that We Need?

posted by Frank Pasquale

Brett Frischmann’s book is a summa of infrastructural theory. Its tone and content approach the catechetical, patiently instructing the reader in each dimension and application of his work. It applies classic economic theory of transport networks and environmental resources to information age dilemmas. It thus takes its place among the liberal “big idea” books of today’s leading Internet scholars (including Benkler’s Wealth of Networks, van Schewick’s Internet Architecture and Innovation, Wu’s Master Switch, Zittrain’s Future of the Internet,and Lessig’s Code.) So careful is its drafting, and so myriad its qualifications and nuances, that is likely consistent with 95% of the policies (and perhaps theories) endorsed in those compelling books. And yet the US almost certainly won’t make the necessary investments in roads, basic research, and other general-purpose inputs that Frischmann promotes. Why is that?

Lawrence Lessig’s career suggests an answer. He presciently “re-marked” on Frischmann’s project in a Minnesota Law Review article. But after a decade at the cutting edge of Internet law, Lessig switched direction entirely. He committed himself to cleaning up the Augean stables of influence on Capitol Hill. He knew that even best academic research would have no practical impact in a corrupted political sphere.

Were Lessig to succeed, I have little doubt that the political system would be more open to ideas like Frischmann’s. Consider, for instance, the moral imperative and economic good sense of public investment in an era of insufficient aggregate demand and near-record-low interest rates:

The cost of borrowing to fund infrastructure projects, [as Economic Policy Institute analyst Ethan Pollack] points out, has hit record “low levels.” And the private construction companies that do infrastructure work remain desperate for contracts. They’re asking for less to do infrastructure work. “In other words,” says Pollack, “we’re getting much more bang for our buck than we usually do.”

And if we spend those bucks on infrastructure, we would also be creating badly needed jobs that could help juice up the economy. Notes Pollack: “This isn’t win-win, this is win-win-win-win.” Yet our political system seems totally incapable of seizing this “win-win-win-win” moment. What explains this incapacity? Center for American Progress analysts David Madland and Nick Bunker, see inequality as the prime culprit.

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  April 26, 2012 at 8:17 am   Posted in: Economic Analysis of Law, Infrastructure Symposium, Innovation, Law and Inequality, Philosophy of Social Science, Political Economy, Politics, Symposium (Infrastructure), Technology   Print This Post   2 Comments

Koch, Cato, and Nonprofit Takeovers

posted by Frank Pasquale

The Volokh Conspiracy has been providing a forum for discussion of the Koch/Cato lawsuit. According to Cato Senior Fellow Jerry Taylor, the Koch Brothers may want to “use their board majority to . . . transform our Institute into an intellectual ammo-shop for American for Prosperity and other allied (presumably, Koch-controlled) organizations.” All sides may be interested in this article by Dana Brakman Reiser (“Nonprofit Takeovers: Regulating the Market for Mission Control”). Here is part of the abstract:

For-profit takeovers create a robust market for corporate control, and the legal regimes that regulate them are well known. Far less appreciated, however, are efforts to seize control of nonprofit organizations in order to alter their missions or activities. This article explores the largely uncharted territory of nonprofit takeovers, the regulation of defenses to them, and repercussions of both for the nonprofit sector and society at large. . . . [C]ase studies demonstrate both a range of nonprofit takeover tactics and the harsh responses to them by incumbent fiduciaries and reviewing courts. . . . Within the context of these cases, the article critiques courts’ deference to nonprofits’ incumbents and intolerance of takeovers. In its place, the article advocates a nonprofit-specific approach, which will work to distinguish perilous from constructive takeover activity, and balance the opposing virtues of mission preservation and evolution. This framework will provide guidance to those who may become involved in these transactions. Moreover, it will focus nonprofit law on the crucial importance of mission and the challenges of policing that mission in organizations with multiple stakeholders.

As the latest of many battles for the soul of libertarianism, this lawsuit will be closely watched.

  March 3, 2012 at 10:38 pm   Posted in: Corporate Law, Culture, Political Economy, Politics   Print This Post   3 Comments

The Memory Hole

posted by Derek Bambauer

On RocketLawyer’s Legally Easy podcast, I talk with Charley Moore and Eva Arevuo about the EU’s proposed “right to be forgotten” and privacy as censorship. I was inspired by Jeff Rosen and Jane Yakowitz‘s critiques of the approach, which actually appears to be a “right to lie effectively.” If you can disappear unflattering – and truthful – information, it lets you deceive others – in other words, you benefit and they are harmed. The EU’s approach is a blunderbuss where a scalpel is needed.

Cross-posted at Info/Law.

  February 17, 2012 at 12:01 pm   Posted in: Anonymity, Architecture, Civil Rights, Consumer Protection Law, Culture, Current Events, Cyber Civil Rights, Cyberlaw, First Amendment, Google and Search Engines, Innovation, Media Law, Political Economy, Politics, Privacy, Technology, Web 2.0   Print This Post   No Comments

Cary Sherman and the Lost Generation

posted by Derek Bambauer

The RIAA’s Cary Sherman had a screed about the Stop Online Piracy and PROTECT IP Acts in the New York Times recently. Techdirt’s Mike Masnick brilliantly gutted it, and I’m not going to pile on – a tour de force requires no augmentation. What I want to suggest is that the recording industry – or, at least, its trade group – is dangerously out of touch.

Contrast this with at least part of the movie industry, as represented by Paramount Pictures. I received a letter from Al Perry, Paramount’s Vice President Worldwide Content Protection & Outreach. He proposed coming here to Brooklyn Law School to

exchange ideas about content theft, its challenges and possible ways to address it. We think about these issues on a daily basis. But, as these last few weeks [the SOPA and PROTECT IP debates] made painfully clear, we still have much to learn. We would love to come to campus and do exactly that.

Jason Mazzone, Jonathan Askin, and I are eagerly working to have Perry come to campus, both to present Paramount’s perspective and to discuss it with him. We’ll have input from students, faculty, and staff, and I expect there to be some pointed debate. We’re not naive – the goal here is to try to win support for Paramount’s position on dealing with IP infringement – but I’m impressed that Perry is willing to listen, and to enter the lion’s den (of a sort).

And that’s the key difference: Perry, and Paramount, recognize that Hollywood has lost a generation. For the last decade or so, students have grown up in a world where content is readily available via the Internet, through both licit and illicit means; where the content industries are the people who sue your friends and force you to watch anti-piracy warnings at the start of the movies you paid for; and where one aspires to be Larry Lessig, not Harvey Weinstein. Those of us who teach IP or Internet law have seen it up close. In another ten years, these young lawyers are going to be key Congressional staffers, think tank analysts, entrepreneurs, and law firm partners. And they think Hollywood is the enemy. I don’t share that view – I think the content industries are amoral profit maximizers, just like any other corporation – but I understand it.

And that’s where Sherman is wrong and Perry is right. The old moves no longer work. Buying Congresspeople to pass legislation drafted behind closed doors doesn’t really work (although maybe we’ll find out when we debate the Copyright Term Extension Act of 2018). Calling it “theft” when someone downloads a song they’d never otherwise pay for doesn’t work (even Perry is still on about this one).

One more thing about Sherman: his op-ed reminded me of Detective John Munch in Homicide, who breaks down and shouts at a suspect, “Don’t you ever lie to me like I’m Montel Williams. I am not Montel Williams.” Sherman lies to our faces and expects us not to notice. He writes, “the Protect Intellectual Property Act (or PIPA) was carefully devised, with nearly unanimous bipartisan support in the Senate, and its House counterpart, the Stop Online Piracy Act (or SOPA), was based on existing statutes and Supreme Court precedents.” Yes, it was carefully devised – by content industries. SOPA was introduced at the end of October, and the single hearing that was held on it was stacked with proponents of the bill. “Carefully devised?” Key proponents didn’t even know how its DNS filtering provisions worked. He argues, “Since when is it censorship to shut down an operation that an American court, upon a thorough review of evidence, has determined to be illegal?” Because censorship is when the government blocks you from accessing speech before a trial. “A thorough review of evidence” is a flat lie: SOPA enabled an injunction filtering a site based on an ex parte application by the government, in contravention of a hundred years of First Amendment precedent. And finally, he notes the massive opposition to SOPA and PROTECT IP, but then asks, “many of those e-mails were from the same people who attacked the Web sites of the Department of Justice, the Motion Picture Association of America, my organization and others as retribution for the seizure of Megaupload, an international digital piracy operation?” This is a McCarthyite tactic: associating the remarkable democratic opposition to the bills – in stark contrast to the smoke-filled rooms in which Sherman worked to push this legislation – with Anonymous and other miscreants.

But the risk for Sherman – and Paramount, and Sony, and other content industries – is not that we’ll be angry, or they’ll be opposed. It’s that they’ll be irrelevant. And if Hollywood takes the Sherman approach, rather than the Perry one, deservedly so.

Cross-posted at Info/Law.

  February 14, 2012 at 7:40 pm   Posted in: Architecture, Culture, Cyber Civil Rights, Cyberlaw, DRM, First Amendment, Google & Search Engines, Innovation, Intellectual Property, Media Law, Political Economy, Politics, Technology, Web 2.0   Print This Post   5 Comments

The Daily You: A Mandatory Read

posted by Danielle Citron

Over at the Business Insider, Doug Weaver has a terrific review of our guest blogger Joe Turow’s new book The Daily You, demonstrating its practical importance to people in the field like Weaver as well as to policymakers and scholars.Here’s the review:

Listening to the insider discussions and industry reporting about online marketing provides a numbing sense of false comfort.  But every so often, we go outside the bubble and hear civilians talking about what we do.  I’m sure most of us have had someone at a party or family gathering share their ‘creeped out’ moment;  that instance where they finally saw clearly that somehow they were being ‘followed’ online.   Other times, they offer us largely unformed general concerns about online privacy: they don’t really have a sense of what’s going on but they instinctively know they don’t like it.  And once in a great while you’ll hear from someone who’s really done their homework and brings crystal clarity to the issue from the consumer point of view.

That moment came for me when I stumbled on an NPR radio interview with Joseph Turow, author of “The Daily You: How the New Advertising Industry is Defining Your Identity and Your Worth.”  After using up my ten minute commute, I found myself sitting my car in the parking lot of my office for another 30 minutes just listening to this guy.  It was kind of like hearing someone talk about you in a bathroom when they don’t know you’re in one of the stalls.  Except they’re totally getting it right.  Turow, an associate dean at the Annenberg Communication school at Penn, has done a lot of homework.  The book is detailed and rigorous, but also extremely accessible to the curious consumer.  While it’s probably not going to sell millions of copies, I believe it’s going to be a hugely influential and important book for several reasons.

  February 1, 2012 at 5:47 pm   Posted in: Architecture, Articles and Books, Innovation, Political Economy, Privacy, Technology   Print This Post   No Comments

Gamifying Control of the Scored Self

posted by Frank Pasquale

Social sorting is big business. Bosses and bankers crave “predictive analytics:” ways of deciding who will be the best worker, borrower, or customer. Our economy is less likely to reward someone who “builds a better mousetrap” than it is to fund a startup which will identify those most likely to buy a mousetrap. The critical resource here is data, the fossil fuel of the digital economy. Privacy advocates are digital environmentalists, worried that rapid exploitation of data either violates moral principles or sets in motion destructive processes we only vaguely understand now.*

Start-up fever fuels these concerns as new services debut and others grow in importance. For example, a leader at Lenddo, “the first credit scoring service that uses your online social network to assess credit,” has called for “thousands of engineers [to work] to assess creditworthiness.” We all know how well the “quants” have run Wall Street—but maybe this time will be different. His company aims to mine data derived from digital monitoring of relationships. ITWorld headlined the development: “How Facebook Can Hurt Your Credit Rating”–”It’s time to ditch those deadbeat friends.” It also brought up the disturbing prospect of redlined portions of the “social graph.”

There’s a lot of value in such “news you can use” reporting. However, I think it misses some problematic aspects of a pervasively evaluated and scored digital world. Big data’s fans will always counter that, for every person hurt by surveillance, there’s someone else who is helped by it. Let’s leave aside, for the moment, whether the game of reputation-building is truly zero-sum, and the far more important question of whether these judgments are fair. The data-meisters’ analytics deserve scrutiny on other grounds.
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  December 19, 2011 at 3:21 pm   Posted in: Political Economy, Privacy, Social Network Websites, Sociology of Law   Print This Post   One Comment

An Important Post on Egypt from Nagla Rizk

posted by Frank Pasquale

At a time of global economic crisis, the renewed centrality of two origin points of modern civilization (Greece and Egypt) is uncanny. Nagla Rizk, a professor and dean at the American University in Cairo, has courageously offered a nuanced and critical perspective on tomorrow’s elections there and the past 10 months of political turmoil. I was privileged to meet Prof. Rizk while at Yale’s Access to Knowledge Global Academy, and I highly recommend following her work and twitter feed. A few insights from her:

When we stormed the streets last January, we chanted “Aish, Horreya, Adala Egtema’eya” (“Bread, Freedom, Social Justice”). . . . Ten months down the road, yesterday we chanted in Tahrir, “Aish, Horreya, Adala Egtema’eya” (“Bread, Freedom, Social Justice”). Why? . . .

Rather than tackling the root of the problem or starting a dialogue with the protesters, [the post-Mubarak SCAF regime] chose to order them to go home. To add insult to injury, SCAF and its government portrayed them as the cause of instability, turning the rest of Egypt against them.

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  November 27, 2011 at 6:58 pm   Posted in: Constitutional Law, Corruption, Political Economy, Politics   Print This Post   No Comments

Our Fractured Age

posted by Michael Zimmer

The disconnect between what seem to the common interests and needs of most of us – now the 99% of us – and how we think about ourselves collectively has fascinated and troubled me for quite some time. Daniel T. Rodgers, Henry Charles Lea Professor of History at Princeton, has recently published a very interesting book entitled, “Age of Fracture,” that explores the intellectual basis for that disconnect. Looking at a broad set of social, economic, philosophical and political intellectual traditions, Rodgers explains how the intellectual underpinnings of our thought processes have shifted from the idea of collective identity to one of individualized freedom, but freedom from reality.  Reviewing the intellectual history of the late twentieth century until now, his analysis crosses the left-right divide to show how all of these different disciplines can by synthesized because they all vector in the same direction, this idealized sense of individual freedom.

Rodgers starts by describing the political rhetoric Presidents have used in their speeches. Presidential speechwriters rely on tropes that resonate because that rhetoric helps bolster Presidential leadership: The better the rhetoric connects to the prevailing mindsets of the people, the more effective the “bully pulpit.” Presidential rhetoric has interested me ever since I read Gary Wills’ Pulitzer Prize winning book, “Lincoln at Gettysburg: The Words That Remade America.” In essence, Wills analyzed President Lincoln’s use of rhetoric to show that it both reflected but helped reify a change in the concept of the nature of our country: Our  concept of American changed from, “The United States are . . .” to, “The United States is.” Rather than going back that far, Rodgers begins with the rhetoric of our Cold War era Presidents – for example, Kennedy’s “Ask not what this country can do for you; ask what you can do for this country” – calling us to gird our loins and stand united to advance our collective national interest in order to better confront the menace we faced by the menace of Communis and the Soviet Union. With the ending of the Cold War, President Reagan’s rhetoric moved away from that sense of collective identity and obligation toward an idealized, almost dream-like, sense of individual “freedom,” including freedom from the actual conditions of our lives as well as our from much sense of collective obligation. That predominant mindset allows us to escape hard choices and to assume a perfected life will be easy to achieve. It is not as if a Reagan’s rhetoric by itself caused the shift. Rather, presidential rhetoric both reflects but also amplifies the ideas that are already settling into our unexamined background mindset.

Having launched this project through the lens of presidential rhetoric, Rodgers then looks at developments across a wide swath of our intellectual life. He starts with economic theory and describes how the earlier macroeconomic Keynesian theory was supplanted – he quotes economist Robert Lucas, “The term ‘macroeconomics’ will simply disappear from use” — by microeconomic theory, the idealized world of individual rational actors motivated solely to maximize their profits. While he shows how disconnected this was from reality, Rodgers fits microeconomic theory within the broader conceptual view of the world of the individualized but unreal “freedom” reflected in President Reagan’s speeches. Rodger’s next chapter moves to politics and political theory. He traces the shift from Galbraith’s earlier view that the overwhelming  economic power of megacorporations gave them extraordinary political power to the microeconomic view that disconnects economic from political power by its focus on individual economic actors focused solely on their own economic agendas. In an interesting take, Rodgers shows how political theory moved toward rational choice analysis with its exclusive focus on the “power-seeking saturated world of politics” means that the problems of our powerless subordinated groups slip “out of the categories of analysis.” In a tour de force, he then describes how the divergent views of Gramsci, Genovese, Geertz and Foucault, nevertheless when taken together, conceptualize power as dispersed extremely broadly in “spheres of culture, ideas, everyday practices [and] science.” In sum, if microeconomic theory is all about individual economic gain disconnected from politics, political gain is all about special interest “rent seeking” divorce from collective needs and power is defined so broadly that it is so diffused as to exists everywhere, Rodgers asks whether power is in fact “nothing at all.” If power is nothing at all for us, that leaves most of us collectively powerless. Read the rest of this post »

  November 8, 2011 at 12:36 am   Posted in: Book Reviews, Civil Rights, Constitutional Law, Political Economy, Politics, Psychology and Behavior, Supreme Court, Uncategorized   Print This Post   4 Comments

Science and Employment: You Must Remember This, The Fundamental Things Apply As Time Goes By

posted by Deven Desai

Here are some pointed questions about science, innovation, and technological progress:

First: What can be done, consistent with military security, and with the prior approval of the military authorities, to make known to the world as soon as possible the contributions which have been made during our war effort to scientific knowledge?

The diffusion of such knowledge should help us stimulate new enterprises, provide jobs for our returning servicemen and other workers, and make possible great strides for the improvement of the national well-being.

Second: With particular reference to the war of science against disease, what can be done now to organize a program for continuing in the future the work which has been done in medicine and related sciences?

The fact that the annual deaths in this country from one or two diseases alone are far in excess of the total number of lives lost by us in battle during this war should make us conscious of the duty we owe future generations.

Third: What can the Government do now and in the future to aid research activities by public and private organizations?

The proper roles of public and of private research, and their interrelation, should be carefully considered.

Fourth: Can an effective program be proposed for discovering and developing scientific talent in American youth so that the continuing future of scientific research in this country may be assured on a level comparable to what has been done during the war?

New frontiers of the mind are before us, and if they are pioneered with the same vision, boldness, and drive with which we have waged this war we can create a fuller and more fruitful employment and a fuller and more fruitful life.

War should be understood as the military actions in Asia and the war on terror.

By now you all may have wondered, “What the heck is Deven doing talking about war (good God, y’all, what is it good for)?” Or something like that. And some of you may have figured out that all of the above except “War should be understood as the military actions in Asia and the war on terror”, which I threw in to try and seem like the ideas are from today, is from President Roosevelt’s letter to Vannevar Bush.

Funny how little changes overtime. Jobs, medical progress, public/private collaboration, the future of science education are all on our minds today. They have been a core issue since at least 1944. The full history of Science the Endless Frontier is hosted by the NSF. It is a fun read. Well, if you are absurdly nerdy, it is a fun read.

There are many things to enjoy in the report. One part that jumped out at me is his idea about employment and science. I may write more as I digest the report in general. For now take a read:

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  November 3, 2011 at 8:06 pm   Posted in: Education, Innovation, Political Economy   Print This Post   3 Comments

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