Browsed by
Tag: Wendy McElroy

The Internet Memory Hole – Article by Wendy McElroy

The Internet Memory Hole – Article by Wendy McElroy

Comments 0 Comment
The New Renaissance Hat
Wendy McElroy
November 24, 2014
******************************

Imagine you are considering a candidate as a caregiver for your child. Or maybe you are vetting an applicant for a sensitive position in your company. Perhaps you’re researching a public figure for class or endorsing him in some manner. Whatever the situation, you open your browser and assess the linked information that pops up from a search. Nothing criminal or otherwise objectionable is present, so you proceed with confidence. But what if the information required for you to make a reasoned assessment had been removed by the individual himself?

Under “the right to be forgotten,” a new “human right” established in the European Union in 2012, people can legally require a search engine to delete links to their names, even if information at the linked source is true and involves a public matter such as an arrest. The Google form for requesting removal asks the legally relevant question of why the link is “irrelevant, outdated, or otherwise objectionable.” Then it is up to the search engine to determine whether to delete the link.

The law’s purpose is to prevent people from being stigmatized for life. The effect, however, is to limit freedom of the press, freedom of speech, and access to information. Each person becomes a potential censor who can rewrite history for personal advantage.

It couldn’t happen here

The process of creating such a law in the United States is already underway. American law is increasingly driven by public opinion and polls. The IT security company Software Advice recently conducted a survey that found that “sixty-one percent of Americans believe some version of the right to be forgotten is necessary,” and “thirty-nine percent want a European-style blanket right to be forgotten, without restrictions.” And politicians love to give voters what they want.

In January 2015, California will enforce the Privacy Rights for California Minors in the Digital World law. This is the first state version of a “right to be forgotten” law. It requires “the operator of an Internet Web site, online service, online application, or mobile application to permit a minor, who is a registered user … to remove, or to request and obtain removal of, content or information posted … by the minor.” (There are some exceptions.)

Meanwhile, the consumer-rights group Consumer Watchdog has floated the idea that Google should voluntarily provide Americans with the right to be forgotten. On September 30, 2014, Forbes stated, “The fight for the right to be forgotten is certainly coming to the U.S., and sooner than you may think.” For one thing, there is a continuing hue and cry about embarrassing photos of minors and celebrities being circulated.

Who and what deserves to be forgotten?

What form would the laws likely take? In the Stanford Law Review (February 13, 2012), legal commentator Jeffrey Rosen presented three categories of information that would be vulnerable if the EU rules became a model. First, material posted could be “unlinked” at the poster’s request. Second, material copied by another site could “almost certainly” be unlinked at the original poster’s request unless its retention was deemed “necessary” to “the right of freedom of expression.” Rosen explained, “Essentially, this puts the burden on” the publisher to prove that the link “is a legitimate journalistic (or literary or artistic) exercise.” Third, the commentary of one individual about another, whether truthful or not, could be vulnerable. Rosen observed that the EU includes “takedown requests for truthful information posted by others.… I can demand takedown and the burden, once again, is on the third party to prove that it falls within the exception for journalistic, artistic, or literary exception.”

Search engines have an incentive to honor requests rather than to absorb the legal cost of fighting them. Rosen said, “The right to be forgotten could make Facebook and Google, for example, liable for up to two percent of their global income if they fail to remove photos that people post about themselves and later regret, even if the photos have been widely distributed already.” An October 12, 2014, article in the UK Daily Mail indicated the impact of compliance on the free flow of public information. The headline: “Google deletes 18,000 UK links under ‘right to be forgotten’ laws in just a month: 60% of Europe-wide requests come from fraudsters, criminals and sex offenders.”

American backlash

America protects the freedoms of speech and the press more vigorously than Europe does. Even California’s limited version of a “right to be forgotten” bill has elicited sharp criticism from civil libertarians and tech-freedom advocates. The IT site TechCrunch expressed the main practical objection: “The web is chaotic, viral, and interconnected. Either the law is completely toothless, or it sets in motion a very scary anti-information snowball.” TechCrunch also expressed the main political objection: The bill “appears to create a head-on collision between privacy law and the First Amendment.”

Conflict between untrue information and free speech need not occur. Peter Fleischer, Google’s global privacy counsel, explained, “Traditional law has mechanisms, like defamation and libel law, to allow a person to seek redress against someone who publishes untrue information about him.… The legal standards are long-standing and fairly clear.” Defamation and libel are controversial issues within the libertarian community, but the point here is that defense against untrue information already exists.

What of true information? Truth is a defense against being charged with defamation or libel. America tends to value freedom of expression above privacy rights. It is no coincidence that the First Amendment is first among the rights protected by the Constitution. And any “right” to delete the truth from the public sphere runs counter to the American tradition of an open public square where information is debated and weighed.

Moreover, even true information can have powerful privacy protection. For example, the Fourth Amendment prohibits the use of data that is collected via unwarranted search and seizure. The Fourteenth Amendment is deemed by the Supreme Court to offer a general protection to family information. And then there are the “protections” of patents, trade secrets, copyrighted literature, and a wide range of products that originate in the mind. Intellectual property is controversial, too. But again, the point here is that defenses already exist.

Reputation capital

Reputation capital consists of the good or bad opinions that a community holds of an individual over time. It is not always accurate, but it is what people think. The opinion is often based on past behaviors, which are sometimes viewed as an indicator of future behavior. In business endeavors, reputation capital is so valuable that aspiring employees will work for free as interns in order to accrue experience and recommendations. Businesses will take a loss to replace an item or to otherwise credit a customer in order to establish a name for fairness. Reputation is thus a path to being hired and to attracting more business. It is a nonfinancial reward for establishing the reliability and good character upon which financial remuneration often rests.

Conversely, if an employee’s bad acts are publicized, then a red flag goes up for future employers who might consider his application. If a company defrauds customers, community gossip could drive it out of business. In the case of negative reputation capital, the person or business who considers dealing with the “reputation deficient” individual is the one who benefits by realizing a risk is involved. Services, such as eBay, often build this benefit into their structure by having buyers or sellers rate individuals. By one estimate, a 1 percent negative rating can reduce the price of an eBay good by 4 percent. This system establishes a strong incentive to build positive reputation capital.

Reputation capital is particularly important because it is one of the key answers to the question, “Without government interference, how do you ensure the quality of goods and services?” In a highly competitive marketplace, reputation becomes a path to success or to failure.

Right-to-be-forgotten laws offer a second chance to an individual who has made a mistake. This is a humane option that many people may choose to extend, especially if the individual will work for less money or offer some other advantage in order to win back his reputation capital. But the association should be a choice. The humane nature of a second chance should not overwhelm the need of others for public information to assess the risks involved in dealing with someone. Indeed, this risk assessment provides the very basis of the burgeoning sharing economy.

History and culture are memory

In “The Right to Be Forgotten: An Insult to Latin American History,” Eduardo Bertoni offers a potent argument. He writes that the law’s “name itself“ is “an affront to Latin America; rather than promoting this type of erasure, we have spent the past few decades in search of the truth regarding what occurred during the dark years of the military dictatorships.” History is little more than preserved memory. Arguably, culture itself lives or dies depending on what is remembered and shared.

And yet, because the right to be forgotten has the politically seductive ring of fairness, it is becoming a popular view. Fleischer called privacy “the new black in censorship fashion.” And it may be increasingly on display in America.

Wendy McElroy (wendy@wendymcelroy.com) is an author, editor of ifeminists.com, and Research Fellow at The Independent Institute (independent.org).

This article was originally published by The Foundation for Economic Education.

Ludd vs. Schumpeter: Fear of Robot Labor is Fear of the Free Market – Article by Wendy McElroy

Ludd vs. Schumpeter: Fear of Robot Labor is Fear of the Free Market – Article by Wendy McElroy

Comments 0 Comment
The New Renaissance Hat
Wendy McElroy
September 18, 2014
******************************

“Report Suggests Nearly Half of U.S. Jobs Are Vulnerable to Computerization,” screams a headline. The cry of “robots are coming to take our jobs!” is ringing across North America. But the concern reveals nothing so much as a fear—and misunderstanding—of the free market.

In the short term, robotics will cause some job dislocation; in the long term, labor patterns will simply shift. The use of robotics to increase productivity while decreasing costs works basically the same way as past technological advances, like the production line, have worked. Those advances improved the quality of life of billions of people and created new forms of employment that were unimaginable at the time.

Given that reality, the cry that should be heard is, “Beware of monopolies controlling technology through restrictive patents or other government-granted privilege.”

The robots are coming!

Actually, they are here already. Technological advance is an inherent aspect of a free market in which innovators seeks to produce more value at a lower cost. Entrepreneurs want a market edge. Computerization, industrial control systems, and robotics have become an integral part of that quest. Many manual jobs, such as factory-line assembly, have been phased out and replaced by others, such jobs related to technology, the Internet, and games. For a number of reasons, however, robots are poised to become villains of unemployment. Two reasons come to mind:

1. Robots are now highly developed and less expensive. Such traits make them an increasingly popular option. The Banque de Luxembourg News offered a snapshot:

The currently-estimated average unit cost of around $50,000 should certainly decrease further with the arrival of “low-cost” robots on the market. This is particularly the case for “Baxter,” the humanoid robot with evolving artificial intelligence from the US company Rethink Robotics, or “Universal 5” from the Danish company Universal Robots, priced at just $22,000 and $34,000 respectively.

Better, faster, and cheaper are the bases of increased productivity.

2. Robots will be interacting more directly with the general public. The fast-food industry is a good example. People may be accustomed to ATMs, but a robotic kiosk that asks, “Do you want fries with that?” will occasion widespread public comment, albeit temporarily.

Comment from displaced fast-food restaurant workers may not be so transient. NBC News recently described a strike by workers in an estimated 150 cities. The workers’ main demand was a $15 minimum wage, but they also called for better working conditions. The protesters, ironically, are speeding up their own unemployment by making themselves expensive and difficult to manage.

Labor costs

Compared to humans, robots are cheaper to employ—partly for natural reasons and partly because of government intervention.

Among the natural costs are training, safety needs, overtime, and personnel problems such as hiring, firing and on-the-job theft. Now, according to Singularity Hub, robots can also be more productive in certain roles. They  “can make a burger in 10 seconds (360/hr). Fast yes, but also superior quality. Because the restaurant is free to spend its savings on better ingredients, it can make gourmet burgers at fast food prices.”

Government-imposed costs include minimum-wage laws and mandated benefits, as well as discrimination, liability, and other employment lawsuits. The employment advisory Workforce explained, “Defending a case through discovery and a ruling on a motion for summary judgment can cost an employer between $75,000 and $125,000. If an employer loses summary judgment—which, much more often than not, is the case—the employer can expect to spend a total of $175,000 to $250,000 to take a case to a jury verdict at trial.”

At some point, human labor will make sense only to restaurants that wish to preserve the “personal touch” or to fill a niche.

The underlying message of robotechnophobia

The tech site Motherboard aptly commented, “The coming age of robot workers chiefly reflects a tension that’s been around since the first common lands were enclosed by landowners who declared them private property: that between labour and the owners of capital. The future of labour in the robot age has everything to do with capitalism.”

Ironically, Motherboard points to one critic of capitalism who defended technological advances in production: none other than Karl Marx. He called machines “fixed capital.” The defense occurs in a segment called “The Fragment on Machines”  in the unfinished but published manuscript Grundrisse der Kritik der Politischen Ökonomie (Outlines of the Critique of Political Economy).

Marx believed the “variable capital” (workers) dislocated by machines would be freed from the exploitation of their “surplus labor,” the difference between their wages and the selling price of a product, which the capitalist pockets as profit. Machines would benefit “emancipated labour” because capitalists would “employ people upon something not directly and immediately productive, e.g. in the erection of machinery.” The relationship change would revolutionize society and hasten the end of capitalism itself.

Never mind that the idea of “surplus labor” is intellectually bankrupt, technology ended up strengthening capitalism. But Marx was right about one thing: Many workers have been emancipated from soul-deadening, repetitive labor. Many who feared technology did so because they viewed society as static. The free market is the opposite. It is a dynamic, quick-response ecosystem of value. Internet pioneer Vint Cerf argues, “Historically, technology has created more jobs than it destroys and there is no reason to think otherwise in this case.”

Forbes pointed out that U.S. unemployment rates have changed little over the past 120 years (1890 to 2014) despite massive advances in workplace technology:

There have been three major spikes in unemployment, all caused by financiers, not by engineers: the railroad and bank failures of the Panic of 1893, the bank failures of the Great Depression, and finally the Great Recession of our era, also stemming from bank failures. And each time, once the bankers and policymakers got their houses in order, businesses, engineers, and entrepreneurs restored growth and employment.

The drive to make society static is powerful obstacle to that restored employment. How does society become static? A key word in the answer is “monopoly.” But we should not equivocate on two forms of monopoly.

A monopoly established by aggressive innovation and excellence will dominate only as long as it produces better or less expensive goods than others can. Monopolies created by crony capitalism are entrenched expressions of privilege that serve elite interests. Crony capitalism is the economic arrangement by which business success depends upon having a close relationship with government, including legal privileges.

Restrictive patents are a basic building block of crony capitalism because they grant a business the “right” to exclude competition. Many libertarians deny the legitimacy of any patents. The nineteenth century classical liberal Eugen von Böhm-Bawerk rejected patents on classically Austrian grounds. He called them “legally compulsive relationships of patronage which are based on a vendor’s exclusive right of sale”: in short, a government-granted privilege that violated every man’s right to compete freely. Modern critics of patents include the Austrian economist Murray Rothbard and intellectual property attorney Stephan Kinsella.

Pharmaceuticals and technology are particularly patent-hungry. The extent of the hunger can be gauged by how much money companies spend to protect their intellectual property rights. In 2011, Apple and Google reportedly spent more on patent lawsuits and purchases than on research and development. A New York Times article addressed the costs imposed on tech companies by “patent trolls”—people who do not produce or supply services based on patents they own but use them only to collect licensing fees and legal settlements. “Litigation costs in the United States related to patent assertion entities [trolls],” the article claimed, “totaled nearly $30 billion in 2011, more than four times the costs in 2005.” These costs and associated ones, like patent infringement insurance, harm a society’s productivity by creating stasis and  preventing competition.

Dean Baker, co-director of the progressive Center for Economic Policy Research, described the difference between robots produced on the marketplace and robots produced by monopoly. Private producers “won’t directly get rich” because “robots will presumably be relatively cheap to make. After all, we can have robots make them. If the owners of robots get really rich it will be because the government has given them patent monopolies so that they can collect lots of money from anyone who wants to buy or build a robot.”  The monopoly “tax” will be passed on to impoverish both consumers and employees.

Conclusion

Ultimately, we should return again to the wisdom of Joseph Schumpeter, who reminds us that technological progress, while it can change the patterns of production, tends to free up resources for new uses, making life better over the long term. In other words, the displacement of workers by robots is just creative destruction in action. Just as the car starter replaced the buggy whip, the robot might replace the burger-flipper. Perhaps the burger-flipper will migrate to a new profession, such as caring for an elderly person or cleaning homes for busy professionals. But there are always new ways to create value.

An increased use of robots will cause labor dislocation, which will be painful for many workers in the near term. But if market forces are allowed to function, the dislocation will be temporary. And if history is a guide, the replacement jobs will require skills that better express what it means to be human: communication, problem-solving, creation, and caregiving.

Wendy McElroy (wendy@wendymcelroy.com) is an author, editor of ifeminists.com, and Research Fellow at The Independent Institute (independent.org).

This article was originally published by The Foundation for Economic Education.