Uncertainty

Markets hate uncertainty.

That’s why big companies prefer certain tyranny to uncertain anarchy. It’s why many more Americans are doing business in Beijing than in Moscow. I think it’s why IBM cooperated with Hitler as alleged in Edwin Black’s new book “IBM and the Holocaust: The Strategic Alliance Between Nazi Germany and America’s Most Powerful Corporation.”

Uncertainty has everything to do with the failure of the Internet recession to turn around quickly. Parents are uncertain for their kids, but adults are uncertain whether their viewing of legal materials will get them in trouble. Record companies are certain kids are violating their copyright, leaving music lovers uncertain if “Big Brother” is watching them in the name of controlling copyright.

There is uncertainty in the real world, too. But there are also ways to protect yourself. Locks and gates and mace and self-defense courses provide some protection. You also need to go out of your way to break most laws, and that provides protection as well.

But the best protection you have in the real world is the rule of law. The borders of what is legal and illegal are clearly marked. There are procedures and rights and both civil and criminal penalties. It’s not perfect (what is?), but it provides enough certainty for the Internet economy to thrive.

On the Internet, actions that may be illegal (or violate someone’s property rights) are nonetheless easy to commit. It is designed as an anonymous, global network. This makes it a great tool for people fighting “every tyranny over the mind of man.”

Unfortunately, tyranny, like love, is in the eye of the beholder. So efforts have now begun to make local laws of all kinds enforceable over the Net. This is true both for criminal and for civil laws, and for standards that vary widely from place to place.

The result is an escalating war. Police and civil plaintiffs have joined global tyrants like China on one side. Hackers and many ordinary users have joined the opponents of tyranny on the other side.

Which side wins doesn’t matter. The merits of any side in any case don’t matter. What matters today is that a struggle has begun. Struggles imply uncertainty, both for the combatants and regarding the final result.

To return to my original point, markets hate uncertainty.

The best solution for all of these troubles is a market solution. That would imply a compromise between copyright holders and music lovers, between employers and employees, between law and the natural Internet.

A compromise agreed to by 99 percent of us would allow the forces of the law to concentrate on the remaining 1 percent, without further empowering those tyrants who (like China’s) see liberti, egaliti, and fraterniti (not to mention life, liberty, and the pursuit of happiness) as threats to order that must perish from the Earth.

In other words, any tool that serves absolute adherence to easily broken law serves the interests of absolutists. If we’re to break out of this box and get the Internet economy going again, we need to lighten up and embrace relativity.

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