Free Speech In The Age Of The Internet

Not too long ago, the internet used to be a very free space. It seemed out of reach from governments, and was almost entirely unregulated. Users felt free to publish almost anything they liked, and they could do so anonymously. The internet, therefore, was a hope for everyone with non-mainstream opinions that their voices could finally break through the protected consensus of the mainstream.

This hope was certainly justified. The internet still is very much a force for good. But like all forces for good, the government tends to hate them. And so Leviathan has been eager to jump on it. The state is trying to make the internet a force for its own good. The progress made in that endeavor during the last decade is very worrying.

Edward Snowden, who worked for the NSA, was the first to blow the whistle. His revelations revealed that western governments had very advanced programs to use the internet to control society. Before Snowden, few people had thought about the consequences that most of what we do these days leaves some traces on the internet. I certainly was not worried about it. But Snowden made the public aware that, by hovering up all these information, the government could potentially know about almost everything we are up to in our lives.

This is not just a problem for really bad guys, like terrorists. The secrecy of private lives has been an effective tool against a lot of government tyranny. Whenever the official rules of the state became too silly, a lot of people just secretly stopped following them. The state essentially needed to be good enough, so that most people followed the rules out of conviction. The prospect of the state being able to take away this kind of effective protest is truly frightening. For the first time, Snowden revealed that the internet did not necessarily have to be a force for good. If we are not careful, it could turn out as a tool for real enslavement.

Nevertheless, the fact that everyone can now publish their opinions cheaply, and on multiple platforms, remains extremely powerful. After all, in many western countries there are still laws in place which, at least formally, guarantee a certain amount of free speech. These laws date back to times, when it was significantly more complicated and costly to make one’s voice heard. The establishment therefore usually did not see free speech as too much of a threat.

In fact allowing people to express their opinions, while at the same time not giving them a platform, can be an effective tool for controlling opposition. The moment the government locks up dissidents, they can claim to be a victim of an oppressive regime. This tends to draw support to them. At the same time, leaving someone alone without platforming him, but giving him hope that his voice might be heard in the future, gives that person an incentive to not go too far with his opposition. As long as he believes he can make his voice heard in the future, he might still play along with the system, even though the system is very much rigged against him.

But with the internet, people now have a very real chance of finding an audience. The internet has indeed shown to be the game changer that it was promised to be at the beginning. Since the people in power often believe their own propaganda, they have been very late to realize, how much they have been loosing control over the narrative of debates.

The big wakeup call came with Brexit and the election of Trump. Both events were completely unexpected to the established forces. They were so hit by surprise that it took them a while to realize why voters had turned against them. A lot of people simply do not get their information from officially briefed sources anymore.

Since the establishment had this epiphany, we have seen frantic attempts to win back control. There has been an increase in legal speech prohibitions in almost every western country, with the possible exception of the US. Only last week we saw Scottish YouTuber Markus Meechan, who goes under the name Count Dankula, being convicted in a court of law for hate speech. His crime was to make a joke for his girlfriend, by teaching her pug to perform a Nazi salute to the words “gas the jews”. Meechan is not actually a Nazi. Far from it, he explains at the beginning of the video that he thinks Nazis are the most offensive thing he could imagine. The goal was not to spread hatred, but to teach his girlfriend wrong, who claimed that her pug could not possible do anything that is not cute.

None of that of cause matters. Free speech is meaningless if it is not allowed to offend people. Unless someone is issuing a concrete and believable thread, or is involved in planning a violent crime, everyone should be free to say whatever he or she likes. A Precedence like the Meehan case clearly shows that the government is trying to clamp down on free speech.

Last year, we saw the UK government even proposing punishments of up to 15 years in prison for people who merely watch “extremist” content online. This is allegedly targeted at supporters of terrorist groups. However, all it takes is a precedent from a judge to extend this law to cover all kinds of opposition to the government. True opposition can easily be portrayed as extremist. But if merely watching content online becomes a crime, punishable by multiple years in prison, we are truly in deep tyranny territory.

The bigger strategy to get back in control of the narrative, however, does not seem to be outright speech prohibitions. Especially in the US, these would face some serious legal hurdles. Instead, the strategy seems to be to somehow go back to the good old days of being able to deny someone a platform.

After the Trump election, a narrative has been spun to make alternative news sources look like tools for evil forces. The phrase ‘fake news’ was introduced to differentiate between legitimate, meaning establishment, information, and uncontrolled news sources. Introducing the label ‘fake news’ would be little more than amusing if it had stopped there. But unfortunately, we are seeing an outright criminalization of everything that is not approved media content.

This would usually look like a cause doomed to fail, giving how easy it is to publish anything on the internet. But unfortunately, the way the online distribution of information appears to work at the moment does give the government a chance of succeeding. While it is true that everyone can publish anything easily on the internet, that is not to say that it is easy to find an audience.

Social media has a huge effect on which content people consume. What does and does not appear in the news feed of Facebook and Twitter, or in the search results of Google and YouTube, very much influences opinions. And these few companies very much control a huge amount of the distribution, and advertisement of alternative media.

From a libertarian perspective this could sound like good news. If distribution is in the hands of private companies, then there is little to worry about, right? Private companies, for the most part, do not have political agendas. They just want to make a profit. That means, they have an economic incentive to make as many customers happy as possible.

Unfortunately, this is only true in a free market system. What we have today, however, is crony capitalism. In today’s system, whenever a company reaches a certain size, or whenever a company crosses political interests, a collusion between the government and that company can be observed. After all, the government can make business very difficult for pretty much anyone. It is therefore difficult to say no to the mob.

How do we know that this is happening? Well, first of all, it is naïve to believe that the state would simply stand bank when one of its core interests is threatened. Many people have long suspected that the reason google is the best search engine is because they get help from the intelligence community in the US.

But we don’t even need to go into conspiracy theories. The collusion is happening very overtly. Governments simply have declared the media platforms to be responsible for the content that its users post. As a result, Facebook, Twitter and YouTube, who have a quasi monopoly, have started to censorship user content. And they are not just censoring posts that are against some laws. They are keenly censoring anything that even remotely might get them any negative criticism from the establishment, just in case.

There clearly is no will to resist government influence. These companies are more than happy to go along with an established agenda. On the other hand, the pressure they are put under by the government is certainly huge. Campaigns to demonize content are being lounged very aggressively. Anyone who is on the wrong side of the news, is attacked as being an illegitimate actor.

The most prominent villain has been made out to be Russia, who is accused of “interfering” in elections by simply talking to people on social media. I wrote about this here. But there are other scapegoats. The latest scandal is the use of Facebook data by the company Cambridge Analytics. As already in the Russian scandal, there is a lot of noise, but it is actually not so easy to find out what the exact accusations are. I might be wrong, but as far as I can tell, Cambridge Analytics is not actually accused of breaking the law. Instead, the company is accused of unethically collecting user information on Facebook, by burying the agreement to share these information in the terms and conditions of its apps. And we all know that no one reads those. It then used these information to provide a superior advertisement service.

If this is true, than it is not clear what the huge scandal is about. Sure, Cambridge Analytics might have got some information about users that the users were not really happy to share. While that would not be very good, the harm done in this case does not seem to be huge. After all the company did not use these information to steal or harm users in any other way. It simply used it for tailor made advertisement.

The fact that Facebook excessively collects its user’s data, and uses it to influence people on the network, has been well know for a long time now. Many users feel uncomfortable about it. I know a number of people who have left the platform for that reason. I myself have a ‘strictly no private stuff’ policy when it comes to using Facebook. As a consequence, user numbers are declining, and the average time spend on Facebook is down 24%. That is huge. If the Cambridge Analytics scandal will turn the psychology of users against using Facebook even more, than that is certainly a net positive as far as I am concerned.

Still, one has to ask why this particular case sparks so much outrage. One cannot help but get the impression that the real “crime” of Cambridge Analytics was to work for the wrong team in the last US election. What if they had worked for the Clinton campaign, or to promote an officially accepted cause, like climate change? I am willing to bet anything that in that case, we would have never heard much about it. And if we did, the media would have presented Cambridge Analytics in a very different, much more positive, light.

In fact, we don’t really have to wonder about this. As a number of commentators have pointed out, Obama employed very similar advertisement tactics in the 2012 election. This was not a big scandal at all. No one seemed to have be bothered by it. And the difference between the two cases is clear – advertising the election of Obama is officially approved, while advertising Trump is not.

All of this makes it increasingly obvious that the domination of distributing content online by a very few big players is a real problem. It gives governments a handle on attempting to control the narrative. Making distributers of information responsible for the media content on their networks is a quite clever stroke of genius. That way, we will likely overshoot on the censorship side, without the government having to formally make it look like they are clamping down on freedom of speech. But this strategy would not be so easily possible if it wasn’t for the fact that we have quasi social media monopolies.

What can be done about it? I have heard a lot of people suggesting that we need to get the government involved in controlling these monopolistic platforms. This would apparently guarantee more fairness. At the very least there should be strict regulations.

Unsurprisingly, this seems like a really bad idea to me. I really do believe that the government is the real villain in all of this. Facebook, Twitter and YouTube were not too bother censoring information before the state threatened them, and made a lot of noise about it. Putting the state officially in charge of these platform would only make things a lot worse.

It seems that the only possible answer to this problem is more consumer responsibility. Users need to demand less interference, and move to alternative platforms if possible. This is certainly easier said than done. The reason why there are so few players in this field is, because one of the major benefits of big platforms is a network effect. As consumers, we want to have as easy as possible access to all information. More importantly, content providers want to use platforms on which they can reach a maximum amount of people. If, however, all information are in the same place, we are necessarily talking about a quasi monopoly.

So the only solution seems to be to make a compromise to reduce one’s benefits of a network effect in exchange for having fewer interferences. But this could turn out to be a too big compromise for many people to make. Still, with the degree of interference that we are seeing at the moment, it seems likely that a large enough number of people will eventually make that compromise and move to alternative platforms.

In fact, this is what we are seeing already in the last few months. As mentioned, user time on Facebook is down 24%. Market monopolies don’t tend to last forever. Very few of the biggest major companies from a century ago are still around today. I shell be very surprised if Facebook will still be the dominant platform 20 years from now. At some point users will have enough of it. If nothing else, Facebook will at some point become old and not hip anymore. All the cool kids will be on the new popular platform X.

I witnessed the speed with which such change in psychology can happen myself when I was still living in Germany. Before there was Facebook, another social network called StudiVZ was very popular there. Within a very short time, it was so popular that one had to be on it in order to maintain a normal social life. Then, suddenly, people liked Facebook more and an exodus from StudiVZ began. Within a year, the network went from being so popular that no one could afford not to be on it, to being completely dead. That is how quickly it can go. Something similar happened of course to myspace.

Meaning, if there is any major shift in psychology against Facebook, the social network could very well go from having a quasi monopoly to being out of business very quickly. This seems inconceivable to most people now, and I am not predicting this to happen within the next year. But it seems almost certain to me that social media platforms will be subject to fashions. And that means that at some point in the future the network effect will work against Facebook.

In free markets, consumers have powers and responsibilities. Simply complaining about the policies of a company, without being willing to take action and move to the competition, is usually not very effective. On markets, everyone acts according to incentives. And the big companies have no incentive to resist the influence of governments. An institution that has a monopoly on physical force has the ability to make offers that no one can refuse. We therefore need to educating internet users about their responsibilities as consumers in order to change the psychology against companies that have become too powerful. I am not saying it is easy, but it is the only way, and it can clearly be done.

Stability as a Business Model

Google is making the news in the UK for an agreement with the government to pay an additional £130 000 000 in taxes that it allegedly owes the state for past business in this country. While the government argues that this is a great deal, the opposition criticizes the arrangement as not nearly going far enough. According to them, google owes the state a lot more money than that. Numbers up to £700 000 000 are being discussed in the media.

To anyone who understands economics, all of this is of course terrible news. This huge amount of cash is being taken away from the great entrepreneurs at google, and it is being given to the unproductive, bureaucratic hands of the state. Google could have used the money to invent the next new exciting technology or improve their already existing excellent services. The result would have been an increase in life quality for pretty much all of us. Instead, all that capital is now being allocated by unproductive central planners. That means it will at best be used very inefficiently to produce things that aren’t completely useless, like for example roads. Things that would have most likely been produced anyway, but now they are probably being produced in a very inefficient way. More realistically however a lot of that capital will simply be destroyed, meaning it will be put to no productive use whatsoever by the gigantic wealth destroying machine that is the state. The worst case scenario, but unfortunately very realistic, is that the capital will not just be destroyed, but instead it will be used to prevent a lot of other entrepreneurs from creating wealth. It will be used to distort the free market and therefore produce misallocations of privately owned capital as well. In other words, the damage that is being caused to all of us from making people pay taxes, in particular very productive companies like google, cannot be overestimated.

And yet, it is only a small minority of hardcore libertarians who seem to object. Even people who are very sympathetic to free markets nevertheless often defend the state in principle for its ‘right’ to demand taxes. The argument here goes that in return for the taxes the state provides some services that are worth paying for. And the UK, so the argument, is a particularly good service provider. That is why so many companies want to have their headquarters and/or do business here. Clearly they benefit from the UK, and in return, it is only fair if they pay some taxes.

But I am confused. What services exactly are the UK providing to companies? Maybe security? That cannot really be it. Go into any office building, and you will observe the security there being run not by the police but by private companies. It is private security men that sit at the reception. Buildings are locked and secured by privately installed security and CCTV systems, bought from other private companies. It is no secret that the private security industry employs significantly more people than the state. That is because anyone who really has something worth protecting would be outright stupid to entrust that protection to the state.

So if it is not security, then what else is the UK offering that would justify a minimum service bill of £130 000 000. Servers? A phone network? All of these are privately owned, and we know from the past, and really just from good economic theory, that they are much better off in private than in state hands. So what is it that seems to attract companies to the UK?

The answer that one often gets is that the UK provides stability. You know what you are getting. You have to pay what the law says you have to pay, not more and not less. If you have the legislature on your site, you have a good chance of having it enforced in a state court. And the state laws are fairly stable. The UK is not known for doing revolutionary legal changes. So companies know what they get and that means they can calculate with it. This stability is very important to make long term investment decisions. And in many countries you do not get this stability. In a lot of states, legal rules and even whole political systems can change over night and often they are utterly corrupt. That means that what is advertised in the state’s legislature is often not really what you are getting. If you are brave enough to build up a company in a corrupt state like say Russia for example, you may find that after you have been successful, Putin’s thugs will come in and take it away from you. If you protest against this, the government might in addition to taking your assets throw you in a Siberian jail. No wonder there aren’t any world class companies coming out of places like Russia.

So the UK is, according to many in the stability business. That however seems like a fairly odd service model to me. Usually, providing a service means to actively produce something of value to the recipient of that service. But the service of stability that the UK is providing seems to be to refrain from not hurting the customer more than already advertised. The UK does not say that it won’t hurt people doing business here. Paying £130 000 000 certainly hurts, even for a big company like google. The UK does not even say that it will hurt companies less than other countries. It is a high tax jurisdiction. All it say it that you will always know in advance how much the state is going to hurt you.

Maybe I should get into that industry. I will charge everyone coming through my street £5 for the service of not breaking their nose. I will be fair to advertise the service in advance and will make sure that it is stable. What, you thing you are getting a bad service? Think again! The guy controlling the next street is charging £10 for the same service. And in the three streets after that you never know what you get. Some people might have gotten a better deal. There have been many reports however, of people getting more than their nose broken and still being charged for it. So given that, my stable service of £5 for a not broken nose seems fair and competitive. But believe it or not I still have customers complaining. They say they would be better off without anyone providing stability services. Luckily those are only a few weirdos called libertarians.

Being a libertarian, it is mind boggling to me why people are simply excepting, even praising this anti service from the state. Certainly, in some weirdly twisted logic I can see that stability can be preferable over other thugs. However, calling that a service that justifies charging people is an additional slap in the face of the victims. That however is the moral universe of statism that we live in. Suddenly being the least bad thug is seen as a service.

The real kicker in the google case however is that the UK did not even provide the stability service. Google is not a tax protester that was breaking the law to make a point. It used completely legal loopholes in the legislature to legally get around paying taxes. In other words, google was playing by the rules. Then the government came in and said, ‘yes, you were playing by the rules, but you have to pay anyway’. So it seems that the UK is more and more desperate enough to even abandon the stability service model. And all this is happening under the cheers of the vast majority of the public. What a crazy society this is.