August 29, 2004  ·  Richard Posner

What particularly strikes me in reading over the comments (not that I’ve been able to read carefully all of them) is the challenge of managing uncertainty. It is uncertainty that pervades the topics that I’ve touched on in my postings and that have provoked many of the comments. I started with IP, where the underlying uncertainty is that we just don’t know the social value of creating enforceable legal rights in intellectual property. In the case of physical property, we know or think we know that something like the present definition of rights, including such limited exceptions to private property rights as eminent domain, adverse possession, trespass by necessity (e.g., driving onto someone’s lawn in order to avoid a collision with another vehicle), forfeiture for nonpayment of taxes, rights of business invitees, etc., is economically optimal. We don’t have any grounds for similar confidence with respect to IP rights. To abolish them altogether would almost certainly be inefficient; likewise to expand them much beyond their present scope; but that leaves a vast middle area. I think there are some reforms that can be advocated without worrying too much about fundamental questions, like allowing unauthorized copying of old copyrighted works that have little or no commercial value, as evidenced by failure to register them; and maybe that’s where we should concentrate our efforts.

The uncertainty concerning the proper scope of IP rights is magnified by the onrush of technology. As I said, repeating a Lessig point, law is relative to technology; technology can disrupt a balance carefully struck by law. But if we have no clear sense of where the balance should be struck, this makes it difficult to know what stance to take with relation to encryption technologies that enable IP owners to obtain greater protection from copiers than IP law would give them.

I am distrustful of people who think they have confident answers to such questions.

When we turn to such issues as global warming, other potential environmental disasters, and various forms of terrorism, again we are in the presence of profound uncertainties. There is an old but still useful distinction between “risk” and “uncertainty,” the former referring to contingencies to which a probability can be attached, the latter to contingencies to which no probability can be attached. The former is the domain of insurance and cost-benefit analysis. The latter? No one can assign a probability to any given time, place, or manner of a terrorist attack within a very broad range (obviously some possibilities can be excluded); and yet we have to take counterrorist measures; we have, in short, to manage uncertainty as well as risk.

There is finally a question of who should be heard on such matters. It is apparent from the comments that the commenters cover a very broad range with respect to expertise concerning particular topics. They’re a mixture, in other words, of specialists and generalists. I am a generalist, and some people think I shouldn’t be talking about most of the things I do talk about when I’m not judging or writing articles dealing with legal topics or applying economic analysis to legal topics. But in areas of uncertainty, areas where optimal responses cannot be reduced to formula, it seems to me that generalists are entitled to be heard, because specialists in such areas are likely to be acting on intuition and bias rather than on exact knowledge and cogent methodologies. Do we really want to turn over the design of our system of intelligence gathering and analysis to intelligence experts? And who are they, precisely, and do they agree with each other and if not what do we do?

It seems right that I should sign off with a question, even if it is rhetorical.

It’s been fun. Au revoir.

August 29, 2004  ·  Richard Posner

Interesting comments, as usual; and since this is my last day as Larry’s guest blogger, I think I’ll limit myself to responding to comments. (Unfortunately, I can’t respond to all–and of course some comments are responded to very well by other commenters. I am impressed by the quality and interactive character of many of the comments.)

One commenter corrected my statement that the Copenhagen Consensus had ranked global warming last on the list of the world’s ills. For one thing, the list is very incomplete (more on that below). For another, what the conferees were asked to rank were solutions, not problems. They were given three solutions to global warming, including the Kyoto Protocol, and didn’t like any of them.

But what a weird procedure! Not to ask the economists to rank the best solutions they could think of, but instead give them the solutions and tell them to rank them. So by his choice of solutions, the organizer could pretty much predetermine the results.

Another commenter asked: what makes me think global warming is the world’s most serious problem? Nothing; but it’s not what I think. The Copenhagen conferees were given a short, rather eccentric, list of problems; they were not asked what they think the most serious problems are. The list includes not only malnutrition, AIDS, and malaria, but also such things as water purity and trade barriers. In that list, it seems to me global warming is the most serious problem, though it doesn’t follow that we should adopt either the solutions put to the conferees, or any other solution: that depends on costs and benefits. Global warming would be very costly to arrest, so maybe we shouldn’t do anything about it, although for reasons I can’t adequately explain here but are spelled out in my book, I think we should.

If I were asked to list the greatest threats to the world, I would include global warming, but would add bioterrorism, nuclear terrorism, nuclear proliferation, biodiversity loss, cyberterrorism, nanotechnology, artificial intelligence/robotics, and asteroid collisions.

Asteroid collisions? I anticipate teasing comments asking me whether I’m also worried about invasions of aliens from other galaxies. (I’m not.) In fact the probability of a catastrophic asteroid collision, while small, has a greater expected cost than the $4 million that is all that NASA is spending a year to map NEOs (dangerous near-earth objects, i.e., asteroids whose orbits intersect the earth’s orbit. For a good discussion, see the report of the Task Force commissioned by the U.K.’s minister for science. It was less than a century ago that an asteroid a mere 60 meters or so in diameter exploded over Siberia with the force of a hydrogen bomb. Fortunately, the only casualties, so far as anyone knows, were the local reindeer. Maybe the next asteroid will explode above Los Angeles, sparing the reindeer. Of course that’s unlikely; cities occupy a minute fraction of the earth’s surface. But a slightly larger asteroid, wherever it landed, could inflict tens or even hundreds of millions of casualties from tsunamis, fire storms, shock waves, and dense clouds of debris that could block photosynthesis and even trigger catastrophic global warming.

A survey of global dangers, ranking them by expected costs, and analyzing cost-justified responses (if any), would be a great project, and one in which economists would play a key role. The “Copenhagen Conference,” however, strikes me as a parody of such an undertaking.

August 28, 2004  ·  Richard Posner

My posting on the Copenhagen conference, and its downgrading of global warming, provoked a neat hostile comment: you (Posner) criticize these economists for opining outside their fields, but isn’t that what you do all the time? Well, yes, but here’s my defense: you don’t have to be an expert in a field to criticize the experts, provided you know enough about the field to understand what the experts are saying and writing, to be able to spot internal contradictions and other logical lapses, sources of bias, arguments obviously not based on knowledge, carelessness in the use of evidence, lack of common sense, and mistaken predictions. These are the analytical tools that judges, who in our system are generalists rather than specialists, bring to the task of adjudicating cases in specialized fields of law.

I don’t have to be a climate scientist to realize that assembling a group of economists none of whom is a specialist in the science, politics, or economics of global warming, and asking them to reach a consensus on where to rank global warming among the world’s worst ills without conducting any research of their own, but instead by discussing a position paper commissioned from another economist by the organizer of the conference, is not a rational procedure. And there is more (see the Copenhagen Consensus website). The organizer, Bjorn Lomborg, a statistician and controversialist, not an economist, gave the conference participants a week to discuss 17 projects (three involving climate, the others involving health issues, malnutrition, water purity, and other disparate topics) and rank them. The results were publicized before any analytical or evidentiary backup was, and the very idea of pressing for consensus (unanimity) suggests, as in the case of the 9/11 Commission’s similar consensus drive, a basic lack of intellectual seriousness.

August 28, 2004  ·  Richard Posner

I thank commenter Craig for discovering that my review of the 9/11 Commission’s report, to be published tomorrow in the New York Times Book Review section, is now online. The review was written before Senator Roberts’ proposal to break up the CIA, but offers several reasons for thinking that the failure to prevent the 9/11 attacks, if it was indeed a culpable failure rather than an inevitable one, was primarily a managerial rather than a structural failure.

Issues of government organization are baffling. Where you have a boundary, you have a turf war; and if you erase the boundary, you lose diversity and competition, and with it the power of intelligent control. If only one person reports to you, you’re pretty much at his mercy; he’ll tell you just as much as he wants to.

I suggest in my review (despite my general skepticism about structural solutions) carving the domestic intelligence function out of the FBI and creating a stand-alone domestic intelligence agency, similar to England’s MI5; and I point out that MI5 and MI6 (England’s counterpart to the CIA) work well together because they’re both intelligence agencies. The FBI doesn’t work well with the CIA, because the FBI is not an intelligence agency, but a criminal investigation agency, in other words a plainclothes police department.

MI5 has no power of arrest; the power to arrest terrorists is lodged in the Special Branch of Scotland Yard, Scotland Yard being England’s counterpart to the FBI. Presumably MI5 has some of the same problems of coordinating with the Special Branch as the CIA does in coordinating with the FBI; in both cases, you have an intelligence agency working with a criminal investigation agency. But I think–though could well be wrong–that a section of the FBI that was, like the Special Branch of Scotland Yard, specialized to arresting and otherwise assisting in the criminal prosecution of terrorists would make a better fit with a domestic intelligence agency modeled on MI5 than the current counteterrorism branch of the FBI makes with the rest of the FBI. Because the dominant culture of the FBI is and probably always will be that of criminal investigating, intelligence officers lodged in the FBI will always seem odd men out; a person wanting a career in intelligence will not be attracted to working for a police deparment. But it is quite otherwise with someone wanting a career in the criminal investigation and prosecution of terrorists, a perfectly respectable and exciting field of police work. Such a unit in the FBI could holds its head high, and would at the same time have strong incentives to cooperate with a domestic intelligence agency.

Or so one can hope.

August 27, 2004  ·  Richard Posner

The following description of a recent conference on the world’s worst ills, featuring several economists who had been awarded the Nobel Prize in economics, enables me to sink global-warming skeptics and academic public intellectuals with only one salvo.

“An international panel of economists brought together to rank the world’s worst ills ended a weeklong conference in Copenhagen Saturday by listing HIV/AIDS, hunger, trade barriers and malaria as the world’s most pressing problems while relegating global warming to the near-bottom of the list. The eight economists at the Copenhagen Consensus � among them Nobel laureates Robert Fogel, Douglass North and Vernon Smith � were invited by maverick environmentalist Bjorn Lomborg to spend a hypothetical $50 billion in ways that would produce the most results. The panel unanimously gave HIV/AIDS top priority and recommended spending $27 billion to fight it, saying that although the costs were ‘considerable, they are tiny in relation to what can be gained.’ The issue deemed second in importance, malnutrition, was allocated $12 billion. The panel ranked trade liberalization third but allocated no funds to expand it. Fourth-ranked malaria received $13 billion.”

Each of these illuminati was paid $30,000 to attend the conference.

The AIDS epidemic is serious, but it does not threaten to destroy civilization; it is also readily controllable, without medical intervention, by avoidance of promiscuous sex. Malnutrition and malaria are serious problems too, but one effect of eliminating them would be to cause a population surge, which would in turn increase global warming, because added population means added energy demands (met primarily by burning fossil fuels) and added food demands (met in part by deforestation). Unlike AIDS, malnutrition, and malaria, global warming, especially if abrupt, could terminate civilization.

As I mentioned in a previous posting, the global climate equilibrium is fragile. In a period (known as the “Younger Dryas”) of only about a decade some 11,000 or 12,000 years ago, the earth’s temperature rose by 14 degrees Fahrenheit. The climate was very cold (it was the end of the last ice age) when the surge started, so no harm to human beings was done (rather the contrary); but imagine a similar surge today. Suppose the ice sheets that cover Greenland and Antarctica melted, raising ocean levels to the point at which most coastal regions, including many of the world�s largest cities, would be inundated. Or if the dilution of salt in the North Atlantic as a result of the melting of the north polar ice cap, the ice of which is largely salt free, diverted the Gulf Stream away from the continent of Europe. The dense salty water of the North Atlantic blocks the Atlantic currents from carrying warm water from the South Atlantic due north to the Arctic, instead deflecting the warm water east to Europe. That warm-water current is the Gulf Stream. If reduced salinity in the North Atlantic allowed the Gulf Stream to return to its natural northward path, the climate of the entire European continent would become like that of Siberia, and Europe�s agriculture would be destroyed.

Worse is possible. I mentioned in a previous posting the possibility of a runaway methane greenhouse effect, and here I add that it might be augmented by the effect of higher atmospheric temperatures in increasing the amount of water vapor in the atmosphere, because water vapor is another greenhouse gas. It is even conceivable that because increased rainstorms mean more clouds, and some clouds prevent sunlight from reaching the earth without blocking the heat reflected from the earth�s surface, global warming could (paradoxically) precipitate a new ice age�or worse. Falling temperatures might cause more precipitation to take the form of snow rather than rain, leading to a further drop in surface temperatures and creating more ice, which reflects sunlight better than seawater and earth (both of which are darker than ice) do. Surface temperatures might fall so far as to engender a return to �snowball earth.” The snowball-earth hypothesis is that 600 million years ago, and maybe at earlier times as well, the earth, including the equatorial regions, was for a time entirely covered by a layer of ice several kilometers thick except where the tips of volcanoes peeped through.

The hypothesis is controversial. It is unclear whether the conditions required for the initiation of snowball earth were ever present, and whether current or foreseeable conditions could cause such initiation. What is suggestive about the example is the ominous tipping or feedback effect that it illustrates (the domain of chaos theory). A relatively small change, such as an increase in rainfall caused by global warming, or an increase in the fraction of precipitation that takes the form of snow rather than rain, could trigger a drastic temperature spiral. The runaway greenhouse effect involving methane illustrates the same process in reverse, and, as in the rainfall example, one spiral can trigger the opposite spiral; that is the essence of a chaotic system.

The probability of abrupt global warming that would precipitate the disasters that I have described is unknown, but presumably small; yet economists know that to figure the expected cost of some risk, you must consider the consequences if a risk materializes, and not just the low probability that it will materialize. This point was missed by the “Copenhagen Consensus.” Nor is there any indication that the participants had studied the relevant science or conducted any cost-benefit analyses in deciding how to allocate their hypothetical $50 billion. Nor, I believe, were any of the economists experts in the economics of climate change. Economics is a large field, and the fact that one has received a Nobel Prize for work in economic history (Fogel), experimental economics (Smith), or the history of institutions (North) is no warrant of competence to opine on the economics of climate change.

August 27, 2004  ·  Richard Posner

In an article in WIRED called Insanely Destructive Devices, Larry Lessig discusses one of the greatest of possible techno-disasters, a terrorist-engendered smallpox epidemic. What gives it a technological dimension is that experiments have shown that genetic alteration of the smallpox virus, utilizing biotechnological techniques and equipment that are inexpensive and widely available, including in Third World countries, could make the “juiced up” virus not only more lethal than “ordinary smallpox” (which kills a “mere” 30 percent of its victims) but also, and more important, impervious to smallpox vaccines (and there is no cure for smallpox). Smallpox is highly contagious and because its initial symptoms are not distinctive, the disease could spread so far, for example by aerosolizers placed in major airports around the world, before it was discovered that quarantining would be instituted too late to be effective, even if health workers and security personnel could be induced, without vaccine protection, to enforce a quarantine. (There is a full discussion in Chapter 1 of my forthcoming book Catastrophe: Risk and Response.)

Lessig despairs of being able to come up with a technological or regulatory solution to this threat. Instead he suggests, with unmistakable reference to the foreign policy of the Bush Administration, that we should foreswear “our present course of unilateral cowboyism” which is “produc[ing] generations of angry souls seeking revenge on us”; we should “focus on ways to eliminate the reasons to annihilate us.” I don’t think so. The “reasons” are too various. Think of the Unabomber; what could we have done to remove his particular grievance? Think of the Islamist terrorists, for whom Western values, including the emancipation of women, are our greatest offense. And of course once we decide that the way to prevent terrorism is to change our way of life, we create new incentives for people who want us to change our way of life to resort to terrorism.

Lessig’s is a counsel of despair, and is premature. Although it is extremely difficult to prevent bioterrorism, it should not be impossible to reduce the risk of it substantially. Measures include an international organization patterned on the International Atomic Energy Agency (a solution the Administration has resisted), stricter restrictions on access to laboratory supplies of lethal pathogens and toxins–and such simple measures as not allowing airports to install aerosol fresheners, as they are doing–and nothing would be easier than for a terrorist to switch such a freshener with an aerosol dispenser containing a lethal pathogen.

Yet there is the standard, and very serious, dual-use dilemma. To develop effective vaccines against variants of lethal pathogens such as the smallpox virus, we need to create samples of these variants, these “juiced up,” bio-reingineered bacteria and viruses, and these sample are potential weapons and the techniques used to create them are techniques that bioterrorists could utilize. The more people we train to create new vaccines, the more people there are with knowledge that can be put to evil uses.

The solution to this dilemma is not obvious, but one possibility is to shift much of the research on new vaccines from open university facilities to closed university affiliates, such as MIT’s Lincoln Labs, which conduct classified research under more secure conditions that found or feasible in the ordinary university setting.

August 26, 2004  ·  Richard Posner

Good comments, and mostly supportive though some skeptical along the lines of climate models are complex, climate science is uncertain, the experts may be wrong. All true; but reading the skeptical literature, I am reminded of the debates in the 1960s over the effects of cigarette smoking on human health. The evidence for serious ill effects was already very strong, but there were skeptics, some financed by the tobacco industry, who said such things as: the evidence is statistical, the mechanism by which nicotine and tars cause changes in lung tissue, etc. is not well understood, and in short we can’t be certain that there are these effects–the implication being that we should do nothing. Similar points are made today, often by energy companies or persons in their pay, and similarly insinuating that, given uncertainty, we should do nothing.

That is a non sequitur. We rarely have the luxury of being able to act on certainties; you’d be a fool if, credibly informed that unless you had an operation to repair an aneurysm you had a 99 percent chance of dying within a week, you responded that you only act when you’re certain. In my last posting, I speculated that a 1 percent chance of criminal punishment might deter certain copyright violations, and I didn’t mean that only the irrational would be deterred.

What would be irrational would be to conclude, from the fact that a minority of scientists deride global warming fears, that we should ignore the problem. Indeed, if you look at their grounds for skepticism, you may become more alarmed about global warming rather than less so. Because what you will learn is that their skepticism is based mainly on the existence of profound uncertainties about climate, and those uncertainties cut both ways and by doing so imply added rather than diminished risk. For example, skeptics point out that in the earth’s prehistory there have been periods (one roughly 10,000 years ago) in which the concentration of carbon dioxide in the atmosphere spiked, even though cavemen didn’t drive SUVs. Yes, and if one of those non-human-induced spikes coincided with our human-induced spiking, we’ll be in real trouble.

I mentioned in passing, in the preceding posting, risk aversion. If you would rather pay $100 certain than run a 1 percent risk of a $9,999 loss, even though the expected cost of such a risk is only $99.99, then you’re risk averse (think of the $100 as an insurance premium). The greater the variance in possible outcomes, the more upset the risk averse are likely to be. The more uncertainty there is about climate, the greater the variance in possible consequences of increasing the atmospheric concentration of carbon dioxide (and of other greenhouse gases, such as methane, which is even more heat-retentive than carbon dioxide, and is being released into the atmosphere in increased quantity because of the melting of the Alaskan and Siberian permafrost–and you can see what a dangerous feedback effect is possible as more methane in the atmosphere raises surface temperatures which melts more permafrost releasing more methane…). So people who are risk averse, and that is most of us when we are facing potential disaster on the scale that global warming might inflict, will not be reassured by people who ground their global warming skepticism in nothing solider than a reminder that other things besides human activity affect climate; those other things seem as likely to exacerbate the effects of human activity as to offset them.

August 26, 2004  ·  Richard Posner

…the Justice Department is conducting criminal investigations of file-sharing networks. This development illustrates a point I made in a previous posting (a Lessig point) about the relationship of substitution between law and technology. The Grokster decision last week, if it holds up, will facilitate circumvention of copyright law by file sharing, by placing the sellers of the software for such sharing beyond reach of the copyright law. The liability of the sharers themselves is not affected; and already as we know hundreds of them have been sued by the recording industry. But copyright law also authorizes criminal sanctions. The Justice Department has not yet indicated an interest in prosecuting individuals who download just an occasional copyrighted song. But it is sometimes possible to deter unlawful behavior by a very slight threat of prosecution. Economists have the useful concept of an “expected cost.” If there is a 1 percent probability that you will incur a $100 cost, the expected cost is $1 ($100 x .01), and if you’re risk averse, you will spend up to $1 to avoid it. If the expected cost is an expected cost of punishment, it may be very great even if the probability of punishment is slight: many kids will stop downloading copyrighted songs if they think there is a 1 percent probability that they will be sent to prison for 6 months. So we can think of what the DoJ is doing (whether you like it or not) as the law pushing back against technology–trying to defeat technological circumvention of law by jacking up legal sanctions, in this instance possibly to a higher level than the RIAA can achieve with its civil suits.