October 15, 2007  ·  Lessig


I bought this book because I heard it described on the radio (NPR, no less) in a way that made it sound like the dumbest book of the decade. It turns out that it was the summary, and not the book, that was dumb. Indeed, this is a fantastic book by an extremely smart and experienced liberal. It is the first book on the Corruption Required Reading list.

A clue that there’s something interesting here is that here a liberal is arguing (among other great arguments) that the corporate income tax ought to be abolished (shareholders should pay that tax instead), and that corporations should not be giving health benefits to workers (the tax benefit is a huge skew to the economy, producing an inefficient and ineffective national health care system, costing close to $140 billion a year). Both sensible proposals signal that Reich is thinking, not simply rehearsing. And thought from a person as experienced as Reich, a Professor at Berkeley and Labor Secretary under Clinton, is critical to achieving the reform we need.

But the book will be on the required reading list for corruption because of the place corruption has in the argument. The basic arc of the argument is to first describe what Reich calls the “Not Quite Golden Age” in America, roughly the first half of the last century, when barriers to competition meant capitalism was relatively rich and big. Oligopoly defined the period; cooperation among big guys was the consequence.

This relatively quiet period for competition had some interesting consequences. (Big) business could afford to do socially helpful things (health care, etc.). Government could lean on them, and it was possible, because of the implicit protection of relatively weak competition, for them to give the government what it wanted.

We’ve now left the NQGA, Reich says, and entered a period of Supercapitalism — a time when competition has grown dramatically, and when half of us (meaning half of each of us, or at least half) more effectively demand lower prices in the product and service market place and higher returns in the investment market place. This hyper competition is forcing extraordinary rationalization in both markets. Wal-Marts and an exploding stock market are the consequence. The half of us that lives in the product/service and investment markets have been rewarded by this competition. Supercapitalism is producing super-efficiency, at least here.

The problem, from Reich’s (and my) perspective, is that the other half of us – the part that thinks not as an actor in a market, but as a citizen – has atrophied. That is, the half of us (again, of each of us – Reich’s point is that each of us has these two parts) that demands that government set sensible and efficient limits on private action has atrophied. Deep skepticism about government has made most of us turn away from it as a tool of sensible policy making. We instead (and this is a truly brilliant part of the book) turn to corporations to make good policy in government’s stead. We push for “corporate social responsibility” and praise corporations who agree to do the “good” thing, imagining that this means something other than the “money making” thing. This, Reich says, is “politics diverted” – trusting companies to do good policy rather than getting government to set good policy, imagining “corporate social responsibility” will produce something different from corporations maximizing profits.

This is a critically important point for people to get — and one that many good thinking souls don’t yet agree with. It’s related to an answer I gave to a great question by Jon Zittrain at the Corruption vAlpha lecture. As I said there, we need to understand the nature of the corporation — to make money — and come to love it, and yet, to keep it in its proper place, just as you can love a tiger, but know that it’s not the sort of thing that should play with your kid. (Here’s the question and answer). Corporations are not more efficient governments. They are instead increasingly efficient money making machines. And while there’s nothing at all wrong with money making machines — indeed, wealth and growth depends upon them — there is something fundamentally wrong with trusting these machines to restrain the drive for profits in the name of doing the right thing. The cushion that enabled that in the past (relatively limited competition) is gone. The job of GM is even more now to make money for GM.

Recognizing this point forces you to recognize how important it is that we make government work. It is government’s job to set the appropriate limits on corporations (and individuals) so that when corporations and individuals pursue their self-interest, they will not harm a public interest. If government were doing that sensibly, it would force carbon producers to internalize the negative externality of carbon (something our current government doesn’t do), just as it would force those who benefit from creative work to internalize the positive externality of creativity (something our current government is obsessed with doing).

And this leads to the link with the work on corruption: for notice (surprise!, surprise!), government is pretty good at forcing internalization when it benefits strong special interests (again, copyright), and not when it harms strong special interests (again, carbon). Here, and in a million contexts, the government is coopted by the powerful influence of powerful interests. Reich points to the obvious and well known examples of money buying (indirectly) influence. He also points nicely to the “corruption of knowledge” as he calls it, coming from corruption policy analysis. Nothing gets fixed till we fix these corruptions, powerfully identified in this very clearly and beautifully written book.

[Criticism? Only one small nit: Reich works hard to argue that we should not think of the corporation as a person. Corporations have no "corporeal form," he argues. A corporation instead is just a legal form for the activity of people. The law should therefore focus on those people, and not on this corporation. The corporation should therefore have no rights. It should also have no "corporate" responsibility. The only rights and responsibilities here are rights and responsibilities of people.

I agree that in lots of cases, the law should focus on the people, and not the corporation. But I reach that conclusion based upon the utility of focusing upon the people inside a corporation rather than upon the entity itself. In my view, however, there are times when it does make sense to think about the corporation as an entity and to allocate responsibility in that way. Reich concedes as much when it is civil liability at stake. But focusing on the non-thingness of a corporation, he rejects criminal liability for the corporation. I reject a thingness theory of criminal responsibility. My view is informed by the work of (in my view) one of the most brilliant members of the legal academy, Meir Dan-Cohen. His work is not online (not brilliant), but see, e.g., his Freedoms of Collective Speech, 79 Cal. L. Rev. 1229 (1991). ]

Buy (Amazon, B&N) or borrow this book soon. And thank you to Robert Reich.

October 14, 2007  ·  Lessig

As promised, here’s the first lecture on corruption. It is an alpha version. I’m eager for comments and feedback. My first written feedback came from Aaron Swartz, with whom I had conspired last winter about making this move. I have reprinted his comments in the extended entry, with some replies.

I’ve also set up a page on the wiki where I will collect significant versions of the argument. Summary and criticism there would be helpful.

Comments by Aaron Swartz:

# Lessig on Corruption

**The Argument:**

(American) politics is filled with easy cases that we get wrong. The
scientific consensus on global warming is overwhelming, but we abandon
the Kyoto Protocol. Nutritionists are clear that sugar is unhealthy,
but the sugar lobby gets it into dietary recommendations. Retroactive
copyright extensions do nothing for society, but Congress passes them
over and over.

Similar errors are made in other fields that have the public trust.
Studies of new drugs are biased towards the drug companies. Law
professors and other scholars write papers biased towards the clients
they consult for.

Why? Because the trusted people in each case are acting as
_dependents_. The politicians are dependent on fundraising money. They
are good people, but they need to spend a quarter of their time making
fundraising calls. So most of the people they speak to our lobbyists
and they never even hear from the other side. If they were freed from
this dependence they would gladly do the right thing.

The scientists get paid to sign on to studies done by the drug
companies. The law professors get paid to consult.

How do we solve it? We need to free people from dependency. But this
is too hard. We should fight for it, but politicians will never
endorse a system of public funding of campaigns when they have so much
invested in the current system. Instead, we need norms of
independence. People need to start saying that independence is
important to them and that they won’t support respected figures who
act as dependents. And we can use the Internet to figure out who’s
acting as dependents. Projects funded by the Sunlight Foundation can
be used to identify politicians who decide in response to campaign
contributions and the Internet can work together to identify these
people and shame them.

So far, I agree with this summary.

Finally, there is another kind of corruption. Lessig represented a man
who was abused by the headmaster of his boarding school. The courts
focused all the blame on the monster, the headmaster, and decided that
everyone working at the school who knew the abuse was going on and did
nothing was immunized. But we cannot change the monsters — instead,
the real guilt lies with the good people who support them.

If politicians are those monsters, we are those good people. We are
all complicit.

Almost. I need to make this point clearer. The argument has three parts — (1) identifying that corruption, (2) arguing that norms must be an important part in remedying corruption, and (3) that our focus should be on those of us who can do something, not on those who can’t. I don’t think politicians are monsters; what links politicians with the abuser and the President is that they can’t do anything, or enough.


The argument is new, only half-finished, and has been made only
circumspectly in a couple fora. So it is not surprising that I do not
totally understand it.

I think there’s a disanalogy between politicians and the scholars.
Politicians need the money to run their campaigns, while scholars seem
to take it out of greed. This disanology becomes more severe when we
talk about solutions: we can make politicians less dependent on money,
but it’s less clear how to make scholars less greedy. I suppose the
norm regimes work for both, however.

This is an important distinction, but I don’t think that the problem with scholars is “greed.” I do agree, however, whatever the character of the problem, what unites both cases is that they both can be (somewhat) remedied by norms.


The first part is right: there is a lot of corruption. In fact, I
think there is far more than Lessig suggests. Our schools are taught
from textbooks which are chosen through a corrupt process. Our college
professors only receive tenure if they teach the established wisdom
(or something novel that’s close enough). Our corporations routinely
break the law to maximize profit. Our media routinely get the facts
wrong in service of their monetary interests. Our public intellectuals
sign their names on to corporate-written op-eds and PR-run
psuedoconferences. And so on.

But I think the diagnosis of the problem is only halfway there. In the
case of politicians, Lessig says they are good people who are forced
into doing wrongs because they need to raise campaign funds. This
means they spend most of their time with lobbyists who only give them
one side of the story. This is almost right.

Lessig is missing the power of the _filter_. Even if the politicians
knew all the right positions in advance and could not be swayed by
lobbyists, it would not help: these politicians would never get
elected. If a politician does not espouse pro-business positions, they
do not get campaign funds. If they do not get campaign funds, they
will lose to someone who can. This is very well documented:
Businessmen even have dinner parties where they interview candidates
to determine which ones agree with their interests and then go ahead
to fund those. (Lessig should know this, since I believe he’s attended
and possibly hosted such parties.)

Possibly, but actually no, no such parties. But the more important point in response is to acknowledge that solving the problem of corruption is not the same as getting a government that I (or Aaron) agrees with. Corruption is the amplification of money in the process. But even without that amplification, the other side may well have more votes. E.g., I disagree with the Supreme Court in many cases. In none do I think the disagreement has to do with money.

And, when politicians find a way to avoid relying on businesses for
money, like Howard Dean did, there is still the media to contend with.
Lessig has notably avoided saying much about the media’s complicity
(more on this later).

Lessig we suggest we have bloggers ostracize bad politicians. But all
politicians are bad in this sense — there is no other way they can be

This is very true. So the solution is not within the system. It comes from changing the system, or the rules governing the system.

And nobody who votes is going to check those blogs first.
Only 10% of the population even votes on the basis of issues; the
percentage whose vote will be swayed by corruption must be miniscule,
and most of those will be swayed in the (counter-productive) direction
of not voting.

For the other scholars, he is not even close. You are a scientist. You
spend long hours at a lab painstakingly measuring out various
chemicals. You have to work incredibly hard to avoid getting fired.
You don’t see your family. You needed to move to a strange city to get
the job, so your wife is out of work. You had to by a new house in
this town so the debt is crushing. You still haven’t paid off your
school loans. Now a man comes and says that he’ll pay you tens of
thousands if you just sign your name to your study. Better still, he’s
well trained in the tactics of persuasion and you find yourself
signing it even before you stop to think about the implications.

Yes, it would be nice if all scientists were good, strong men who
could resist such ignoble urges. But that’s not going to happen. Even
if there is ridicule and sanctions for some of the scientists who
engage in such deals, it will still be very hard to say no.

Let’s define a kind of regulation as “soft regulation.” Soft regulation is the sort that comes through norms. No doubt, soft regulation is not always effective. But that’s different from saying it’s not enough. Science doesn’t crumble because a handful of scientists are corrupted.


Why “instead”? Why not both?

I think we have to focus on the man with the contract and
pen. He works for a profit-maximizing corporation that will stop at
nothing (Lessig says they stop at the law, but that’s a joke) to make
such bogus studies. If you somehow convince all the scientists to be
good, strong men, they will invent their own scientists (look at
what’s happened with think tanks). If the journals reject the fake
scientists, they will take over the journals. If the government
rejects the new journals, they will take over the government. As long
as they’re in control, you will never win this game of whack-a-mole.

Lessig says he hopes this isn’t true because it is depressing. It is
hard to fix the profit-maximizing corporation. Sadly, the truth is
sometimes depressing. And I think fixing the profit-maximizing
corporation would be a good idea. But there is an easier place to
start: fix the media.

Any government, even dictatorship, relies to some extent on the tacit
consent of the population. (Hume) Usually this is done through
propaganda and the media and our government is no different. Media
campaign ads as well as the (often irrelevant and miniscule) campaign
news coverage are how the country decides who to vote for as well as
forming the basis for many of their other positions. (If all you know
about social security is that it will go bankrupt unless it is
privatized, then even the most left-wing person will support
privatizing social security.)

Fixing the media does not seem absurdly out of reach. The Internet is
helping a great deal and I think it is possible to do a great deal
more. This seems rather more practical than having people to listen to
bloggers when deciding who to vote for or teaching all scientists to
be good strong men.

Fixing the media is good and important. And indeed, the mechanism I imagine with peer-producers on the net is not that voters read and then vote, but that such work shifts the debate in, and through, “the media.” So I’m all for this. But I don’t think the problem with “the media” is that they don’t read enough blogs. There is real economics driving the spiral in that field, and it would take an extraordinary amount of resources to check that spin. (Though I do know of some very good news on this front to be announced (not by me) soon.)

But his (very powerful) last part is also correct: we are all
complicit. In some of his talks, Lessig goes further and points the
finger right at the people he is addressing. This is exactly right and
extremely courageous. I hope that we can find the courage to change.

Complicity is the punchline. Its recognition is the first step to change.

October 4, 2007  ·  Lessig

The wires are sparking with news of the GAO report (pdf) that FCC insiders routinely tipped lobbyists and corporate insiders about agency agenda decisions before they were made public. This is critical, because under agency “sunshine rules,” FCC members can’t be lobbied for the week between the public announcement of an agenda and the meeting. Knowing what’s going to be announced on the agenda in advance thus gives lobbyists and corporate insiders an opportunity to lobby before the sun[shine rules] rise. From the report:

FCC generally followed the rulemaking process in the four case studies of completed rulemakings that GAO reviewed, but several stakeholders had access to nonpublic information. Specifically, each of the four rulemakings included steps as required by law and opportunities for public participation. Within the case studies, most ex parte filings complied with FCC rules. However, in the case studies and in discussions with other stakeholders that regularly participate in FCC rulemakings, multiple stakeholders generally knew when the commission scheduled votes on proposed rules well before FCC notified the public. FCC rules prohibit disclosing this information outside of FCC. Other stakeholders said that they cannot learn when rules are scheduled for a vote until FCC releases the public meeting agenda, at which time FCC rules prohibit stakeholders from lobbying FCC. As a result, stakeholders with advance information about which rules are scheduled for a vote would know when it is most effective to lobby FCC, while stakeholders without this information would not.

When I commented upon this to a colleague, his response was typical: “What do you expect? And anyway, so what? What’s wrong with giving affected parties a bit more time to make their case?”

“What’s wrong” first is that the rules say otherwise.

“What’s wrong” second is that the rules are bent in a completely predictable way. Agency insiders curry favor with precisely the people they’ll be getting a job with after they leave the FCC.

And “what’s wrong” third is just what this indicates about the kinds of bending we might expect goes on inside the FCC. If the agency is willing to bend the rules to favor futures employers, are they willing to put the thumb on the scale in difficult contested policy determinations?

But my colleague was right about one thing: “What do [I] expect?” Here’s an agency chaired by a former lobbyist. Is it likely to be scrupulous about rules meant to constrain or balance the lobbying process?

This example is just one many that is our government. (As I’m learning as I work through the extraordinary reading list compiled by my Read-Write readers at the Lessig Wiki on Corruption. But it needs to become a bigger issue for the candidates in this election. Let’s hear a promise by the presidential candidates that they will only appoint FCC commissioners who promise not to work for those they have regulated for at least 5 years after their term is over. That would be real change.