Mark Carney, Stephen Gordon and the Globe and Mail’s credibility problem

Posted on December 19, 2012 by bhaggart

I’ve been following Stephen Gordon since he was the first to really publicize the Harper government’s unconscionable scrapping of the mandatory long-form census. His economic analyses in the Globe and Mail, Maclean’s and Worthwhile Canadian Initiative have been for the most part solid and level-headed.

So I was surprised to see him go into a full-on meltdown over the Globe and Mail’s weekend story about how some factions in the federal Liberal party spent their summer vacation courting Bank of Canada Governor Mark Carney for the Liberal leadership race.

In allowing himself to be courted, Gordon argues, Carney and the Liberals who dared to try to drag the formally non-partisan Governor into the muck of partisan politics have, at worst, destroyed the Bank’s hard-won credibility as a non-partisan arbiter of Canadian monetary policy.

That’s not good, I thought.

But then I read the actual Globe story, and it’s pretty clear that Gordon has way, way overreacted.

First off, I’m not a Liberal party supporter or apologist, as Gordon was labelling some of his critics on Twitter yesterday. I’m just someone who can read a newspaper article. And when you break the article down, what Daniel Leblanc, Steven Chase and Jane Taber have provided us with is a circumstantial, anonymously sourced argument that’s more innuendo than reportage. It’s bad data.

Much of the article focuses on Liberal feelings about Carney (“Liberals sensed that Mr. Carney was one of theirs, and that he could be sold to the party membership”) and speculation on hypotheticals (“One of the concerns among Liberals about Mr. Carney’s potential candidacy last summer was whether he could successfully jump into the world of politics from his non-partisan position at the Bank of Canada.”) In other words, idle gossip.

But let’s go through the more substantive (relatively speaking) parts of the Globe story, shall we?

  • The Globe alleges, relying on “dozens of” mostly anonymous sources, that a faction of the federal Liberals wanted to draft him as leader (perhaps because that worked out so well last time? But I digress.).
  • Carney, according to anonymous sources, “responded to inquiries by seeking clarification about the job, but also about what it would take to beat Mr. [Justin] Trudeau at the convention next April. ‘He asked questions,’ said a well-known party organizer who was tasked by Liberals with finding answers for Mr. Carney.”
  • Carney gave “a surprising speech to the Canadian Auto Workers and a human-interest interview with a Nova Scotia Web publication that focuses on political and business news.”
  • Carney “stayed for close to a week at Liberal finance critic Scott Brison’s Nova Scotia seaside home last summer, a visit that took place as members of the opposition party mounted the effort to recruit him.”

Are you shocked? I’m shocked. Let’s go!

On the first point, which forms the bulk of the article, I really find it hard to muster much outrage. We’re talking about the same party that thought it would be a swell idea to draft as leader a Harvard professor who had been out of touch with Canadian politics for three decades. So to the extent that trying to draft a sitting governor of the Bank of Canada might be a bad idea, I’m hardly surprised that they tried: their leadership track record isn’t exactly stellar. (And, it bears noting, that this was only a faction within the party.)

What matters, though – and this brings us to the second point – is that Carney obviously at some point said, “No thanks.” Essentially, Gordon’s argument against Carney is that he didn’t say no fast enough. Why he didn’t I don’t pretend to know (and the Globe writers shed no light on this issue), but isn’t the important thing that he did?

If “He asked questions” is the most damning thing they could find (again, from an anonymous source), then I’m not sure what the fuss is about.

I would’ve hoped Gordon had a more nuanced and realistic view of what it means to be a non-partisan civil servant. This might just be me, but I take it as a given that everybody has political leanings. I spent six years (as an economist!) with the non-partisan Library of Parliament (several of them on the House Finance Committee, giving me a bit of familiarity with both monetary policy and the politics of monetary policy. Anyway.) The Library provides research services to committees and parliamentarians from every party, and I can tell you that to a person we a) had political opinions, and yet b) managed to put these aside and provide the best possible service to everyone, be they socialist, conservative or separatist. It’s not the Bank of Canada, and I was about as far from having the power of a Bank Governor as you can be and still be part of the same political system, but the principle is the same. Given that we all have political (and often partisan) leanings, who wouldn’t ask questions if they were being bombarded by requests to lead a (3rd-place) federal party?

Would Gordon argue that we should re-examine former Bank Governor David Dodge’s tenure because he addressed a Liberal party conference in March 2010? Dodge wasn’t governor at the time, but it’s not like most people change their political inclinations depending on whether they’re in office or not.

On to the third point, in which the Globe writers attempt to show that aggressive Liberal courting influenced Carney’s actions. What’s amazing about their evidence is how little there is. This is the Globe’s best effort at putting this story together. And yet think about what’s not in here, even though they talked to “dozens” of people and the only person on the record in this article in any substantive way is John McCallum.

Dozens of anonymous sources and there’s nothing touching even remotely on Bank policy. There’s no hint of impropriety, that a Bank Governor appointed by the Liberals Conservatives [edited because I goofed on who appointed him] has done anything less than his best while working under (or alongside) a Conservative government. (Shouldn’t that undercut their argument just a bit?)

The best these three journalists can come up with after working on this story for weeks is that he gave a speech to the Canadian Auto Workers, talked about his running habits to a provincial-news website and expressed concern about income inequality.

One example in particular shows how weak their argument is. Leblanc, Chase and Taber write:

As governor, Mr. Carney startled more than a few central bank watchers in 2011 by sympathizing with the frustrations of the Occupy Wall Street movement.

The implication being that such opinions mark him as being either sympathetic to the Liberals or that he was expressing such opinions because he wanted to make himself politically palatable should he decide to seek the Liberal leadership.

How preposterous are these assertions? Try Googling “Occupy Wall Street” and “Ben Bernanke,” head of the U.S. Federal Reserve. The first hit (out of 7.5 million) is from New York magazine: “Ben Bernanke on Occupy Wall Street: ‘I Can’t Blame Them’.” To the extent that Canadian “central bank watchers” were “startled” by Carney’s OWS opinions (again, no evidence is given) suggests not that Carney is a Liberal plant, but that Canada needs a brighter breed of central bank watchers.

It’s all pretty thin gruel.

As for the other fact in the Globe story, that Carney and his family spent almost a week in Brison’s cottage, while he was being courted by the Liberals: We know that Brison and Carney have been friends for about a decade. Would Gordon have been suspicious of the two families spending time together if he’d heard about it, say, two years ago? Maybe, but I think most people would’ve probably let it slide.

The optics problem, such that it is, results from Carney staying with Brison while he was being courted by a faction of the Liberal party. And yet even from this article it seems that this courtship was almost completely one-sided. And Carney said no.

I understand Gordon’s concerns. If there were evidence that Carney had been acting as a partisan that would not be good news for what is supposed to be a non-partisan institution. But Gordon errs in not considering the source and quality of the report in question. To repeat myself, the Globe report is an anonymously sourced article that fails to provide anything beyond innuendo and circumstantial evidence. Just because it’s in Canada’s paper of record doesn’t mean that it’s above suspicion. Remember the Globe’s kid-gloves treatment of serial plagiarist Margaret Wente.

In his battle against the cancellation of the mandatory long-form census, Gordon demonstrated that he understands the importance of high-quality data, and how our understanding of the world is damaged when we are forced to rely on poor information.

Maybe Mark Carney allowed himself to be swayed by a Liberal faction looking for (yet another) saviour. But before reaching that conclusion I’d want better information than what Leblanc, Chase and Taber have served up, and so should Gordon.

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What a century-old political science theory can tell us about the future of online activism (spoiler: a heck of a lot)

Posted on December 11, 2012 by bhaggart

One of my old Carleton professors, Glen Williams, always used to make time in his first-year political science intro course to teach about Robert Michel’s Iron Law of Oligarchy, which Michels came up with almost a century ago, in 1911. I hope I’m not misremembering this, but he told me that it was probably the smartest thing ever written in the discipline. And I don’t think he’s wrong.

Wikipedia give a summary above, but the key line (from his book Political Parties, p. 241) is:

“Who says organization, says oligarchy.”

In other words, any organized effort will always result in hierarchy and leaders.

It’s a fantastic insight that people who study Internet activism, and particularly those who believe that the decentralized nature of the Internet allow for a new, leaderless, way of organizing social movements and improving democracy, should keep in mind. Sorry, says Michels, that’s not the way the world works. If you’re going to organize (i.e., work together) and you want to be successful, you’re going to need leaders.

(An aside: this is why Occupy Wall Street’s consciously leaderless approach has condemned it to the margins of political effectiveness.)

Two recent articles and a recent book indirectly make this point. Ayelet Oz, a Harvard Law student, analyzes the decision-making process behind Wikipedia’s decision to black itself out on January 18, 2012, to protest the Stop Online Piracy Act (SOPA) (h/t Michael Geist). She highlights the role that Wikipedia founder Jimmy Wales played in initiating the protest, even as the process of consultation and decision-making was rooted in the consultative norms of the Wikipedia community. But you still needed that leader for the protest to happen, and Wales’ status in the community was doubtless central to how the protest unfolded:

It was rather a delicate play between authoritative agenda setting and holding authority back, between charismatic leadership and broad community consensus. The center of this play lay at the paramount importance the community gives to legitimacy, and the different requirements it places for the decision–making process. The back–and–forth between narrowing and broadening the discussion went hand–in–hand with different understandings and alternate means of legitimation.

Meanwhile, in a critique of Manuel Castell’s new book Networks of Outrage and Hope: Social Movements in the Internet Age, Christian Fuchs quotes Paolo Gerbaudo from Gerbaudo’s new book Tweets and the Streets: Social Media and Contemporary Activism challenging “on theoretical and empirical grounds the assumption of Castells’ and others that the Internet brings about leaderless movements” (citations removed):

although contemporary social movements claim that they are leaderless networks, there are soft leaders that make use of social media for choreographing protests and “constructing a choreography of assembly” : “a handful of people control most of the communication flow.” The choreography of assembly means “the use of social media in directing people towards specific protest events, in providing participants with suggestions and instructions about how to act, and in the construction of an emotional narration to sustain their coming together in public space.” The movements’ spontaneity would be organised “precisely because it is a highly mediated one.” The ethical problem would not be this movement choreography, but the denial that there are leaders because this would result in unaccountability.

(h/t Dwayne Winseck)

Last bit of evidence that leaders still matter in Internet activism comes from Parmy Olson’s We Are Anonymous, a journalistic account of Anonymous and LulzSec. A recurring theme in that book was how discussions about large-scale ops were invariably conducted behind the scenes in small groups of recurring players (i.e., leaders) and then presented to the wider Anon community.

So, yeah, leadership takes somewhat different forms if you’re engaging in online activism, but it’s still there, and it’s still important.

Bottom line: If you want to know how the Internet affects social movements and democracy, read your Michels and don’t forget about the Iron Law of Oligarchy. As Prof. Williams would argue, it’s the rare political science theory that will never go out of style.

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Copyright shapes creation; it doesn’t drive it

Posted on November 27, 2012 by bhaggart

I’m only now getting around to Peter Nowak’s provocative post (and its follow-up) about living in a world without copyright. One of the commentators wonders what this would do for creation:

“Sure, people will create without IP law, but why would they go through the cost and expense of producing and promoting it?”

It’s a good question that gets at the main reason why people support copyright: The comment recognizes that the urge to create is inherent in everyone, but that the market (it seems) would collapse without copyright.

This is a question for economists. And I think the key point to keep in mind is that while copyright and other laws shape creation and the market in creative works, they don’t drive them.

On the necessity of copyright: Economists Michele Boldrin and David K Levine argue in Against Intellectual Monopoly (free [legit] book!) that creators would still have the ability to profit from creation even in the absence of copyright. There are other ways to make money from art than the sale of copies.

Now (and this is a very important point), this isn’t to say that artists would be better off without copyright, only that the way the market worked would be different. Most likely some would be better off; some would be worse off. Some things that get created today would probably become rarer, while new forms of creation would come into existence.

In his recent (fantastic) book How Music Works, David Byrne makes this point with respect to licensing fees for music samples. These high fees mean that it would be way too expensive to create a masterpiece like the Beastie Boys’ Paul’s Boutique today. However, these fees didn’t stamp out creativity: Artists responded by creating their own beats, which they can now sell on sites like Beatport. So the rules governing the music market led to a loss of one art form but also to the birth of another. Are we better or worse off because of this change? It’s in the ear of the listener.

Nowak is right to argue that a world without copyright is possible. Is it likely? Who knows? The market in creative works, like all markets, will always be subject to some form of regulation, by definition. But it doesn’t have to be regulated by copyright.

No matter the type of regulation, it’s certain that creation, for fun and profit, will continue because creativity is shaped by market rules; it isn’t driven by them.

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That Republican copyright critique isn’t conservative: It’s economic

Posted on November 27, 2012 by bhaggart

Nice to see that that that Republican memo proposing that copyright be considerably rethought has been getting a lot of coverage. And I’m particularly interested to read an upcoming book that will apparently make the conservative case for copyright reform (h/t Copyfight).

I am a bit worried about the whole labels thing, though. While the book, judging from the chapter titles, will almost certainly look at copyright through a conservative/libertarian lens, it’s maybe worth noting that the Republican memo, at least, is making an economic argument, not a partisan/conservative/libertarian one.

That’s actually what makes it so so significant: that a U.S. political party released (if only briefly) a document that essentially proposes shifting the copyright debate from the realm of interest-based politics to one in which we start to focus on its actual, measurable effects on society as a whole.

What makes it an economic proposal? Let’s consider the three myths it debunks.

First, it argues that the purpose is not to compensate the creator of the content, but to benefit society as a whole by encouraging the creation and dissemination of knowledge and culture. This should be totally uncontroversial to any economist. Private property is a social institution designed to benefit all of society, not just property owners. Same with copyright. When thinking about whether copyright (or any property regime) makes sense, we have to consider the overall societal benefit, not just the benefit to one group.

Second, it argues that copyright is not “free-market capitalism at work,” but rather a government-supported monopoly right granted to works upon creation. Again, no reputable economist would disagree with this. Every single economic justification of copyright is based on the idea that without this government-granted right you couldn’t have a market in the things covered by copyright, because they are so easily copied.

Third, it argues that “the current copyright legal regime” actually hinders innovation and productivity. This is an argument that appeals to evidence of what’s going on in the real world, which should be the bread and butter of any economic analysis of copyright.

There’s nothing in here that a liberal or Democrat couldn’t agree with. At all. This isn’t a zero-sum argument about the evils of raising taxes; it’s a recognition that the market in creative works is constructed by government, and that the current policy doesn’t seem to be meeting its overall objectives.

In their book, Against Intellectual Monopoly (it’s free – legal – download, kiddies, and a must-read for anyone interested in the economic intellectual-property debate), economists Michele Boldrin and David K. Levine compare the intellectual-property debate to that over free trade in the 19th century. That was another debate that initially was dominated by particular interests arguing for a policy (mercantilism) that benefitted them while hurting society as a whole. It was eventually debunked decisively by David Ricardo’s theory of comparative advantage, and has been accepted by Democrats and Republicans alike.*

Point is, there’s nothing keeping these ideas from being adopted by liberals or conservatives. The real division here isn’t ideological; it’s between those who favour the current interest-based approach to policy and those who want to look at the evidence and consider how we can best regulate the market in creative works to benefit society as a whole.

* FTR, I’m aware of and sympathetic to the limitations of free trade and comparative in a world of unequal power, but I think the critique of mercantilism as an overall policy still stands.

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Interested in balanced, user-friendly copyright law? Get ready to start voting Republican [updated below]

Posted on November 17, 2012 by bhaggart

One of the most fascinating things about copyright is how it has largely been a non-partisan issue, particularly in the United States. Unlike pretty much every other public-policy issue in existence, you can’t predict how an American politician will vote on copyright based on party affiliation.

While that’s been the story up to now, I wonder if we’re on the verge of copyright becoming a partisan issue, with Democrats defending the content industries and pushing for increasingly stronger copyright (a.k.a. the status quo) and Republicans representing the interests of individual users and (this might be a bit of a stretch) tech companies.

The Republicans are (or should be) desperate for ideas and policies that actual American voters actually support. The 2012 election showed that they’re on the wrong side of pretty much every ideological and demographic issue. As Bloomberg’s Josh Barro puts it:

Any conceivable agenda that is likely to be effective in getting health care, jobs and higher wages in the hands of the American masses will be unconservative, at least on the terms by which most American conservatives define conservatism.

(h/t Ed Kilgore)

So it’s adapt or die time for the Republicans. (Take a moment to savor the irony.) What’s a Grand Old Party to do?

Well, there’s an issue out there that’s ripe for the taking that just happens to line up with key conservative principles such as the importance of well-defined property rights, individual liberty and economic prosperity. As Russell McOrmond has been saying for years, conservative should be very concerned about the way that copyright interferes with individuals’ property rights in goods they’ve legitimately acquired.

Here’s the conservative pitch: In every other area of private property, if you purchase something, you can do what you want with it. Copyright, and especially digital locks, keeps you from enjoying these property rights and allow others to control what you can do with your property. It is a monopoly power granted to creators but exercised by corporations who reap the majority of its benefits. The result? Less innovation, lower prosperity, and Amazon can delete books you’ve purchased with the flick of a switch.

And how about privacy? Digital technology has made everything easier to trace and control, and to tell who’s been downloading what. This is how you enforce copyright on the Internet. Conservative pitch: Why should the government allow a business monopoly to track what consumers read and watch, especially when it’s not clear that file sharing actually hurts the overall economy (see below)? Bonus points: Hollywood ain’t exactly overflowing with Republicans.

Heck, coming out for moderate copyright reform, or even reductions in the scope of protection (think: no special protection for digital locks, legal non-commercial file sharing) would place Republicans smack dab in the middle of the “reality-based community.” That’s not been an overly familiar place for them these past several years. Well, it turns out there’s a lot of empirical support for reigning in copyright protection. Pretty much every serious, non-industry-sponsored economic study of copyright protection going back at least to Arnold Plant’s key 1934 study of the book industry is at least skeptical about whether extending copyright protection provides society with any net economic benefits. Several studies confirm that file sharers (i.e., those who illegally download stuff) actually spend more on books, music and so on than non-file sharers. We even have a couple of good economists making a sound case that you don’t need intellectual property at all to spur the creation and dissemination of knowledge and culture.

From a partisan point of view, it won’t hurt that the Democrats can be easily tarred as supporting out-of-touch special interests in the entertainment industry that have spent the past decade suing the pants off of ordinary Americans. Vice President Joe Biden has been the Recording Industry Association of America and Motion Picture Association of America’s most prominent advocate in the Obama administration. (That said, a couple of the most prominent advocates for balanced copyright are Representative Zoe Lofgren and Senator Ron Wyden, both Democrats.)

It seems that at least some Republicans have recognized that a refocused copyright policy is either good policy or good politics. (Republican) Representative Darrell Issa, himself a tech millionaire, has emerged as the champion of this type of copyright policy and has positioned himself as a defender of an open Internet.

The biggest piece of evidence that Republicans are starting to catch on to the policy and political benefits of user-focused copyright comes courtesy of Mike Masnick at Techdirt, who reports that “the Republican Study Committee, which is the caucus for the House Republicans, [has] released an amazing document debunking various myths about copyright law and suggesting key reforms.” How good is the report? Manick’s article makes it seem like, after decades in the wilderness, he has finally glimpsed the promised land:

This document really is a watershed moment. Even if it does not lead to any actual legislation, just the fact that some in Congress are discussing how copyright has gone way too far and even looking at suggestions that focus on what benefits the public the most is a huge step forward from what we’ve come to expect.

[Update: The report has been withdrawn following pressure from the music and movie industries; see below.]

Copyright is no longer a special-interest-based issue, where the only players are big companies. The January 18, 2012, Internet blackout proved, there are tens of millions of voters who are very interested in copyright reform. Oh, and you can bet lots of them are young, too.

With that many votes up for grabs and their very existence on the line, the Republicans have everything to gain and nothing to lose by coming out strong in favour of user-focused copyright law. Don’t be surprised if, in four years, Republicans have re-branded themselves as the party of copyright sanity and digital freedom. Consider your vote accordingly.

[Update: Nov. 18, 7:30 a.m.: Well, it looks like the Republicans do have something to lose: The financial backing of the movie and music industries. As Techdirt and others have reported, that “watershed” Republican caucus report has been scrubbed out of existence after the MPAA and RIAA went “ballistic.” (Not completely: Here’s a copy of the report for your eternal viewing pleasure. Thanks, Dwayne Winseck!)

So what does this mean? First, it’s a reminder to me that I should never forget about the importance of money in U.S. politics, and that the music and movie industries have very, very important lobbies on Capitol Hill. The “user rights” lobby is nowhere near as well organized, and potential allies like the tech industries have their own agendas.

But the attempt to shove this report down the memory hole doesn’t change the underlying politics. The Republicans need a winning conservative issue and there are tens of millions of copyright votes potentially up for grabs. This voter interest is a new reality in U.S. copyright, and I don’t think it’s going away. I’m very curious to see what happens next.]

Posted in U.S. copyright, U.S. election | Tagged , , | Comments Off on Interested in balanced, user-friendly copyright law? Get ready to start voting Republican [updated below]