Lessig

On Tuesday I give my first cut at this question of corruption in a public lecture at Stanford.

One part of my research leading up to this talk has led me to redescribe what before I was calling the "Noncorruption Principle." I now think a better way to describe this idea is with the notion of "independence." The aspiration I would commend is to maintain independence.

I hope to have a version of the talk available here afterwards.

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.

I got off a plane in Copenhagen and drove directly to this interview.

As I think through this issue of corruption, I am brought back again and again to the differences in an institution's sense that the rules should be followed. For example, the great thing about the Supreme Court -- an institution I would criticize on substantive grounds in lots of contexts -- is that the culture of the place is that people follow the rules. Perhaps clerks do more of the writing than one would want, but the institution is basically doing what the framers imagined it would be doing. And it does so with everyone in that institution following the rules. Compared, for example, with the FCC, where the staff apparently thinks following the rules is just an option, not a requirement, in my experience at the Court, no clerk would ever have had any contact with a party to a case, or discuss the proceedings of the court during the time it is considering a case. The difference, again, as I argue in Corruption vAlpha, is one of culture.

So then this story about the Texas legislature is just perfect in making the same point. The point is not really about the significance of the act. It is about the culture it reveals. There is a plain rule the prohibits what you will see in this video. The Texas legislature is a culture where the rules apparently don't matter.

Thanks to Laurie for linking me to this via BlacklistedNews. Also directly related: Elizabeth Williamson's piece in the Post: Getting Around Rules on Lobbying. Thanks to friends who sent the link to make sure I saw this.

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.

The Sunlight Foundation has launched a distributed research project. The aim is to learn what happened to former members of Congress and staffers after the 1 year "cooling off" period has come to the end (and thus, they can go work for lobbyists). Using a very cool interface, you can help track down former staffers, and add the results to the research database. Begin here.

So this Thursday, January 31, at 1:00pm, at Memorial Auditorium on the Stanford Campus (directions) (map), I will be giving my last lecture about "Free Culture." The event is a bit staged (literally), as it is being sponsored by an entity making a film about these issues, and they want the lecture to use in the film. But the venue is beautiful, and I will also use the opportunity to map out one plan for addressing the problem of "corruption" (as I've described it) in politics. I've now finished a draft of the talk; for those who have seen me speak before, it is new (almost completely new -- maybe 1% are must have slides from the past). For those who haven't seen me speak before, it will be a nice map of where this debate has been, and where I think I want to go. Any questions about logistics, send an email here.