Innovate Don’t Regulate: The Message of George Gilder’s Life After Google

Big Shot Republicans are besieging companies like Google and Facebook. This most recently was evidenced by the grilling in the House Judiciary Committee of Sundar Pichai, Google’s CEO.

As Wired Magazine — a shrewd source of sophisticated tech thinking — observed:

“Pichai began his testimony by insisting that he leads Google ‘without political bias.’

“We are a company that provides platforms for diverse perspectives and opinions — and we have no shortage of them among our own employees,” the soft-spoken CEO said in his opening remarks.

“But that didn’t stop lawmakers from bombarding him with anecdotes that suggested otherwise. Why is it, wondered Rep. Steve Chabot (R-OH), that when he Googled the Republicans’ proposed healthcare bill in 2017, only negative stories popped up? Rep. Steve King (R-IA) asked Pichai why his granddaughter saw negative news about him on her iPhone. When Pichai informed him that Google doesn’t make iPhones, King offered lamely, “It might have been an Android.” Meanwhile, Rep. Lamar Smith (R-TX) cited a report by PJ Media that claims 96 percent of search results for President Trump are from liberal media sites, a stat that has previously been debunked.”

Incongruously, some big league conservatives are calling for what used to be considered conservative heresy: using antitrust law to break up big companies — call it the Hammer. Or to, at least, regulate them hard — call it the Sickle.

Even worse, there is truculent talk in some circles about changing the law governing online content to hold companies like Google, Facebook or Twitter liable for material posted there by users.

Doing that would effectively “break” the Internet.

Unclear how many of our Senators and Congressmen grasp this key fact.

Not so very long ago proposing that kind of Big Government intervention could have gotten you burned at Heritage Foundation’s stake. Shockingly, now, we are encountering a resurgence, out of right field, of the “politician’s syllogism,” a logical fallacy of the form:

1. We must do something

2. This is something

3. Therefore, we must do this.

True. There might be some bias to which Big Data is subject. Masters of the Universe though they be, the executives and team members are only human. They are thus subject to what Kenneth Burke termed a terministic screen, “composed of terms through which humans perceive the world and that direct attention away from some interpretations and toward others.”

In more lowfalutin’ terms, “To err is human.”

But asking the government — whose officials and civil servants are subject to their own terministic screens — to bring down its hammer surely will not end well.

There is, of course, a conservative or libertarian way of addressing the problems caused by Big Data. My old friend George Gilder, a well-respected high tech (and conservative economic) guru has written a splendid book, Life After Google: The Fall of Big Data and The Rise of the Blockchain Economy. It points us in the right direction.

Why listen to Gilder? Gilder wrote the “bible” of the Reagan Revolution, the million-selling Wealth and Poverty, and was the living author most quoted by President Reagan. Thereafter, Gilder’s book on the microchip, Microcosm, predicted how the silicon chip would create trillions of dollars of value, and — not so incidentally — transform our lives. It did so.

Then Gilder’s books on fiber optics, Telecosm and Life After Television, predicted how these glass cables would create trillions of dollars of value and, yet again, transform our lives for the better. They did so.

Then Gilder’s book, The Silicon Eye, predicted how cameras would become ubiquitous, create trillions of dollars of value, and transform our lives (mostly) for the better. And so it is.

Gilder has prophetic chops.

So. Gilder grasps free enterprise and high tech and their powerful intersection. Gilder’s newest book is about the “fall of Big Data.” By Big Data he means Google, Facebook, and the other new bêtes noir of the vast right wing conspiracy.

And yet Gilder, a Founding Father of the vast right wing conspiracy, is not at all hostile to Google, Facebook, or any of the current Masters of the Universe.

Why not?

Enter the Cryptocosm.

Gilder meticulously explains how the blockchain (best known for its incarnation as bitcoin) promises to unleash the solutions to the very problems that conservatives — and some progressives — now are fretting about.

Spoiler alert! To solve these problems:

Don’t legislate.

Don’t regulate.

Let industry innovate.

The inventors of the Internet and the Web, Gilder observes, built it for seamless and effective communication. It works brilliantly for that. The Internet’s original architecture was not designed to inhibit Internautes from getting access to, and analyzing, mind-boggling amounts of information … about us.

This didn’t cause problems until, much later, commerce moved (thanks, no kidding, to Al Gore’s deregulating the Internet) to the Web in a big way.

Then, as Gilder decodes for us, the inherent vulnerability of the Web’s design structure became problematic, in two ways. The first problem is the vulnerability of our Web-based information, personal (such as emails) and financial (such as credit cards) to the Bad Guys — hackers and phishers and malware, oh my!

Gilder shows us how these problems are not adequately handled by awkward attempts to paste security patches — passwords, two-step verification, and elaborate rigmarole — to an inherently vulnerable structure.

The problems associated with such vulnerability don’t end with the Bad Guys. The other problem? The Good Guys — like Google, whose original corporate slogan was “Don’t be Evil” — who make a fortune by monetizing our attention. They let us use their services for free. No charge to do a Google search!

In return, Google sells billions of dollars in advertising aimed at us, tailored to our interests, from the information it thereby gleans about us. Businesses are more eager to advertise to people who really are more likely to be interested in their products than to an undifferentiated mass.

Nothing sinister about that.

That said, it has some troublesome aspects. As Gilder observes:

“In business, the ability to conduct transactions is not optional. It is the way all economic learning and growth occur. If your product is ‘free,’ it is not a product, and you are not in business, even if you can extort money from so-called advertisers to fund it.

“If you do not charge for your software services — if they are ‘open source’ — you can avoid liability for buggy ‘betas.’ You can happily evade the overreach of the Patent Office’s ridiculous seventeen-year protection for minor software advances or ‘business processes,’ like one-click shopping. But don’t pretend that you have customers.

“Security is the most crucial part of any system. It enables the machine to possess an initial “state” or ground position and gain economic traction. If security is not integral to an information technology architecture, that architecture must be replaced.”

Prodded by a faction of the conservative movement, Uncle Sam now is beginning to convene, now and then, in shows of Public Consternation.

Yes, there are some causes for concern.

But legitimate concerns don’t necessarily call for “government-to-the-rescue.” Conservatives are typically skeptical of that and for good cause. A poster at Despair.com shows the Capitol with the caption “If you think the problems we create are bad, just wait until you see our solutions.”

As Abraham Maslow, the founder of humanistic psychology, once observed “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.”

And the main tools that Uncle Sam has are the hammer of legislation and the sickle of regulation. Conservatives, be dismayed!

As it happens, barreling down the tech pipeline are tech solutions to the problems Big Data is encountering (and causing). One of those technical solutions is the blockchain, a decentralized, distributed, record of transactions that cannot be tampered with.

This breakthrough, according to Gilder, will allow us to regain ownership and control of our own data. He explains exactly how.

I am no anarchist, more of a classical liberal than hard-shell libertarian. The government has a legitimate role in protecting the vulnerable from force, fraud, or coercion. To do so, though, it needs to be judicious.

There were plenty of calls to shut down, or take measures that would cripple, the Internet back in the ‘90’s. So the hostility to Big Data is, to quote that great yogi, Berra, “Déjà vu all over again.” Not so fast!

How does the blockchain solve our Big Data problems? Gilder:

“An insecure Net could not protect property rights, defend privacy, host safe and efficient transactions, permit micropayments to halt spam, or establish sure identities. …

“As [Munneb] Ali writes, ‘Currently, with frequent use of an online service, user data gets locked into ‘data-silos,’ e.g., data that is understood and stored by Facebook, Yahoo!, Google and others respectively but cannot be migrated across services. This leads to a centralized data model; the data silos inevitably get hacked eventually, e.g., the recent hack of 500 million Yahoo! users.’

“‘… They worked well for their proprietors but destroyed the global coherence of the Net and caused increasing segmentation. Within the segments, Google, Apple, Facebook, Amazon, et al. collected more and more private data and protected them with firewalls and encryption. But as time passed, they discovered that centralization is not safe. Putting data in central repositories solved hackers’ hardest problem for them: It told them which data were important and where they were, putting the entire Internet at risk.’

“Ali, with a colleague, came up with an elegant technological solution to this, called ‘Blockstack.’

“The Internet stack had become a porous and perforated scheme in which most of the money and power could be sucked up by the big apps at the top run by companies such as Google. What was needed was a blockstack that could keep the crucial IDs and personal data and pointers to storage addresses in a secure and immutable database on the blockchain.

“…[S]ecurity is not an app or a video game. It is an architecture. Resolving to design that architecture, Ali became an American citizen and — with Brendan Eich, Vitalik Buterin, and other pioneers — a leader of the movement to reestablish the Internet on the decentralized, peer-to-peer principles ….”

Gilder goes on to explain, in incandescent detail, how free enterprise is already developing and swiftly implementing solutions. Solutions, that is, if we don’t strangle innovation in the cradle with misguided legislation and heavy-handed regulation.

Some impertinent yet pertinent advice to legislators, regulators, and policymakers? It really would be a tragedy were Uncle Sam, wielding his hammer and sickle, to drive the epicenter of the blockchain economy — the billions and maybe trillions of dollars of new wealth portended and the transformation of our future lives in wonderful ways — out of the United States into tech friendlier, savvier, jurisdictions such as Singapore.

So: attention to our U.S. Representatives, Senators and regulators? Put down that hammer, lay aside that sickle. There’s a better way.

Read George Gilder’s Life After Google: The Fall of Big Data and The Rise of the Blockchain Economy. Equip yourselves with an elegant array of tech to improve matters rather than wielding a hammer and sickle with which to beat tech down or slice it up.

Welcome the Cryptocosm and the cornucopia it portends.

Ralph Benko, of Washington, DC, is the principal of ralphbenko.com.

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