When Lew first asked me to speak on this topic,
I thought to myself, computer nerds,
now how would I know anything about nerds?
Well, that objection quickly subsided
and began to think about this topic.
What I want to discuss with you today
is the role of technology in changing public attitudes
towards government.
and as the title of the talk suggests, future looks pretty good. As people come
to depend more and more on computers and information technology, people are
becoming increasingly concerned about government intrusions into their lives.
Now I'm not claiming that technology is a primary cause of social change. No,
the primary cause of social change is ideas, such as the ideas that you're
We're supporting by being here today, but technology can have a significant influence.
Now my particular focus is on computer nerds since they are at the forefront of these new
technologies.
As it turns out, the dominant political philosophy of the internet community is classical liberalism
or libertarianism.
Now you notice that I'm using the politically correct term community as in the African American
Community, or the Gay and Lesbian Community, or the Community of Nations, each of which
has its self-appointed spokesperson, and I'm appointing myself as the spokesperson for
the internet community.
Now many of you are undoubtedly and justifiably wary of portentous pronouncements about the
meaning of the internet and the information revolution.
You might be expecting the sort of silly futurism you get from people like George Gilder or
Alvin Toffler or somebody who's way out there like Newt Gingrich.
Indeed, many pundits tell us that the Internet is going to bring about a fundamental transformation
of human society.
The physical world will become increasingly unimportant as we all enter a virtual reality
of unlimited potential.
Other writers argue that computer technology will bring an end to scarcity through nanotechnology,
which can build things at the atomic level.
These are the same kinds of people who arrange to have their bodies frozen until the year
2500.
Now, I'm not going to give you one of those speeches, and I promise I will not use the
prefix cyber a single time, as in cyber libertarians or cyber Misesians.
No, what I'm going to try to do instead is describe the political and social views of
of Computer Folk, and explain why they think that way.
What exactly do computer nerds think about the state
and state intervention?
Well, it's quite commonplace to observe today
that the internet community is a source
of decidedly libertarian sentiment.
Let me give you a few examples.
Forbes ran a cover story in September
about net libertarianism, calling it, quote,
the central axis of political discussion online.
Wired magazine's John Katz writes about the Internet community's, quote, ingrained libertarianism, its wholehearted commitment to political and economic freedom, and its fierce opposition to constraints on individual expression.
Even the New York Times has written on, quote, the free market libertarian bent of the architects of the high-tech economy, referring to people like the maverick entrepreneur T.J. Rogers, a cyber semiconductor.
The libertarian computer scientist Barry Fagan calls libertarianism, quote,
the descriptive political philosophy of the digital age.
It's clear then that people in the computer industry largely view the government as an
intruder, as an interloper, interfering in areas in which it has little knowledge, let
alone justification.
Why do they feel that way?
Why do computer nerds think this way about the state and state intervention?
Let me suggest a few reasons.
The first is fear of censorship and awareness of the potential for censorship.
One example of this is the huge spontaneous groundswell of opposition for the Communications
Decency Act, or the CDA, which was defeated in June of 1996.
Those of you who surf the web may have noticed the last year and a half, an increasing number
There's a number of websites that display this blue ribbon on their homepage, that supposedly shows your solidarity for opposition to the CDA.
There's amazing support in the internet community for the right to encrypt information, the right to encode information to protect it from third parties, in particular what's called strong encryption.
And I should add the right to export software that performs encryption across national borders.
Interestingly, there's a pro-strong encryption group called Americans for Computer Privacy.
And this group has recently hired the Malibu public relations firm Goddard-Klausen.
This is the firm that produced the Harry and Louise ads that helped defeat the Clinton healthcare plan.
So there's going to be much more public awareness of some of these encryption issues.
Incidentally, there was a feature on CNN headline news this morning, I don't know if any of you saw it,
about Hewlett-Packard being granted by the administration the right to export a certain kind of encryption technology to a few countries, about five countries including Britain.
But the caveat is, this technology is designed so that there's what they call a back door, a secret key where government officials can unencrypt or decode the data if they need to.
Now, I do want to say that computer nerds are not completely consistent on these kinds
of issues.
In general, they tend to be more tolerant of restrictions on commercial speech, advertising,
for example, on websites.
In general, many computer folks decry the increased commercialization of the net.
Many of them tend to support so-called anti-spamming laws, laws that would prohibit the sending
of unsolicited email.
Of course, a potential danger of this is that any anti-spamming law would have to be a federal,
nationwide anti-spamming law and not a state anti-spamming law.
There was a group just a couple of weeks ago, there was a mock trial to see how a state
anti-spamming law would work and it turned out it wouldn't work very well because of
The bottom line is that many of the so-called free speech advocates on the net have more the ACLU's definition of free speech than what we would consider to be free speech.
Free speech means the right to communicate pornography but not to communicate commercial information, not to try to sell goods and services.
A more important reason, which Lou alluded to last night, why computer nerds tend to fear the government, is because they have a unique understanding of what it's like to operate in a largely unregulated environment.
They're used to communicating in an unregulated environment, the so-called chat rooms and discussion groups,
use net groups, where there's a considerable amount of sort of community self-policing through ostracism,
refusing to deal with people who don't obey the rules of the community.
There's relative freedom of association in those kinds of groups.
But even more important than that, computer nerds are used to dealing with electronic commerce and they understand how to buy and sell goods and services without any regulation, without any taxation, without any government interference at all.
Now, by the way, this is another reason to be very cautious about any kind of national sales tax plan to replace the income tax because a national sales tax would seriously cripple the booming catalog and online commerce markets.
Now, as Lew mentioned last night and you may have read about this week, there are several internet sales tax proposals being tossed around.
One is this proposal by the National Governors Association to which they referred to support uniform state and local sales taxes on electronic commerce.
Now the reason the governor's group is doing this is because they're trying to head off some congressional legislation that's being debated,
the so-called Internet Tax Freedom Act, supported by Representative Chris Cox of California and Ron Wyden of Oregon,
Oregon, which would bar states and localities from passing any Internet taxes until at least
the year 2004.
Now, these state and local policymakers worry that the Tax Freedom Act or the Cox-Widen
Bill would drain their coffers of revenues as more and more commerce moves online, okay,
takes place between states.
Now, to his credit, if you want to call it that, the President has so far announced that
He Supports the Internet Tax Freedom Act.
In fact, on Thursday, he made a pronouncement that he opposed the governor's proposal.
But if you think about it, you can be assured that something is in mind, and it's not tax
freedom.
There was an article in yesterday's USA Today discussing Clinton's pronouncement, and the
author of the article correctly observed, quote, supporters say the Internet Tax Freedom
Act will keep state and local governments from burying the internet in taxes before
policymakers can agree on a fair way to tax electronic commerce.
So you don't want to kill the goose that's laying the golden egg right at the beginning.
You want to let the process get going and then you figure out the quote fair way to
tax and regulate it.
Internet commerce is a really fascinating area because it's a perfect example, as Lou
Lew mentioned last night of how an unregulated market works.
What happens when thousands of buyers and sellers get together and through a series
of voluntary transactions exchange goods and services.
Couple of examples, we've recently seen the emergence of independent third party intermediaries
who help to facilitate transactions among people on the internet.
For example, with the buying and selling of used computer equipment, which is a big business
on the internet, there's a company called TradeDirect.com, which some of you may have
seen. It's a very interesting function. What TradeDirect does is it acts as a trusted third-party
intermediary to protect these kinds of exchanges. For example, suppose that I wanted to buy
a used computer monitor from Jeff Tucker.
I'm a little bit wary of him,
so I don't want to send him the money before he sends me the monitor.
And he doesn't want to send me the monitor before I send him the money.
It's a classic dilemma. So what to do?
Well, Trade Direct has stepped in and offered the following services for a small fee.
What Trade Direct does,
once Jeff and I have agreed that we want to make this transaction,
I send my money to Trade Direct, and they hold my money. Then Jeff sends the computer monitor to me, and I check it out, I inspect it, see if it meets my standards, if I want it. If I decide to keep it, then Trade Direct passes the money on to Jeff. If I decide that I don't like it, I send it back to Jeff, and when Jeff has received it, he notifies Trade Direct that he's gotten it, and they send my money back to me, they refund my money. So basically, there's no risk for either of us that we might be taken advantage of.
No, there's no need for a government policing agency.
There's no need for a department of commerce, of electronic commerce, to make sure that people don't get cheated through electronic transactions.
The market takes care of that function, that governance function perfectly well.
Now, it should come as no surprise that media and government elites hate and fear the internet and all that it represents, and the computer industry more generally, as I'll say in a moment.
Now, the greatest example of this, as you all know, is the Lewinsky scandal, or intern gate, whatever you want to call it, which has been a huge boost to internet news.
The story itself, as Lew mentioned last night, was first broken on the internet by Matt Drudge, author of the great Drudge Report, an online magazine.
Drudge was the first to report, actually what he reported was Newsweek's decision to spike the story, which Newsweek then went on to report once the whole world knew about it.
If you've been following, if you've been on your computer in the last three or four weeks, you know that every major news site on the internet, all the websites of the agencies, CNN, Yahoo, all of these places have special sections devoted to the scandal, which in the wonderful early days were being updated almost minute by minute. A great time waster during the day.
Now, the pundits are talking almost as much about the Internet's coverage of the scandal
as the scandal itself. Michael Kinsley, formerly of the New Republic and the president editor
of the online magazine Slate, told the LA Times that not only did the Internet make
this story, but this story has made the Internet. Kinsley says, quote, it is the Lewinsky story
has done for the Internet what the Gulf War did for CNN and what the Kennedy assassination
for Television in General. Elsewhere he wrote that the scandal represents the Internet's
coming of age as a media force. However, Kinsley is dead wrong about the reason for this. He
claims, quote, the Internet beat TV and print to this story and ultimately forced it on
them for one simple reason, lower standards. In other words, well, the respectable media
were not going to run this story because they hadn't had time to check it out, they wanted
to sift through and find all the inaccuracies and so on. Of course the truth is very different
from that. The truth is that the internet allows people from all over the world to communicate
the little bits of information that they have. This is what Hayek talked about when he mentioned
and the knowledge of local circumstances of time and place.
The establishment media, on the other hand, only report information that comes from Washington,
LA or New York.
A great example of this is the extremely hostile reaction to Ambrose Evans Pritchard's book
that Lew mentioned last night, The Secret Life of Bill Clinton.
One review of the book by Newsweek's Mark Hosenball.
In that review, Hosenball complained that Evans-Pritchard must have, quote, switched
his BS detector off before he left the mobile lounge at Dulles Airport. Now what he means
by that is because Evans-Pritchard actually went to Oklahoma. He went to this famous Elohim
City compound in Oklahoma and interviewed people who knew about the Oklahoma City bombing,
to a reporter like Mark Hosenpaul, reporters see no need ever to leave the mobile lounge
at the Dulles Airport. When your primary source is Mike McCurry, why would you ever need to
And one thing I remember about traveling with Murray Rothbard is Murray had a passion for
local news and events. Wherever he went, he always wanted a copy of the local paper and
he would read it to find out what was going on, also because you get information reported
in small local newspapers that the establishment papers don't pick up. Now you can get this
local news from anywhere delivered right to your desktop. Almost all the small local news
Now the establishment media, as we know, purposefully suppress information, they believe, rightly
or wrongly, to be harmful to the institutions of modern society itself, which they mean
big government themselves, i.e. the mainstream media. Example, in February 1997, as reported
by Evans Pritchard. ABC News had prepared a segment on Carol Howe, the BATF informant
who had penetrated the white Aryan resistance in Oklahoma and had been reporting back to
her superiors plans to blow up federal buildings in Oklahoma, months before the destruction
of the Murrah Building.
At the last segment, at the last moment, the segment was pulled and replaced, I think,
by a story on sheep in New Zealand or something like that.
Now the assistant producer of the segment, a retired Marine Lieutenant Colonel named
Roger Charles, he protested this decision to ABC and he was fired immediately.
His superiors left him two messages, he told Evans Pritchard, quote, the first, the first
The first message was that this story would bring the country down, whatever that's supposed to mean.
The second was that it would lead to the abolition of the ATF, machine guns on every corner.
You know the argument.
The government, quite understandably, is terrified by the Internet and the prospects of uncensored access to information.
No longer can the government assume that people will get their information from the official media.
Thousands of people have learned the truth about the Waco incident, about the Oklahoma City bombing,
about what most likely happened with the TWA-800 crash from the internet, not from the major newspapers.
And of course, the best writing on many of these topics has been done by Evans Pritchard.
And before his book came out, the easiest way to get this information was on the web.
Of course, Evans Pritchard is a reporter for the London Telegraph,
and unless you have access to the print version of the London Telegraph,
It would be difficult to get this information, but the electronic version of the London Telegraph is available to anybody with a web browser.
Now, how does the White House in particular feel about this state of affairs?
Mrs. Clinton made some surprisingly candid remarks about the internet coverage of the Lewinsky scandal
at a press conference on an unrelated topic a couple of Wednesdays ago.
February 11th, quoting Mrs. Clinton.
There are a number of serious issues without any kind of editing function or gatekeeping function.
Now I wonder who she has in mind for the editors and gatekeepers.
I bet it's not any of us.
She goes on,
What does it mean to have the right to defend your reputation or to respond to what someone says?
There used to be this old saying that the lie can be halfway around the world before the truth gets its boots on.
Well, today the lie can be twice around the world before the truth gets out of bed to find its boots.
I mean, it is just beyond imagination what can be disseminated, she said.
She continued, I don't have any clue about what we're going to do legally, regulatory, technologically,
i.e. we haven't figured it out yet, but obviously we're going to do something.
But I do think we always have to have competing interests in balance.
Any time an individual or an institution or an invention leaps so far out of that balance and throws a system,
whatever it might be, political, economic, technological, out of balance, you've got a problem.
Because it can lead, it can then lead to the oppression of people's rights,
it can lead to the manipulation of information,
it can lead to all kinds of bad outcomes which we have seen historically.
So we're going to have to deal with that.
Now I have to admit that she speaks with some authority on the oppression of people's rights,
the manipulation of information, and all kinds of bad outcomes, which we've seen historically.
According to one reporter who covered this press conference, a reporter named Declan McCullough,
who writes for a Time Warner electronic publication called The Netley News,
the unnamed victim of Hillary's diatribe was Drudge and the Drudge Report.
And this reporter quite insightfully added, quote,
the beauty of the internet, of the at-large internet,
is that there are no gatekeepers.
And that terrifies politicians because they
are accustomed to a close relationship with the media.
By the way, the White House has also
actively encouraged Clinton aide Sidney Blumenthal
to pursue a $30 million libel suit against Drudge
for a story that Drudge reported a few months ago
and then immediately retracted when he discovered
Well, what are the prospects for government regulation of the Internet?
I'm happy to say that outright censorship of the kind favored by Hillary is not very
likely as the failure of the Communications Decency Act indicates, although a certain
amount of de facto censorship already exists.
For example, in the spring of 1996, a White House official named David Lytell put pressure
on Hotwired Magazine to remove a link from one of its pages to a page called the Skeleton
Closet site, which details skeletons in various public figures' closets, including Clinton,
of course.
Now other scenarios for regulation are much more likely.
The Esther Dyson, who's a well-known computer industry analyst, said just Monday of this
this week that she believes a great catastrophe will happen in the near future and will be
blamed on the Internet. For example, someone will bomb a building and it will turn out
that that person used email to communicate with an accomplice. And see, this will be
used as a pretext for regulating communication on the Internet or for giving the FBI and
the BATF the right to intercept any electronic transmission without a warrant or whatever.
This is the familiar ratchet effect described very well in Bob Higgs' book Crisis in Leviathan.
There will be some crisis which will justify massive government intervention to protect
us from unfettered information.
An even more likely prospect is the regulation of Internet service providers, the companies
like America Online CompuServe and so on who provide access to the net.
There's discussion now of treating them like telephone companies and having Internet service
providers be subject to the same regulations of the Federal Communications Commission that
traditional communication services are subject to.
For example, to regulate rates that Internet service providers charge, forcing them to
communicate to the so-called Universal Service Fund to cross-subsidize various users.
There are also prospects for government intervention in the computer industry more generally, even
outside the internet. The Microsoft case is a perfect example of that. What the Microsoft
case primarily illustrates is that government officials, and I should say government economists,
really don't understand much about computers. This whole recent controversy over whether
Microsoft was violating the 1994 consent decree by requiring resellers to include the Internet
Explorer Web Browser, along with Windows 95, this big debate raged among techies as
to whether a browser is part of the operating system, as Microsoft claimed, or whether it's
a separate application, as the government claimed. The lesson from that dispute is,
who knows? There's no unambiguous definition of what constitutes an operating system, what
constitutes an applications program. This is not something that the government should
The Head of the Justice Department's Antitrust Division, Joel Klein, insists that the government
is not trying to decide what goes into computers.
However, the Justice Department's latest complaint against Microsoft included a request
that Microsoft had to submit design details and descriptions to the government 30 days
before the introduction of any new browser or operating system.
And I want to mention that some of the chief villains in the Microsoft case, as you know,
are Microsoft's competitors, who have been pushing very hard for the government to attack
the menace of Microsoft. People like Scott McNeely, the CEO of Sun Microsystems, and
Larry Ellison, the CEO of Oracle, are villains here.
And by the way, you might never guess who is the latest friend of Microsoft's competitors.
This very prominent citizen wrote a fundraising letter containing the following, quote,
In the coming months, we will need to educate the public, the administration and Congress
about the dangers of a laissez-faire attitude toward Microsoft. I am personally convinced
that if nothing is done now, it will become increasingly difficult to have fair competition
in the years ahead. That is why we will need companies like yours to help finance and support
our efforts. Do you know who said that? That was Bob Dole. Bob Dole's law firm is now representing
Netscape, Sun and other companies who are agitating for action against Microsoft.
Finally, I want to speak just a moment or two about students.
Students are the most computer literate, on average, the most technologically hip of the
future victims of government action.
Do they share the attitudes and outlooks of these computer nerds?
The answer is yes, by and large they do.
Why is that?
One reason is simply because they are more, they have more experience with technology, more experience with computers, so they learn these free market attitudes of the internet community at an earlier age than the rest of us.
But there's even more than that. Just as computer nerds have little respect for the governing elites,
Students also have increasingly little respect for the academic elites and the regime they serve.
Why is this? Well, students increasingly recognize, as has been mentioned by both Lew and Sean,
that they recognize the modern, multicultural, politically correct university for what it truly is, namely an embarrassment.
I recently read, according to the Young America's Foundation, every Ivy League university except
Princeton now offers more courses in women's studies than in economics.
That's not true at the Mises University, I can guarantee.
Students are also realizing that the traditional university as an institution is losing much
of its social relevance.
You've heard many pronouncements about the university being in a state of crisis, increasing
and Costs. There's much more public scrutiny now of what goes on in public universities.
A lot of cutbacks and downsizing are on the horizon. And at the same time, the quality
of higher education is perceived as being in a state of constant decline. Students are
increasingly dissatisfied with large classes and different instructors, poor campus facilities
and safety and so on. Yesterday before coming here, I was giving a talk at USC. If you've
If you've ever been to USC, you know it's not in the greatest neighborhood. It's a completely gated campus.
Campuses are not safe places in most cities.
What can we expect the University of the future to be like?
Well, in all likelihood, it will be radically decentralized.
It's already true that much of the intellectual activity, the real intellectual activity in the US,
goes on not at the universities, but in the private sector, at think tanks and other private
research organizations like the Mises Institute. That's where many scholars would much rather
be where they don't have to deal with the politicized curricula and committees of the
university, they don't have to attend mandatory sensitivity training seminars and so on. There's
There's no political correctness at Mises U, as Lew mentioned last night. Furthermore,
increasing numbers of students are uninterested in pursuing an education at these traditional
institutions of higher learning. For example, the popularity of homeschooling is at an all-time
high.
Now, I should add that for all the blather from people like Al Gore about hooking up
every public school classroom to the Internet, which I think would be a complete waste of
program, you hear very little from those people about the potentially revolutionary impact
of the Internet on homeschooling and other decentralized educational opportunities.
It's now easier than ever for homeschooling parents to get information, to get course
and curriculum information, to share ideas with other homeschooling parents than ever
before through the Internet.
And I did a little web search and found that there are dozens and dozens of websites and
and mailing lists devoted to homeschooling, resources for homeschoolers.
I didn't find any sites devoted to resources for public school teachers.
Now these kinds of students, the students who are homeschooled or who do get a proper
education and of course they're much brighter and more motivated than the average student,
they're going to be interested in alternative forms of higher education, maybe some using
and the New Technologies, video classes, classes over the internet, whatever.
As evidence that such students are around and that they exist, you only have to consider
the huge popularity of the Mises University.
And I'm sure Lew would tell us that there is enough demand to hold three or four Mises
Universities every summer.
These are the students who we're reaching and the students we need to continue to reach
To conclude, like the computer nerds we've discussed, these students are a great hope
for us. They share the computer nerds' skepticism and frustration with the governing elites.
But they do want to learn. They are interested in genuine ideas. They do want to know about
liberty. It's nature and origins. And that's what we must continue to teach them. Thanks
to these new technologies, we have better and better opportunities to do so.
Now remember, technology is not the determinant of culture. Technology is the product of culture.
It is ideas that created Western civilization.
The civilization that you are helping to sustain through your continued support of the Mises Institute.
And for that, you deserve our heartfelt thanks.