Thoughts on economics and liberty

Category: Current Affairs

Wikileaks has reduced Australian security

Despite whatever Julian Assange may think (and he appears to have delusions of grandeur, sitting in judgement – without any authorisation from the people – about what is good for the world and what is not) he has harmed the security of many Western nations, particularly of Australia.

His actions have reduced the level of trust between Australia and US (Kevin Rudd has been put into a difficult situation with regard to USA).

His actions have damaged relations between Australia and China (by disclosing Kevin Rudd's views re: China).

It will take years, if not decades to repair these relationships. It puts Australia in a truly difficult situation.

And  other harm just adds to the damage caused:

  • US is now shifting many of its diplomats to avoid embarrassing relationships, thus significantly losing corporate knowledge and relationships which take years to build.
  • There is going to be SIGNIFICANTLY reduced information-sharing within the Western world for fear that it may be leaked.
  • Information on vital assets is now widely known, including to terrorists. This is perhaps the least important, but there are other things as well in the leaks that may disclose gaps in information or confirm uncertain information to enemies/terrorists. That is all in really bad form.

Citizens of the world are now far less secure than they were before the latest sage of Wikileaks. Julian Assange has undoubtedly caused far more harm than any good that might have come out of this. I am unable to count a SINGLE good thing that has come out of his recent mindless disclosures.

I reaffirm my view that I'm comfortable for Wikileaks to be shut down in its current form. We can't afford idealist lunatics like Assange. They are bulls in a china shop – destroying years of hard work without any knowledge of what they are doing.

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Wikileaks – a classical liberal perspective — continued (#2)

Atanu Dey, my good friend (and I do admire his work!), still doesn’t agree with me on this issue (see my previous blog post). He has now provided a more extensive discussion at:

So, with due respect, let me extend the discussion further and suggest a few key points for his kind consideration.
I believe that Atanu has veered – perhaps unwittingly – into utopia. He suggests that “The government should not be working in secrecy at home or abroad”. This sounds very similar to what Nehru thought about China with his “Hindi-Chini bhai bhai” delusion. – let’s all be good, let’s all trust each other, let’s all hold hands and tell each other everything …
Does that work in global affairs? No. Never.
According to Atanu  the benefit of TOTAL transparency is that “if the people in government know that there is nothing that they do on behalf of the people will ever be a secret they will not do such things that are against the interests of the people. That is not such a difficult thing to appreciate.”
Now, some might find this easy to appreciate but I can't. Yes, we want transparency but yes (also!) – there are things that not everyone needs to know immediately (they can know after 30 years). 
I found the precise flaw in Atanu's assumptions when I read this statement: “What about commercial firms? Is it ok for people to pry out trade secrets and publicize them to the world? Most definitely not. Commercial enterprises are not in the game for public welfare.”
This, then is the precise problem  – that Atanu imagines governments to be in the business of "public welfare".
Let this be clear that the provision of defence is not “public welfare” as commonly understood. If we imagine defence to be “public welfare” and compare it with, say, the education of children – and expect the same level of transparency – then we are lost! Our nation is doomed.
Defence is a highly competitive and risky business, requiring considerable strategy, tactics, feints, deception – and the lot. Chess is far less difficult at its topmost level than defence is.  A nation that images that defence is “public welfare” and that therefore everyone in the entire world is entitled to all its secrets will soon reach an inglorious end. Make not mistake about that.
Defence is the raw edge of human animality. It cannot be otherwise. There are no mercies shown in matters of defence, and none expected.
Atanu moves even further into utopian territory by suggesting that: “With sufficient light on what governments are doing — especially the governments of powerful nations such as the US — it is possible to see a time when it will be impossible for governments to wage perpetual wars that only enrich the powerful.”
I’m afraid wars are never (or almost never) about enriching the powerful – in the modern world. Few (if any) in a democracy are likely to be enriched through war. As Rudolph Rummel has shown, it was non-democratic governments – predominantly collectivist – that killed over 262 million people in the 20th century (
We are under siege by terrorists and collectivist ideologues of all sorts. Osama bin Laden will not feel the slightest compunction before ordering mass nuclear attacks on innocents should he get access to nuclear bombs. The battle of defence is not a trivial battle over intellectual copyrights. This is about war. It is a battle against evil.
So let’s not underestimate the many (often hidden) dangers the modern world is besieged with by living in an idealistic stratosphere. Doing so will hand over the world in a platter to the evil.
Do not misunderstand me. I'm NOT anti-transparency. By all means let there be whistleblowers who pinpoint corruption or human rights violations – even in defence.
But let’s not support mindless (and that’s the key) transparency.
The costs of living with utopian delusions is huge – well beyond our comprehension. Yes, let there be accountability of our governments. Let our elected representatives be held to account as diligently as we possibly can. Let us demand information from them. Let us be vigilant. Let us vote them out when the fail. Let us have whistleblowers, even. But unless Wikileaks exercises great discretion, it will CERTAINLY endanger millions of innocent lives – and that I do not support..
I do not support mindlessness of any sort, least of all that which involves questions of life and death.
I’m happy for Wikileaks to be shut down in its current formWikileaks in its current form is causing genuine and serious harm to people – some elements of which I've explained in my previous blog post –  that they don’t readily see in their amusement and titillation with tid-bits in the press.
Freedom is limited by accountability. Currently, Assange seems to be accountable to none – for the harm he has caused (and I don’t care about the embarrassments caused: I care for serious harm caused by the disclosure of internal government processes).  Who has set him up as an aribiter of the world's security and secrets? Whom does he represent? What is is his authority? None.
All harm caused will be born by the innocents. (And utopians.)
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Wikileaks – a classical liberal perspective

A flood of confidential information has been leaked into the public domain by Wikileaks. This offers a particularly interesting case study for moral and political thought as it tests the limits of freedom of expression – limits that I discussed at some length in this blog post.

Two tensions are involved:

a) that we must have unhampered information on what governments do; 


b) that information which forms part of the current business of a government must be protected to allow frank and free discussion within government and enable it to make considered judgements.

A clear exception to (b) exists with regard to whisleblowing. If, let's say, someone has discovered that Hitler is undertaking a secret project likely to cause significant loss of innocent life, then publication of such confidential data is perfectly defensible, for doing so could save innocent lives. 

But what about the case when no whistleblowing is involved or no harm is prevented? What if all we have is a fanatic who is fixated on releasing all information that governments hold? Worse, what if the confidential information is part of a strategic operation to save lives: an operation that could be compromised by the leak? 

Unlike the libertine, the classical liberal is aware that governance cannot always be fully transparent.

The business of governance does involve access to certain discreet information. Such information could have been obtained from, say, a dissenter of communist N.Korea. Releasing such information could, hypothetically, set back the advance of freedom in N.Korea by decades. I'm sure we'd all oppose the release of information that can harm lives. There are clearly no natural rights to all information regarding the functioning of the state

My good friend  (and FTI speakers panelist) Atanu Dey asks: "I cannot for the life of me understand why information that is good for the leaders is somehow not good for the people. I can understand that dictators don’t want people to know the truth. But in democratic societies? Why?"

To Atanu I'd suggest: by all means let the truth be known. Indeed, archival laws in modern democracies usually permit the release of such confidential information 30 years after the event. Such delayed release is appropriate and – in most cases -sufficient for truth to be known. So I'm not saying that information should be hidden from public view for ever. 

But I'm suggesting that there are no urgent natural rights of citizens to know everything that happens inside a government immediately as it happens. Upon electing our representatives, we effectively delegate our powers to them and expect them to exercise diligence and good judgement on our behalf. We can't demand to sit on their shoulder and watch everything they do or say. 

Would would Atanu say if commercial-in-confidence information belonging to his (or any other company) is forcibly released in the public domain – information that includes confidential statements made by board members and other confidential conversations and emails? We would then become better aware of the truth about his company. But is knowledge about such 'truth' our  birthright? No! It is private information the release of which must be protected by the law. 

Similarly, many operational decisions of a government must be accorded the shelter of secrecy. All reasons that apply to not releasing operational company information apply equally to governments, and more. In particular, the more such leaks become common, the less will be the information that diplomats share with their bosses, thus making the world less, not more safe. 

By all means support good whistle-blowing. But mindless release of information that perhaps embarrasses governments but ends up preventing free and frank discourse within governments, is not something I'd like to support.

This case (the release) can be attributed to severe failure of governance systems in USA. Such information should not have leaked out in the first place. Whether Wikileaks has broken any laws or not, one thing I can safely predict: that laws will soon be enacted all over the world to criminalise such acts where no direct public purpose (such as saving lives) is involved. 

Whistleblowing is good. Mindless disruption of government operations and strategies is not good.

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The global shift towards India gains momentum

A recent issue of The Economist had an excellent summary of the rapid changes occurring in the world – as innovation shifts to the East, in particular to India. This is as an inevitable consequence of India currently being (in many ways) the world's largest free market laboratory (see my post here), even as Western nations have followed the social democrat path and tied their hands behind their backs (see this post). 

Does this mean in any way that India WILL succeed? No. Its governance is in shambles, despite private infrastructure trying to fill some crucial gaps in that area. India desperately needs leaders who can provide good governance. FTI is the only entitly focused solely on this goal.


(Source: The other elephant, Economist, 4 Nov 2010)

India is producing a legion of new global giants that are competing head-to-head with established American companies. Look at Arcelor Mittal and Tata Steel in steelmaking; Bharat Forge and Sundram Fasteners in car parts; Hindalco in aluminium rolling; and a host of companies, including Infosys, Tata Consulting Services (TCS), Cognizant and HCL Technologies, in information services. Twenty years ago India had no global companies worth mentioning. Today the Tata group earns 60% of its revenues abroad, and Indian companies ranging from natural-resource firms, such as Reliance Industries, to health-care companies, such as Pirmal Healthcare, have been snapping up American brands.

American companies are also setting up shop in India. Bangalore and Hyderabad have “electronic cities” crowded with America’s leading companies. In Bangalore Cisco spent $1 billion on its Globalisation Centre East and General Electric (GE) opened a swanky research centre. IBM employs more people in India than in the United States.

India has long since turned itself into the world’s back-office—subjecting paper-processing hubs such as Kansas City to the same forces of competition that devastated former industrial cities such as Gary, Indiana. Now Indian-based companies are moving into an wider range of services: reading CT-scans and X-rays, processing legal documents and helping with animation. They are also moving into sophisticated niches. TCS and Infosys compete directly with IBM and Accenture in consulting. American companies are adding to the trend by moving more of their important operations to India: John Chambers, Cisco’s boss, has decreed that 20% of the firm’s leadership should be in Bangalore.

Companies in India are challenging American ones in an area that they have long considered their own—innovation. The Boston Consulting Group’s 2010 survey of innovation notes that the number of American companies on its list of top innovators is declining while the number of Indian companies is rising. It also points out that the Indian firms place a higher value on innovation than the American companies.

Most strikingly, Indian companies have produced a new type of innovation, variously dubbed “frugal”, “reverse” and “Gandhian”. The essence is to reduce the price of a product or service by a breathtaking amount—80% rather than 10%—by removing unnecessary bells and whistles. Tata Motors is selling its “people’s car” for $3,000; GE’s Indian arm offers a medical ECG machine for $400; Bharat Biotech sells a single dose of its hepatitis B vaccine for 20 cents and Bharti Airtel provides one of the cheapest wireless telephone services in the world. These frugal products are likely to disrupt established Western companies (including GE itself) by forcing them to engage in a bloody price war.

To add to this general turbulence Indian-based companies are also on a hiring binge. For decades America has gorged itself on a seemingly limitless supply of brilliant Indian PhD students and entrepreneurs. Half of Silicon Valley’s start-ups were either founded or co-founded by Indians. But these paragons are now returning en masse to the mother country (just as America makes life more difficult for immigrants). Why work for a sluggardly American firm when Infosys is growing at double digits? Why live in a flimsy bungalow in the Valley when an Indian company will provide you with a villa in a gated community, membership of a country club and a chauffeur-driven car?

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