METANOMICS: LIVE FREE AND PROSPER:
GOVERNMENT’S PLACE IN VIRTUAL WORLDS AND ONLINE COMMUNITIES
OCTOBER 7, 2009
ANNOUNCER: Metanomics is brought to you by Remedy Communications and
Dusan Writer’s Metaverse.
ROBERT BLOOMFIELD: Hi. I’m Robert Bloomfield, professor at Cornell University’s
Johnson Graduate School of Management. Today we continue exploring Virtual Worlds
and the larger sphere of social media, culture, enterprise and policy. Naturally, our
discussion about Virtual Worlds takes place in a Virtual World. So join us. This is
Metanomics.
ANNOUNCER: Metanomics is filmed today in front of a live audience at our studios in
Second Life. We are pleased to broadcast weekly to our event partners and to welcome
discussion. We use ChatBridge technology to allow viewers to comment during the show.
Metanomics is sponsored by the Johnson Graduate School of Management at Cornell
University and Immersive Workspaces. Welcome. This is Metanomics.
ROBERT BLOOMFIELD: Welcome to Metanomics. Today is the first of two sessions with
an emphasis on policy matters. Next week we’ll be joined by behavioral economist, book
author, and New York Times columnist Robert Frank, who often favors government
regulations, mandates and progressive taxes despite thinking of himself as a Libertarian.
But today we are joined by Adam Thierer, a more traditional Libertarian, senior fellow at
The Progress & Freedom Foundation and the director of The Progress & Freedom
Foundation’s Center for Digital Media Freedom. Adam works on communications, high
tech, media policy and has been featured in the Wall Street Journal, Washington Post,
New York Times, USA Today, Forbes, The Economist, Newsweek and just about, I guess,
any other publication you can name that would cover such things. Adam, welcome to
Metanomics.
ADAM THIERER: Well, thanks so much for having me.
ROBERT BLOOMFIELD: It’s great to have you. I’m looking forward to an interesting
discussion. I’m sure that we will have a lot of commentary from people in our audience. So
welcome, everyone who’s watching on the web at Metanomics.net or in Second Life at any
of our many event partners. We’ll be tracking the text chat so please keep those questions
and comments coming.
So, Adam, what exactly is your role at the Progress & Freedom Foundation, and what do
you do as the director of the Center for Digital Media Freedom?

ADAM THIERER: Well, I am a senior fellow in policy matters here at the Progress &
Freedom Foundation, and I cover a wide variety of high-technology policy issues that
affect our digital economy, with a particular focus on the intersections of concerns about
online child safety and free speech, with a particular focus on First Amendment freedoms
and how they pertain to new digital environments, including Virtual Worlds.
ROBERT BLOOMFIELD: Great. Before we get into details, why don’t you just lay out for
us your overall philosophy on the regulation of online privacy, child protection and related
issues?
ADAM THIERER: Sure. Well, generally speaking, what we favor at the Progress &
Freedom Foundation, the approach we’ve tried to adopt in all of our work, is that we favor
parental empowerment or personal responsibility over most regulatory approaches to
online free speech or online content and expression. So specifically, what we mean by that
is that we would favor education and empowerment over regulation as the first and best
way to go about dealing with various concerns about online child safety, content,
expression, so on and so forth.
My particular focus over the last couple of years has been building a giant inventory, if you
will, of all of the various types of parental-control tools and methods, that are out there on
the marketplace today, that can help parents or individuals take matters into their own
hands, if you will, and better protect themselves, their personal information, their privacy,
or their children when they’re online. So that’s the approach we take, what I call sort of
household empowerment approach, and I believe that’s a superior approach to the sort of
community standards approach that we’ve taken in America for many, many decades, or
essentially called in Uncle Sam to play the role of surrogate parent or national nanny and
make a lot of these decisions for us.
Luckily, as Americans have become more empowered to make these decisions for
themselves, I think we can move government out of the way a bit more and allow people
to express themselves freely online and elsewhere and to consume and watch and listen
to and play with the things that they’re most interested in.
ROBERT BLOOMFIELD: Now realistically, of course, you know that government is going
to get involved. I don’t know if we can quite say Uncle Sam is going to be a nanny, but I do
get your point. So I assume that another big part of what you do at PFF is, I mean you
may endorse and encourage these more personal empowerment approaches, but you
must also be taking a very close look at the various regulations that are being proposed
and trying to encourage people to move them into something they’re a little happier with. Is
that right?

ADAM THIERER: That’s absolutely correct. What we try to do her at the Progress &
Freedom Foundation is to outline a set of objectives or policy priorities that would steer
away from regulatory preemption as the first default option and, again, towards more of an
empowerment or educational based approach or solution to the concerns expressed by
policymakers, parents or the general public. So for example, there’s been quite a bit of
concern about child safety in social networking sites. The first order of business we argue
is, let’s look at the facts: Are children unsafe in social networking sites? Are we at risk and
somewhat [AUDIO GLITCH]?
And what we have found, after I’ve been on a number of taskforces on this issue and done
a lot of studying on it, is that the concerns that many lawmakers have about, for example,
online predators, predation if you will, is really actually a very, very small problem in the
overall larger scheme of things. And that what the really big problem is more peer-on-peer
activity: cyber-bullying, harassment, stalking, that sort of thing. So it’s always important to
put things into perspective and ask ourselves if the regulations or solutions that are being
put forward as sort of a technological silver bullet solution to concerns makes sense if
they’re not commensurate with the actual harms that are out there. So that’s led to efforts
by me and others to try to fight things like mandatory age verification or identity
authentication before everyone goes online to various social networking sites or to virtual
communities such as Second Life.
ROBERT BLOOMFIELD: Well, I have to say you’ve mentioned all of the sort of hot-button
terms in the Second Life community. You started off with community standards, which
Second Life has, and age verification, which is recently coming online, and so on. But
before we get to all that, there’s a long history of these matters online. I’m wondering if you
could just give us kind of a quick history lesson going back to the early regulatory moves
and sort of walking us up to where we are in the present day.
ADAM THIERER: Sure, I’d be happy to. Well, basically, starting in the mid 1990s
Congress tried to pass a variety of laws dealing with objectionable content online, namely
indecent or quote/unquote “obscene content” on the internet. The first effort to regulate
this was known as the Communications Decency Act or the CDA, which passed in 1996,
as part of a major bill that Congress passed called the Telecommunications Act of 1996.
The CDA basically again took a sledgehammer approach to try to regulate speech or
expression online, saying anything that was indecent or obscene should essentially be
banned. Well, that law was immediately challenged by the ACLU and a variety of other
folks--The ACLU is the American Civil Liberties Union--they tried to block this and
succeeded in blocking it from ever going into effect.
But Congress came back and very quickly passed another law called the Child Online
Protection Act, which tried to require mandatory age verification of any site that had

adult-oriented content of an indecent or obscene nature or that was quote/unquote
“harmful” to minors. Well, that led to another lawsuit, a lawsuit that lasted, believe it or not,
ten years and went to the Supreme Court three times in the United States, and it was
finally struck down basically for good or enjoined for good just earlier this year.
So what we have is a situation in the ’90s where Congress is very much trying to take,
again, this sledgehammer approach to regulating the internet. Once that didn’t work, or
was enjoined for Constitutional purposes, the Congress and many of our state lawmakers,
state and local officials and state Attorneys General tried to take other approaches at
regulating the internet. I already mentioned the age verification issue that’s out there.
There’s questions about: Should the government mandate that everyone be authenticated
before they go online to visit their favorite social network or their favorite Virtual World or
even to engage in some online gaming on an Xbox or a PS3? There have been many
lawmakers who’ve suggested that that has to be done. But how do you do it? And that’s
not easy, and it also potentially invades our privacy to do so, so that hasn’t passed into law
yet, but it’s still being considered.
There was also a law that was proposed just a couple of years ago in Congress, called the
Deleting Online Predators Act. Again, this concern about predators online led to 415
Members of the House of Representatives voting in favor of a law that would have banned
all social networking sites, however you define them, in publicly funded schools and
libraries. Now luckily, that bill didn’t make it through our U.S. Senate in America and
become law, but that’s the sort of threat that’s still out there.
And then most recently, we’ve seen legislative efforts aimed at addressing cyber-bullying
or cyber-harassment online. Now at least here I would argue that Congress and other
lawmakers are finally aiming at a more legitimate concern that’s always been with us.
Right? This isn’t just something new to our Virtual Worlds, this has always been in the
Real World. There’s always been bullying, unfortunately, and harassment. We do need to
find ways to address it, but now Congress is debating two very different approaches, one
that would actually criminalize it, including criminalize it for young kids and take sort of a
“lock them up and throw away the key” approach versus a different approach which favors
education, counseling and other forms of intervention to try to deal with that problem.
The point is, Rob, is that we’ve seen Congress and other lawmakers take many different
cuts at internet regulation. For the most part, most of them have been stopped or haven’t
been imposed yet, and therefore, the internet, social networking sites and Virtual Worlds,
luckily in my opinion, so far have been kept free of meddlesome government regulation.
ROBERT BLOOMFIELD: I know the Federal Trade Commission is undertaking a little
meddling. They’re doing a review of industry practices. I think it’s called On Child

Protection and Adult Content. What do you know about that?
ADAM THIERER: Right. So just recently, the U.S. Congress, when it was passing its
appropriations bill for the U.S. Federal Trade Commission, or FTC, included a few lines in
the appropriations bill saying that, if the FTC was going to get their money this year, they
were going to have to study the question of underage access to objectionable content
within Virtual Worlds or virtual online communities. And this was something I think even
caught the FTC staffers by surprise because it was buried in their appropriations bill. But
there was a Member of Congress, and sometimes all it takes is one Member, in this case
his name is Representative Mark Kirk--basically said he wanted the FTC to investigate if
kids could access adult-oriented content or pornography within virtual communities or what
other types of adult-oriented activities were going on that kids might see or hear.
And so the FTC is currently investigating this question, looking at not just Second Life, but
dozens of other Virtual Worlds, taking a look in real time of what’s happening in these
Virtual Worlds, taping it and then producing a report for the Commissioners at the Federal
Trade Commission to consider what, if any, steps should be taken to address these
concerns. I believe the report is due out before the end of the year, and the rumor that I’ve
heard most recently is that we’ll see it the first week of December in fact. I’m not quite sure
what’s going to happen there, but I have a feeling what the Federal Trade Commission is
going to do is to essentially recommend a set of best practices or guidelines to various
Virtual Worlds or virtual communities about how to address access to certain types of
potentially objectionable adult-oriented content or expression.
ROBERT BLOOMFIELD: Well, interesting stuff. I guess that’s pretty much then where the
regulations stand right now. Thanks for that background. I’d like to move on then to some
of your writings, and in particular, you wrote a document, a 250-page guide Parental
Controls and Online Child Protection: A Survey of Tools and Methods. So I guess this is
really capturing what you laid out earlier, giving people the ability to use education and
tools to protect themselves and their children. You have some Rules, Tools, Schools and
Talk model of parental control. Can you walk us through that?
ADAM THIERER: Yeah, absolutely. Basically what I’m trying to do in this report is--let me
take you back a step. After the first of my two children was born back in 2002, I decided I
really needed to get serious, as a free-speech advocate, and sort of put my money where
my mouth was, so to speak, and show the world that, yes, there was a way to deal with
potentially objectionable content or expression without calling in government officials to
regulate on my behalf or play the role of surrogate parent for us. And so I sat down and
started putting together a compendium that at first was just only about 20 or 25 pages of
various approaches or tools that parents could use to deal with objectionable content in a
variety of platforms or context. And it has grown, as you mentioned, Rob, into a 250-plus
page document that’s freely available online. I don’t charge any money for it.

It’s on our website at pff.org/parentalcontrols. Again, pff.org/parentalcontrols. People will
find there this document, which I update every three to six months because of all the
fast-moving changes in this space, both on the technology side and in terms of the
response side what people are doing to address concerns. I address every major media
and communications platform you can find. I start with the oldest, such as television and
radio. I then discuss things like video games and Virtual Worlds. I also have a section on
mobile media and mobile content and a huge section on internet and social networking
services. And what I show in each and every one of those sections is that never before in
human history has there been more ways for parents to deal with potentially objectionable
content or expression that is out there in the world around them.
Now it is also true that technology continues to evolve at a very rapid pace, and that’s
where the real challenge lies for a lot of parents, essentially just keeping up with
developments that are going on out there. But I’m actually very bullish on technology to
solve problems that technology creates. And so for example, when it comes to underage
access to pornography online, the approach that a lot of people have taken in the past is
using filtering technologies. You can filter out quite a bit of objectionable stuff on your
personal computer or through your other workplace devices.
And now there is a whole new class of monitoring tools that allow you to watch what your
younger kids are doing online, to see if they’re stumbling into sites they shouldn’t be
looking at. There are also tools within the various operating systems that are on the
market, tools that are embedded within your browsers, whatever browser you use there
are tools. And many, many other tools. Even more exciting to me is the rise of sort of
community self-policing, which refers generically to any and all efforts by various sites out
there are services such as YouTube or MySpace and Facebook or even maybe Second
Life, where the community comes together and sets some standards about what they think
is and is not appropriate or flags certain types of content that they think is truly
objectionable and offensive and deal with those problems in sort of a self-regulatory basis.
And that, to me, even though I know that also can be controversial at times, it’s definitely
preferable to having the government come in and set a “one size fits all” standard for all
online communities and all online content sites.
So that, I think, is the approach I try to push forward in my book on parental controls and
online child protection is that we can empower our very diverse citizenry with a diversity of
tools and methods to make sure that they can set a standard that’s appropriate for them,
their families and the communities they like to hang out in, be they online or off.
ROBERT BLOOMFIELD: You used a phrase that usually makes sense when we’re on
talk shows, speaking in English, “our government,” but, of course, we’re in Second Life.

This is very international and just looking at Metanomics itself, I’m in the U.S. We’re
actually owned by a Toronto-based company, and our broadcast company is in Australia. I
know we have people in the audience from Germany, Belgium, India, so on and so forth,
and so it certainly gets tricky cross-jurisdictionally. I wanted to ask you about this because
I know that you just came back from a conference called Child Protection, Free Speech
and the Internet: Mapping Territory and Limitations of Common Ground. That took place in
Oxford and had people from all over the world there. And so I guess I’m just wondering
were there any particular lessons you take away about differences in perspectives across
the countries or how people are looking to solve the international aspect of this?
ADAM THIERER: Oh, absolutely, Rob. In fact, every time I visit Europe or other
continents and countries, I’m struck by the different cultural visions and values and
differences that basically really raise the question of how we’re going to deal with these
things going forward for a borderless medium like the internet and for borderless virtual
communities.
Let me give you just one concrete example. I’ve been in Europe many times over the past
five or six years, and, every time I’m there, I usually get needled by some of my European
friends or even by European policymakers about how we Americans are very Puritanical
and a little bit backwards when it comes to matters of sexuality or sexual expression and
how the Europeans just don’t understand why we get so worked up over these things,
such as the famous Janet Jackson episode during the Super Bowl or other things and why
we regulate all of this stuff obsessively. I have to admit it perplexes me at times too.
But then, in the same breath, my European friends will turn around and say, “But why don’t
you Americans do something about violent speech or hate speech? We need to shut that
down.” And, of course, we in America don’t really try to regulate violently themed media or
content at all, and we don’t regulate hate speech. These things are fully protected by our
First Amendment in the United States. So here you have two very, very different standards
on either side of the Atlantic, with the Europeans being worried about violent media or
violent content as well as hate speech, and we Americans being more obsessed with
sexual themes or vulgarity.
Well, how in the world do you harmonize those values across borders for trans-border kind
of sites online or services online that defy geography? This is, in fact, a topic of one of my
seven books that I’ve written or edited. I edited a book called Who Rules The Net, and
basically asked a bunch of academics and others to explore this question, and I’m sad to
report we didn’t have a definitive answer. It’s a really, really tough question about how to
deal with this, but my preference would be that we not allow sort of the internationalization
or the international harmonization of these questions, or else what ends up happening is,
you have what I would call a lowest common denominator regulatory standard. Which is to

say we end up regulating content according to whoever has the most sensitivity about it
across the globe.
I would rather take the opposite approach and leave these online communities largely free
to operate as they wish and only at the boundaries or the margins where there’s truly
egregious behavior that crosses a line that everyone would agree on, for example, child
pornography, where everyone in every culture and continent can generally agree we need
to eradicate that. But on these other matters, I’d prefer to leave these communities free to
police themselves online and not have, say, a United Nations for the internet or something
like that, or for Second Life, God forbid.
ROBERT BLOOMFIELD: You chose an interesting example that I’m not sure I agree with
on child pornography because, although, well, I guess if you’re talking about real
photographic depictions of real human children, then I do agree. But, in fact, with the
internet and with Machinima video, like we’re doing right now, it won’t be long until we
have very photo-realistic depictions of people of all ages doing all sorts of things, which I
understand right now would be legal in Japan, illegal in Germany and unclear in the United
States.
ADAM THIERER: Yeah, it is unclear in the United States, but actually there was a
Supreme Court case not too many years ago that dealt with this and said that virtual
depictions of child pornography essentially are not unconstitutional, that they are protected
by the First Amendment because basically, at the end of the day, no one was hurt. No real
human being, physical human being or child was hurt in the production of these things.
Now I have to tell you I’m about as hardcore of a free-speech First Amendment guy as
you’ll find, but that decision left me a little uneasy. And, even though I generally think I
support that going forward, I think your point, Rob, is a really interesting and touchy one,
which is, we’re talking about depictions right now that everyone can clearly see are not
real human beings. These are avatars or other types of digitizations, digital renderings of
these activities. That’s one thing. But what happens when it’s so photo-realistic that you
cannot tell the difference between an actual human and a digital avatar? Well, of course, I
think the first thing we’d say is, “Well, let’s explore this and see if it was a real human or
not.” It is going to be tricky.
At the same time, there is another question, which is: Is it equally as destructive on the
human psyche or on criminal behavior, if you will? Will it create something in the minds of
certain criminals that would facilitate Real World harms? I’m not saying I have a definitive
answer on this. All I’m saying is that this is going to be something that virtual communities
are going to struggle with increasingly, going forward, especially as the Virtual Worlds we
see now online start to mesh with virtual reality technologies, and we start to have a
projection of virtual life into the Real World, that’s when things are going to get really,

really interesting. I mean I’m just waiting for the day when I come home and see my son
swashbuckling with Johnny Depp in Pirates of the Caribbean 10 in my living room, and
Johnny Depp running virtual swords through my kid’s real neck, I’m going to probably be a
little bit creeped out at first.
My first instinct isn’t to run to the government and say, “Ban virtual reality.” I’m sure it won’t
be, but you can imagine that some parents will be very nervous about that. They’d be even
more nervous if they come home and find Junior having an orgy with 14 naked women. So
you can imagine that we’re going to have a real struggle with this, as a society, going
forward. And I would hope we can find other solutions to this, other ways to deal with this
besides a blanket prohibition because I never think that’s a good idea. But, nonetheless,
it’s something to keep our eye on.
ROBERT BLOOMFIELD: Okay. So we’re right about at the halfway point of our session,
and, when we come back, what I’d like to do is shift from free speech to discussions of
privacy because I know that you see those as two sides of the same coin, which was an
interesting idea and a new one to me. But right now we’re in our third year of broadcasting
Metanomics, and what we’re going to be doing for each of our shows this year is to splice
in a few excerpts of older discussions from our archives. So we will be back with
Adam Thierer after this quick stroll down memory lane.
[VIDEO]
ROBERT BLOOMFIELD: With Metanomics now in its third season, we thought it’d be fun
to take a look back at some of our past shows and guests, since September of 2007. With
over 80 episodes to choose from, we chose some of the most interesting, engaging and
occasionally contentious discussions. As always, you can see the complete episodes at
Metanomics.net or on our iTunes channel.
ARCHIVE
METANOMICS: AV-CULTURATION
TOM BOELLSTORFF: Now as to your other question, which is an extremely important
question about what are the positive or negative aspects of the fact that I didn’t try and
meet people in the physical world or interview them in the physical world. I think that
talking about that as positive or negative sort of misses the point. The point is, when you
do different kinds of research, you need to have different kinds of research questions. So if
I was interested, let’s say, in how people’s physical world disabilities affect the ways that
they use Second Life, then it would be helpful for me to meet people in the physical world,
who, let’s say, have trouble moving their hands or typing and then looking at how that
affects the way that they do things inside of Second Life.

However, if I’m interested in studying the culture inside of Second Life itself, meeting
people in the physical world there’s not necessarily any harm in it, but to assume that any
research project must always include meeting people in the physical world, it really misses
the point of what happens in Virtual Worlds. It does a kind of violence to it. There is
however many 25 or 30 people right now sitting around here in Metanomics. Some of us
could be in Europe. Some of us could be on the East coast or the West coast or Midwest
of the United States, but where we are right now is in this place, this Metanomics virtual
place.
And, if we’re interacting in this place and saying things and doing things, there’s culture
happening, and that culture is happening here on the Metanomics Sim. It’s not happening
in Long Beach, California, where I’m sitting right now, in California, talking to you. If I were
to fly to California, I wouldn’t be able to learn about what’s happening right now where I’m
looking over at RobinG2, who looks like a robot, and looking at all these things that are
happening inside of Second Life. And so as we move forward in this wonderfully growing
field of research on Virtual Worlds, online games and all these kinds of things, I think we
need to have multiple methods.
I think that there will be some cases where we’ll want to be talking to people in the
physical world as well, that there will definitely be cases where not only is that impractical,
like I can’t fly to 30 different countries and talk to everyone, but it would actually be
denigrating or missing the point of what’s happening to the social interaction, the culture
that’s happening inside of the Virtual World itself. So to me, it’s not positive or negative. It’s
about different research techniques. They all cast different light on some common
problems and issues.
DR. ROBERT YOUNG - MAY 13, 2009. FEDERAL INTEREST & SOCIAL SECURITY
WITH DR. ROBERT YOUNG.
ROBERT YOUNG: Well, I know that on security, we’re always the “no” men. We’re never
the “yes” men. We’re always saying security. But I agree with Paulette that you’re
forward-facing and some of the things that you’re talking about for doing some type of
publicity or something like the Air Force trying to bring people in, that’s great. The issue is
that people are having to do it day to day. They’re having to use Second Life, in their job,
and they’re a federal employee, the recommendation that Paulette had said and what
we’ve built at IRMC is an enclave. It’s a specialized area that will not bring the problems
from Second Life and/or these Virtual Worlds onto our government systems which might

be your production government system doing your national war-fighter job or maybe doing
IRS tax returns; I’m not sure what your job may be.
And Paulette’s agreement with the multi-agency, all of our problems are becoming multi
because we’re so interconnected. Our networks have no boundaries anymore. So in order
for us to make sure that we don’t have a problem that, say, DOD brings in, it doesn’t bleed
over to your EPA and your FAA and your DOT. Some of the agents are doing exactly what
you said. It’s all bound to the software, the client and the server, and, as Paulette had said,
we have the HBSFO(?) [base?] security system in the Department of Defense. It’s actually
locked down for a specific reason, to protect us to the best of its abilities again. And [going
to be?] people on these systems doing these things, and the issue is, we have
government people now, insiders, that actually are doing things that they’re not supposed
to do. We know appropriate use of the network. We know appropriate function.
Our worry is that as they get into Second Life and these other 3D Virtual Worlds, that
sometime they forget that they’re at work. They may accept something that they wouldn’t
normally do in the other world. But it’s all down to the software and evaluating the code
and evaluating what that server-client relationship, what it has allowed in and out. And as
Paulette said: the ports, what ports are we opening, can we watch them closely. Can we
monitor what’s going on in this Virtual World? And the identity management looks huge for
Paulette and for everyone else. Am I talking to who I really think I’m talking to? Do you
have a federated ID or some way to say that, yes, you are indeed speaking to Dr. Rocky
Young. No one has taken over the avatar. No one is misrepresenting or social engineering
you to get information out of you.
There’s so many ways to do social networking, and Paulette works through all of those at
IRMC. And I just want to be person who says, “I want you all to go into these Virtual
Worlds as security professionals, but I want you to understand the risks when you go into
them and accept that risk that something could happen.” And, as long as you’re aware and
you accept it, then you’re standing there when they reference it so that E-9/11 and these
other, you know, the E-Pearl Harbor that may happen. We’re not saying, “Gee whiz! We
never thought of this,” or, “Gee whiz! I had no idea this could happen.”

[END VIDEO]
ROBERT BLOOMFIELD: We’re back on Metanomics. I’m Rob Bloomfield, and I’m here
with Adam Thierer of the Progress & Freedom Foundation. We spent the first half of the
show talking primarily about free speech and protecting children from objectionable
content and the like, but now we’re going to look at a related issue, which is privacy
protection. And, Adam, I understand you see privacy protection as simply the other side of
the coin of free speech. Can you spell that out for us?
ADAM THIERER: Sure. Well, when you think about it, when you have a regulation
governing speech, sometimes the regulations can involve surrendering your privacy. So
for example, the regulations that I mentioned that some had favored for the internet, such
as mandatory age verification or identity authentication, would require a surrender of
personal anonymity. You’d be forced to always reveal yourself at every virtual doorstep
that you walked up to and knocked on the door. You’d have to say, “Here I am. This is who
I am,” and you’d have to be credentialed. Well, that would require surrender of privacy so
it’s obvious there how speech regulation or controls can entail privacy-related concerns.
But the flip side is often not appreciated as much, which is some privacy regulations or
proposals essentially require people to stop sharing certain types of information or to not
say certain things about certain peoples or subjects, and that’s really troubling to me as
well. But these things are related.
In a paper that a colleague and I at PFF wrote last year, called What Unites Advocates of
Speech Controls and Privacy Regulation, my colleague, Berin Szoka, and I argued that
many times when a [root/route?] animates movements to regulate these things is simply
sort of an elitist belief that, one, people are sort of too ignorant or too busy to be trusted to
make wise decisions for themselves and/or for their children, and, two, what also unites
them in this elitist belief is that all or most people essentially share the same values or
concerns, and therefore, a broader community standard or governmental standard should
trump individual or household standards. So I’ve already talked a lot about that. I won’t
impact that any further since I’ve already discussed it.
But the point is that we see our government today trying to aggressively regulate the
internet both for speech-related concerns and privacy-related concerns, and these two
themes come up again and again and again, the idea that people are too lazy or too stupid
to make their own decisions or protect their own privacy or safety, and then secondly the
notion that, again, someone else should make the decision for them because there’s some
broader public interests or national interest involved.
ROBERT BLOOMFIELD: As the quintessential Ivy League elitist, even Volvo driving and

everything up until a few years ago, I hear the word “elitist,” and my ears prick up. So I do
want to ask you a little bit more about that aspect of it.
ADAM THIERER: Sure.
ROBERT BLOOMFIELD: In that paper with Berin Szoka, you talk about Google Mail,
Gmail as an example, sort of the quintessential example of a case--so this was way back
in the day when, what, I think it was AOL was the biggest mail provider, and they were
offering a pittance of memory. And Google comes out and says, “Hey, for free, you can
get--” what then it was like a gig or something of storage space. And so a lot people just
naturally said, “Hey, that sounds good to me,” and they chose it. Now Google uses
contextual advertising, which concerned a lot of the elitists who effectively were arguing
that, sure, you’re choosing it of your free will, but we’re smarter than you are, and we think
you’re making the wrong decision. Isn’t it the case that sometimes they might be right?
ADAM THIERER: Well, look, I want to make sure I separate some things here. When I
talk about the elitism that I’m concerned with is political enforced elitism, if you will. It’s the
elitism from above, up on high, as opposed the elitist viewpoints of those and maybe, as
you said, your Ivy League friends or academics or the Ivory Tower in general. I have no
problem with that. I like the viewpoints of those academics and hearing from even privacy
advocates about what their concerns are. I think those sometimes are valid, and
sometimes they are legitimate things that we should be exploring. Whether we should
enforce by law prohibitions based upon those concerns is an entirely different matter.
So to get back to the Gmail example you mentioned, we have to go back to the Dark Ages
of 2004 when most of us were using AOL or maybe Yahoo! and getting very limited
amount of email storage, ten megabytes or something, usually much less than that. I don’t
know if you or any of our viewers out there remember, but back then you had to delete
every other email for fear of them butting up against your buffer or your limit. And, all of a
sudden, Gmail came along and offered at that time an astonishing gigabyte of storage,
and it’s now up around six or seven gigabytes, I believe. And everybody’s offering more
and more and more. The point is, at that point in time, Gmail said, “The quid pro quo here,
the deal we’re going to make with consumers is, we’re going to give you this service and
all this storage for free, but you’re going to have to accept some advertising around it.”
Well, certain privacy advocates went bananas and said, “No, no, no, no. We can’t have
that because people will be surrendering too much personal information.” Again, they’re
sort of sheep. They’ll just go along with it and be led to the slaughter. My argument at the
time and still today is that, well, this is a choice we should be allowed to make for
ourselves. I’m willing to trade away some potential information about myself or at least be
served up as contextual ads that basically can offer me this free service, which is
something that we take it for granted that these email services do cost money, but we get

them all free.
And today, there’s nearly 150 million people around the world, who use free Gmail
services, and that’s a steadily growing share, and yet there are some people who say we
shouldn’t have access to it because of privacy concerns. So I’ll just say we have to accept
the tradeoffs and understand that there is no free lunch out there. You have to understand
that, if you’re going to take something for free, there might be something you give up. In
this case, maybe it’s a bit of privacy or the annoyance of having ads accompany your
email.
ROBERT BLOOMFIELD: So I guess my concern on this is twofold. I think the first one is
that, although we can talk about it just being ads, well, actually I should say I don’t know
what Google is doing with the data they have. Maybe they have a wonderful policy, but I
know that I have a Google Gmail account, and I am probably not the only one of the
150 million who never bothered to read the little click-wrapped Terms of Service. For all I
know they have rights to my firstborn child. Well, actually I know they don’t because we
have a law against that. But, if we don’t have any laws on privacy, I don’t know what keeps
them from having an inordinately one-sided agreement that they get all my data.
And to make it worse, what if I use my Cornell account, and I send you an email to your
PFF account, but you forward that without my knowledge to your Gmail account, and now
they’ve got information about me on Gmail. And, again, without regulations, I don’t know
how I can trust my data to anyone because I certainly don’t want to have to write a
contract with you saying you can’t forward to email accounts I’ve never even heard of and
companies I’ve never heard of that might have intrusive privacy policies.
ADAM THIERER: Sure. So two answers to that: Number one, let’s keep in mind that
Gmail and these other email services are services we voluntarily sign up for, and while it’s
true that we don’t always read the EULAs, the end license user agreements or whatever
else, the fact of the matter is that we can opt out of these systems anytime we wish.
They’re free services. We don’t pay anything for them, and so let’s not lose sight of that
fact, that we voluntarily walk into these exchanges.
But, number two, even after we’ve walked in voluntarily to these exchanges, we don’t
necessarily need to accept everything that they ask from us. Start with advertising, which a
lot of people find annoying, and yet it is the mother’s milk of the internet. I mean it powers
so many sites and services, and it’s what keeps costs down, keeps services free online.
So when we have ads that we don’t like, a lot of people accept them and just move on
because they know they get their free stuff, but a lot of people, in fact tens of millions of
people go out of their way to block ads and any form of intrusive banners or pop-ups that
are on their screen or on the services they use.

ROBERT BLOOMFIELD: So this is along the lines of your tools argument: use the tools to
protect yourself.
ADAM THIERER: Exactly. Applying the same model I apply in the child safety space,
when you have a toolbox that includes a variety of tools in it that allow you to empower
yourself and your family to take matters into your own hands, you can deal with these
problems. And, in fact, the numbers are quite astonishing: tens of millions of people, who
use Firefox, have made Adblock Plus the number one most downloaded privacy tool for
the Mozilla Firefox web browser.
ROBERT BLOOMFIELD: I’m raising my hand, by the way. I’m one.
ADAM THIERER: There are people who download this every single day, and it’s just one
of hundreds and hundreds of these privacy solutions that are out there to deal with these
matters. And, if you want to go further, you can download the number three most
downloaded service on Firefox is called NoScript, to disallow any sort of script that might
show on the page in real time. Using just those two tools alone, you can end up blocking a
significant portion of that which you would find annoying and/or intrusive.
You can also use browser controls in every major browser to block the acquisition of
cookies that you might set by visiting websites. You can also use encryption technologies,
and I could go on and on and on. The point is a lot of people don’t like having to use some
of those tools, just as some of the people don’t like using them on their child’s safety or
free speech front, but, at the end of the day, if they’re available and people can have
access to them, what my argument would be is that that’s preferential to having the
government come in and set the standards or the laws for us about how these
technologies or tools work, if we have the tools within our grasp to do it for ourselves.
ROBERT BLOOMFIELD: A middle ground possibly comes from Chicago law professor
Cass Sunstein and behavioral economist Richard Thaler, who I should point out was a
colleague of mine for a number of years here at Cornell. They have a book called Nudge
and a philosophy they call libertarian paternalism, libertarian because they’re trying to give
as much freedom as possible, paternalism because they’re going to help out a little bit. I’m
wondering how you feel about, for example, government stepping in and saying, “Look,
we’re not going to outlaw this, that and the other thing, but we are going to require that, if
you have intrusive privacy terms on your internet service, the default is that people opt out
and they explicitly have to go through some work to opt into that.” So I’m wondering what
you think of that.
ADAM THIERER: I’ve read and critiqued Professors Sunstein and Thaler’s books many

times. They’re brilliant scholars, and I can appreciate what they’re trying to do by changing
incentives essentially and creating what they call a new choice architecture by setting
defaults and incentives and rules in a different way. But the fact of the matter is that, at the
end of the day, that, to me, sounds a heck of a lot more like actual old-fashioned
paternalism than it does libertarian paternalism. Because, at root, what they’re saying is
that someone, and that someone most notably would usually be governments or
government regulatory agencies, should be changing defaults online or in devices and the
way that they function before they’re even shipped to market or allowed to get out of the
gates.
So I’ll give you an example of a little “nudge” that has been recommended by lawmakers
both here and overseas. There are some people who believe we should have a different
set of defaults on video game services or PCs that would not allow certain types of games
to be played or sites to be accessed, that are rated a certain way. So for example, on an
Xbox 360 or a PlayStation 3, it would come shipped to market with a standard that says
nothing higher than E for Everyone can be played. Nothing rated over E for Everyone by
the Entertainment Software Ratings Board which regulates video games. And no online
Worlds can be visited as a default. So the default out of the box is essentially sort of a
G-rated world except it’s an E for Everyone world in ESRB terms, and no Second Life or
anything like that should be accessible through a PC. And some people say, “Why not
make that the standard? Why don’t we nudge people in that direction, and then make
them choose to opt out of that?”
ROBERT BLOOMFIELD: It sounds more like driving tackle than a nudge.
ADAM THIERER: Yeah, and indeed that’s what these often come out as. They’re very
ham-handed approaches to trying to encourage people to do something that they want to
do, which is very paternalistic, which is, they don’t want them to play certain games or
access certain sites that they feel are objectionable to their values.
My alternative approach is exactly the opposite, which is to say, “Hey, let’s encourage
these sites, these services, these devices to have embedded controls, embedded tools
that allow parents and average folks to make these decisions for themselves when they
want, how they want. But don’t make the decisions out of the box for them.
And that’s the distinction between Thaler and Sunstein and myself is that they want to
nudge people in the direction of true paternalism and take a sort of more heavy-handed
approach to saying, “Well, if you want to get to that other stuff, you’re going to have to take
a lot of steps to get to it.” I take the opposite approach and say, “Let’s assume people are
generally responsible and leave them to their own devices, but empower them with tools
that can allow them to change their safety settings, their family settings, their privacy

settings, whatever else, when they want to.”
The other reason I feel this way and feel strongly about this is that, if you sent every digital
device to market with free installed defaults that were quite restrictive, restricted to the sort
of lowest level, you’re going to have a ton of people thinking you’ve crippled the product or
that it’s broken. You’re going to have consumer complaint lines light up like Christmas
trees the next day and saying, “Why doesn’t my Xbox play an R-rated movies or a
Mature-rated video game?” Or, “Why doesn’t my PC let me access Second Life?” And
somebody will have to walk you through the steps you take off restrictions that forbid you,
out of the gates, from seeing that content or accessing that information.
ROBERT BLOOMFIELD: But isn’t the flip side of this that you have someone who doesn’t
want their child to see content that they think is inappropriate for their child? They’re going
to have to go out and get help to use those tools that you’re saying will empower them to
limit what their kid see.
ADAM THIERER: Yes, indeed. I don’t deny that, Rob. That’s exactly what I’m saying. It’s
called parental responsibility. I mean basically what I’m saying is that parents, once they
bring a $300 video game console in the house or a thousand-dollar laptop, at that point in
time, I expect them to take a couple of more steps to be responsible enough to figure out
how to deal with things that they don’t want their kids to see. I know that there are some
hurdles there. There are some homes that don’t have as much time. There are some
homes or families that maybe need a bit more education. There are some tools that need
to be more widely available or easier to understand.
These are challenges that we should absolutely face up to and deal with, both for child
safety and for privacy. And companies and site administrators should absolutely make this
process easier. A big part of the solution that I favor is a self-regulatory, self-policing
approach where sites go out of their way and do their best to hand consumers these tools
and educate them about these empowerment tools so that they know how to do this
themselves. And I think some of the best success stories are emanating out of the Virtual
World community and out of the video game world. I mean we have for traditional video
games, for example, great ratings for content, and we have great site policies on Second
Life and elsewhere for how to deal with objectionable content.
ROBERT BLOOMFIELD: I’d like to get to that in a second. I just want to say I think I know
what Dick Thaler would say in response because he said this at a conference to a
proponent of rational markets and efficiency. He said, “The difference between us is that
you assume everyone is as smart as you are, whereas, I assume everyone is as dumb as
I am.” Which is always a quote I thought was pretty entertaining.

ADAM THIERER: The problem with that is assuming that everyone is stupid leads to
some really troubling results in terms of policy. It basically assumes that our government is
really, really smart, and they can make these choices for us. And I think, if everybody’s as
stupid as Richard Thaler is, I can’t believe anybody in the government’s smarter than him.
He’s one of the smartest guys I know. I don’t necessarily think that they’re in a better
position to make the choice for Richard Thaler or myself than anybody else. So I would
say you have to think about what you’re asking your government to do when you make a
judgment like that, saying, “Everybody’s stupid, and therefore, think for us.” Because that
has really profound implications for a lot of things in this world and a lot of things in our
online lives.
ROBERT BLOOMFIELD: We have time for one more topic, and I want to follow up on
what you just talked about, which was what is going on in online communities in Virtual
Worlds. One of our event partners here in Second Life, the Democratic Sims, I mean they
actually have their own self-elected government and set their own terms of service and so
on. Do you see that as being a long-term solution where people come into Virtual Worlds
and self-select? And related to that, do you see a difference between people
selecting--like Linden Lab sets their terms of service and community standards--do you
see a difference between them making decisions versus the government or Linden Lab
making decisions versus the actual residents of the World?
ADAM THIERER: Oh, absolutely, I see a difference, starting with the fact that you have
the ability to exit Linden Lab and Second Life at any point you like and choose a different
online community or Virtual World more to your liking and more in line with your particular
values or desires. Whereas, we do not have that option, obviously, with our government.
We’re sort of stuck with the one we’ve got, and, if government regulates and sets rules for
all of us, it essentially forecloses the opportunity for different communities to develop that
suit our values.
That being said, I can appreciate concerns raised by some people when certain
companies, who grow very large, have very heavy-handed approaches or policies
governing their communities. I think what’s really great about the new tools that are out
there and the new strategies that are out there in these virtual communities is that people
have been shown to rise up and make themselves heard in organized fashion. And that’s
what’s really exciting to me what happens in Second Life when I hear about various
groups that set up independent communities with different standards. Yeah, sometimes
Linden Lab does come in, steps in and says, “Well, we won’t tolerate this or that,” but I
think eventually Linden Lab has to be a good community steward and listen to the various
sub-communities within the larger community.
This is why I like to use a phrase from my favorite modern political philosopher

Robert Nozick, who wrote about the idea of a utopia of utopias as the optimal form of
government, the notion that, “There is never going to be any one central vision that should
govern all society and create a utopia. It’s better that we have a system that allows many
different utopias to flourish underneath an umbrella.” And that’s what I think is happening
in Worlds like Second Life, at least I hope it will start happening more where you have a
broad community of interests, and you allow different communities to develop within that
broader one. That’s the same approach I take to the Real World government too.
ROBERT BLOOMFIELD: Okay. We’re going to have to leave it there because we’re
running out of time, and I get the last word with my Connecting The Dots segment. But
thank you for a fascinating conversation, Adam Thierer of Progress & Freedom
Foundation. I hope we’ll hear from you again on Metanomics.
ADAM THIERER: Absolutely. It was really a pleasure to be here with you today, Rob.
ROBERT BLOOMFIELD: Okay. The title of today’s show was Live Free and Prosper, and
our guest, Adam Thierer, provided a forceful and compelling defense of freedom and
self-empowerment. Well, I’m going to use my segment of Connecting The Dots to argue
the other side. That’s right, folks, I am going to argue against freedom. Well, no, of course
not. Instead what I’m going to do is, I am going to argue against simplicity. H.L. Mencken
famously said, "For every complex problem, there is a solution that is simple, neat, and
wrong." And, for me, this captures the problem of libertarianism.
Let me start by saying that I can’t think of a better place to study libertarianism than Virtual
Worlds. Communities like Second Life arose in a setting largely devoid of regulation. At
our opening show on virtual goods and Second Life’s economy this season, founder
Philip Rosedale sounded a strong libertarian note. The first words out of his mouth that
day were, and I quote, “My role in Second Life’s economy is to keep my hands off it.”
On the other hand, freedom and self-organization hasn’t always worked out so well in
Second Life. It was a little over a year ago that I connected the dots in a segment title
Everything I Needed to Know About the Financial Crisis I learned in Second Life. Second
Life’s free and unregulated financial markets quickly devolved into a series of bank failures
that reflected some combination of excessive risk-taking, incompetence, outright fraud and
pyramid schemes. Attempts at self-regulation, self-governance, repeatedly failed due to
conflicts of interest, and so Linden Lab eventually came up with a very non-libertarian
solution. They insisted that banks could operate in Second Life only if they showed
evidence of Real World regulatory oversight.
My own philosophy on freedom and regulation is probably best described by the rather
unpopular General Theory of the Second Best, which was formalized in the ’50s by Lipsey

and Lancaster, and brought into the regulatory sphere by legal theorist Richard Markowitz
in the 1990’s. The basic idea is this: The foundation of neo-liberal economics is that, when
markets are perfectly free of regulation, friction, externalities, transaction costs and other
imperfections, they achieve the pinnacle of economic success, which economists call
allocative efficiency, and that is also called the first best solution. Now, we all recognize
that markets are not perfectly free of imperfections so what we strive for is what
economists call the second best, the highest degree of allocative efficiency we can
achieve, given the imperfections we can’t avoid.
The general theory of second best says this: If you have multiple imperfections in the
market, then getting rid of only one of them doesn’t necessarily improve allocative
efficiency. Now the theory turns out to be really pretty unpopular politically, even though
it’s hard to disagree with because it doesn’t allow for simple arguments. A regulation that
addresses an obvious problem, like pollution, doesn’t necessarily help because it might
have unintended consequences that are worse than the problem we are trying to fix. And,
by the same token, eliminating a regulation that stymies freedom doesn’t necessarily help
because, even though you’re making people more free, getting you closer to that
frictionless economy, that regulation might be essential to counterbalancing some other
imperfection, and you’re worse off.
The bottom line is that we live in an imperfect world, and we’ll never eliminate all
government regulation and other imperfections. The general theory of the second best
tells us that we need to look at each regulation in all its messiness, in the context of the
other regulations and imperfections we suffer with. So I’m not against freedom, I’m just
skeptical of simple arguments. So those of you who want to maintain the highest degree of
freedom in your virtual lives, your greatest degree of privacy, I applaud your sentiment.
But take a lesson from what Adam Thierer does when he’s not a talking head on a show
like this. He is not just arguing for freedom because freedom is good, he’s laying out the
mechanisms by which we can empower ourselves, the tools, the armaments that we need
in order to get over the imperfections that we face. And, if you want to argue in favor of
additional regulation, you’d better make sure you really understand exactly what
implications they are going to have, and that’s going to be a big challenge in an
environment that moves as quickly as high tech does.
So bottom line: I don’t believe people when they tell me that a new regulation will improve
our lives, and I don’t believe people when they tell me that getting rid of an old regulation
will improve our lives. At least I’m not going to believe them if their arguments are simple. I
want their arguments to be messy, complicated and uncertain because, in the end, those
are the arguments that are going to be least wrong.

Okay. Well, thanks so much for joining us this week. Join us next week for a very different
take on policy and economics from Robert Frank, author of The Economic Naturalist’s
Field Guide, Winner-Take-All Society, Luxury Fever and also author of an introductory
economics textbook written along with Federal Reserve Chairman Ben Bernanke. It should
be a very interesting discussion, and I hope to see you there.
Also, don’t forget you can see over 80 hours of Metanomics in our archives at
Metanomics.net, and you can download them on iTunes. Bye bye.
Transcribed by: http://www.hiredhand.com
Second Life Avatar: Transcriptionist Writer
http://www.hiredhandtranscription.org