Privatized Censorship Mark Weller There has been some debate recently about whether it is possible to have truly free markets within a regime that does not permit free speech. In view of the policies of nations such as Singapore and China, both of which have liberalized markets and restricted communication, this would seem to be a point well worth debating. Advocates of free markets generally agree that where commerce is allowed to operate unfettered, restrictions on speech soon become untenable.With the arrival of the Internet in full force, this assertion can now be tested to see if it is true. For if the liberalization of markets and speech are connected, then this process should be particularly evident in today's information economy, where the demands of business and the need for unfettered communication are more connected than ever before. So is there any evidence that the information revolution is storming the walls of censorship?
Many nations still have grave reservations about how far to go in allowing new communications technologies. For instance, in both Saudi Arabia and Iraq, there is no Internet. There are no Internet service providers in these nations, and to obtain access one must dial long distance to another jurisdiction, such as Bahrain or Kuwait.
The People's Republic of China, which is also nervous about the Net, has taken a somewhat different approach. Last year, the government of the PRC announced that all Internet service providers must be licensed, and abide by a strict set of rules that covered everything from usage to content. The penalty for the violation of these regulations included confiscation of the Internet server, a one year jail term and a US$1 million fine. Not surprisingly, this policy served as a deterrent to the creation of new providers.
However, the increasing need for international business to have Internet access recently forced the People's Republic to re-evaluate. Last April, China entered into a joint venture with Prodigy, a U.S. based on-line service provider. Under the agreement, Prodigy will build an online service for the use of Chinese businesses and individual users. Prodigy, having already developed a system of controlling the content of submissions to their service in the United States, has assured the Chinese that this system will abide by state censorship requirements. So, in order to allow for greater Internet access for commercial purposes within China, the government has contracted the service out—or put another way, they have privatized censorship.
These developments in China are also of interest to other nations, such as Saudi Arabia, where King Fahd has announced that he will begin to allow public and private Internet access. First of all, however, he has given his government a mandate to find a way to protect his citizens from on-line material that "conflicts with our faith and our Arab traditions." No doubt a similar deal to the China-Prodigy arrangement will be the result.
So are these developments examples of free markets generating greater liberty in communication, or rather evidence of the reverse—free markets and the restriction of free speech operating side by side? They are very clearly evidence of the former. These governments would not have considered allowing Net access if there had not been a compelling commercial interest to do so. In order to stay competitive, this service had to be provided. As of today, Saudi Arabia is the only nation on the Arabian peninsula not to have Net access. In order to compete, it has begun the process of easing the restrictions on the Internet. The demands of the market have required these regimes to open up communication.
One must also remember that the process does not stop here. Having resisted the information revolution as long as they can, these governments are hoping to regulate its introduction, which will prove exceedingly difficult. Even if these nations have content rules, individuals can still communicate in code to circumvent any regulatory requirement. The sheer volume of communication will eliminate the ability of governments to physically monitor each transmission, and automated content monitoring systems can be easily tricked.
As well, the ability to charge phone calls to third parties combined with the ongoing reduction in long distance costs will soon enable individuals within these nations to bypass their domestic providers. Finally, the increased use of wireless communication will reduce the regulatory reach of governments, which for the moment is chiefly focused on phone companies who own the cable.
These gradual steps toward the liberalization of electronic communication are just the beginning for these nations, and most of them know it. At best, privatized censorship is a transitional policy, because once the free speech genie is released, it is extremely difficult to put it back in the bottle. In addition, the economic analysis is simple: restrict communication and miss the information revolution, or liberalize communication and experience the benefits of electronic commerce. Most analysts agree that the latter will prevail, and when this process is complete it will provide an even clearer example of how free markets are indeed the most efficient way to bring about lasting human dignity and freedom.
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