I agree with relaxing the ethical standards for bloggers but I think it's mainly a first amendment issue, insofar as blogging meets constitutional bar of protected speech, i.e., not obscene, inciteful, etc., it should be protected. I mainly agree with your reasoning for classifying blogs in a separate category from the press, which must meet certain ethical standards.

I don't agree with your analysis that the Tax Freedom act is a blow to federalism since ideas about federalism don't really make sense in regard to new Internet commerce. Even our laws governing corporations have become a system where consumers lose. I don't see this as a strong system of federalism but one where businesses, particularly credit card companies have the resources to essentially forum shop for local, state laws that would favor their interests and thus hurt consumers. A similar situation would occur with the Internet tax. The great thing about Internet commerce is that it allows for small retailers to compete with larger ones. The tax would benefit large businesses with the ability to forum shop for favorable tax rates, hurting smaller businesses that lack the ability to move.

We can consider this fair competition but it's really not, especially when our local and state laws, and hence this "federalism" ends up hurting those who they are supposed to protect, the local folk and the consumer next door.

Tangential comment on:

the recipient is compensated for having to encounter unwanted advertising, in the form of a lower price for a tied product that he wants to consumer, such as “free” television (i.e., paid for by advertisers).

I find that there is an appaling shortage of commercial free television programming - noone seems to offer "pay" channels without advertising - I suppose the market doesn't support such a beast. This is one reason I prefer the internet to television: not being force fed information that someone else wants me to swallow.

---

States have funny twists on taxation of internet transactions. I believe Florida still taxes sales delivered to Florida addresses by companies with Florida offices. A small mom and pop California business ran into this when they sold our business a $10,000 motor, about 18 months later the state of Florida tracked them down and informed them that since they have a sales representative (actually, they have about 2% of that sales rep.) operating from an office in the state, they must pay sales tax on all sales to the state. I believe the mom & pop shop simply complied. I've seen invoices from companies like Dell and Gateway where they only collect a Florida sales tax on a small fraction of the product cost, such fraction presumably determined by their tax law team and argued / defended to the state auditors.

Any simplification of taxation I think presents a net benefit, since tax lawyers, accountants, and all such rules workers are really just a burden on society. If it forces local businesses to open internet portals to take advantage of the "zero tax" zone online, that's not a big cost to them, and ultimately it is a more efficient delivery channel - not requiring air conditioned retail space, stocking staff, checkout staff, theft prevention, parking, highways to the retail space, etc. for all of the online customers. If there is any scalability to their business, they should be able to grow an online presence in parallel with their traditional retail storefront, and maybe employ an out of work tax lawyer to maintain their website.

Federal, State and Local governments have no shortage of tax avenues open - elimination of one will not stop them from collecting the revenue they think they need to operate.

A few comments and an idle thought regarding "tax-free" Internet purchases:

• Consumers who avoid paying state sales tax by buying on the Internet generally owe an equivalent state use tax on the purchase. So the uneven tax playing field does not exist in theory, only in practice-- because for the consumer, use tax is inconvenient to track, easy to forget, and tempting to disregard.

"imposing ethical standards" means imposing moral standards, since ethics are personal and thus only self-imposed. Morality is the name for those rules of conduct which are (can be) forcefully imposed on an individual. Regulating morality with the use of the State's monopoly on force brings us a step closer to the dark days of the Inquisition; it has no redeeming value whatsoever, on the long run, except to maintain the status quo, if one considers that to be of value to him.

A blogger willfully writing lies should be free to do so because there is no contractual obligation for him to tell the truth, and therefore he can't be accused of fraud. If people will only read blogs with clear-cut, contractually-binding editorial policies, then "regulation" would emerge, by virtue of the actions of visitors.

I agree that spam has receipt costs and negative externalities of billions of dollars, but I have yet to hear of any regulation scheme that I find at all compelling economically.

It's easy to be frightened by apocalyptic extrapolations of spam volume, but are they realistic? Yes, sending costs are extremely low, but they are not zero, and as the volume of spam increases, each spam email gets less and less attention (saturation), making it harder for spammers to profit. Also, people adapt and learn how to avoid scams, especially when the pervasiveness of each scam is so high. Newcomers to the internet are more scam-savvy than their forbearers. And most spam that cannot be opted-out of is indeed scams! Most legitimate companies do not wish to damage their reputation by becoming known as big spammers, much less become the target of hatred for not supplying an opt-out link in their advertising emails.

I really believe that the spam problem will solve itself without regulation. Spam is a significant problem for only a few people. Consider how potent an effect improved spam filters and increased scrutiny in giving out email addresses have already had in reducing the problem.

I myself only get spam in old addresses that I stupidly made publicly available and that I'm too lazy to switch from, and even in those, my spam filters get rid of 95% of stuff I don't want to read and almost never filter out a single email that I do.

Allow me to focus on one snippet of your post, while, naturally, saving the rest of my views for my own blogging.

You write that there is "greater political diversity in the blogosphere than in the traditional media, because a conventional journalist's career appeals disproportionately to liberals." Maybe so -- my own experience in journalism tends to confirm your point, although I worked at papers in large urban centers, which may not be perfectly representative -- but I hope you can be persuaded to adduce both evidence for this point and, more importantly, a theory as to why this is so.

More importantly, I would not want your statement to be taken, as some readers might, as necessarily suggesting that a conventional journalist's career conduces to liberal political bias in reporting. It may do so, to the extent that one's work will tend to track one's own perspective, even against one's own best efforts and the efforts of one's editor. And at the margins, if your statement is true, than departures from conventional journalistic standards -might- tend to disproportionately favor liberal political views, although this depends on a variety of other circumstances: for example, whether liberally or conservatively oriented "mainstream" publications tend to depart from standard journalistic practices with the same or different frequencies.

But even if liberals are disproportionately drawn to "a conventional journalist's career," that profession -does- carry certain "conventions," some of which emphasize the quest for objectivity, however imperfect, over the pure propagation of opinion. To analogize, secularists may be drawn disproportionately to careers in the biological sciences, but once within such professions they tend to internalize a scientific method that emphasizes the importance of evidence and the possibility of falsification. One might argue that these scientists would tend unduly to discount alternative theories of biological development, such as creationism, but it would be more tendentious to argue that their work is itself necessarily suspect. So, in short, your statement quoted above, even if true, should not be assumed by readers to prove too much about liberal bias in the mainstream press. It may indeed prove something, but it is not clear how much it proves.

Paul Horwitz
Associate Professor of Law
Southwestern University School of Law
Los Angeles, CA

Posner writes: "since the mainstream media have adopted ethical standards concerning
such matters as reliance on anonymous sources
and retraction of errors, so should bloggers".
I would be interested in a pointer to that
ethical standard adopted by the MSM. I am
not aware of one. One can certainbly name
several known-to-be-false stories reported
by the MSM that have never been retracted.
(Audi "sudden acceleration" on 60 Minutes for
example.)

Paul N:

I think your analysis regarding the cost of spam ignores all of the costs of spam that must be borne by service providers. It is inefficient to have servers where 75% of their storage and computational resources are "wasted." In particular, one of the main reasons so little spam shows up in your email box is the spam filtering that is done on the server-side. These techniques often involve learning algorithms and bayesian analysis which is not computationally-free (Another reason is your email address is not easily available on the web, an option support departments, etc. don't have.)

These added expenses are placed on the recipients of email while the cost of sending bulk messages --especially ID theft scams where response is desired via a website rather than a return message -- are much lower. In short, the recipient of the undesired mail bears the monetary costs of the communication rather than the sender.

Posner's argument, coolly referencing Hayek, seems to justify exempting bloggers from journalistic ethics because bloggers are a cottage industry. But he fails to explain why lying is better when lying can be done for cheaper. I suppose it is more efficient lying, but it is still lying. Likewise, I would agree that if 10 terrorists are driving in a van on their way to kill innocent children, and one terrorist did not chip in his fair share to pay for gas, he's a free rider, but that doesn't mean that if he chips in his fair share for gas that suddenly he is a saint. Posner notes that errors are corrected more quickly on-line, but even if that is true, ethical standards do not merely apply to correcting errors, but avoiding negligence beforehand by intentionally following best practices. Bloggers who are gross negligently or who intentionally flout journalistic ethics in bad faith may correct their errors more quickly, but then again, they may put out more "errors" in order to propagandize. Posner also notes that the "comments" feature of blogs is part of the self-correcting machinery of the internet, but fails to note that neither he nor Becker posted a reply to the "Sexual Revolution" thread because it got so heated and nasty. There was no dialectic or dialogue between Posner/Becker on that contention issue, and the debate, in fact, was simply shut down -- there was no self-correction at all. And one need only look to Posner's recent Estate Tax reply to note that he swiped aside many of the comments made as peripherally related to his original post. In other words, there was no communication, as the ideas sent out weren't actually received by an audience. This does not bode well for the part of his argument supposing that MSM corrections are not read much; yes, Posner, but even on your own site, people who read what you say do not always understand it, and you sometimes do not respond to their "corrections". Posner anticipates this line of potential critique by generalizing the antisocial behavior that blogging tends to amplify to all uses of the Internet -- in other words, "it happens in chat rooms, too." But this is irrelevant -- chat rooms are in fact realtime communication; blogging has a time-delay element; in that respect blogging is more similar to a very efficient MSM outlet that is on-line and in-print (an example is Nicholas Kristof writing his column and then responding to e-mail critiques in his forum) than a chat room. Moreover, Posner neglects that chat room populations are are self-selected in a manner unlike newspapers and blogs. If one does not like a chat room, one can start up another that is very similar and attract many participants. For example, if you're in "NYBaseball" and the other 34 people there are pro-Yankees, you can start-up "Pro-MetsChat" and soon be filled up with 35 members. The reason is that there are millions of people online, thousands of them potential Mets fans, and the chat room has an upper limit to the size of its population. That does not exist with blogs. Anyone can visit any blog, and anyone can purchase any newspaper. There are no limited seats, as it were. The population of blogs and newspapers is more diverse than that of chat rooms: does anyone truly believe that the readership of the New York Times is less diverse than the membership of "NaughtyFemaleBodybuildersinTXchat"? So while it may be true that chat rooms are more of a cottage industry than blogs and blogs are more of a cottage industry than newspapers, it is also true that more quality communication, correction, and information is transmitted by newspapers than by blogs and by blogs than chat rooms. It seems that efficiency and crud go together. The perfect example that efficiency and crud share a directly proportional relationship is spam: spam, Posner says, is low cost to send, so it benefits the senders in the aggregate by reducing their costs; but what Posner dismisses without considering is the offsetting aggregate benefit -- the fact that some people really, really, really value what they get from spam. Posner tries to anticipate this argument by noting that worthwhile spam can be preserved while negative value spam is eliminated, but he fails to note that if we accept his technocratic approach then the only reason to switch from the present system, where, say, a million people are damaged a dollar but two people are benefitted by two million dollars each (net benefit of 3 million dollars), to a new system, where the harmful spam is eliminated, is that removing the harmful spam costs less than or equal to 3 million dollars. One need only glance at Becker's post to note that he feels taxing the internet would slow its growth (meaning the number of users would decline, i.e., deadweight loss). If, in this post's example, the users who discontinue using e-mail are recipients of harmful spam, then the tax drives out people who benefit from the tax and taxes people who benefit from the spam and so is inefficient. Posner's reply to this argument is that we should get rid of all federal internet taxes, but allow states to tax at whim. While federalism is an interesting concept, it really is irrelevant to this discussion. Regardless of who is doing the taxing, if the people bearing the burden of the tax are the people who benefit from its nonexistence and the people who flee the market because of the tax are the people who would benefit from the tax, the tax is inefficient. The tax doesn't suddenly become efficient simply because the states are doing it. Again, because people run away from taxes, but do not run away from free money, it makes more sense to simply subsidize the behavior we want and let bad behavior wilt at the vine than to administer inefficient taxes.

In other words, we should repeal all Internet taxes and subsidize ethical bloggers.

A quick question: I'd like to hear Posner's thoughts on taxing email in order to basically wipe out spam. I believe the idea has been floated by a number of economists, as well as Bill Gates in a speech last year (too busy studying for Crim to find the link -- in any event, Bill Gates' supporting it doesn't make it right). The tax would not have to be high -- in fact it could be far less than the externality imposed by spam (I'd guess that most of us find spam that we have to glance at and delete to be around 1 cent worth's of a hassle, though spam that's filtered out automatically is probably far less than that). Perhaps a 1/100th of a cent tax on every email sent? The tax could be levied on the ISPs or email providers rather than individuals, making collection easier at least. Such a tax would have virtually no effect on most internet users through their ISP prices, but sending 1,000,000 emails would cost $100 instead of zero.

Doesn't the old "soapbox" still exist in Hyde Park in London? How about the one in Washington Park in Chicago? A "blog" is nothing more than the electronic version of this old tradition. In fact to locals, Washington Park is known as "Bug-House Square". As for journalism, it must operate to a much higher standard. As is constantly covered in Journ-101, credibility is based on two things, corroboration and verifcation. Not withstanding Newsweeks latest gaff.

As for taxation issues, why not? The main problem is who gets it. The locality, state or Fed. and at which end point of the transaction? The sales location or the purchase location? Since there are variations in tax rates, which one is to be applied and where (major jurisdictional problems here). It's only a matter of time and the problems are ironed out.

PLUG:

Harvard Legislative Research Bureau, Remote Taxation and Fundamental Fairness, 35 Harv. J. on Legis. 537
(1998)

There is also greater political diversity in the blogosphere than in the mainstream media, because a conventional journalist?s career appeals disproportionately to liberals

Even if part 2 of this statement has been more or less proven, where is the proof for the first part?

I've found that the blogosphere attracts a disproportionately large amount of libertarians and a disproportionately small amount of your more garden variety conservatives. This blog in particular is a case in point.

I have a question regarding blogging on the Internet. If a blogger wishes to form an LLC, and advertising revenue generated from the blog is paid to the LLC -> does the LLC need to register in every state where advertising revenue is generated? This seems onerous. Bloggers may not know what states are generating advertising revenue. The advertising revenue may not be enough to cover LLC fees in more than one state.

What if the blogger's time is split between two states - 50% of the year the blogger lives in state A and 50% in state B. Where should the blogger file for an LLC?

Do you know where on can go to read more on this?

Is spam really that much of a problem anymore? There are various automatic spam filters which are free, not to mention those included in popular webmail services such as Yahoo and Gmail. I don't know about everybody else, but spam has not been a problem for me at all this last year or two, largely thanks to that type of filtering software.

It seems to me that it is only a matter of time before the marginal benefit of a spammer spamming is less than the marginal cost of setting out to spam to begin with, because all of their mail gets filtered anyway. The overhead of a taxation system for spam surely is not worth it....?

I guess there is the problem of phishing type spam, especially those crazy nigerian bank emails (who knew I had a relative in Africa?). These emails seem to be a little better at averting filtering software than other more advertising oriented emails. But still, I just don't see how a taxation system is worth it.

Bloggers should be treated like journalists. There are only two differences: blogs are a new type of media and bloggers are truly independent.
The problem is that the ruling elites have created an environment where they are inaccessible directly for everybody else than representatives of the established media.
For this reason a lot of questions are not asked in the first place. Nobody has to be afraid of media events, e.g. press conferences, to become overcrowded as this would regulate itself.
Nobody will waste his time as an onlooker but it will add a lot of expertise on the contrary.
Free speech means also free questions with a chance to get an answer.