Google in China--Posner

Last week a congressional committee questioned representatives of Google, Yahoo, Microsoft, and Cisco concerning Chinese censorship and surveillance of Internet services (and in the case of Cisco, equipment) provided by these companies. Google, for example, has acknowledged that it does not offer email, chat rooms, or blogs in China, but only Web search, image search, local search, and Google news and that it censors these programs so that Chinese customers cannot search for "democracy," "Falun Gong," and other topics that China wants to shield its people from. Yahoo apparently provided information about one of its Chinese customers that led to his arrest and a 10-year prison sentence for political activity that would be legal in the United States. Cisco is said to have sold equipment to the Chinese police that assists them in monitoring dissidents. Members of Congress are incensed and are threatening legislation that might forbid U.S. companies to knuckle under to political restrictions imposed by China as a condition of permitting our Internet companies to do business there. In general, U.S. companies, including Internet companies, are required to comply with the laws of every country in which they operate. Thus, for example, they have agreed to block access, in France and Germany, to Nazi Web sites, pursuant to those countries' laws against Nazi advocacy. They have agreed in a number of countries including the United States to block access to sites that infringe copyright. Like other companies that possess information that is not considered the "property"`of the people who furnished it (and this is generally the case with respect to information voluntarily provided to an online vendor), the Internet companies often respond to informal government requests for information, and they are also subject to having such information subpoenaed. Of course there is a difference between foreign laws that we regard as defensible, including some laws, such as those forbidding Nazi advocacy, that would be unconstitutional in the United States (which has by international standards an extravagant conception of freedom of speech), and laws that we regard as contrary to fundamental human rights, which is an accurate description of Chinese laws designed to suppress political freedom and, in the case of persecution of the Falun Gong and of some Christian sects, of religion as well; there are also forced-labor camps in China, torture, and other human rights violations. If China were a small, poor country, its violations of human rights might induce international sanctions, such as were imposed on Rhodesia and South Africa before the fall of their racist regimes. But because China is an enormous country, rapidly developing, soon to be--perhaps already--the second largest economy in the world, and very much open to investment by foreign, including U.S., companies, sanctions are out of the question as a practical matter. A separate question is the effects of sanctions. The theory of cartels is useful in illuminating that issue. When competing firms get together and agree to raise price (and thus limit output, since increased price will cause some customers to switch to other products) in order to increase their profits above the competitive level, they face two problems. First, each member of the cartel will have an incentive to cheat because by charging a price slightly below the cartel price it will have proportionately greater sales and its net revenue will rise. Second, firms outside the cartel will have an incentive to increase their output by selling slightly below the cartel price, for the same reason that impels cheating. The harder it is to cheat, and the smaller the fringe of competing firms outside the cartel, the more effective the cartel will be. A sanctions regime is similar. Each country that has agreed not to buy from or sell to the sanctions target will have an incentive to cheat, and countries that have not agreed to the imposition of sanctions will have an incentive to increase their trade in the embargoed goods. So our Internet companies, were they under political or public relations pressure, or were compelled by U.S. law, not to agree to conditions imposed by China would have an incentive to try to circumvent the ban; and Internet companies in countries that did not impose such a ban would have an incentive to enter the Chinese Internet market. But it is not clear to me how effective such incentives would be. The U.S. Internet companies would be reluctant to violate, or perhaps even to circumvent, U.S. law, since they are taking a big public relations hit from the revelations of their complicity with Chinese repression. And in the short run at any rate it does not appear that foreign Internet companies can provide close substitutes for the services that our companies provide. Of course in the long run an exclusion of our Internet companies from the vast Chinese market would stimulate the growth of foreign companies offering close substitutes for our companies’ products. This assumes that faced with abolishing censorship of the Internet or losing Google search and other Internet services that U.S. companies uniquely provide, China would choose to lose the services. This seems, however, by far the likelier outcome given the perceived threat to the regime that political and religious freedoms pose. If so, then the only effect of the sanctions regime would be to slow Chinese economic growth slightly by reducing the Chinese people’s access to Internet services that promote economic efficiency. One reason to think the effect will be slight is that China does have its own Internet providers, such as Baidu, which provides a Google-like search service, although not as good a one as Google. The deeper question is whether it is in the U.S. national interest either to promote Chinese democracy, religious freedom, etc. or to impede Chinese economic growth by inducing it to curtail its people's access to the Internet beyond the current censorship. The answer probably is "no." Lifting the repression lid from Chinese society might, for all I know at any rate, have destabilizing effects that might result in a worse government (from our standpoint) than the present one. Slowing Chinese economic growth might also be destabilizing, and would harm the world economy as a whole, and probably the U.S. economy. Then too, although there are inherent tensions between the United States and China, owing in part to the American military and political presence on the periphery of China, China is not an enemy and we don't want to make one by imposing sanctions on it. Although the behavior of our companies may be offensive and their claim to be altruistically motivated is ludicrous, it is unlikely that efforts to prevent the companies from complying with ugly Chinese laws will help either the Chinese people or the American people. A possible intermediate solution, however, would be to forbid U.S. economies (or for them to agree under pressure of American public opinion) to assist the Chinese government in surveillance of their customers. There is a difference between censorship and surveillance. Most governments engage in some censorship, including our own (child pornography, national security secrets, copyright violations, defamation, false advertising, criminal solicitations, etc.). But for our companies actively to assist a foreign, repressive regime to persecute its political and religious dissidents is a step beyond. It is unlikely that the Chinese government would bar our Internet companies merely because they did not provide active assistance to Chinese police.

Comments

[SteveSC]

How about another intermediate step: full disclosure. If a search result is edited due to government edict, the result has a prominent banner that says "This search was edited at government request" or some equivalent. This, of course, should apply to all government actions, whether it be in the EU for Nazi pages, the U.S. for copyright or pornography, or for China and Tiananmen.

Exactly what was edited, or even which government requested it and why, wouldn't have to be disclosed. Search pages would compete to have the fewest 'edited' banners, and blogs and other Internet observers could monitor for accuracy. It might also open some eyes in the West at how much is censored in the free world.

[Arun Khanna]

Judge Posner said: "If China were a small, poor country, its violations of human rights might induce international sanctions, such as were imposed on Rhodesia and South Africa before the fall of their racist regimes. But because China is an enormous country, rapidly developing, soon to be--perhaps already--the second largest economy in the world, and very much open to investment by foreign, including U.S., companies, sanctions are out of the question as a practical matter."
U.S. and EU have restrictions on export of military items to China. Similar restrictions in information technology are called for.

[arnaud]

Very interesting and entertaining post. I'm wondering, however if the chinese government restrictions won't at some point, infringe upon the growing individual freedom and make the chinese economy recede because of some new restrictions on freedom?

[logicnazi]

Finally some sensible discussion of the subject. I am getting tired of the hysterical denunciations which ignore the complex issues involved.

Mostly I agree with you but I think you understate the benefit to the Chinese by Google's deciscion to enter that market (I agree that handing over surveillance data is a problem but google hasn't done this to my knowledge). Even bowing to the Chinese government google is likely to be less helpful to a repressive regime than a home grown solution. The Chinese government can bring a huge amount of pressure to bear on a local company like Baidu which ultimately has little choice but to totally go along with anything the chinese government proposes, likely without even a peep to the public. China is likely to display more restraint about asking western companies to do its dirty work and google can keep some of its information in the US where china can't get at it while Baidu really doesn't have this option.

On a more global perspective not entering the Chinese market risks creating major competitors in the search space, e.g., Baidu or a similar search engine might rise up to challenge the US search giants flush with the cash from a chinese market. Quite likely such a company, without the strong cultural support for free speech that an american company might hae, is going to be even more likely to provide censored search services for other countries. For instance I very much doubt that Google and the other search companies are going to provide search services to Iran or other muslim countries that refuse to return any results critical of islam. Would a company like Baidu? I don't know but it certainly seems more likely.

In other words their is a real danger that if google, MS and Yahoo aren't willing to bend a bit other companies who might not even be reluctant to sacrifice these principles may take over.

I'm not sure but perhaps something usefull to do would be for congress to pass laws preventing US internet companies from keeping personal data in repressive regimes. Perhaps some kind of cooperative deal could be worked out with china to give them valid law enforcement information. However, this is the area that we should be concentrating on not the censorship issue that is likely to actually backfire.

I also have a bit to say about the perception of the US controlling the internet which I will put over in Becker's post.

[logicnazi]

Ohh yah and the problem with the US government passing laws saying that the search results must indicate that they are censored (which would be good in principle) is what do you do if the foreign government says "take those down or we will ban you entierly."

I think perhaps this could also be an opportunity for the US government to negotiate with China and reach some comprimise that is better for all parties. Demanding an all or nothing sort of solution is likely to work to everyone's disadvantage.

Also really quickly I would like to say that it is wrong to critisize google as the last major search company to appease the chinese the same way one critisizes MS and yahoo. A choice by google not to enter the chinese market would simply mean that the chinese would use a censored MS and yahoo not that they would somehow be more free. So long as google believes they would be doing less harm to the rights of the chinese than MS and yahoo they would on net be benefiting the chinese by choosing to appease the government.

[Seth Weinberger]

Take a look at the Washington Post article from yesterday...the more access to information is provided to China, the harder it becomes to staunch the flow. Criticizing or preventing Google, or any other provider, from increasing the flow of information only helps, not hurts, the control of the Communist Party and retards any move towards democracy in China.

[W]

On stabilization: Generally, negative externalities justify government regulation of the marketplace. But the negative externalities here are felt by Chinese citizens. The damage to us is ethical: we do not think it is right to indirectly promote tyranny. But if it is ethical to promote democracy, then these technology sales to China are good, because they promote free speech. Some free speech is better than no free speech. And there will be more free speech than there otherwise would have been if we barred these sales. But even if the quantity of free speech is increased, it is done so at the cost of legitimizing the prevailing regime. The ability to censor without leaving fingerprints is the ability to create a total bubble. If a regime claims that the Holocaust does not exist, it could, using this technology, remove all mentions of it online. For younger generations, the Holocaust indeed would not exist. Those youths would be easier to transform into violent anti-Semites than youths informed about the Holocaust. Even if such technology would permit ruling coalitions to create total reality bubbles for their citizens that the Western world cannot penetrate, it is dubious that would lead to more violence than easy access to total information. Muslims are rioting all over the world right now because they had access to a small Danish paperís cartoons. Maybe a little censorship by a wise government can prevent violence, unrest, and genocide. So while it is easy to argue that China could become Iraq if we promote democracy there, China could also use this technology to stabilize its transformation from more tyrannical to less tyrannical. Given that China has rule of law, viable and venerable institutions, functional social norms, a national identity, political participation, educated citizenry, and a large middleclass, I do not see why the addition of more democracy would send the country into a tailspin. To the extent that such technology would promote democracy while also permitting the Chinese government to stem the tide of democracy's swell, it is a good thing. The question is how much control should the Chinese government have to censor versus how much should the technology promote democracy. What is wrong with rigging the technology so that it is likelier to promote democracy than censorship? To the extent such a default in the programming tends to erode the legitimacy of the Chinese government, that is a sanction against China for its failure to meet its human rights obligations that no company can opt-out of.

[Yong]

As usual, Judge Posner's remarks are extremely insightful and a pleasure to read for those such as myself who is not a lawyer or an economist.

There is one thing that sets Google's business apart from the traditional business transactions, namely the overtness of Google's internet search service. The results of Google's internet search service are easily and completely visible and verifiable. It seems to me that this characteristic would make Judge Posner's analysis under the theory of cartels inapplicable. Suppose the US government passes a law that forbids American internet search companies from filtering politically sensitive searches, there is no way for Google to cheat, and to hence get an unfair business advantage, without getting caught easily and immediately by the US government or its business competitors such as Yahoo. One simply needs to compare the search results in and out China to prove that Google is in violation of the embargo. This is quite unlike an embargo barring the selling of military airplanes to China which can be bypassed through covert activities that evades detection by the US government or business competitors, for example by disguising military airplanes as civilian airplanes. Thus it seems to me that, as a practical matter, a law that forbids the selective filtering of internet searches can be rather easily enforced.

Internet surveillance is of course a different matter because by nature it can be done covertly. Google could cooperate with the Chinese government by providing records of private internet search activities to the Chinese government without easily getting caught by the US government or its competitors.

[Thomas Brownback]

". . . [T]he behavior of our companies may be offensive and their claim to be altruistically motivated is ludicrous"

It appears to me Google has selected the option that most benefits the Chinese people out of a series of unpalatable alternatives, though it may have been incented by market forces as well.

It would certainly be ludricrous to claim your behavior was altruistic if it carried pecuniary benefits and only harmed others. However, if your actions benefit people and simultaneously confer an advantage upon yourself, your motives are at best incognizable.

Perhaps you find claims of altruistic motives ludricrous under these circumstances because you find such claims suspect under all circumstances.

However, Hume effectively debunked descriptive egoism a while back. You might describe the mother caring for her child as selfish, because she gets some benefit from the relationship. But if we describe all actions as selfish, it might be useful to differentiate between orders of selfishness. We'll have selfish(1), where your motives are purely self interested. And selfish(2), where your actions involve some cost to you for some benefit to others. And at this point, we'll go ahead and substitute the term "altruism" for selfish(2), so we don't have to muss up the language too much, and we're back where we started.

I can't presume you were pushing descriptive egoism from the statement cited above. It's possible you were just talking about this case, and understated your position.

[Joe Merchant]

Consider this: China decides that "Falun Gong" should be supressed on all website searches worldwide. As enforcement they will slap a 100% tariff on all goods outbound to any offending country.

Easy to scoff that this would stifle trade and hurt the Chinese economy, what if the (obviously control-oriented) Chinese government just doesn't care? An examination of currency policy suggests that China is not acting to maximize profit from international trade, but rather to foster it's growth - already at a level where the trading partners have become highly dependant upon Chinese exports. Imagine the effect on rural America if all the prices at Wal-Mart suddenly doubled.

Europeans, especially Germans, exhibit a strong domestic preference for most products, confering a protection from this type of threat - Americans do not generally care where their goods come from. I do prefer the prospect of economic warfare to bombs and bullets, but if the China decides to drop the economic nuke, America is highly exposed, and the results will not be pleasant.

As American culture threatens to seep uncontrolled into China through "the Information Superhighway", I would not be surprised to see radical reactions from the current regime... Distasteful as it may be to think that American companies are "being controlled" regarding what information (culutre) they are allowed to import into China, I believe that allowing the Chinese government a degree of control over this cultural threat is in everyone's best interests, not only because they can pose a potent economic threat, but out of simple respect for their culture and soverign rights.

[W]

Joe: I believe that allowing the Chinese government a degree of control over this cultural threat is in everyone's best interests, not only because they can pose a potent economic threat, but out of simple respect for their culture and soverign rights.

How much?

[N.E.Hatfield]

To paraphrase an old Marxist, "Never mind the Capitalists, they'll sell us the material, production process's and the like to make the rope to hang them with." Ahh... the ideology of "Free Trade" and the New World Economic Order" we're just one big, happy, warm and fuzzy family. Unrestrained Capitalism, the ideology of mutually assured suicide.

The Chinese are still Marxists bent on World Domination aren't they?

[D. Stevenson]

China's ideological censorship is reprehensible, but also may be too precise, at least from their point of view. Allowing all Google searches except those for certain taboo words (like "Falun," "libertarian," "Evangelical," or even "Maranatha") limits the most direct information about these terms, but can never shield Chinese citizens from all the background ideas that really give rise to movements and ideologies.

An Internet user in China may still be able to access Thomas Aquinas' "Prime Mover" argument for God's existence, even if "God" were blacklisted. (Evangelicals trying to reach Chinese Internet users already know how to sanitize their sites for traditional Christian jargon, while still getting the point across). Similarly, reading about "cross-examination by a criminal defendant's attorney" (presumably John Grisham is not yet on the Chinese blacklist) implies notions of due process and civil liberties (which might be).

It seems impossible to censor enough to keep the feared ideas from occuring to people, as long as they can read a sufficient amount of seemingly harmless material to connect the dots. Perhaps Google and other search engines can afford (from an ethical perspective) to drop a handful of taboo words, knowing that the concepts described by those words will still come through in everything else.

It seems we are talking mostly about ideologies and religions, compelling amalgamations of other ideas. These are compelling (and dangerous to dictatorships) as overarching paradigms for interpreting and prioritizing other information. The same underlying conceptual ingredients, however, could give rise to the same recipe, sua sponte. This is different, for example, from information on the spread of epidemics or impending natural disasters, where a lack of facts can be lethal even in the short run. The latter problem may be less applicable to Google anyway, because the Chinese government is in such a good position to supply misinformation - for the short run.

[Robert]

I believe that Google, as a private company, can sell a product to a foreign government on terms agreeable to it (Google) as long as such action is not violative of the laws of the United States. If the terms are too onerous, e.g., the use of the search engine for surveillance as per Judge Posner's hypothetical--then Google can choose not to sell its product, or seek different terms. However, such a decision is Google's and not that of the U.S. government absent a law to the contrary.
The "danger" here is that Google is, in some way, abetting totalitarianism by allowing its search engine to be censored by the Chinese Communist government. However, the U.S. government is free to use state power to prevent Google from selling its product to China, and other similar nations, by passing a law proscribing such a sale. The fact that it is not politically palatable to so should not result in Google--a purely private entity-- being charged with a responsibility that neither our government nor the people of China have: the responsibility of changing a totalitarian regime. This result is the first responsibility of those in China, i.e., its citizens. They are the ones who, in the end, must demand reform of their own government (assuming reform is what they want). Secondarily, it may be the responsibilty of the U.S. Government (and its allies?) but only if China is objectively a threat and not changeable either from within or as a result of diplomatic and/or economic means.

[Joe Merchant]

Joe: I believe that allowing the Chinese government a degree of control over this cultural threat is in everyone's best interests, not only because they can pose a potent economic threat, but out of simple respect for their culture and soverign rights.

W: How much?

Joe: About as much as an control as a concerned American parent expects to have over the media content viewed by their minor children - which is quite a bit in many cases.

Remember, American culture is virulent and toxic to most other cultures it touches. If the foreign culture welcomes this, very well - but if they do not, think how much you would like for your children to learn goose stepping, or keeping your women under veils.

[Collestro]

It is important to distinguish between Yahoo and Google. Google had permitted political censorship of its search engine results. Yahoo provided information leading to imprisonment of Chinese dissident journalist Shi Tao.

[David]

I do not know if it would help the cause of liberty to slap sanctions on Yahoo, Google, or China for their participation in censorship. The economic and technological revolution occuring in China will eventually produce a large middle class that will eventually demand a share of the political power, so a democratic form of government is likely to emerge at some point. The Chinese gov't probably knows that and is trying to hold on to power for as long as possible, but it will eventually lose the struggle. Most likely the gov't will grudgingly accept democratic reforms at some point, under pressure from internal and external sources.

I worry far more about dysfunctional regimes, like many of the Arab states, that use propoganda to incite hatred and inflame their populations against outsiders, such as the United States and Israel, in order to distract their people from internal corruption. We should demand a free and balanced press in those countries, as well as an end to the propoganda and hatred, as a condition for entry into the world community. Maybe we can't take away their oil, but we can deny them military aid, or take away their seats on the security council, or impose sanctions in extreme cases. Since those societies have dysfunctional economies as well as dysfunctional political systems, they pose a far greater long-term danger than China.

[logicnazi]

Interesting Question:

Would a law preventing google from censoring results (not just requiring them to tell people they were censored) be unconstitutional?

After all free speech extends to choosing not to speak as well as to speak and telling a company what results they can and can't list on their website seems like a problematic content restriction. Of course the fact that it is aimed at China complicates things but the same website is accesible in the US.

I'm curious if judge posner has nay thoughts.

[human]

Wow. I totally disagree, Joe Merchant. I do not believe your standard would lead to the optimal level of Chinese control over this technology to censor. I wonder what Posner thinks.

[Joe Merchant]

If you are able to step outside the situation and view it as neither an American or Chinese, what do you see?

I see a bunch of Americans gleefully plotting the downfall of the present Chinese regime through Americanization of their culture. In terms of net effect, this is no less hostile to the regime than boarding armed soldiers in citizens' homes 300 years ago....(though, I admit, it does somewhat less trauma to the citizens.)

If you think you have freedom of speech in America, I challenge you to buy an airline ticket to Regan National Airport (Washington D.C.), and make a statement like "W is going down! We're taking him out tonight" while you're passing security prior to boarding. Similarly, I'm sure that posting certain forms of websites will not only get your content censored, but also get you a personal visit from an agent of "Homeland Security." We have our touchy points, and they have theirs. They choose to censor history, while we may not appear to do this, our media effectively drown certain stories in the noise, while others are thrust into everyone's face. Our methods are actually more effective at controlling "mind share," and no less nefarious.

I simply propose that if we, as a soverign state, choose to limit access to information deemed hazardous to law and order in our country, we should respect the choices of other soverign states when they choose to do this in their own way. Ultimately, if their wishes are not respected you can expect stronger forms of isolation to be enacted, on the internet and in the shipping ports as well.

[Anonymous]

This is not related to Google-China, but last November (2005) Mr. Posner posted a comment on the impending avian flu pandemic. I was wondering if you or Mr. Becker could address the avian flu issue again in an upcoming blog, since it has recently become more widespread here in Europe.

[N.E.Hatfield]

Anon., The E.U. is discussing that very issue this morning. If it decides to follow UN guidelines, kiss your poultry industry goodbye.

[Katherine]

I have two points to submit to this discussion:

Firstly, I do not think the US government has any right to tell anyone how to operate their business. Whether or not the public finds the actions of the firm repugnant is irrelevant. The government should not be able to dictate to businessmen how to run their firms. Let the market declare moral judgment on such practices.

Secondly, it seems inconsistent to declare that one ought not assist the Chinese government in surveillance of internet users while allowing such surveillance to occur in the private sector. I feel as though I am stating the obvious in saying that customer surveillance is widespread in the private sector. Self-interested firms have long made use of monitoring technologies to improve the services they might supply to their customers. Why ought US firms treat the Chinese government as anything other than a customer, demanding "big brother" software to keep an eye on users? Whether the firm agrees to supply such software should be left to the firm's moral and business judgment. Ultimately, the Chinese government would get its hands on such software anyway. Do we really need to protect US businessmen from the "sins" of interaction with a tyrannical government?

I guess I am irritated by the United States' inconsistent policy regarding China. If we really think free trade is going to "save" China, then stand behind that conviction. Otherwise, we should ban trade with China this moment.

[Anonymous]

it is true, if one industry wants to succeed in foreign countries or districts, he should comply with the laws and regulations thereof.

[Anonymous]

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