Category: Property Rights

Open-Source Volunteers “May Not Have Sufficient Resources to Prioritize Security”

(p. A15) The recent discovery of a vulnerability in Apache log4j, a widely used open-source software tool, has exposed a significant security issue with our digital world.

. . .

We’ve had security issues with open-source software occur every couple of years, including the Heartbleed Bug in 2014 and the npm Left-Pad Vulnerability in 2016. According to the Cybersecurity and Infrastructure Security Agency, in 2020, two of the most routinely exploited information-technology vulnerabilities were related to open source.

One of the primary reasons for these vulnerabilities is that popular open-source software such as log4j is often maintained by volunteers who may not have sufficient resources to prioritize security. But these volunteers aren’t to blame. What appears to be an esoteric technical problem is actually one of funding and the sustainability of the entire digital ecosystem. While some open-source projects are supported by companies and nonprofit organizations, other pieces of code are maintained and released by people who struggle to monetize their work. The open-source security problem is, at its core, a tragedy of the commons. When the underlying health of our digital infrastructure is unsound, the whole system suffers.

For the full commentary, see:

Eric Schmidt and Frank Long. “Protect Open-Source Software.” The Wall Street Journal (Friday, January 28, 2022): A15.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date January 27, 2022, and has the same title as the print version.)

DNA Evidence Supports John Locke’s Vacuum Domicilium Argument for Europeans Claiming New World Land Ownership

(p. A21) The population size of “pre-contact” Hispaniola . . . [is] a contested issue until the present day, not least because of its profound emotional and moral resonance in light of the destruction of that world. Modern scholars have generally estimated the population at 250,000 to a million people.

Some of the arguments for large population numbers in the pre-contact Americas have been motivated by an attempt to counter a myth, perpetuated by apologists for colonialism like the philosopher John Locke, that the Americas were a vast “vacuum domicilium,” or empty dwelling, populated by a handful of Indigenous groups whose displacement could be readily justified. In a similar vein, some of the arguments for large population sizes have been motivated by a desire to underscore how disastrous the arrival of Europeans was for Indigenous people.

By any measure, the arrival of Europeans was catastrophic for Indigenous Americans. This is true whether the numbers of people were in the hundreds of thousands or millions — or for that matter, the tens of thousands. It is questionable to pin our judgments of human atrocities to a specific number. To learn from the past, it is crucial to be willing to accept new and compelling data when they become available.

In the case of the pre-contact population of Hispaniola, such data have arrived. By analyzing the DNA of ancient Indigenous Caribbean people, a study published in Nature on Wednesday [Dec. 16, 2020] by one of us (Professor Reich) makes clear that the population of Hispaniola was no more than a few tens of thousands of people. Almost all prior estimates have been at least tenfold too large.

. . .

The finding about the pre-contact population size in Hispaniola was made possible by a new scientific advance: We are now able to detect “DNA cousins” in ancient genomes — taking two people and determining whether they share large segments of DNA inherited from a recent ancestor. This is similar to what personal ancestry companies like 23andMe and Ancestry do with living people.

When the Reich team applied this method to 91 ancient individuals for whom it had sequenced enough of the genome to carry out this analysis, it found 19 pairs of DNA cousins living on different large islands or island groups in the Caribbean: for example, an individual in Hispaniola with a cousin in the Bahamas, and another individual in Hispaniola with a cousin in Puerto Rico. This meant that the entire population had to be very small; you wouldn’t find that random pairs of people had such a high probability of being closely related if the entire population was large.

For the full commentary, see:

David Reich and Orlando Patterson. “DNA Rewrites the Telling of the Caribbean’s Past.” The New York Times (Saturday, December 12, 2020): A21.

(Note: ellipses, bracketed word, and bracketed year, added.)

(Note: the online version of the commentary has the date Dec. 23, 2020, and has the title “Ancient DNA Is Changing How We Think About the Caribbean.”)

The paper in Nature mentioned above is:

Fernandes, Daniel M., Kendra A. Sirak, Harald Ringbauer, Jakob Sedig, Nadin Rohland, Olivia Cheronet, Matthew Mah, Swapan Mallick, Iñigo Olalde, Brendan J. Culleton, Nicole Adamski, Rebecca Bernardos, Guillermo Bravo, Nasreen Broomandkhoshbacht, Kimberly Callan, Francesca Candilio, Lea Demetz, Kellie Sara Duffett Carlson, Laurie Eccles, Suzanne Freilich, Richard J. George, Ann Marie Lawson, Kirsten Mandl, Fabio Marzaioli, Weston C. McCool, Jonas Oppenheimer, Kadir T. Özdogan, Constanze Schattke, Ryan Schmidt, Kristin Stewardson, Filippo Terrasi, Fatma Zalzala, Carlos Arredondo Antúnez, Ercilio Vento Canosa, Roger Colten, Andrea Cucina, Francesco Genchi, Claudia Kraan, Francesco La Pastina, Michaela Lucci, Marcio Veloz Maggiolo, Beatriz Marcheco-Teruel, Clenis Tavarez Maria, Christian Martínez, Ingeborg París, Michael Pateman, Tanya M. Simms, Carlos Garcia Sivoli, Miguel Vilar, Douglas J. Kennett, William F. Keegan, Alfredo Coppa, Mark Lipson, Ron Pinhasi, and David Reich. “A Genetic History of the Pre-Contact Caribbean.” Nature 590, no. 7844 (Feb. 4, 2021): 103-10.

Ranchers Will Protect and Invest in Brazilian Forest Land That They Own

(p. A1) POMBAL, Brazil—For the past 15 years, Carlos Pacheco has raised cattle in what was once virgin forest. When pastures went bad, he would simply cut deeper into the Amazon, one of millions of farmers who have helped strip away about a fifth of the world’s greatest rainforest.

Because he expanded into land he doesn’t own, he can’t use it as collateral for a loan to buy equipment and fertilizer, nor can he tap the expertise of a government agronomist. The upshot is that he uses more land to raise each cow than do legal farmers in the breadbasket of southern Brazil.

It may sound counterintuitive, but Brazilian authorities think giving Mr. Pacheco a deed to the land he farms might curtail deforestation. The idea is it could help him become a more efficient farmer, able to produce more on less land, and also make him hesitate to just walk away from depleted pastures and carve new ones. In short, it might discourage him and squatters like him from cutting ever deeper into the jungle.

“If this doesn’t happen, we will continue to deforest,” said the 49-year-old rancher, the leader of a tightknit group of several hundred settlers on the forest frontier.

The administration of Brazilian President Jair Bolsonaro wants to see if he is right. In February [2020], it plans to start handing out deeds to some 300,000 Amazon squatters, with a plan that might help but has raised a howl of disapproval for re-(p. A12)warding bad behavior.

. . .

Over the decades, 73-year-old cattleman João Bueno cut into the forest in Pará state to build a network of ranches totaling 45,000 acres, with 28,000 head of cattle.

He has a special document that allows him to produce and sell cattle to a slaughterhouse, but it isn’t a title, so it doesn’t allow him to use the land as loan collateral. Mr. Bueno said tapping credit would permit him to modernize his operation with fertilizer and techniques common elsewhere, raising three times as many head of cattle on the same acreage.

“Land without documentation is nobody’s land, so people take advantage of it to clear forest for pastures,” Mr. Bueno said.

For the full story, see:

Paulo Trevisani and Juan Forero. “Brazil’s Unusual Bid to Curb Deforestation.” The Wall Street Journal (Saturday, February 1, 2020): A1 & A12.

(Note: ellipsis, and bracketed year, added.)

(Note: the online version of the story has the date January 31, 2020, and has the title “Squatters Cut Down the Rainforest. Brazil Wants to Give Them the Land.”)

“Slavery Without Private Property”

(p. B11) Yuri Orlov, a Soviet physicist and disillusioned former Communist who publicly held Moscow accountable for failing to protect the rights of dissidents and was imprisoned and exiled for his own apostasy, died on Sunday [September 27, 2020] at his home in Ithaca, N.Y.

. . .

A credulous Communist Party member since college, Professor Orlov began having doubts about the party based on a growing foreboding under Stalin over what he later described as “slavery without private property.” He was further alienated by the subsequent Soviet repression of civil liberties movements in Hungary and what he called the “savage suppressions of workers’ unrest” in Czechoslovakia.

. . .

In 1956, after publicly advocating democratic socialism, Professor Orlov was fired as a research physicist at the Institute of Theoretical and Experimental Physics and expelled from the Communist Party. In 1973, in a letter to Leonid Brezhnev, the general secretary of the party, he denounced the stultifying effect of repression on scientific research and presciently proposed “glasnost,” or openness, long before that word was in common use.

. . .

Professor Orlov was arrested in 1977 and, after a show trial, sentenced to seven years in a labor camp, followed by five years in Siberian exile, for “anti-Soviet agitation and propaganda.”

For the full obituary, see:

Sam Roberts. “Yuri Orlov, Dissident Of Soviet Union Sent Into Exile, Dies at 96.” The New York Times (Friday, October 2, 2020): B11.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the obituary has the date Oct. 1, 2020, and has the title “Yuri Orlov, Bold Champion of Soviet Dissidents, Dies at 96.”)

Lack of Property Rights in Land Keep Chinese Farmers Poor

(p. A6) XIAOXIHE, China — Every year, the message is the same: the government will fix China’s left-behind countryside through a raft of reforms. This year was no different, with measures meant to help farmers move to cities, educate their children, and invest in improving their land.

But every year, the gap between village and city remains stubbornly wide. Many blame this on the fact that farmers are not allowed to own land, a policy that goes back to one of the founding decisions of the Communist revolution.

In Xiaoxihe, a rolling eastern Chinese region of rice paddies and fishponds, farmers speak of land ownership as something so improbable that it defies imagination.

Dai Jialiang, a 69-year-old farmer, grows rice and vegetables on a small plot of land his family leases from the government. That means that Dai’s family has made a modest living off toiling the land but their gains are limited.

“Ownership is not possible in China,” Mr. Dai said. “Socialism doesn’t allow that.”

. . .

The party has long argued that one of traditional China’s main problems was that land was concentrated in the hands of landlords. After taking power in 1949 it introduced a violent campaign that killed up to two million farmers labeled “landlords.” State ownership of land became a nonnegotiable policy and farmers had to work in state-run collectives.

What farmers in this area came up with in the late 1970s was a plan to break the collectives back into the old family plots of land. Ownership stayed with the state but farmers were allowed to farm their plots as they saw fit as long as they paid a tax, usually in grain, to the government. Anything else they produced was theirs.

Suddenly motivated, farmers set records in grain production, while opening up orchards, vegetable plots and fishponds. Starvation, always a risk during the Communists’ first 30 years in power, disappeared.

National leaders endorsed this system but made sure that land stayed in the state’s hands. Farmers eventually got 30-year contracts over their land. When that ran out about a decade ago, they were extended another 30 years.

. . .

According to popular accounts of Chinese economic history, the nearby village of Xiaogang is where the household-contract system began in 1978. There, a large museum features dioramas showing how farmers almost starved to death under the Communists until they secretly subverted their policies — the unwitting implication being that only civil disobedience can effect change.

For the full story, see:

Ian Johnson. “Barred From Owning Land, Chinese Farmers Miss Spoils of Growth.” The New York Times (Friday, September 27, 2019): A6.

(Note: ellipses added.)

(Note: the online version of the story was last updated on September 28 [sic], 2019, and has the title “Barred From Owning Land, Rural Chinese Miss Spoils of Country’s Success.”)

Spectrum Property Rights Allowed Wireless to Flourish

(p. A15) Economic activity is increasingly conducted wirelessly, under a regulatory regime developed nearly a century ago—one that favors well-heeled incumbents and does little to encourage efficient use of the spectrum. The difficulty that new entrants face in securing spectrum, along with a system that locks in existing technology, chills investment in next-generation infrastructure.

Given the exciting promise of today’s technology, how did we end up hamstrung by such a backward regulatory regime?

. . .

Mr. Hazlett cites as an example the 1930s-era drama surrounding FM radio. From the start, FM had much better sound fidelity than AM—and so threatened existing AM networks operated by NBC, CBS and AT&T’s wired long-distance telephone network. These companies used the Federal Communications Commission to hamper the development of FM and succeeded in having it moved to a different band after World War II. This rendered all existing FM equipment—purchased by consumers at no small expense—useless and limited stations’ transmission power such that their audiences became too small to sustain a competitive business. So distressing was the episode that the father of FM radio, Edwin Howard Armstrong, ended his own life in 1954. The sad saga was merely an early example of the FCC exhibiting the “capture theory” of regulation, according to which regulators and legislators enact rules nominally in the public interest but in fact designed to enrich specific interest groups.

. . .

Mr. Hazlett devotes a substantial portion of his book to arguments for reforms, the most promising of which rest on the Nobel Prize-winning work of British economist Ronald Coase. Coase showed that, absent transaction costs, well-defined assets will wind up in the hands of the entities that value them most. By assigning property rights to frequencies—thereby turning them into assets and enabling the pricing mechanism—immense value can be created from the more efficient employment of bandwidth. For years, the concept of treating bandwidth like property and distributing it through competitive auctions seemed like a pipe dream. In the 1970s, two FCC commissioners said that the odds that this approach would be adopted “were equal to ‘those on the Easter Bunny in the Preakness.’ ” Well, the Easter Bunny won, and in 1994 the FCC started auctioning wireless licenses.

. . .

. . . for consumers and the public, “The Political Spectrum” is a good reminder of how far we have come. Today few economists question the benefits of well-defined rights, flexible use and auctions. That we are debating how to implement these ideas, rather than whether to do so, is reason for cautious optimism about our wireless future.

For the full review, see:

Gregory L. Rosston. “BOOKSHELF; Unlocking the Airwaves; In regulating radio, the FCC enacted rules nominally in the public interest, but which actually enriched specific interest groups.” The Wall Street Journal (Monday, July 17, 2017): A15.

(Note: ellipses added.)

(Note: the online version of the review has the date July 16, 2017, and has the same title as the print version.)

The book under review is:

Hazlett, Thomas W. The Political Spectrum: The Tumultuous Liberation of Wireless Technology, from Herbert Hoover to the Smartphone. New Haven, CT: Yale University Press, 2017.

Huawei “Spent All Their Resources Stealing Technology”

(p. B1) On a summer evening in 2004, as the Supercomm tech conference in Chicago wound down, a middle-aged Chinese visitor began wending his way through the nearly abandoned booths, popping open million-dollar networking equipment to photograph the circuit boards inside, according to people who were there.

A security guard stopped him and confiscated memory sticks with the photos, a notebook with diagrams and data belonging to AT&T Corp. , and a list of six companies including Fujitsu Network Communications Inc. and Nortel Networks Corp.

The man identified himself to conference staff as Zhu Yibin, an engineer. The word on his lanyard read “Weihua”—an accidental scramble, he said, of his employer’s name: Huawei Technologies Co.

. . .

(p. B6) A review of 10 cases in U.S. federal courts, and dozens of interviews with U.S. officials, former employees, competitors, and collaborators suggest Huawei had a corporate culture that blurred the boundary between competitive achievement and ethically dubious methods of pursuing it. Continue reading “Huawei “Spent All Their Resources Stealing Technology””

“Seek Truth from Facts”

(p. A15)  . . . 2019 . . .  marks the anniversary of the result of a . . . defiant protest—one that will receive little attention in or out of China, even though it launched the economic reforms that kick-started the country’s rise.

Forty years ago this spring, corn farmers in Xiaogang village, in the central province of Anhui (where Pearl Buck set “The Good Earth”), reported a grain yield of 66 metric tons. This single harvest equaled the village’s total output between 1955 and 1970—but for once the figure was not exaggerated. In fact, villagers underreported their actual yield by a third, fearing officials would not believe their record haul.

What caused this massive spike in production? A new fertilizer or hybrid seed? Better equipment? A catchy, rhymed propaganda slogan? No; Xiaogang’s farmers were starving. After taking power in 1949, China’s Communist Party had effectively abolished private land ownership, grouping farms into “people’s communes” subservient to the state. By 1978 villages were crippled by quotas that seized most of what they grew for redistribution.

Continue reading ““Seek Truth from Facts””

Private Property Unleashed Innovation

(p. A17)  Enlightenment philosophers recognized that the crown, guild, church and village sometimes acted as rent-seekers stripping away the rewards for work, thrift and innovation, and in the process inhibiting productive effort and progress. The Enlightenment established the principle that labor and capital are private property and not communal assets subject to involuntary sharing, and thus unleashed the explosion of knowledge and production that drives human flourishing to this day.

Extraordinarily in America, the crown jewel and greatest beneficiary of the Enlightenment, political movements are afoot that seek to overturn the individual economic rights secured in the Enlightenment and return to a medieval world of subjects and subjugation.

For the full commentary, see:

Phil Gramm and Michael Solon.  “Enemies of the Economic Enlightenment.”  The Wall Street Journal  (Tuesday, 9):  A17.

(Note:  the online version of the commentary has the date 9.)

Chief Justice Marshall Held That Corporations Were Citizens

(p. C4) How did corporations come to possess some of the most fundamental rights of individuals? They never marched on Washington. Instead, they have fought to win their rights in the Supreme Court–and in the process have been unexpected innovators in constitutional law.
The first Supreme Court case on the rights of business corporations was decided in 1809–nearly a half-century before the first case on the rights of African-Americans. Far from an oppressed minority, the Bank of the United States, which brought the case, was among the richest and most powerful corporations in the new nation.
After opponents in Georgia imposed a tax on the Savannah branch, the bank claimed a constitutional right to challenge the tax in federal court. Article III of the Constitution, however, guaranteed the right to sue in federal court only to “citizens.” In one of the neglected landmarks of American law, the legendary chief justice John Marshall held that the Constitution must be read expansively to include corporations.

For the full essay, see:
Adam Winkler. “What Rights Should Corporations Have?; The business world’s ‘artificial persons’ have long fought to win the same constitutional protections as citizens.” The Wall Street Journal (Saturday, March 3, 2018): C4.
(Note: the online version of the essay has the date March 1, 2018.)

The essay is based on the author’s book:
Winkler, Adam. We the Corporations: How American Businesses Won Their Civil Rights. New York: Liveright Publishing Corp., 2018.

Jason Potts Offers Advance Praise for Openness to Creative Destruction

What explains innovative dynamism? Art Diamond has written a fantastic book exploring how strong property rights, not innovation systems, should be the basis of modern innovation policy. He has done a great job in setting out the case for a classical liberal approach to innovation and technology policy, and carefully counters many of the common arguments supporting interventionist policy models. The book is full of lucid and compelling case studies and will be popular among innovation scholars and policy-makers.

Jason Potts, Professor of Economics, Royal Melbourne Institute of Technology (RMIT), Director of Blockchain Innovation Hub at RMIT. Author of The New Evolutionary Economics, and other works.

Potts’s advance praise is for:
Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, forthcoming June 2019.