“GO VIRTUAL YOUNG MAN!”

Claiming Property in a Placeless World

Due to fundamental changes in technology, demographics, industry, the economy and the world, we are embarking on an era where people participate in the economy like never before. Americans find themselves increasingly re-aligned through multilateral interactions and foreign associations.

Although opportunities are expanding and efficiency is increasing, traditional conceptions of freedom and democracy must realize an impending inadequacy within the global marketplace. This marketplace—the World Wide Web—has produced a fiat existence, a virtual frontier, and a torrent of lawlessness. Because warrant-less surveillance is considered incompatible with democratic principles of liberty and privacy, the United States has little governing influence in this realm. Although property ownership is quantifiable and apparent in the physical world, it remains a comparatively nebulous concept in the virtual world. The indefinite nature of virtual property rights will only be reconciled through the collaborative-rule of primary virtual actors. This union—while taking the law into its own hands—must define and implement a mechanism for the enforcement of virtual property rights in the expanding global market.

The Globalization of Common Sense

American democracy has always valued innovative information and expanding associations. Thomas Paine described this characteristic in its earliest form, “In this state of natural liberty, society will be their first thought. A thousand motives will excite them…and every different want will call…a different way.”[1] Alexis De Tocqueville later praised the application of these desires: “I have often admired the infinite art with which the inhabitants of the United States managed to fix a common goal to the efforts of many men and get them to advance it freely.”[2] The equality present in American society requires the corporate pursuit of common desires if any measurable result is to be achieved. While this mechanism advances social progress, “sentiments and ideas renew themselves, the heart is enlarged, and the human mind is developed only by the reciprocal action of men upon one another.”[3] Democratic associations, by definition, promote community through the gathering of individuals with shared desires. Furthermore, they improve society through the sharpening nature of competition, and contribute to society through the consensus required therein.

Private property is the benefit which gives value to enterprise. Paine explained that once it had been established, society required governance: “Wherefore, security being the true design and end of government, it answerably follows that whatever form thereof appears most likely to insure it to us, with the least expense and greatest benefit, is preferable to all others.”[4] De Tocqueville described the nature of this goal within democracy: “In a constituted and peaceful democracy like that of the United States, where one can enrich oneself neither by war nor by public posts nor by political confiscations, love of wealth directs men principally toward industry.”[5] Furthermore, “it is the very violence of their desires that renders Americans so methodical. It troubles their souls, but it arranges their lives.”[6]

Now, more than two hundred years since the nation’s birth, enterprise is still propelled through collaborative efforts, and property rights remain formative to American consciousness. Since the founding, however, the nature of these interests has changed. Although collaborative associations have been expanded and improved, claims to private property have been correspondingly blurred.

When admiring the efficiency and vastness of collaborative associations in America, De Tocqueville was responding to physical collaborations—for the production of theatres, publishing of books, construction of churches, sending of missionaries, representation of politics, etc. The World Wide Web, however, has vastly expanded American associations—to the extent that they are no longer American. Peer production has harnessed human skill, intelligence, and ingenuity within a synthetic global marketplace. We are now “participating in the rise of a global, ubiquitous platform for computation and collaboration that is reshaping nearly every aspect of human affairs.”[7] Although substantive values are sought by individuals and groups within respective states, the realm in which they are sought is largely—if not entirely—separate from the state. As explained by authors, Tapscott and Williams, “A new kind of business is emerging—one that opens its doors to the world, co-innovates with everyone (especially with customers), shares resources that were previously closely guarded, harnesses the power of mass collaboration, and behaves not as a multinational but as something new: a truly global firm.”[8] With society as its primary interest—as predicated by Thomas Paine—this virtual market is now grafted as a cosmopolitan common sense for the world.

The Fourth Amendment

The virtual economy—as grafted by the internet—has imputed macro issues into a micro world. Instead of in an open/visible marketplace, transactions and associations are now conducted within the privacy of the home; global interactions exist within the seclusion of domestic privacy. For democratic peoples, this has produced an increasingly fluid conception of private property—that which can be owned, protected, and sold. Democratic governments have been handicapped in their most fundamental role: the protection of private property. As explained by economist Arye Hillman, the first responsibility of government is to protect competitive markets and the rule of law (property rights), and the second is to correct inefficiencies and preserve social justice.[9] Because virtual property is created and acquired, in a marketplace that is “separate from” and “other than” the traditional state economy, conventional governments experience difficulty here. The American Constitution, specifically, precludes its own effectiveness in fulfilling these responsibilities.

As stated in the Fourth Amendment: “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated; and no Warrants shall issue but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.” Furthermore, this “right to privacy” is applied to virtual global interactions in Supreme Court cases: Ex Parte Quirin, Hamdi v. Rumsfeld, U.S. v. U.S. District Court, and others. The personal computer (PC), when combined with the World Wide Web, produced a form of (virtual) property which is simply ungovernable. The right to privacy is a firewall for lawlessness—rather than protecting private property, it protects those who steal it. Because warrant-less surveillance is considered unconstitutional, the United States has little governing influence in this realm.

Piracy Restrained

Whether for music, movies, books, etc., nearly every PC in the world is used for the pirating and storage of stolen property. Although different countries have different standards and some are more active than others, no nation can fully regulate the legality of an individual’s internet use: “Despite attempts to increase protection for intellectual property on a global level, countries vary widely in their implementation and enforcement of international agreements. The result it piracy on a widespread scale.”[10] Not only is piracy protected, the internet is also replete with file-sharing programs that aid in the embezzling of virtual properties. The lawless tendencies of this new territory could be compared, in some respects, to the early days of the Wild West. Although expansive, untamed, and filled with fortune seekers, the World Wide Web differs in that it is unclaimed by national boundaries. In the virtual economy, no one man, business, or nation, is an island, “and the bona fide new business rule for competitiveness, ‘collaborate or perish,’ is a global one.”[11]

As explained by Thomas Paine, “Society is produced by our wants and government by our wickedness; the former promotes our happiness positively by uniting our affections, the latter negatively by restraining our vices.”[12] Although alluding to the colonization of the New World, Paine clearly attributes broad scope to the definition of society. Society can be described as any grouping of individuals characterized by common interests. Within the intricacy of associations and virtual transactions, global collaboration is the unifying interest of the World Wide Web. Virtual society, however established, expanding, and rampant with lawlessness, has yet to produce any adequacy of governing restraints. Because enterprise—the acquisition of property—is the unifying desire, and the security for such is its primary deficiency, virtual society will inevitably produce a government for its correction, “and whatever form thereof appears most likely to insure it to us, with the least expense and greatest benefit, is preferable to all others.”[13]

Coase Economy

When market forces take on the characteristics of a public good, free-riders can only be restrained through the assigning of legal rights to the use of goods and entities therein. This theory, as argued by Ronald Coase, explains that, in the absence of transaction costs, all government allocations of property rights are equally efficient, because interested groups will negotiate privately to correct negative externalities.[14] Furthermore, property rights should initially be given to those gaining the most utility from them. Because of contrasting interests and high information costs, traditional governments are unable to establish the most valued use of virtual resources. Because the marketplace is the best mechanism for matching supply with demand and establishing prices, virtual actors “are turning to collaborative self-organizing business-web models where masses of consumers, employees, suppliers, business partners, and even competitors cocreate value in the absence of direct managerial control.”[15] Although written long before the internet became widely known, Coase’s theories predicated the collaborative rule of primary actors within the virtual marketplace.

Because traditional governments are inadequate, primary virtual actors (i.e. Google, Apple, Yahoo, News Corp., Citigroup, and others) must rise to the task. These companies, while offering efficiency through mass collaboration, will gradually accrue power—naturally monopolizing their respective spheres. As market portals are increasingly filled, primary actors will inevitably collaborate in the establishing of property rights and for the further protection thereof. This oligarchic union, while establishing property rights and policing the virtual world, can only exist to the measure that it is valued within society.

- Abram Olmstead