The last two weeks have witnessed dramatic victories against two very different lawbreaking networks. First the death of Bin Laden removed the leader of al Qaeda. Second, the conviction of Raj Rajaratnam represented a major victory for prosecutors against the so-called expert insider trading networks. Although the two lawbreaking networks have a multitude of differences – in terms of social harm, motivations, and structure – they also have important similarities.
For one thing, both terror networks and insider trading networks present an opportunity to study social networks in a rigorous manner. “Networks” are more than just loose metaphor, but instead the subject of the emerging field of network theory that borrows from and links computer science, sociology, economics and a host of other fields. “Emerging” does not mean new: some of the germinal research stretches back over four decades. For example Granovetter’s work on “weak ties” in sociology. Mark Lemley and David McGowan authored a wonderful piece on network effects and law over 10 years ago and the legal literature continues to blossom (from Aviram to Zaring). Network theory has arrived.
And it is being put to use. A number of years ago, media reports suggested that the U.S. intelligence agencies were seeking to use network theory to crack Al Qaeda (see here for a law review article by Christopher Borgen on network theory and terrorism). The extent to which financial regulators and prosecutors have done the same with respect to insider trading is not clear, although scholars have recently suggested new potential approaches.
We may not know for a long time the extent to which network theory is influencing law enforcement. You can understand that intelligence and law enforcement would be unwilling to disclose the methods they use to catch bad guys. But the secrecy means that their methods do not enjoy the benefits – one could even say network effects – of being subject to the scrutiny of a larger community. Observers could help answer vital questions, such as “how effective are these efforts against lawbreakers?” and “could they be improved?” According to Linus’s Law: “given enough eyeballs, all bugs are shallow.” Aside from questions about efficacy, there are lingering and legitimate concerns about the implications of national security surveillance over internet communications.
But even the information we have learned about the two recent victories against anti-social networks leads to some interesting, if tentative observations. First, the ultimate value of these government operations is not in traditional deterrence alone, but in disrupting networks. In other words, successful operations against networks rely not only on crude deterrence of criminal behavior by scaring off would-be criminals. After all, it isn’t clear that a jihadist will be sobered by Bin Laden’s fate. By contrast, one thing that does disrupt networks is interfering with their capacity to send signals. Driving bad guys off the net seriously interferes with their ability to conduct business. From news reports, it doesn’t look like Bin Laden was all that successful in managing operations without an internet connection or a phone line. (Some reports suggest that the one time he did use a phone contributed to his location by U.S. intelligence.) Of course, government surveillance is thwarted not only by encryption, but by the daunting task of finding a needle in a haystack of data. Old-fashioned informants will still prove a critical tool.
Indeed media reports suggest that the government is heavily relying on informants in cracking the expert insider trading networks. From the perspective of law enforcement, this is important not only because it may lead to prosecutions, but also because it might disrupt the thing that these networks most rely on: trust.
So network theory suggests that we pay more attention to the marginalia of the Rajaratnam story. It is not the conviction alone that matters. It also argues for looking at other policy tools – such as a use of bounties in corporate crime – in another dimension, namely engendering distrust and thwarting the development of illegal networks. Of course, bounties for corporate crime and promoting snitching can create their own perverse incentives and pernicious effects. (Eleanor Brown penned an interesting essay on snitching, immigration, and terrorism that uses network theory.)
Another problem with a broader use of these tools is that they don’t always yield headline grabbing successes. No one sees the insider trading or terror attacks or law breaking that didn’t happen. The political economy of deterrence rewards prosecutors for victories in the courtroom, not necessarily for crime prevented.
Still, the events of the last week should give new life to study of network theory. There is evidence that network theory has become white hot. Consider this graph (from Google’s nifty Ngram tool) that plots the rising use of “network effect” compared to “deterrence effect” in books from1970 to mid 2007.
One can now also see a lot of those neat network graphs (see below) in news reporting.
Of course, the popularization of theory also threatens to reduce the intellectual rigor. Let’s hope the network effects of this line of inquiry are positive.
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This was a civil RICO case filed by the United States in 1999 against several tobacco companies and two of their non-profit organizations, the Council for Tobacco Research and the Tobacco Institute. The lawsuit accused these entities of engaging in a conspiracy, taking place over a period of approximately 50 years, to mislead the public about a number of issues related to smoking including: the potential health consequences of smoking; the dangers of environmental smoke (second-hand smoke); whether nicotine was an addictive substance; whether the tobacco companies were manipulating nicotine content; whether the tobacco companies were intentionally targeting youth in their advertising and promotional efforts; whether they were intentionally marketing cigarettes as "light" or "low tar" to imply health benefits (or less detriment) the companies knew did not exist because of a phenomenon known as "compensation," and other claims.
The case went to trial in 2004 and lasted for about 9 months. In 2006 D.C. District Court Judge Kessler, issued an opinion with findings of fact and conclusions of law that ran about 1700 pages. The evidence buried in these pages is unequivocally damning.
Several years later, in 2009 the D.C. Circuit Court affirmed most of these findings in the per curiam opinion above. The defendants (and the government) filed petitions for cert. The petitions of the parties are available here. Whether the Supreme Court will agree to hear the case is unknown, but with the government seeking review as well it may do so. And issues of commercial speech and the First Amendment are raised through out the case. Indeed, the amicus brief filed by the Washington Legal Foundation and the National Association of Manufacturers explicitly says this case offers the Court the opportunity to answer the question that it left open in Nike v. Kasky, writing "This Court has recently reaffirmed that the speech of corporate actors may be entitled to full First Amendment Protection" (Page 19 of the brief which you can view here citing yes, Citizens United).
The 5th case down in the Table of Authorities is Citizens United and it is cited twice in the argument. The brief argues the lower court ignored that much of the misleading speech took place in the form of editorials, op-eds, press releases and the like and involved issues of "public concern" and thus was fully protected speech. Mind you these press releases, so-called informational pamphlets (some sent to school children purporting to educate them about the "debate"), came from a group of defendants who the record amply demonstrates did meet together with their public relations and law firms to come up with a strategy to manufacture a debate that really didn't exists since their problem was that there was scientific consensus on the basic facts about the health risks of smoking and that these facts would be very damaging to future business. Their strategy is succinctly captured in the phrase found in some internal documents and widely reported on since, "Doubt is our product." It is important to be clear on what they are asking for; they are asking for constitutional protection for the manufacture of a phony debate, to obfuscate rather than to clarify information about a product for which there is no safe level of use.
This seems an appropriate juncture to raise Justice Jackson's admonition that "the Constitution is not a suicide pact." It seems like the government ought to be able to regulate a potentially lethal product, and that regulation of advertising and marketing is a necessary part of such appropriate regulation in the public interest. Such a regulation has recently been passed in the form of the Family Smoking Prevention and Tobacco Control Act, Pub. L. 111-31, 123 Stat. 1776 (2009). The Act permits the FDA to regulate tobacco products and includes very strict limitations on permissible forms of advertising and promotion.
But a group of tobacco companies is attacking this statute in a District Court in Western Kentucky (much forum shopping there?) on the grounds (among others) that it violates the First Amendment. The companies even wanted to claim First Amendment protection for marketing practices like giving out free samples! The district court denied most these claims, but nevertheless found that some of the statute's regulation of color and trade dress did violate the First Amendment. The opinion is here It was issued before Citizens United came down. But taken together with the arguments raised by the Washington Legal Foundation in the Philip Morris RICO case, I think we can expect Citizens United may well be used in the future in this case as well. Only time will tell. I would worry about giving them ideas, but the connection between Citizens United and commercial speech protection claims is clearly already out there amongst firms litigating these issues.
Later I will post some other aspects of the Philip Morris case which may be of interest to Glom readers, in particular whether a corporations can commit conspiracies or have specific intent.
Kim Krawiec (Duke) has a new paper on SSRN, “A Woman’s Worth”, in which she disputes some of the traditional arguments for legal regulation of prostitution, oocyte donation, and surrogate pregnancy. Here is the abstract:
This Article examines three traditionally “taboo trades”: (1) the sale of sex, (2) compensated egg donation, and (3) commercial surrogacy. The article purposely invokes examples in which the compensated provision of goods or services (primarily or exclusively by women) is legal, but in which commodification is only partially achieved or is constrained in some way. I argue that incomplete commodification disadvantages female providers in these instances, by constraining their agency, earning power, and status. Moreover, anticommodification and coercion rhetoric is sometimes invoked in these settings by interest groups who, at best, have little interest in female empowerment and, at worst, have economic or political interests at odds with it.
Krawiec’s focus is on whether regulation of these markets reflect an inherent bias against women. For example, she questions why regulations of egg donation are so stringent (and appear to push women to “donate” for altruistic motives) while men face little comparable restrictions in sperm donation. This contributes to the shocking statistic cited by Krawiec that egg and sperm donors receive roughly the same hourly compensation for their services.
I see these regulations less as a means to regulate women differently and more as a way to protect the marriage contract as a social institution or tool of social control. There are some interesting connections between Krawiec’s work on these “taboo trades” and her research on financial derivatives. Whereas financial derivatives are often used as ways to unbundle the various economic rights associated with financial assets such as debt and equity, these taboo trades – prostitution, egg donation, and surrogacy – represent the unbundling (or decoupling) of the marriage contract. Religious and legal strictures traditionally bound sex, conception, and childbearing all within the confines of the marriage contract. As with derivatives, new technology and markets combined to allow these services to be unbundled. Regulation of trades of these unbundled services may be aimed at protecting the marriage contract (or at least minimizing its damage) and not just at regulating women per se.
In fact, these regulations also serve to control men – albeit indirectly. Regulating the availability of prostitution pushes men to seek sex in a relationship (like marriage). Raising the cost of surrogacy impacts men – including gay men -- who want fatherhood outside of heterosexual marriage. What explains then why women are the dominant targets of these regulations and not men? Perhaps it is gender bias. But law & economics may offer an alternative explanation. Women may be the cheapest cost avoiders. For example, it may be far cheaper to regulate the relatively fewer number of prostitutes compared to the larger number of johns. It may be easier to regulate egg donation and surrogacy – which often require more invasive technology than sperm donation.
Krawiec’s article opens up a number of interesting questions for future research – particularly how the unbundling of the marriage contract have different effects across class lines. This has long been an interesting area of inquiry in economics – see for example George Akerlof and Janet Yellen’s work on “reproductive technology shocks.” One hypothesis would be that both the markets and the restrictions Krawiec describes have widely differing impacts along two axis -- higher income and lower income women on the one hand and women seeking to be part of a long-term opposite sex relationship or not on the other. Disaggregating the analysis based on class might yield some very provocative conclusions. Might higher-income women favor price controls (including indirect price controls that operate through moral suasion) on surrogacy and oocyte donation because it keeps the cost of having a baby artificially low?
Happy Commercialized Romance Day!
Working at one of the standout research universities in the United States, we are often solicited to participate in various studies around campus, from various departments. I'm a pro-research person, so I always look to see if I am eligible to participate. Some are mere online surveys, and I usually participate in those if I have the time. My oldest child participated in a linguistics study, and I blogged about the hilarious IRB consent form earlier. I responded to a solicitation for new mothers to participate in a study comparing nursing infants with formula-fed infants, but I was told that way more nursing mothers had signed up than bottle-feeding mothers. Next week, Will and I are going to spend 10 minutes watching a puppet show in the Psychology department as part of an infant cognition study.
However, I have my limits. Twice now my kids have come home with a solicitation to be part of much more invasive studies. One study was on childhood obesity, and the other was on a connection between physical activity and cognition. Both of these research areas seem very important to the public at large. However, both studies required way more than I could put my child through for no medical reason. Each study seemed to be designed similarly: my child would fast for 12 hours, then have blood drawn. Then, my child would do a treadmill-style stress test. I think in one study she would wear a pedometer and a heart monitor for three days. I believe the blood test was repeated at the end of the study. My child was quite willing to forego swim camp for three days to wear the heart monitor, but she drew the line at the blood test. And as much as I'm pro-science, I can't force my healthy, needle-phobic child to endure pain (and the anxiety about the pain) for this study.
I recognize that if all parents are like me, that we will continue to have gaps in our research concerning children's health. I would love to know how many families sign up for these studies and why their kids don't balk also. Am I a bad citizen? Or, is it unethical to let your healthy child experience even short, temporary pain without any personal medical benefit? (I should add that the paperwork said that the information families would receive from the assessments would be worth hundreds of dollars, so I guess if you were worried about your child's physical activity level, you might think the study was good for your child.)
On my bookshelf is a book that I have been wanting to read for a long time, but it never seems to make its way to the top of the pile. Brian Greene's The Fabric of the Cosmos seems like the sort of book that presents science at about the right pitch for me.
Greene was at BYU today, and I attended his Forum address, which could have been entitled "String Theory For Dummies." (A video of the address will be posted here at some point.) Like I said, about the right pitch.
I noticed on Greene's bio that he hosted the NOVA special, "The Elegant Universe," which inspired this sketch by Brian Regan ...
Scientific American reports on a study attempting to explain the biological basis for why girls seem to have superior language skills compared to boys. As a father of two sons experiencing some of the trials and tribulations of pre-school, I notice these stories. Apparently, girls completing linguistics tasks show more brain activity in areas specialized for language encoding, while boys show activity in areas relating to visual and auditory functions. What does this all mean?
[I]t implies that boys need to be taught language both visually (with a textbook) and orally (through a lecture) to get a full grasp of the subject, whereas a girl may be able to pick up the concepts by either method.
Subjects ranged from 9 to 15 years of age. The next question is whether these differences persist with age.
By the time I graduated from high school, I had dissected three frogs, a pig and countless earthworms in my quest for a well-rounded education. I had also learned how to use a Bunsen burner, mostly to heat substances to create a reaction guaranteed to produce that great sulfur smell. I was lucky in Chemistry -- my total bill at the end was around $8 for assorted tubes I could not find. My lab partner's bill was over $150 because he broke that really big beaker they tell you not to break. All of this lab angst may be coming to an end, according to the NYT, with online high school laboratories.
Obviously, labs are expensive. So students at some high schools find themselves unable to take a class in say, zoology. Voila, the Internet! Through online high schools, students can take courses they are interested in and create chemistry explosions or dissect animal cadavers online in video-game like simulations. Some educators are skeptical, arguing that no simulation can duplicate a real chemistry lab or biology lab. One educator expressed disdain that a student would graduate from high school without learning how to turn on a Bunsen burner. Surely this teacher was speaking metaphorically; I'm not sure what the act of igniting a gas flame teaches a person who wants to be pre-med. (I've used a gas stove thousands of times for cooking. I should be an M.D. by now.)
Some of the arguments seemed familiar to me. During my five-year journey teaching legal writing, I often witnessed heated arguments over whether teaching students electronic research could replace traditional library research. Often faculty would invoke the same rhetoric: "To do research, you have to smell the books." "How can someone graduate without having to wade through four volumes of Shepard's citations?" "I just like the way the case looks in the book." Ah, the Bunsen burner!
Mississippi State University is getting $37.2 million dollars in federal R&D earmarks this year, just as its senior senator Thad Cochran has ascended to the chair of the appropriations committee. Its earmarks from last year totaled only $19.8 million, while Ted Stevens of Alaska was chair. Among the past beneficiaries of government largess in Mississippi are the Thad Cochran National Warmwater Aquaculture Center at MSU Stoneville, the Thad Cochran Research, Technology and Economic Development Park at MSU Starkville, and the Thad Cochran Research Center at his alma mater Ole Miss.
According to CSM:
"Universities have long mastered the whole vanity game of naming rights [for new campus facilities], and in recent years they've added politicians who, unlike philanthropic donors giving their own money, are the Thad Cochrans of the world giving someone else's money," says Ron Utt, a budget expert at the Heritage Foundation, a conservative think tank in Washington.
Besides the interesting tale of MSU's success in garnering federal funds, CSM has a companion piece detailing the increasing efforts of academic institutions to lobby Congress for "directed appropriations."
Academic earmarks jumped from $15 million the first year of the Reagan presidency to $336 million in fiscal year 1989, the year he left office. By the 1990s, academic institutions rivaled defense contractors as consumers of lobby services to win federal earmarks - and helped define a new lobbying specialty in Washington's K Street corridor.
Orin Kerr asks Where Were You? when the Challenger disaster occurred 20 years ago. I had just been having this conversation with friends yesterday, so I remember exactly where I was. I was a junior in high school in Biology II class. (I had to wince to realize that Orin is three years younger than I am.) Our teacher was letting us watch the Challenger take-off, so we saw the disaster occur live. At the time, I didn't instantly assume that something had gone wrong. The shuttle looked to me like a three-stage rocket in a cartoon, and the stages were exploding and falling off as expected. When our teacher ran out of the room to get the other science teachers, we all realized that something had gone horribly wrong.
Our trigonomotry teacher took this opportunity for the next month to remind us that trigonometry errors had caused the disaster, so we had better pay better attention. Knowing that I would probably never work for NASA, I just went on as usual.
I suppose it is to be expected in a world of new discoveries, but half the things I learned in high school are proving to be wrong. This whole "Pluto is not a planet" thing has inspired me to start a list. "Things That Were Facts But Are Now Not." As I take my children to museums and read the plaques on the exhibits, I seem more and more ignorant.
1. Our solar system had nine planets, including Pluto.
2. We don't know why the dinosaurs disappeared, but it may have been due to climatological change, the smallness of their brains, or some other crackpot theory like a giant asteroid.
Apparently, the asteroid theory that was presented with such disdain twenty years ago has won, according to the Milwaukee Public Museum.
3. The Rosenbergs were innocent people who were executed wrongly.
Apparently, according to the International Spy Museum, they were proven as spies sometime in the 1990s.
4. Alger Hiss was framed.
OK, that probably wasn't considered a fact then, but my extremely liberal U.S. history teacher sort of made it sound like that. Or, it could have been that in the movie she showed us, Whitaker Chambers was sweating all the time. He looked like he was lying to me. Again, the Spy Museum people say he was a spy.
Does anyone else have any examples so that I can catch up to the 12th grade level?
Last night Tom Ashbrook had an interesting program on "America's Lag in the Sciences." The theme was that the United States is not training enough American scientists and engineers.
This is from one of Tom's guests, Nobel Laureate David Baltimore, who is currently the president of Cal Tech:
In the last 20 years, many of the students in American universities who majored in the sciences and engineering came from Asia. Today, significant numbers are staying in Asia because the schooling there is so improved, and because we have made it harder to study here. And Asian scientists who have been successful here are returning home. None of this is lost on the governments of, say, India and China, which are putting huge sums into modernizing their science infrastructure and universities.
The implication seems to be that the U.S. is taking the first steps on the road to financial ruin (Baltimore begins his article by asking: " The United States is the richest nation on Earth, the world's biggest beneficiary of the global economy. But will it last?"), but the connection between basic science and economic development is not linear. Physical, legal, and market infrastructure must combine to create an environment in which science can develop into economic benefit. These other countries have begun to develop the institutions necessary to thrive, but they are still at the beginning of the journey.
Nor is it clear that having scientific innovation distributed among other nations, including India and China, is a bad thing for the United States. As they develop, we will lose some battles, but we are winning a much larger war. I operate on the assumption that a prosperous world is good the the U.S. In my view, Baltimore's argument comes from the opposite -- and in my opinion -- antiquated view that the U.S. must dominate science. This argument comes from the same fount as the anti-outsourcing arguments, and at base the argument is not only jingoistic, but misguided.
Tyler Cowen has been writing about economics as science -- or not -- and he points to this recent entry (entitled "Uh Oh") on Dave Tufte's blog, summarizing a forthcoming paper in the Journal of Money, Credit, and Banking:
In short, 1) economists publish papers with results that are not replicable, and 2) few make enough effort to notice. Economists - we have a big problem here. It looks like we fib to each other, and then wink at the liars. This is not the way to run a science.
Tufte also supports the finding of the paper with a few (shocking) personal anecdotes. This isn't news, exactly. Most economists I know are pretty open about the fact that their discipline lacks the rigor that we typically associate with the sciences. Nevertheless, Tyler Cowen must be right: "economics is surely a science. We produce empirical knowledge which is subject to process of testing, broadly interpreted, and feedback."
Closer to home, most law professors avoid the problems inherent in scientific inquiry by avoiding data. Though that is changing in some areas of law.
Scientific American describes two brain studies, one demonstrating that aesthetic sensibility activates the prefrontal cortex, and the other showing that flashes of insight emanate from the right hemisphere of the brain’s temporal cortex (thus supporting the notion that insight is neurologically different from routine problem solving). If you have having trouble visualizing this, here is an interactive brain map. So I wonder: what part of the brain is motivating Professor Kevin Warwick? (Link courtesy of TJ's Weblog.)
The fall colors are long gone in Wisconsin, but another new favorite blog (The Loom) is paying tribute to William Hamilton's attempt to explain fall colors as an evolutionary adaptation.
He and Brown proposed that a brilliant leaf was, like a peacock's tail, a signal. A peacock's tail takes a huge investment of energy, energy that could otherwise be diverted to fighting off parasites or surviving other stresses. A strong male can afford to use up this energy, which makes the tail an honest ad for its parasite-fighting genes. In the case of leaves, trees are not sending signals to other trees--they are sending signals to tree-eating insects.
Trees, after all, are as besieged by insects as birds or other animals are by internal parasites. They fight their enemies a sophisticated arsenal of chemical agents, sticky traps, and other weapons of mass arthropod destruction. Hamilton and Brown proposed that trees that have a strong constitution warn off insects by changing colors in the fall. In a sense, they say, "I can shut down my photosynthesis early in the fall, pump a lot of red or yellow pigments into my leaves, and still have enough energy left to annihilate your babies when they hatch in the spring. So just move along."
Now, I am not a biologist (though I did read parts of The Structure of Evolutionary Theory!), but this strikes me as at least a little far-fetched. It reminds me of the old expression, "when you have a hammer, every problem looks like a nail." I have another explanation for fall colors: they just happen as the leaves die. It's going to take more than 100 birch trees in Norway to convince me otherwise.