Gresham’s Second Law

The inventor of the Web writes to its 2bn users.

Sir Tim Berners-Lee, who with Robert Cailliau created the World-Wide Web 28 years ago with the specification for HTML, has published an open letter to the Web’s 2 billion users today.

The text is here, in English, French, Spanish, Portuguese and Arabic. He invites everybody to share it, so I’ll save you the fatigue of clicking on the link to reproduce it below the jump. Some quick comments from me to get you going.

Internet users by country, 2011

1. Berners-Lee is one of the few people who can speak with real authority on this stuff. If he says we have big problems, it’s a safe prior that we do. If he says they can be fixed, there is a very good chance they can.

2. The approach is too narrow. I rely here on another authority, Mike O’Hare of this blog. He has written about the crisis in society created by the arrival of transmission and reproduction of information at near-zero marginal cost, leading to the implosion of subscriber revenues for journalism and the dramatic thinning out of newsroom staff.

Let’s give this insight a catchy name: Gresham’s Second Law.

Robert Gresham was an English financier of the Elizabethan era, who has given his name to the first genuine economic law: that is, a generalisation based on solid observation, explained by a robust theory. (He had eminent predecessors including Copernicus so the attribution is a little unfair.) The Law reads:

Bad money drives out good.

That is, with a bullion specie currency, when the king debases it by reducing the bullion content of the coins, the price of the metal rises in nominal terms, and anyone who can get hold of the old, fatter coins can make a quick doubloon by melting them down. So the good old coins disappear.

Gresham’s-nth-granddaughter’s Second Law, which I have just invented, is similar:

Bad information drives out good.

The cost of production of good information – science, literature, accurate reporting – is high. The cost of production of lies, bullshit, smears, pornography, and rumours is negligible. On the consumption side, bad information is designed to appeal to our lower human nature (Kahneman’s System 1). Good information is often difficult, unwelcome or both, and requires the support of the lazy System 2. So the good information always has a struggle to be heard.

Now consider a technical innovation that lowers the cost of reproduction or transmission of information: say from hand copying to print, or print to the Internet. In the print era, Adolf Hitler had to struggle to get his message across. He had to find a printer for Mein Kampf (the title was accurate). He had to build a united movement from the hard-right flotsam floating round Munich, through endless face-to-face meetings in beer halls. Even in favourable conditions, it took him a decade before he could mount a credible challenge to gain power. Contrast Donald Trump. Starting from nowhere politically in 2015, he won an election in a much larger country with little more infrastructure than a Twitter account and support from the Breitbart website.

The contrast can be explained in terms of  Gresham’s Second Law. The drop in transmission costs removes an obstacle to the dissemination of bad information, and releases its advantage in lower costs of production. So the problem has got worse.

3. Berners-Lee is right that we need to brake bad information. His example of political advertising linking to fake news is just one abuse. Americans in particular need to rethink free speech absolutism. Citizens United represented to many of us a reductio ad absurdum. As legal persons, corporations are slaves, with inferior, not equal rights to the humans they serve. Should corporate bodies – with access to much bigger megaphones than individuals – be held to a higher standard of care in their public speech? Companies that mislead their stockholders face severe sanctions, and deception in advertising is limited to suggestio falsi and suppressio veri, outright lies being banned. I don’t see why the privilege of corporate political and cultural speech should not face analogous restrictions.

4. We also have to think positively: how can the good information be paid for? The answer for science has been socialism leavened by philanthropy. Literature and music seem to be doing all right in the market system, though that’s just a non-expert impression. A sufficient number of customers for music seem prepared to pay one or two dollars for a song rather than pirate everything, a convention that relies more on an honesty-box ethic than on sanctions. The immediate crisis is in reporting. It’s good news that Sir Tim’s team will be looking at micropayments. They should be looking at socialism too. It’s already how we pay for education and health.

* * * * * *

(Letter over the jump)

Three challenges for the web, according to its inventor
Web Foundation · March 12, 2017
Today marks 28 years since I submitted my original proposal for the world wide web. I imagined the web as an open platform that would allow everyone, everywhere to share information, access opportunities and collaborate across geographic and cultural boundaries. In many ways, the web has lived up to this vision, though it has been a recurring battle to keep it open. But over the past 12 months, I’ve become increasingly worried about three new trends, which I believe we must tackle in order for the web to fulfil its true potential as a tool which serves all of humanity.

1)   We’ve lost control of our personal data
The current business model for many websites offers free content in exchange for personal data. Many of us agree to this – albeit often by accepting long and confusing terms and conditions documents – but fundamentally we do not mind some information being collected in exchange for free services. But, we’re missing a trick. As our data is then held in proprietary silos, out of sight to us, we lose out on the benefits we could realise if we had direct control over this data, and chose when and with whom to share it. What’s more, we often do not have any way of feeding back to companies what data we’d rather not share – especially with third parties – the T&Cs are all or nothing.

This widespread data collection by companies also has other impacts. Through collaboration with – or coercion of – companies, governments are also increasingly watching our every move online, and passing extreme laws that trample on our rights to privacy. In repressive regimes, it’s easy to see the harm that can be caused – bloggers can be arrested or killed, and political opponents can be monitored. But even in countries where we believe governments have citizens’ best interests at heart, watching everyone, all the time is simply going too far. It creates a chilling effect on free speech and stops the web from being used as a space to explore important topics, like sensitive health issues, sexuality or religion.

2)   It’s too easy for misinformation to spread on the web
Today, most people find news and information on the web through just a handful of social media sites and search engines. These sites make more money when we click on the links they show us. And, they choose what to show us based on algorithms which learn from our personal data that they are constantly harvesting. The net result is that these sites show us content they think we’ll click on – meaning that misinformation, or ‘fake news’, which is surprising, shocking, or designed to appeal to our biases can spread like wildfire. And through the use of data science and armies of bots, those with bad intentions can game the system to spread misinformation for financial or political gain.

3)   Political advertising online needs transparency and understanding
Political advertising online has rapidly become a sophisticated industry. The fact that most people get their information from just a few platforms and the increasing sophistication of algorithms drawing upon rich pools of personal data, means that political campaigns are now building individual adverts targeted directly at users. One source suggests that in the 2016 US election, as many as 50,000 variations of adverts were being served every single day on Facebook, a near-impossible situation to monitor. And there are suggestions that some political adverts – in the US and around the world – are being used in unethical ways – to point voters to fake news sites, for instance, or to keep others away from the polls. Targeted advertising allows a campaign to say completely different, possibly conflicting things to different groups. Is that democratic?

These are complex problems, and the solutions will not be simple. But a few broad paths to progress are already clear. We must work together with web companies to strike a balance that puts a fair level of data control back in the hands of people, including the development of new technology like personal “data pods” if needed and exploring alternative revenue models like subscriptions and micropayments. We must fight against government over-reach in surveillance laws, including through the courts if necessary. We must push back against misinformation by encouraging gatekeepers such as Google and Facebook to continue their efforts to combat the problem, while avoiding the creation of any central bodies to decide what is “true” or not. We need more algorithmic transparency to understand how important decisions that affect our lives are being made, and perhaps a set of common principles to be followed. We urgently need to close the “internet blind spot” in the regulation of political campaigning.

Our team at the Web Foundation will be working on many of these issues as part of our new five year strategy – researching the problems in more detail, coming up with proactive policy solutions and bringing together coalitions to drive progress towards a web that gives equal power and opportunity to all. I urge you to support our work however you can – by spreading the word, keeping up pressure on companies and governments or by making a donation. We’ve also compiled a directory of other digital rights organisations around the world for you to explore and consider supporting too.

I may have invented the web, but all of you have helped to create what it is today. All the blogs, posts, tweets, photos, videos, applications, web pages and more represent the contributions of millions of you around the world building our online community. All kinds of people have helped, from politicians fighting to keep the web open, standards organisations like W3C enhancing the power, accessibility and security of the technology, and people who have protested in the streets. In the past year, we have seen Nigerians stand up to a social media bill that would have hampered free expression online, popular outcry and protests at regional internet shutdowns in Cameroon and great public support for net neutrality in both India and the European Union.

It has taken all of us to build the web we have, and now it is up to all of us to build the web we want – for everyone.  If you would like to be more involved, then do join our mailing list, do contribute to us, do join or donate to any of the organisations which are working on these issues around the world.

Tim Berners-Lee

Author: James Wimberley

James Wimberley (b. 1946, an Englishman raised in the Channel Islands. three adult children) is a former career international bureaucrat with the Council of Europe in Strasbourg. His main achievements there were the Lisbon Convention on recognition of qualifications and the Kosovo law on school education. He retired in 2006 to a little white house in Andalucia, His first wife Patricia Morris died in 2009 after a long illness. He remarried in 2011. to the former Brazilian TV actress Lu Mendonça. The cat overlords are now three. I suppose I've been invited to join real scholars on the list because my skills, acquired in a decade of technical assistance work in eastern Europe, include being able to ask faux-naïf questions like the exotic Persians and Chinese of eighteenth-century philosophical fiction. So I'm quite comfortable in the role of country-cousin blogger with a European perspective. The other specialised skill I learnt was making toasts with a moral in the course of drunken Caucasian banquets. I'm open to expenses-paid offers to retell Noah the great Armenian and Columbus, the orange, and university reform in Georgia. James Wimberley's occasional publications on the web

21 thoughts on “Gresham’s Second Law”

  1. Unfortunately, the statement "Bad information drives out good" is relatively old. I'm certain that I saw it in a newspaper 15-20 years ago, with the comparison to Gresham's statement that "bad money drives out good", something that I'd learned in my first-year college economics class. While I agree with your ideas and Mr. Berners-Lee's ideas, I don't see them coming about. The idea that corporations are people is a basic tenet of American law, going back at least 130 years. I don't see Citizens United being reversed in my lifetime (I am 57), nor do I see any will in Congress to put up even the smallest restriction on political activities that will gain 60 votes. I think our only hope is that a majority of people become educated enough or learn enough critical thinking to identify what is real and what isn't. I don't expect to see that happen in my lifetime, either.

  2. I'm sure you are right that the Second Law is not original with me - but then the first wasn't with Gresham.

    The question about corporations is not whether they are legal persons (a practical necessity) but whether they are equal persons to humans (which strikes me as batshit crazy).

    1. I agree, but under American constitutional law, corporations have the same right of freedom of speech as people do.

    2. How are you going to restrict the speech of a corporation when a corporation may be a newspaper, book publisher, film producer, or a user of their services? This will do little but create more job security for lawyers.

      1. I'm not sure you can.

        My own idea is that part of the problem lies in defining contributions as speech. It is one thing to spend money putting out a newspaper or buying ads. It is another to simply write a big check to a PAC or some other organization.

        Another part, with large corporations, is the inherent agency issue. If a large corporation supports a specific candidate it is reflecting the views of management, not shareholders, and the argument that "You can always sell the shares," is bogus for about 10,000 reasons.

        How to distinguish media is a problem, but possibly something along the line of "engages in actual expressive behavior," might work. If Exxon wants to publish the Exxon Daily Tribune let them. But don't let them dump money into the treasure chests of politicians they are fond of.

      2. They have in-house libel lawyers today, especially in the UK. The identified authors of pieces are individuals, with stronger speech rights. A corporation whose business is information can easily demonstrate that it meets a low duty of care in supervising the work of authors, simply by pointing to the organisation and workflow chart. Articles by reporters are always reviewed by editors before publication. Publishers have editors who read manuscripts. The problem is PR staff of corporations like Exxon or Drudge just making stuff up, or giving money to people who just make stuff up.

  3. People have been studying micropayments for 20-plus years (well, longer than that, but the first 15-20 years or so weren't even about the web). It's not the technology, it's the institutions. In particular, a privatized monetary/payments system that is doing very well with charging a minimum of roughly 25 cents per transaction, plus a percentage. A working, widely used micropayments system would eat their lunch.

    We even have proof of concept for semi-universal micropayments in the global web advertising ecosystem — although the payments go from advertisers to sites instead of from readers, the scale is right. But the very success of the advertising micropayments system makes it clear that the problem is curation. There's a huge population out there that would likely be perfectly happy to pay a few millicents a click for their ongoing diet of fake news.

    We may look at (roughly) 1950-2000 as the period when not enough people had figured out how to make lots of money subverting public discourse.

  4. The problem with marketing is not how much of it there is, nor how consensual or non-consensual it is, nor the fact that it can be misused.

    The problem with marketing is the fact that it works.

    The only worthwhile end state is one in which marketing is no longer effective — at all. This is a matter of education.

    Trying to throttle or censor it, while it is still effective, is a mug's game.

  5. Why did you include that figure? It is too small to actually see what it's supposed to represent, and clicking on it just summons an image of the same size instead of one that's big enough to see.

    1. Gosh, I had just the opposite reaction. I looked at this post first on my iPhone. I could expand the picture on the screen, and I felt it gave me a new appreciation of how the internet affects the populations of different countries. In particular, I was unsurprised by the relatively low penetration in China, but I was very surprised by the even lower penetration in India, where I would have expected higher. A useful graphic, I thought.

      After I red your comment, I tried it on my PC. On my PC, i didn't have the ability to zoom in through my browser, but I could achieve the same result by saving the image, then looking at it via Microsoft Picture Manager.

    2. Here's the source, at higher resolution. Remiss of me to leave the link out. It's a pity the data are only for 2011; the absolute numbers for Africa must have shot up since through smartphones.

  6. While I'm not a huge fan of Citizens United and mostly agree with Stevens's dissent [1], I don't think it had actually much of an effect on recent elections. The much bigger issue has always been the abandonment of the Fairness Doctrine and the rise of agitprop media (esp. talk radio) in its wake. America does not have a public broadcaster that is both trusted and influential (much as I love NPR/PBS), so private broadcasters need to be held to higher standards. And one should keep in mind that much of the electioneering in past years has been done by the media, who are unambiguously protected by the First Amendment and for whom Citizens United is largely irrelevant.

    One could observe similar effects during the Brexit campaign in the UK, even though they have tougher restrictions on electioneering there. One of the problems there was that the media went into full partisan mode, and while neither side covered itself in glory, the Leave campaign engaged in what Professor Michael Dougan of the Liverpool Law School accurately called "lying on an industrial scale". And especially the Murdoch papers went into full political campaign mode.

    I'll also note that "bad information drives out good" is not just restricted to lack of ethics. Too often, Hanlon's Razor applies, and what we actually see is incompetence rather than malice. My favorite example is the refugee crisis, for which the English language media basically constructed an entire alternate reality. And by alternate reality I mean factual reporting (or lack thereof), not opinions or assessments of the consequences. The media often did not even seem to understand very basic things, such as what it means to have a coalition government in a parliamentary democracy and how that affects decision making processes, and instead seemed to assume that it worked just as in a presidential system. They did not have an even basic understanding of how the Dublin Regulation or the Qualification Directive work (both being key elements of EU asylum law). They reported restatements of EU law by politicians or its direct, non-discretionary consequences as policy decisions. A major cause of this is probably the fact that many publications struggle financially and lack the resources for proper research and on-the-ground reporting.

    The social media are an indirect factor in this. They serve as such a huge force multiplier for online publications that it has become increasingly more important to be first than to be right. The economics of this greatly favor dishonest and rushed reporting.

    [1] Let me point out here that I don't have any issue with corporate personhood as such, and think that the majority opinion is right insofar as they think corporate speech needs to be protected, especially as individuals often speak through a corporation or other entity (think trade unions, the WWF, or Amnesty International), just with the categorical unwillingness of the majority opinion to take the dangers of corporations as anonymity shields and their ability to leverage vast amounts of money into account.

  7. I read that Trump won the largest electoral majority ever among high-school drop-outs. I'm not so sure it's the quality of the information that's being downgraded so much as the quality of the ability to digest it.

  8. The problem starts at a very young age, when we are taught that our conscious mind is all powerful, and our ego knows when we're right and our free will can overcome all instinctual response. We think we can't be manipulated, so our defenses are down.

  9. In case no one has noticed, Donald Trump just blew up the model of campaigning that Citizens United was supposed to turbocharge.

    1. Agreed that Citizens United is not a sufficient explanation for Trump's victory, and fixing it would not have prevented the type of media manipulation and deception that won him the Presidency. It's important not to focus on corporate speech exclusively. My post argues for a broad approach. The financial crisis in reporting surely has something to do with the inadequate media scrutiny of Candidate Trump. And yet: cynical corporate agitprop has been a very big part of the conversion of US and Australian conservatism to denialist nonsense on climate change. That happened independently of Trump and was complete before he entered politics.

  10. I think Tim is overly pessimistic here — and incidentally I wish people would stop all this silly stuff about him having invented the Web. He is no more the father of the Internet that the equally fine Vint Cerf is. They both contributed clever and very useful sets of technical protocols. Thanks fellas.

    Most of the stuff printed with the Western version of moveable type during Gutenberg's lifetime was pornography. and most of the rest was vicious political pamphleteering. People give him credit for his version of the Christian Bible instead. The implicit assumption is that this was less harmful to order and good morals than the other two categories.

    I can't see any reason to think that the current period in data transmission will be different in any significant way.

    1. He's not the father of the Internet but the father of the Web. At (European) CERN he devised a protocol to allow hyperlinked texts and images (experimental particle physics uses images a lot), and it's the ancestor of the one we use. If that's not inventing the Web, what could possibly be? Cerf, Postel and others were the earlier American creators of the Internet 1.0, with TTP-IP, the email addressing system, FTP and a few other useful things. That was the necessary technical substrate for a web of hyperlinked pages: a clicked link is an instruction to a remote server to email you a page. Berners-Lee has SFIK never said anything different.

Comments are closed.