One of my favorite recurring themes has to do with the premise that just about any form of regulation, if it is to be effective, must follow the metaphor of an arms race. Udi Manber introduced this metaphor back when he was at Yahoo!, where his responsibilities included dealing with protection against malware; but more recently the metaphor has resurfaced in the context of preventing the next financial crisis while recovering from the current one. As I put it last February, financial security is more a matter of Wendell Phillips' concept of "eternal vigilance" than one of closing the barn door to keep the horses from being stolen. Unfortunately, whether you are in the Internet business or just chewing the fat with Socrates over the nature of an ideal republic, it quickly becomes apparent that, if you want eternal vigilance, you have to pay for it.
It appears that the People's Republic of China has now confronted this problem as it applies to their own issues of censorship. The following report appeared on the BBC News Web site this morning:
Reports from China say a controversial government-backed software project to filter internet content could be on the brink of collapse.
State media said the developer behind the Green Dam Youth Escort software had closed its Beijing project team because of a lack of government funding.
Its partner in Henan said without funding, its team would soon close too.
The problem appears to be that the Chinese government saw the problem of maintaining censorship as being a matter of a software product that could be developed and deployed with one year of funding. In other words they wanted to put a lock on the door while the horses were pretty much all in the barn. One could think of the locked door as a form of utopian "goal state." Once that state has been achieved, the system will remain in it; and the job is done.
To go back to the question of financial regulation, this is the fallacy that Benjamin Friedman explored in his review of John Cassidy's How Markets Fail: The Logic of Economic Calamities. Friedman advocated Cassidy's plea that we recognize the difference between "utopian economics," which is all about finding goal states in clean mathematically-based systems, and "reality-based economics," which tries to take into account all of the messier aspects of human behavior. I raise these points not to advise the Chinese on how to deal more effectively with achieving their censorship goal. Rather, I see it as an amusing irony that the Chinese are running into the same problems of achieving the goals of their value system that the Western world has been forced to confront in matters of protection, whether from spam or financial malfeasance. The real irony is that we have two cultures with rather significantly different values, both of which have been drinking the technology-based "Kool-Aid of globalization" to dangerous excess. In Kenneth Burke's terminology the same act is taking place in radically different scenes, and in both of those scenes the agents are now forced to confront unanticipated consequences.