Re: pro regulation viewpoint on cyber vulnerabiltiy

[David Farber <dave () farber net>]

Begin forwarded message:

From: Vadim Antonov <avg () kotovnik com>
Date: April 1, 2009 7:33:30 AM EDT
To: David Farber <dave () farber net>
Cc: ip <ip () v2 listbox com>
Subject: Re: [IP] Re:   pro regulation viewpoint on cyber vulnerabiltiy



David -- for IP, if you wish.

The science was never about consensus and "accepted theories".  If the
argument is sound, it can stand on its own, without recourse to  
acceptance
by any number of credentialed people.  The "scientific consensus" is  
often
completely wrong: we still can remember when the coming Ice Age was the
consensus, when doctors were certain that stomach ulcers are not  
caused by
bacteria, when it was accepted that non-coding DNA has no function, etc,
etc.

The truth is, the existence of market failures postulated by most  
economic
textbooks is counterfactual. This statement (accepted by economists of
Austrian school) is very easy to falsify: doing so requires only a  
single
clear-cut case of such phenomenon to exist.

The fact that no such case was ever offered (not for the lack of  
trying),
is quite telling.

It is mainstream economics which is faith-based. It postulates phenomena
which do not exist, and relies on logical and mathematical fallacies  
(such
as averaging on collections of non-additive quantities, which is the  
basis
of all econometrics).  Most of what is taught in economic schools is  
plain
old pseudoscience.

The Austrian school is demonstrably unpopular among academic  
economists -
it, essentially, says that the detailed predictions of economic
developments are impossible - so all the fancy mathematics built by
manistream economists has no bearing whatsoever on the reality.

In this respect Austrian economics is very similar to the evolution
theory.  It is, to a large extent, qualitative.  We know that when
environment changes the living things will adapt to the new environment;
we can make some guesses about how they will look like, but we cannot
predict with quantitative certainity their forms and adaptations.

The business people, those who care more about making money in the real
market rather than about playing with fancy models, are significantly  
more
enthusisastic about Austrian economics - it has proven its worth by
predicting and explaining every major economic event, from Great
Depression on, and including the current crisis.  The Internet is a
wonderful conservation machine - you can easily find, for example,  
public
statements made by mainstream economists and by Austrian economists  
(such
as Peter Schiff) few years ago and check the accuracy of their
predictions. This is why Austrian books are now on bestseller lists (the
latest one is "Meltdown" by Thomas Woods).

Finally, the Windows example - the argument that people buy insecure
operating system while lower-cost more secure one exists and this  
somehow
demonstrates that market is failing to provide for their needs is
logically fallacious.  It contains the hidden assumption that the  
security
is the only factor which makes an operating system valuable.

The reality, of course, is that people choose operating systems on the
basis of functionality they need, and the functionality is defined by
applications.  Windows has lots of applications; orders of magnitude  
more
than Linux and other OSes.  The very inability of Microsoft to  
drastically
improve security of the system comes from the fact that Microsoft does  
not
want to break compatibility with application software - and thus reduce
its value to end users.

This has absolutely nothing to do with imaginary "market control" - if
users do care about security as much as publicity-seeking security  
experts
say, and somebody figures out a way to run the same applications, but  
in a
secure fashion, he will steal Microsoft's market in no time.  In fact,  
my
current employer (Symantec - I am a security expert) is a multibillion
business built around making Windows more secure, and does a rather good
job of making it good enough for most users.

This is not a case of market failure; it is a case of techincal
impossibility to offer Windows APIs while making the system as secure as
Unix - so users are forced to choose between security and compatibility.

The situation gradually improves, from both directions (Miscrosoft
gradually introduces better APIs, while Linux accumulates application
software).  Thinking that some bureaucrats in Washington can help to
resolve this technical conundrum by regulating software business is,  
well,
naive. There's a lot of smart people in Silicon Valley and Seattle who
were and are keenly aware of the problem and spent years working on it -
and made some impressive progress, many years before any federal  
busybody
knew how to spell "buffer overflow".

(In fact, Microsoft dominance is partly due to the government-propped
"intellectual property" regime; trademarks, copyrights, and patents are
nothing more than temporary monopoly grants by the government. Thus,
again, we have a good reason to qualify it as government failure.)

--vadim

> From: Dave Wilson <dave () wilson net>
> Date: March 31, 2009 11:11:39 AM EDT
> To: dave () farber net
> Cc: ip <ip () v2 listbox com>
> Subject: Re: [IP] Re: pro regulation viewpoint on cyber vulnerabiltiy
>
> Speaking solely for myself: Forgive me, but engaging in debates about
> whether market failures can exist without government distorting the
> market are a little like having an argument about Creation Science: It
> flies in the face of accepted theory, it ignores demonstrable fact,
> and since it's a faith based argument, nobody's mind will get changed.
>
> Here's an example of market failure that doesn't have anything to do
> with government intervention in a market: Microsoft's Windows
> operating system dominates the market for workstations. Other
> operating systems are known to have identical capabilities, but are
> far more secure (and in fact are less expensive), yet Windows
> continues to dominate the market. Why? Because the company has market
> control (as was established during a decade of excruciating antitrust
> investigation); free market theory says Microsoft would either fix
> Windows, or consumers would stop using it and immediately leave for
> other, safer systems. The fact that this has not happened, despite the
> widespread acknowledgment of the data I've stated above, is a classic
> market failure.
>
> -dave






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