Wikileaks

I've refrained from commenting too much about the Wikileaks case as honestly I've yet to digest the whole situation. On one hand I laud the transparency that the project has brought and how it is increasingly forcing big governments and big business to think about the ways in which they are conducting themselves. But on the other hand I also acknowledge that whereas in an ideal world we could have complete transparency, in our sub-optimal world many things can be a lot less painful if not done in the open.

From a big business perspective, I have a hunch that this is in fact a good thing. I've long held the view that companies adhere to a rather intuitive life cycle of birth, growing stronger, increasing inertia, and eventually falling. In the ideal case after a company reaches the threshold level of inertia, the resources are merely freed up to do other things in more efficient fashion. And that is natural. The problem often is that once big business reaches a certain size, it is occasionally difficult to let the company fall. And sometimes the companies may even begin to behave irresponsibly by abusing its commanding market position to help it stay competitive.

To tackle the problem of the undead incumbents, we have some authorities, such as the anti-trust authorities who enforce competition laws. They have been, to an extent, fairly toothless in the past. This has naturally enabled some companies and some individuals within companies to behave irresponsibly and do things that they shouldn't be doing. It is to this issue that I feel that the trend of leaking and whistle-blowing could offer a counterweight. If chances of getting caught if you do bad things gets closer to 1 and the penalty is heavy enough, this should be a clear demotivator for companies to behave in anti-competitive ways. And if this in turn helps to revitalize industries and create a level playing field once again, all the better.

I would apply a somewhat similar logic to the governments. It still may not solve the agency problem where big government fails to dismantle unneeded structures to increase available resources only to build more rigid structures on an already a very rigid system. But leaks and whistle-blowing will hopefully make big governments think twice about how to conduct its affairs and whether to engage in activities that cannot stand daylight.

Of course there may be multiple problems with the above. Perhaps the irresponsible people opt instead not to document any bad things they are doing and only rely on word-of-mouth instructions and guidance when coordinating their schemes. And perhaps governments may be less inclined to discuss diplomatic issues if they fear that they can't speak in a direct and frank fashion lest someone gets a hold of the material. But despite this, big business and big government is getting increasingly out of control and the checks and balances mechanisms are either not working or completely nonexistent. So maybe, just maybe, the media will now begin to take a more active role again in keeping these increasingly strong actors on their toes. I would like to think that this will have longer term implications and help bring more health to the whole system, but at the same time I am fearing the worst and thinking that maybe nothing large will change in the long term and that this is just normal oscillation within the system.