Unless it wants to shackle innovation, the government should ignore calls to regulate cybersecurity -- the protection of computer hardware, software, and networks from malicious viruses or hackers -- according to Benjamin Powell, director of the Independent Institute's Center on Entrepreneurial Innovation.
The industry's "track record should make us skeptical that government regulation can improve security without damaging innovation," writes Powell in his new op-ed, "Don't Regulate Cyber Security."
Consumers and corporations weigh the extra cost of cybersecurity against the extra benefit. Even where third parties would be affected, markets have been providing more security each year. The financial services industry, for example, has taken the lead in promoting cybersecurity, Powell explains.
Over 85 percent of financial institutions surveyed for the latest Deloitte GLOBAL SECURITY SURVEY used intrusion-detection and -prevention software, "and most firms were experimenting with using many more advanced technologies," writes Powell. From 2003 to 2004, "63 percent of firms surveyed saw their security budgets increase while only 10 percent decreased, and nearly half of all firms increased security staffing."
Concludes Powell: "Reforms should be limited to examining negligence liability standards in situations where security breeches spill over to firms without contractual relations. Direct government regulation will raise costs against consumer wishes, delaying and limiting new products from coming to market. Market forces are better regulators of cyber security than government bureaucrats."
See "Don't Regulate Cyber Security," Benjamin Powell (2/28/05)
http://www.independent.org/newsroom/
article.asp?id=1470
Also see, "Will Strong Encryption Protect Privacy and Make Government Obsolete?" featuring David Friedman (4/24/01)
http://www.independent.org/
events/event_transcripts.asp?page=2&sort=&sd=
David Friedman (Milty's boy) is next to godliness.
(I just chopped up those URLs so they'd fit on my site. If that causes problems, that's what the deal is.)
