Gary North

Dec. 6, 2010

To understand what WikiLeaks has done, we must understand economic cause and effect. Let us begin with a comparable market: the market for gambling.

Governments have laws against gambling. Why? The justification is moral principles. This reason is less persuasive, once the government sets up state lotteries and also licenses taxable gambling, such as horse racing. The real reason is the governments want to monopolize the vice. They expect greater tax revenues.

Governments arrest bookies. But bookies are merely providers of the service. The source of demand is the individual gambler: the guy who is placing the bets. The infrastructure that delivers the service is surely basic to the process, but it is the individual citizen who is the prime mover. Why? He is paying for it.

Want to understand the process? Follow the money. It ends with the customer.

The government prosecutes the bookie because it is cheaper than following the money to the sources. It's a matter of the economies of scale. But it is hypocritical to blame the bookie. It is cheaper to arrest and try him than to arrest and try all of his customers, but he is not the source of the practice. Customers are.

Back to WikiLeaks. Who is the source of the problem? Readers of articles about the scandals. This is gossip for educated people. This is Jerry Springer for college graduates. This is "You know what she said about him?"

Readers are going to websites: plural. They are not going to WikiLeaks' site. They are going to the "bookies'" sites: The Guardian, Der Spiegel, , and the New York Times. These are the national "newspapers of record." These are the Establishment's main news sources in the West.

Do you see what Julian Assange has done? He has pitted one against another. He gives them first shot at the leaked documents for a few days. Then he releases them to everyone. "Want a scoop? I'll provide it. Want to be an also-ran? Just sit on the story." He has them salivating for the next release. The papers have staffers ready to read, write, and post.

This strategy is working. The Establishment press is all over these stories.

The public, Pavlovian to the core, can't wait to get the next bit of gossip. "And then she said this!"

This is National Enquirer for the literati.

Obama's spokesmen are playing it cool. This is wise on his part. Meanwhile, what we might call the Lieberman/Huckabee/Palin axis is going ballistic. "We must stop WikiLeaks!"

Really? Why bother with WikiLeaks? Just arrest the editors and publishers of the outlets -- the major Establishment media. If all those government-funded official leakers (spies) are at risk, then the source of this risk is the Establishment media.

But the critics cannot arrest the editors and publishers. The ACLU would go into action. So would the other Establishment media. "This is a freedom of the press issue! This is a first amendment issue." This is a hits-on-our-site issue.

When The Guardian did a live interview with Assange on December 3, it got so much Web traffic that the site went down.

The incensed critics are not about to stick their fingers into this media hornets' nest. So, they call for Assange's head. Why? Economies of scale. It is cheaper to shut down WikiLeaks' site.

But this does little good. The mirror sites are too numerous. There is no way to stop the flow of information on the Web. WikiLeaks is proving this, day by day.

If the mirror sites go down, there will be FedEx deliveries to the Establishment outlets of thumb drives filled with data. Do you think the media outlets will exercise self-restraint, when they know that the others have also received FedEx packages? I don't think so.

The U.S. government's attempts to shut down WikiLeaks, as Assange knew in advance, is creating enormous publicity for WikiLeaks. This makes it even less likely that any of the Establishment media outlets is going to cease publishing stories based on the leaks. "And then she said. . . !"

The problem is this: the public loves the gossip. It delights in hearing about the latest blunder. This is a feeding frenzy. It is boosting traffic. The press has never been able to resist this, once a single member of the Establishment breaks ranks.

A generation ago, the Establishment media sat on Daniel Ellsberg's purloined documents for weeks. The New York Times began its report on June 14, 1971. The Washington Post followed on June 18. It took until June 26 for 15 more to join in the bonanza.

One week later, Assange was born.

Assange has done his homework. He set it up so that the Big Boys -- one per nation -- are given first dibs. There is an implied warning: "He who hesitates is lost."

We are witnessing the undermining of the U.S. government. The stories are harmless. They are all gossip. But it makes the experts look like the rest of us -- mean-spirited, jealous, behind-the-back snipers. These experts have no respect for the bureaucrats on the other side of the borders. They look like petty schoolgirls. This undermines the required sense of public awe.

WikiLeaks is playing Toto. It has raced behind the curtain and is pulling the pants leg of the ersatz wizard.

Obama has wisely not joined in the howls of rage. If he did, he would look like the wizard. He is letting others do this. The wizard is clearly impotent.

So far, WikiLeaks has released only a few hundred documents. What is in the other 250,000?

Assange says that the documents have been sent in encrypted form to over 100,000 other potential leakers. He may be bluffing, but who will call his bluff? Digits are so easy to send. All you need is a mailing list.

Maybe the anonymous source of the leaks will be tried. Maybe Assange will be tried. But they have made themselves part of history. They are getting way more than 15 minutes of fame. They are the Matt Drudges in this decade. Assange will get a paragraph in some future U.S. history textbook. He may even make it into a European history textbook.

WikiLeaks is now headquartered in Iceland. Iceland is considering passing a law next year making it the stolen data-distributional capital of the world. There will be other small nations that try to compete for this title.

Or, to quote Wilford Brimley's character in Absence of Malice,

You had a leak? You call what's goin' on around here a leak? Boy, the last time there was a leak like this, Noah built hisself a boat.

There will be more leaks. There will be more scandals. There will be more government officials exposed as little men behind the curtain.