Social media slippery slopes

Yesterday, I went through what I see as a trilemma for age-gating social media access. 

A system putting obligations and liability on social media providers to keep kids off the platform will have at least one of the following three problems:

1. Easily worked around by those under the age limit;
2. Cumbersome for those over the age limit;
3. Ends internet pseudonymity. 

I think the proponents of the proposed Member's Bill that National has endorsed envision the system being light-touch and consequently leaning on the first part of the trilemma. It's about 'sending a message' as much as it is about developing a workable regime. 

The Bill is broad enough to encompass all kinds of ways of running it. It depends what you think counts as "reasonable steps". 

Consider the lightest-touch version. 

The Minister designates only Snapchat, Instagram, Facebook and Twitter - leaving everything else alone. And the Minister signals that they don't want the platforms going overboard on what's 'reasonable'. 

The platforms then require users to confirm that they are over the required age. They use various AI tools to watch for accounts that might be under-aged. Some of them, like Instagram, already do this - they try to push teenaged users onto a teen-version of the platform. 

If they suspect a user is under-aged, the platform will issue a challenge. "We think you're actually under the age limit. If you can't prove otherwise, we'll suspend your account or punt you into the kids' version (if that kid version is still legal)." 

For users falsely identified by the automated tools as being under the age limit, the trilemma applies. Either the challenge is easily worked around, or it is cumbersome for those over the age limit, or it's the end of pseudonymity. Being a light-touch regime, it leans on the former.

This does not seem like a political equilibrium. 

People will forget about the tradeoffs when it is obvious that kids are still on the networks. The Minister will put the platforms "On Notice!" that they have to do more to close loopholes. 

That pushes the designated platforms to tighten up. More users will face cumbersome checks confirming that they are over the age limits. It will be harder to maintain pseudonymity if those accounts need to be verified with a real ID. 

The more the regime is successful in keeping kids off of the regulated platforms (at cost to adult users), the more that kids will be pushed onto platforms that have not yet been designated. Those platforms will then be designated. Discord. WhatsApp. Various videogames that have chatrooms or that enable chat. 

Compliance burdens continue to rise, except on platforms outside the reach of New Zealand regulators, like 4Chan. 

The stable equilibrium at the end of that? Substantial hassles for users over the age limit and/or the end of pseudonymity, some kids deterred from using platforms, others out on forums that are far worse than where they are now. 

Recall that John Key's ban on pseudoephedrine-based cold medicines remained in place for more than a decade after it was very obvious that it had done nothing to stop meth while inconveniencing everyone with a cold. 

A social media trilemma

Australia has required social media platforms to come up with ways of excluding under-16s.

Chris Luxon has followed suit for New Zealand, backing a proposed Member's Bill that is now in the ballot.

I think the evidence on social media harms for kids is strong enough for parents to keep an eye on things, but not strong enough to justify bans. 

But leaving that aside, suppose you wanted to implement one. 

I think a trilemma applies for any system that puts the obligation on platforms. If you want to set penalties for kids found to be on social media, that trilemma wouldn't apply - but I doubt effective penalties would be credible.

Anyway. The trilemma. Or at least my asserted trilemma. Disprove me by providing a system that does not suffer from at least one of these problems:

1. The system is easily circumvented by those under the legal age. 
2. The system is onerous for those over the legal age.
3. The system means the effective end of social media pseudonymity/privacy.

Consider solutions grounded in zero-knowledge proofs. 

A verifier confirms my credentials are consistent with my being aged 16+. I authorise it to reveal that to anyone providing it with a key that it generates for me. I give that key to my preferred platform. The platform isn't required to disclose that it's Twitter or Facebook or whoever. There's just an API that takes keys and confirms whether the person associated is over the age or not. 

The platform doesn't know the identity associated with the key. The verifier doesn't know which platform has asked about my age. All good, right? 

I'm 16. My 15 year old friend hands me their phone. I log into the verifier on their phone, presenting my credentials. It generates a key. My friend takes back the phone, logs into Twitter, asks it to authorise using that key, and it does. 

Zero-knowledge proofs are great for a lot of purposes but they aren't going to help you much if the person seeking authentication is happy to have someone else take that authentication. 

So we have the first tine of the fork. And a bit of the second tine - there is a burden imposed on every person using the platform, not just those under the age limit. 

Govt says aha! We will require frequent verification challenges or you will not be considered as having taken all reasonable efforts to keep kids off the platform. 

Well, now you're firmly into fork tine 2. It's a recurring hassle for users. 

Maybe the platforms use AI tools to restrict the challenges to those who it thinks might be underaged. Tine 2 then applies to a narrower set of above-age-limit users. It'll be a big hassle for a few years after you pass the age limit. 

Want to make it simpler? Here's an easy way. The platform gives you the option to just upload your driver's licence; it then occasionally takes a picture of your face to make sure that the user is the person who presented the credential. No having to log into other sites, none of that. 

But now we're on tine 3. The end of internet pseudonymity. And the Chinese Government now has everyone's ID from TikTok. 

The legislation as drafted winds up with a mix of all three. Platforms can use whatever method they like for verifying age. And they have a defence against $2 million dollar liability if they provide evidence that they relied on a presented ID that wasn't right.

So it's easy for kids to circumvent - get a friend's ID.

It's a hassle for adults, who all have to provide ID.

And it's the end of internet privacy/pseudonymity, because the system Chris Luxon's endorsed will find it simplest to collect and store everyone's passport or driver's licence. 

And those can always be subpoenaed later, if anyone says anything wrong on the internet. 

Maybe allow competition?

The Initiative's Insights newsletter generally concludes with a more light-hearted column.

The case that our Michael Johnston took on in it this week lent itself to lots of different approaches. 

This was my take on the same topic - but from a different angle. Because I tend to think about things in terms of statutory barriers to entry. And Jennifer Roback Morse lives in my head. 

Imagine that you lived in a small town with one pharmacy. The next town is a long drive away.

And the town’s pharmacist is the most culturally insensitive, if not outright racist, person you’ve ever met.

Friends avoid going there to avoid being ridiculed for their health conditions.

You’ve had enough. You know that the town would be better off with another pharmacy. So you decide to open one.

You buy a shop right across the street from your soon-to-be competitor.

You’ll hit your first roadblock pretty quickly.

You aren’t a pharmacist. You’d obviously planned on hiring a pharmacist, but you were going to own and control the business.

The pharmacist cartel has ensured that nobody except for pharmacists can compete with other pharmacists. It’s in the Medicines Act. And it helps protect the shop across the street.

Because you care about your community and because you refuse to give up at the first bureaucratic impediment, you find a solution.

Instead of hiring a pharmacist, you partner with one. You loan that pharmacist a lot of money to buy into the business. Your partner gets 51% ownership and effective control of the pharmacy’s operations. You get 49%, interest payments on that loan, and the joyful anticipation of driving the other guy out of business by providing your town with better service.

But then you hit your second hurdle.

You need a license to dispense funded prescription medicines. That licence comes from the government. And the government prioritises applications for licenses in places that are underserved.

Your town is small. It can’t sustain two pharmacies. Your plan is to drive the racist across the street out of business by providing a better and more inclusive service.

But your application to dispense funded medicines goes to the bottom of the pile. Because the town that can sustain one pharmacy already has one.

The Pharmacy Councill this week announced that all pharmacists will be required to undertake ongoing cultural competence training and activity.

Their guidelines are as cringe-inducing as you might expect. And I doubt that cultural competence training does much to help a racist to achieve enlightenment.

I wish instead that it were legally simple for new pharmacies to drive culturally incompetent ones out of business.

It would be more effective.

But I doubt the pharmacists’ cartel would like it.

Misuse of land use planning

If you thought McDonald's was some kind of public health hazard, using processes under the Resource Management Act to try to block one from opening in Wanaka would be among the stupidest possible ways of dealing with it. 

The country already has food safety regulations. If you thought that (in fact delicious and fine) McDonald's food were actually toxic waste, food safety regs would address the problem across all existing 170+ outlets across the country. 

Objecting to a single restaurant would just be dumb. 

The land use planning system doesn't even work this way. The consent in Wanaka was to operate a restaurant type activity. 

If some other restaurant got a consent to open there, a McDonald's could buy the site and flip it to being a McDonald's without much land use consenting hassle unless they needed different transport links for a drive-through. 

If you wanted to handle this kind of thing through the land use planning system, every time a restaurant turned over it would have to go through a new consenting processes checking that the characteristics of the restaurant were substantially equivalent. 

It would be insane. 

So even if the National Public Health Service's submission against a McDonald's consent application in Wanaka hadn't been a steaming pile of anti-corporate buzzwords fresh out of a 1990s anti-globalisation rally (I mean, just look at the darned thing), it still would have been a terrible idea. 

The submission really was mad though. Here are a couple of snippets.

...there is no evidence supporting the fact that transnational (TNC) or multinational (MTC) create a prosperous, resilient, and equitable economy in the District"

...We are not aware that a holistic assessment of the value that this proposed new corporate business will add to the social, economic, and cultural wellbeing and physical health of the people and the community of Wānaka has been undertaken.

...To summarise, NPHS Te Waipounamu:

• strongly encourages further meaningful engagement with the community.
• reminds council of its Te Tiriti obligations to Kāi Tahu as mana whenua.
• is concerned about the impacts of MNC and TNC, such as McDonalds, on planetary health and the health of current and future generations.
• recommends a comprehensive HIA (including cultural impact assessment to analyse the cultural impact for Kāi Tahu). We would like to see such an assessment demonstrating that the outcomes for the individuals and the community of Wānaka would mostly be positive before granting consent for this proposed fast-food restaurant.

NPHS Te Waipounamu wishes to be heard with respect to this submission.

[Note that the changing acronyms MTC vs MNC are in the original.]

They didn't just put in a written insane submission. They also headed on out to the hearing to be heard about it.  

It reflects an NPHS that has lost sight of what it is meant to be doing and is off pursuing other objectives, in a time of tightly constrained resources. They were even intervening in the nutritional aspects of food carts in Invercargill. 

I'd covered it in my column in Thursday's New Zealand Herald, ungated here. 

A snippet:

The submission urges further measures that seem aimed at increasing McDonald’s legal costs – like demanding a comprehensive health impact assessment and a cultural impact assessment. The NPHS also weighs in on other matters about which it has no competence – like the visual amenity of the proposed restaurant.

And it provides a remarkable chart asserting that “GDP as a measure of economic growth” contributes to ill-health and health inequalities.

This is not a one-off. This is how the NPHS sees its role. This is its baked-in ideology.  

Mr Barry had previously inserted himself into discussions of whether Invercargill’s food trucks’ offerings have sufficient nutritional merit.

The letter from Health in All Policies Advisor Monica Theriault, which concludes the submission, notes, “We are eager to enhance how the concepts of health promotion can be effectively applied within the RMA framework.”

They want to do more of this.

The NPHS has revealed what it considers a priority in a time of restraint.

I draw a few conclusions.

First, the government’s coming reforms to the land use planning system must prevent the weaponisation of consenting processes.

Second, the Commerce Commission needs to pay a lot more attention to the anticompetitive effects of the land use planning system.

Finally, Minister Reti has not gone far enough with proposed budget cuts. He might consider razing the NPHS to the ground and starting over with an agency sharply focused on infectious disease. It is hard to see what else could fix it.

I also chatted with Sean Plunkett about it yesterday morning. 

Today, Minister Reti published a serve back to Health New Zealand, reminding them to focus on their core business. 

A snippet of that:

Minister of Health Dr Shane Reti says the National Public Health Service should concentrate its focus on prioritising serious public health issues facing New Zealanders.

“Earlier this week I was informed about an 8-page submission by the southern arm of the NPHS regarding a proposed fast food outlet in Wanaka,” Dr Reti says.

“I have raised my ongoing concerns about the content of submissions like these with the Chief Executive of Health New Zealand.

“Content within the submission, including observations about planetary health, landscape values, traffic and Te Tiriti do not match my over-arching view of what the NPHS should be spending its time on.

“Whooping cough, measles and raising immunisation rates are among the most pressing issues facing health today.

The serve was needed. And is welcome. 

I think Bob Edlin over at Point of Order missed the point here. 

A public health service focused far from main business, and using exceptionally stupid methods for achieving ends outside of their main business, has to be steered back, and hard. It will be hard for it to get anything else right without that direction, or without my alternative (and still preferred) solution of razing it and starting over. 

As David Farrar pointed out over at Kiwiblog:

Around half the public health staff (those who deal with infectious diseases) do amazing work, but around half seem to be taxpayer funded lobbyists who lobby the Government that employs them, or local governments.

I have an OIA in with Health NZ asking for the resourcing that went into that submission process, and for the decision-making process around it. And one in with the Ministry of Health just ruling out that they'd ever given Health NZ advice about this kind of thing. Will be interested to see what I hear back, eventually. 

And really, a better land use planning system ought to take this NPHS submission as a benchmark for "This is the kind of vexatious submission that should not only be dismissed summarily, but also result in a fine assessed against the submitter."

This will not end well

I still think Rod Carr had this stuff right two decades ago when he'd argued against having deposit insurance at all, and instead making very clear that government would never bail out depositors. 

People can argue the toss about hard caveat emptor versus some perfect deposit insurance scheme with full risk-based pricing and whether following through with minor depositor haircuts after burning through investor equity under OBR was credible. 

But that makes the mistake of comparing an imperfect status quo with an assumed-to-be-perfect government policy. 

Here's what the government is doing.

The Herald can reveal Cabinet has decided levies will be risk-based. So, big banks will pay less, relative to the value of insured deposits, than risker deposit takers.

But only a small portion of the risk will be priced into the levies.

The levies won’t be as risk-based as the Reserve Bank, which regulates deposit takers, recommended.

Credit unions and building societies will also be given a hand-up by being allowed to pay lower, flat levies until 2028, before moving to the risk-based model.

The Commerce Commission, which is interested in increased competition, had recommended all deposit takers initially pay flat levies (worth a certain percentage of insured deposits) until the impacts of the scheme were better understood.

I suppose I could look at it the other way. 

Remember when the government set up a hasty deposit guarantee scheme in response to the GFC over worries that deposits would flee from risky places into safer places, so it set a scheme that encouraged money to fly from safe places into risky places whose high returns were suddenly government guaranteed? 

One of our sharper students maxed out his 0% student loans to invest in South Canterbury Finance at, I think, 8%. 

We could all take a page from his book. If you can borrow at less than the deposit rate offered at the riskiest places that Nicola Willis is going to guarantee through 2028, it's free money! Fiscal stimulus for those of us who are most meritorious, as demonstrated by our credit-worthiness. 

The lowest three-year-term mortgage rate is currently 5.65%. 

The highest three-year term-deposit rate that I think might be covered is currently 6.75%.

So.

Borrow $100k and you get a risk-free $1,100 on it per year. 

This Is Not Financial Advice. You'd probably need to do it through a company structure so you could write the interest cost against the interest earnings. Unless you had access to zero-percent student loans. 

Where are the food carts?

I still don't get why there aren't more food carts on Wellington's waterfront. On a good sunny day, you might find, along a stretch of gorgeous waterfront more than two kilometres long, all of it close to downtown, 2-3 food carts. 

Meanwhile, downtown Christchurch restaurants are worried about the Arts Centre's plan to host around 30 carts not just on weekends: every day. They point to the rates bills they pay and consenting hassles they deal with that food carts avoid; they want Council to cut its subsidy to the Arts Centre if it doesn't abandon its food trucks plan. 

My column for this week's Post, Christchurch Press, Waikato Times etc:

Assessing council rates on land value alone, while abolishing the punitive ratings differential assessed on businesses, would be a better way of levelling that part of the playing field. The piece of land would pay the same amount in rates regardless of whether a restaurant, a shop, or some carts sat on it.

Similarly, radically easing consenting burdens would level the playing field while improving outcomes more generally. This week, results from the UK Growth Survey were released. Forty-four top UK economists were asked what their government should do to pursue growth. They overwhelmingly pointed to planning reform. We have the same problem.

Building a restaurant should be a simple by-right activity.

And letting food carts serve beer would remove a distortion that currently works in restaurants’ favour.

Christchurch council should only reduce the subsidy it provides to the Arts Centre to the extent that having food carts reduces the value of the public amenity that the centre provides. And really, food carts seem more likely to improve that amenity than impede it.

Christchurch’s problem then brings us back to Wellington’s puzzle. Food carts do not have to deal with resource and building consents, though they do need a food registration certificate. They enjoy a ratings advantage, and Wellington’s business ratings differential is even worse than Christchurch’s. And everywhere in Wellington’s downtown is a short walk from the waterfront. Christchurch is more dispersed.

So, on a good day, to steal a line from an old Australian tourism commercial, where the hell are the waterfront food carts?

Better to level playing fields by removing shackles rather than by adding them. But if food carts do have such an advantage, why are there so few on Wellington's waterfront? 

An ungated version of the column will eventually turn up here.

Generation screwed?

I gave a short talk for a new student group last week, Generation Screwed. The event was joint with Students for Liberty, who seem to be setting up in NZ!

They'd asked about debt, tax burden, and intergenerational issues. I put together a few starter-notes to let them know where I was coming from; I've copied those below. 

1. The cleanest measure of the tax burden is government spending. Governments will try to hide the burden by shuffling it off to future through debt. Always watch spending rather than just taxes. The only real tax cut is a spending cut. The Public Finance Act tries to constrain govt use of debt, but it doesn’t enforce itself.
2. As a rule of thumb, governments should not spend more than they earn in tax revenue. Fine to take on debt in a crisis or downturn and pay it back on the upswing. But funding normal expenditure through debt is a terrible idea. It only works until it doesn’t. And when it doesn’t, things can get very bad indeed.
3. Debt for long-term infrastructure, funded by payments from the use of that infrastructure, is of a different category entirely – so long as the accounting is sound. What’s a good way to make sure the accounting is sound? Ban bailouts of that debt from government’s main balance sheet. Interest rates on it will be higher because they reflect real commercial risk. If a project is then not viable, it was a bad project to begin with.
4. Getting that kind of ring-fenced debt in order is vitally important in bringing housing costs down. Why? It lets the beneficiaries of the infrastructure needed to support new housing pay for that infrastructure over a long period of time, rather than spreading its cost across the entire community over a shorter period of time. The current setup means every other ratepayer has incentive to restrict new infrastructure because they’re stuck paying for it. Going back to basic principles of beneficiary-pays means we’d get to have more nice things. The housing shortage is fundamentally a zoning issue, and it’s a zoning issue because councils experience housing growth as a cost to their balance sheet to be managed through zoning rather than a benefit to be sought through infrastructure provision. Fix that and most of the problem is solved.

Seems like a fun group. I had fun anyway!