Thursday, September 24, 2009

Transparency As Part of the Product

Jim Harper made an astute observation on Cato-At-Liberty about transparency. The post begins by noting that transparency transfers power from the center. The progressives dominating congress in both parties want to see more power in the center. So while transparency is fun rhetoric, the parties manage to block when in power:

Transparency won’t be a gift from government. It is something we have to take. That’s why I think the action lies in private efforts like OpenCongress, GovTrack, and (my own) (Links are to sites’ H.R. 3400 pages.)

The free market is able to build transparency into a product at a foundational level. That transparency can give a product a market advantage. For example, I contend that companies (which have been systematically burned by manipulations in the closed box systems of the NYSE and NASDAQ) would favor trading their equities on a trading system designed with open source code where the clearing of the certificates is transparent (OSRTX).

Conversely, people in the market must realize that much of the centralization of our economy has come about because we've fallen into a pattern where too many important business decisions are being manipulated behind closed doors.

As the Obama administration demonstrates, transparency will never be anything more than a buzz word used by the opposition party. Individuals have a lot more clout when dealing with businesses than they have with government. A market demand for greater transparency will result in greater transparency.

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