Every time disruptive technology becomes widely adopted, those who rely on what is has displaced often turn to the government seeking protection. It’s a phenomenon well described in the 18th century by Frederic Bastiat who, in a famous essay entitled “The Candlemakers’ Petition,” described the demands made of the French government by candlemakers seeking to block the sun from competing against them.
The protections they sought - rules and regulations forcing people to keep their windows shuttered during the day and skylights closed so they would have to live in darkness unless they employed candles to light their homes - was a satirical attack by Bastiat on the very real problem of rent seekers attacking progress.
We’re well passed the stage where there’s anything even remotely funny about it. American businessmen who otherwise sing on the praises of competition and its effect on the free market still fail to grasp the absurdity of the economic fallacy Bastiat described so well.
Today, among the list of American industries who are taking much the same position Bastiat ascribed to the candlemakers are those in the paper and printing business. They’re losing market share to the paperless society the Internet is creating which, it should come as no surprise, is affecting the industry’s bottom line.
To even things out they’ve undertaken a lobbying campaign intended to persuade government agencies to require that legal documents continue to be printed and mailed rather than delivered by email alone. Technological advances are, it seems, no substitute for good, old fashioned political pressure.
Anyone invested in a mutual fund, holding retirement and pension funds, or participating in the stock market is familiar with the thousands of pages of disclosure paperwork mailed out at least twice per year. These disclosure documents, produce under a mandate from the United States Securities and Exchange Commission, provide critical information about investments. An estimated 440 million of these forms are mailed out each year, and to be honest, most of the time they lay on a table somewhere in someone’s house until they’re thrown away, unopened, to make space for something else.
The cost of printing and mailing these documents is enormous. The impact on the environment is nearly catastrophic. Nearly two million trees, somewhere between 28 and 57 percent of the total harvested each year to produce paper, are cut and milled just to satisfy this legal requirement. At the same time, most American homes have had email and Internet access for nearly two decades. Some estimates say as many as 90 percent of seniors and 95 percent of mutual fund owners are connected to the web and, in recognition of this fact the SEC is finally getting around to modernizing its disclosure rules.
Proposed SEC rule 30e-3 would allow investors who prefer e-copies to receive disclosure forms electronically. This would save money and protect the environment and help investors better digest the information the government has deemed it essential for them to have. Online documents are searchable, and questions about the forms can simply be cut, pasted, and emailed to company representatives or personal accountants.
Like the candlemakers of old, however, paper companies want Congress to intervene to protect their share of the market. Papermakers and tree millers want the SEC to scrap the prosed change and have found allies among members of Congress from states like Maine where paper and timber interests are dominant. They’re trying to get what they want into legislation without congressional hearings or regular order just like used to be done with earmarks before they were banned.
Americans use the Internet to access news and information, book travel for their family vacations, and manage their family finances. Thousands of companies have “gone paperless” since the Internet became part of our lives. It makes little sense for Congress to stop companies from allowing financial firms to modernize too, especially since those still wanting paper forms will not be affected.
The clearer-thinking members of Congress should cut these selfish tree choppers down to size. Paperless documents made possible by innovative technology will make the lives of many Americans easier while increasing corporate productivity by saving businesses time and money. The change the SEC wants to make will also help preserve forests and drastically reduce the size and scope of legitimate environmental concerns. It’s a win-win almost all the way around, something usually not found in the digital age of which most voters would strongly approve.
Roff is a former senior political writer for UPI and a well-known commentator based in Washington, D.C. Email him at peter.Roff@Verizon.net.