Thursday, October 16, 2008


A word that's been popular for a while is "transparency." Almost every one who writes an article or book on how to make business and government better cites more transparency as a goal. McCain mentioned it three times last night.

But what do we (and they) really mean by "transparency"? The Wikipedia entry is not too much help, talking a lot about openness and accountability. With government, it points out such positive steps as open meetings and freedom of information acts, and those are good things (too easily circumvented; we're still waiting to hear who "helped" Dick Cheney formulate an energy strategy in the early days of the Bush administration).

The concept gets even muddier when applied to business. Would this financial crisis have been mitigated by knowing exactly what securities were bundled into these shaky mortgage obligations? Perhaps, but how specific can you get? To understand the nature of those underlying mortgages, you would need to know not only the sales price of every house, but the financial condition of everyone who took out those mortgages.

Moreover, much of the value of a particular company comes from its "private" information, the techniques and ideas that they have developed and their competition hasn't. Should potential investors in Google, which, since they're a public company, includes everyone, be informed as to the company's exact search algorithms so they can ascertain the real value of their technology over, say, Yahoo's?

Back to government. McCain can be withering when he accuses Obama of giving away too much information: "You don't tell the enemy what your plans are." Perhaps true, but that's not exactly transparency, is it? Ultimately, everyone is in favor of more transparency for everyone else, but not for themselves. Until each person confronts and resolves that conundrum, calls for transparency seem easy and hollow.

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