In the not-so-distant past, the lack of good and reliable data about applicants with no credit history left banks little choice but to lump them together as high-risk bets. As a result, they either were offered loans at prohibitively high rates or had their applications rejected.

Thanks to the proliferation of social media and smart devices, Silicon Valley is awash with data. While much of it has no obvious connection to finance, some of it can still be used to make accurate predictions about the user’s lifestyle and sociability. As a result, a new generation of companies is beginning to deploy algorithms that sieve through these data to separate trustworthy borrowers from those likely to default and to price their loans accordingly.

Some—like the Hong Kong-based Lenddo, which currently operates in the Philippines and Colombia—do so by scrutinizing the applicants’ connections on Facebook and Twitter. The key to getting a successful loan from Lenddo is having a handful of highly trusted individuals in your social networks. If they vouch for you and you get the loan, your select friends will also be notified of your successes in repaying the loan. (In the past, Lenddo even threatened to notify them—exerting maximum peer pressure—if you had problems repaying the loan.)

Similarly, the U.S.-based LendUp, which hands out short-term loans with high interest rates while allowing its most trusted established clients to move to more attractive longer-term packages, looks at social media activity to ensure that factual data provided on the online application matches what can be inferred from Facebook and Twitter. Not surprisingly, most such startups—including Lenddo and LendUp—are financed by the same venture capitals who have backed much of the social media boom. (Accel Partners, one of the first investors in Facebook, has funded Lenddo; LendUp has received support from Google Ventures and Andreessen Horowitz.)

Social media is just the tip of the iceberg. Wonga, an extremely ambitious online payday-lending company based in London, even considers the time of the day and the way a candidate clicks around the site in determining whether to grant her a loan. It rejects two-thirds of all first-time applicants. Kreditech, a Germany company that seeks to provide “scoring as a service,” looks at 8,000 indicators, such as “location data (GPS, micro-geographical), social graph (likes, friends, locations, posts), behavioral analytics (movement and duration on the webpage), people’s e-commerce shopping behavior and device data (apps installed, operating systems).”

Those without smartphones or Twitter accounts need not despair. Even simple cellphones are sources of data with great predictive value. Thus, Safaricom, Kenya’s largest mobile operator, studies how often its customers top up their airtime, how regularly they use the voice service, and how frequently they use the mobile money function. Once their trustworthiness has been established, Safaricom would gladly lend them money. But mobile operators moonlighting as banks aren’t the only ones leveraging these data: A Cambridge-based startup called Cignifi is using the length of calls, the time of the day, and the location of the call to guess the lifestyle—and hence the reliability—of loan applicants in the developing world.

All these efforts are premised on the sensible idea that current models of assessing creditworthiness focus on too few indicators, shutting off many potential borrowers who pay their bills on time but don’t have good (or any) credit histories. “Big data” can separate the lazy slackers from those who truly deserve better loan terms. The goal, then, is to get as many data as possible, perhaps even nudging potential applicants to preemptively disclose as much information about themselves as possible. In yet another puzzling paradox of the modern age, the rich people are spending money on expensive services that protect their privacy and improve their standing in Google’s search results, while the poor people have little choice but to surrender their privacy in the name of social mobility.

Google and Facebook are often touted as the models to emulate in this business. As Douglas Merill, Google’s former chief information officer and the founder of ZestFinance—a startup that leverages “big data” to provide credit scoring information—told The New York Times last year: “We feel like all data is credit data, we just don’t know how to use it yet. This is the math we all learned at Google. A page was important for what was on it, but also for how good the grammar was, what the type font was, when it was created or edited. Everything.” To that effect, ZestFinance looks at 70,000 signals and feeds them into 10 separate underwriting models for assessing the risk. The results of those models are then compared—in milliseconds—and an applicant’s risk profile is generated. If only East Germany’s Stasi—the true pioneers of “big data”—had the same model for assessing potential dissidents!

All of this sounds wonderful, and some of these startups do seem to be led by social entrepreneurs who want to make credit more accessible to the masses. That said, this field is not without its controversies: Online payday lenders like Wonga have been used of having their ads displayed in a children’s game, of targeting students with predatory lending offers, and of hiring government officials to help them survive increasing scrutiny of their activities by the regulators.

But what happens once these firms, having figured out that all data are credit data, realize that all data are also marketing data? Given how much they know about their clients, it would be very hard for such lending companies not to use this information to sell their existing customers on yet another loan or, perhaps, encourage them to use the loan to take advantage of some unique online sales offer. Wonga, for example, has recently embarked on a partnership with a furniture retailer, whereby customers get the option to pay for the furniture they buy later and in installments—courtesy of Wonga and its high interest rates. Might it get tempted to make this purchase irresistible to those lucky few who happen to be browsing at the wrong place at the wrong time?

Given how much they know about their clients, these companies can perfect the art of hidden persuasion and manipulation in ways that Madison Avenue could never even dream of. LendUp—co-founded by a former executive at the online game giant Zynga—already relies on techniques of “gamification” to reward its customers for paying their loans on time. Might they also rely on such techniques to get them to borrow more often?

So far, many in this industry downplay such moral hazards. Wonga’s founder told the Jewish Chronicle last year that he doesn’t believe that people can ever be convinced to borrow money that they don’t need. “[Our clients] have a cash-flow challenge and need a solution. We are not asking them to take credit they don’t need. You don’t generally get sold things on the Internet. You have to go and search for something. It’s not the same as someone coming to your door and selling you something that you may or may not need.”

It takes a very brave—or short-sighted—man to argue that we are never sold things we don’t need. (I’m looking at you, Amazon!) This is especially true when we’re dealing with companies that know more about us than our families do—and that make money by, well, having us borrow money and buy stuff. Is it just the usual Silicon Valley naivete? Or is good-old Wall Street greed hiding behind the cyber-utopian rhetoric?

Do we need a “big data” lending equivalent of the Glass-Steagall act, which separated commercial from investment banking before being repealed in 1999? Perhaps it’s too early for such drastic interventions. But it’s not too soon to for the regulators to start thinking about ways to separate the use of “big data” for assessing trustworthiness and its subsequent reuse for marketing new financial products. Making loans accessible to millions of the previously unbankable customers is a noble goal. Getting them hooked to such loans isn’t.

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The business press eagerly swallowed such stories of emancipation through technology; the San Jose Mercury News enthused in 1983, “Home computers are nurturing working mothers.” Back then, it didn’t seem unreasonable to expect that the “electronic cottage” might one day allow us, as Karl Marx once famously put it, “to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner.” For Toffler and his followers, humans would use computers to get more work done in less time while bypassing the alienating experience of a 9-to-5 city job.

It would be fair to say that Toffler’s dream—let alone Marx’s—is still a long way off. In some limited form, of course, telecommuting has taken off quite handsomely. Earlier this year, a poll from Ipsos/Reuters found that about one in five workers around the globe telecommutes frequently—a practice especially common in the Middle East, Latin America, and Asia. Even there, many telecommuters worry that the lack of face-to-face contact with their bosses would hurt their chances of promotion. (One caveat on telecommuting research: Each study defines it slightly differently. In this case, it refers to “employees who work remotely from their office, communicating by email, phone or online chats, either daily or occasionally.”) Pollsters didn’t ask, but it seems reasonable to assume that few of those workers think of themselves as living in an “electronic cottage” of any kind. One of the reasons for it is that relatively few firms have fully embraced telecommuting. Sure, many permit employees to spend every second Friday working from home, but they still require some face time in the office.

That’s because as glorious as working remotely may sound, research shows that it doesn’t always reach expectations. The most recent high-profile failure on this front is a one-year experiment run from August 2010 to August 2011 by the Office of Personnel Management—a U.S. government agency that runs the nation’s civil service—that allowed employees full flexibility over where and when they worked as long as they got the job done. Thanks to a Freedom of Information request by the Federal Times, we know now that a Deloitte report evaluating the pilot program found that OPM senior managers couldn’t evaluate performance of their employees, the quality of work deteriorated, and employees had little idea whether they were putting in enough time and effort.

Granted, not every attempt at full-blown telecommuting ends up like OPM’s. Aetna, an insurance company, is often held up as a success story: 47 percent of its U.S. employees work from home every day. But there’s also a downside to spending so much time at home. Aetna’s telecommuters tend to be heavier, and the company now provides an online personal trainer to help them stay in shape.

It might also be that, contrary to some early expectations, telecommuting is not necessarily good for the environment. A 2011 article in the Annals of Regional Science found that, on average, telecommuters end up putting in more travel—on both nonwork- and work-related trips—than those who don’t telecommute. (This article defines telecommuters as those who “work at home instead of going to usual workplace” once a week or more.) In other words, that they don’t drive to work doesn’t mean that they drive less overall. As Pengyu Zhu, the article’s author, put it, “the hopes of planners and policymakers who expected the promotion of telecommuting programs to substitute for face-to-face interactions and thus reduce traditional travels remains largely unmet.”

What also doesn’t get nearly enough attention is just what it takes to make telecommuters stay on task. As a recent investigation by the Wall Street Journal reveals, more and more firms that have embraced full telecommuting are relying on new and sophisticated tools of surveillance to ensure that their employees are not slacking off. The employers might be taking screenshots of their computer activity or checking their browser history (while also monitoring how much time their telecommuting employees spend on each site). If employees are using their home computers for work, their privacy—and that of their relatives—might be collateral damage: Would their employers also peek, if only accidentally, at what they are browsing during the nonworking hours?

Somehow, what was supposed to be an “electronic cottage” has become an “electronic sweatshop.” It’s not just surveillance—it’s that many employees who telecommute only occasionally end up doing far more work than before their “emancipation.” This, at any rate, is what a recent study published in Monthly Labor Review, a publication of the Bureau of Labor Statistics, suggests.

Relying on two data-comprehensive sources (the National Longitudinal Survey of Youth 1979 panel and special supplements from the U.S. Census Bureau’s Current Population Survey), the study has traced the evolution of telecommuting practices in the United States in the last few decades. It contains many surprising nuggets. For instance, it seems that telecommuters (which this study defines as “employees who work regularly, but not exclusively, at home,” with or without technology or special arrangement with their employer) are less likely to be married. So much for Toffler’s “glued families.” But the most interesting finding is that telecommuting, instead of restoring work/life balance, may have resulted in workers doing more work—but from home. As the authors put it, one plausible interpretation of their findings might be that “telecommuting has become instrumental in the general expansion of work hours, facilitating workers’ needs for additional work time beyond the standard workweek and/or the ability of employers to increase or intensify work demands among their salaried employees.”

In other words, telecommuters—the majority of whom still go to the office, even if less frequently than their non-telecommuting peers—are in some sort of Catch-22 here: They want to use technology to become more productive and spend more time with their families, but the availability of productivity-boosting technology also makes their managers believe that the employees will get more work done, on weekends or after dinner. The 2008 Networked Workers survey from the Pew Research project offers some strong evidence to back up these claims, having found that “since 2002, working Americans have become more likely to check their work-related email on weekends, on vacation and before and after they go to work for the day.” Perhaps telecommuters’ constant connectivity means that those who physically commute have to check in more frequently, too.

Could it be that the labor-saving gadgets that were supposed to help restore our work/life balance would only make it worse? If so, historians of technology would not be much surprised by this ironic twist. In her classic More Work for Mother, University of Pennsylvania historian Ruth Schwartz Cowan showed how the introduction of supposedly labor-saving devices into the household resulted in women doing ever more work. Gender relations aside, Schwartz’s broader philosophical point was both simple and intriguing: The supposed benefits of such devices cannot be assessed in isolation from the broader social, economic, and cultural context in which they are put to use.

So, short of a revolution, we, perhaps, should temper our enthusiasm for what productivity-boosting technology would deliver. As tempting as it might be to think that Google’s self-driving cars will allow us to watch films instead of driving, we’d probably be spending this newly gained time glued to some boring spreadsheet. How is that for progress?

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All of this sounds beautiful in theory. Have a great idea for a new project? Simply sign up for Kickstarter and post a description (don’t forget to make a glitzy video in support), set your fundraising target and the deadline, create a panoply of rewards tied to various contributions (for instance, $5 might get you the new CD, but $5,000 would also get you a dinner with the musician), and spread the word about the campaign. If you meet the fundraising target, Kickstarter takes a 5 percent cut and the project goes ahead—if you don’t, no money changes hands. The platform is enjoying tremendous success: Earlier this year, one of its founders proclaimed—to some controversy—that in 2012 Kickstarter might distribute more money ($150 million) than the National Endowment for the Arts (its budget for the year is $146 million).

Such phenomenal success has attracted its fair share of criticisms. Some, like NPR, have bashed Kickstarter for being rather opaque about how it deals with projects that, once funded, provide few (or questionable) updates on their progress, face significant delays, or never deliver at all. Those aren’t few: A recent study from the University of Pennsylvania looked at 47,000 Kickstarter projects and found that more than 75 percent deliver with delays. It’s hard to say how many projects never deliver, as for Kickstarter “never” is a rather flexible term: Instead of acknowledging failure, many doomed projects simply drag on indefinitely, providing no updates and constantly postponing the launch date.

Delays are particularly common among projects that go viral and raise far more money than originally planned. Kickstarter has few incentives to safeguard such projects from their own viral success: The organization takes a cut from all money raised. And while Kickstarter expects that projects that don’t deliver will eventually compensate their backers, it has no way to enforce such a policy.

As the projects advertised on Kickstarter move beyond entertainment and start tackling problems like urbanism and designing more livable cities, it’s no longer enough to evaluate them solely in aesthetic and functional terms. For example, architecture and design critic Alexandra Lange has taken issue with the narrow, gadget-driven approach to solving complex urban problems that Kickstarer encourages. “You wouldn’t Kickstart a replacement bus line for Brooklyn, but you might Kickstart an app to tell you when the bus on another, less convenient line might come. You can’t Kickstart affordable housing, but the really cool tent for the discussion thereof,” wrote Lange in Design Observer. A community that is channeling its energy into crowdfunding a new urban park might be less prone to participate in the boring but consequential urban planning meetings at the local town hall.

All of these are substantial, potent criticisms, and the company has addressed at least some of them. But one of the assumptions that has mostly gone untested is that Kickstarter, with its great emancipatory potential to free creative artists from the shackles of the entertainment industry, would revitalize our culture, make it more diverse and less dependent on the conservative or greedy gatekeepers.

A new article in the latest issue of Media, Culture, and Society by the Danish academic Inge Ejbye Sørensen challenges this assumption and tells a more complex story about the impact of sites like Kickstarter on the culture industry. Sørensen studied how crowdfunding has affected documentary filmmaking in the United Kingdom. Britain stands out from other countries in that most of its documentaries are produced and fully funded by one of its four main broadcasters (BBC, ITV, Channel 4, and Channel 5) that dictate the terms to the filmmaker. In this context, crowdfunding seems liberating, even revolutionary.

But, as Sørensen points out, this revolution has a few mitigating circumstances. First, Kickstarter might produce many new documentaries, but the odds are that those documentaries will be of a very particular kind (this critique also applies to other sites in this field like indiegogo.com, sponsume.com, crowdfunder.co.uk, pledgie.com). They are likely to be campaign and issue-driven films in the tradition of Super Size Me or An Inconvenient Truth. Their directors seek social change and tap into an online public that shares the documentary’s activist agenda. A documentary exploring the causes of World War I probably stands to receive less—if any—online funding than a documentary exploring the causes of climate change.

Second, some films require significant startup costs (think drama-documentaries or history movies) or involve considerable legal risks that may be hard to price and account for. Say you are making a film that includes an undercover investigation of the oil industry. When you have the BBC’s lawyers backing you up, you’ll probably take many more risks than when you are relying on crowdfunding. But if Kickstarter is your platform of choice, you’ll probably forgo venturing into the thorny legal issues altogether.

Both of these arguments show the danger of viewing the nimble and crowd-powered Kickstarter as an alternative (rather than a supplement!) to the behemoth that is the BBC. This might fit quite nicely with David Cameron’s rhetoric of the “Big Society”—whereby individuals take on the roles formerly performed by public institutions—but it would be a mistake to treat the two approaches as producing the same content only through different means. Some content is just unlikely to get crowdfunded.

Most interestingly, Sørensen argues that there are few reasons to believe that Kickstarter and its brethren would weaken the dominance of TV broadcasters or film festivals—the cultural gatekeepers that crowdfunding seeks to circumvent. Those behind the documentaries that make it big online know how to leverage—rather than renounce—their status in the industry. They play up the fact that their director might have won an Oscar or that their producer has a solid track record or that some TV broadcasters have already expressed interest in the film. This makes perfect sense: To assess a film’s odds of success (because even crowdfunders don’t want to back a loser), a prospective funder would want to know what people in the know—who are part of the “industry” in one way or another—make of it. This is the point often missed by those hailing Kickstarter as a revolutionary project that could emancipate the artists: What defines potential “success” for their film is still very much defined by the industry heavyweights.

A recent Kickstarter initiative to raise funds for an indie film called Hotel Noir is a case in point. The project has successfully raised its target of $50,000. But what do they need the money for? To get the film distributed the old way—via cinemas. Here is how the film’s director put it: “We need to put the movie in a theater in New York and L.A. because ideally, we want this movie not just on VOD and digital platforms but ALSO on good old-fashioned, popcorn-serving movie theaters. … [W]e believe that a run in New York and L.A.—while FANTASTIC—could be the start of something bigger.” Obviously, the assumption here is that this “something bigger” would not just naturally happen on iTunes or YouTube.

As Sørensen notes, “although crowdfunding and crowd investment ventures … are often perceived as level playing fields with no or low entry barriers, it is not only the material capital, but very much also the cultural capital that a project is able to accumulate which determines whether a film receives funding in the first place and, subsequently, reaches a significant audience.”

From this perspective, the power of the cultural gatekeepers might only get entrenched—albeit now it would function in a much more invisible and decentralized manner. The industry would still get the filmmakers to do what it wants—only now everyone would believe in self-empowerment, Oprah-style. Not a reason to oppose crowdfunding as such—only a reminder that we need to embrace it with a critical, perhaps even skeptical, mind.

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As the eyes of the world turn to the events sweeping across the Middle East, the role of new media is coming under scrutiny. Can social media forces be usurped by authoritarian regimes as easily as they have motivated burgeoning democracies?

According to Evgeny Morozov, author of The Net Delusion: The Dark Side of Internet Freedom, the answer is yes.

Instead of a hand looming over the red button for a nuclear weapon launch, imagine it’s an Internet kill switch, said Morozov, who spoke at the Actors’ Gang in Culver City. The romanticized notion of an “open” network for the people may be at its end.  The reality is that manipulating social media for political repression and propaganda is on the rise.

Assumptions about Social Media

“As you probably could guess from my name and accent I come from Eastern Europe. I was born in Belarus,” Morozov began. Given the nature of the region, “the question of democracy and freedom has always been very near to my heart,” he said.

In 2005,  said Morozov, “there was still a lot of hope in terms of how blogging and new media in general could change politics.”  When Morozov became the Director of New Media at Transitions Online, he spent three years traveling all over the Soviet bloc, promoting social networking. “I got to know people in Washington who were actually funding a lot of work” in the region, he said. There was a common assumption that the public was using social media for democracy, and the dictators “were more or less doomed,” he reflected.

Morozov found this view “very naive and short sighted” and noted that the funders and decision makers didn’t have “a good intellectual paradigm” for how the Internet was truly taking hold in the authoritarian countries. “I had to dig a little bit deeper,” he said.

Egypt’s Mistakes

“It’s not just propaganda that governments are experimenting with, it’s also online surveillance and new forms of censorship,” Morozov claimed. Governments are using mobile technology to track people. “It’s easy to obtain because your mobile phones have to connect to mobile towers.”

Morozov believes the revolution in Egypt was successful because the government lacked the sophistication of other authoritarian regimes. They didn’t have a “strong online propaganda strategy,” like China, Russia and Tehran, Morozov said.

Egypt’s flawed methodology was to intimidate bloggers and beat them up in jail. Morozov contends that this tactic backfired, making the bloggers “well known public figures” who became instrumental in the movement, such as Google executive Wael Ghonim. The fatal police beating of 28-year-old Khaled Said (or Saeed) at an Internet cafe and the release of photos showing his disfigured face in 2010 were ignited the uprising.

China’s Sophistication

China’s response to a similar incident of police brutality and corruption was far more effective. In 2009, a peasant named Li Qiaoming was arrested for allegedly felling trees illegally and was beaten to death in his cell. “This created an outcry–80,000 comments in one blogosophere in 24 hours,” Morozov said.

But the Chinese government “did something very smart.” The deputy of propaganda made a statement online calling netizens to help create change. They took applications for an investigative commission and it dragged on for weeks. Although the promise of a serious investigation was a sham (the 15 people chosen to work on the commission had all worked for the state media) the public response was quelled, even positive.

“Not only do [the Chinese] try to act aggressively; they also train bloggers,” Morozov said. They have a “Fifty Cent Army.” (“They have nothing to do with the rap singer, they’re just paid 50 cents for every comment that they make online,” Morozov noted.) They train those bloggers, they pay them, and, instead of using the strong arm, they use spin to delegitimize dissidents, like linking them to the CIA or Mossad.

Iran’s Crackdown

The disputed victory of Iranian President Mahmoud Ahmadinejad in 2009 sparked massive protests in Iran. According to Morozov, journalists mistakenly gave too much credence to the role of social media in the uprising. Al Jazeera could identify only 60 Twitter users, and that went down to 6 when the Iranian government stepped in.

Moreover, thanks in part to the hype, the Iranian government became attuned to social media as a mobilizing force. “The Iranian government began seeing [social media] as one of the biggest threats,” Morozov said.

After the street protests settled down, the government looked at Twitter, Facebook and Google and started to crack down in disturbing ways. The government collected photos on Flickr, circled people’s faces in red, and published them with agencies to seek out the individuals and arrest them. Iranian Americans were screened at airports and their Facebook friends were added to lists.

They wanted absolute control, Morozov explained. When you look at Twitter use today in Tehran, “you actually see many more pro-government messages.” Morozov said this is partly because people think the government now has a staff that goes online to “spoil” online conversations.

“My fear is that we’ll end up in a situation where more and more governments will try to cultivate their own social networks,” Morozov said. Vietnam, for example, has banned Facebook and has its own social networking site. That way, if something goes wrong, they can simply turn it off.

America’s Conflicting Image and Interests

Many American companies are complicit in authoritarian efforts, Morozov claimed. The Egyptian government was able to monitor its opponents because of technologies created by American companies. “This is something we need to be aware of,” Morozov said. Once governments create this climate of fear, Morozov cautioned, “companies become more conservative.”

Social networking sites also have their own business interests in marketing and expansion. “Even if you look to Twitter, Facebook and Google, I think you’ll see that the revolutions in Egypt and Tunisia succeed not because of them, but in spite of them,” Morozov said. For example, companies don’t allow activists to create pseudonyms and maintain anonymity.

America is also contradictory in its policies. While touting Internet freedom, the FBI wants to “build secret backdoors” into software like Skype. The U.S. also wants to shut down websites that trade in counterfeit material. Morozov called the response to Wikileaks less then inspiring.  And why couldn’t we foresee Egypt’s uprising? At a hearing in Washington a few days ago, the government concluded: “The CIA was not spending enough time on Facebook.”

See photos of the event here.
See a highlight of the lecture here.
See full video here.
Read an excerpt of The Net Delusion here.
Buy the book: Skylight Books, Powell’s, Amazon

*Photos by Aaron Salcido

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Such unchecked enthusiasm — which I dub The Net Delusion — rests on two major fallacies. The first one posits that the Internet is making authoritarianism unsustainable, empowering the oppressed and disempowering the oppressors. The second fallacy assumes that various do-gooders — above all, Western governments — could and should mobilize the Internet as a weapon to spread democracy. Taken together, these two fallacies give rise to highly ambiguous policy initiatives like “Internet freedom” — one of the most popular new buzzwords in Washington, DC.

Those who believe that the oppressed are winning over the oppressors tend to overlook the immense flexibility of modern authoritarianism. The reality is that authoritarian governments are likely to adapt themselves to the threats posed by the Internet as skillfully as they have managed to adapt themselves to the threats posed by globalization. Do dictatorships have to change how they operate?  Of course.  But a challenge to become more adept and nimble is not the same as a lethal threat to modern authoritarianism, which has shown a remarkable ability to adapt to modern conditions.

Those touting the democratizing potential of the Internet would be well-advised to look at how it also empowers Big Brother. Thanks to the Internet, governments have suddenly acquired the new means to monitor their citizens; today they can do so by reading their blogs and tracing their cell-phone calls. Their secret police spend countless hours data-mining profiles from social-networking sites to identify previously unknown connections between anti-government activists and their Western supporters. Censorship can now happen almost in real-time rather than retroactively: Chinese bloggers who cannot publish their blog posts because those contain certain sensitive words know this all too well. Blogs and social networks allow the subtle production and dissemination of propaganda.

As for the second fallacy, one limitation to the Internet’s potency as a weapon in Washington’s arsenal of democracy is the basic fact that the U.S. government doesn’t even own the digital infrastructure connecting today’s global public sphere. That infrastructure is in private hands – those of Google, Facebook, and Twitter. Before people in Washington woke up to the immense political repercussions of cyberspace, these companies were, more or less, left to their own devices; the Chinese did block many of their services – but then they always held very tight control of information.

Now things are about to worsen,  as every effort by Washington to leverage Silicon Valley’s online dominance is likely to backfire – on Silicon Valley itself. It will become a lot harder for American companies – who are suddenly perceived as nothing but extensions of the U.S. State Department – to do business in places like the Middle East or Southeast Asia. What we are likely to see as a result is the singling out of Internet search as a “strategic industry” – on part with energy and transportation – and offered state protection.

This is hardly good news for the likes of Google; in fact, the governments of Iran, Russia, Turkey have each embarked on creating their own national search engines, mostly with the goal of driving Google out of their local markets. It’s hard to judge how much of this is driven by geopolitical interests and how much by sheer ambition to make money but the emerging connection between Washington and Silicon Valley – most clearly manifesting itself in highly ambitious – and equally ambiguous – State Department initiatives like “21st century statecraft” – can hardly be of much help here.

Yet another problem with assuming that the Internet can be a useful tool in promoting democracy is the assumption that promoting democracy is a consistent objective pursued by Western governments. Dissident activists in Egypt, Saudi Arabia, Kazakhstan or Azerbaijan – to name a few places – might quibble with this assumption. Were Washington genuinely interested in bringing democracy to Egypt, it would suffice to stop propping the Mubarak regime with aid – there is little need for organizing a Facebook Revolution on the streets of Cairo.

As such, the danger here is that the quest to promote Internet freedom becomes a fetish divorced from the pursuit of more old-fashioned freedoms. Compounding the confusion is the Obama administration’s inability to define what it means by “Internet freedom,” allowing for multiple rather ambiguous interpretations. Had its meaning been limited to the defense of an open and uncensored Internet – an Internet of “radical transparency” tolerant of initiatives like WikiLeaks, covert spying operations like GhostNet, and suspicious viruses like Conficker – it would have been a clear, even if somewhat questionable policy objective.

But in its current iteration, “Internet freedom” is a catch-all term that seems to mix real politics with virtual ones: Washington does want to defend some limited version of the open Internet – which it hopes to be able to control – but with an expectation that democratic movements in places like Iran or China would be able to take advantage of this online freedom to instigate democratic revolutions and challenge their authoritarian governments. Not surprisingly, the latter read the quest to promote “Internet freedom” as little but yet another undercover plan to promote US-inspired “color revolutions” – not confined to the virtual, online realm.

The naivete and irrational exuberance surrounding the call for “Internet Freedom” runs the risk of jeopardizing some of the Internet’s important, but more modest, potential. It very well may be that the greatest promise of the Internet lies in fostering non-political connections and facilitating access to various points of view. The excessive politicization of the Internet resulting from its embrace by crusaders intent on wielding it as the ultimate democratizing weapon might simply deprive people in many parts of the world of some of the online realm’s actual benefits.

Evgeny Morozov is a visiting scholar at Stanford University, a Schwartz fellow at the New America Foundation and the author of the forthcoming The Net Delusion: The Dark Side of Internet Freedom.

*Photo of Iran’s Green Revolution supporter courtesy Andrew Partain.

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