Silicon Valley’s problem with Congress has already been solved—by the defense industry

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The giants of Silicon Valley have been under sustained fire for months over a number of perceived sins, none more prominent than their enabling Russia’s manipulation of the 2016 US presidential election.

Hearings in Washington last week left Congress fuming about the apparent obliviousness of Facebook, Twitter, and Google, and seemed to whet its appetite for imposing regulations on the sector. At least some senators are considering a proposal that would require social-media companies to disclose who is paying for advertising on their sites, if only as a prod to force the companies to police themselves.

“You have to be the ones who do something about it,” California senator Dianne Feinstein said at a hearing. “Or we will.”

Social media is a recent invention, but conflicts between Washington and business aren’t. The defense industry found itself in a similar jam three decades ago, and the strategy it used to extricate itself may serve as a model for Silicon Valley.

In the mid-1980s, defense contractors were under fire for overcharging the Pentagon for routine items—this was the era of $640 toilet seats and $7,622 coffee makers—and for more serious charges of fraud and corruption. Congress assembled hearings, and drafted hundreds of bills aimed at the defense industry, many introduced at press conferences featuring angry denunciations of the venal contractors.

To ward off Congressional action, and following the recommendation of a blue-ribbon commission formed by then-president Ronald Reagan, 18 companies founded the Defense Industry Initiative on Business Ethics and Conduct (the DII), which has survived to this day and now has 70 corporate members.

The DII drafted broad, lofty-sounding principles about acting honestly. It committed member companies to draft individual codes of ethics, and to share best practices amongst each other. It has since served as a model for other industry efforts.

The DII didn’t prevent regulation of defense contractors—because they manufacture and sell weapons, and because their biggest customer is the US government, the industry will always be heavily regulated. But it arguably staved off more draconian rules, and more importantly, it helped its members stay out of trouble, says Donald Featherstun, a defense industry lawyer who is a coordinator of the DII.

“Congress will always keep an oversight over the defense industry, as it should,” he said. “The DII was not an attempt to avoid oversight; it was an attempt to be compliant with oversight.”

There’s been a long debate over the effectiveness of industry self-regulation versus government oversight, and the arguments for and against often fall along political lines. A 2015 OECD report on self-regulation said it can be a useful complement to government rules—and because it is often more flexible and cost-effective, it can achieve more buy-in from stakeholders. But its effectiveness is determined by exactly how much of the industry participates, how tough the standards are, and if there are consequences for not adhering to them.

For Silicon Valley, an industry-wide code of ethics—one that’s embraced by the leaders of the biggest tech companies—could be more effective than new laws, which are likely to be unwieldy and lag advances in technology, says Kirsten Martin, an associate professor at the George Washington University School of Business who studies technology and corporate responsibility.

It could push companies to address these issues in a way they’ve never had to before, she says. “In the tech industry, they’re not thinking about their obligations to society,” she said. “But in many ways, no one told them to. They weren’t thinking about it.”

Tech workers also need to think about their obligations, and should be governed by a code in the same way as other professionals like architects and engineers, Martin says. Just as we live in a physically engineered world, we live online in a world engineered with algorithms, and their authors bear responsibility for their consequences, she says.

A programmers’ code of ethics?

There are nascent efforts at creating a code of ethics for individual programmers and software engineers—including one similar to that of civil engineers—and a discussion of ethics should be part of the on-boarding process at tech companies, says Irina Raicu, director of the Internet Ethics Program at Santa Clara University’s Markkula Center for Applied Ethics. Behavioral research shows that simply reminding people of their moral responsibilities, such as signing an honor code before a test, can prompt them into better behavior.

But a professional code of ethics wouldn’t necessarily address the larger, structural lapses at a corporate level—at companies with those kinds of obstacles, forcing workers to choose between their personal ethics and their jobs is unfair, Raicu says.

“There has to be responsibility at the board level, there has to responsibility at the founder level, at the funder level, with marketers,” she says. “It can’t just be the engineers.”

Working in concert

Raicu is skeptical than an industry-wide program of self-policing will take hold. The biggest tech companies are too dissimilar—with different business models, products, and customers—for one code to apply to all of them, she argues. And she doubts the public or Congress would be reassured even if they did adopt one.

A code of ethics alone might not work, but ethics combined with regulations—the model practiced by the defense industry—can be effective, says Andrew Hunter, a fellow at the Center for Strategic & International Studies, who worked on Capitol Hill and in the US Defense Department. The law sets a floor for the behavior that the government expects, but a voluntary code of ethics allows the bar to be set higher, while recognizing that it can require interpretation, he says.

“Legislation is an inflexible tool, and in ethics, a lot of subtlety can be required,” Hunter says. “There is definitely a role for something more flexible, like a code of conduct that can be amended.”

Adopting a code of ethics has hardly eliminated waste and bloat from defense contracts, and it hasn’t prevented scandals like Boeing’s CFO bribing an Air Force procurement official with the promise of a job. But those incidents are now exceptions, not routine, and the most egregious behavior has largely been tamped down, Hunter says. “It has made a difference,” he says.

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