Spam in a Jam

Let's forget about Iraq for a moment and talk about an enemy more ruthless and cunning than Saddam Hussein, more sinister than a nuclear-armed North Korea. I'm talking about spam.

Just kidding. I actually love getting invitations to refinance my house, lose weight fast, talk to lovely Russian ladies, help Nigerian bankers loot dormant accounts, and enlarge my penis.

And boy, am I getting them. I've been overrun at the office for some time, but for a while I managed to keep my home email account relatively clean. It couldn't last. Over the past week they've started coming in, 2 or 3 a day, then 4 or 5, now up to 10 or 12.

So I started wondering if it was just me or if it's getting worse for everybody. That's when I found out: Spam is multiplying faster than the tribbles in that old Star Trek episode. Consider:

* According to the Washington Post, AOL blocks more than 780 million spams a day -- 100 million more messages than it actually delivers.

* Spam now accounts for about 30% of all email, by July it's expected to equal 50%. That's four months from now!

* The average email account currently gets about 15 spams a day. If you've got two accounts, like I have, that's 30 a day. Will it soon be 50, then 100? 1000?

The reason is obvious: Because spam is dirt cheap, even a 1-in-100,000 response rate can turn a profit. Most of the costs are fixed, so blasting out as much as you conceivably can is a complete no-brainer. The only limit is set by the number of email addresses you can buy or steal.

The Internet service providers have been bitching about this for years. But it's gotten so bad even the spammers say something's got to be done. The Direct Marketers Association, which represents the larger, more "reputable" spammers, switched positions last fall, and decided tougher federal regulation wasn't such a bad idea after all. This is the same outfit that's fought tooth and nail against any and every effort to put a leash on the telemarketers.

Why the change of heart? Because spam is now so bloody ubiquitous, response rates are threatening to fall below even the absurdly low levels needed to make a buck.

This is a classic example of two things:

* Market failure. Spammers are now in roughly the same boat as Mississippi cotton farmers during the Great Depression. When costs are fixed and prices are falling (as cotton prices did during the 1930s), the only way to keep your head above water is to grow more, so you can sell more. But if every farmer does that, prices will fall even further. They're screwed either way. But they're less screwed if they grow more cotton, since their costs are fixed. To break the downward spiral, someone either has to buy more cotton, limit the supply, or both. Which is what the federal government eventually did, making FDR a god to a generation of Southern sharecroppers.

* Capitalist hypocrisy. Business groups are always against government regulation, until they realize they need it. Then, of course, the public interest demands it. Years ago a historian named Gabriel Kolko wrote a book called The Triumph of Conservatism, in which he argued that much of the early business regulation pushed by Teddy Roosevelt (patron saint of the McCain Republicans) actually was done at the request of the great robber barons, who realized they could use government to restrict competition and protect profits.

The spammers may not be Rockefellers, but I'm sure they get the general idea.
And if they can come up with enough campaign cash, I'm sure a Republican Congress and a Republican administration will, too.

The hard part will be coming up with a regulatory system that limits spam but doesn't ban it, and tilts the playing field towards the "reputable" spammers -- i.e. the ones with the campaign cash. Is that technologically possible? Beats me. But if is, and the spammers cough up the dough, the Spam Control Act (a.k.a. the Commercial E-Mailer Relief Act) of 2003 may not be far away.

Funny how much the New Economy looks like the old one.

Billmon

Posted February 28, 2003 10:07 PM | Comments (16)