But cookies are also how, in the not-very-distant future, web pages will be able to cough up your shopping history, along with your astrological sign, hair color, and phone number. A company called DoubleClick has already compiled a database of 50 million people and is currently working to integrate these data with other companies (like L.L. Bean) that have long-running and extensive data series on specific customers.

According to privacy expert Jason Catlett, companies like DoubleClick will soon be "able to do some really scary things. For instance, say you're browsing a favorite web newspaper site, and you spend time reading an article on financial planning. Two minutes later, the telephone rings, and it's a guy trying to sell you life insurance. Companies will pay a lot of money for getting someone at the time when they might be receptive to their pitch."

Less sinister, but still thoroughly irritating, is the ease with which companies can get e-mail addresses and pummel recipients with untraceable, unwanted e-mail known as spam. But the government has done basically nothing at all--perhaps because congressional aides serve as middlemen, filtering out the junk e-mail flooding upon congressmen before it can irritate them. Ralph Nader's Consumer Project on Technology has advocated that all e-mail be tagged so that senders of spam can be identified. But, like all other consumer protection regulation for the Net, this bill is buried in a file on some congressman's desk, next to a coffee mug that hasn't been cleaned in three months. It wasn't put in the "urgent" folder, where so many of the bills to help large Internet companies (like the one protecting them from Y2K liabilities) have gone.

Let Them All Run Free

Elliott Maxwell, a senior adviser for the digital economy at the Department of Commerce, has felicitously said that he wants the Net to become "a clean, well-lighted place." The concept is a good one, but the administration's approach of complete private self-regulation is not.

The first principle of Magaziner's grand report of 1997, "A Framework for Global Electronic Commerce," begins: "The Internet should develop as a market-driven arena, not a regulated industry," and the report plunges on from there. The Internet is "changing classic business and economic paradigms." The administration "will encourage the creation of private forces to take the lead in areas requiring self-regulation such as privacy, content ratings, and consumer protection."

The first justification for this paean is the classic laissez faire mantra that private industry will self-regulate because it has a vested interest in doing so. Nothing would destroy Amazon.com faster than a large-scale onslaught of fraud on the Net. If people can't trust their credit card numbers, people won't buy books online. If enough people die from sub- (or non-) standard drugs from online drugstores, the customers left on their feet are going to race straight back to their neighborhood corner shops.

But as President Clinton's attempts at health care, environmental protection, and tobacco regulation have shown, self-interest has not been repealed, and freedom for the wolves is still death for the sheep. Private companies are not always going to serve the public interest; they're going to serve their private interest. Sometimes the two will overlap, sometimes not. As even the famous free marketer Adam Smith wrote in 1776, when people of "the same trade" meet together, inevitably "the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

Regulation

There are two primary ways for the government to regulate the Net. The first way is to try to restrict activity. Examples include a law mandating that every business disclose its full address and location information in large type on its home page or a law making it illegal to sell or exchange private credit information. The second way is to offer support for people online. Examples include publishing consumer tips online or offering subsidies to people like Judy Fischer who are trying to limit Net fraud.

Magaziner and Clinton reject both types of regulation. With regard to restrictions, they're mostly right. With regard to supporting consumers, they're dead wrong. Clinton and Magaziner's legitimate trouble with restriction is that the Net moves too fast to be pinned down. Try to set restrictions on content and, by the time a bill is halfway through its first House committee meeting, every company possibly in violation will have moved its servers to Djibouti. Draft a law restricting the use of cookies and the whole technology will be obsolete two years before the bill reaches the president's desk.

Moreover, this country's lax approach to restriction has certainly allowed the U.S. online industry to leap ahead of other nations that have taken a plodding, institutional approach to the Internet. France, for example, is still slogging through negotiations over cultural content. Unsurprisingly, we're wired and they're not. Seventy percent of all electronic commerce is now transacted in the United States.

Everyone "knows" that the Net shouldn't be regulated, but few people can offer a serious rationale.