OPINION
Motto for Freedom Activists: 'Don't Be Unreasonable'

Many Americans were horrified to learn that American-grown technology firms such as Yahoo (Nasdaq: YHOO) , Microsoft (Nasdaq: MSFT) , Cisco (Nasdaq: CSCO) and Google have been complying with the Chinese government's demands to control information. When Yahoo handed over data last fall that landed a Chinese journalist in jail for 10 years for simply e-mailing newspaper briefing comments to a democracy group in New York, outrage followed. However, the mistake many observers make is to equate the power of corporations with the power of governments.

The Real World

Michael Moore's rants aside, corporations cannot force anyone to do anything that they don't agree to do. Companies can persuade through advertising and other marketing, but ultimately customers decide. Governments, on the other hand, have the power of the sword, and China -- the world's largest communist dictatorship -- is known for wielding that power. That puts American companies at a huge disadvantage when the question of freedom arises in a country where the people aren't free.

In America, when the government appears to infringe on freedom, citizens can sue and companies can refuse to act. Indeed, the American Civil Liberties Union recently filed a lawsuit claiming that the National Security Agency's wiretaps violate the American constitution, and Google itself is currently refusing to hand over search data to the U.S. government. In China, the story is much different.

Companies that don't comply with government demands in China face expulsion from the country, and their officers may face imprisonment. You can't sue the Chinese government for free-speech violations because such protections don't exist there. That means American technology firms face a difficult question: Do they comply with Chinese government demands? Or do they leave the country and let other businesses take their places?

Sticking It Out

The argument in favor of staying is twofold: First, American companies want a slice of the lucrative Chinese market; second, the argument can be made that American activity in China will, over time, lead to democracy. That's because increased trade with people from a free country leads to the spread of information about freedom, no matter how tightly the government tries to restrict it.

When the Chinese people interact with American people, they share stories that slowly chip away at the government's hold. When the Chinese middle class finally sees what it is missing, the Chinese government will be in trouble.

It is not inevitable that increasing American contact with the Chinese people will bring about democracy. However, simply leaving and allowing other companies -- especially those from countries less free than America -- to provide those services makes it even less likely.

No one lives in a perfect world, and when the choices are imperfect, it's best to go with the one that's the least problematic. Google's motto is, "Don't be evil," but one might suggest it is now operating under a different mantra along the lines of, "Don't be stupid." That is, if Google doesn't compete in the Chinese market, others will, and the status of Chinese freedom will not have changed.

American tech firms are caught in the middle of a sad tension between freedom-loving individuals and an oppressive government. Those outraged at the actions of these firms should bear in mind that no company has the power to battle a country with weapons. Critics should target their anger where it belongs -- at the Chinese government.