Less than a year ago, Edward Snowden lived in Hawaii with his beautiful girlfriend, earning a six-figure salary as a government contractor. If he had followed the rules of the intelligence agencies that paid his salary, he would probably still be enjoying that idyllic life today.
But Snowden didn't follow the rules. As 2013 began, he was already plotting to release thousands of pages of documents revealing details about the National Security Agency's domestic surveillance programs. His actions would transform the national debate over government surveillance while making him an exile from the land of his birth.
Some people change their societies by being elected to high office or rising to lead powerful institutions. But others use more direct methods: They do what they think is right, without worrying too much about the rules, and hope that their example will change public attitudes and, eventually, the rules that govern society.
2013 was a big year for this kind of insubordinate idealist. While few took the kind of immense personal risks that Snowden did, people willing to defy authority, social convention, and the law have changed how we think about everything from the nature of love to the future of our financial system.
When Edith Windsor flew to Canada in 2007 to marry her partner of 40 years, Thea Spyer, she was one of thousands of gays and lesbians defying laws in their home states. They lived in New York, which didn't recognize gay marriage at the time.
New York began recognizing out-of-state same-sex marriages like theirs in 2008. But federal law still didn't recognize their marriage when Spyer died in 2009. So Windsor became public face of the legal campaign against the Defense of Marriage Act.
If federal law had recognized her marriage, Windsor would have owed no taxes on the assets she inherited from her wife. But the Defense of Marriage Act prohibited the federal government from extending the legal benefits of marriage to same-sex couples. So the IRS told Windsor she owed hundreds of thousands of dollars in estate taxes. She sued.
This year, Windsor's case reached the Supreme Court, which ruled that the Defense of Marriage Act was unconstitutional. The ruling clears the way for same-sex couples married in states that allow it to receive federal marriage benefits.
Obviously, getting married has tremendous personal significance. But the decision of couples like Windsor and Spyer to marry also had a social and political dimension. Their quiet defiance of discriminatory marriage laws and social norms gave straight Americans around them an opportunity to see same-sex marriages first-hand. The fact that their marriages looked pretty much like the marriage of straight people helped many voters get comfortable with changing the law.
These changing attitudes haven't just affected the Supreme Court. There has also been significant momentum for marriage equality in the states. The number of states recognizing gay marriage rose from nine at the end of 2012 to 17 today (Illinois is scheduled to join them on June 1, 2014).
A similar strategy of defiance has led to steady progress for advocates of marijuana legalization. For decades, millions of Americans have ignored laws against using marijuana, but until recently they tended to do so in private. They became more open about it after states began adopting medical marijuana laws. In some states, especially California, a doctor's certification has become little more than a formality for those who want to light up.
Late in 2012, two states, Colorado and Washington, became the first in the nation to officially legalize marijuana for recreational use. While marijuana consumption is still officially illegal under federal law, the federal government doesn't have the resources to effectively enforce those laws by itself. So 2013 saw entrepreneurs openly building illegal marijuana businesses in Colorado and Washington.
You might think this kind of open lawbreaking would trigger a public backlash. But so far, polls suggest the opposite: The more voters see people defying laws against same-sex marriage and marijuana, the more they support repealing them. A March poll found that a record number of Americans, 58 percent, support legal recognition of same-sex marriage. Coincidentally, the same percentage also support legalizing marijuana, and that, too, is a record.
Bitcoin goes mainstream
The rise of Bitcoin is also a story of rule-breaking. Bitcoin was explicitly created to undermine the power of the conventional banking establishment. And the network's unorthodox structure makes it an uneasy fit for conventional financial regulations.
U.S. law implicitly assumes that each financial network is operated by a company or other institution that can enforce financial regulations, including those designed to fight money laundering. Congress never imagined the possibility of a completely decentralized financial network. So at the start of 2013, it was unclear how the law would apply to this innovation in payment technology.
Bitcoin rejected other key assumptions of the conventional financial industry, too. Older financial networks are based on conventional currencies such as the dollar. Bitcoin uses its own currency. Conventional financial networks give consumers mechanisms for reversing fraudulent transactions. On the Bitcoin network, transactions are irreversible. If someone steals your bitcoins, you are out of luck.
It didn't help the network's reputation that one of the most-discussed applications for the virtual currency was the online drug bazaar Silk Road. Unsurprisingly, most people dismissed Bitcoin as impractical, or worse.
But everything changed in 2013. The currency's price rose from around $13 at the start of the year to $1,200 by the end of November (it's now around $800). As Bitcoin's price soared, it got an avalanche of press coverage.
That forced influential people who dismissed the currency initially to give it a second look. Investors started to take notice. Bitcoin startups announced a series of fundraising successes, culminating in Coinbase's $25 million fundraising round earlier this month. Policymakers, too, began taking the currency seriously. A pair of November Senate hearings were Bitcoin lovefests, with federal regulators stressing their commitment not to hamper development of the fledgling payment network.
Bitcoin's decentralized structure was essential to winning the blessing of regulators. If there were a Bitcoin Inc. that owned the network, federal regulators would likely have demanded that it make changes to facilitate enforcement of federal regulations, and shut it down if it didn't comply. But the Bitcoin community pointed out that no one had the authority to change the Bitcoin network. They argued that excessive regulation would simply push Bitcoin-related commerce overseas, where U.S. regulators would have even less influence. The gambit worked. Regulators interpreted U.S. law in a way that's relatively hospitable to the development of Bitcoin-based businesses on American soil.
Bitcoin wasn't the only technology to push the legal envelope in 2013. A number of start-ups pursued similar strategies, jumping into new markets in the face of significant legal uncertainty.
Aereo is one example. The start-up allows New Yorkers (and more recently users in other select cities) to stream broadcast television content over the Internet. Instead of paying licensing fees to broadcasters, Aereo relied on a clever interpretation of copyright law.
In Aereo's server room are circuit boards with thousands of tiny antennas. When an Aereo customer wants to watch television, he's assigned a distinct Aereo antenna for his personal use. Aereo argues that its service amounts to a virtual television set with an extremely long cord between the antenna and the display.
No one was sure if the courts would buy this crazy-sounding argument. But this year they did. Appeals courts in New York and Massachusetts rejected the arguments of broadcasters that Aereo's service violated their copyrights. The legal battle isn't over — Aereo has encouraged the Supreme Court to take the case — but the TV streaming service is on much firmer legal footing than it was a year ago.
2013 was also a big year for Uber, which raised $361 million from investors in August. Like Aereo, Uber's business strategy has been to enter new markets first and worry about the legal niceties afterwards. In January, Uber reached an agreement with the California Public Utilities Commission after the agency had threatened to shut down Uber and other car-sharing services for operating without appropriate licenses.
Asking forgiveness, not permission
Airbnb also works at the margins of the law. The service helps users offer their apartments for short-term rentals. In many cities, doing this requires registering with the authorities, paying hotel taxes, and other following other rules. Airbnb leaves it to its hosts to worry about those issues, and some hosts simply ignore them. As a result, Airbnb has come under scrutiny from regulators in New York and other states.
Like Uber, a big part of Airbnb's strategy is simply to grow so quickly that it becomes politically costly to shut down. The more people who benefit from the service, the larger the political backlash for a crackdown. Giving thousands of voters the chance to try the service first-hand is often a powerful argument for changing the law to permit it.
That strategy hasn't gone as well for 23andme, a genetic testing service that has come under fire from the Food and Drug Administration. The FDA requires genetic testing services to prove the accuracy of their diagnostics to the satisfaction of regulators before offering products for sale. While 23andme uses the same genetic sequencing labs as more established testing products, it hasn't been able to satisfy the FDA about the scientific validity of 23andme's interpretations of that data. Earlier this month, the firm pulled its product from the market while it works on satisfying federal regulators.
Still, it's not clear that coloring inside the lines would have worked out better for 23andme. FDA regulations aren't designed for 23andme's data-heavy approach to medical testing. If the firm had formally requested approval and waited for a response, it might have wound up waiting for years, running out of funding before it could start attracting customers. And while public pressure hasn't forced the FDA to relent yet, the agency likely feels more pressure to reach an accommodation with the company than it would if it were a tiny start-up no one had ever heard of.
America's changing mood
Paul Graham, an early investor in Airbnb, once argued that America's tolerance for people who color outside the lines is one of the nation's great strengths. "It is greatly to America's advantage that it is a congenial atmosphere for the right sort of unruliness—that it is a home not just for the smart, but for smart alecks." But in 2013, there were some signs that American society, and especially its government, is becoming less tolerant of smart alecks.
One is the death of Aaron Swartz. Swartz, a brilliant programmer and activist, was frustrated by the way commercial publishers were locking up access to the world's academic research. Rather than appeal to publishers or Congress to change their policies, he took a more direct approach. He logged into the network of MIT, which had a subscription to the academic database JSTOR, and began downloading articles.
MIT is famous for being a school with a sense of humor about such things. But this time they called in the authorities. Swartz was arrested in 2011. He faced felony hacking charges that came with a theoretical maximum of decades in prison. In January 2013, with the funds he needed to defend himself running out, he took his own life.
Swartz's friends and colleagues in the technology world were shocked at the heavy-handed way he was treated by the criminal justice system, but his treatment wasn't actually out of the ordinary. The American criminal justice system gives prosecutors vast powers to ruin the lives of defendants, with no real consequences for overzealous prosecutions. But most of the time, prosecutors target people without Swartz's resources, connections, and skin color. So Swartz's treatment shocked the consciences of people who don't normally interact with people targeted by the justice system.
Another rule-breaker, Bradley (now Chelsea) Manning, was treated even more harshly by the federal government. Manning released classified information to Wikileaks that allegedly documented human rights abuses by the U.S. government. After more than two years of military detention, under conditions that the U.N. special rapporteur on torture described as "cruel, inhuman and degrading," the Army private finally faced charges this year. Manning was convicted and sentenced to 35 years in prison.
People disagree about whether Manning was a hero or a villain. The disclosures provided the public with valuable information about the conduct of America's wars in Iraq and Afghanistan. But government officials argue that the indiscriminate nature of the leaks exposed information that damaged the United States with little public benefit.
One of Manning's most ardent defenders is one of America's most famous rule-breakers: Daniel Ellsberg. He's the man who released the "Pentagon Papers," secret government documents that revealed how poorly the Vietnam war was going, in 1971.
Ellsberg rejects efforts to distinguish Manning's whistleblowing from his own. "I'm sure that President Obama would have sought a life sentence in my case," Ellsberg told me in a June interview. And while the Supreme Court upheld the publication of the Pentagon Papers, Ellsberg says he's not sure today's Supreme Court would have reached the same conclusion.
Why Snowden's future matters
America is a nation with an increasingly split personality. For entrepreneurs and well-connected elites, America is one of the most hospitable places on earth for people with unconventional ideas. But those with the bad fortune to be targeted by the criminal justice system—whether because they threaten the power of the national security establishment or just live in the wrong neighborhood—often have a very different experience. For them, defying the authority of the federal government can lead to draconian punishments.
It remains to be seen whether Snowden will face the full wrath of the American criminal justice system, be forced to live out his life in exile, or will eventually be welcomed back to the United States. Four decades ago, the prosecution of Daniel Ellsberg collapsed after the judge learned that the government had engaged in illegal surveillance of the Pentagon Papers whistleblowers. There's little reason to think Snowden would get off so lightly if he returned to the United States today.
But changing public attitudes could work in Snowden's favor. If the public continues to grow more alarmed about the extent of NSA surveillance—and especially if Congress responds to that outrage by passing NSA reform legislation—large majorities could come to see Snowden as a hero. Perhaps President Obama or (more likely) his successor could conclude Snowden deserves a pardon,
Doing so would send an important message: that America is still a home for rule-breakers and smart alecks.