The Case Against Regulation

This blog will present ideas about the regulation of digital money, especially about why it is not sensible.

Alternatives to Revolution

Tyrone Wednesday October 1, 2014

by Tyrone Johnson

Revolution is just and often justified. It is a type of warfare to overthrow a government which has become tyrannical. As an anarchist, I approve of overthrowing, or throwing down, governments, all of which are more or less forms of tyranny in my view. So, don't get me wrong, I'm not against revolution.

But, there are problems with revolutions. In his great classic novel Animal Farm, George Orwell wrote about the overthrow of the tyranny of the farm owners by a group of animals under the leadership of the pigs. In very short order, the pigs decide to have the best of things, refuse to divide things equally, and take exception to calls for equality. Soon, the pigs have taken over the role of running the farm, and not a little later, started walking on two feet to distance themselves from the other animals. By the end of the story, the pigs are no different from the human masters that were overthrown.

Since the book indicates that revolution ends badly, was Orwell's message "to hell with revolution and hail the status quo"? Quite a few leftist, especially Stalinist, intellectuals of his time seemed to think so. Dwight McDonald wrote a letter to Orwell in December 1946 which appears in George Orwell: Life in Letters, 2013. McDonald felt that the "hail the status quo" view wasn't what Orwell meant, and sounded him out about it. A favourable, but confusingly footnoted, review of the volume of letters provided me with Orwell's reply and appeared in the 11 July 2013 issue of The New York Review.

Orwell says, "Of course, I intended it primarily as a satire on the Russian revolution. But I did mean it to have a wider application in so much that I meant that *that kind* of revolution (violent conspiratorial revolution, led by unconsciously power-hungry people) can only lead to a change of masters. I meant the moral to be that revolutions only effect a radical improvement when the masses are alert and know how to chuck out their leaders as soon as the latter have done their job. The turning point of the story was supposed to be when the pigs kept the milk and apples for themselves (Kronstadt). If the other animals had had the sense to put their foot down, then, it would have been all right. If people think I am defending the status quo, that is, I think, because they have grown pessimistic and assume that there is no alternative except dictatorship .... What I was trying to say was, 'You can't have a revolution unless you make it for yourself; there is no such thing as a benevolent dictatorship.'"

Readers are left to exercise their interest in research by looking into the circumstances in 1921 at the naval base at Kronstadt, where sailors supported workers striking over food shortages and harsh treatment. The fact that Trotsky and Tukhachevsky put down this rebellion, violently, and were subsequently liquidated by Stalin, illustrates the dangers of all forms of dictatorship.

The fallacy of a benevolent dictatorship appears also in Unintended Consequences the epic 1996 self-defence novel by John Ross. His protagonist, Henry Bowman, objects to a scholarly analysis of Leviathan by Thomas Hobbes in which the professor says it is "just one more scholarly justification for forfeiting your rights and allowing you to be subjugated by the State."

Bowman points out, "The important question is, when do you know it's going to become enslavement? When is the proper time to resist with force? ... The end result, which we want to avoid, is the concentration camp. The gulag. The gas chamber. The Spanish Inquisition. All of those things. If you are in a death camp, no one would fault you for resisting. But when you're being herded towards the gas chamber, naked and seventy pounds below your healthy weight, it's too late. You have no chance. On the other hand, no one would support you if you started an armed rebellion because the government posts speed limits on open roads and arrests people for speeding. So, when is it not too late, but also not too early."

Bowman, and Ross, go on to point out that when the big bully tries to take away your future ability to resist, that's when you should fight to the death. The balance of Ross's novel goes into the despicable nature of the bureau of Alcohol, Tobacco, and Firearms, and how agents of that tax enforcement agency have historically proven themselves to be evil, hateful, psychotic misanthropes with totalitarian ambitions. Numerous enjoyable fictional scenes ensue where the gun culture overcomes tyranny.

Now, today, where do things stand? There is global espionage. Your privacy and, therefore, your autonomy, have been revoked. Only very determined people who use encryption have any meaningful privacy in their communications. Only very determined people have any meaningful economic privacy. Enormous bureaucracies exist to eliminate your freedom to use your property and money as you see fit, prevent you from using plants and plant extracts as you see fit, prevent you from owning certain types of weapon, prevent you from travelling in certain ways while in possession of the ability to defend yourself, and force you to support a welfare and warfare state with an endlessly increasing debt. And those facts are true whether you live in the United States, Canada, Mexico, Europe, or elsewhere in the world. Emigrating isn't an option, because the reach of these bureaucracies is global. If we consider NASA to be just another such bureaucracy (and I do), then their reach is inter-global.

Which brings me to sunny point number three: Hannah Arendt, writing in "Reflections on Violence," an essay published by the New York Review on 27 February 1969, notes: "Violence, being instrumental by nature, is rational to the extent that it is effective in reaching the end which must justify it. And since when we act we never know with any amount of certainty the eventual consequences of what we are doing, violence can remain rational only if it pursues short-term goals. Violence does not promote causes, it promotes neither History nor Revolution, but it can indeed serve to dramatize grievances and to bring them to the public attention. As Conor Cruise O'Brien once remarked, 'Violence is sometimes needed for the voice of moderation to be heard.' And indeed, violence, contrary to what its prophets try to tell us, is a much more effective weapon of reformers than of revolutionists. France would not have received the most radical reform bill since Napoleon to change her antiquated education system without the riots of the French students in May 1968, and no one would have dreamed of yielding to reforms of Columbia University without the riots during the 1968 Spring term.

"Still," continues Arendt, "the danger of the practice of violence, even if it moves consciously within a non-extremist framework of short-term goals, will always be that the means overwhelm the end. If goals are not achieved rapidly, the result will not merely be defeat but the introduction of the practice of violence into the whole body politic. Action is irreversible, and a return to the status quo in case of defeat is always unlikely. The practice of violence, like all action, changes the world, but the most probable change is a more violent world. Finally, the greater the bureaucratization of public life, the greater will be the attraction of violence. In a fully developed bureaucracy there is nobody left with whom one could argue, to whom one could present grievances, on whom the pressures of power could be exerted. Bureaucracy is the form of government in which everybody is deprived of political freedom, of the power to act; for the rule by Nobody is not no-rule, and where all are equally powerless we have a tyranny without a tyrant. ... Huge party machines have succeeded everywhere to overrule the voice of the citizens, even in countries where freedom of speech and association is still intact."

Arendt notes that dissidents in Russia, China, and elsewhere (we would mention Hong Kong and North Korea, today) "demand free speech and thought as the preliminary conditions for political action; the rebels in the West live under conditions where these preliminaries no longer open the channels for action, for the meaningful exercise of freedom. The transformation of government into administration, of republics into bureaucracies, and the disastrous shrinkage of the public realm that went with it, have a long and complicated history throughout the modern age; and this process has been considerably accelerated for the last hundred years through the rise of party bureaucracies."

How then, are we to proceed? In their excellent 1993 book-length essay, War and Anti-War, Alvin and Heidi Toffler quote former secretary of state Warren Christopher in supposing that if people were not forced to live together under multi-ethnic governments there would, fairly quickly, be "five thousand countries" on Earth. Christopher describes this eventuality with alarm, of course, presumably imagining how tiresome and irritating it would be to have a separate desk at the State department for each country. How dare people imagine that they live as they choose, are free to determine their own destinies, seems to be his attitude. And, indeed, that has been the attitude of any number of United States politicians, diplomats, delegates to the United Nations, and so forth. With very rare exceptions (the 1993 establishment of Eritrea and the 2011 independence of South Sudan come to mind), the nearly 2,000 identifiable ethnic populations in Africa, over a billion people, are forced, by US, EU, UN, and African Union political policies, to live together in 54 countries, nine territories, and two de facto states which have limited recognition by other countries.

An old friend of mine used to comment on injustices with his favourite question, "Yeah, but, what are ya gonna do? Start your own country?" Perhaps you should, at least a micro-nation that brings you some money from the sale of unique postage stamps, passports, and visas. But you really aren't going to get very far that way.

Nor can I give you much reason to expect to emigrate from Earth to another planet any time soon. Dozens of space entrepreneurs have tried very diligently to mine or at least claim asteroids, send probes to the Moon or Mars, or even simply bring tourists up into "space" on suborbital flights reaching an apogee of more than sixty miles. If Sir Richard Branson, with all his billions, was unable to keep his 2004 promise (at the X Prize victory celebration for Scaled Composites) to have tourist flights in 2007, and has, at latest inquiry, postponed beyond 2014 his first flights, you may be waiting quite a while for affordable tourists flights to Earth orbit, let alone colonisation trips to other planetary bodies. Or, to paraphrase an old space enthusiast clarion cry, "L5 did not arrive by 1995." Technically and economically you can certainly do quite a lot with the space frontier, but you are not allowed to get there from here.

All of these sunny points should, by now, do much to explain why hard science fiction is mostly a dead end for authors, so many of whom have been writing time travel fiction, swords-and-sorcery fantasy fiction, and looking for a really good pay-off in video game licence fees. The definition Eric Raymond gives (here:http://www.catb.org/esr/writings/sf-history.html" rel="external nofollow"> http://www.catb.org/esr/writings/sf-history.html ) of hard science fiction as involving individuals solving problems using knowledge and understanding is an excellent one. But it isn't a surprise that a great many people don't expect to be able to solve their problems, or, having the ability to be permitted to profit by so doing. So, fantasy games, role playing games, and extremely violent single-person-shooter games are triumphant. Planning your way to a sustainable future in a community beyond the Earth is no longer fashionable.

If these facts make you feel frustration, good. Your mind is still free. You chafe at the idea of endless boundaries and limitations. You are ready for a change. So, too, are tens of millions of others.

You can see their readiness for change in their protests, in Hong Kong, Catalonia, Ferguson Missouri, Kiev, and elsewhere. You can sense their readiness for change in their investigation of and experimentation with new technologies, such as the crypto-currency revolution unleashed by Satoshi in 2009. You can see their willingness to act in the work of Anonymous and in the work of identifiable world heroes such as Chelsea Manning and Edward Snowden. The fact that tens of thousands of people have supported projects like WikiLeaks and people like Julian Assange indicates a willigness to seek the truth. Today's revolutionaries are often seen carrying video systems to capture (and instantly upload) images of protests while they happen.

Bitcoin and other block-chain-technology currencies have their own limitations, of course. You cannot use them directly without publishing that fact to the blockchain. The blockchain is the essential instrument of decentralisation that makes bitcoin work, and it is a key vulnerability to your privacy. But there are effective ways to use that tool in order to benefit from the innovation surrounding the bitcoin financial community. I've elsewhere pointed out that to "finance war no more" (external link: Daily Anarchist ) you should consider SilentVault, a technology with which I've been very familiar for several months, based on a system called Voucher-Safe which has been developed since 2008.

Of course, that isn't really very easy to do. In order to create a SilentVault wallet, you need to download and install the SilentVault wallet application, or the more-than-complete SilentVault Spark plugin. Doing so on a Windows operating system requires that you reach a screen where Windows tells you it has "protected your system" by refusing the installation of our software. On that screen there is "more info" which, if you choose to look, takes you to a screen that lets you actually install our software. On Linux and Mac systems, our software doesn't have this issue.

Windows screen pretending it protects you.

Why is that screen there? SilentVault's technology lead, Justin Turrell, recently commented on it. "This means that whenever you install software not from Microsoft, or from a vendor with a package signed by a key belonging to a Microsoft-certified Certificate Authority, you are perforce going to have to click past a warning indicating that the sky is falling. In order to eliminate this warning, a software company has to submit to a highly invasive and somewhat costly procedure in which names, photo IDs, and proof of address must be submitted for all company management and responsible developers. Needless to say most open source projects cannot or will not comply with this, and it is particularly out of the question for a financial privacy application like ours. At least, it's safe to say that no such 'know-your-developer' regime will be complied with whilst I am on the staff. The purpose for these annoying warnings is restraint of trade by a state-facing cartel, with security used as a pretext. It's especially ironic given that the operating system itself is made deliberately insecure."

Indeed, there are good reasons to expect less freedom and privacy from Microsoft products than from nearly anyone else in the world. They are, after all, a significant military and government contractor. They reap significant benefits from their relationship with the state. You cannot really expect them to be all that concerned if, through the security holes they maintain and the software they build, a bunch of people are sent to long term detention without trial, as seems to be the case.

If your economic privacy, your individual liberty, your personal sovereignty, your ability to refuse to participate in a global warfare/welfare state which actually oppresses you is motivation enough to get involved in securing your economic privacy, good. Very good. Welcome aboard.

If not, if you really just cannot be bothered to, say, update to a recent version of Java in order to install a client that runs on your computer in a java virtual machine, therefore safer than a browser, and which decentralises data storage using page kites and public key cryptography, if that level of technical sophistication is "a bit too much" for you right now, I don't blame you. I am not very surprised that only a few people are sufficiently interested to explore this opportunity. The good news, which comes later, is that there is a "killer app" coming which provides a substantial independent motivation for going and getting a SilentVault wallet for yourself.

The problems, as Ernie Hancock noted on a recent interview (link: Ernie Hancock Interview ) with crypto-currency expert Sean Daley, with fighting for your freedom are significant. You are outnumbered, outgunned, and likely to be sold out by people you thought were your compatriots. Fighting a system which over a hundred million people still seem willing to pay taxes to support (while roughly an equal number are, apparently, unwilling) is probably a forlorn battle. So if you can simply be free without having to fight, why not?

I think it is worthwhile. I think you'd like the results. Avoid the system that oppresses you. Refuse, as Etienne de la Boetie urged, to hold up the tyrant, and he will fall. Even if "he" is a nameless, faceless bureaucracy. Even if that bureaucracy is financed by an international banking cartel that would rather you participate in their system and pay your taxes to finance the debts they've inflicted on your country, non-support is eventually going to bring about change. Refuse to don the manacles.

If you enter the SilentVault, you'll be glad you did.

Finance War No More

Tyrone Monday September 22, 2014

One of the most important arguments against the regulation of bitcoin by government is the opportunity inherent in alternative financial systems to avoid supporting the welfare/warfare state through the development of parallel systems.

I wrote extensively on this topic for exclusive publication at "The Daily Anarchist." No doubt, in future, I'll write about it, again. Here is the link to that essay:

Comparative Advantage

Tyrone Thursday August 7, 2014

When certain people in the bitcoin industry discuss their eagerness for regulation, they often do so in one of two really irritating ways. One of the ways in which such talk is circulated that is frustrating, irritating, and unpleasant, is the naive way in which certain people approach the idea of government and governmental regulations as though the folks in government were good, kind, nice, friendly public servants, always wanting to do what is best for the most people, and utterly without guile. This naivete is frustrating because it speaks to the ignorance, stupidity, and sheltered foolishness of people who ought to be able to learn more, think better, and be responsible for their own lives, but who don't want to. Learned helplessness is good for those in power, bad for those who want to live their own lives. And the learned helplessness, naivete, stupidity, ignorance, foolishness, and determination to go on leading sheltered lives where everything is someone else's problem are frustrating because a person just wants to shake those people up, maybe slap some sense into them, and that never works.

While it is very occasionally possible to find decent people in public service, the truth is far worse. The people who have power in bureaucracies generally speaking want more power, which means a higher salary, control over more money, control over a larger staff, and therefore greater status amongst those they see as their "peers." People in government circulate back into the private sector, not only after retirement, but often during the course of a career. A few years making decisions about an industry which clearly benefit some participants and harm other participants in that industry can generate enormous financial rewards for the people who make those choices. Even if they are fairly scrupulous about not taking bribes in the time when they are in public office, they often have conversations about jobs in the private sector after their careers are officially ended. Various efforts over the last century to "reform" the practices which are generally described as the "revolving door" between bureaucrats and private sector jobs have been pointless. The system works against the interests of some companies and in the interests of other companies, and those that get the benefits hire the people in government who have been giving them the benefits. We all know it happens, it happens in every major country, and there isn't anything that is going to be done about it.

In writing a letter about the debacle in catastrophic care in the 24 October 2013 issue of the New York Review, author David Goldhill describes the problems in an industry that has been extremely heavily regulated in the USA at state and national levels since 1877. "Adopting a version of Sweden's health care system won't make our health care like Sweden's; it will make it more of what it is already — undisciplined industrial policy made by a coalition of the naive and the self-interested."

Which brings me to sunny point number two. Many of the people who express eagerness for regulation of bitcoins are grotesquely mean-spirited. Their self-interest is not enlightened, but venal. They are mercenary in a short-sighted, vicious, and dishonourable way. Such people have made it clear that they want government regulations to exclude innovation and, to the shock of no one with a grain of scepticism, the first major state regulations, from New York, make innovation nearly impossible, and require that all innovative plans and procedures be submitted to the state regulatory agency so that no trade secrets can be kept within that industry.

The "coalition of the naive and the self-interested" or, as they might be better known, the foolish and the venal, is going to make things very expensive, very difficult, very dangerous, and generally bad - through lack of innovation and lack of participation - in an industry that could be vigorous, growing, and ground-breaking. The people who want regulations because they demand special privileges from government are, to put it simply, evil.

Understanding how this type of evil works, and why naive people should catch a clue before their actions and inaction harm a great many others, might be easier if we take a look at two industries, one that has been extremely heavily regulated for over a century and another which has hardly been regulated at all, since its inception. I don't expect any of the evil people who want to use the force and fraud of government to force their will on the rest of us and make everyone else suffer so they can have more money, power, and leisure, to be a bit less evil. Nor do I really expect many of the people who are extremely naive and form coalitions with the evil because they are too stupid to think things through are going to catch much of a clue. But the people who form the dynamic core, both within our industry and in other fields who are thinking about getting into it, who are neither interested in using the government to screw over their competitors, nor especially naive about anything, might find these ideas useful.

Goldhill's letter formed the inspiration for this essay. "Undisciplined industrial policy" is certainly the way to characterise the healthcare industry in the United States. There were medical licensing laws in Colonial America, but all of these were repealed due to the advent of effective innovations in healthcare, beginning at the start of the 19th Century. So, when I mention the extremes of heavy regulation in the USA since 1877, I am referring to the first medical licence act, that of the state of Alabama, which was passed in 1877 and has not been repealed since then.

Now, I can hear the naive drones beginning to stir. "But, Mr. Johnson, surely you don't imagine that licences for doctors are a bad thing?" And, of course, I do. I think they are a pernicious evil. Just consider, if you would, for a moment, the utter absence of licences for computer professionals. People who write, or have written, computer programmes, including myself, have done so for decades without any government licence at all. Do we have malicious computer programmes? Sure we do, but we have far more programmes that are effective, useful, and perform more or less as expected. Do we have hastily released computer programmes that don't do everything they claim, but are sometimes revised and improved on "upgrade" by major software development companies? Yes, we do. But we don't have any reason to expect less of that sort of thing from, say, Microsoft, if we make computer programmers get a licence in order to work in their profession.

"But doctors do things that could kill people." Hey, goofball, so do computer programmers. Professionals in a vast array of industries do all kinds of things, both as managers, and as line operators of systems, that can kill other people. The wonder of it is that so many people get killed every year in so many different ways without the people responsible, such as the General Motors management clowns directly, personally responsible for sending out faulty ignition systems, being arrested, tried in criminal or even in civil courts, and held accountable. If you've ever had a complaint against a licensed medical professional, you know that you are far more likely to get somewhere going after a claim against their malpractice insurance than you are in going after their medical licence. And, yes, I do oppose mandatory insurance laws, just another huge sop to the finance cartel; in the absence of malpractice insurance a practitioner would face the consequences of malpractice directly, so some doctors would buy insurance and others would be driven into bankruptcy for malfeasance, and still others would be careful, rigorous, and effective healers.

Writing in "The Early Development of Medical Licensing Laws in the United States, 1875-1900," Ronald Hamowy of the Department of History at the University of Alberta explains the specific background that motivated medical licence laws in the United States. His scholarly work can be found here: https://mises.org/journals/jls/3_1/3_1_5.pdf So if you have questions about what he wrote, consult his footnotes in that publication, please.

Prof. Hamowy writes, "By the 1870's, homeopathy, emphasizing minute doses of medication and the recuperative energies of nature, and eclecticism, relying on botanical and herbal remedies, had substantially altered regular medical therapeutics, lessening its dependence on large doses of metallic medicines and bloodletting and adding to its materia medica a host of new botanical drugs. The two sects had firmly established themselves as competing systems of medicine, with homeopathy especially popular in the large urban areas of the east and eclecticism concentrated in the midwest and south. Of the 62,000 physicians practicing in 1870, estimates place the number of homeopaths and eclectics at approximately 8,000, with homeopaths accounting for about two-thirds this number.4 American Medical Association statistics on medical schools and graduates for 1880 show that of the 100 medical schools in operation in that year, fourteen taught homeopathic medicine, graduating twelve percent of all new physicians, while nine schools taught eclecticism, from which close to six percent of all graduates issued.

"The economic condition of the profession being what it was in the 1870's, with no restrictions on entry into the field, a host of competing medical schools eager to graduate doctors in greater numbers, and heterodox medicine contending for the patient's dollar, regular physicians increasingly felt the need to effectively organize. Their goal was to enlist the support of government as a means of regulating the number and qualifications of physicians. The aims of orthodox medicine and its most effective and tireless spokesman, the American Medical Association, were threefold: (1) the establishment of medical licensing laws in the various states to restrict entry into the profession and thus secure a more stable economic climate for physicians than that which obtained under uninhibited competition; (2) the destruction of the proprietary medical school and its replacement with fewer, non-profit institutions of learning, providing extensive and thorough training in medicine with a longer required period of study to a smaller and more select student body; (3) the elimination of heterodox medical sects as unwelcome and competitive forces within the profession."

In other words, the "regular physicians" organised around the perfidious and evil American Medical Association, didn't want to compete. They didn't want to compete in the arena of ideas, they didn't want to compete with alternatives to their brutal and often pointless surgeries and pharmaceutical poisons, and they didn't want innovation. So they organised, they planned, and then they began pushing legislation. Low and behold, a great many naive Americans fell into line, believed newspaper propaganda about the imaginary problems the doctor cabal pretended were at the core of their work, and legislators fell into line. Okay, yes, it was the 1870s, so we can be sure that many legislators took bribes to pass legislation, much as they do today.

You can go ahead and do some research on your own to find out where the enormous powers of the Food and Drug Administration came from. You'll find that a novelist, Upton Sinclair, wrote a book that encouraged a racist, nationalist, militarist "Progressive" named Theodore Roosevelt to come up with a huge new government agency, entirely without constitutional authority for its many powers. You'll also find that the experiments with a radical treatment for morning sickness led to a huge number of birth defects and the dramatic extension of the FDA's powers in 1962. Today, Americans live with a very small cartel of truly enormous pharmaceutical giants controlling an entire industry, with the cooperation and complicity of the national government.

That other interesting governmental initiative of the 1870s, opposition to trusts and cartels that led to the Sherman Anti-Trust act of 1890 and other laws which purported to limit and regulate the consolidation of different industries, has very definitely fallen by the wayside. The people who opposed injustice, whether they were involved in labour unions, in public policy research, or what have you, seem to have utterly failed to act against the total consolidation of the finance industry (where five banks own more than half of all financial assets in the country), the total consolidation of the petrochemical industry (where the giant trust, Standard Oil, has mostly resurrected itself as Exxon-Mobil), the total consolidation of the pharmaceutical industry, the total consolidation of the automobile industry, and so forth. These consolidations leave only a small number of huge corporations running the vast majority of industrial production in their industries, with regulators pretending to keep them in line but actually giving them everything they want, to the disadvantage of all consumers everywhere, with dramatic reductions in innovation, direct attacks on effective products and services, and enormous concentrations of wealth and power among a tenth of a percent of the population.

Now, I'm not in favour of anti-trust laws, either. Why not? Because cartels, trusts, and monopolies do not exist in free markets. Where people are free to innovate and choose, there is competition. Competition is good, effective, and powerful. The people who inherit wealth hate it, so it must be good. Consumers benefit from lower prices, better products, and more new things to do.

If you look at the ultimate end points in these two industries, you see the health care industry becoming a huge government bureaucracy. We already know how Americans are going to be served by such a huge single-provider system. The Veterans Administration has been butchering veterans in its hospitals for as long as I've been alive, and has recently put so many thousands of them on waiting lists that some veterans actually died while waiting for health care. Recently, Congress passed and Obama signed, a bill authorising $18 billion plus for the VA system, so we can expect a lot more butchery, suffering, and death. Efforts to reform the VA have been endless, tireless, and pointless.

Again, you can go ahead and do some research on your own to find out what's been going on. Basically, the people who work in the VA, including nurses, doctors, and patient care schedulers, among many others, have been pointing out what's wrong. Because they have refused to accept shoddy results, these people have "complained." They have reported, fairly and accurately, to their superiors, what is wrong. And, because it is a government agency, they have been fired. They have been routinely dismissed, punished, demoted, re-assigned to horrid jobs, or otherwise attacked by their superiors for daring to look at the truth and daring to want something better.

That, my friends, is the new American way. The people who like government regulations want to make the whole world into a government agency. Ludwig von Mises correctly pointed out that such people have been willing to shed rivers of blood in order to make everyone a bureaucrat and every activity that of a government bureau. One researcher, RJ Rummel of the University of Hawaii, has written extensively on just how deep those rivers of blood have been running. His figure for the 20th Century is now at 262 million lives, as reported here: https://www.hawaii.edu/powerkills/NOTE5.HTM

In other words, if you want to be mean-spirited and unpleasant, if you want government to solve your problems, if you want to see what becomes of that path, you don't have to scratch very hard at the facts to find hundreds of millions of lives obliterated and millions more suffering because of government. I'm an anarchist, I don't believe there is any such thing as "limited" government and I don't think it is funny to hear of "good" government.

On the other hand, you have the computer industry. Beginning at the time of World War Two, very intelligent men and women began developing not only digital computer systems but also computer software to operate on those systems. As things progressed in the comparative peace-time of the 1950s and 1960s, computers became more powerful and computer systems that had filled very large warehouses with equipment were the size of small trucks. In the 1970s, micro-computers arrived, developed by extremely intelligent innovators like Steve Wozniak and dozens of others in the electronics hobby industry. Today you have a computer screen in front of you that probably represents an investment on your part of a few hundred dollars, possibly much less, that can do more calculations per second, is more useful, and takes up much less space than the most sophisticated computer that could be built in 1964, just fifty years ago.

Nobody in the United States licences the manufacturing of computer systems, the development of system architecture, the building and networking of computer systems, the development of computer components and peripherals, the development of two-dimensional or three-dimensional printers, the development of software, the process of learning to program computers, and the benefits are everywhere you look. Many hundreds of millions of people have more computing power in their handheld "cell" phones, each, than was available fifty years ago in the most magnificent computer installations on Earth. Communications cost less and are more extensive today than ever - we were promised video phones in the 1950s, and we finally have them, thanks to cheap computers.

The people who followed Frederick Taylor's concepts of scientific management were wrong, and, frankly, evil. The people who followed Karl Marx's concepts of nationalising industry were wrong, and, frankly, evil. The people who have wanted to build bigger government agencies have proven to be mercenary, venal, mean-spirited, and a bane to human existence. We aren't better protected, we aren't safer, we aren't better off because of government agencies, we are worse off. Americans pay enormous amounts of taxes and their out-of-control government borrows tens of trillions of dollars every year or so from an out-of-control finance industry, and the suffering inflicted worldwide as a result is legendary.

Regulation is bad. It is bad for you as a consumer. It is bad for your industry. Government is a pernicious evil, which, even when it is at its best, as George Washington once noted, is like fire - something very powerful to have under some control, something very destructive if out of control. All evidence since Washington's time has shown that there is no such thing as a limited government, they all get out of control.

Government gets out of control because it is beneficial in a really short-sighted way for people who can influence government to use the power of force and the power of fraud inherent in the nature of government to generate benefits for themselves in their industry. The doctors did it, the pharmaceutical giants did it, the auto giants did it, the banking giants did it, and many other industries have done it: they have used government to force consumers to deal only with them; they have used government to force their competitors out of business; they have used government to inflict suffering on hundreds of millions, and they have used government to get away with all these things, including murder.

The computer hardware and software industries illustrate that it isn't necessary to have government regulation to have a successful industry. The suffering and mass deaths of the 20th Century illustrate that the costs of big government are very high.

You should turn your back on government and choose freedom. The choice is yours.

You Asked For Regulations?

Tyrone Saturday July 26, 2014

The people who want bitcoin and similar currencies to be regulated by the New York state authorities which regulate financial activities in that state are going to get their wish. It seems like they are "really asking for it," judging by what has been issued by the regulatory authority there. Or, to paraphrase a famous Beatles song, "You say you wanna regulation? Well, you know, we'd all love to see the plan."

If you want to know all about that plan in New York, you need to visit this page: http://www.dfs.ny.gov/about/press2014/pr1407171-vc.pdf

Fair warning: that is the New York state government's web site, and it may want to run scripts through your browser to do all kinds of things you don't want. If you don't have something like "no-scripts" installed to your browser, you might want to review that choice.

In my career over the last few decades, I've worked in industries such as real estate development, port development, finance, accounting, management, consulting, and within information systems: software development, software documentation, custodianship of records for a healthcare enterprise, and digital currency systems. Naturally, I've encountered laws for these industries, been expected to have familiarity with these laws, and in some instances been expected to critique proposed laws and regulations on behalf of the enterprises I worked with. I've seen a lot of laws, and I've seen very few that come close to being as bad as the proposed regulations from the state of New York.

For example, and it seems trivial in some ways, but noteworthy in others, the proposed regulations are intended, quite clearly, from their timing among many other factors, to regulate Bitcoin activities in the state of New York. These regulations have been developed in order to establish regulatory control and authority over businesses that deal in the buying and selling of bitcoin. Discussions of these regulations dating back many months have indicated that bitcoin regulation was coming, that it was to be included in these regulations, and that people should sit up and pay heed if they were engaged in dealing in bitcoin. Not only has all the publicity and discussion of these regulations been about the bitcoin phenomenon, but also the regulations themselves, on page 35, refer to timing of virtual currency events being recorded on a "'block chain' ledger."

So, you would think, as a diligent and responsible consumer of legal documents, that the term "block chain" would appear in the definitions of the law in question. They use the term, they should explain what it means, don't you think? But the definitions pages, starting on page 4, beginning with Section 200.2 Definitions, includes (a) Affiliate and (b) Cyber Security Event, and proceeds alphabetically throughout, and does not include the term "block chain." So, when you get to page 35, if you don't know what a "block chain" is, you are out of luck. Turning back to page 4 isn't going to help. The definitions page makes no mention of bitcoin, either. There is no mention of blockchain-type virtual currencies in the definitions, nor anywhere else in the law, except suddenly on page 35, the timing of certain economic events is supposed to be recorded on this block chain ledger. Whee.

Yes, that is trivial. It is possible for a reasonable person to go out in the wild, connect to the Internet, and find definitions for block chain and lengthy, even academic, peer-reviewed discussions of block chain virtual currencies. But, in terms of law, things that aren't defined in the law shouldn't be included in the law. Unless, of course, you are promulgating bad law.

Now, from the perspective of freedom-loving, individualist, anarchistic persons, such as myself, people who have no reason to respect the concept of government, there are a lot of things wrong with this law that I wish to mention. The law talks very actively about the importance of money-laundering, especially the prevention of money laundering. Section 200.15 "Anti-money laundering program" runs to four pages, beginning on page 25 of the document. I should certainly take a moment to note that Section 200.2 never defines money laundering. Enormous costs for each licence holder are indicated in this anti-money laundering programme, alone. Enormous invasions of customer privacy and a clear requirement that the licencee spy upon all of its customers are indicated. The business costs and the violations of civil liberties indicated ought to be enough to give anyone pause, but nobody in the New York state department of financial services makes any effort even to define money laundering, let alone justify these regulations.

In fact, money is money, whether it is used for buying a bottle of wine, a bottle of water, or a bottle-rocket. Money isn't tainted by its contact with the merchant selling the wine, even though such sales are illegal in a great many nations where Islamic laws, and in many USA jurisdictions where Baptist and other religious convictions make the sale or purchase of alcohol illegal.

But, you say, in my musing mind, "What about the war on drugs?" And I reply, you mean, the war on individual liberty developed in the early 20th Century through a series of international treaties on "narcotics trafficking" which were created by racists, Progressive movement politicians, and diplomats determined to force their will on the entire world's population? You mean the policies which result in millions of arrests in the United States, each year, for the non-violent acts of owning, possessing, buying, selling, or using "illegal" narcotics? You mean the policies which deny and disparage the Biblical command by God to "behold!" that He has given mankind every herb bearing seed and every tree bearing fruit to be as meat (Genesis 1:29)? You mean the racist policies of discrimination, authoritarian control, and police brutality which are a direct subsidy to the military supply contractors, the prison industries, and the surveillance industries? You mean the unconstitutional policies that invoke "civil asset forfeiture" based on admiralty law to seize private property without trial and hold it until the erstwhile owners prove that it was not used in criminal activities? You mean the policies that result in tens of thousands of deaths each year in overdoses and gun fights over criminal turf and in fights with police because the racists who control the governments of the United States and its several states don't think people should be free to put "drugs" in their bodies without permission from the state, or a licensed doctor?

You can imagine how little I care about the drug war.

But, you say, in my imagination, "What about the war on terror?" And I reply, you mean the fake war on a strategy or tactic, the war on individual liberty posing as a means of protecting people from criminal and war-related violence but actually robbing those same people of their constitutionally guaranteed freedoms? You mean the policies to centralise responses to incidents which are, by their very nature, decentralised? You mean the policies of the USA and other nation states to pretend never to negotiate with "terrorists" while frequently encouraging terrorists through clandestine activities and very frequently negotiating with them? You mean the policies to prevent the free flow of persons and goods over national borders so as to maintain control over territories and populations, to secure for existing nation states a continuing supply of tax dollars and fees without any possible threat of rebellion, insurrection, or non-compliance?

You can imagine how I am not taken in by the lies told and the hobgoblins shaken in the faces of the public in the name of fighting "terror."

But, you say, "What about human trafficking?" And, I am very much against slavery, including slavery for sex, including slavery for child pornography. I am in favour of consent in human relationships, which is why I oppose not only these forms of slavery, but all other forms of slavery, such as taxation without consent, and regulation without limit. It is my view that human trafficking is not being reduced by having more and more espionage, including by financial institutions on their own customers. Anti-money-laundering laws are not ending human trafficking, and won't.

There is no justification for invading your privacy, attacking your civil liberties, and turning financial enterprises against you that I would find agreeable. You cannot make doing evil things okay by saying that it is meant for a good result. The saying that the road to hell is paved with good intentions may relate to a similar saying by Jesus, quoted in Matthew chapter 7, verses 13 and 14, that the gate which leads on to destruction is wide while the one leading to life is narrow. Or, to quote Shakespeare, "Show me the steep and thorny way to heaven, Whiles, like a puff'd and reckless libertine, Himself the primrose path of dalliance treads," and heeds not his own warnings.

If the government should not engage in anti-money laundering practices itself, and it seems clear that it should not, then it should not require such activities on the part of its licence holders. So, why do you suppose the State of New York has promulgated these regulations, including the extensive anti-money laundering section?

It seems very clear from the responses we've seen in the part of the online media devoted to the bitcoin industry that the proposed regulations are not a spur to greater innovation. Indeed, the regulations specifically prohibit innovation in section 200.10 which requires prior written approval for any "material change" such as introducing a new product, service, or activity, or changing an existing product, service, or activity. Moreover, innovation is discouraged in a number of uniquely regulatory ways by requiring the disclosure of business plans and strategies in the application (200.4, item a 8), and in reports and disclosures (200.14, item a 3). You are a trusting soul indeed if you believe that the things you put on your application and in your reports and disclosures and turn over to the New York state government are going to be kept private from your competitors.

It also seems clear from the comments we've seen on these regulations and from the regulations themselves, that enormous costs are indicated. Our own technology chief, Justin Turrell, said in his first reaction to the regulations: "Utterly draconian, completely unworkable, and probably nobody who isn't already a bank would be willing or able to comply. Which may be the intention."

My own review found specific problems such as: 200.2 (a) affiliate is defined to suggest criminal conspiracy; (d) fiat currency refers to a law http://www.law.cornell.edu/uscode/text/31/5103 identifying legal tender but not establishing any punishment for refusing to accept it; (h) does not have any geographic limitations on persons coming under the jurisdiction of this supposed authority; (j) is so defined that a person can be a principal shareholder without owning any stock; (m) defines virtual currency to include bullion, coins, and other manufactured items such as tokens; (n) defines virtual currency business activity very broadly to include any receipt of virtual currency; 200.3 prevents anyone without a licence from accepting virtual currency unless exempt as a merchant or consumer (thus, anyone); 200.4 (a) (2) and (3) requires very complete lists of names and particulars invading the privacy of everyone involved in the licence holder; (5) by requiring fingerprints you are presumed criminal and by requiring photographs you must participate in the fallacy of the identity state; (7) none of your officers have any financial privacy and must incriminate themselves through extensive disclosures; (8) all your strategies and advantages must be disclosed and will get around to your competitors; (11) you are presumed guilty; (13) you have to explain things to the ignorant people who claim authority to regulate you; 200.4 generally: you apply, they deny, until you run out of money; 200.5 fees are not refundable no matter how frivolous their reason for denial; 200.6 (a) extensive weasel words about the confidence and trust of the community and the efficiency of applicants that makes it clear that anyone can be denied unless they have a very cozy relationship with the superintendent; (b) you cannot expect any results because the superintendent can extend the time he/she has to review your application as much as he or she wants; (c) additional weasel words to allow any licence to be revoked for any reason or no reason so you cannot expect to keep a licence unless you already have enormous economic power; (d) revocation comes after an administrative hearing, there is no appeal process indicated; 200.7 (a) you must comply with millions of pages of state and federal regulations without fail; (b) and be able to prove that you have done so at whatever that costs you; (c) you must spend (as entrants into heavily regulated industries such as Tesla Motors seem to have done, for years and to the tune of millions of dollars) on compliance with regulations even if you are not yet or have ceased doing business; 200.8 (a) your books are completely open; (a) (4) if you are a bank or otherwise already regulated you may be presumed to have carte blanche if we understand this section correctly; (c) you cannot keep any earnings or profits in gold, silver, virtual currencies, shares of your own stock, or in any way but certificates of deposit, money market funds, state or municipal bonds, USA government securities, USA government agency securities - in other words, there is no escape from inflation, and this provision is obviously meant to extend further funds to the out-of-control warfare and welfare state that has to be financed with endless debt upon debt; 200.9 (a) the superintendent can require a bond of any amount at all, can change that amount at will, and can close your enterprise if you don't get all the bond to satisfy the superintendent that the bonded amount is acceptable, and your enterprise can have a completely different bond amount from every other enterprise even if they are exactly the same as you in all major ways, and you have no appeal to anyone else, ever; (b) you cannot have any fractional reserve of virtual currency in your operations, which is going to be a source of dismay to the banking cartel that the New York state department of financial rigmarole is usually jumping through hoops to please; (c) don't go using client funds without their knowledge the way various brokerage and banking concerns during the 2006-2013 financial crisis have been proved to have done; 200.10 see above concerns on innovation being prohibited; 200.11 (a) you cannot sell your controlling interest in a licence holder without permission; (a) (2) control does not apply to enterprises that are not stockholder corporation type; (a) (3) change of control takes longer than it does to get a licence in the first place, and this time may be extended indefinitely, so you can be prevented from selling your ownership forever at the whim of the superintendent, and, oh yeah, you still have no way to appeal any such action by the superintendent; (b) you cannot merge without permission; (b) (1) you have no privacy; (b) (2) it takes less time to get a licence than to get a merger approved, the merger review time can be extended at the whim of the superintendent; you cannot appeal any part of the actions of the superintendent ever; (b) (3) extensive weasel words to excuse the superintendent for refusing a merger for no reason; 200.12 (a) you have to keep data for ten years or more, which is longer than phone companies are required to keep the records of phone calls, texts, and Internet activity for the federal espionage agencies; (a) (6) you have enormous costs to keep all this information; (b) you have no privacy; (c) a time period is referenced from an Abandoned Property Law, which is not cited as to what chapter of which part of the New York state code it might be found in, and the time period itself isn't indicated - presumably there is a definition fail here, as well; 200.13 (a) at the whim of the superintendent you can be examined every hour of every day without recess; you have enormous costs for examinations which you bear entirely; there is enormous uncertainty about doing business anywhere else in the world if you have a licence; there is no way to know whether you will be allowed to continue operating because of the onerous nature of the examinations; you have no right to appeal at all, ever, any whim of the superintendent; 200.14 (a) more costs for quarterly reports; (a) (3) your plans are going to be exposed; (b) more costs for audits and preparation of financial statements; (b) (2) more costs for proving compliance with everything under the Sun; (b) (3) guess who is totally responsible for the accuracy of all those reports and statements and has no right of appeal, ever; (c) merely being arrested or sued, even in the case of a frivolous suit, can jeopardise your licence, and any conviction includes the promise of double jeopardy, being punished again by the licensing authority; (d) you have to be able to calculate the value in fiat currency and be responsible for what you've filed with the New York department of financial shenanigans, but you have no control over the market, so good luck there; (e) you have to report yourself and give up your Fifth Amendment right to be safe from being required to incriminate yourself; (f) at the whim of the superintendent you can be required to spend all of your time filing additional reports on anything, at any time, and in whatever way the superintendent demands; you continue to have no right to appeal any part of any of this stuff; 200.15 you have to have accounting in USA dollars the value of which you have no control over; 200.15 (a) you have to pay for a very expensive and comprehensive risk assessment that you probably won't ever find useful; every year or at the whim of the superintendent you have to conduct additional pointless risk assessments that, oh, by the way, won't reduce any risks; (b) you have enormous costs for anti-money laundering compliance; (b) (2) there is a cost here that is an obvious sop to the companies that do "independent testing for compliance," so, yay for more regulatory capture; (b) (3) there is someone at your company they will come arrest, so, keep this person terrified; (b) (4) enormous costs for training so that everyone is always afraid and wants to rat on everyone else; (d) (1) your customers cannot have any possibility of privacy, and if they provide an address which is not physical you are in violation; (d) (2) there are endless reporting requirements, and a $10,000 limit per day per person plus (g) (4) requires special orifice probes for any customer wanting to do more than $3,000 in business with you, ever; (d) (3) you are required to spy on your customers and, you have to pay the costs for doing so; (d) (3) (ii) even if you aren't otherwise required to pay for filing some federal forms, you have to file other forms, at the whim of the superintendent; (e) you are liable for assisting in structuring whether or not you have material knowledge that a customer structured transactions to avoid some of the reporting requirements; (g) (1) you have to know and spy upon your customers; (2) all foreigners are suspected of being criminals and you should discourage them from doing business with you, or else; (3) if a business enterprise doesn't have some brick and mortar "physical presence in any country" you are in big trouble if you do business with them, because bricks and mortar are good; (j) you have to designate a scape goat and pay to have that person do an enormous amount of stuff; yeah, no appeal here, either; 200.16 (a) don't ever have your computer security fail; (a) (3) don't fail to detect intrusions; (a) (5) you have enormous costs here; (c) designate someone they can come arrest; (e) enormous costs for audit, penetration testing; audit trail; reconstruction tracking; tamper protection; logs; records; source code reviews; (3) your source code will be reviewed, and presumably exposed to your competitors; (f) you have enormous personnel costs in hiring, training, and updating; 200.17 you have enormous costs in business continuity and disaster recovery, and you better be able to prove you've already spent this money by the time you apply or "no soup for you!"; also in this section, you don't matter in the event of an emergency; 200.18 There are enormous costs to comply here, you aren't allowed to make any errors in your advertisements, there is a clear restraint of trade by the NY state department of funny business, and there are identifiable prior restraints on your freedom of speech; you have to keep hard copy of your ads so more trees will die; oh, and no right to appeal; 200.19 there are some hints here at multi-language support, so be ready to pay more to comply; there is in (a) (1) prior restraint on your free speech; (a) (2) you are required to instill fear of political risk in your customers; (a) (4) you have to talk about the block chain, whether your virtual currency is a block chain currency or not, and you have to include weasel words about event timing here; (a) (6) you have to include weasel words to discourage all of your customers; (b) more language support, more costs, more fear that you must instill in your customers or else; (d) you have to have one of those nonsensical acknowledgement of disclosure buttons that implies you have disclosed things that most of your customers didn't read and will ignore; (e) you have to have a very expensive system for handling all complaints, however frivolous; (g) don't engage in fraud, unless it is one of the many types of fraudulent misrepresentations inherent in fiat currency, investing your retained earnings in doubtful government securities, and misrepresenting how the NY government is pretending to protect consumers; you have to pay for an anti-fraud policy that complies with bizarre standards; you have no rights to appeal any of this part, either; 200.20 complaints are also part of the costs you will bear, and, oh, you have to testify against yourself; 200.21 there will be a brief grandfather clause if you were already doing business when all this stuff becomes the law of the land, so submit an application within 45 days or fail; if you have applied and were already doing business, you are in compliance, unless the superintendent has a whim.

Well, that was a long run-on sentence, wasn't it? But you were going to have to scroll further if I broke it up and put it into paragraphs, and you were only reading all of it for the laughs, anyway. The page count of these regulations is considerably longer than the original white paper by Satoshi describing bitcoin. Talk about regulatory overkill.

What it all amounts to, it seems clear, is a department of financial services operating in cooperation with the major banks based in New York in restraint of trade to curtail innovation, competition, and consumer choices in the financial services sector. What's that? A government-big-corporations conspiracy operating in restraint of trade, therefore violating the various federal anti-trust statutes? The deuce you say!

But, even the vaunted Federal Reserve recognises that the finance industry is a cartel operating in restraint of trade, as they report here: https://www.dallasfed.org/assets/documents/fed/annual/2011/ar11b.pdf

A couple of brief excerpts: "As a nation, we face a distinct choice. We can perpetuate too big to fail, with its inequities and dangers, or we
can end it. Eliminating TBTF won’t be easy, but the vitality of our capitalist system and the long-term prosperity it produces hang in the balance." So, doom, right? And if too big to fail is a big problem in the existing finance industry, having the New York state department of fail services promulgate rules favouring the too big to fail entities in the virtual currency realm, too, is not helping.

In Exhibit 2 of the Dallas Fed report quoted here, the consolidation of the financial assets of the United States by the top five banks, which as of 2010 held 52% of the financial assets of the country, is examined. As recently as 1970, that was only 17% of the financial assets. The Dallas Fed comments, "Concentration amplified the speed and breadth of the subsequent damage to the banking sector and the economy as a whole."

My point here is that the government's own agency for consolidating financial assets, the Federal Reserve, is saying that concentration is a bad thing. Moreover, it is saying that it is a problem created by the government's policies. Yes, the big banks help the government make bad policies that advantage them, but the government should have power to stop doing stupid things, unless, as an anarchist would say, government cannot stop being stupid.

So, you have to wonder, who are the financial contributors to the campaigns of the prominent New York state and federal politicians who have been clamouring for the New York state department of financial fail get going with these regulations that clearly have high costs to the virtual currency businesses and clearly advantage the existing banks? Could it possibly be that those politicians are getting campaign contributions, and, who knows, may be pay-offs, from the big banks?

We don't always quote as extensively from people we admire a great deal as we might, so here is something that should remind Ayn Rand enthusiasts of a conversation between Dagny Taggart and her brother Jim Taggart about how to really get ahead: http://www.freemansperspective.com/business-success/ It isn't about knowing anything, doing anything well, it is all about getting the people who have power to use that power against the businesses you compete with, and for you, and keep them happy through bribery. Isn't that...special?!

If you are wondering how we, at SilentVault, are preparing to comply with the New York state regulations, you'll be pleased, we think, to learn that we have complete terms of service coming soon to this web site. Our terms of service will be based on our technology, and the technologies we use (Voucher Safe, among others) that enables our system to function. We are very, very severely limited in what we can do with the technology of SilentVault as it exists:

We cannot tell who holds which wallet.

We cannot tell what assets are in each wallet.

We cannot prevent transactions from taking place, for any reason.

We cannot report on transactions in any way.

We have no way of discovering the identities, addresses, IP addresses, nor age, gender, religious preference, skin colour, fingerprints, nor photographic likenesses of any of our customers.

We would have no way to help send you to a death camp if, in complying with anti-money-laundering regulations, we were required to spy upon you, report on your activities, or identify you.

In other words, by silencing the block chain, by implementing effective technology, and by providing for person to person transactions, SilentVault is enabling economic privacy in ways that are not available anywhere else.

The freedom you protect may save your life.

Clash of Civilisations

Tyrone Sunday July 20, 2014

The following essay was published at The Libertarian Enterprise on 20 July 2014. http://ncc-1776.org/tle2014/tle780-20140720-02.html

Clashing Civilisations

by Tyrone Johnson

Attribute to L. Neil Smith's The Libertarian Enterprise

In the July 13th, 2014 issue of The Libertarian Enterprise, our intrepid editor quotes someone named "Tom Kratman" posting at a blog site called "Vox Populi" that "we're stuck in a self reinforcing cascade of civilizational decay."

First a few quick points about the blog site, Vox Populi. It appears to be a site maintained by Theodore Beale writing under his pen name "Vox Day." Anyone who can be purged from the Science Fiction and Fantasy Writers of America must have at least a few interesting things to say. I expect to visit that site again in the future, and I thank our editor for the pointer.

Are we "stuck" in a cascade of civilizational decay? Goodness, that sounds very scary. One has visions of being caught in an avalanche or mud slide, clearly nothing to joke about, although it necessarily makes one feel there is some sort of slippery slope involved.

Other writers have considered the possibility that civilisation is in decay. Kratman might enjoy some of the writings of Thomas Hobbes, a wicked authoritarian with lots to say about centralised power and authority. Or he might consider "Uneasiness in Culture" as its title might be transliterated from German, or, more commonly, "Civilization and Its Discontents," by Sigmund Freud. This book was first published in German in 1930.

Freud has some impressive thoughts on the topic. For example, he wrote, "Most people do not really want freedom, because freedom involves responsibility, and most people are frightened of responsibility."

In the same book, Freud writes, "It is impossible to escape the impression that people commonly use false standards of measurement - that they seek power, success and wealth for themselves and admire them in others, and that they underestimate what is of true value in life." You know, things like freedom, beauty, grace, possibility, enlightenment, knowledge.

One so very rarely finds a writer speaking openly in favour of mass murder. But Kratman does. He says he has an "holistic solution" to the cascade of civilisational decay, to whit:

"Kill all the common law felons in custody. Round up and kill all the people ever convicted of a common law felony currently at large without clear and convincing evidence that they have amended their lives (job, wife, home, no further crimes of any kind). For us, that's probably in the range of 6 million people. And then we need to round up the progressives and kill them too. (Why do we call them "progressives," anyway? Their job isn't progess; it's decay.) And then use all the overmilitarized police and prison guards to round up and kill or deport illegals."

My, my. He starts with six million people, which figure happens to correspond to a rather notorious number widely used in descriptions of the Holocaust in Nazi Germany, that is believed by many to have resulted in the deaths of at least six million Jewish persons, and probably tens of millions of German cripples, mentally handicapped, socialists, anarchists, communists, homosexuals, dissidents, Jews, and Europeans caught in German-occupied territory who were either opposed to Nazi aggression or members of some race the Nazis thought should be exterminated (which included Jews, Slavs, Poles, Russians, Gypsies, and a good many others).

A person has to really wonder about anyone who calls for mega-deaths on this scale. So, I visited the link to the Vox Populi site that was so helpfully provided by our editor, Ken Holder. To my surprise, Kratman begins his piece (after a throw-away comment denigrating anarchists as being unnecessary) with a fairly calm paragraph asserting that more than 0.33% of the population should not be police, or bad things result.

That is, he says "The usual and reasonable percentage of cop to citizen is about 1 per 300 or so. ... But 1 to 300 is it; any more than that and you start letting in too many hyperactive yet not too bright, violence prone sorts. (Obviously I don't have a problem with violence; I have a problem with excessively and needlessly violent police.)"

So, I took 1, divided by 300, and converted to percent form. Then I went looking for data, and I learned that a huge number of American cities have a much, much higher ratio of police to "citizens." In particular, all 101 cities listed here have as much as 19.6 cops per 300 citizens (Washington, DC), and no fewer than 7.53 cops per 300 citizens (Boca Raton, FL). It was really, really easy to find that study, and I can only wonder why this data wasn't used by Kratman to suggest, oh, say, dramatic reductions in the size of police forces throughout American cities.

There is a saying going around lately that "orange is the new black." In other words, the orange jump suits issued to prisoners, represents the new group that is being discriminated against. In the 1960s, as some of you recall, a great many black men and women stood up against decades of repression and systematic, legalised, government-enforced discrimination to win a great deal of change. Many people from northern states, both black and white, went to Mississippi in 1964 to challenge the endemic and socially-accepted racism of the national Democratic party. Although they did not succeed in getting their delegates to the racist Democratic national convention seated that year, their work was vital for the subsequent passage of the voting rights act.

So much progress has apparently been made that, even more recently, the Supreme Court ruled that forty years of "affirmative action" in college admissions was enough, and schools could go back to being "colour blind" on admissions. Similarly, the Supremes have evidently determined that the states which were so violently racist in their administration of voting laws in the period before the voting rights act can, now, fifty years on, stop being monitored closely.

Orange people, however, seem to be a different class, an actual "untermenschen" to judge by Kratman's call for their extermination. By orange people I am not necessarily referring to those like Republican John Boehner who use excessive amounts of fake tanning skin treatment, but only those convicted of some crime in the United States. I say "not necessarily" since I cannot express much optimism that Boehner won't ever be convicted of a crime.

Notwithstanding that decades of research makes it clear that the death penalty does not deter crime, and, indeed, that the cessation of executions in some places has correlated with a decrease in homicides, Kratman enthuses about setting up a system to review the "convincing evidence" that persons convicted of a "common law felony" by which I assume he means a violent or major-property crime, should be allowed to live (in other words, reversing the presumption of innocence and insisting that convicted criminals must be killed unless they can plead that they have changed their ways). I should probably bother to offer at least a link to some other links about how the death penalty fails, in case anyone isn't up to date on this topic. Links There are various links to criminology studies, views of police chiefs, and a national research council study of studies (meta-study) that concluded that there is no evidence that the death penalty has any deterrent effect.

So, what is to be gained by slaughtering 6 million people who once wore orange jumpsuits? Presumably, there will be a whole bunch more ammunition sold. Maybe Kratman thinks he can cash in on the extermination technologies by investing in the contemporary equivalent of Zyklon B. Or, perhaps he is happier under a system of brutal authoritarianism.

Consider Freud's idea that law and order, power, and wealth, are not really the great things in life. If beauty, grace, technological innovations, creative ideas, freedom, possibility, enlightenment, knowledge — if these things are the great parts of life, then what is "civilisation" and its law and order enthusiasts doing for us? Is it bringing about an elevation of the spirit of mankind, such that persons who are very sensitive, creative, and intelligent are able to feel good about themselves, write great works of literature, create great works of technology, make and do great things? I suspect that the civilisation that Kratman wants around him does nothing of the sort.

Rather, I think, the police state serves to obliterate that spirit of intelligence, sensitivity, and creativity. "The greatest of spirits can be liquidated if its bearer is beaten to death with a rubber truncheon," wrote Adolf Hitler in Mein Kampf, published in German in two volumes in 1925 and 1926.

My purpose in mentioning this viewpoint is to suggest that what Kratman is perceiving as a cascading failure of civilisation might be something else, entirely. I suggest another quote from Wide Is the Gate by Upton Sinclair, "I believe I would point out to them that the increase in employment...is based entirely upon the manufacture of armaments; also, it depends on the piling up of debts, and so it cannot go on indefinitely. It can have but one end, another slaughtering.... It is obvious that when a nation turns its whole substance into war materials ... the time will come when that nation has to go to war — it can do nothing else because it is equipped for nothing else...". Sinclair's novel was published in English in January 1943 at a time when the German and Soviet armies were busy bleeding the snow red along an enormous Eastern front, eighteen months before the British, French, Polish, and American forces would stage their landings on the beaches at Normandy. Although I certainly don't agree with much of Sinclair's views on economics, I think he was well-positioned to think deeply on authoritarian cultures, including his own.

How likely is Tom Kratman to find himself arrested? There hasn't been a lot of good data on that topic, but a recent study, "Sexual Victimization in Prisons and Jails Reported by Inmates, National Inmate Survey 2011-2012" available at bjs.gov from the Bureau of Justice Statistics, has some interesting facts to report. It notes that 3.2% of all people in jail, 4% of all people in state and federal prisons, and 9.5% of all those held in juvenile detention facilities were sexually abused in their current facility during the preceding year. Most of these sexual assaults were committed by guards in the detention facilities, and most of the victims were sexually abused more than once a year. Among the other disturbing facts in the report, it says that 13.6 million people were arrested in the United States in the 12 months ending mid-year 2008.

In other words, the "justice" system arrests, tries, and attempts to convict, quite a lot more than twice as many people as Kratman thinks are likely to have committed a "common law felony." Or, as our editor notes, "that's the way it is in the American Police State, July 13, 2014."

But, wait, there's more! Kratman does not only want to slaughter those convicted of felonies, to the tune of six million, he also wants to "round up and kill or deport illegals." What is an "illegal" person?

Is it illegal to be a human being in certain circumstances? I gather from his follow-on notes, "Then put them on the border to our south, and on small patrol craft at sea. They'll be happier, and so will the rest of us," that Kratman means persons who are not documented by a national government and are, therefore, not supposed to have residence nor travel nor work activities inside the United States. Funny thing, though, how the United States Congress passed laws signed into effect by Republican president George W. Bush in 2008 that have dramatically increased the number of "illegal alien" visitors to the United States.

One of my associates at work noted recently that at SilentVault, "we focus mainly on economic and financial regulation, but of course other forms of regulation do not work any better, and there's no reason to expect them to do so. For example, consider this news article

"'Many of the hundreds of thousands of illegal aliens who have been crossing America?s southern border in the past few months are purposely surrendering to Border Patrol because they know they will be sheltered, fed, transported deeper into the U.S. and ultimately released with a court date so far into the future that it doesn?t really matter."


"'Even if they did show up to their court date, what we're going to start seeing is what we call the "anchor babies" because these court dates are being set from what I understand so far down the road that these people are going to come here, settle in, some of them are going to have children, and those citizens are now United States citizens.?

"So, due to the inherent absurdities of laws about 'citizenship' and legal process, "illegal immigration" cannot be prevented so long as enough people are doing it. All folks have to do is: 1. Cross the border. 2. Get caught. 3. Within the next three years, have a baby within US borders. 4. Don't bother showing up for court date. 5. If caught again, display child who cannot be deported.

"Of course Alex Jones and his fellow right-libertarian types are foaming at the mouth about how bad this is. Securing the borders is one of the few functions even Ron Paul-ers think the feds should perform, and there *is* some evidence that immigrants are being recruited as Democrat voters. But really it's another example of regulatory failure and statist absurdity. Mexico is said to be a failed state, and American constitutionalists direly predict the same will happen to the USA. But as Jeff Berwick says, 'You say that like it's a bad thing!'"

Let's try to put a figure to the number of "illegals" who are currently in the United States illegally. We'll give Kratman a break on all the formerly "illegal" persons who have subsequently been given amnesty, and assume for a moment that he wouldn't want to also slaughter all of them. Figures vary, but it seems that the "illegal" immigrant population declined from 12.5 million in 2007 to 11.5 million in 2011, according to wikipedia A more recent article puts the current figure at 11.7 million.

Finally, Kratman wants to exterminate "Progressives" because "their job isn't progress." He seems uncertain about who would actually be a Progessive. His uncertainty seems to mirror national polling data for Americans on this topic. Link Apparently as many as 12% of adults in the USA think they are Progressives, though 54% are unsure. If we take a rough figure of 317 million Americans, then 12% of adults would be a further 38 million.

Mind you, Kratman might want to demolish part of the monument at Mount Rushmore, since Theodore Roosevelt was very clearly a Progressive. The Progressive Era in the United States (1890s to 1920s, mostly) is associated in the minds of some people with expanding democracy, including women in the voting population, putting government agencies in charge of many industries, breaking up national trusts to further limit corporate power, and creating other new national enterprises, such as national parks. Of course, the people most closely identified with Progressive politics, namely Theodore Roosevelt, William Howard Taft, and Woodrow Wilson, are also closely identified with overseas adventurism, military occupations of the Philippines, Central America, Cuba, and other places, and an incredible race hatred. Wilson was so horribly racist that he segregated the civil service bureaucracies of the government. Roosevelt was so racist that he insisted that Filipinos were not capable of self-government. Many Progressives promoted the ideology of eugenics — the killing of inferior persons — so Kratman might feel at home with that crowd. Wilson was also extremely fascist, creating a brown-shirt organisation called the American Protective League, forcing the country into war, and promoting the Federal Reserve and other major interventions into free markets. Prohibition and other interventionist policies are directly associated with the Progressive agenda. The Federal Bureau of Investigation, the Black Chamber, and other domestic espionage operations are directly a part of Progressive policies.

Kratman then defends his mass murder ideology by saying, "That's all pretty harsh, right? Unjust? Horrid? Horrible? Unthinkable? Yeah, well, the collapse of civilization, which is where we're heading, is going to be a lot worse, and to much more innocent people. Think little kids turning on spits over low coals." I'm not so sure. With 55.7 million persons slaughtered to fulfil the policies Kratman outlines (felons, including those who have served their complete sentences; "illegals;" and Progressives), would we be further toward, or further away from, the collapse of civilisation?

Really, think about it. A police state, a national government that spends more on military activities than every other nation on Earth, and about 38.8% of the total spent worldwide (see here for details), which cannot itself treat the veterans chewed up in its wars of overseas aggression without putting them on waiting lists for months at a time (visions of what national healthcare managed by the USA government might look like) until some of them die waiting for medical attention, which is run by people who might generously be characterised as Freud did as people who "seek power, success and wealth for themselves and admire them in others," and would more accurately be characterised as sociopathic, psychopathic, homicidal, misanthropic maniacs, is not civilised.

Let me say that again: the United States government is a police state, run by maniacs who hate humanity. The United States government is not civilisation.

I believe that what Kratman is saying about civilisation is really true only of that concept of law and order that he finds virtuous. The United States government is failing, and one can certainly point to the large number of people arrested, the large number of people entering the country illegally, and the large amount of disregard for the government's policies by ordinary American civilians, as evidence that the government as a nation state in control of its territory and population is failing.

But is that a bad thing? A police state isn't civilisation, so its downfall isn't bad news.

Rather, on the contrary, there is something else entirely different happening, right now, which is important. For over two hundred years, Americans in particular and a great many others all over the world in general, have been against the central state. Consider the actions of the American patriots of 1775, the words of people like Patrick Henry, the destruction of the Bastille in 1789 by French peasants, the revolutions all over Central and South America, the slave uprising that resulted in the freedom of every slave on the island of Haiti, and the many other struggles for individual liberty in the two centuries since then. Consider the generations of men and women all over the world who believe as they were taught that "all men are created equal," that men and women are most human when they are most free, that freedom in individual affairs is a positive good, and that government is, at its very best, when very thoroughly limited and controlled, a "necessary evil." Consider the people like George Washington who consider government to be like fire, useful if controlled, terrible if unleashed, and then consider another type of civilisation.

Think, if you would, please, about a civilisation built by men and women who want their children to have more freedom than they do. Consider, then, a world in which you don't hear the imperative voice, "Call now!" and "Obey orders!" in both commercial and governmental promotions, but in which you hear requests followed by courtesy words like "please." Consider a world in which the centralisation of power is understood to be a fundamental mistake, in which the collection of great databases of information is recognised as evil, and in which people are free to operate communications devices without constant surveillance being possible, let alone conducted by their own governments. Consider a world in which people are so free of centralised, bureaucratic regulation that they can invent new tools and technologies, build flying cars and fly them without licences, develop launch systems and travel to the Moon or Mars, see great works of art on the walls of their home, or on their computer screens, and live just as they please, all the time.

Think about what you would do with much greater freedom, with control of much more of the wealth you create, the "income" you earn every week. Think about how you could make your life better, and possibly make the lives of others, in your family, in your neighbourhood, or on your planet, better. Then imagine what it would look like if all the systems of control, of police authority, of surveillance, and of enforcement that intimidate you, that concern you, that worry you even a bit in the back of your mind, were gone.

Doesn't that sound much more like civilisation? Doesn't that sound like a world worth your time, your energy, and your creativity?

If so, if that's what you want, don't just sit there. Get busy. Figure out how to arrange your affairs better so that you keep more of your own money. Figure out how to undermine the systems of surveillance, command, and control that burden you. Contribute less to the system that abuses you and undermines your freedom. Build a better future.

It's your life. You choose.

Tyrone Johnson is SilentVault's key person for marketing and business development. He has experience in business operations in Europe, Africa, Asia, and North America. Johnson has a classical education in the arts and sciences and a graduate degree in business. He has worked in mainstream banking, alternative currencies, technology development, and management consulting. He is working on the August 2014 launch of SilentVault.com digital currency wallet service.

Centralisation Is Bad

Tyrone Monday July 7, 2014

Centralisation is a bad idea. Its disadvantages include a reduction in choices, quality, and opportunity, an increase in arbitrary order, and a concentration of power. Given its various disadvantages, why has it been so frequently adopted? Centralisation generates benefits to those at the centre of power.

So, while the choices available to everyone else from a centralised system are fewer, the quality lower, the opportunities less, those are not things the people at the centre care very much about. Oh, sure, having fewer automobile companies to choose from by haivng a high level of government regulatory barriers to entry makes it worse for the consumer, but the people who operate those automobile companies aren't concerned about the consumers. How do we know?

We know that the people who run General Motors do not care about the consumers of automobiles because they kill drivers with shoddy products. Consider the deaths, at least thirteen that we have been told about, of drivers from an ignition switch error. (In this article: http://articles.latimes.com/2014/mar/13/autos/la-fi-hy-autos-303-deaths-linked-to-recall-gm-20140313 the figure is much higher.) General Motors seems to have known about the error as early as 2004, or ten years ago. Recently, GM executives determined that they would need to offer a million dollars, or more, to be distributed amongst the survivors of those thirteen dead people. A few months ago, GM executives determined that they would have to recall millions of cars with a similar problem. How did millions of cars get on the roads with a problematic ignition switch? Obviously by GM being able to release cars for as many as ten years with the same problem, with utterly no care for the consumers.

The GM ignition switches are not the first design flaw in an automobile released by one of the three remaining "major" or centralised car companies, GM, Ford, and Chrysler, in the United States. Recall notices go out from time to time for foreign made as well as for domestic cars. Many of these recall notices are for issues that could potentially kill the drivers. Sometimes more than 13 drivers are killed before the problem results in a recall. Viewers of the film "Fight Club" may be familiar with the mathematics, the calculation that the cost of the recall be less than the amount of damages the automaker would actually have to pay out in lawsuits if drivers can prove that the defects caused actual harm. (An overview on product recalls going back to 1959 in several industries and countries is found here: http://en.wikipedia.org/wiki/Product_recall )

Centralisation is used in many other ways. The creation of empires by European countries during the sixteenth, seventeenth, eighteenth, and nineteenth centuries resulted in the world map having about 115 countries by the year 1914. Several thousand other groups, tribes, clans, and ethnic populations were consolidated into major empires, including those of the British, French, Spanish, Portuguese, German, Italian, Russian, Dutch, Japanese, American, and Ottoman empires. Even Belgium got into the act with the conquest of the Congo. Somehow, all this consolidation didn't produce enough bad effects, so under Lenin and Stalin, the Soviet Union created its own empire. China, which had been rather thoroughly fragmented by imperial European powers in the 19th Century was re-consolidated by Mao in the mid-20th Century.

Just how many "countries" have been consolidated out of existence? There are about 600 native clans and tribes in North America, something like 2,000 distinct ethnic populations in Africa, to give only two examples. The dissolution of Yugoslavia after 1991 led to the establishment of countries such as Serbia, Bosnia, Croatia, Kosovo, and Montenegro. On the continent of Africa, the major powers met in Berlin in 1885 to draw lines on the map indicating the borders of the countries there. Most of these lines are still in effect. Of course, the only African country present at the conference was the Kingdom of Ethiopia. The rest of the lines were drawn by European powers for European interests.

Now, you might say, why shouldn't the Europeans draw lines on maps? After all, they represent "culture" and "civilisation" not to mention "Christianity." My answer would be, "because it isn't right, and even if it were right, it doesn't work." We have seen, since 1885, dozens of wars to re-arrange Africa, the territories of the former Ottoman empire in the Middle East, and other territories claimed by various imperial or "great" powers. The only thing that seems "great" about them is the enormous piles of dead bodies they generate, a great amount of death.

The psychotic misanthropes in Britain, France, and the other formerly-globe-spanning empires continue to insist on "the territorial integrity" of places like "the Ukraine," Mali, Kenya, and so forth. None of it works. It seems noteworthy that in Russian and Ukrainian languages, ukraina (оукраина) means "outer country" or "borderland" or "fortified borderland" depending on who you ask. Whose borderland? Well, there you go, asking the really deep questions. Again.

What does it mean, "the territorial integrity of Kenya" when Kenya is a set of lines drawn on a map to represent British occupation of a zone in East Africa? There are 69 languages spoken in Kenya, including Somali, Oromo, Rendille, English, Arabic, Hindustani, Turkana, Maasai, Kigiryama, Kiembu, Oluluyia, and the six major languages, Kikuyu (spoken by 7.2 million Kenyans), Dholuo (spoken by 4.3 million), Kamba (spoken by 4 million), Ekegusii (spoken by 2.1 million), Kimiiru (spoken by 1.74 million), and Kalenjin (spoken by 1.6 million). With 41 million people of sundry Bantu, Nilotic, and Cushitic population groups, does it actually make any sense at all to speak of Kenya as though it were one country, Kenyans one people, and the "territorial integrity" of a set of lines drawn exclusively by Europeans for colonial, imperial, psychotic, and misanthropic reasons as if the imaginary lines on the map represent sacred knowledge handed down from Heaven? Clearly, I don't think so.

But I don't matter, because it isn't my country. So, I do not shed my blood for its territorial integrity, nor for control of its central government, although, evidently, quite a few people have done. Nor does it matter toward which country we point. The United States has no legitimate right to the territories of hundreds of native American populations, each of which was sufficiently its own sovereign nation state for the purposes of treaties which were signed and duly ratified by the United States before being completely ignored, trampled on, and treated like the treaties weren't worth the paper upon which they had been written. Even within the white European tradition of the United States, there is contention over the powers of the several states, including the power of a number of them to secede, which power was duly exercised in 1861, leading to a war that shed the blood of more men and women than any other war in USA history. Apparently, centralisation remains very popular over there.

Similarly, in Britain, there is renewed interest in limited independence at least for purposes of a parliament, for Wales, for Scotland, and for England. The Scots themselves had a country under King Robert (the Bruce) in 1314 (and in various other ways under other systems going back hundreds of years prior) which was "united" with England in 1707. But to speak of a central government of Scots is not especially Scottish, given the upwards of 790 islands, 89 major clans, and hundreds of septs and sub-clan groups, each of which has territory, heritage, and related claims. One official-ish list that I consulted had about 270 separate clans identified by name, each with its own page on their site. Of these, a great many related names show up with their own traditions and history. So there is no end to the consolidations one might have in clans, great clans, and clan groups, should anyone ever care to dispute the lineage of "royal" descent. The point being that in country after country, wherever we look, we find nothing like a collective sense of identity, but a plethora of separate groups with their own stories.

So, why centralise? Did the Scottish clans benefit from centralisation after 1707? Judging by their attitude in fighting for further independence as late as 1744, presumably not. Certainly their being cleared off the Highland territories by British soldiers did not indicate a benefit to them. Certain land owners definitely gained a benefit in grabbing lands that were "vacant" after having been "cleared" though these euphemisms make as little sense in Scotland as similar sayings like "manifest destiny" make in the United States. When people are forced off their land, killed, beaten, robbed, sentenced to "transportation" for alleged crimes on scant evidence, and end up in North America against their will, where they are sometimes conscripted into an army to force Native Americans off their lands, to be killed, beaten, robbed, and sentenced to a Trail of Tears, one does begin to wonder where the imaginary benefits of centralisation are to be found. Those who gained by these exercises in racism and brutality should probably raise their hands and step forward to be identified.

Do you imagine, then, that the centralisation of economic power in, say, an electric power utility that has a monopoly to distribute power into a metropolitan area makes any sense for the consumer of electric power? Are you better off with one electric company, or would you be better off with ten to choose from? Wouldn't you be even better off still if you were to buy solar panels and harvest your own electricity?

Yes, there are definitely economies of scale from making a big power plant, burning a large amount of coal, oil, natural gas, or diesel fuel, or generating electricity from nuclear materials. But who profits from these economies? Do the consumers of residential electricity benefit? Do the companies operating malls, office buildings, and factories benefit? One can be sure that the agencies which regulate power consumption and power distribution come into existence and benefit from the monopoly since that monopoly cannot exist without government sanction. The company which holds the monopoly power gets monopoly pricing advantages, subject to approval from the regulators, and they probably buy off those regulators in various ways in a well-known process called "regulatory capture." It is very doubtful that the people in general benefit in any way. Given the lack of disaster preparedness at sites like Fukushima, we can also wonder whether the long term consequences might be even more negative for the people living around these power plants.

For some time, the idea that we are all better off with more centralisation, more single points of failure, and more agglomeration of power, has been questioned. In the period of empire building, roughly the 15th to early 20th Centuries, the number of "countries" in the world was reduced again and again as more territory was grabbed by imperial powers. Since World War Two, the number of countries has been on the rise, roughly tripling in about 70 years. That trend seems destined to continue, with South Sudan being a recent example of a new country being formed out of one of the giant swaths of territory claimed by a former imperial power.

About 1969, the United States military recognised that a devastating nuclear attack by Russia might wipe out a large amount of computing power, but the remaining computer systems might want to communicate through some sort of inter-networking protocol. So they had some very intelligent people develop the Internet. As a result, the protocol developed for that communications system is extremely decentralised. There are reasons to think that the future of computer communications is going to involve continuing decentralisation, the elimination of more and more single points of failure, and the ability for "routers" to automatically route around damaged nodes.

You now find information very widely distributed, stored on an enormous number of computers, and available for download to your own computer any time you need it. So you can access nearly every book ever published, a great many news sources, images, videos, music, art, and other information wherever you are, about as close to instantly as your communications nodes can manage.

Since the 1970s, a trend has emerged to change the way that software is developed. Software is the code used to operate your computer and make applications available to you. The code that operates the hardware of your computer and tells it, for example, what parts of the screen to illuminate with different colours, or how to send a signal to the printer, is called the operating system or OS. You may have heard of "Windows," and "Apple OS" which are fairly common, and Linux, which is an open source operating system. It turns out that having a software company in control over the development, upgrading, and release of an operating system has inherent disadvantages to the users. Since a great many computer users are also skilled software developers, they collaborated on open source development of Linux. There are now a great number of open source operating systems.

Similarly, the software which runs under a given operating system that makes it possible to, say, process words into a text file, or format them into a document, is an application. There are thousands of applications for all kinds of purposes. And, again, people have begun developing them as open source projects. Open source simply means that the source code, or actual logical operations that are performed by the application, is available for scrutiny. That turns out to have advantages in cost, in distribution, in development speed, in error identification, in error correction, and in other ways.

Very recently, the giant central government of the United States decided to crap all over the open source movement. In particular, its Internal Revenue "Service" has decided to attack applications for tax-exempt status from groups developing open source software. So, equality for everyone, but some are more equal than others (to paraphrase Orwell).

Here's a brief excerpt from:

"Luis Villa, a lawyer and well-known open source community member who currently serves as deputy general counsel at the Wikimedia Foundation, told the Times about two nonprofit open source software organizations that were denied tax-exempt status because their use of a targeted keyword triggered a harsh response from the agency.

"'As soon as you say the words 'open source,' like other organizations that use 'Tea Party' or 'Occupy,' it gets you red-flagged," he told the Times. 'None of the groups have been able to find the magic words to get over the hurdle.'"

Presumably, if you are part of the trend toward bank centralisation, documented by the Dallas Federal Reserve here: http://www.dallasfed.org/assets/documents/fed/annual/2011/ar11.pdf and you want to form a non-profit organisation for your banking corporation to pretend to engage in some charitable behaviours, the IRS will be eager like a puppy to help you. But if you oppose in any way the trend toward central control over everything, you are scum of the Earth not to be given an even break.

Or, to quote the Dallas Fed: "When competition declines, incentives often turn perverse, and self-interest can turn malevolent. That's what happened in the years before the financial crisis." The Dallas Fed, part of an enterprise that began in 1914 to consolidate power within the banking industry in the United States, thinks that "we have to end too big to fail, now."

You might share my misgivings that the Federal Reserve, which oversaw the consolidation of the banking industry from 1970 when 12,500 banks controlled 46% of the financial assets of the USA, the top 5 banks controlled only 17% and the remaining 37% was controlled by a further 95 large and medium-sized banks to 2010 when 5,700 smaller banks controlled only 16% of the financial assets, the top 5 banks controlled 52% of the assets, and the remaining 32% was controlled by (a different) 95 large and medium-sized banks, has any meaningful interest in actually doing anything to reverse this trend. You'll notice that in the process of making it possible for those top 5 banks to control more than half of the financial assets (and pay salaries and bonuses every year amounting to millions of dollars to each of their dozens of top executives) the Federal Reserve has seen to the demise of nearly 7,000 banks in one way and another.

Centralisation is where the top one-tenth of one percent of the population controls an outrageous portion of the total income, get whatever they want from big government, and make the lives of tens of millions of others miserable. Centralisation is where one country, the United States, spends more per annum on military activities in all categories than all the other countries in the world combined. It may not be good to be the king so much as it is good to be a military contractor, or one of the financial giants that make that spending possible.

Are you beginning to get the idea that centralised power, information, and control isn't good for you? If not, please leave a comment, and we'll do our best to explain further. If you are confident that you understand the value to you of decentralised systems, you may want to take a look at our Economic Privacy blog series. We're encouraging people to encrypt, use virtual privacy networks, and consider other issues in their search for greater freedom. Decentralisation has a huge role to play in you being more free.

The nature of the government

Tyrone Wednesday June 18, 2014

When people make the case "for" government regulation of bitcoin, they seem to make assumptions about the actual nature of government. It seems that there are people who feel that the government of the United States of America, the governments of other major countries, and the inter-governmental agreements that these nation-states have for joint purposes are something kind, honourable, decent, and meant for the benefit of everyone on the planet. That apparent view stands in very stark contrast to the evidence available.

Here is a quote from a New York Review essay by Mark Danner published 7 November 2013. He writes, in part, "The government is a national security regime of interlocking and overlapping intelligence and military agencies led and largely staffed by a besieged and increasingly ruthless minority." Of course, Danner is writing of the government of Bashar al Assad in Syria.

However, when I look around at the actual evidence of "what is the government of the United Kingdom," or "what is the government of the United States of America," or "what is the government" of various other identifiable places, and I take off the rose-tinted glasses that everyone in the "let's regulate things for the greater good" community seems to be determined to shove onto my face every single day, what I see is: "a national security regime of interlocking and overlapping intelligence and military agencies led and largely staffed by a ...ruthless minority." I do not see a kind, gentle, participatory government which welcomes dissent, which advocates for the best interests of everyone. I see a bunch of rabid dogs wearing the uniforms of lobbyists racing about demanding that government do this, that, and the other, for the benefit of those the lobbyists represent while a group of extremely privileged people sit at the centre of power and pass judgement on how much they are going to get away with taking home.

Maybe I'm missing something. I evidently missed something when over 7,700 protesters were arrested in two years of the Occupy movement in the United States, as documented here: http://stpeteforpeace.org/occupyarrests.sources.html

If people who are peacefully protesting the government bailouts of enormous corporations, who simply want to be heard, are being arrested in the thousands, it raises a large number of questions. People are supposed to be free to speak, to assemble, and to petition the government for redress of grievances. Those freedoms apparently no longer exist, or there would not have been 7,700 plus arrests in the first two years of the Occupy movement.

Maybe I'm missing something. General Keith Alexander seriously proposed "going after not terrorists or criminals but 'radicalizers,' including innocent Americans by searching the Internet for their vulnerabilities, such as visits to porn sites. Then by secretly leaking this information, the NSA could discredit them," according to a speech James Bamford gave on the occasion of Edward Snowden winning the Ridenhour prize. That speech was covered by The Nation magazine in a recent cover story. http://www.thenation.com/blog/179634/edward-snowden-and-laura-poitras-receive-ridenhour-prize-truth-telling

It seems odd, then, to encounter a few weeks later, reading over an old issue of The New York Review, to see an article by Perry Link titled, "How to Deal with the Chinese Police." In it, Link describes a system of police, informants, and government censors in the People's Republic of China who "...are especially attentive to any sign that an unauthorized group might form. The goal is to stop 'trouble' before it starts. Weiwen does blanket coverage.... Those who do choose to stand out from the crowd, risking the label of 'troublemaker,' immediately come into focus for weiwen. Police arrive for 'visits.' They warn. They cajole. Failing that, they threaten and harass. Beyond that, they detain and charge with crimes." (New York Review, 7 November 2013)

Now, although this guy was allowed to retire from the government in 2013, it seems clear that the policies espoused by General Alexander are the policies of the National Security Agency and of the Obama administration, because those policies were implemented and backed by Lt. Gen. James Clapper of the NSA, who very clearly likes the idea of monitoring all Americans, and everyone else in the world, whether they are engaged in criminal or terrorist behaviour, or not. Clapper repeatedly lied to Congress, and Congress has repeatedly asked for his resignation, asked for the Obama administration to investigate Clapper, and been rebuffed. The Obama administration really likes Clapper, stands behind him, and encourages him in doing everything in his power to attack everyone on Earth who has any opinion about anything.

So, where is this government in which people are able to participate, voice their opinions, be themselves, say what they really think? There is no such government, and agencies like the NSA and MI5 and MI6 make sure of it. You don't have any privacy in your communications unless you yourself make sure of it through encryption, through the use of a virtual privacy network, and in other ways.

Why pretend? Why pretend that the republic of limited powers we were told about in grade school still exists? It doesn't. And pretending that it does is harmful to you.

Leviathan Revisited

Tyrone Friday June 13, 2014

Brett Scott has written an excellent review of the Bitcoin phenomenon as it relates to government regulation and international affairs. His essay appears here: http://www.e-ir.info/2014/06/01/visions-of-a-techno-leviathan-the-politics-of-the-bitcoin-blockchain/

First, a few quick points on the author and the publisher. Scott is the author of The Heretic’s Guide to Global Finance: Hacking the Future of Money (Pluto Press: 2013). He has written for publications like The Guardian, New Scientist, and Wired magazine, and he blogs on alternative finance at http://www.suitpossum.blogspot.com/ He evidently has looked closely into developments in the crypto-currency world.

The web site, e-ir.info describes itself as "the world’s leading website for students and scholars of international politics." It is operated by a non-profit and the editorial board apparently donates their time in order to provide a major resource to scholars. The site was founded by Adam Groves who works on monitoring and promoting improvements to the effectiveness of non-governmental organisations (NGOs) at Bond UK. So one should expect a certain perspective about ideologies, politics, and governments without necessarily setting too much store in technical analysis found in these pages. Given these limitations, the article is very, very impressive.

Scott makes a large number of really important points:

"The vision of a free-floating digital cryptocurrency economy, divorced from the politics of colossal banks and aggressive governments, is under threat."

"The core innovation of Bitcoin is not going away, and it is deeper than currency. What has been introduced to the world is a method to create decentralised peer-validated time-stamped ledgers."

"Banks are information intermediaries."

"Thus, commercial banks collectively act as a cartel controlling the recording of transaction data, and it is via this process that they keep score of ‘how much money’ we have."

"To create a secure electronic currency system that does not rely on these banks thus requires three interacting elements. Firstly, one needs to replace the private databases that are controlled by them. Secondly, one needs to provide a way for people to change the information on that database (‘move money around’). Thirdly, one needs to convince people that the units being moved around are worth something."

With regard to Bitcoin, "A scattered collective of mercenary clerks essentially hire their computers out to collectively maintain the ledger, baking (or weaving) transaction records into it."

"I have a public Bitcoin address (somewhat akin to my account number at a bank) and I then control that public address with a private key (a bit like I use my private pin number to associate myself with my bank account). This is what provides anonymity."

Here, the geek in me wants to chime in, well, it doesn't really provide anonymity. Since you are associated with that public address, and since you are likely publishing that address to a web site if you want lots of bitcoin, or distributing it to your contacts through unencrypted e-mail messages if you want your personal contacts to send you bitcoin, your control over that public address is probably known to some of the people in government, and may be known to others who are determined to find out. You can protect your privacy a bit better if you keep your connection with that public address very quiet, using open source encryption such as Open PGP to safeguard your e-mail messages. But you shouldn't set much store in the anonymity of bitcoin. The blockchain by its very nature records transfers of value among users so you would be wise to be careful about how you use it.

As we go further into his essay in this review of it, I'll feel more and more inclined to chime in with a few words. But there really is a rich trove of ideas in Scott's article, so I'll quote what I think is best.

Scott writes, "The result of these two elements, when put together, is the ability for anonymous individuals to record transactions between their bitcoin accounts on a database that is held and secured by a decentralised network of techno-clerks."

"Within the Bitcoin system, a set of powerful central intermediaries (the cartel of commercial banks, connected together via the central bank, underwritten by government), gets replaced with a more diffuse network intermediary, apparently controlled by no-one in particular."

Here, I think Scott has a very important point. He doesn't quite say that the commercial banks are a cartel operating in restraint of trade (to borrow terminology from the anti-trust laws of some countries) but it seems evident that they are a cartel and that they do operate in restraint of trade, and of freedom.

More good points from Scott:

"The corresponding political reaction from policy-makers and establishment types takes three immediate forms. Firstly, there are concerns about it being used for money laundering and crime. Secondly, there are concerns about consumer protection. Thirdly, there are concerns about tax." (For my own part, I'm not really sure that these were listed in priority order.)

"One non-monetary function for a Bitcoin-style blockchain could thus be to replace the privately controlled ledger of the notary with a public ledger that people can record claims on."

"One can, however, use a blockchain to create a decentralised registry of domain name ownership, which is what Namecoin is doing."

"Theoretically, this process could be used to record share ownership, land ownership, or ownership in general."

"Unlike the original internet, which was largely used for transmission of static content, we experience sites like Facebook as interactive playgrounds where we can use programmes installed in some far away computer. In the process of such interactivity, we give groups like Facebook huge amounts of information. Indeed, they set themselves up as information honeytraps in order to create a profit-making platform where advertisers can sell you things based on the information. This simultaneously creates a large information repository for authorities like the NSA to browse. This interaction of corporate power and state power is inextricably tied to the profitable nature of centrally held data."

"But what if you could create interactive web services that did not revolve around single information intermediaries like Facebook? That is precisely what groups like Ethereum are working towards."

(It seems worth noting that Diaspora* has been a distributed social networking system since November 2010.)

"I send information to this entity, triggering the code and setting in motion further actions."

"Humans can overtly manipulate, or bow in to pressure to censor. A decentralised currency or a decentralised version of Twitter seems immune from such manipulation."

"When asked about why Bitcoin is superior to other currencies, proponents often point to its 'trustless' nature. No trust needs be placed in fallible 'governments and corporations'."

"The vision thus is not one of bands of people getting together into mutualistic self-help groups."

(As someone who has gotten together in mutual aid groups, and has organised several, I don't agree that the vision of crypto-currencies is devoid of any role for mutual assistance groups. How technical tools are used depends on the users.)

"Rather, it is one of individuals acting as autonomous agents, operating via the hardcoded rules with other autonomous agents, thereby avoiding those who seek to harm their interests."

"Note the underlying dim view of human nature."

(Here there seems to be some confusion, since a dim view of human nature is indicated as underlying or implied when it seems much more overt. There is ample evidence to support such a dim view, and it ought to inform every activity of humans. People do lie, cheat, steal, deceive, abuse power, murder, rape, and torture. The people with more power always seem more willing to do these things, and vice versa. It isn't sane to assume that other human beings have your best interests at heart. Indeed, it is not a safe assumption that other people have a better nature; it is, however, generally safe to assume that each human being has self-interest, to paraphrase Robert Heinlein.)

"If only we can lift currency away from manipulation from the Federal Reserve."

(After a hundred years of Federal Reserve currency manipulation, one would think that if the Federal Reserve were good for anything but making rich bankers more wealthy and more powerful, someone would have come across that thing, by now.)

"Activists traditionally revel in hot-blooded asymmetric battles of interest (such as that between StrikeDebt! and the banks), implicitly holding an underlying faith in the redeemability of human-run institutions."

(So, how's that been going? All measurements seem to indicate ever-greater-concentrations of power, with widening gaps between the wealthy and the poor, despite endless activism and faith in institutions.)

"The Bitcoin community, on the other hand, often seems attracted to a detached anti-politics, one in which action is reduced to the binary options of Buy In or Buy Out of the coded alternative."

(Giving people more choices is apparently viewed as a bad thing, though I'm not really sure why. For my own part, I don't think the entire Bitcoin community is being fairly described here. Many people who use Bitcoin are also involved in various types of politics, including activism. It might be more fair to say that Bitcoin technology creates very limited political implications, and is mostly about choice-taking behaviour, or economics.)

At one point, for his own reasons, Scott writes of Cody Wilson: "But where exactly is this perfect system Wilson is disappearing to?" I found this statement very odd, probably because I missed where Cody Wilson said his system was perfect. And, indeed, Scott goes on to note, later, "... Wilson is a subtle and interesting thinker, and it is undoubtedly unfair to suggest that he really believes that one can escape the power dynamics of the messy real world by finding salvation in a kind of internet Matrix. What he is really trying to do is to invoke one side of the crypto-anarchist mantra of 'privacy for the weak, but transparency for the powerful.'"

But, hey, it is also really, really unfair to suggest that people who want to travel to Mars and settle there are interested in doing so in a way that "escapes" from a technologically complex civilisation. Those of us who remember the history of Roanoke, for example, are likely to be extremely sceptical of settlements in distant places having utterly no contact with nor connection to the parent society from which they come. Presumably, it is necessary for Scott to take a moment to be forgiving of Cody Wilson, especially for the sin of believing he can escape the power dynamics of a messy real world since Wilson never seems to have said as much. Whether it is any more appropriate to make assumptions about what space settlement enthusiasts actually want is left as an exercise for the reader.

Scott writes: "Back in the days of roving bands of nomadic people, the political option of 'exit' was a reality. If a ruler was oppressive, you could actually pack up and take to the desert in a caravan."

"The bizarre thing about the concept of 'exit to the internet' is that the internet is a technology premised on massive state and corporate investment in physical infrastructure, fibre optic cables laid under seabeds, mass production of computers from low-wage workers in the East, and mass affluence in Western nations."

It almost sounds as though alternative technologies for communication by radio packet, by bouncing signals off meteors, by operating cell towers, were impossible. A whole series of data store-and-forward satellites built by amateur radio enthusiasts seems to have gone missing from reality.

The essential nature of the Internet is that it was designed to be so robustly decentralised that it could survive a nuclear war. That it was designed by the psychotic militarists who wanted the power to plunge the world into such a nuclear conflagration is irony, not a contradiction.

Scott: "If you are in the position to be having dreams of technological escape, you are probably not in a position to be exiting mainstream society."

Of course, exiting mainstream society is not well-tolerated by the people who control things. Scott appears determined to say that it isn't tolerated by the activists and left-anarchists who want to fight for a more human solution to the problems of human behaviour. Of course, the people who want to leave Earth and settle elsewhere don't particularly care who is willing to tolerate their migration. Space enthusiasts have known for some decades that space tourism and space colonies were not welcomed by those in power within government space agencies. Even someone as wealthy and powerful as Richard Branson seems to have had enormous difficulties getting his space tourism venture "off the ground" due substantially to difficulties with government.

Scott: "That is a healthy radical impulse, but the conservative element kicks in when the assumption is made that somehow privacy alone is what enables social empowerment."

In fact, what is meant by privacy seems to be given short shrift here. Eben Moglen, writing in the Guardian for a Columbia Law School lecture series, notes: "Our concept of 'privacy' combines three things: first is secrecy, or our ability to keep the content of our messages known only to those we intend to receive them. Second is anonymity, or secrecy about who is sending and receiving messages, where the content of the messages may not be secret at all. It is very important that anonymity is an interest we can have both in our publishing and in our reading. Third is autonomy, or our ability to make our own life decisions free from any force that has violated our secrecy or our anonymity. These three – secrecy, anonymity and autonomy – are the principal components of a mixture we call 'privacy.'" http://www.theguardian.com/technology/2014/may/27/-sp-privacy-under-attack-nsa-files-revealed-new-threats-democracy If you are going to focus only on privacy as a tool for the owners of private property, you are missing a great many essential aspects of what it means to the people building technologies to promote it.

Scott writes: "Despite the rugged frontier appeal of the concept, the presumption that empowerment simply means being left alone to pursue your individual interests is essentially an ideology of the already-empowered, not the vulnerable."

I often wonder how much time on actual frontiers, hundreds of miles from amenities like running water, the people who write about "rugged frontier appeal" have under their belts. But, a far more significant point, to crypto-geeks, is that the vulnerable are the ones who have the greatest need to be left alone by systems of arbitrary power. It is not the wealthy and powerful who need good systems for protecting their private property - they already have them, and can afford to lose forty percent of their income every year with a shrug of the shoulders. Poor people need much more help protecting their income, property, and power because they have so very little of it.

It would be not only idle but also idiotic, to suppose that by taking 40% of the incomes of some of the wealthiest, the government is doing anything for those who are poorest. Judging by the inability of the government of the United States to operate Veterans Administration hospitals for millions of veterans without leaving at least 57,000 of them out in the cold without any care at all for more than 90 days, one would think the pretence of governments being good for poor people would have been penetrated by now. I can't tell whether Scott feels that governments are good for the poor, but there is a strong aroma of that view in some of his sentences.

Scott writes: "It is often pitched as a radical empowerment movement, but as Richard Boase notes, it is 'a world full of acronyms and codes, impenetrable to all but the most cynical, distrustful, and political of minds.'"

So, it was amusing to see a very acronym-laden sentence in Scott's concluding paragraph: "That is why liberation movements always seek to break contracts set in place by old regimes, whether it be peasant movements refusing to honour debt contracts to landlords, or the DRC challenging legacy mining concessions held by multinational companies, or SMEs contesting the terms of swap contracts written by Barclays lawyers." I guess we're all supposed to know that DRC is the Democractic Republic of Congo (which, judging only by published accounts of events there in the last ten years, is neither democratic nor much of a republic) and that SMEs are small and medium-sized enterprises. Thank goodness for acronyms, huh? smile

Scott writes: "Indeed, crypto-geekery offers nothing like an escape from power dynamics. One merely escapes to a different set of rules, not one controlled by ‘politicians’, but one in the hands of programmers and those in control of computing power."

Many crypto-geeks would object to this concept, since it is in the nature of knowledge about computer languages and systems that anyone can learn to use those tools. It is not in the nature of political power that anyone can, by learning how it works, actually have any of it.

It is very hard for computer geeks to read documents like the constitution for the United States and then see that the clear text of that document has utterly no bearing on the nature of government as it is actually expressed in that country. No doubt it is comforting for people who don't want to bother learning mathematically intensive skills, like computer programming, to suppose that it is an arcane system that can be used as abusively as the Byzantine legal code of the federal government, but it turns out that mathematics and logic have rigour that systems of governmental authority lack. Or, put more simply, political power has no rules - politicians lie, cheat, steal, murder, and rape, and get away with these things with impunity nearly all of the time. Programming software requires some mathematics and quite a lot of logic, and has rules that do apply all the time.

Scott: "It offers a form of protection, but guarantees nothing like 'empowerment' or 'escape.'"

It offers a set of rules. Many anarchists understand that rules, including physical laws of nature, are all around. It isn't the rules that some of us want to get away from, it is arbitrary rulers. Referring to the Greek language roots, "an-archon" or "without ruler" is a very different matter from the chaotic implications of "no rules."

Nothing offers real protection. There is no form of society that is free of risk, free of danger. All you can hope to do is manage the risks you are presented and make the best use of technologies available to you to mitigate those risks.

Scott writes, "Actually, it is highly questionable whether one can 'choose' whether to use email or not."

He makes the point that if you don't use e-mail, you may be marginalised. That's certainly true, although I have gone for weeks without using e-mail, and for over a year without cracking open Facebook or Twitter. It is actually possible to "detox" from digital systems, if you set your mind to it.

"While individual instances of blockchain technology can clearly be useful, as a class of technologies designed to mediate human affairs, they contain a latent potential for encouraging technocracy. When disassociated from the programmers who design them, trustless blockchains floating above human affairs contains the specter of rule by algorithms."

People who favour democracy, or a theoretically-limited-but-actually-unlimited republic, or another form of government may not be comfortable with anarchy, kritarchy, or technocracy. Certainly any "rule by algorithms" applies to data, and can only loosely be applied to humans, given our nature. Many anarchists seem to want to have "participatory democracy" in their mutual aid societies, rather than having those who want to aid one another simply do so. Some anarchists actually want a system without any rulers, even peer pressure, to dominate one another, but as Thoreau pointed out long ago, such people are very rare.

Kritarchy offers a very different model. Sometimes called "rule of judges" it attempts to apply certain concepts of law to find results or judgements that are suited to the interests not only of the individual participants in a dispute, but also those of the community in which those people live. Kritarchy is described in the books of judges in the Bible, and is contrasted by one of those judges, Samuel, with the extreme voracity of monarchy as an alternative. Many traditional societies live by the judgements "discovered" or found or invented by elders. Of course, not everyone is comfortable with traditions. Some traditions are more unequal than others.

Scott: "Interestingly, it is a similar abstraction to that made by Hobbes. In his Leviathan, self-regarding people realise that it is in their interests to exchange part of their freedom for security of self and property, and thereby enter into a contract with a Sovereign, a deified personage that sets out societal rules of engagement. The definition of this Sovereign has been softened over time – along with the fiction that you actually contract to it – but it underpins modern expectations that the government should guarantee property rights."

Again, I feel impelled to ask, "How has that been going?" How has the expectation that governments exist to guarantee property rights been working out, in the event? My reading of Hobbes was that he favoured an absolute monarch with totalitarian authority, and that in this view he could be contrasted with others like Rousseau who also imagined a social contract that not only guaranteed property rights, but also limited governmental authority. As an individualist and as an anarchist, I cannot find any evidence that a limited government has ever remained limited. My scepticism is only based on thousands of years of evidence.

Scott: "Conservative libertarians hold tight to the belief that, if only hard property rights and clear contracting rules are put in place, optimal systems spontaneously emerge."

Actually, my direct personal experience of conservative libertarians is that they believe that by being conservative Republicans they won't get anywhere, but by being members of the much smaller Libertarian party, they play a big role in a small pond. The idea that optimal systems spontaneously emerge appears, to me, to be a distortion of the ideas of economists like Hayek and von Mises who have only said that in a free market, optimal prices emerge.

Mind you, living in places under societies where free market pricing was forbidden has proven to be extremely difficult for those of us who have had to experience such things. Ludwig von Mises noted that without the ability to find prices, all sorts of totalitarian behaviour shows up, because scarcity becomes very widespread. Of course, he also noted that the idea of turning the world into a huge bureaucracy with every individual in charge of some bureau, or desk, has caused people to shed "rivers of blood." So his writings were not welcome in Nazi Germany or Stalinist Russia, two places where his personal papers were held from public view (and withheld from him) until 1991. Go figure.

Scott: "They are not actually that far from Hobbes in this regard, but their irritation with Hobbes' vision is that it relies on politicians who, being actual people, do not act like a detached contractual Sovereign should, but rather attempt to meddle, make things better, or steal."

Thomas Jefferson made a similar point in his first inaugural address, that we have not been able to find "angels in the shape of kings" to rule us, so we must relent to the limitations of self-government. Although individuals are probably not very capable, or learned, in matters that might prove important, there is no evidence that their inability to govern themselves has any magical power to generate an ability to govern others. Hobbes' vision is really one of authoritarian power running rampant, and everyone in the world obeying total authority. It is, it turns out, a vision of a society where life is poor, nasty, brutish and
short, if we are to judge by the experiences of people under Ataturk, Hitler, Mao, Stalin, and Pol Pot, to name only a few.

Scott asks, "Don’t decentralised blockchains offer the ultimate prospect of protected property rights with clear rules, but without the political interference?"

I really don't think that would be true. There is no ultimate protection for property rights - everyone has to do their best to protect what they have by available means. It is clear, though, that a fear of political interference is based on real understanding of human experiences.

Scott writes: "This is essentially the vision of the internet techno-leviathan, a deified crypto-sovereign whose rules we can contract to. The rules being contracted to are a series of algorithms, step by step procedures for calculations which can only be overridden with great difficulty. Perhaps, at the outset, this represents, à la Rousseau, the general will of those who take part in the contractual network, but the key point is that if you get locked into a contract on that system, there is no breaking out of it."

It isn't at all clear how that would be true. The assets involved in a blockchain might be forfeit, but people can always choose to build new systems, to remove assets using the existing rules, or to abandon the assets that they feel are burdensomely connected to rules they no longer like. People would remain free, even if such a techno-leviathan could arise. Of course, some of us believe that we are free in spite of political systems, too. It isn't clear that deification has ever been much good, whether one were to choose to deify governmental authority or cryptographical technology.

Scott writes, "This, of course, appeals to those who believe that powerful institutions operate primarily by breaching property rights and contracts. Who really believes that though? For much of modern history, the key issue with powerful institutions has not been their willingness to break contracts. It has been their willingness to use seemingly unbreakable contracts to exert power. Contracts, in essence, resemble algorithms, coded expressions of what outcomes should happen under different circumstances. On average, they are written by technocrats and, on average, they reflect the interests of elite classes."

Quite a few people believe that powerful institutions break their contracts. Many people in the labour movement, for example, have pointed to contracts guaranteeing wages, working conditions, or other limitations on corporate power, which have been broken, often repeatedly, by the companies that don't want to be held to their obligations. How do those companies get away with such behaviour? By having powerful governments to ratify their actions, often with the force of arms.

Contracts are written by people with power, including the power to enforce or not enforce, those terms. So it is always true that if you are contracting with someone you don't trust, you probably have an agreement that isn't worth the paper it is written upon. That doesn't mean that you cannot ever trust anyone. And if you never trust anyone, as Larry Niven noticed some years back in his novel "Destiny's Road," you can't get much done.

Scott: "That is why liberation movements always seek to break contracts set in place by old regimes, whether it be peasant movements refusing to honour debt contracts to landlords, or the DRC challenging legacy mining concessions held by multinational companies, or SMEs contesting the terms of swap contracts written by Barclays lawyers. Political liberation is as much about contesting contracts as it is about enforcing them."

That's widely regarded as a valid perspective of history. However, there is a pattern here of deception and abuse of power which makes the term "contract" inappropriate. If someone holds a gun against your head, and demands that you sign a contract, many courts of law are going to be reluctant to enforce that contract. For it to be a "contract" as such, it ought to be entered into freely, knowingly, and competently by all parties, and there should be an exchange of value involved. When peasant movements deride "debt contracts" that effectively make them slaves to the soil owned by "landlords" they do so in the realisation that the agreement was not entered into freely, and its terms may have been concealed from them.

Another way of looking at the same history would be to say that political liberation is about contesting whether a set of rules being enforced was ever actually a contract. Given the extremely coercive nature of many of these systems of rules, it seems incorrect to call them contracts. So it may still be possible to have freedom and have contracts.

It is an interesting side note, to me, that the Greek term for money, "nomisma" refers to their word for "law." And in my most recent blog on this topic, I've mentioned how silly it was for Solon to imagine he could make the people of Athens more righteous by weaving them a web of laws. If, however, his purpose was to ensnare the weak while creating artificial advantages for the powerful, then his web of laws did its job.

Scott writes: "Rather, you use technology as a tool within ongoing political battles, and you maintain an ongoing critical outlook towards it. The concept of the decentralised blockchain is powerful."

A very cogent statement, indeed. The concept of decentralisation is big. Indeed, it is that very decentralised nature that has made it possible to have an Internet that is robust enough to survive nuclear strikes on a number of cities. The power of decentralised systems has become evident since 1969 or so when the Internet was first conceived, and we are going to live in a future where decentralisation plays an enormous role in how things get done.

Scott notes, "Centralised vote-counting authorities are notorious sources of political anxiety in fragile countries. What if the ledger recording the votes cast was held by a decentralised network of citizens, with voters having a means to anonymously transmit votes to be stored on a publicly viewable database?"

That idea is very exciting. Vote fraud is one of the many reasons that anarchists are often very reluctant to trust democracy. It is, however, not the only reason.

Scott: "We do not want a future society free from people we have to trust, or one in which the most we can hope for is privacy. Rather, we want a world in which technology is used to dilute the power of those systems that cause us to doubt trust relationships."

The only way to have a future free from people who have to be trusted is to have a future without any people, in my opinion. We are better off with technologies that let us have more say in our own destiny. And in that respect, I think that Brett Scott and I are in agreement.

Many of these ideas have a lengthy history. For example, the powerful nature of centrally held data is discussed by William Irwin Thompson. In Darkness and Scattered Light from 1978, Thompson points out that in ancient Egypt the illiterate were all out in the hinterland, whereas the elite with mathematics and writing and knowledge were concentrated in the centre, around the temple. The people who knew how to read and write had a great deal of power that was not available to people who did not, and in ancient Egypt, that power was part of their central mass.

In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed money in terms of four functions: a medium of exchange, a common measure of value or unit of account, a standard of value or standard of deferred payment, and a store of value. There is some really tasty history in the unit of account part, which Scott mentions as having a significant role in the blockchain technologies. For example, during several centuries there were no Byzantine gold solidi anywhere on the British Isles, but the solidus was the basis for accounting nevertheless, because of its long-term stability as a coin. Even in a future where an all-powerful state attempts to ban bitcoin technologies, it may be difficult to eliminate the underlying unit of account.

The corrupting influence of the aggregation of state power with regard to contracts and money is identified in a letter from EC Riegel to Ludwig von Mises in 1952: "The economy functions by means of verbal and written contracts, and under a monetary system, these contracts are all expressed in terms of the monetary unit. Hence the meaning of the monetary unit is the meaning of the contract. With the state's power to change the meaning of the monetary unit, it holds complete perversive power over the economy. To admit this all pervasive intervention while objecting to collateral ones is to swallow a whale while gagging at minnows."

Riegel makes a few other points well worth considering which popped into my head as I was reading Scott's essay. In his New Approach to Freedom, Riegel writes about who should issue money. The issue power does not belong in the hands of government, Riegel pointed out in 1946, because government is not a free enterprise. It is a coercive enterprise, so it on the one hand demands money at gunpoint and, sometimes, issues money and makes it legal tender, forcing it into circulation at gunpoint. The only people morally fit to issue money are free enterprisers, individuals and groups operating in the free market. Why? Because, if a free market outfit issues money, it is also going to provide goods or services for which that money would be acceptable. Therefore, it creates a market for the money it issues. It does so non-coercively, which is the whole point of cooperating in the free market. In his book, Riegel suggests that anyone can issue currency and that there is no moral hazard so long as they are prepared to make enough things (or provide enough services) to accept that same amount of currency in return.

Of course, not everyone sees cooperation and non-coercive behaviour as preferable. Quite a few people seem very willing to have a powerful state that forces other people to do things. Some people, who also seem to take a dim view of human nature, seem to believe it is necessary to have a powerful state to force people to do things. I don't share that view.

E.C. Riegel wrote in June 1947 that, "…it has not dawned upon society that the political monetary system that prevails in every nation is fundamentally socialistic. To point the finger at conscious socialists is self-deceiving, for it implies that others are not socialists. The finger should be pointed as well at the professing individualists who accept the socialization of the monetary system and are naïve enough to believe that we can have a free enterprise system in spite of it (Escape from Inflation, published 1979)."

Riegel's writings have been helpfully collated by The Heather Foundation which maintains this site that includes all of his published writings. http://www.newapproachtofreedom.info/

Scott also seems to ignore the critical international relations aspects of the closing not only of the space frontier to human settlement (see the 1967 Outer Space Treaty), but also the closing of the frontiers of the sea surface and sea floor (1982 Law of the Sea Treaty) and Antarctica (1957 treaty as renewed). Of course, not everyone is interested in an open frontier.

Dr. Robert Zubrin, quoting extensively from the writings of Frederick Jackson Turner, has made a number of points about the difficulties associated with the closing of the American frontier. It is noteworthy that within a single generation of that event, prohibition of alcohol led to the formation of a national police agency, a "black chamber" was formed to spy on Americans, a brown-shirt style American protective league was formed, the United States was dragged into the First World War (the settlement of which seems to have led ineluctably to the Second), and a number of major industries began to be regulated and heavily cartelized, not the least of which was the banking industry. Frontiers do seem to make a difference to some people, but not, it seems, to Scott, who concludes, "Screw escaping to Mars."

If you consider the factory worker in Boston in 1835 who didn't like his job, nor his boss, nor his working conditions, nor his pay, you might have a left anarchist view of an open frontier. At that time it was possible for that factory worker to walk to the frontier, making it less essential that he go on strike to get better working conditions. The numerous injustices of European immigrants taking land from Native Americans are important aspects of human history. It is noteworthy, though, that there are neither native peoples nor blue whales on Mars, so a space frontier might have fewer inherent forms of injustice about which to worry.

It won't be an escape from technological civilisation, if a human settlement on Mars is to succeed. For that to work, one would need to get out to the asteroid belt where, to quote Freeman Dyson, "the IRS won't be able to find us." And on that amusing side note, I conclude.