Privacy: An appeals court has denied the appeal of a person who is jailed indefinitely for refusing to decrypt files. The man has not been charged with anything, but was ordered to hand over the unencrypted contents on police assertion of what the contents were. When this can result in lifetime imprisonment under “contempt of court”, the United States has effectively outlawed file-level encryption – without even going through Congress.
Last week, a US Appeals Court ruled against the person now detained for almost 18 months for refusing to decrypt a hard drive. The man has not been charged with anything, but authorities assert that the drive contains child pornography, and they want to charge him for it. As this is a toxic subject that easily spins off into threads of its own, for the sake of argument here and for sticking to the 10,000-foot principles, let’s say the authorities instead claim there are documents showing tax evasion on the drive. The principles would be the same.
Authorities are justifying the continued detention of this person – this uncharged person – with two arguments that are seemingly contradictory: First, they say they already know in detail what documents are on the drive, so the person’s guilt is a “foregone conclusion”, and second, they refuse to charge him until they have said documents decrypted. This does not make sense: either they have enough evidence to charge, in which case they should, or they don’t have enough evidence, in which case there’s also not enough evidence to claim with this kind of certainty there are illegal documents on the drive.
In any case, this loss in the Appeals Court effectively means that file- and volume-level encryption is now illegal in the United States.
Without going through Congress, without public debate, without anything, the fuzzy “contempt of court” has been used to outlaw encryption of files. When authorities can jail you indefinitely – indefinitely! – for encrypting files out of their reach, the net effect of this is that file level encryption has been outlawed.
So were there illegal documents on the drive? We don’t know. That’s the whole point. But we do know that you can be sent to prison on a mere assertion of what’s on your drive, without even a charge – effectively for life, even worse than the UK law which will jail you for up to five years for refusing to decrypt and which at least has some semblance of due process.
The point here isn’t that the man “was probably a monster”. The point is that the authorities claimed that there was something on his encrypted drive, and used that assertion as justification to send him to prison for life (unless he complies), with no charges filed. There’s absolutely nothing saying the same US authorities won’t claim the same thing about your drive tomorrow. Falsely, most likely. The point is that, with this ruling, it doesn’t matter.Syndicated Article
The makers of an Internet-connected sex toy have settled to pay a small amount to some 300,000 owners of a vibrator which was used to spy on their sex habits, which the manufacturer collected as individually identifiable data. Additionally, the bluetooth-controlled sex toy device was utterly insecure, allowing remote anonymous administration. In the mess of IoT devices spying on us, we now need to add the bedroom.
In Las Vegas in 2016, at Defcon, hackers g0ldfisk and followr originally disclosed the We-Vibe vibrator vulnerability, observing that anybody in bluetooth range could take control of the device. As the duo noted during their presentation, such an intrusion would amount to sexual assault – meaning we can now add sexual assault to the list of possible consequences of unsecured IoT devices.
This vulnerability – along with a shockingly audacious and undisclosed data collection about its users’ sexual habits, like temperature and sexual intensity, collected insecurely as identifiable data connected to their e-mail addresses – has led up to the class action lawsuit, which has been settled now. The manufacturer, We-Vibe, will pay four million Canadian dollars – expecting this to result in maybe C$500 for a violated individual at best.
The lawyers for the anonymous plaintiffs contended that the app, “incredibly,” collected users’ email addresses, allowing the company “to link the usage information to specific customer accounts.” — US NPR
This is just the start of devices made by engineering morons who may understand their original field – sex toys – but have absolutely no clue about Internet-level security. They are not alone: corporations as large as the biggest banks enjoyed the comfort of having a private network up until just recently, and have had to wake up in a hurry to the fact that all input must be regarded as hostile until proven friendly. The engineering principle of “your code is the last piece of code standing” was something that woke Microsoft up as late as fifteen years ago, and they were late in the IT game, but that’s nothing compared to non-IT players wanting in on the Internet of Things and the Fun Profitable Apps who still haven’t learned.
We can add sexual assault to the list of possible consequences of insecure IoT devices.
Your privacy indeed remains your own responsibility.Syndicated Article
Bitcoin: The American SEC, which oversees financial institutions, has rejected a bid to create a traditional trading fund (an ETF) based on bitcoin. The trading fund was the initiative of the Winklevoss brothers, who had seen this as a way to bring bitcoin to the masses and make money in the process. While a lot of the bitcoin world talked about the ETF, caring too much about the approval of the old world is ultimately misguided.
The bitcoin community had been awash in buzz all week about the Securities and Exchange Commission (SEC) promising a decision by March 11 on whether the Bitcoin ETF had governmental approval or not. The decision was delivered at 21:00 UTC on Friday, and the bitcoin exchange rate took an immediate nosedive, from 1300 USD per coin earlier in the day to below 1000. It has since recovered to just under 1200.
It should be noted that other similar constructs, with non-American names, exist elsewhere since some time ago. For example, bitcoin is already traded as a security like this on the Stockholm Nasdaq exchange, where it was first to launch.
At the end of the day, though, seeking the approval of the SEC and other governmental financial bodies is ultimately misguided. Bitcoin was specifically designed to not submit or yield to their jurisdiction; bitcoin was designed to replace the old corrupt financial world. Thinking of bitcoin’s success in terms of uptake by the old world is like measuring the success of mammals in terms of their approval by dinosaurs.
Thinking of bitcoin’s success in terms of approval by the SEC is like measuring the success of mammals in terms of their approval by dinosaurs.
The SEC justified their decision by noting that bitcoin cannot be regulated enough to meet approval standards. In other words, they denied the bitcoin ETF’s stamp of approval of the old world specifically because bitcoin does not submit to the rules and the frauds of the old financial world.
That, if anything, shows that bitcoin is working exactly as intended. And in this decision, the SEC squandered an opportunity to delay their own replacement a little: if they had brought bitcoin into the old world, it would replace the old world at a slower pace.Syndicated Article
Corruption: In a surprise move, Switzerland has a bill passing through parliament that would introduce net censorship to protect domestic gambling against foreign competition. This is as dangerous as it is misguided and utterly ineffective, and it is alarming to see that even a strong democracy like Switzerland not seeing censorship for what it is, especially when it’s being used for protectionist means.
This Swiss bill, which has moved through several legislative steps and is on its way to becoming law, mirrors similarly misinformed initiatives in other countries. It is still something of a shock to see it happen in Switzerland, which is known for having a very strong protection of civil rights.
A recurring theme in facepalms like this is how legislators don’t understand that the Internet is inherently borderless, in combination with everything on the Internet being private communications. There just isn’t something on the Internet that is “a commercial service” that isn’t also private communications while using said service – and thus, blocking a foreign commercial service on the net is indistinguishable from general censorship of certain private correspondence.
Blocking a foreign commercial service on the net is indistinguishable from general censorship of certain private correspondence.
What’s particularly interesting is to observe how legislators are bending over backwards to explain how this is “not censorship”, even to public state media, which is a telltale sign they’re well aware of 1) that it technically is censorship, and 2) that such censorship is illegal, and 3) that they therefore must bend every definition in existence to get away with doing it anyway.
Other countries have tried similar bills. In Sweden, there was a bill in 2008 trying the same thing which was summarily discarded, which didn’t deter the local lobbyists; another was just initiated with the same purpose.
The real danger lies in establishing the idea that censorship can be an acceptable method of protecting an industry’s legacy market position against competition.
At the end of the day, the efforts are utterly futile, as such censorship is trivially circumventable by using a VPN; sometimes even just by changing your DNS settings to use a public uncensored DNS server. But the danger isn’t in its ineffectiveness; the real danger lies in establishing the idea that censorship can be an acceptable method of protecting an industry’s legacy market position against competition.
Privacy and free speech remain your own responsibility.Syndicated Article
Copyright Monopoly: The copyright industry is trying – again – to forcefully conscript Internet Service Providers into doing their bidding. This time, the RIAA and other organizations are demanding “filtering”, which is a pretty word for censorship, of anything they don’t want people to send to each other privately.
Ask yourself this one question: is it any shade of reasonable that a private industry gets a governmental mandate to silence our phonecalls when we talk about things that the private industry in question don’t want us to talk about? Because that’s exactly what the copyright industry is demanding here, exactly what they’re demanding, as applied to the Internet.
This demand is so audacious, so revolting, so utterly despicable I don’t really know where to start. These are rent-seeking parasites* who are so completely shameless they claim they have a moral high horse in demanding censorship of general private communications when it goes against their profit interests.
This is completely in line with my previous column about how the copyright industry is so bothered by civil liberties and due process, they are trying to circumvent and eliminate both. In particular, note how this fits with the line of action of having ISPs be governmentally forced to be non-accountable thugs of the copyright industry.
It’s important to notice three things here:
First, it is not reasonable to prevent transmission of a particular movie or music, even if it breaks the law. We have a judicial system where somebody is punished after the fact, and after something called due process. This demand is Minority Report pre-crime bullshit.
Second, this completely eliminates fair use as a concept. There are millions of cases where publishing something on YouTube is illegal in one context (say, just sharing it), and completely legal in another context (say, providing political commentary on the exact same piece). Blanket censorship, as the copyright industry demands here, would be completely blind to all the exceptions to copyright distribution monopolies – exceptions without which the copyright monopoly would be in direct conflict with the First Amendment in the US and freedom of speech in general elsewhere. These exceptions, which are rights and not defenses, are what allows the copyright monopoly to even exist from a constitutional standpoint. Blanket, automated censorship would just strike out this entire field, which is exactly what the copyright industry wants (until somebody would challenge its following constitutionality, but still).
Third, copyright law is immensely complex, and cases are frequently being decided in Supreme Courts. Despite this, the copyright industry likes to pretend that it’s dead simple, and basically they’re arguing it’s dead simple because the copyright industry is always in the right. (Hint: they’re not.) So instead of due process in a proper judicial system, you would have an automated censorship process at worst, and being casually decided by a minimum-wage clerk at best.
These are the same things the copyright industry is pushing for in Europe under the notion of changing “notice-and-takedown” to “notice-and-staydown“, which is nothing but blanket governmentally-sanctioned censorship completely ignores all the checks and balances that have been struck over the years, decades, centuries.
Why are we literally letting a cartoon industry regulate our most important infrastructure?
Note that this doesn’t even go into the shamelessness of wanting to dump your problems on somebody else – the cost for any website operator and ISP to fulfill these insane demands would be enormous, just because the copyright industry thinks it is more important than the Internet. Why are we literally letting a cartoon industry regulate our most important infrastructure?
On the other hand, the blame isn’t really with the copyright industry: they’ve just learned that they get what they want when they throw a tantrum, after all. The real problem and the blame lie with the politicians who keep giving them whatever they ask for just because they’re loud.
Privacy and freedom of speech remain your own responsibility.Syndicated Article
*) When somebody is demanding – and getting away with – getting extensive private levying privileges on things like an iPhone and a Playstation because they once complained about the cassette tape, making single mothers pay a premium for their kids’ game console so that record executives won’t have to change, I don’t think twice about calling them out as parasites.
Copyright Monopoly: Google has agreed to demote so-called “pirate” sites from its search results, at the demands of the copyright industry. All experience from the past 600 years says this is a mistake.
A story in Ars Technica and elsewhere celebrates that Google will hide the sites people are looking for, because there are others that don’t want people in general to find them. When phrased like this, it becomes obvious that Google has little or nothing to gain from this move, and that throwing whiners a bone of meat to make them shut up is a mistake, for two reasons working together.
Reason #1: The easy-to-use, friendly sites are what people are actually looking for, and legality is utterly secondary. 70% of young men in Sweden state they’re using video services outside of the copyright distribution monopolies. That effectively means that every household is doing it: Every. Single. One. It’s considered completely socially acceptable: the copyright distribution monopoly enjoys less acceptance even than speed limits. (Far less, even.)
Google is choosing to bring less value to its customers in this move, and that’s never a good business move. Whether somebody else approves of what people are looking for is completely beside the point. There are tons of vested interests who would seek to prevent people from finding certain information.
“Beware of he who would deny you access to information, for in his heart, he dreams himself your master.” — Commissioner Pravin Lal
Reason #2: Appeasement has not worked toward the copyright industry at any time in history for the past 600 years; they always come back demanding more and more and more, simply because it has worked for them for the past 600 years. You’re just not getting anything from giving them what they’re throwing a tantrum over, because they’ll be back the next day and throw the same kind of tantrum over the next inch of territory.
This is the same reason that a flat cultural extra fee for “allowing” or “permitting” personal downloads outside of the copyright distribution monopoly, an idea that pops up every so often, would be a huge mistake: free uploading (and therefore personal sharing) would still be prohibited, and therefore, such a scheme would just give the copyright industry a perpetual free income in return for no effort or progress at all, an income they could (and would) use to fund further curtailment of liberty.Syndicated Article
Civil Liberties: In this three-part series, I’m going to show how a state can be a pure market actor and not require taxation. The state will still have an income – cynics would call it taxes under any other name – but the key difference is that the income is obtained through market means, based on a state’s USP, and not through coercion by force. This leads to a society where the state does not need to know anybody’s income, wealth, or transactions, leading to the obsolescence of most registers and reporting requirements (including the elimination of a corporate register), and where a “black market” is a contradiction in terms, as the state does not interfere with the market it is a natural part of. It also means an end to victimless crimes by its very nature.Recap
In part one, we observed that there are different tiers of land ownership, where a higher-tier owner (say, a landlord) has the say over which lower-tier land owners get to believe they own the land – and that the highest-tier land owner are today’s states (countries), which are the only actors capable of repelling other tier-one land owners. Thus, a state is the only actor capable of owning land, and can therefore lease it to lower-tier actors to generate income.
In part two, we see that this proposal leads to a low-friction economy where there are no taxation, reporting, or recording burdens on any transaction, and which therefore is in prime state to maximize the sheer quantity of value-optimizing voluntary transactions, thereby creating wealth better than the economies in competing states. Further, we observe that all taxes – income tax, corporate tax, sales tax, etc – go out the window. In turn, we also see that there is no tax wedge at all which would prevent profitability of division of labor, and therefore, this proposal also enables an efficiency optimization not present anywhere else.Part Three: How a land lease would work
This leads us to the question of how such land leases would work in practice, since it’s absolutely crucial to get the incentives right. We want to encourage development and land improvement that facilitates additional trade, after all. We also want to facilitate urbanization, as physical proximity of people naturally increase the number of trades taking place. This is therefore a proposal with all its possible flaws for further development.
Absent a tabula rasa state where there is no existing ownership or lease of land plots, a proposal like this must relate to the previous order of things. It is therefore desirable to mimic the current tier-two ownership of land as closely as possible, maybe even to the point of calling the lease a “land ownership tax” under any other name. Economies do not respond well to changes to fundamental frameworks and we want to minimize systemic disruption while optimizing wealth and efficiency potentials.
In particular, we want to ensure that market actors feel secure in investing in their land plots – to make sure that there’s no yearly bidding process or similar where they can be overbid after having spent enormous amounts improving their plot. Therefore, it’s important that a lease lasts until surrendered one way or the other – closely mimicking the way we think of ownership. However, the lease contract can and would typically stipulate that pricing will vary with market conditions – possibly within a limited scope, to reduce risk to land improvement on the plot.
When a lease expires, though – either due to being surrendered or due to serious lapse of payment – the plot can be auctioned off to a new lease for proper price discovery, and this can be weighted in to the general price landscape of the area. More on this later.
Thus, only a very small part of the population would have to deal with the state at all. The rest would have a functioning economy that just needed to feed landlords for their lease costs, and that could work however they please to set up a low-friction economy.Grandfathering and Initial Pricing
This leads to the question of how you phase in a system like this. Realistically, you’d need a lot of political capital and a desire to move the entire state construct in this direction, so we can safely assume that a lot of the current state expenditure will be cut rather unceremoniously. Regardless, at the end of the day, you’ll have a budget which states an income you desire for this state construct. Let’s call this number X for now – an income which will need to come from land leases, and only from land leases.
I propose this X be divided across all current plots of land by area, weighted by the square root of nearby population density, so that the total leasing price arrives at X plus some safety margin of about 5%. This solves a number of problems and doesn’t solve a few others:
First, leasing the plot price proportional to land area makes sense – that 1 km² costs half of 2 km².
Second, making land significantly more expensive in cities than out on the countryside also makes obvious sense (hence the weighting by “nearby population density” – a number which will be single-digit on the countryside and four- or five-digit in the cities).
Third, why weight by the square root of population density, rather than linearly? This is actually rather important, because if the weighting was linear, you would not gain from trying to stack people more densely together in land improvement. But when weighting logarithmically, by using the square root, we’re creating an enormous incentive to use land in the cities more effectively, to house more people per square meter – essentially a developer getting more rent income at a lower land cost. If the weighting was linear, an increase in people would correspond to a linear increase in land cost, removing this incentive.
What this doesn’t factor in – can’t factor in – are the sparsely populated and hugely expensive areas, akin to the mansion area in Beverly Hills. It also doesn’t factor in resource deposits (a gold mine in the wilderness would be dirt cheap, and this may need adjustment to enter ballpark of reason). But the next section fixes that over time.
In any case, with this weighting, we can set our initial state income from contractual land lease by applying X over the respective plot weights. This assumes, of course, that the existing plot owners choose to agree to those leases – but most plots of land should find a customer, and the 5% safety margin above is to factor in a certain initial healthy vacancy.Adding market incentives to pricing
After the initial pricing, when leases are terminated by the customer (or the customer defaults on payment), land plots can be auctioned for lease moving forward. This creates a price discovery mechanism for the general area that can be factored in to the nearby plot lease pricing according to some to-be-determined mechanism that’s left as a minor implementation detail.
We’re also creating a secondary market where customers can trade leases directly between themselves, in what was previously buying and selling plots of land in tier-two ownership. This also assists in price discovery and highlights value differentials in the market.Problems and considerations
With a shift in how you regard a state as large as this proposal, there are a number of problems and questions to consider.
One of the first is whether someone can opt out of the lease entirely and still occupy the land, excluding others from its utility. The answer to that question, under this proposal, would be no. Such a mechanism would create an incentive to let all the border plots of land pay for the military defense of the entire country. It’s noteworthy, that under Land Value Tax philosophy which is similar in implementation but not philosophy, a payment for lease of the land is also a compensation to the community for a right to exclude other people of the same community from said land – after all, land property is of a completely different type than property you can hold in your hand and move physically, like an apple. But this proposal focuses primarily on the state as a fair market actor, rather than justifying a taxation with some obligation to compensate others for exclusion.
Still, in the realm of politics, this proposal takes the state construct 75% of the way toward such an opt-out being possible in the future.
A second good question is whether this isn’t just a reset button on state power, and which would enable the state to slowly grow back over time. This may be true, even if the proposal severely hinders such a growback by getting rid not only of taxation mechanisms, but also of the taxation discovery mechanisms (transaction reporting and recording infrastructure). That said, a hostile takeover could build such structures back over a 20-30 year period. But expressed differently, if you did have a reset button on the state’s ability to commit violence, would you not push it?
A third question that has popped up is the existence of a social safety net. There’s nothing in this proposal that precludes the state from providing civil services. For myself, I’m a warm proponent of Friedrich Hayek’s and Milton Friedman’s proposal of a Universal Basic Income to all citizens, as it does not require any bureaucracy at all for qualification, and allows the recipients to provide price discovery in how such a small basic income is best spent.Conclusion
A state can be a pure market actor and not require taxation. This enables enormous gains in efficiency, as the tax wedge can be completely eliminated, and enables wealth creation through maximization of the quantity of voluntary trades. Doing so does not preclude civil services or a social safety net. The proposal also allows for the elimination of all state databases except the citizen registry and the land registry, drastically reducing bureaucracy, and eliminates victimless crimes just by its nature of being a market actor.Syndicated Article
Civil Liberties: In this three-part series, I’m going to show how a state can be a pure market actor and not require taxation. The state will still have an income – cynics would call it taxes under any other name – but the key difference is that the income is obtained through market means, based on a state’s USP, and not through coercion by force. This leads to a society where the state does not need to know anybody’s income, wealth, or transactions, leading to the obsolescence of most registers and reporting requirements (including the elimination of a corporate register), and where a “black market” is a contradiction in terms, as the state does not interfere with the market it is a natural part of. It also means an end to victimless crimes by its very nature.Part Two: A low-friction voluntary economy
In the first part of this series, I introduced necessary new way of thinking of land ownership – how there are tier-one and tier-two land owners, and a nation-state is the only type of entity capable of owning land, on the basis that it’s the only type of entity able to maintain a military capable of repelling other tier-one land owners (other countries).
This leads us to part two, where I elaborate on the gains this brings, given that one accepts the premise that the state owns all land (even if it pretends to give sub-ownership, that’s still sub-ownership, as argued in part one). This means that people who formally lease a land plot pay a lease for that plot to the state. Everything is voluntary and on market terms, and this gives the state an income with which to uphold basic internal and external security, civil services, and a social safety net (probably universal basic income) to its liking – but just as probably not enough money to employ scores of unnecessary bureaucrats and gender study battalions.
(Let’s skip for now exactly what a land lease will look like – I’ll be returning to some basic thoughts around that and possible models in part three.)Wealth is created in the quantity of voluntary trades
Remember how, if we want to create wealth in a nation, our objective is to maximize the quantity of voluntary trades? This means we should enable people to trade how they want, when they want, what they want, and without any burden of taxing, recording, or reporting any of it.
This structure, where the state gets all its income from voluntary land lease and nowhere else, enables a society to have exactly that.
There is no longer any need for bookkeeping regulation. There is no longer any need for banking regulation. There is no car register. Apart from leasing land, there are no forms whatsoever.Gold bullion with the Bank of England. Did not really need taxation to be collected.
The state gets its income at the bottom of the stack, literally on ground level of the economy. Every other cost must be enough to cover that land lease. The rest of the economy can work exactly how it wants, and will work exactly how it wants.
There are no income taxes, which leads to people being able to make income how and when they please, from one or many sources. There are therefore no personal tax declaration and no tax return forms. There is no corporate registry and therefore no corporate taxes either — investment and bankruptcy protection can be well handled contractually — and therefore no bookkeeping requirements. There are no authority forms whatsoever for regular everyday business over and above the state income, which is land lease and only land lease.
(Obviously, corporations could keep proper bookkeeping anyway. If they want to. In any form they want. That’s the whole point! Maybe there are better forms of bookkeeping today than the double Venetian bookkeeping from 1495. Yes, you read that right: fourteen ninety-five.)
Imagine the amount of trade that can happen if you just allow it to happen, if you don’t burden it down with recording and reporting requirements for every single transaction – if you don’t have to care about any one single transaction and can have the state work just fine anyway!
This also means that there’s no tax wedge at all into the efficiency gains from division of labor. If there’s a few percent of efficiency to gain from exchanging services, there’s no longer a state which makes that unprofitable before there’s a 150% gain – or more usually a 500% gain. Imagine the efficiency gains unlocked!
As a corollary, imagine the wealth that can be built if you remove all – all – obstacles to trade like this! It has the potential to be running circles around a traditional society with an overdeveloped sense of bureaucratic order.
In part three, we’ll return more precisely to a few models of how the land lease could work in terms of market pricing and trade. There’s also the important question on how to value land improvements.Victimless crimes cease to exist
As a final note on this part, it is absolutely key that the Simplified Taxless State remains a non-privileged market actor, even if it is also the arbiter between market actors in another role. By this, I mean that the state is strictly prohibited from inventing “collective problems” and give itself the right to use force against citizens to “solve” those problems. This has the very important side effect that the state can’t enforce arbitrary behavioral rules against citizens where there’s no victim, and therefore, no claim.
In other words, in just that definition of the state duty, we have introduced a requirement onto the definition of a crime: There must be a victim pressing charges. This basically means that everything except crimes against life, liberty, and property cease to be criminalized immediately – just as it should be. There is no reason for a state to interfere with somebody exercising their property rights to manufacture slippers, a chair, or a DVD from their own materials. There is no reason for a state to interfere with voluntary trade of goods and services, except moralistic reasons, which should go out the window yesterday anyway.
Oh, and what about pollution, which is the most common objection to this? How would this scheme handle pollution? That’s actually one of the easiest things in this entire picture. Remember how, when you lease a residence, you’re liable for any damages caused to the residence by you during your lease? The exact same standard boilerplate could just as well apply to a land lease, and it’s as simple as that.
Liberty: In this three-part series, I’m going to show how a state can be a pure market actor and not require taxation. The state will still have an income – cynics would call it taxes under any other name – but the key difference is that the income is obtained through market means, based on a state’s USP, and not through coercion by force. This leads to a society where the state does not need to know anybody’s income, wealth, or transactions, leading to the obsolescence of most registers and reporting requirements (including the elimination of a corporate register), and where a “black market” is a contradiction in terms, as the state does not interfere with the market it is a natural part of. It also means an end to victimless crimes by its very nature.
What is a state’s unique selling point? What can a state construct do, that nobody else can do (or do nearly as well)?
I would argue that the value proposition of a state consists of three unique activities:
The problems with this set of state activities started when the state found out it was able to abuse its power as arbiter of civil disputes to give itself preferential treatment as a market actor, something we would describe as corruption in everyday terms. (Technically speaking, a state can’t think, so it was nobles and kings of flesh and blood who walked down this path, but let’s talk in terms of abstractions for the sake of simplicity.)
In any case, these are three things that a state is uniquely positioned to do well. A state that does this, and only this, is known as a Night-watchman state. However, as we shall see, when the state is treated as a market actor, it gets the ability to offer some other services over and above this basic set like various civil services – but only on market terms, never coercively.What is land property, when you look at it up close?
In order to model the Simplified Taxless State, we need to remodel our view of land ownership based on some harsh realities. To do this, we need to compare the property rights of land to the property rights of objects.
If the Russian Embassy were to steal an object from me here in Berlin, I would be able to seek redress and have Berlin order the property returned (or the value thereof), and the Russian Embassy in Berlin would have to comply, being on Berlin soil and Berlin jurisdiction. In this dispute, the Russian Embassy and I are equal-level market actors with Berlin as arbiter of a dispute.
However, a plot of land I have in Berlin is written into the Berlin ledger (land register), which – important! – assumes that the ledger itself is the authoritative source of who owns what land in a particular Berlin-controlled territory. If Russia were to steal that plot of land,from Berlin – or from Germany – and directly from the ledger that says I own it, thereby negating the ledger’s authoritativeness over what-used-to-be-my-plot-of-land.It has happened in the past, after all.
In this scenario, my plot of land would be transferred from the Berlin ledger to the Russian ledger, and that Russian ledger would completely disregard what the Berlin ledger asserted about “ownership”. And unlike the case with the object where I can seek redress in a dispute, there is no international arbitration for land ownership between states’ ledgers except brute military force. You own what you defend.
Thus, we can talk of tier-one and tier-two land owners, where tier-one owners are those land owners capable of defending their territory against state-level aggression (or capable of performing state-level aggression), and tier-two land owners are those who are somehow at the mercy of the tier-one owners retaining ownership of the land the tier-two owners think they own, but actually don’t when push comes to shove.
In cleartext, a state-level actor is the only type of actor capable of owning land. Within a state, there is arbitration for when tier-two “owners” are in dispute over a piece of territory. But between states, there is no international arbitration of land ownership – brutal aggression decides who owns what (whether one approves of that fact or not). When tier-two “owners” are in dispute, it is not much different from when two children are fighting over who gets to use family property: at the end of the day, it’s still the adults’ property.
If one accepts this reality – that the state is the only actor capable of owning land within its territory, and all other territorial actors are at the mercy of the state retaining ownership of that land – then one can also stop pretending that a tier-two ownership of land, an “ownership” within a state, defended by a state, and contingent on a state, is on the same level as a tier-one ownership of land.
And if the state is the only actor capable of owning land, then that land can be leased at market rates, thus giving the state an income with which to defend such territory and fulfill its three obligations on it – obligations possibly even specified as part of the lease. We’ll be looking closely at such income structures in parts two and three of this series, and how they encourage urbanization, resilience, and free trade.
In practical terms, absent a tabula rasa state like Liberland, a change like this can be a hard sell politically and make many enemies, as it obviously changes existing wealth structures and removes subsidies that are taken for granted. People who have “owned” land for generations (and have had it defended for free) will no longer have such a service provided for free, subsidized by coercive taxation of others. Therefore, it needs to be said that while this can easily be portrayed as a seizure of property from its current owners, it is not: it is an acknowledgement of the reality described above, that land owners operate in different tiers, and that a “land owner” on any tier below the first is completely at the mercy of the ledger maintained by the state — a ledger which would not be respected by a different state should it seize the territory in question.
Such a rethinking of land property, were it difficult to portray as the acknowledgement of tier-two property, could also be framed as a rewriting of tax rules: doing this while calling it “revising the taxation framework” would be completely within the bounds of the current corrupt state construct, but would set it on a path to rapidly and completely eliminate the coercive taxation construct as such and to make it very difficult to rebuild such state corruption, absent the databases and infrastructure supporting taxation.
What this means is not only that the state needs to behave as a market actor among many, but also that it can’t arbitrarily raise its income by the popular-but-harmful notion of “raising taxes”. Instead, a state has as much income as the market will determine (by auction, or by vacancy), and will have to adjust ambitions to actual capacity.
In parts two and three of this series, we’ll examine how such a remodeling to market principles results in a possible eradication of not just all taxes, but also all the supporting structures required for collecting taxes: the only databases necessary are a citizenship register and a land register. There’s no further need for a car register, a corporate register, coercive bookkeeping requirements, income reporting, tax returns, and so on. We’ll also look at a complete elimination of victimless-so-called-crimes as a result of the Simplified Taxless State.
(For people on the traditional left in politics, this proposal can also be called a Simplified Fair State, as the state doesn’t give itself preferential treatment in the market. Words are important and “fair” is classically a left-wing buzzword like “taxless” would be for libertarians.)Syndicated Article
New World: Politicians and policymakers don’t understand where wealth comes from. They don’t understand the very basics of why capitalism works, they don’t understand how the wealth of a nation can increase – and as a result, almost every single policy is counterproductive to a country’s competitiveness. This is despite the observation that the free market builds wealth due to one of the simplest of reasons, and once policymakers understand this, a completely different support structure would emerge.
Politicians and activists frequently regard the economy as a zero-sum game, where somebody must lose for another to gain. This is despite the quite trivial observation that we have built quite a lot of wealth from the Ice Age up until present day, and almost nobody is as bad off today as everybody was during the Ice Age. In this, it is baffling why politicians and pundits focus on redistribution, when the focus should be building of wealth.
But it’s counterintuitive for politicians to focus on building wealth, because doing so requires relinquishing control. Regulators can’t build wealth and competitiveness. They can only destroy it to various degrees. A lot of this comes from not understanding just why, and how, capitalism and the free market works to increase overall wealth, and not just redistribute it.
The free market brings 179,000 people out of extreme poverty every day. Not politicians. Not foreign aid. Not seized and redistributed wealth (minus the usual cuts to the redistributors). In my work in the European Parliament and elsewhere, I have rarely met a politician who understands the very fundamentals of why capitalism builds wealth – despite it being so ridiculously simple.
Capitalism works because it is voluntary.
It works because people seek to maximize their wealth, on a completely subjective basis. Some people value free time, some value money, some value happiness, some value rare Pokémon. That’s fine, all of it. The only thing you need to do as a politician is to get out of the way of millions of people trying to maximize their own value by trading something with other people.
In order to maximize overall wealth, you want to maximize the quantity of voluntary trades. That’s it.
Since every trade is voluntary, both voluntary parties consider themselves gaining in value from the transaction. This is key. As a result, a voluntary transaction adds value to the nation as a whole. Every voluntary trade adds a small bit of value, with both parties having gained from it, and maximizing wealth is about merely maximizing these voluntary trades on a purely quantitative basis. The more trades you have, the more increases in value you get.
Now, every person’s perception of “value” is arguably subjective. Some of it can be measured in terms of GDP, other subjective value is just happiness in various forms. The good part about the many forms of value is that you don’t have to concern yourself with this at all; people’s completely subjective understanding of value is much better than yours when distributed across millions of people.
The distributed free market is better even at determining and valuing the precise definitions of “value” than any bureaucrat has ever been.
Now, compare this with how politicians today try to “build wealth” or “create jobs” and thump themselves over the chest about it.
It usually involves creating horrible burdens on every single transaction. At a minimum, a receipt must be created (usually with penalties for not offering it). Moreover, transactions must be summarized to some kind of tax authority at regular intervals, and often to more than one authority. Meticulous bookkeeping is required – not for your sake, but for the sake of authorities. All this creates a wet blanket of unhappiness smothering the will to make voluntary transactions.
And then, of course, other politicians have the idea that regulated transactions are good for wealth, transactions which aren’t voluntary and therefore contain at least one losing party, if not two. These don’t build wealth. They may make the politician or regulator look good, but they aren’t a transaction in the free-market sense because they’re not voluntarily agreed upon by two consenting parties.
To top this off, all of the burden is usually directed toward subsidizing obsolete industries because they’re a vested interest and/or contributed a lot to somebody’s election campaign.
Politicians basically behave toward the free market and wealth-building like drunken elephants trumpeting about in a porcelain factory.
No, I don’t have an illustration for that.
Let’s do a thought experiment if we really wanted to create wealth in a nation, and just quantitively maximize the number of voluntary trades. How far can we go in making a nation competitive in this measure?
We’re eliminating all requirements to tell authorities about your transactions. No wet blanket of despair. That means no income taxes, no sales taxes, no bookkeeping requirements. You let people trade and be happy. This means you can’t have a corporate registry, there’s no regulation of employment (as that’s a special form of regular transaction), there’s possibly not even a concept of a corporation at all. There’s just people trading and taking entrepreneurial investment risks. Such risks can be detailed contractually in a project-by-project basis to eliminate the need for bankruptcy law and therefore the need for corporate legal entities and the heavy supporting authority bureaucracy.
There is still a need for a social safety net of some kind, not for compassion reasons, but for straightforward competitiveness reasons. You could solve this with a universal basic income like Friedrich Hayek and Milton Friedman have suggested. That would also be cheaper than building a bureaucracy for somehow determining who’s “worthy” of support. With such a general safety net, you create competitiveness for the nation overall as a lot more people will try out business ideas in entrepreneurship.
Society as a whole benefits from a risk-positive environment, and if you can provide a mechanism where anybody can try any stupid commercial idea without risking becoming homeless and indebted, more people will innovate and take risks – and the society using this mechanism will get a competitive edge.
So what you need is a population register with people who qualify for UBI (citizens or similar). You also need a land registry, for reasons I’ll be returning to. But that’s it. All other registers can be scrapped. Every one. Car plates, driver’s licenses, corporate registers, boat registers, every other database that requires data collection, and therefore puts obstacles in the way of maximizing the sheer quantitative amount of voluntary trades.
All this is perfectly doable today. It’s just that politicians think that Regulating More is the answer to creating wealth. It’s not, obviously. They Regulate More instead of focusing on something really simple – like the mere quantity of voluntary trades – and just doing everything possible to maximize that number, to get rid of obstacles for voluntary trades. As it turns out, you don’t even need taxes. Taxes require paperwork. There are ways to fund a state-construct maintenance that don’t require taxation and therefore don’t require paperwork.
I’ll be returning to that with a proposal for a Simplified Taxless State in a three-part series over the coming days.Syndicated Article
Repression: All governments of the world are cracking down on privacy and increasing mass surveillance, sometimes in the name of copyright enforcement, sometimes in the name of fighting terrorism, sometimes because they just want to. There’s a pattern here of similar things in the past – something is horrible, horrible, horrible, until the point where fighting the phenomenon just looks silly, counterproductive, and inhumane. Cannabis is there today, and it’s going to be years if not decades until it’s just as silly to fight people sharing knowledge and culture with each other, trying to brand them as awful people.
The striking pattern here is that people in power may regard an issue as completely peripheral, even downright uninteresting – like powerholders regard copyright – and still use the push from legacy industry interests as an excuse to get what they really want, like the copyright industry demanding mass surveillance.
Nixon declared war on cannabis… what year was it again? Oh nevermind exactly what year, it was as far back as when Nixon was president, which says a whole lot more than an exact year (it was 1968). His campaign advisor has since gone on record saying they knew all along they lied about the dangers of drugs, but that declaring war on them helped them shatter the communities that threatened Nixon’s re-election, specifically the hippies that opposed the Vietnam war.
“Did we know we [the Nixon administration] were lying about the drugs? Of course we did.” — John Erlichman
The pattern seems to be that social breakthroughs, getting rid of the old taboos, happen in a few areas first that test the waters, and when nothing bad happens, the floodgates open. Bloomberg did a good feature of it from a US perspective, analyzing US breakthroughs like women’s suffrage, marriage between people of different skin tones (which was once illegal!), and other similar issues.
“A few pioneer states get out front before the others, and then a key event—often a court decision or a grassroots campaign reaching maturity—triggers a rush of state activity that ultimately leads to a change in federal law.” — Bloomberg
When it comes to privacy in general, and sharing music, movies, culture, and knowledge between each other in particular, we can tell that we’re not at the “okay, this policy is just silly, everybody’s doing it and nobody cares” phase yet. Everybody’s sharing and nobody cares, except the copyright industry, and the powers that be are using every excuse of that industry to crack down and toughen existing laws. Even though everybody who knows something understands that the laws are not just ineffective, but counterproductive and silly, there’s no room for such thinking where the lobbyists of legacy industries roam unchallenged.
It took some 50 years to get to the “okay, this persecution is just silly” phase with cannabis. Let’s not make it fifty years with sharing and digital civil liberties.
Privacy remains your own responsibility.Syndicated Article
Cryptocurrency: Cryptocurrency will cripple governmental ability to collect taxes, and they won’t see it coming. When it’s already happened, expect major changes to take place in how society is organized on a large scale – but also expect governments to act in desperation to retain control.
As bitcoin launched in 2009, most early adopters saw its disruptive potential. While bitcoin has stalled for some time approaching a valid use of the term “stagnation”, cryptocurrency in a larger context is still just as disruptive. In 2011, I stated that bitcoin (cryptocurrency) will do to banks what e-mail did to the postal services. This is not just true, but it will be even more brutal to governments, and by extension, governmental services.
Now, governments love anything that smells like innovation, because it means jobs, this magic word that smells of magic unicorns to anybody in government. Therefore, people who like innovation are nurturing this bitcoin thing, this cryptocurrency thing, this ethereum thing (as if governments made a difference, but still). Lots of startups in tip-of-the-spear financial technology means that their government may get a head start over other governments. They have no idea that cryptocurrency will radically scale back the power of government, not just their own one, but also all those other governments over which it seeks a competitive edge.
Individual people in government can also love bitcoin because it gives them something to do. More specifically, it gives them something to regulate. Fortunately, other people in government see that this gives them something to do, which is to hold those government regulators with an overdeveloped sense of order somewhat in check. You’ll hear no shortage of wannabe regulators saying that “bitcoin is bad because it’s being used in crime and contraband trade!”, to which I usually respond, “well, bitcoin is a currency, so I mean you put it in relation to the US Dollar, which then… is not used in crime and contraband trade, is this the argument you’re using to support your position?”, at which point the discussion generally changes topic.
This completely disregards the observation that bitcoin and cryptocurrency were designed to not submit to regulation in the first place. Well, at least not governmental regulation. It is heavily regulated – but by its source code, and by its source code alone.
The reason this will cripple today’s governments — today’s idea of what a government is and does — is because today’s economy is built on one layer doing actual work and three layers of abstraction on top.
At the first and bottom layer of our economy are the individual people doing all the actual work.
The second layer on top of the first is the abstraction we call corporations, which is a way to organize our economy and optimize transaction costs.
The third layer on top of the second would be banks, which handle money for corporations and individual people in a middleman gatekeeper position.
Finally, the fourth layer is the government, which takes advantage of the banks’ gatekeeper position to siphon off taxes from money flows in order to fund itself and governmental services. In other words, layer four completely depends on layer three for its operations – or at least for the relative simplicity of funding its operations.
Now, what bitcoin and cryptocurrency do is make away with the banks – cutting them out of the loop entirely, making them redundant, obsolete, dinosaurified. This resulting absence of anything where banks used to be creates an air gap between the functional part of the economy – people and corporations – and governments who want funding.
The way governments want to tap all money flows in order to fund itself is not entirely unlike how the surveillance agencies want to tap all information flows in order to have an information advantage. In this way, the deployment of cryptocurrency is to tax collection what deployment of end-to-end encryption is to mass surveillance. The government can no longer reach into money flows and grab what it wants, but will be dependent on people actively sending it money. The government can’t point a gun at a computer and have it give up its money; you can only make a computer operator feel very sorry for not voluntarily producing the keys to that money. So the government is no longer able to collect taxes without the consent – even if coerced and forced consent – of the people being thus collected.
The deployment of cryptocurrency is to tax collection what deployment of end-to-end encryption is to mass surveillance.
Governments, and individual people in government, have no idea about this bigger picture. They’re far to wrapped up in things-as-usual to notice. They won’t see it coming until it’s already happened.
When this happens, there will be no shortage of people in government who suddenly want to regulate cryptocurrency – only to find out it will be as effective as regulating gravity. When this happens, government as we know it will be redefined from a coercive Colossus able to take what it wants and do what it wants into a construct that actually depends on people wanting to fund it. This will be a very interesting time to live in. While today’s governments will see themselves as getting crippled, I suspect most citizens will regard it as unquestionably healthy that governments will actually begin to depend on the approval of the people at large.
We’re just beginning to see the changes to society that the Internet brings. This is one of them.
(Note: I write cryptocurrency and not bitcoin on purpose here, just as I’d prefer proclaiming the success of social media over the success of Myspace.)Syndicated Article
Corruption: Net Neutrality is being discussed again, and it’s important that your friends understand why this concept is crucial. Instead of explaining it in typical technical terms, it’s usually better to draw parallels to if we hadn’t had infrastructure neutrality in other fields. Roads are frequently mentioned; I find electricity to be a much better example to get the point across.
Imagine if all your kitchen appliances only worked with one power company. The electricity they provided was somehow coded so that only their fridge, their freezer, their stove, and their washing machine could be used when their power is in your outlets.
Imagine the cost of switching to a better power company. Cheaper, more reliable, less smug. You’d have to replace all your home appliances. Every single one. Pretty much like moving from the US to Europe or vice versa, to double or half the voltage in the power outlets. The cost of replacing everything, everything, would be prohibitive. Therefore, the power company could pretty much charge you anything they wanted that was less prohibitive than buying new appliances for your entire household.
And of course, that power company would be the only company selling the appliances that are compatible with their particular power. Forget about choice. No Miele, no Samsung, not even any Ikea. Why would they care about choice? You need to use their power, anyway, so it’s not like you can walk away from the table if you don’t like it. They don’t need to get a quality manufacturer in China, or India, or Vietnam. Some startup in Burma or Laos will do fine.
This is infrastructure neutrality as applied to electricity. This is why we need infrastructure neutrality as applied to the Internet.
For once one power company has started doing this and gets away with it – a so-called “vertical bundling” that they claim is “free market practice”, which basically tells their customers that their satisfaction is worth less than what you scrape off from the underside of your shoe – all the others will follow, if there’s a small number of providers like there typically is with infrastructure. The customer lock-in effect is so enormous, the executives will be salivating over how much they can overcharge.
Now, compare this to your cable companies. We’re so used to Game of Thrones just appearing on HBO, some other show just appearing on just another place, and another on some other, et cetera, that we don’t reflect on it.
But the scenario without electricity neutrality is not imaginary. It used to be exactly like that, with power companies requiring only their particular electrical equipment to be connected.
We’re just used today to some industries getting away with this (entertainment) and some not (roads and electricity), and expect that today’s particular situation is somehow natural. But this was not always so. In electricity’s infancy, the described scenario with incompatible power companies was exactly how it was, with different energy companies delivering different types of power that were utterly incompatible with each other. Most notably, this was a technology fight between Edison and Tesla (and Tesla’s power solution won worldwide).
This is why we need net neutrality, this is why we need infrastructure neutrality in every kind of infrastructure.
Last but not least, don’t forget John Oliver’s take on net neutrality, who was (is) instead suggesting it should be called “preventing cable company fuckery” to paint a more illustrative picture of it:Syndicated Article
Copyright Monopoly: In a previous column, I outlined how the copyright monopoly is fundamentally, irreparably incompatible with privacy at the conceptual level. While the copyright industry may appear behind the times — even outright dumb — it is a mistake to believe they’re unaware of this incompatibility. To the contrary, their persistent and consistent actions show they’re trying to erode privacy at every level and every turn in order to tip the balance toward preserving their distribution monopoly at the expense of civil liberties and human rights.
To talk of human rights and civil liberties are at risk when you’re doing something that’s technically illegal – such talk can easily come across as exaggerated and hyperbolic, even objectively false. In this case, there would be no shortage of people who dismissed people who share knowledge and culture — file-sharers and streamers – as mere criminals trying to excuse something illegal. It’s a little reminiscent of people who yell “that’s against the Constitution” at every corner when they see something they either don’t like or insist they have a right to do.
However, in the particular case of people sharing movies, music, and TV series, there’s an authority on the matter that is hard to dispute – the European Court of Human Rights, the foremost international human rights court that supersedes even the constitutions of 47 developed countries. This court has ruled super clear that interference with people’s right — yes, right — to share and partake of culture and knowledge freely is indeed a violation of human rights:
For the first time in a judgment on the merits, the European Court of Human Rights has clarified that a conviction based on copyright law for illegally reproducing or publicly communicating copyright protected material can be regarded as an interference with the right of freedom of expression and information under Article 10 of the European Convention. Such interference must be in accordance with the three conditions enshrined in the second paragraph of Article 10 of the Convention. This means that a conviction or any other judicial decision based on copyright law, restricting a person’s or an organisation’s freedom of expression, must be pertinently motivated as being necessary in a democratic society, apart from being prescribed by law and pursuing a legitimate aim. It is, in other words, no longer sufficient to justify a sanction or any other judicial order restricting one’s artistic or journalistic freedom of expression on the basis that a copyright law provision has been infringed. Neither is it sufficient to consider that the unauthorised use, reproduction or public communication of a work cannot rely on one of the narrowly interpreted exceptions in the copyright law itself, including the application of the so-called three-step test […]
Note how the Human Rights Court specifically states that undisputably breaking copyright law is insufficient for a conviction thereof – a prescribed law of code is just one of the three criteria that must be fulfilled to justify breaking the human rights charter. This, just by itself, is a legal bombshell. (It doesn’t stop people from getting convicted, but raises the bar a lot.)
This is consistent with my previous column where I describe how and why enforcement of the copyright monopoly online is utterly incompatible with privacy as we know it – for infringements take place in private communications that may both be used for super-protected communications like leaking evidence of abuse of governmental power to the press under protection-of-source laws, and for sharing music and movies, and if you’re going to make the latter discoverable, you’re also negating the legal protection of the former.
The copyright industry not just agrees with this analysis, but understands it deeply and has integrated it into their strategy.
To the copyright industry, the conflict between human rights and the exclusive distribution monopoly is crystal clear, and to them, nothing can get in the way of the exclusive distribution rights we know as copyright — nothing must be allowed to. Therefore, when it is recognized that the judiciary must prevent convictions based on the exclusive rights alone, and that privacy rights (as guaranteed by the law and government) get in the way of enforcement of the copyright monopoly, the copyright industry opted for a two-pronged approach:
First, the copyright industry strived to circumvent the judiciary altogether, aspiring for the right to go full Dredd and become judge, jury, and executioner.
It did so on multiple fronts. The most famous attempt would probably be the introduction of a Three Strikes scheme, where the copyright industry would be given the right to shut off a household’s internet access — that’s an entire household’s access — on the basis of three accusations of sharing in violation of the monopoly. (And as we all know, the copyright industry never makes mistakes.) The legal fight in the European Parliament was very telling, with one single word making all the difference: prior. The fight was over whether people subject to such exile from modernity should have access to prior legal due process — as in, the copyright industry wanted to shut people off first, and then, while shut off, only then could they seek legal redress. In effect, they wanted a right to circumvent the judiciary and shut hundreds of thousands of people off the net as a big-hammer collective punishment, scaring people into submission from the prospect of losing all contact with modern life.
Of course, such a scheme would require the copyright industry to have some jurisdiction over what Internet Service Providers could and could not do. We’ll be returning to that shortly.
France was first out with a three strikes scheme, creating a new authority – the Hadopi – which was tasked to shut down the Internet for misbehaving households (or households the copyright industry accused of misbehaving, anyway). The European Parliament saw through this attempt of the copyright industry’s, with the help of a lot of activists, and made the practice blatantly illegal in all of Europe. The relevant legislation even sported something called “the Hadopi test” – meaning that if the law code didn’t outright ban Hadopi, three strikes, and everything smelling remotely like it, the law wasn’t properly written yet. The European law passed a wording passing this test, and with that, three strikes was completely illegal in all of Europe – no state was at liberty to send people into exile from modern society by shutting off their household’s Internet access on mere accusations from an offended obsolete industry.
The end result was that the copyright industry couldn’t shut people off en masse as was planned, but had to resort to talking in “education efforts” in their PR material with regards to forcing Internet Service Providers to do their bidding. It was an enormous win for civil liberties in Europe and elsewhere.
However, the copyright industry has also tried suing ISPs directly to get a judicial order forcing them to censor the Internet on their behalf. While not technically circumventing the judiciary, it’s still avoiding dealing with the human rights issue as such on the prerequisite case-by-case basis. Perhaps most infamously, IFPI – the international record industry association founded in Mussolini’s Italy – sued Eircom, the largest Irish ISP, for the right to install “filtering” (censoring) equipment directly into their network. Yes, you read that right: a private industry demanded the right to silence any conversation it didn’t like, just because it felt (feels) entitled to do so.
Second, in order to erode and curtail privacy rights, the copyright industry sought a forced conscription of the Internet Service Providers to act as police on their behalf. In this way, the copyright industry would be able to introduce both proactive non-governmental censorship and mete out extrajudicial punishments, circumventing and curtailing the human rights “problem”.
In order to mete out these extrajudicial punishments – typically threats of a lawsuit, “pay up or else”, also known as copyright trolling, the more neutral speculative invoicing, the Hollywoodesque “an offer they can’t refuse”: in order to do this, the copyright industry obviously needed to know who’s operating behind an IP address. (This isn’t technically identifying user data, as ruled by courts, but the industry wasn’t deterred.)
In order to do this, it needed two separate legal mechanisms:
First, it needed the legal right to coerce an ISP to give out identifying information behind an IP address, something even the Police didn’t have the right to demand for mere everyday infringements of copyright.
Second, it needed a mandatory retention time for ISPs for such data, enabling retroactive surveillance or the everybody’s a suspect principle, so ISPs wouldn’t be able to protect the interests (and civil liberties) of their customers and delete the data immediately, thereby preventing the copyright industry from demanding it a week or so later.
The first mechanism was achieved by the IPRED federal law in Europe, which I described in a previous column, the law which was spearheaded in the European Parliament by the spouse of the CEO of Vivendi Universal, one of the big four record companies. This law is still in effect, and for a time, the copyright industry did indeed have more far-reaching powers to invade people’s privacy than even the Police. (The Police have rightfully argued that this is bad, but instead of reverting the private industry’s private policing rights, the governmental police instead argued they should have the same authority. They mostly do, today.)
The second mechanism, forcing ISPs to retain data so it could be demanded later, has been one of the most controversial things to happen to Europe (and elsewhere). The directive – the federal law – was passed in the European Parliament on December 14, 2004, and was called the Data Retention Directive. It basically required ISPs to store all identifying subscriber data for some period of time, at least six months, turning this privacy violation from “absolutely forbidden beyond direct billing needs” to “mandatory”. The European Supreme Court (the ECJ) struck it down as utterly unconstitutional in April of 2014, almost a decade later: the Court didn’t just nullify it onward, rather, the law was ruled so grotesque a violation of human rights it was retroactively ruled to never have existed.
It’s trivial to find massive copyright industry support for both of these mechanisms, not just in public consultations to law proposals, but pretty much at every trade show and political gathering at the time the laws were discussed.
In summary, the copyright industry understands full well that its distribution monopoly is incompatible with human rights, and is working consistently to remove those human rights in order to maintain enforcement of its commercial distribution monopoly at any cost.
Privacy remains your own responsibility.Syndicated Article
Copyright Monopoly: Britain and France have been the primary copyright hawks in the EU, pushing for stronger distribution monopolies and harsher penalties at every turn. With Brexit in the cards, and a possible Frexit following this spring’s French elections, a hypothetical future EU copyright law looks much more sensible. Let’s review the dynamics at play.
Britain has already voted to exit the European Union, and with the possiblility of Marine le Pen winning the presidency in France, along with a campaign promise to leave the eurozone and/or the entire EU if she wins, there’s a possibility France will also be preparing an exit soon. In order to understand what impact these developments may have on future copyright legislation, let’s take a look at the dynamics at play over the last decade and how France and Britain have used their influence on the Union.
When the EU massively expanded eastward on May 1, 2004, the copyright industry realized the expansion would mean a permanent shift against evermore-policies of evermore-copyright: Eastern Europe isn’t fond of this rich-man’s-protectionism scheme at all. Therefore, the copyright industry tried their damndest to get everything they could crammed through the door before the expansion date, the date Eastern Europe would get their voting rights in the Union, in the so-called IPRED federal law (“directive”) – the IPR Enforcement Directive. This legislative package gave the copyright industry more far-reaching powers than the Police in many European states. Yes, you read that right: it gave the private copyright industry the right to break anonymity and privacy in many cases where the Police weren’t allowed to.
The idea was to cram much more into the directive, including four-year prison sentences for sharing music, but time was running out toward the EU expansion date, and so everything contested was cut out in order to pass what had been agreed on (IPRED), with the four-year-prison parts and more pushed out to a later successor package, IPRED2. This successor directive failed and was withdrawn in 2010, since power had indeed shifted permanently. The intended IPRED2 directive also had the side effect of criminalizing a lot of open-source software development, as it also criminalized patent infringements – something that has always been a purely civil issue – and that contributed to scuttling it as a Generally Very Bad Idea.
So how does this relate to France? That federal law which gave the copyright industry more powers than the Police, the original IPRED, was spearheaded in the European Parliament by a French Member of European Parliament (MEP) named Jannelly Fourtou. Jannelly is married to Jean-Réné Fourtou, who was the Chairman and CEO of Vivendi Universal during this time. Yes, this means that Vivendi – one of the big record labels – was essentially writing draconian European copyright law in 2002-2004.
France continues to be draconian in this area. One of the MEPs infamous for harsher industrial protectionism was the French Marielle Gallo, who was one of the people fighting hardest for the passage of ACTA, even in the face of massive protests across Europe. (“I know better what these people need than they do”, is an authentic quote from her in Parliament on the matter.) Gallo was defeated in the matter and no longer works in the European Parliament, having been replaced by people who hopefully understand the Internet just a little bit better.
So much for France. So what about Britain? Well, Britain is currently preparing laws that enable ten years in prison for sharing music and TV. Does that sound sensible to you – that sharing music with a stranger is worse than, say, aggravated sexual assault? Britain with its record industry (that’s record industry, as in making small silly round pieces of plastic, as opposed to music industry) has been a major powerhouse in the EU.
In other words, without these two draconian powerhouses, the much more sensible powerhouses like Poland will instead set the tone for industrial protectionism in Europe, leading to completely different policy moving forward – one where the old record labels don’t get to dictate policy. While there are a few other draconian countries, like Denmark, they’re of small influence compared to the big players.
This reasoning, of course, ignores the much bigger picture that a potential European Union without Britain and France is not the European Union as we know it today but something entirely different. But as this post has shown, that can also be a good thing, at least from some aspects.
As a final sidetrack here, it’s interesting to note that Britain and France are the only two countries in Europe with the kind of two-party system that the United States has, and which was constructed to resist temporary fads of populism at the cost of having a high inertia to actual change. Therefore, when real change happens (like with the Internet arriving 20 years ago), such countries will be the slowest to see its policy adapt to new circumstances. This is interesting to watch in the light of these countries clinging the hardest to old structures.
Meanwhile, and especially in times of change, privacy remains your own responsibility.Syndicated Article
Belgium: Several European countries will start requiring photo ID from passengers to ride trains, similar to airport identity checks. The requirement concerns the high-speed Thalys and Eurostar services in Europe, with the vague goal of “tightening security and tracking criminals”. Activists said this would happen when useless security theater appeared in airports – it will just spread, but people dismissed the idea at the time as preposterous, probably because it still is.
Reuters reports that Belgium, Netherlands, and France intend to have passenger lists and passport checks in place on high-speed trains by the end of the year. This is despite all three countries being part of the European Schengen zone with borderless and paperless travel – similar to how you don’t need to show papers when traveling between states inside the US or Canada.
When the airport security theater was rolled out, spearheaded by the USA following September 11, 2001, many privacy and security professionals criticized it for being intrusive and ineffective, respectively. Most notably, security guru Bruce Schneier pointed out that the only thing that really had a positive effect on security was the locked cockpit door, with a half-nod to armed air marshals as another possible measure that actually works (though being an air marshal is apparently one of the most boring jobs ever, with a horrible turnover combined with long and expensive training).
As a tragic side note, that one positive security measure – locked cockpit doors – has instead resulted in the death of 144 people.
The rest just doesn’t work. It’s theater, security theater. There’s even a YouTube channel with a guy constructing explosive devices and weapons only out of things he buys after the security check on airports.
And of course, it’s violating people’s privacy – their privacies of movement and of location. (In the TSA case, also their privacy of body.)
When these identity checks and this security theater appeared at domestic flights (at least domestic Scandinavian flights, which were as unchecked as bus rides before 9/11), activists warned of a slippery slope that politicians would like it so much, despite it being utterly ineffective, that train travel would be next. Everybody dismissed the idea as absolutely ridiculous. And it is. It is just as ridiculous when being forced onto train stations this year, as it already is at airports. We’ve just gotten used to it at airports already.
“The bullshit this generation puts up with as a temporary annoyance, the next generation will instead regard as the natural order of society and how things have always been.”
Germany is refreshingly choosing to not participate in these identity checks. It would increasingly seem that Germany is the only contemporary country who learned anything from totalitarian near-history, the only country that really has it in its blood, bones, and marrow that civic rights are there for a reason and are not to be taken lightly.
Make careful note at this time of the little remark at the end of the Reuters story: “The scheme will not be enforced… on bus services.” This is the first time I see somebody even mentioning the possibility of having a photo ID requirement to ride a bus. The idea has been conceived.Syndicated Article
Civil Liberties: Asia Nikkei has just reported that the Trump administration has formally withdrawn from the TPP, the Trans-Pacific Partnership, a protectionist agreement masquerading as a free trade agreement. This also indicates certain termination of the corresponding TTIP agreement. Before the champagne pops open, though, it’s important to realize that something else will happen instead, and we don’t know what: these policies go back a full four decades.
Since the late 1970s, the United States has projected industrial dominance across the world by tying aggressive trade negotiations to its foreign policy. This was a bold and unusually aggressive move in the 1970s which was recommended by the ACTN, the Advisory Committee on Trade Negotiations, a committee which was headed by Edmund Pratt Jr – the head of Pfizer – and which reported straight to President Carter.
The background to this tectonic shift in the late 1970s was basically Toyota. When the geopolitical strategists in the United States observed that the American public actually preferred Japanese cars over the freedom-loving (and gas-loving, and spare-parts-loving) cars of ole American Detroit, it was written on the wall that the United States could no longer compete on industrial production alone. Putting America first, a number of committees tried putting in place international agreements that would ensure America’s status as king of the hill even in the face of superior industry elsewhere – essentially a very advanced form of rent-seeking.
The American negotiators first went to the United States WIPO with this proposal, where they were rather unceremoniously kicked out on the street, the United Nations seeing the proposal for the rent-seeking that it was. Instead, they needed to hijack another forum and convert it to what they wanted, and there were many to choose from. The choice fell on the GATT forum, the General Agreement on Tariffs and Trades.
Through a series of sessions where countries were played against each other, GATT was slowly converted into something called “GATT-plus” at the time, where a new global trade agreement would honor protectionist monopolies of the United States – particularly Hollywood’s distribution monopolies in the form of aggressive copyrights and the pharma industry’s monopolies on manufacturing drugs – in exchange for being able to trade at all. This way, it didn’t matter if Japan had better cars, or indeed, better everything. The world would pay rent in any case. (Of course, such a scheme only works while the US has a majority of the internationally recognized exclusive rights, but in the 1970s, China was nowhere near overtaking the US in quantity of patents and other monopolies).
Once finished, this new agreement was named TRIPS – and a new body was created to oversee it and supersede GATT. This new body was named the WTO, the World Trade Organization.
With the Internet entering the stage, the copyrights in this agreement started to collide with basic liberty – specifically, privacy. Where our parents had had the right to send an anonymous letter containing anything they wanted without it being opened in transit, powerful forces in the copyright industry wanted to curtail this liberty for our digital children, on the simple basis that “they can’t make money if anybody can send anything to anybody else anonymously”.
Not that it should matter; tomorrow’s civil liberties should never have to take a back seats to preserving yesterday’s business models.
Quite notably, even when these agreements were sold with the argument that they don’t change existing laws or only cause minor changes, it’s important to understand that the agreements also lock out the possibility of future reform. Their entire purpose is basically to tie the hands of legislators.
In order to understand just how critical enforcement of the copyright monopoly is to the United States geopolitical dominance, we can look at what happened when Russia applied for entry into the WTO. The point of controversy was a site named allofmp3.com, a site which sold mp3 files at far below record-level rates, and did so completely legally under Russian law as it was classified as a radio station, albeit a digital one.
The United States demanded it closed. That was the only notable American demand for Russia’s accession.
So let’s back up here a little: two former mortal enemies who had held each other at nuclear gunpoint 24-by-7 had come to the negotiating table and agreed to settle their differences. The United States could have asked for anything, absolutely anything. And so what did it ask for?
It demanded that Russia close a bloody record store.
This is when you start realizing the scale of importance of these frameworks. They’re not free trade agreements, they’re domination insurances.
On June 1, 2006, the New York Times reported that US trade negotiators have warned Russia that the continued existence of AllOfMP3 could jeopardize Russia’s entry into the World Trade Organization. This was reiterated by the United States Trade Representative Susan Schwab in remarks to the US Chamber of Commerce on September 28, 2006. — Wikipedia
Fast forward to 2010 and “TRIPS-plus”, known as ACTA (deceptively named the Anti-Counterfeit Trade Agreement). This was going to be yet another ratcheting up of protection of US industries across the globe – among other things, it would put generic drug production in India out of business. But in this case, the Internet rose up in response to the copyright industry overreach against liberty and managed to defeat ACTA in the European Parliament on July 4, 2012.
There is no small irony in Europe asserting its independence from American special interests as momentously as this on July 4 of all dates.
Without the European Union, which is the world’s largest economy, there would be no global ratcheting up of protectionist agreements. (China was the probable target of the ACTA framework, seeing it was the only major economy not a party to the negotiations.)
And so with the defeat of ACTA, liberty activists knew that the trade negotiators would come back and try again. It’s their 9-5 job, after all. But they wouldn’t hinge success on European consent again. Therefore, in the next round, the trade negotiators went west from the US and east from the US in separate trade agreements essentially saying the same thing, but independently from each other, avoiding the ability for the European Parliament to put en end to the whole shebang as disappointingly as last time around.
The westbound post-ACTA agreement across the Pacific was to be called the Trans-Pacific Partnership, the TPP.
The eastbound agreement across the Atlantic was to be called the Transatlantic Trade and Investment Partnership.
All this has a straight line in history back to the WTO, the Carter era, and Toyota overtaking Detroit.
The TTIP had run aground in negotiations with Europe – one negotiator mentioned that in several years, not one single of the 20-plus points in the agreement had come to closure – and in particular, something called the ISDS proved controversial: a framework where corporations cound sue entire countries for making unfavorable laws in the face of their business model. Yes, it is exactly as insane as audacious as it sounds. For a prime example, see when Philip Morris used such a framework to sue Australia for requiring plain cigarette packages.
This is why it’s very interesting to see the Trump administration announce a withdrawal from the TPP. It ends 40 years of United States trade policy. While some are calling Trump’s policies “protectionist”, that’s not necessarily true – these policies since the 1970s have been protectionist if anything.
So it remains to be seen what the U.S. Trump administration will do instead. I have a hard time imagining all the built-up rent-seeking will just be dropped on the floor.
If you want to read more about these background events, I can recommend the book “Information Feudalism: Who owns the knowledge economy?” by Drahos and Braithwhite. It’s a bit heavy, but shows through deep interviews with the 50 most involved people what really happened behind the scenes when the WTO came into existence.
Meanwhile, however, liberty online just got a major reprieve from the aggression of the copyright industry (who gets to dictate major parts of these agreements). That’s something inherently positive.
Privacy remains your own responsibility.Syndicated Article
Cryptocurrency: The third Satoshi Roundtable has just concluded in Cancún, Mexico. The Roundtable is a private gathering of 100 movers and shakers within the bitcoin industry, with no media present, and it’s held under Chatham House rules – meaning everybody can use the information shared at the meeting, but never disclose who said what or their affiliation.
First, it can be acknowledged that an event like this can feel like elitism to those who are not invited. Nevertheless, it must be argued it is a very efficient way to make shit happen, and seeing there’s nothing preventing anybody from inviting people to a relaxed meeting, there’s nothing inherently wrong with doing so just because the whole world isn’t invited. This is the third annual Roundtable (and yes, the knight on the picture is the Roundtable mascot).
These are my impressions, and I’m taking the liberty to be blunt. Being blunt saves time that is otherwise needed to guess what people meant.The good
First, the meeting was superbly arranged by the Bitcoin Foundation and Bruce Fenton. It was set in just the type of location which makes it easy for participants to hang around the meeting venue instead of taking a taxi to whatever favorite other venue and splitting up, which makes all these magic spontaneous small meetings happen.
For me as a Nordic person, it wasn’t too bad to come to 27°C in the air and 23°C in the water in January, either. Not to mention the intense sunlight. (The sun doesn’t rise in large parts of Scandinavia this time of year.)
It was also a breath of very fresh air, after having felt the antagonistic attitude and tensions in online discussions, to see people meet and honestly try to exchange perspectives and gain understanding. In short, people are behaving not just like civilized adults, but like humble thought leaders. You’d never believe this if you just participated in online discussions.The outstanding
The productivity in a meeting like this is amazing. It’s so intense, you’re having high-impact discussions with everybody you meet, every five to ten minutes at tightest. Almost every single interaction leads to cooperation opportunities. Meeting so many other movers and shakers in such a tight spacetime means there’s an ignition of opportunity pretty much with every person you speak to.
I also had very fruitful and frank – even blunt – discussions with people who represent ideas and objectives seemingly diametrically opposed from mine in the bitcoin sphere, and there was a humility in the air and a willingness to listen and understand that is plain inconceivable if you are judging by the online toxicity. Again, I’m not allowed to disclose whom or their affiliation, but they deserve a metric ton of credit for the attitude. You know who you are.
I’m leaving Cancún with eleven actionable items I wouldn’t have had without meeting all the amazing people here, just one of which would have been sufficient to justify the trip and attendance.The beautiful
“Blockchain technology is an extinction event to traditional financial institutions. Like the dinosaurs, a few will survive by morphing into agile birds at a small fraction of their previous weight and size, but most will just die.”
I’m not allowed to disclose who said this, but I think it’s a beautiful quote. Roger Ver also posted the first part of it on Twitter, similarly without disclosing who said it, as is appropriate.
There was also a call for leadership among the people present – “we need to act like the leaders we are, and not tolerate bad attitude in the discussions: at the very least, we need to act as good examples and not foster a bad atmosphere”. This was very refreshing to hear and was met with applause.The bad
The major bitcoin discussions concerned segwit and the present deadlock. As it’s taking most of the energy right now, I’m also going to devote a lot of space to those impressions. There were many hours of discussion with (a non-identified subset of) people present calling for “segwit adoption and activation now”, plain and simple, with frustrated expressions that Chinese miners are “blocking progress” by not signaling, deploying, and activating segfault, basically “because they should be doing so”.
In a speaking slot of mine, I stood up and made the observation that we (people in the room) are acting like a Toyota boardroom who are trying to make a decision that every family should buy the latest Toyota model. “It doesn’t work like that”, I said. “We’re not the Soviet Politburo commanding a planned economy. The reality of the situation is that we’ve made the market an offer, and the market is rejecting our offer.” I made the point that thinking the market should behave differently, no matter how good your reasons, is not going to make the market behave differently in the slightest. The Toyota boardroom doesn’t get to decide what car a family should buy, and the present company does not get to decide what code miners run on their own machines. The world isn’t fair, but instead of complaining about it, play the cards you’ve got on your hand. Give your client what they want and you both benefit.
Some people seemed to take to this argument. Most didn’t, appearing to be stuck in the mindset that miners are there to serve the community, as opposed to the actual objective, serving themselves only as a rational economic actor.
I find it really, really frustrating that you have a room full of otherwise hyperintelligent people, who were told in very clear terms by the Chinese miners what those miners want about a year ago (a hardfork increasing the max blocksize limit for the present type of transactions to at least 2 megabytes), and today, you have the same people asking in frustration why Chinese miners are not adopting segwit when those miners said in bright blinking cleartext a year ago what it is they want, and it is not segwit. The lack of understanding the customer perspective comes across not just as substandard, but appalling to the level of downright confusing.
The conclusion from this meeting appears to be to do mostly nothing and just expect segwit to activate, possibly lowering the activation threshold (which would not go over well at all). I find that disappointing, because it means that 44 weeks from now, when segwit has definitely failed to activate (when the activation window closes), there will be a flurry of confused activity as what to do next. So in 52 weeks, we’ll be at another Satoshi Roundtable with absolutely no progress at all, if this is the only path worked on.
The alternative, of course, is that a hard fork happens in the meantime. There are at least four levels of hardfork that can take place, and the most likely is that enough miners just switch to a non-Core bitcoin distribution with a higher or dynamic blocksize limit – the second easiest level of hardfork.
I am aware of several hardfork initiatives, at three different levels, that are already underway with work progressing. I predict and anticipate an actual fork event to take place six to 18 months from now. And it’s not going to be “firing Core” as some would frame it; more accurately, it’s going to be “firing Blockstream”. The open question would be if such an event happens in time to preserve bitcoin’s first-mover advantage over other, technically superior coins – my crystal ball is very hazy on this point.
Overall, my assessment is that bitcoin is lacking project management. There’s no clear vision of what the community wants bitcoin to be, who the customer is, or what problem it should solve. This is maybe best illustrated by the rather random statement “It’s now clear that microtransactions have been priced out by rising transaction fees”, as one person stated in the meetings.
Yeah, bitcoin just lost two billion users, and it was presented like a freak, unforeseeable, completely unpreventable accident – like a volcano erupting. In reality, it was foreseeable for years and completely preventable. It’s okay to not prevent such a catastrophic loss of userbase as an active choice or as a choice of whom to target – but it’s not okay to merely observe “oh and by the way, this just happened”.The ugly
The meeting started with the observation that there are now 70,000 transactions in the backlog. Despite this, a subset of the participants insist that there’s absolutely no problem with network capacity. It’s as if that subset of participants and another subset (including me) are living in different realities.
A further subset of people – I am still not going to name or imply an affiliation because Chatham House rules – insist on the importance of not taking risks with the bitcoin network. This comes across as completely counterfactual to me. We’ve seen a capacity ceiling approach for two years, and now we’ve hit it – how can you talk about not taking risks at the same time as you completely ignore the approaching and completely predictable capacity wall for several years? To many, this would come across as some form of arrogance, but calling it that would be to assign bad faith. I don’t believe in bad faith in this company; I prefer to assign the phenomenon to tunnel vision.
I’ve seen segwit rationalizations that doing a hardfork would take 12 months “and we must choose a fast path now”. Well then, the right thing to do would have been to start executing that hardfork lifting the blocksize limit a year ago, when miners declared loudly and openly that this is what they want. But that wasn’t done, and here we are a year later.
The best time to plant a tree was twenty years ago. The second best time is today. –Chinese proverb
Of course, this argument could be trivially rebutted by claiming that something has been done: segwit. But in my blunt world, it’s results that count, and segwit is not happening. Again, this was completely predictable with a modicum of project management.Conclusion
In conclusion, it was a very productive meeting that was superbly organized and executed. Some of my preconceptions were shattered, particularly with regard to attitudes and professionalism; others were more or less confirmed, particularly with regard to stances and action plans of various actors and actor groups, as well as my assessment of the political situation at hand.
After this meeting, I’m very bullish on bitcoin’s future. There’s one thing I believe in more than ideas, and that’s people. Specifically, people with the ability to execute those ideas — and there’s a ton of them here. They’re not going to let bitcoin die silently with a whimper, but something will happen to resolve this deadlock, and it’s going to happen sooner rather than later with all this energy around. I cannot predict what that event is — as I said, I’m aware of three hardfork initiatives myself — but I am quite sure such an event will come from somewhere.
Copyright Monopoly: Enforcement of copyright is fundamentally, conceptually incompatible with privacy of correspondence. You can't have the sealed and private letter in existence at the same time as you enforce copyright, once communications have gone digital. This is the reason you see VPN companies and other privacy advocates fight copyright enforcement and copyright law: because society has to choose between privacy and copyright, and basic civil liberties are considered more important than one particular entertainment business model.
Why is a VPN company interested in copyright law? Why does a VPN company even question copyright law expansion and enforcement? Why do the most appreciated internet operators talk back a lot to the copyright industry – and are appreciated by their customers for that very reason? Why does the net generation generally say, as a blanket statement, that copyright law just has no place in an Internet world?
Is it, as some would claim, because BitTorrent users make up a majority of the paying customers of a VPN company or an internet operator? That the net generation just wants everything for free? That the VPN company profits from protecting criminals? You know, there are people who would actually claim this with a straight face, apparently serious. The facts are clear on the matter, though: BitTorrent usage is neither a majority reason for using a VPN, nor are heavy-bandwidth users particularly profitable. And the net generation has no illusion about everything-for-free being sustainable or even desirable – but they do defend their liberty ferociously.
No, the reason successful VPN teams are critical of copyright enforcement goes deeper. Much deeper. It has to do with the basic passion for privacy that led a founder to create a VPN company in the first place, and for passionate co-workers to share the vision of privacy being a civil liberty worth defending.
There is a little-acknowledged conflict between enforcement of the copyright monopoly – which is a governmentally-sanctioned private monopoly on distribution, duplication, and transmission of certain bitpatterns – and private correspondence as a concept. When I open a digital communications channel to somebody, I can use that channel to transmit private correspondence (thoughts, ideas, feelings), for which there is a constitutional right to privacy. But I am also technically able to use this channel to transmit a piece of music, at TV show, or a movie, which would typically be illegal – a violation of the copyright distribution monopoly, and there is no shortage of people who do.
Thus, the key observation here is that the infringements of copyright used to be visible to the naked eye in a public location – they could be a printed book for sale in a bookstore, or an unlicensed concert — but the infringements have now moved into private correspondence, into the protected private sphere. An active BitTorrent is a set of ones and zeroes that arrive at and leave my computer, interspersed with all the (other) private things I do on the same computer: browse sensitive information, send mail, advise political dissidents, et cetera. I could also be using email or chat channels to violate copyright, for that matter, at the same time as I’m sending anonymous evidence of governmental abuse to a reporter on another channel. The only way to discover the illegality of a small part of the aggregate bitstream my computer is transmitting is to capture and analyze all of it. Thus, we’re now at a point where enforcement of this distribution monopoly has become irreconcilable with keeping the very concept of private communications.
There's no way to say that private correspondence is still as completely protected as it's always been, but copyright-infringing data transmissions are not. They're mixed in with each other now, mixed with each other forevermore, and the only way to tell which is which is to look at the aggregate stream, pick it apart, and analyze it. The act of sorting requires observation. At the point somebody has sorted the private correspondence into legal and illegal, it is no longer private, by definition. Thus, the only way to maintain the concept of privacy is to prevent the observation, and as a consequence, prevent the discovery of infringements of the copyright distribution monopoly. There is no middle ground. None. It’s one or the other: privacy or copyright.
This is why a privacy company fights against copyright enforcement. It follows from that company’s very existence, which in turn usually follows from a deep passion for civil liberties on behalf of the founder and co-workers.
“If I send you an e-mail, that e-mail may contain a piece of music. If we are in a video chat, I may drop a copyrighted video clip there for both of us to watch. The only way to detect this, in order to enforce today’s level of copyright, is to eliminate the right to private correspondence. That is, to eavesdrop on all the ones and zeros going to and from all computers.
There is no way to allow the right to private correspondence for some type of content, but not for other types. You must break the seal and analyze the contents to sort it into allowed and disallowed. At that point, the seal is broken. Either there is a seal on everything, or on nothing.
So we are at a crossroads. We, as a society, can say that copyright is the most important thing we have, and give up the right to talk in private. Either that, or we say that the right to private correspondence has greater value, even though such correspondence can be used to transfer copyrighted works. There is no middle ground.”
— From the book The Case for Copyright Reform
Curiously, a lot of people seem to defend the copyright distribution monopoly in a vacuum – as if there was no cost to upholding it, as if there were no bad effects down the road, only somebody making money in a vacuum. “They get to decide how the fruit of their labor is distributed. How is that a bad thing?” Well, it is a bad thing when the consequence of that principle is that nobody gets to communicate in private anymore. It is a very bad thing. And that is, indeed, its consequence. Many seem to reason along this line:
“Because I (we) make money from this legal construct, it is just and righteous, and therefore this legal construct has a right and an obligation to keep existing, no matter what else happens.”
Worse still, some take the stance that infringing the distribution monopoly is “stealing”, despite this being obviously false from moral, philosophical, economic, and legal standpoints. Yes, legal – even the U.S. Supreme Court says that infringing the copyright distribution monopoly isn’t related to stealing, and U.S. courts have grown so tired of this false rhetoric they’ve even banned the copyright industry from using such terms in court, quite an unusual and far-reaching measure.
It can be debated whether there is a tangible loss of income involved; studies show the income to artists from direct copyright is “insignificant” when taking a statistical view and comparing it to overall creator income. Regardless, and this is an important point, even if maintaining private correspondence and thereby preventing copyright enforcement does result in a loss of income for some people, it is still the right thing to do: civil liberties do not get to compete with business models, and no entrepreneur has the right to dismantle civil liberties such as privacy just because they claim they can’t make money otherwise. These two concepts – foundational civil liberties and a particular business model – are concepts that reside on completely different levels in our society.
The reason this conflict receives so little political acknowledgment most likely has to do with the two concepts being in different departments, and nobody (so far) having considered the issue important enough to do a cross-department prioritization. Copyright and other forms of Industrial Protectionism typically reside in a Department of Commerce, and basic civil liberties like privacy typically reside in a Department of Justice or similar.
So there are two sides of a scale here that are utterly, completely irreconcilable, and society must choose one of them and abandon the other. On one side of the scale is private correspondence at the conceptual level, or at least whenever it happens in a digital environment, which is increasingly all correspondence there is. On the same side, as a consequence of the right to private correspondence, are also freedoms of the press and freedoms of assembly and opinion. Meanwhile, on the other side of that scale, we find a distribution monopoly for an entertainment industry — a monopoly which enables a few centralized business models for entertainment and arts, but isn’t remotely required for the vast majority of the conceivable entertainment business models. When valuing these two sides of our scale against each other, which side has more weight and importance to society as a whole? It should not even be a matter of discussion.
Of course, there is also the issue of a law that cannot or must not be enforced. Some people claim that there’s nothing wrong with the law, just with its enforcement. But the existence of an unenforced law is not justified the first place, and serves only to undermine respect for the legal system as a whole. After all, the text of law cannot be separated from its enforcement in practice.
There are many other civil liberties that are grounded in privacy, such as freedoms of speech, expression, and assembly; also the freedom of the press. These are also at stake. The Freenet philosophy is unusually clear about this:
“Of course much of Freenet’s publicity has centered around the issue of copyright, and thus I will speak to it briefly. The core problem with copyright is that enforcement of it requires monitoring of communications, and you cannot be guaranteed free speech if someone is monitoring everything you say. This is important, most people fail to see or address this point when debating the issue of copyright, so let me make it clear: You cannot guarantee freedom of speech and enforce copyright law. It is for this reason that Freenet, a system designed to protect Freedom of Speech, must prevent enforcement of copyright.” — Freenet Project philosophy
On the other hand, once you acknowledge that privacy must take priority over today’s distribution monopoly enforcement, you can instead reap all the positive rewards of every single human being having 24-by-7 access to all of humanity’s collective knowledge and culture. Just as when libraries appeared, the effect of this is not to be taken lightly. Moreover, all the tools for this effect have already been rolled out, all the infrastructure built, everybody already trained. All we need to do is to remove the ban on using it.Syndicated article
Copyright Monopoly: When the copyright monopoly was reinstated in 1710, the justification was that of publishing being many orders of magnitude more expensive than authoring, and so without it, nothing would get published. But the Internet has reversed this assumption completely: publishing is now many orders of magnitude cheaper than writing the piece you want to publish.
The copyright monopoly, as we know, was created on May 4, 1557, when Queen Mary I introduced a complete censorship of dissenting political opinions and prevented them from being printed (and thus the “right to copy” was born as a privilege within a guild, by banning all wrongthinkers of the time from expressing ideas). This stands in contrast to France’s attempt at banning the printing press entirely by penalty of death in at least two aspects: One, England’s suppression was successful, and two, the suppression has survived (albeit mutating) to present day.
After the Glorious Revolution of 1688, which is a point of pride in that no blood was shed (at least none that mattered to the history writers), people were really really really tired of the censorship, and wanted to end it promptly. Thus, the monopoly that was the foundation of copyright – the exclusive right to the London Company of Stationers to print anything in the country, in exchange for letting it pass by the Crown’s censors first – the monopoly of copyright was not renewed as the law required, and lapsed in 1695.
Yes, the copyright monopoly ceased to exist in 1695, after having been in effect since 1557.
The post-revolution British parliament would have none of it.
The formerly very profitable print shops, having operated under a repressive monopoly upholding political censorship, though — they would petition Parliament again, and again, and again, to reinstate their lucrative monopoly, but to no end. Parliament just wouldn’t introduce something like it again. What’s really interesting here isn’t the fact that the printers gathered their families on the steps of Parliament to weep for bread to their children, but the arguments they used, and what didn’t happen:
First, they argued that nothing would get printed if they didn’t get their monopoly back, as they couldn’t make a profit. The extremely noteworthy part of the argument is that they didn’t argue nothing would get created – but that nothing would get printed.
Second, the authors had no interest whatsoever in this construct. The printers and publishers were the ones arguing for the monopoly, claiming to speak on behalf of authors, and presented the idea that authors should “own” their works and have such “ownership” transferrable by contract — knowing full well authors would have no choice but to sign their rights away to the previous vested interest.
The British Parliament bought this line of reasoning, unfortunately, sending us down 300 years (and counting) of suppression of speech by those who have most to profit from suppressing it. This date – the reinstatement of copyright on April 10, 1710 – this is what the copyright industry deceptively calls “the birth of modern copyright”, in an attempt to conceal or dissociate from copyright’s origin as political censorship.
The real meat here lies in understanding that the entire underlying assumption, and justification of this construct, was that publishing was far more expensive than writing. Setting up a print shop required considerable investment and labor in order to distribute works, whereas writing just required pen, paper, and time.
“Far from viewing copying as theft, authors [in 1700] generally regarded it as flattery. The bulk of creative work has always depended, then and now, on a diversity of funding sources: commissions, teaching jobs, grants or stipends, patronage, etc. The introduction of copyright did not change this situation. What it did was allow a particular business model — mass pressings with centralized distribution — to make a few lucky works available to a wider audience, at considerable profit to the distributors.” — Copyright historian Karl Fogel
The Internet has completely reversed this assumption. Thinking in terms of time required, the effort required to publish is now approximately the equivalent effort of writing a few words – here in WordPress, it involves moving the mouse to the upper right corner, placing the cursor over “Publish”, and pressing the left mouse button. Thus, we can observe the following:
Where the reintroduction of the copyright monopoly – the “modern” copyright monopoly – was justified by publishing being several orders of magnitude more expensive than authoring, the Internet has made publishing several orders of magnitude cheaper than authoring, completely reversing the original premise.
Of course, there will be no shortage of people who profit from an artificial limitation, once it is in place. You could easily argue today that X and Y must not change, because A and B profit from the status quo — and so, the copyright industry readily claims that so and so many thousand jobs are upheld (“created”) by this artificial and harmful limit. But really, what kind of an argument is that? Who has the right to prevent the passage of time because they benefit from a lack of change? This is effectively the copyright industry’s single argument today.
And that industry will let nothing stand in its way – in particular not civil liberties such as privacy. They have consistently tried to erode basic freedoms under the guise of preserving the status quo, when what they’re doing is denying our children the liberties that our parents had, such as the ability to send an anonymous letter to somebody.