February 2007 - cypherpunks-legacy

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[dave@farber.net: [IP] Britons angry over trash bin tracking]
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26 Feb '07

----- Forwarded message from David Farber <dave(a)farber.net> -----

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[jamuir@scs.carleton.ca: "Low-Resource Routing Attacks Against Anonymous Systems"]
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26 Feb '07

----- Forwarded message from James Muir <jamuir(a)scs.carleton.ca> -----

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[Dgcchat] Totalitarian Force Monopoly and Geodesic Capital (was Re: [Clips] The Economics of the Rise of Ahmadinejad)
by R.A. Hettinga 25 Feb '07

25 Feb '07

--- begin forwarded text Delivered-To: rah(a)shipwright.com Delivered-To: clips(a)philodox.com Date: Sun, 25 Feb 2007 13:28:27 -0500 To: "Philodox Clips List" <clips(a)philodox.com> From: "R.A. Hettinga" <rah(a)shipwright.com> Subject: [Dgcchat] Totalitarian Force Monopoly and Geodesic Capital (was Re: [Clips] The Economics of the Rise of Ahmadinejad) Reply-To: clips-chat(a)philodox.com Sender: clips-bounces(a)philodox.com --- begin forwarded text Delivered-To: rah(a)shipwright.com Date: Sun, 25 Feb 2007 12:38:31 -0500 To: Dgcchat(a)dgcchat.com From: "R.A. Hettinga" <rah(a)shipwright.com> Subject: [Dgcchat] Totalitarian Force Monopoly and Geodesic Capital (was Re: [Clips] The Economics of the Rise of Ahmadinejad) Sender: dgcchat-bounces(a)dgcchat.com -----BEGIN PGP SIGNED MESSAGE----- Hash: SHA1 At 9:50 AM +0000 2/25/07, Darren Rhodes wrote: >The note below assumes that Republicans and Democrats are not >different wings of the same party; similarly for Conservatives and Neu >Arbeit in the UK. In other words the West is ruled by one party >states. > >As has been pointed out many times before on this list fiat currency >is the enemy. Apparently, the source of the article didn't completely confound your abilities to reason clearly about its content. ;-) The point of the article, to me, was that more access to capital increases freedom. That single party states (for some definitions of "party" :-)), decrease the availability of capital, and that that the availability of capital decreases exponentially with the totality of control, eventually resulting in famine, suffering, and war. By the way, I think we're in reasonable agreement, to the extent that I think this applies to western countries, as well, since we're, currently, in the process of increasing government control on more and more things in general -- but, in particular, for this list, and in light of very recent events, the very flow of capital itself. In the interests of lively discussion, however, :-), I'll chum the water for the flame-sharks out there by noting Jeanne Kirkpatrick's distinction between authoritarians, like Augusto Pinochet, and Lee Kwan Yew, who didn't brook much political dissent but allowed freedom in most other spheres, particularly economic ones, and totalitarians, like Hitler, Mao, Stalin, and Pol Pot, (or Fidel Castro, the Kim dynasty, and, now, apparently, Hugo Chavez) who insist on literally controlling the totality of their citizen's behavior, with varying degrees of "success" in doing so. Note that currently, government of all stripes, using information technology, both financial and otherwise, is trending toward totality of control, because, like the lewd joke about dogs, they can. Authoritarians, paradoxically, make money and can be pretty safe for capital. Totalitarians, are, of course, unsafe for just about everyone, sooner or later. In the same way that psychiatric disease is increasingly diagnosed by which psychopharmacological substance changes which undesired behavior, the article seems, to me, to point to capital and access to same as the definition of the distinction between the two. Which leads me to some interesting thoughts about force monopoly in general. To the extent that armies are designed to kill people and break things, states, too, are *exactly* about force monopoly and nothing else, and literal mayhem results when they are used for any other purpose. To look at both extremes of the continuum, authoritarians are about maintaining their force monopoly, political power, pretty much to the exclusion of anything else. Totalitarians, on the other hand, are about using their force monopoly and political power to control everything around them. In so doing, they not only fail in their objectives, they *destroy* everything around them. That leaves vote-market controlled force, because I think that voting, democratic (small-d) and republican (small-r), systems work better than totalitarians or authoritarians in allocating the use of monopolistic force, and have been ultimately desirable as places, in the modern world, to build, and conduct markets for, capital. The United States, pretty much since the original Anglo-American colonization until the advent of automated central records processing with Hollerith cards in the early 20th century, was a splendid example of democratic and quasi-democratic, even anarcho-capitalist, force control. Capital flowed in, prospered, and eventually the US became the largest capital market on the planet. Even the Civil War was, mechanistically, at least, proof that industrialism and capital and obviated the need for slavery itself, a peculiar totalitarian "institution" with a history at least as old as the wild-grain sedentiarianism that preceded agriculture in the Levant some 17-12,000 years ago. Automated records processing, coupled with the first light-speed telecommunications, eventually enabled an increase of the span of control, and it's no surprise that it was first used in the "enhanced" censuses of the time, and, ultimately, on the constitutionally-amended re-introduction of the income tax itself, both of which are impossible without that technology. Modern book-entry transactions are, of course, another result of this, producing an increasing totality of control, and institutional gigantism, until well into the 20th century, before, eventually, Moore's Law and microprocessors started to disassemble that process and create actual dis-economies of scale. I cite the collapse of the Soviet Union, and, the apparent conversion of China from totalitarian to authoritarian control as reasonable examples of this process. And thus, I think, as always :-), that reality, literal, physical, reality, is not optional. Technology, not politics, software, not legislation, is the only solution to this problem of the universally increasing government trend towards totality of control. A phenomenon that, to me, at least, is more a symptom of the end of such behavior, than it is of the beginning. The sale of totalitarian indulgences as a precursor to a possible geodesic reformation, if you will. To me, the thin edge of the wedge is enhancing the free flow of capital exclusive of the still-increasingly totalitarian, but nonetheless inertial, trends of the modern nation-state. Financial cryptography as the printing press of geodesic capitalism. Cranking out heretical "tracts" of capital as quickly as modern financiers can dream them up and "publish" them in free markets. I don't say that the solution is easy to execute, but we do have to tools to reverse this trend, to eventually free finance from government control, to convert "economics" -- which, in the same way that "theology" is actually philosophy (natural and otherwise :-)) as applied to religion, is essentially finance as applied to nation-states -- to the same level of intellectual exercise that religion now holds in the modern mind. Something one does, in civilized countries anyway :-), in the quiet solitude of one's own mind, exclusive of the wielding of violent force. Force which, ultimately enabled by this new, geodesic capital, will become less monopolistic over time until auction markets will prevail over monopolistic ones, everywhere, and for *all* markets. Perhaps then, like it did for slavery, technology will finally liberate us from the "peculiar institution" of force monopoly. Cheers, RAH -----BEGIN PGP SIGNATURE----- Version: PGP Desktop 9.5.3 (Build 5003) wj8DBQFF4cmQw/EfyN/eiFoRAsqeAJ0YDdXEXIceEZPfRyGWg+STeZEtwgCg5EaA zi6fu0IyNOqYr6eRslPvf50= =ZV/d -----END PGP SIGNATURE----- -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire' _______________________________________________ Dgcchat mailing list Dgcchat(a)dgcchat.com http://mail.dgcchat.com/mailman/listinfo/dgcchat_dgcchat.com --- end forwarded text -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire' _______________________________________________ Clips mailing list Clips(a)philodox.com http://www.philodox.com/mailman/listinfo/clips --- end forwarded text -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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[Clips] The Economics of the Rise of Ahmadinejad
by R.A. Hettinga 25 Feb '07

25 Feb '07

--- begin forwarded text Date: Sat, 24 Feb 2007 18:01:58 -0500 To: dgcchat(a)dgcchat.com From: "R.A. Hettinga" <rah(a)shipwright.com> Subject: [Clips] The Economics of the Rise of Ahmadinejad Cc: Bcc: X-Attachments: --- begin forwarded text Delivered-To: rah(a)shipwright.com Delivered-To: clips(a)philodox.com Date: Sat, 24 Feb 2007 17:15:51 -0500 To: Philodox Clips List <clips(a)philodox.com> From: "R.A. Hettinga" <rah(a)shipwright.com> Subject: [Clips] The Economics of the Rise of Ahmadinejad Reply-To: clips-chat(a)philodox.com Sender: clips-bounces(a)philodox.com <http://article.nationalreview.com/print/?q=ZjgxM2YwMTMzNzk3ODU4YzM4NWE3MDU3…> The National Review December 19, 2006, 8:42 a.m. The Economics of the Rise of Ahmadinejad Capital markets (or their absence) are central to the emergence of evil and the one-party state. By Reuven Brenner When Iranian President Mahmoud Ahmadinejad visited the U.S. recently, he didn't say explicitly that the Holocaust was a myth. Instead he asked why so much emphasis is put on the 6 million Jews who died during WWII rather than the 60 million people who perished during the conflict. Then, at a Tehran conference where Holocaust deniers congregated with Orthodox rabbis who apparently believe the state of Israel should not exist, Ahmadinejad offered a message satisfying each camp. He told the delegates that the Holocaust should be questioned and that Israel's days are numbered. One wonders, with the terrible lessons of 20th century totalitarianism still so ripe, how history could repeat itself so blatantly and so soon. I hold that the answer lies in just how one-party states such as modern Iran emerge, and of what happens when the access to capital is limited within societies. Of course, the systematic extermination of the Jews started in the early 1930s. By then, Germany had rebuilt itself from the ruins of WWI and the devastating hyperinflation of the 1920s into a powerful, educated, industrialized nation, where science and technology thrived. True, all this occurred within a one-party state. Yet, if such apparent prosperity can lead to murderous instincts not being suppressed, where is the advantage of Western Civilization, which is built on the concept of prosperity? In a recent op-ed in the Wall Street Journal, Mark Bowen asked, Why is the Holocaust haunting the collective memory of the West? Bowen concluded, "what the Holocaust demonstrates is the danger of a one-party state." This conclusion is partially correct, but it begs the question: How did Germany get from the Weimar Republic, a democracy, to the one-party state? And why did the Germans tolerate such a state and accept its murderous ideology? Whether the Germans agreed deep down with Hitler & Co. is irrelevant. Actions - or, in this case, the lack of actions - matter. During the 1920s, Germany, Austria, Hungary, Poland, and Russia each printed money with abandon. This brought about hyperinflation, which weakened or destroyed the capital markets in these countries. Banks failed, markets crashed, unemployment rose, and the middle classes lost their lifetime savings. People want to live first and philosophize a bit later. With their savings gone, these Europeans turned to two other ways of accessing capital: government and crime. Predictably, each of these countries moved toward centralization - that is, government become the main financial intermediary. When the citizens of these countries looked abroad, there was little to admire. England and the U.S. were each suffering through depressions (in the U.S., due to mistaken fiscal and monetary policies). These governments too moved toward centralization, though to a much different degree. Up sprung the jargon of "public works" and, eventually, the Keynesian term "aggregate demand." Here the governments also would become intermediaries, charged with raising and then allocating capital. Importantly, however, this was done without England or the U.S. ever becoming one-party states. Power is dispersed within democracies, and democracies are always weakened when more money flows through government hands. This is true even when the facade of democracy persists. When more capital sifts through the government, more groups depend on government handouts and have less access to sources of capital that are independent from the ruling political parties. But the U.K. and the U.S. retained many more independent sources of capital than did Germany, Austria, Hungary, or Russia during the 1930s. The dangers come when a country either does not develop its capital markets or destroys them on purpose or inadvertently. When this is the case, the chances of one party taking power and imposing its ideology increase. Conversely, when capital markets are opened, the risk that one-party states will emerge diminishes. As independent sources of capital surface, political power is dispersed and lasting prosperity follows. Thus, it is a mistake to promote democracy without first establishing the ground for letting people have access to capital and collateral - or at least coordinating such access with political change. After all, prosperity is the result of matching people with capital, while holding both sides accountable. What happens when societies either do not have or destroy their financial markets? Even today very few societies have developed the institutions that can enable the development of deep financial markets - a solid legal infrastructure and free media among them. In this scenario, most people wanting access to capital have no other option but to turn to government, which will raise the money - either through taxes or borrowing - and then distribute it. That's how one-party states such as Ahmadinejad's Iran emerge: People bet on crazy ideologies when their customary ways of living suddenly crumble and capital markets close. Capital markets are the unique feature of the West, and their democratization is the key to the civilizing process and the best insurance against the emergence of one-party states. Indeed, that's what the U.S. should have been "exporting" all along in the Middle East, coordinating the promotion of capital markets with the necessary political changes in Iraq. - Reuven Brenner holds the Repap chair at Desautels' Faculty of Management, and is partner in Match Strategic Partners. The article draws on his books Force of Finance (2002) and History: The Human Gamble (1983). -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire' _______________________________________________ Clips mailing list Clips(a)philodox.com http://www.philodox.com/mailman/listinfo/clips --- end forwarded text ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire' --- end forwarded text -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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25 Feb '07

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