July 2018 - cypherpunks-legacy

EDRi-gram newsletter - Number 6.23, 3 December 2008
by EDRI-gram newsletter 06 Jul '18

06 Jul '18

============================================================ EDRi-gram biweekly newsletter about digital civil rights in Europe Number 6.23, 3 December 2008 ============================================================ Contents ============================================================ 1. Changes in the telecom package adopted by the Council 2. French EDVIGE decree withdrawn 3. Effects of counter-terrorism legislation on freedom of the media 4. Sweden on the verge of passing the local IPRED law 5. Turkey: Another blocking order against YouTube 6. Ireland proposes to legalise covert surveillance 7. UK rejected data breach notification law 8. Parliaments seem to use very little IT technology 9. Recommended Action 10. Recommended Reading 11. Agenda 12. About ============================================================ 1. Changes in the telecom package adopted by the Council ============================================================ A political agreement on the telecom package was reached by the EU Council on 27 November 2008. Even though the final text does not support the 3 strikes measures proposed by the French Presidency, it has also deleted some important amendments adopted by the European Parliament in order to safeguard the citizen's fundamental rights. Austria and Denmark have spoken up for keeping the Amendment 138 during the Council meeting. Bulgaria, Hungary and Poland joined them in an attempt to provide safeguards for users in the event of any attempts to sanction them or restrict their access to content on the Internet. They asked the exclusion of any issues related to copyright enforcement and the promotion of creative content instead. But in the end, the Council decided the deletion of this amendment, the only pretext expressed being that the wording was too broad. The new text of the modified Universal Services Directive allows the national regulatory authorities to "promote cooperation between undertakings providing electronic communications networks and/or services and the sectors interested in the promotion of lawful content in electronic communication networks and services." The adopted recitals makes it clear that any cooperation procedures will not allow for systematic Internet monitoring and that the Member States, and not the electronic communication providers, have to "decide, in accordance with due process, whether content, applications or services are lawful or harmful or not." The decision of the Telecom Council to reject the 3 strike scheme, comes after the EU culture ministers took a similar decision on 20 November. They also suggested promoting legal offers of music or films on the Internet. The EU Culture Council considered that "a fair balance between the various fundamental rights" needs to be establishedwhile fighting online piracy, first listing "the right to personal data protection," then "the freedom of information" and only lastly "the protection of intellectual property". In fact, the Commission has already sent a number of critical comments on the French draft law on 3 strikes, suggesting a long series of changes in order to comply with the European legislation. The text adopted by the European Telecom Council is not so positive from the privacy point of view. Thus, the Council has rejected the suggestion of the Parliament to allow a study on Internet Protocol (IP) addresses and their use that should have been promoted by the Commission. The Council has decided to keep Art 6 par 6 (formerly amendment 181 adopted by the European Parliament) that has been interpreted as an open door for voluntary data retention. Thus, the German actions to push for the rejection of the amendment 181 in the Telecom Council did not found a majority, despite the public position of the German federal minister of economic affairs Michael Glos. He agreed with a number of civil society representatives that this amendment "would create unmanageable data dumps and thus expose sensitive data on our communications and movements to risks of abuse." The Telecom Council has taken the European Commission's point of view in restricting the obligation for personal data breach notification only for electronic communication providers, thus excluding the Parliament amendment that extended this provision also to "any company operating on the Internet, providing services to consumers, which is the data controller and provider of information society services." The Council has also limited the number of cases when the notification to the competent Authority and affected individuals is mandatory only in cases representing "a serious risk for subscriber's privacy." This common position adopted by the Telecom Council is a base for new negotiations between EU Bodies, that could meetthis month. Also, a new informal meeting of the Telecom ministers is already scheduled on 17 February. The second reading of the European Parliament on the agreed text could take place at the beginning of 2009. 2907th Transport, Telecommunications and Energy Council meeting (provisional version) - (27.11.2008) http://www.consilium.europa.eu/cms3_applications/Applications/newsRoom/Load… European Council - Reviewed ePrivacy Directive (27.11.2008) http://register.consilium.europa.eu/pdf/en/08/st15/st15896.en08.pdf European Council - Reviewed Universal Service Directive (27.11.2008) http://register.consilium.europa.eu/pdf/en/08/st15/st15899.en08.pdf Federal government supports opposition against "voluntary data retention" (25.11.2008) http://www.vorratsdatenspeicherung.de/content/view/280/79/lang,en/ EU states bin telecoms 'super-regulator' idea (27.11.2008) http://euobserver.com/19/27192 Citizen safeguards striked out in EU Council (26.11.2008) http://www.laquadrature.net/en/citizen-safeguards-striked-out-in-EU-council Bulgaria, Hungary, Poland - only EU members on the same page vis-a-vis Internet content control (1.12.2008) http://blog.veni.com/?p=898 European Council opposes Parliament on Amendment 138 (27.11.2008) http://www.iptegrity.com/index.php?option=com_content&task=view&id=212&Item… EU ministers reject ban on free downloading (21.11.2008) http://www.euractiv.com/en/infosociety/eu-ministers-reject-ban-free-downloa… Denmark and Austria speak up for citizens rights (27.11.2008) http://www.iptegrity.com/index.php?option=com_content&task=view&id=211&Item… Commission response to France's obligation of notification for its "graduated response" law (only in French, 27.11.2008) http://www.latribune.fr/entreprises/communication/telecom-internet/20081127… EDRi-gram: Data breach notification - different opinions in EU bodies? (19.11.2008) http://www.edri.org/edri-gram/number6.22/data-breach-ec ============================================================ 2. French EDVIGE decree withdrawn ============================================================ It seems the demonstrations that took place on 16 October against the EDVIGE decree have found an echo with the French authorities. The French Government has finally withdrawn the EDVIGE file after a very strong mobilisation of the citizens through the "No to EDVIGE" group that gathered several associations and unions, including EDRi-member IRIS (Imaginons un Riseau Internet Solidaire). The withdrawal of the decree is different from the abrogation in the sense that the withdrawal has a retroactive character meaning that all the information gathered since the creation of EDVIGE 1.0 has to be destroyed. The RG file, introduced in 1991, previous to EDVIGE, will remain valid until 31 December 2009 but no information will be added to it starting with 1 July 2008. However, the liberty advocates and associations are still vigilant and stay careful while waiting for the occurrence of the newly envisaged file called EDVIRSP which has not yet been published. The new version which should exclude the collection of personal data related to health, sexuality or data on personalities or minors below 13 is now with the French Data Protection Authority - CNIL (Commission nationale de l'informatique et des libertis) before being sent to the State Council. IRIS and the rest of the "No to EDVIGE" group are still concerned by some of the issues of the new version such as the creation of a file based on suspicions and not facts, the collection of data related to religious beliefs, ethnical origin, union membership, political opinions as well as data on minors older than 13. So, for the time being, before the issue of a new file, the data already collected for the withdrawn EDVIGE file cannot be used which means that the police cannot gather data at this point. However, there are concerns that, in this case, the police will use other sources such as Cristina, a similar file to EDVIGE, which is a defence classified file that can provide the legal basis for the collection of data. "We are now under a legal blur and this blur is never favourable to liberties' said Helhne Masse-Dessen, lawyer of "No to EDVIGE" group. IRIS Press release on the withdrawal of EDVIGE1.0 - First citizen victory but vigilance stays in place (only in French, 20.11.2008) http://www.iris.sgdg.org/info-debat/comm-edvige1108.html Decree no. 2008-1199 of 19 November 2008 on the withdrawal of decree no. 2008-632 of 27 June 2008 on the creation of automatic treatment of personal data called EDVIGE (only in French, 21.11.2008) http://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000019774085 Withdraw EDVIGE1.0 team Press Release - + No to EDVIGE ; team congratulates itself but stays mobilized (only in French, 21.11.2008) http://nonaedvige.ras.eu.org/spip.php?article920 The Edvige file officially withdrawn but not yet replaced (only in French, 21.11.2008) http://www.lesechos.fr/info/france/4800116-le-fichier-edvige-officiellement… The Edvige file officially withdrawn, the opponents stay "vigilant" (only in French, 20.11.2008) http://www.google.com/hostednews/afp/article/ALeqM5gRs-meyd--OCvfnMRd3rHruo… EDRi-gram: Protests in France against the Edvige file on St. Edwige day (22.10.2008) http://www.edri.org/edri-gram/number6.20/edvige-saint-edwige-day ============================================================ 3. Effects of counter-terrorism legislation on freedom of the media ============================================================ A new report conducted by Privacy International (PI) for the Council of Europe Media and Information Society Division reveals effects of new counter-terrorism laws on media and free expression rights in European countries. The report "Speaking of Terror" examines how the "war on terror" has affected access to information, the growth of incitement, glorification and "extremism" restrictions on speech, blocking of internet sites, increased surveillance of journalists and limits on protection of journalists' sources. The report finds that the laws have already seriously affected freedom of expression while providing little benefit in fighting terrorism. The report also examines the roles of the United Nations Security Council, European Union and Council of Europe in promoting new laws while paying little attention to human rights. The findings of the study reveal that international bodies including the Council of Europe (CoE) and the European Union (EU) have adopted many international agreements that either ignore or only pay scant attention to fundamental human rights and the importance of a free media. Their agendas are often driven by those countries that are most aggressive in adopting expansive counter-terrorism laws including the UK, US and Russia. The role of European institutions such as the EU and the CoE have resulted in greater adoption and harmonization of these laws than most other regions. New laws on prohibiting speech that is considered "extremist" or supporting of terrorism have been a particular problem. These laws are used in many jurisdictions to suppress political and controversial speech. Newspapers have been closed and journalists arrested. Web sites are often taken down or blocked. State secret and national security laws are regularly being used against journalists and their sources even as access to information laws are widely accepted and adopted across the CoE. Protection of journalists' sources are often undermined by governments seeking to identify officials who provide information. Even the protection is widely recognized both in national laws and in decisions of the European Court of Human Rights. New anti-terrorism laws are giving authorities wide powers to conduct surveillance. Other new laws impose technical and administrative requirements on the ability to intercept communications and keeping information. Of particular concern are data retention laws which require the routine surveillance of all mobile and Internet users that can be used to easily identify sources and journalists' investigations. Speaking of Terror: A survey of the effects of counter-terrorism legislation on freedom of the media in Europe http://www.privacyinternational.org/issues/terrorism/speakingofterror.pdf ============================================================ 4. Sweden on the verge of passing the local IPRED law ============================================================ The Sweden Government is to pass these days a controversial law that might give the entertainment industry some tools to track down those that illegally share copyrighted material on the Internet. The law, which is based on the European Union's Intellectual Property Rights Enforcement Directive (IPRED), has been under debate for more than a year and claims to be essential by the Swedish industry which complains that, presently, Sweden lacks the necessary legislation to support them: " Swedish laws are considered something of a joke and our politicians are viewed as arrogant for not taking this seriously. Sweden has the worst laws in this area and, consequently, the worst problems with piracy. It is embarrassing that Sweden has waited so long to put in place a directive that was implemented long ago by our European neighbours." says a letter addressed to the Swedish Government by the director and producers of the Swedish movie "Let The Right One In". The law, which is planned to come into force on 1 April 2009, would make it possible for copyright holders to get a court order requesting ISPs to provide IP addresses associated with computers which have downloaded copyrighted material without paying for it. The copyright holders could afterwards contact those suspected of illegal file sharing requesting them to stop the activity. If those in question do not comply, the copyright holders can use the information obtained from the ISPs to sue the infringer and ask for compensation for copyright violations. With this, the Swedish draft law would go even farther than IPRED. The proposed law faces a large opposition from centre-right political parties and youth organisations. More than 22 000 members have joined a group started by Pirate Party vice-chair Christian Engstrvm on Facebook which is called Stoppa IPRED (Stop IPRED) and which has sent e-mails of protests to Swedish Parliament members. "We have examples from other countries where this has amounted to the legalization of wide-spread blackmail. Record companies get the name of someone suspected of file sharing and send out a letter demanding 20,000 Swedish crowns (1 800 euros) or some other made up sum with the threat that if you don't pay, we'll be taking you to court" said Engstrvm In an attempt to answer to these concerns, according to Sveriges Radio, justice minister Beatrice Ask, whose ministry is responsible for the law, has asked for the deletion from the draft law of a clause making the law enforceable retroactively, fact which would have giving the industry the possibility to access information about people who have been illegally downloading copyrighted material over the past few years and therefore to take the respective people to court for actions performed in the past. Another change that seems to have been introduced by the minister is that IP addresses can only be given when the suspected file sharing is "of commercial nature." The vote of the Swedish Parliament on the matters is expected these days. Swedish copyright laws 'a joke' (26.11.2008) http://www.thelocal.se/15946/20081126/ Justice minister offers concessions on file sharing law (21.11.2008) http://www.thelocal.se/15844/20081121/ Sweden judges back Pirate Hunter Act (14.11.2008) http://www.theregister.co.uk/2008/11/14/sweden_closer_to_antipiracy_law/ Lines drawn in battle over file sharing bill (14.11.2008) http://www.thelocal.se/15688/20081114/ Resistance mounts to new file sharing law (7.11.2008) http://www.thelocal.se/15536/20081107/ ============================================================ 5. Turkey: Another blocking order against YouTube ============================================================ For the forth time in two years, on 20 November 2008, the Turkish authorities blocked access to YouTube asserting that certain content posted on the site was disrespectful to Kemal Mustafa Atat|rk, the Turkish Republic's founder, or supported the outlawed Kurdistan Workers Party (PKK). Turkey is the only country in the world banning YouTube. "We have said it before and we say it again now - blocking access to YouTube is wrong. It has been blocked since 5 May, as a result of an earlier court order, and the obstinacy shown by the authorities is unacceptable. Denying Turkish citizens access to this file-sharing site violates freedom of information" said Reporters Without Borders. The Cubuk magistrate court issued the latest blocking order on the basis of article 162 of the criminal procedure law and of Law 5651 on crimes and offences committed online which has been in force since November 2007 and which obliges ISPs to block access to websites declared illegal. According to this law, a public prosecutor may ban access to a website within 24 hours if the content is considered "liable to incite suicide, paedophilia, drug usage, obscenity or prostitution" or if it "contradicts the law of Atat|rk." YouTube is not the only site banned by the Turkish authorities. Since 2007, based on the same laws, about 1 000 websites which have been blocked by Turkey's Telecommunications Directorate. Besides YouTube, recently, nacizanebilgo.com, the Turkish popular dictionary website has also been made inaccessible following a complaint from religious leader Adnan Oktar on the grounds that the site editors allowed Internet users to post "insulting" terms on him. Lawsuits initiated by Oktar have resulted in the blocking of at least 61 websites. Other banned websites include that of a teachers' trade union and the site of the British biologist Richard Dawkins. "Banning YouTube, Google's blogging site, the websites of a teachers' trade union, Richard Dawkins and even a Turkish dictionary stands alongside more than 40 cases against writers and journalists even since the reform of the so-called anti-Turkishness article of the penal code," stated Richard Howitt, the vice president of the European Parliament's Human Rights Sub-Committee. Howitt, who is a supporter of Turkey's becoming an EU member, met Justice Minister Mehmet Ali Sahin on 27 November in Ankara and asked him to overturn the decision of banning the sites, in the interests of free speech, warning about the implications of such actions upon Turkey's EU adhering process. "As a modern country looking forward to European Union membership, Turkey should be embracing new communications rather than putting itself in the same bracket as some of the world's pariah states," he said. According to Kerem Altiparmak and Yaman Akdeniz, authors of the book "Restricted Access", Internet restrictions are against European Union standards and Turkey could face charges at the European Courts of Human Rights for violating the freedom of expression. The authors argue that Turkey's current Internet regulations, besides being procedurally flawed, are designed to censor political speech: "Clearly the current regime, through its procedural and substantive deficiencies, is designed to censor and silence speech. Its impacts are wide, affecting not only the freedom of speech but also the right to privacy and fair trial. It has been reported that prosecutors have even demanded that politicians widen the scope of the law to include insults, defamation and terrorism. This antiquated approach remains unacceptable in a democratic society." The authors also point out the fact that blocking a site is also a totally inefficient method to combat illegal content: "Blocking as a preventative policy measure has been explicitly dismissed within the context of terrorist use of the Internet at the level of the European Union. Furthermore, circumvention technologies are widely available, and the filtering and blocking mechanisms and methods currently used in Turkey are easy to circumvent even for inexperienced Internet users." One argument in favour of this is that even the Turkish Prime Minister Tayyip Erdogan stated to the press that, despite the ban, he could access YouTube and even provided the information of how to do it. MEP urges turkey to end YouTube ban (28.11.2008) http://www.google.com/hostednews/ukpress/article/ALeqM5j6NR6ouzA63R5vnPNxaZ… YouTube censored yet again by another court order blocking access (25.11.2008) http://www.rsf.org/article.php3?id_article=29421 European parliamentarians urge Turkey to remove YouTube ban (1.12.2008) http://www.hurriyet.com.tr/english/domestic/10463374.asp?scr=1 Turkey could face charges at European court over restrictions (30.11.2008) http://www.sundayszaman.com/sunday/detaylar.do?load=detay&link=160202 Ban on YouTube proves virtual (1.12.2008) http://www.hurriyet.com.tr/english/domestic/10441126.asp?gid=244 EDRigram - YouTube blocked once more in Turkey (30.01.2008) http://www.edri.org/edrigram/number6.2/youtube-turkey ============================================================ 6. Ireland proposes to legalise covert surveillance ============================================================ The Irish Government has approved the outline of a Bill which, if passed by Parliament, will permit police to break into private property to plant covert audio bugs and video cameras. The Covert Surveillance Bill is intended to legitimise what is already believed to be existing practice, to make Irish law compliant with the European Convention on Human Rights and to allow evidence obtained in this way to be used in court. Judicial approval will be required before this can be done, except in exceptional circumstances. The procedure to deal with cases of exceptional urgency is too lax. Under the Bill as it stands those cases would bypass the judicial process entirely, so that surveillance could take place for up to 14 days without any authorisation. There must be a question mark as to whether this provision would be constitutional if it was used to break into and bug a dwelling. Instead, it would be preferable to deal with cases of urgency by permitting Gardam to commence surveillance without a judicial authorisation but then requiring that an application be made to the District Court for permission to continue the surveillance. Despite its broad title, the Bill addresses only one very narrow area - the covert surveillance of locations by devices which are physically planted in those locations. Many other forms of surveillance - such as the use of GPS devices to track the position of cars, the use of long range cameras and microphones to monitor locations from a distance and live monitoring of Internet activity - will still be entirely unregulated. As a result there will continue to be doubt as to whether Gardam have the power to use these types of surveillance and as to whether the resulting evidence can be used in criminal prosecutions. Meanwhile, although there is some legislation regulating other forms of surveillance such as the interception of communications, data retention and Garda use of CCTV, that legislation has developed on an ad hoc and reactive basis with few consistent principles applying to its use or oversight. Much of it is also out of date, most notably the 1993 interception of communications legislation which due to technological changes no longer adequately protects email and other Internet communications. Considered as a whole therefore, the wider Irish law is inadequate. Given that many of these issues were flagged by the Law Reform Commission in 1998, it is hard to see any justification for the failure to address them to date. Although this Bill does provide for some improvements, it is at best a piecemeal response which will not address similar problems with other forms of surveillance. It is clear that the time has come for comprehensive reform of the overall law relating to surveillance. This Bill is a good first step towards that reform. But it is only a first step, and it would be regrettable if the government were to continue to ignore this area until forced to act by another highly visible crime. Government approves covert Garda measures (18.11.2008) http://www.irishtimes.com/newspaper/breaking/2008/1118/breaking63.htm Time to take a close look at surveillance (28.11.2008) http://www.digitalrights.ie/2008/11/28/time-to-take-a-close-look-at-surveil… (contribution by TJ McIntyre - EDRi-member Digital Rights Ireland) ============================================================ 7. UK rejected data breach notification law ============================================================ Two reports were published on 24 November 2008 by UK Ministry of Justice related to the data breach notification law, the powers of the Government to share data and the Information Commissioner's inspection powers and funding arrangements. One of the reports states that the law requiring that significant data breaches should be notified to the Information Commissioner Office was rejected, the ministry considering that the notification should be subject to good practice and not to a law: "As a matter of good practice any significant data breach should be brought to the attention of the ICO and that organisation should work with the ICO to ensure that remedial action is taken" says the report which adds: "The ICO will take into account the failure of an organisation to notify any breaches of the data protection principles when considering enforcement action." The modification of the EU ePrivacy Directive introduces such an obligation to telecommunications companies and Peter Hustinx, the European Data Protection Supervisor, said in April that that law should be extended to banks, online businesses and medical bodies. William Malcolm from Pinsent Masons said a breach notification law might have anyway been unnecessary as the lack of dealing with responsibly in case of data breach would lead to a breach of the Data Protection Act anyway. The report also announced that new laws would increase the powers of the Government to share data, introducing a fast-track procedure to allow data sharing when "a robust case" could be made. "We intend to bring forward legislation to confer upon the Secretary of State a power to permit or require the sharing of personal information between particular persons or bodies, so long as a robust case can be made to use that power. The power will also be used to simplify the data protection framework and remove any unnecessary obstacles to data sharing" says the report. The new legislation will also place a statutory duty on the ICO to prepare, publish and review a Code on the sharing of personal data that would will provide guidance on how organisations can share personal data and promote good practice in the sharing of personal data. "A breach of, or compliance with, the Code will be taken into account by the courts, the Information Tribunal and the ICO whenever it is relevant to a question arising in legal or enforcement proceedings". A second report acknowledged the necessity of a framework that would increase "public trust and confidence in the handling of personal data by both the public and private sector." The report proposes measures complementing ICO's present powers and ensuring it has the necessary and effective instruments to carry out its regulatory functions. The UK does not need a data breach notification law, says Government (25.11.2008) http://www.out-law.com//default.aspx?page=9619 Government announces new law for increased data sharing (25.11.2008) http://www.out-law.com/page-9617 ICO to get powers to audit public bodies without consent (25.11.2008) http://www.out-law.com/page-9618 The Information Commissioner's inspection powers and funding arrangements under the Data Protection Act 1998 Summary of responses (24.11.2008) http://www.justice.gov.uk/docs/information-commissioner-consultation-respon… Why we don't need a security breach notification law in the UK (19.05.2008) http://www.out-law.com/page-9128 EDRigram: Data breach notification - different opinions in EU bodies ? (19.11.2008) http://www.edri.org/edri-gram/number6.22/data-breach-ec ============================================================ 8. Parliaments seem to use very little IT technology ============================================================ The findings of the World e-Parliament Report 2008 achieved by UNDESA and the Inter-Parliamentary Union on the use of information and communication technologies within 105 parliament assemblies from all over the world were presented on 25 November 2008, at the second high-level meeting of the Board of the Global Centre for ICT in Parliament. The Report is the first one of this kind and was meant to assess the level to which information and communication technologies are used by parliaments within their activities. It also used the information exchanged during the World e-Parliament Conference 2007 and the publicly available information related to the topic. The purpose of the report was to help "legislatures evaluate the potential benefits of ICT in supporting parliament's basic values of transparency, accessibility, accountability and effectiveness, and, at the same time, its representative, legislative and oversight functions. Its publication is intended to establish a shared knowledge base among the parliaments of the world and, most importantly, promote international dialogue on these matters." The issues tackled by the report were: the relationship between parliaments, ICT and the information society; innovation and leadership; management, planning and resources; infrastructures and services; documenting the legislative process; parliamentary websites; building a knowledge base for parliament; enhancement of the dialogue between parliaments and citizens and cooperation and coordination. According to the report, only 10% of the parliaments from EU, Africa, Latin America, Australia and Canada use ICT to make their activities known to their citizens. "For most parliaments, our survey has documented that there is a significant gap between what is possible with ICT and what has been accomplished," said Jeffrey Griffith, one of the authors. The study has shown that only 43% of the parliaments stated having document management systems and most of them find it difficult to keep their websites up to date and accessible to the wide public. Even when the sites displayed the texts of bills they lacked links to the relevant information. In most cases, but not in all, the level of the ICT use by a parliament appears to be related to the level of the national income. In Mr. Griffith's opinion, parliaments should use a similar model to Web 2.0 techniques used by the US presidential elections but also considered that in order to do that, strong political leadership, the active engagement of MPs and well-trained technical staff were necessary. "Attaining a high level of performance in the application of ICT is not only dependent on resources; it also requires strong political leadership, active engagement of members, a skilled secretariat, well-trained technical staff, and a sustained commitment to the strategic implementation of information and communication technologies in the legislative setting" says the World e-Parliament Report 2008. During the EP conference, Mechthild Rothe, vice-president of the European Parliament said that e-parliament strategies also had to guarantee a high level of IT security concerning the privacy of the citizens' personal data. She also made a presentation of the ICT tools used by the European Parliament including RRS feeds, podcasts, online streams of plenary sessions in 23 languages. This presentation came in contrast with the statements of the representatives of the Egyptian Parliament and the Pan-African Parliament who spoke of a "great digital divide" between the developed world and African countries. "There are technical and know-how obstacles in introducing ICT in the parliaments of the developing world, marred by ignorance, poverty and wars," said Ahmed Fathy Sorour, speaker of the Egyptian Parliament who was backed by Gertrude Mongella, President of the Pan-African Parliament. In her turn, she talked about the lack of dialogue and parliamentary representation which was one of the causes of conflicts such as the one presently going on in Congo. The survey also shows there is willingness from parliaments to improve their use of ICT technology and their awareness of the importance of the issue. The World e-Parliament Report 2008 also points out the "opportunities for parliaments to benefit from cooperating at the regional and global levels in the e-parliament domain. Existing and emerging parliamentary networks can sustain some of these efforts, but a worldwide dialogue is becoming increasingly essential. By offering coordinated support and training for those parliaments with fewer resources, increasing the opportunities for sharing expertise and software at a global level and providing greater access to parliamentary information resources, parliaments will be better positioned to fulfil citizens' legitimate expectations, achieve common goals and advance the principles of the World Summit on the Information Society." Parliaments are slow in going online, study shows (25.11.2008) http://euobserver.com/843/27175/?rk=1 World e-Parliament Report 2008 - Executive summary http://www.ictparliament.org/index.php?option=com_content&task=view&id=245 ============================================================ 9. Recommended Action ============================================================ Collective Redress: Commission seeks views on settling large scale consumer complaints The European Commission has published a Green Paper on Consumer Collective Redress on how to facilitate redress in situations where large numbers of consumers have been harmed by a single trader's practice which is in breach of consumer law. Violations of consumer rules could include overcharging consumers - through hidden charges or overbilling - misleading advertising on websites, or failing to provide compulsory information on financial products. These kinds of illegal practices, if they occur to a large number of consumers, can cause considerable damage to consumers, generate unfair competition and distort markets. The Green Paper identifies barriers to effective consumer redress in terms of access, effectiveness and affordability and presents various options to close the gaps identified. The options set out in the Green Paper seek to ensure that consumers who are victims of illegal commercial practices can get compensated for their losses, while avoiding unfounded claims. Comments on the Green Paper can be submitted until 1 March 2009. http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1800&format=H… The Green Paper on Consumer Collective Redress http://ec.europa.eu/consumers/redress_cons/greenpaper_en.pdf ============================================================ 10. Recommended Reading ============================================================ EDPS sees adoption of Data Protection Framework for police and judicial cooperation only as a first step http://www.edps.europa.eu/EDPSWEB/webdav/site/mySite/shared/Documents/EDPS/… The European Commission has published its report on the recent consultation on the review of the PSI Directive. http://ec.europa.eu/information_society/policy/psi/docs/pdfs/online_consult…; http://ec.europa.eu/information_society/policy/psi/online_consultation/revi…. ============================================================ 11. Agenda ============================================================ 3-6 December 2008, Hyderabad, India Third Internet Governance Forum http://www.intgovforum.org 6 December 2008, Berlin, Germany Open Everything http://openeverything.mixxt.de/ 9-10 December 2008, Madrid, Spain Future Internet Assembly http://www.future-internet.eu/home/future-internet-assembly/madrid-dec-2008… http://www.fi-madrid.eu/ 10 December 2008, Skopje, Macedonia Fourth International Conference e-Society.Mk. http://www.e-society.mk/ 10-11 December 2008: Tilburg, Netherlands Tilting perspectives on regulating technologies, Tilburg Institute for Law and Technology and Society, Tilburg University http://www.tilburguniversity.nl/tilt/conference 27-30 December 2008 Berlin, Germany 25C3: Nothing to hide The 25th Chaos Communication Congress http://events.ccc.de/congress/2008/ 16-17 January 2009, Brussels, Belgium Computers, Privacy & Data Protection conference CPDP 2009: Data Protection in A Profiled World? http://www.cpdpconferences.org/ 23 January 2008, Geneva, Switzerland Communia Workshop - Public Broadcasting and Alternative Licensing - Co-organized by the European Broadcasting Union and the Research Center for Information Law at the University of St. Gallen (FIR-HSG) http://www.communia-project.eu/node/163 28 January 2009, Europe-wide 3rd Data Protection Day http://www.coe.int/t/e/legal_affairs/legal_co-operation/data_protection/Dat… 18-20 March 2009, Athens, Greece WebSci'09: Society On-Line http://www.websci09.org/ 1-4 June 2009, Washington, DC, USA Computers Freedom and Privacy 2009 http://www.cfp2009.org/ 2-3 July 2009, Padova, Italy 3rd FLOSS International Workshop on Free/Libre Open Source Software Paper submission by 31 March 2009 http://www.decon.unipd.it/personale/curri/manenti/floss/floss09.html 13-16 August 2009, Vierhouten, The Netherlands Hacking at Random http://www.har2009.org/ 10-12 September 2009, Potsdam, Germany 5th ECPR General Conference, Potsdam Section: Protest Politics Panel: The Contentious Politics of Intellectual Property First proposals to be submitted by 1 February 2009 http://www.ecpr.org.uk/potsdam/default.asp ============================================================ 12. About ============================================================ EDRI-gram is a biweekly newsletter about digital civil rights in Europe. Currently EDRI has 29 members based or with offices in 18 different countries in Europe. European Digital Rights takes an active interest in developments in the EU accession countries and wants to share knowledge and awareness through the EDRI-grams. All contributions, suggestions for content, corrections or agenda-tips are most welcome. Errors are corrected as soon as possible and visibly on the EDRI website. Except where otherwise noted, this newsletter is licensed under the Creative Commons Attribution 3.0 License. See the full text at http://creativecommons.org/licenses/by/3.0/ Newsletter editor: Bogdan Manolea <edrigram(a)edri.org> Information about EDRI and its members: http://www.edri.org/ European Digital Rights needs your help in upholding digital rights in the EU. If you wish to help us promote digital rights, please consider making a private donation. http://www.edri.org/about/sponsoring - EDRI-gram subscription information subscribe by e-mail To: edri-news-request(a)edri.org Subject: subscribe You will receive an automated e-mail asking to confirm your request. unsubscribe by e-mail To: edri-news-request(a)edri.org Subject: unsubscribe - EDRI-gram in Macedonian EDRI-gram is also available partly in Macedonian, with delay. Translations are provided by Metamorphosis http://www.metamorphosis.org.mk/edrigram-mk.php - EDRI-gram in German EDRI-gram is also available in German, with delay. Translations are provided Andreas Krisch from the EDRI-member VIBE!AT - Austrian Association for Internet Users http://www.unwatched.org/ - Newsletter archive Back issues are available at: http://www.edri.org/edrigram - Help Please ask <edrigram(a)edri.org> if you have any problems with subscribing or unsubscribing. ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE

1 0

The Cultural and Spiritual Legacy of Fiat Inflation
by Mises Daily Article 06 Jul '18

06 Jul '18

<http://www.mises.org/fullstory.aspx?control=1570>http://www.mises.org/fullstory.aspx?control=1570 The Cultural and Spiritual Legacy of Fiat Inflation by J.G. H|lsmann [Posted July 28, 2004] The notion that inflation is harmful is a staple of economic science. But most textbooks underrate the extent of the harm, because they define inflation much too narrowly as a lasting decrease of the purchasing power of money (PPM), and also because they pay scant attention to the concrete forms of inflation. To appreciate the disruptive nature of inflation in its full extent we must keep in mind that it springs from a violation of the fundamental rules of society. Inflation is what happens when people increase the money supply by fraud, imposition, and breach of contract. Invariably it produces three characteristic consequences: (1) it benefits the perpetrators at the expense of all other money users; (2) it allows the accumulation of debt beyond the level debts could reach on the free market; and (3) it reduces the PPM below the level it would have reached on the free market. While these three consequences are bad enough, things get much worse once inflation is encouraged and promoted by the state (fiat inflation). The governments fiat makes inflation perennial, and as a result we observe the formation of inflation-specific institutions and habits. Thus fiat inflation leaves a characteristic cultural and spiritual stain on human society. In what follows, we will take a closer look at some aspects of this legacy. I. Hyper-Centralized Government Inflation benefits the government that controls it, not only at the expense of the population at large, but also at the expense of all secondary and tertiary governments. It is a well-known fact that the European kings, during the rise of their nation states in the 17th and 18th centuries, crushed the major vestiges of intermediate power. The democratic nation states of the 19th and 20th centuries completed the centralization of power that had been begun under the kings. The economic driving force of this process was inflation, which at that point was entirely in the hands of the central state apparatus. More than any other economic reason, it made the nation state irresistible. And thus it contributed, indirectly at least, to the popularity of nationalistic ideologies, which in the 20th century ushered into a frenetic worshipping of the nation state. Inflation spurs the growth of central governments. It allows these governments to grow larger than they could become in a free society. And it allows them to monopolize governmental functions to an extent that would not occur under a natural production of money. This comes at the expense of all forms of intermediate government, and of course at the expense of civil society at large. The inflation-sponsored centralization of power turns the average citizen more and more into an isolated social atom. All of his social bonds are controlled by the central state, which also provides most of the services that formerly were provided by other social entities such as family and local government. At the same time, the central direction of the state apparatus is removed from the daily life of its protigis. II. Fiat Inflation and War Among the most gruesome consequences of fiat money, and of paper money in particular, is its ability to extend the length of wars. The destructions of war have the healthy effect of cooling down initial war frenzies. The more protracted and destructive a war becomes, therefore, the less is the population inclined to support it financially through taxes and the purchase of public bonds. Fiat inflation allows the government to ignore the fiscal resistance of its citizens and to maintain the war effort on its present level, or even to increase that level. The government just prints the notes it needs to buy cannons and boots. This is exactly what happened in the two world wars of the 20th century, at least in the case of the European states. The governments of France, Germany, Italy, Russia, and the United Kingdom covered a large part of their expenses through inflation. It is of course difficult to evaluate any precise quantitative impact, but it is not unreasonable to assume that fiat inflation prolonged both wars by many months or even one or two years. If we consider that the killings have reached their climax toward the end of the war, we must assume that many millions of lives could have been saved. Many people believe that, in war, all means are just. In their eyes, fiat inflation is legitimate as a means to fend off lethal threats from a nation. But this argument is rather defective. It is not the case that all means are just in a war. There is in Catholic theology a theory of just war, which stresses exactly this point. Fiat inflation would certainly be illegitimate if less offensive means were available to attain the same end. And fact is that such means exist and have always been at the disposition of governments, for example, credit money and additional taxation. Another typical line of defense of fiat money in wartime is that the government might know better than the citizens just how close victory is at hand. The ignorant population grows weary of the war and tends to resist additional taxation. But the government is perfectly acquainted with the situation. Without fiat money, its hands would be tied up, with potentially disastrous consequences. The inflation just gives it the little extra something needed to win. It is of course conceivable that the government is better informed than its citizens. But it is difficult to see why this should be an obstacle in war finance. The most essential task of political leadership is to rally the masses behind its cause. Why should it be impossible for a government to spread its better information, thus convincing the populace of the need for additional taxes? This brings us to the following consideration. III. Inflation and Tyranny War is just the most extreme case in which fiat inflation allows governments to pursue their goals without genuine support from their citizens. The printing press allows the government to tap the property of its people without having obtained their consent, and in fact against their consent. What kind of government is it that arbitrarily takes the property of its citizens? Aristotle and many other political philosophers have called it tyranny. And monetary theorists from Oresme to Mises have pointed out that fiat inflation, considered as a tool of government finance, is the characteristic financial technique of tyranny. IV. Race to the Bottom in Monetary Organization As Austrian economists have argued in some detail, fiat inflation is an inherently unstable way of producing money because it turns moral hazard and irresponsibility into an institution. The result is frequently recurring economic crises. Past efforts to repair these unwelcome effects, yet without questioning the principle of fiat inflation per se, have entailed a peculiar evolution of monetary institutionssome sort of an institutional "race to the bottom." Important milestones of this process were fractional-reserve banking, national central banking, international central banking, and finally paper money. The devolution of monetary institutions has been on its way for centuries, and it has still not quite reached the absolute bottom, even though the process has accelerated very considerably in our age of paper money. V. Business Under Fiat Inflation Fiat inflation has a profound impact on corporate finance. It makes liabilities (credits) cheaper than they would be on a free market. This prompts entrepreneurs to finance their ventures to a greater extent than otherwise through credits, rather than through equity (the capital brought into the firm by its owners). In a natural system of money production, banks would grant credit only as financial intermediaries. That is, they could lend out only those sums of money that they had either saved themselves or which other people had saved and then lent to the banks. The bankers would of course be free to grant credits under any terms (interest, securities, duration) they like; but it would be suicidal for them to offer better terms than those that their own creditors had granted them. For example, if a bank receives a credit at 5 percent, it would be suicidal for it to lend this money at 4 percent. It follows that on a free market, profitable banking is constrained within fairly narrow limits, which in turn is determined by the savers. It is not possible for a bank to stay in business and to offer better terms than the savers who are most ready to part with their money for some time. But fractional-reserve banks can do precisely that. Since they can produce additional banknotes at virtually zero cost, they can grant credit at rates that are lower than the rates that would otherwise have prevailed. And the beneficiaries will therefore finance some ventures through debts that they would otherwise have financed with their own money, or which they would not have started at all. Paper money has very much the same effect, but in a far greater dimension. A paper-money producer can grant credits to virtually any extent and at virtually any terms. In the past few years, the Bank of Japan has offered credits at 0 percent interest, and it right now proceeds in some cases to actually pay people for taking its credits. It is obvious that few firms can afford to resist such offers. Competition is fierce in most industries, and the firms must seek to use the best terms available, lest they lose that "competitive edge" that can be decisive for profits and also for mere survival. It follows that fiat inflation makes business more dependent on banks than they otherwise would be. It creates greater hierarchy and central decision-making power than would exist on the free market. The entrepreneur who operates with 10 percent equity and 90 percent debts is not really an entrepreneur anymore. His creditors (usually bankers) are the true entrepreneurs who make all essential decisions. He is just a more or less well-paid executivea manager. Thus fiat inflation reduces the number of true entrepreneursindependent men who operate with their own money. Such men still exist in astonishing numbers, but they can only survive because their superior talents match the inferior financial terms with which they have to cope. They must be more innovative and/or work harder than their competitors. They know the price of independence and they are ready to pay it. Usually they are more attached to the family business and care more for their employees than the puppets of bankers. Because credits springing from fiat inflation provide an easy financial edge, they have the tendency to encourage reckless behavior by the chief executives. This is especially the case with managers of large corporations who have easy access to the capital markets. Their recklessness is often confused with innovativeness. The economist Josef Schumpeter has famously characterized fractional-reserve banking as some sort of a mainspring of innovative economic development, because it provides additional money for entrepreneurs with great ideas. It is conceivable that in some cases it played this role, but the odds are overwhelmingly on the other side. As a general rule, any new product and any thoroughgoing innovation in business organization is a threat for banks, because they are already more or less heavily invested in established companies, which produce the old products and use the old forms of organization. They have therefore every incentive to either prevent the innovation by declining to finance it, or to communicate the new ideas to their partners in the business world. Thus, factional-reserve banking makes business more conservative than it otherwise would be. It benefits the established firms at the expense of innovative newcomers. Innovation is much more likely to come from independent businessmen, especially if income taxation is low. VI. The Debt Yoke Some of the foregoing considerations also apply outside of the business world. Fiat inflation provides easy credits not only to governments and firms, but also to private persons. The mere fact that such credits are offered at all incites some people to go into debt who would otherwise have chosen not to do so. But easy credits become nearly irresistible in connection with another typical consequence of inflation, namely, the constantly rising price level. Whereas in former times the increase of prices has been barely noticeable, in our day all citizens of the western world are aware of the phenomenon. In countries such as Turkey or Brazil, where prices increase at annual rates of 80 to 100 percent, even younger people have personally experienced it. Such conditions impose a heavy penalty on cash savings. In the old days, saving was typically done in the form of hoarding gold and silver coins. It is true that such hoards did not provide any revenuethe metal was "barren"and that they therefore did not lend themselves to the lifestyle of rentiers. But in all other respects money hoards were a reliable and effective form of saving. Their purchasing power did not just evaporate in a few decades, and in times of economic growth they even gained some purchasing power. Most importantly, they were extremely suitable for ordinary people. Carpenters, masons, tailors, and farmers are usually not very astute observers of the international capital markets. Putting some gold coins under their pillow or into a safe deposit box saved them lots of sleepless nights, and it made them independent of financial intermediaries. Now compare this old-time scenario with our present situation. The contrast could not be starker. It would be completely pointless in our day to hoard dollar or euro notes to prepare for retirement. A man in his thirties who plans to retire thirty years from today (2004) must calculate with a depreciation factor in the order of 3. That is, he needs to save three dollars today to have the purchasing power of one of these present-day dollars when he retires. And the estimated depreciation factor of 3 is rather on the low side! It follows that the rational saving strategy for him is to go into debt in order to buy assets the price of which will increase with the inflation. This is exactly what happens today in most western countries. As soon as young people have a job and thus a halfway stable source of revenue, they take a credit to buy a housewhereas their great-grandfather might still have first accumulated savings for some thirty years and then bought his house in cash. Needless to say that the latter has always been the Christian way. In Saint Pauls letter to the Romans (13:8) we read: "Owe nothing to anyone, except to love one another; for the one who loves another has fulfilled the law." Things are not much better for those who have already accumulated some wealth. It is true that inflation does not force them into debt, but in any case it deprives them of the possibility of holding their savings in cash. Old people with a pension fund, widows, and the wardens of orphans must invest their money into the financial markets, lest its purchasing power evaporate under their noses. Thus they become dependent on intermediaries and on the vagaries of stock and bond pricing. It is clear that this state of affairs is very beneficial for those who derive their living from the financial markets. Stockbrokers, bond dealers, banks, mortgage corporations, and other "players" have reason to be thankful for the constant decline of moneys purchasing power under fiat inflation. But is this state of affairs also beneficial for the average citizen? In a certain sense, his debts and increased investment in the financial markets are beneficial for him, given our present inflationary regime. When the increase of the price level is perennial, private debt is for him the best available strategy. But this means of course that without government interventionism into the monetary system other strategies would be superior. The presence of central banks and paper money make debt-based financial strategies more attractive than strategies based on prior savings. It is not an exaggeration to say that, through their monetary policy, Western governments have pushed their citizens into a state of financial dependency unknown to any previous generation. Already in 1931, Pius XI stated: [. . .] it is obvious that not only is wealth concentrated in our times but an immense power and despotic economic dictatorship is consolidated in the hands of a few, who often are not owners but only the trustees and managing directors of invested funds which they administer according to their own arbitrary will and pleasure. This dictatorship is being most forcibly exercised by those who, since they hold the money and completely control it, control credit also and rule the lending of money. Hence they regulate the flow, so to speak, of the life-blood whereby the entire economic system lives, and have so firmly in their grasp the soul, as it were, of economic life that no one can breathe against their will.<http://www.mises.org/fullstory.aspx?control=1570#_ftn2>[1] One wonders what vocabulary Pius XI would have used to describe our present situation. The usual justification for this state of affairs is that it allegedly stimulates industrial development. The money hoards of former times were not only sterile; they were actually harmful from an economic point of view, because they deprived business of the means of payments they needed for investments. The role of inflation is to provide these means. However, money hoarding does not have any negative macroeconomic implications. It does definitely not stifle industrial investments. Hoarding increases the purchasing power of money and thus gives greater "weight" to the money units that remain in circulation. All goods and services can be bought, and all feasible investments can be made with these remaining units. The fundamental fact is that inflation does not bring into existence any additional resource. It merely changes the allocation of the existing resources. They no longer go to companies that are run by entrepreneurs who operate with their own money, but to business executives who run companies financed with bank credits. The net effect of the recent surge in household debt is therefore to throw entire populations into financial dependency. The moral implications are clear. Towering debts are incompatible with financial self-reliance and thus they tend to weaken self-reliance also in all other spheres. The debt-ridden individual eventually adopts the habit of turning to others for help, rather than maturing into an economic and moral anchor of his family, and of his wider community. Wishful thinking and submissiveness replace soberness and independent judgment. And what about the many cases in which families can no longer shoulder the debt load? Then the result is either despair or, on the contrary, scorn for all standards of financial sanity. VII. Some Spiritual Casualties of Fiat Inflation Fiat inflation constantly reduces the purchasing power of money. To some extent, it is possible for people to protect their savings against this trend, but this requires thorough financial knowledge, the time to constantly supervise ones investments, and a good dose of luck. People who lack one of these ingredients are likely to lose a substantial part of their assets. The savings of a lifetime often vanish in thin air during the last few years spent in retirement. The consequence is despair and the eradication of moral and social standards. But it would be wrong to infer that inflation produces this effect mainly among the elderly. As one writer observed: These effects are "especially strong among the youth. They learn to live in the present and scorn those who try to teach them old-fashioned morality and thrift. Inflation thereby encourages a mentality of immediate gratification that is plainly at variance with the discipline and eternal perspective required to exercise principles of biblical stewardshipsuch as long-term investment for the benefit of future generations."<http://www.mises.org/fullstory.aspx?control=1570#_ftn3>[2] Even those citizens who are blessed with knowledge, time, and luck to protect the substance of their savings cannot evade inflations harmful impact, because they have to adopt habits that are at odds with moral and spiritual health. Inflation forces them to spend much more time thinking about their money than they otherwise would. We have noticed already that the old way for ordinary citizens to make savings was the accumulation of cash. Under fiat inflation this strategy is suicidal. They must invest into assets the value of which grows during the inflation; the most practical way to do this is to buy stocks and bonds. But this entails many hours spent on comparing and selecting appropriate titles. And it compels them to be ever watchful and concerned about their money for the rest of their lives. They need to follow the financial news and monitor the price quotations on the financial markets. Similarly, people will tend to prolong the phase of their life in which they strive to earn money. And they will place relatively greater emphasis on monetary returns than on any other criterion for choosing their profession. For example, some of those who would rather be inclined to gardening will nevertheless seek an industrial employment because the latter offers greater long-run monetary returns. And more people will accept employment far from home, because it allows them to earn just some little extra money, than under a natural monetary system. The spiritual dimension of these inflation-induced habits seems to be obvious. Money and financial questions come to play an exaggerated role in the life of man. Inflation makes society materialistic. More and more people strive for money income at the expense of personal happiness. Inflation-induced geographical mobility artificially weakens family bonds and patriotic loyalty. Many of those who tend to be greedy, envious, and niggardly anyway fall prey to sin. Even those who are not so inclined by their natures will be exposed to temptations they would not otherwise have felt. And because the vagaries of the financial markets also provide a ready excuse for an excessively parsimonious use of ones money, donations for charitable institutions will decline. Then there is the fact that perennial inflation tends to deteriorate product quality. Every seller knows that it is difficult to sell the same physical product at higher prices than in previous years. But increasing money prices are unavoidable when the money supply is subject to relentless growth. So what do sellers do? In many cases the rescue comes through technological innovation, which allows for a cheaper production of the product, thus neutralizing or even overcompensating the countervailing influence of inflation. This is, for example, the case with personal computers and other equipment built with a large input of information technology. But in other industries, technological progress plays a much smaller role. Here the sellers confront the above-mentioned problem. They then fabricate an inferior product and sell it under the same name, along with the euphemisms that have become customary in commercial marketing. For example, they might offer their customers "light" coffee and "non-spicy" vegetableswhich translates into thin coffee and vegetables that have lost any trace of flavor. Similar product deterioration can be observed in the construction business. Countries plagued by perennial inflation seem to have a greater share of houses and streets that are in constant need of repair than other countries. In such an environment, people develop a more than sloppy attitude toward their language. If everything is what it is called, then it is difficult to explain the difference between truth and lie. Inflation tempts people to lie about their products, and perennial inflation encourages the habit of routine lies. The present writer has argued in other works that routine lies play a great role in fractional-reserve banking, the basic institution of the fiat money system. Fiat inflation seems to spread this habit like a cancer over the rest of the economy. VIII. Suffocating the Flame In most countries, the growth of the welfare state has been financed through the accumulation of public debt on a scale that would have been unthinkable without fiat inflation. A cursory glance at the historical record shows that the exponential growth of the welfare state, which in Europe started in the early 1970s, went in hand with the explosion of public debt. It is widely known that this development has been a major factor in the decline of the family. But it is commonly overlooked that the ultimate cause of this decline is fiat inflation. Perennial inflation slowly but assuredly destroys the family, thus suffocating the earthly flame of Christian morals. The Christian family is the most important "producer" of a certain type of morals. Family life is possible only if all members endorse norms such as the legitimacy of authority, the heterosexual union between man and woman, and the prohibition of incest. And Christian families are based on additional norms such as the love of the spouses for one another and for their offspring, the respect of children for their parents, the reality of the Triune God, the truth of the Christian faith, etc. Parents constantly repeat, emphasize, and live these norms. This daily experience "brainwashes" all family members into accepting them as the normal state of affairs. In the wider social sphere, then, these persons act as advocates of the same norms in business associations, clubs, and politics. Friends and foes of the traditional Christian family agree on these facts. It is among other things because they recognize the familys effectiveness in establishing social norms that Christians seek to protect it. And it is precisely for the same reason that advocates of moral license seek to destroy it. The welfare state has been their preferred tool for the past thirty years. Today the welfare state provides a great number of services that in former times were provided by families (and which, we may assume, would still be provided to a large extent by families if the welfare state ceased to exist). Education of the young, care for the elderly and the sick, assistance in times of emergenciesall of these services are today effectively "outsourced" to the state. The families have been degraded into small production units that share utility bills, cars, refrigerators, and of course the tax bill. The tax-financed welfare state then provides them with education and care.<http://www.mises.org/fullstory.aspx?control=1570#_ftn4>[3] >From an economic point of view, this arrangement is a pure waste of money. The fact is that the welfare state is inefficient; it provides comparatively lousy services at comparatively high costs. We need not dwell on the inability of government welfare agencies to provide the emotional and spiritual assistance that only springs from charity. Compassion cannot be bought. But the welfare state is also inefficient in purely economic terms. It operates through large bureaucracies and is therefore liable to lack incentives and economic criteria that would prevent the wasting of money. In the words of Pope John Paul II: By intervening directly and depriving society of its responsibility, the Social Assistance State leads to a loss of human energies and an inordinate increase of public agencies, which are dominated more by bureaucratic ways of thinking than by concern for serving their clients, and which are accompanied by an enormous increase in spending. In fact, it would appear that needs are best understood and satisfied by people who are closest to them and who act as neighbours to those in need. It should be added that certain kinds of demands often call for a response which is not simply material but which is capable of perceiving the deeper human need.<http://www.mises.org/fullstory.aspx?control=1570#_ftn5>[4] Everyone knows this from first-hand experience, and a great number of scientific studies drive home the same point. It is precisely because the welfare state is an inefficient economic arrangement that it must rely on taxes. If the welfare state had to compete with families on equal terms, it could not stay in business for any length of time. It has driven the family and private charities out of the "welfare market" because people are forced to pay for it anyway. They are forced to pay taxes, and they cannot prevent the government from floating ever-new loans, which absorb the capital that otherwise would be used for the production of different goods and services. The excessive welfare state of our days is an all-out direct attack on the producers of Christian morals. But it weakens these morals also in indirect ways, most notably by subsidizing bad moral examples. The fact is that some alternative "life styles" carry great economic risks and therefore tend to be more expensive than the traditional family arrangements. The welfare state socializes the costs of such behavior and therefore gives it far greater prominence than it would have in a free society. Rather than carrying an economic penalty, public license might then actually go hand in hand with economic advantages, because it dispenses the protagonists from the costs of family life (for example, the costs associated with raising children). With the backing of the welfare state, these protagonists may mock conservative morals as some sort of superstition that has no real-life impact. The spiritual dimension seems to be clear: The welfare state systematically exposes people to the temptation of believing that there are no time-tested moral precepts at all. Let us emphasize that the point of the preceding observations was not to attack welfare services, which are in fact an essential component of Christian societies. The point is, rather, that fiat inflation destroys the democratic control over the provision of these services; that this invariably leads to excessive growth of the aggregate welfare system and to excessive forms of welfare; and that this in turn is not without consequences for the moral and spiritual character of the population. The foregoing considerations are by no means an exhaustive account of the cultural and spiritual legacy of fiat inflation. But they should suffice to substantiate the main point: that fiat inflation is a powerhouse of social, economic, cultural, and spiritual destruction. ________________________ J.G. H|lsmann is senior fellow of the Mises Institute. This is an excerpt from his book forthcoming from the Acton Institute. <mailto:jgh@mises.org>jgh(a)mises.org. Comment on the Mises <http://www.mises.org/blog>blog. Notes <http://www.mises.org/fullstory.aspx?control=1570#_ftnref2>[1] Pius XI, <http://www.vatican.va/holy_father/pius_xi/encyclicals/documents/hf_p-xi_enc…>Quadragesimo Anno (1931), '' 105, 106. See also Deuteronomy 28: 12, 4344. <http://www.mises.org/fullstory.aspx?control=1570#_ftnref3>[2] Thomas Woods, "<http://www.acton.org/publicat/randl/article.php?id=474>Money and Morality: The Christian Moral Tradition and the Best Monetary Regime," Religion & Liberty, vol. 13, no. 5 (Sept./Oct. 2003). The author quotes Ludwig von Mises. <http://www.mises.org/fullstory.aspx?control=1570#_ftnref4>[3] In many countries it is today possible for families to deduct expenses for private care and private education from the annual tax bill. But ironically (or maybe not quite so ironically) this trend has reinforced the erosion of the family. For example, recent provisions of the U.S. tax code allow family budgets to increase through such deductionsbut only if the deductible services are not provided at home, but bought from other people. <http://www.mises.org/fullstory.aspx?control=1570#_ftnref5>[4] John Paul II, <http://www.vatican.va/holy_father/john_paul_ii/encyclicals/documents/hf_jp-…>Centesimus Annus, ' 48. In response to many requests, it is now possible to set your credit-card contribution to the Mises Institute to be recurring. You can easily set this up on-line with a donation starting at $10 per month. See the <https://www.mises.org/donate.asp>Membership Page. This is one way to ensure that your support for the Mises Institute is ongoing. <http://www.mises.org//fullstory.asp?printFriendly=Yes&control=1570>[Print Friendly Page] <http://www.mises.org/blog/> <http://www.mises.org/elist.asp>Mises Email List Services <https://www.mises.org/donate.asp>Join the Mises Institute <http://www.mises.org/store>Mises.org Store <http://www.mises.org/>Home | <http://www.mises.org/about.asp>About | <http://www.mises.org/elist.asp>Email List | <http://www.google.com/u/Mises>Search | <http://www.mises.org/contact.asp>Contact Us | <http://www.mises.org/journals.asp>Periodicals | <http://www.mises.org/articles.asp>Articles | <http://www.mises.org/fun.asp>Games & Fun <http://www.mises.org/news.asp>News | <http://www.mises.org/scholar.asp>Resources | <http://www.mises.org/catalog.asp>Catalog | <https://www.mises.org/donate.asp>Contributions | <http://www.mises.org/calendar.asp>Freedom Calendar You are subscribed as: rahettinga(a)earthlink.net Manage <http://mises.biglist.com/list/article/?p=prefs&pre=l&e=7669537&pw=miya781tml>your account. Unsubscribe <http://mises.biglist.com/list/article/?p=unsub&pre=l&e=7669537&pw=miya781tml>here or send email to <mailto:article-unsub-7669537@mises.biglist.com>this address. --- 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'

1 0

Re: Hacker strikes through student's router
by cyphrpunk 06 Jul '18

06 Jul '18

On 11/10/05, Anthony DiPierro <or(a)inbox.org> wrote: > Of course, that said, you should probably get permission from your ISP > before you run a wifi hotspot. And it's perfectly reasonable for a > university to ban students from setting up free/open wifi hotspots. And > those who run open wifi hotspots probably have to deal with abuse complaints > on a regular basis. > > One of the reasons companies go through all this is because they think > (reasonably in most circumstances) that they can profit from it. If only we > could figure out how to really spread anonymous e-money. Then we could > really start spreading Tor. What if we had a Tor network where exit node operators made Tor-money, and Tor-money was necessary to use the network? Or perhaps, Tor-money at least gave you priority in using the network, so all those P2P traders wouldn't slow you down so much? Maybe exit node operators could even sell their Tor-money for real cash, to potential Tor users. People tend to have two contradictory views about proposals like this. One is that such a Tor network would never work, because people would prefer to use the free one. The other is that free Tor networks will never work, because no one will take the heat to run an exit node. The point is that this proposal cuts the knot and creates a self-sustaining Tor-style network, one which rewards people who take the risk of running exit nodes, just as in Anthony's example about WiFi hotspots. One technical problem is verifying that a particular exit node is legit, so that its operator can get his Tor-bucks. It might be enough to put Tor-money in the packet so that the last node receives it, but then he could skim the cash without performing the service of letting the packets go out. Still, this would be easily detected and users could blacklist exit nodes which didn't perform, so it might be adequate. Obviously an ecash-integrated Tor network is an ambitious project, but it is something to think about if Tor starts running into problems with people not wanting to run exit nodes. CP ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.leitl.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE [demime 1.01d removed an attachment of type application/pgp-signature which had a name of signature.asc]

1 0

EDRi-gram newsletter - Number 6.23, 3 December 2008
by EDRI-gram newsletter 06 Jul '18

06 Jul '18

============================================================ EDRi-gram biweekly newsletter about digital civil rights in Europe Number 6.23, 3 December 2008 ============================================================ Contents ============================================================ 1. Changes in the telecom package adopted by the Council 2. French EDVIGE decree withdrawn 3. Effects of counter-terrorism legislation on freedom of the media 4. Sweden on the verge of passing the local IPRED law 5. Turkey: Another blocking order against YouTube 6. Ireland proposes to legalise covert surveillance 7. UK rejected data breach notification law 8. Parliaments seem to use very little IT technology 9. Recommended Action 10. Recommended Reading 11. Agenda 12. About ============================================================ 1. Changes in the telecom package adopted by the Council ============================================================ A political agreement on the telecom package was reached by the EU Council on 27 November 2008. Even though the final text does not support the 3 strikes measures proposed by the French Presidency, it has also deleted some important amendments adopted by the European Parliament in order to safeguard the citizen's fundamental rights. Austria and Denmark have spoken up for keeping the Amendment 138 during the Council meeting. Bulgaria, Hungary and Poland joined them in an attempt to provide safeguards for users in the event of any attempts to sanction them or restrict their access to content on the Internet. They asked the exclusion of any issues related to copyright enforcement and the promotion of creative content instead. But in the end, the Council decided the deletion of this amendment, the only pretext expressed being that the wording was too broad. The new text of the modified Universal Services Directive allows the national regulatory authorities to "promote cooperation between undertakings providing electronic communications networks and/or services and the sectors interested in the promotion of lawful content in electronic communication networks and services." The adopted recitals makes it clear that any cooperation procedures will not allow for systematic Internet monitoring and that the Member States, and not the electronic communication providers, have to "decide, in accordance with due process, whether content, applications or services are lawful or harmful or not." The decision of the Telecom Council to reject the 3 strike scheme, comes after the EU culture ministers took a similar decision on 20 November. They also suggested promoting legal offers of music or films on the Internet. The EU Culture Council considered that "a fair balance between the various fundamental rights" needs to be establishedwhile fighting online piracy, first listing "the right to personal data protection," then "the freedom of information" and only lastly "the protection of intellectual property". In fact, the Commission has already sent a number of critical comments on the French draft law on 3 strikes, suggesting a long series of changes in order to comply with the European legislation. The text adopted by the European Telecom Council is not so positive from the privacy point of view. Thus, the Council has rejected the suggestion of the Parliament to allow a study on Internet Protocol (IP) addresses and their use that should have been promoted by the Commission. The Council has decided to keep Art 6 par 6 (formerly amendment 181 adopted by the European Parliament) that has been interpreted as an open door for voluntary data retention. Thus, the German actions to push for the rejection of the amendment 181 in the Telecom Council did not found a majority, despite the public position of the German federal minister of economic affairs Michael Glos. He agreed with a number of civil society representatives that this amendment "would create unmanageable data dumps and thus expose sensitive data on our communications and movements to risks of abuse." The Telecom Council has taken the European Commission's point of view in restricting the obligation for personal data breach notification only for electronic communication providers, thus excluding the Parliament amendment that extended this provision also to "any company operating on the Internet, providing services to consumers, which is the data controller and provider of information society services." The Council has also limited the number of cases when the notification to the competent Authority and affected individuals is mandatory only in cases representing "a serious risk for subscriber's privacy." This common position adopted by the Telecom Council is a base for new negotiations between EU Bodies, that could meetthis month. Also, a new informal meeting of the Telecom ministers is already scheduled on 17 February. The second reading of the European Parliament on the agreed text could take place at the beginning of 2009. 2907th Transport, Telecommunications and Energy Council meeting (provisional version) - (27.11.2008) http://www.consilium.europa.eu/cms3_applications/Applications/newsRoom/Load… European Council - Reviewed ePrivacy Directive (27.11.2008) http://register.consilium.europa.eu/pdf/en/08/st15/st15896.en08.pdf European Council - Reviewed Universal Service Directive (27.11.2008) http://register.consilium.europa.eu/pdf/en/08/st15/st15899.en08.pdf Federal government supports opposition against "voluntary data retention" (25.11.2008) http://www.vorratsdatenspeicherung.de/content/view/280/79/lang,en/ EU states bin telecoms 'super-regulator' idea (27.11.2008) http://euobserver.com/19/27192 Citizen safeguards striked out in EU Council (26.11.2008) http://www.laquadrature.net/en/citizen-safeguards-striked-out-in-EU-council Bulgaria, Hungary, Poland - only EU members on the same page vis-a-vis Internet content control (1.12.2008) http://blog.veni.com/?p=898 European Council opposes Parliament on Amendment 138 (27.11.2008) http://www.iptegrity.com/index.php?option=com_content&task=view&id=212&Item… EU ministers reject ban on free downloading (21.11.2008) http://www.euractiv.com/en/infosociety/eu-ministers-reject-ban-free-downloa… Denmark and Austria speak up for citizens rights (27.11.2008) http://www.iptegrity.com/index.php?option=com_content&task=view&id=211&Item… Commission response to France's obligation of notification for its "graduated response" law (only in French, 27.11.2008) http://www.latribune.fr/entreprises/communication/telecom-internet/20081127… EDRi-gram: Data breach notification - different opinions in EU bodies? (19.11.2008) http://www.edri.org/edri-gram/number6.22/data-breach-ec ============================================================ 2. French EDVIGE decree withdrawn ============================================================ It seems the demonstrations that took place on 16 October against the EDVIGE decree have found an echo with the French authorities. The French Government has finally withdrawn the EDVIGE file after a very strong mobilisation of the citizens through the "No to EDVIGE" group that gathered several associations and unions, including EDRi-member IRIS (Imaginons un Riseau Internet Solidaire). The withdrawal of the decree is different from the abrogation in the sense that the withdrawal has a retroactive character meaning that all the information gathered since the creation of EDVIGE 1.0 has to be destroyed. The RG file, introduced in 1991, previous to EDVIGE, will remain valid until 31 December 2009 but no information will be added to it starting with 1 July 2008. However, the liberty advocates and associations are still vigilant and stay careful while waiting for the occurrence of the newly envisaged file called EDVIRSP which has not yet been published. The new version which should exclude the collection of personal data related to health, sexuality or data on personalities or minors below 13 is now with the French Data Protection Authority - CNIL (Commission nationale de l'informatique et des libertis) before being sent to the State Council. IRIS and the rest of the "No to EDVIGE" group are still concerned by some of the issues of the new version such as the creation of a file based on suspicions and not facts, the collection of data related to religious beliefs, ethnical origin, union membership, political opinions as well as data on minors older than 13. So, for the time being, before the issue of a new file, the data already collected for the withdrawn EDVIGE file cannot be used which means that the police cannot gather data at this point. However, there are concerns that, in this case, the police will use other sources such as Cristina, a similar file to EDVIGE, which is a defence classified file that can provide the legal basis for the collection of data. "We are now under a legal blur and this blur is never favourable to liberties' said Helhne Masse-Dessen, lawyer of "No to EDVIGE" group. IRIS Press release on the withdrawal of EDVIGE1.0 - First citizen victory but vigilance stays in place (only in French, 20.11.2008) http://www.iris.sgdg.org/info-debat/comm-edvige1108.html Decree no. 2008-1199 of 19 November 2008 on the withdrawal of decree no. 2008-632 of 27 June 2008 on the creation of automatic treatment of personal data called EDVIGE (only in French, 21.11.2008) http://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000019774085 Withdraw EDVIGE1.0 team Press Release - + No to EDVIGE ; team congratulates itself but stays mobilized (only in French, 21.11.2008) http://nonaedvige.ras.eu.org/spip.php?article920 The Edvige file officially withdrawn but not yet replaced (only in French, 21.11.2008) http://www.lesechos.fr/info/france/4800116-le-fichier-edvige-officiellement… The Edvige file officially withdrawn, the opponents stay "vigilant" (only in French, 20.11.2008) http://www.google.com/hostednews/afp/article/ALeqM5gRs-meyd--OCvfnMRd3rHruo… EDRi-gram: Protests in France against the Edvige file on St. Edwige day (22.10.2008) http://www.edri.org/edri-gram/number6.20/edvige-saint-edwige-day ============================================================ 3. Effects of counter-terrorism legislation on freedom of the media ============================================================ A new report conducted by Privacy International (PI) for the Council of Europe Media and Information Society Division reveals effects of new counter-terrorism laws on media and free expression rights in European countries. The report "Speaking of Terror" examines how the "war on terror" has affected access to information, the growth of incitement, glorification and "extremism" restrictions on speech, blocking of internet sites, increased surveillance of journalists and limits on protection of journalists' sources. The report finds that the laws have already seriously affected freedom of expression while providing little benefit in fighting terrorism. The report also examines the roles of the United Nations Security Council, European Union and Council of Europe in promoting new laws while paying little attention to human rights. The findings of the study reveal that international bodies including the Council of Europe (CoE) and the European Union (EU) have adopted many international agreements that either ignore or only pay scant attention to fundamental human rights and the importance of a free media. Their agendas are often driven by those countries that are most aggressive in adopting expansive counter-terrorism laws including the UK, US and Russia. The role of European institutions such as the EU and the CoE have resulted in greater adoption and harmonization of these laws than most other regions. New laws on prohibiting speech that is considered "extremist" or supporting of terrorism have been a particular problem. These laws are used in many jurisdictions to suppress political and controversial speech. Newspapers have been closed and journalists arrested. Web sites are often taken down or blocked. State secret and national security laws are regularly being used against journalists and their sources even as access to information laws are widely accepted and adopted across the CoE. Protection of journalists' sources are often undermined by governments seeking to identify officials who provide information. Even the protection is widely recognized both in national laws and in decisions of the European Court of Human Rights. New anti-terrorism laws are giving authorities wide powers to conduct surveillance. Other new laws impose technical and administrative requirements on the ability to intercept communications and keeping information. Of particular concern are data retention laws which require the routine surveillance of all mobile and Internet users that can be used to easily identify sources and journalists' investigations. Speaking of Terror: A survey of the effects of counter-terrorism legislation on freedom of the media in Europe http://www.privacyinternational.org/issues/terrorism/speakingofterror.pdf ============================================================ 4. Sweden on the verge of passing the local IPRED law ============================================================ The Sweden Government is to pass these days a controversial law that might give the entertainment industry some tools to track down those that illegally share copyrighted material on the Internet. The law, which is based on the European Union's Intellectual Property Rights Enforcement Directive (IPRED), has been under debate for more than a year and claims to be essential by the Swedish industry which complains that, presently, Sweden lacks the necessary legislation to support them: " Swedish laws are considered something of a joke and our politicians are viewed as arrogant for not taking this seriously. Sweden has the worst laws in this area and, consequently, the worst problems with piracy. It is embarrassing that Sweden has waited so long to put in place a directive that was implemented long ago by our European neighbours." says a letter addressed to the Swedish Government by the director and producers of the Swedish movie "Let The Right One In". The law, which is planned to come into force on 1 April 2009, would make it possible for copyright holders to get a court order requesting ISPs to provide IP addresses associated with computers which have downloaded copyrighted material without paying for it. The copyright holders could afterwards contact those suspected of illegal file sharing requesting them to stop the activity. If those in question do not comply, the copyright holders can use the information obtained from the ISPs to sue the infringer and ask for compensation for copyright violations. With this, the Swedish draft law would go even farther than IPRED. The proposed law faces a large opposition from centre-right political parties and youth organisations. More than 22 000 members have joined a group started by Pirate Party vice-chair Christian Engstrvm on Facebook which is called Stoppa IPRED (Stop IPRED) and which has sent e-mails of protests to Swedish Parliament members. "We have examples from other countries where this has amounted to the legalization of wide-spread blackmail. Record companies get the name of someone suspected of file sharing and send out a letter demanding 20,000 Swedish crowns (1 800 euros) or some other made up sum with the threat that if you don't pay, we'll be taking you to court" said Engstrvm In an attempt to answer to these concerns, according to Sveriges Radio, justice minister Beatrice Ask, whose ministry is responsible for the law, has asked for the deletion from the draft law of a clause making the law enforceable retroactively, fact which would have giving the industry the possibility to access information about people who have been illegally downloading copyrighted material over the past few years and therefore to take the respective people to court for actions performed in the past. Another change that seems to have been introduced by the minister is that IP addresses can only be given when the suspected file sharing is "of commercial nature." The vote of the Swedish Parliament on the matters is expected these days. Swedish copyright laws 'a joke' (26.11.2008) http://www.thelocal.se/15946/20081126/ Justice minister offers concessions on file sharing law (21.11.2008) http://www.thelocal.se/15844/20081121/ Sweden judges back Pirate Hunter Act (14.11.2008) http://www.theregister.co.uk/2008/11/14/sweden_closer_to_antipiracy_law/ Lines drawn in battle over file sharing bill (14.11.2008) http://www.thelocal.se/15688/20081114/ Resistance mounts to new file sharing law (7.11.2008) http://www.thelocal.se/15536/20081107/ ============================================================ 5. Turkey: Another blocking order against YouTube ============================================================ For the forth time in two years, on 20 November 2008, the Turkish authorities blocked access to YouTube asserting that certain content posted on the site was disrespectful to Kemal Mustafa Atat|rk, the Turkish Republic's founder, or supported the outlawed Kurdistan Workers Party (PKK). Turkey is the only country in the world banning YouTube. "We have said it before and we say it again now - blocking access to YouTube is wrong. It has been blocked since 5 May, as a result of an earlier court order, and the obstinacy shown by the authorities is unacceptable. Denying Turkish citizens access to this file-sharing site violates freedom of information" said Reporters Without Borders. The Cubuk magistrate court issued the latest blocking order on the basis of article 162 of the criminal procedure law and of Law 5651 on crimes and offences committed online which has been in force since November 2007 and which obliges ISPs to block access to websites declared illegal. According to this law, a public prosecutor may ban access to a website within 24 hours if the content is considered "liable to incite suicide, paedophilia, drug usage, obscenity or prostitution" or if it "contradicts the law of Atat|rk." YouTube is not the only site banned by the Turkish authorities. Since 2007, based on the same laws, about 1 000 websites which have been blocked by Turkey's Telecommunications Directorate. Besides YouTube, recently, nacizanebilgo.com, the Turkish popular dictionary website has also been made inaccessible following a complaint from religious leader Adnan Oktar on the grounds that the site editors allowed Internet users to post "insulting" terms on him. Lawsuits initiated by Oktar have resulted in the blocking of at least 61 websites. Other banned websites include that of a teachers' trade union and the site of the British biologist Richard Dawkins. "Banning YouTube, Google's blogging site, the websites of a teachers' trade union, Richard Dawkins and even a Turkish dictionary stands alongside more than 40 cases against writers and journalists even since the reform of the so-called anti-Turkishness article of the penal code," stated Richard Howitt, the vice president of the European Parliament's Human Rights Sub-Committee. Howitt, who is a supporter of Turkey's becoming an EU member, met Justice Minister Mehmet Ali Sahin on 27 November in Ankara and asked him to overturn the decision of banning the sites, in the interests of free speech, warning about the implications of such actions upon Turkey's EU adhering process. "As a modern country looking forward to European Union membership, Turkey should be embracing new communications rather than putting itself in the same bracket as some of the world's pariah states," he said. According to Kerem Altiparmak and Yaman Akdeniz, authors of the book "Restricted Access", Internet restrictions are against European Union standards and Turkey could face charges at the European Courts of Human Rights for violating the freedom of expression. The authors argue that Turkey's current Internet regulations, besides being procedurally flawed, are designed to censor political speech: "Clearly the current regime, through its procedural and substantive deficiencies, is designed to censor and silence speech. Its impacts are wide, affecting not only the freedom of speech but also the right to privacy and fair trial. It has been reported that prosecutors have even demanded that politicians widen the scope of the law to include insults, defamation and terrorism. This antiquated approach remains unacceptable in a democratic society." The authors also point out the fact that blocking a site is also a totally inefficient method to combat illegal content: "Blocking as a preventative policy measure has been explicitly dismissed within the context of terrorist use of the Internet at the level of the European Union. Furthermore, circumvention technologies are widely available, and the filtering and blocking mechanisms and methods currently used in Turkey are easy to circumvent even for inexperienced Internet users." One argument in favour of this is that even the Turkish Prime Minister Tayyip Erdogan stated to the press that, despite the ban, he could access YouTube and even provided the information of how to do it. MEP urges turkey to end YouTube ban (28.11.2008) http://www.google.com/hostednews/ukpress/article/ALeqM5j6NR6ouzA63R5vnPNxaZ… YouTube censored yet again by another court order blocking access (25.11.2008) http://www.rsf.org/article.php3?id_article=29421 European parliamentarians urge Turkey to remove YouTube ban (1.12.2008) http://www.hurriyet.com.tr/english/domestic/10463374.asp?scr=1 Turkey could face charges at European court over restrictions (30.11.2008) http://www.sundayszaman.com/sunday/detaylar.do?load=detay&link=160202 Ban on YouTube proves virtual (1.12.2008) http://www.hurriyet.com.tr/english/domestic/10441126.asp?gid=244 EDRigram - YouTube blocked once more in Turkey (30.01.2008) http://www.edri.org/edrigram/number6.2/youtube-turkey ============================================================ 6. Ireland proposes to legalise covert surveillance ============================================================ The Irish Government has approved the outline of a Bill which, if passed by Parliament, will permit police to break into private property to plant covert audio bugs and video cameras. The Covert Surveillance Bill is intended to legitimise what is already believed to be existing practice, to make Irish law compliant with the European Convention on Human Rights and to allow evidence obtained in this way to be used in court. Judicial approval will be required before this can be done, except in exceptional circumstances. The procedure to deal with cases of exceptional urgency is too lax. Under the Bill as it stands those cases would bypass the judicial process entirely, so that surveillance could take place for up to 14 days without any authorisation. There must be a question mark as to whether this provision would be constitutional if it was used to break into and bug a dwelling. Instead, it would be preferable to deal with cases of urgency by permitting Gardam to commence surveillance without a judicial authorisation but then requiring that an application be made to the District Court for permission to continue the surveillance. Despite its broad title, the Bill addresses only one very narrow area - the covert surveillance of locations by devices which are physically planted in those locations. Many other forms of surveillance - such as the use of GPS devices to track the position of cars, the use of long range cameras and microphones to monitor locations from a distance and live monitoring of Internet activity - will still be entirely unregulated. As a result there will continue to be doubt as to whether Gardam have the power to use these types of surveillance and as to whether the resulting evidence can be used in criminal prosecutions. Meanwhile, although there is some legislation regulating other forms of surveillance such as the interception of communications, data retention and Garda use of CCTV, that legislation has developed on an ad hoc and reactive basis with few consistent principles applying to its use or oversight. Much of it is also out of date, most notably the 1993 interception of communications legislation which due to technological changes no longer adequately protects email and other Internet communications. Considered as a whole therefore, the wider Irish law is inadequate. Given that many of these issues were flagged by the Law Reform Commission in 1998, it is hard to see any justification for the failure to address them to date. Although this Bill does provide for some improvements, it is at best a piecemeal response which will not address similar problems with other forms of surveillance. It is clear that the time has come for comprehensive reform of the overall law relating to surveillance. This Bill is a good first step towards that reform. But it is only a first step, and it would be regrettable if the government were to continue to ignore this area until forced to act by another highly visible crime. Government approves covert Garda measures (18.11.2008) http://www.irishtimes.com/newspaper/breaking/2008/1118/breaking63.htm Time to take a close look at surveillance (28.11.2008) http://www.digitalrights.ie/2008/11/28/time-to-take-a-close-look-at-surveil… (contribution by TJ McIntyre - EDRi-member Digital Rights Ireland) ============================================================ 7. UK rejected data breach notification law ============================================================ Two reports were published on 24 November 2008 by UK Ministry of Justice related to the data breach notification law, the powers of the Government to share data and the Information Commissioner's inspection powers and funding arrangements. One of the reports states that the law requiring that significant data breaches should be notified to the Information Commissioner Office was rejected, the ministry considering that the notification should be subject to good practice and not to a law: "As a matter of good practice any significant data breach should be brought to the attention of the ICO and that organisation should work with the ICO to ensure that remedial action is taken" says the report which adds: "The ICO will take into account the failure of an organisation to notify any breaches of the data protection principles when considering enforcement action." The modification of the EU ePrivacy Directive introduces such an obligation to telecommunications companies and Peter Hustinx, the European Data Protection Supervisor, said in April that that law should be extended to banks, online businesses and medical bodies. William Malcolm from Pinsent Masons said a breach notification law might have anyway been unnecessary as the lack of dealing with responsibly in case of data breach would lead to a breach of the Data Protection Act anyway. The report also announced that new laws would increase the powers of the Government to share data, introducing a fast-track procedure to allow data sharing when "a robust case" could be made. "We intend to bring forward legislation to confer upon the Secretary of State a power to permit or require the sharing of personal information between particular persons or bodies, so long as a robust case can be made to use that power. The power will also be used to simplify the data protection framework and remove any unnecessary obstacles to data sharing" says the report. The new legislation will also place a statutory duty on the ICO to prepare, publish and review a Code on the sharing of personal data that would will provide guidance on how organisations can share personal data and promote good practice in the sharing of personal data. "A breach of, or compliance with, the Code will be taken into account by the courts, the Information Tribunal and the ICO whenever it is relevant to a question arising in legal or enforcement proceedings". A second report acknowledged the necessity of a framework that would increase "public trust and confidence in the handling of personal data by both the public and private sector." The report proposes measures complementing ICO's present powers and ensuring it has the necessary and effective instruments to carry out its regulatory functions. The UK does not need a data breach notification law, says Government (25.11.2008) http://www.out-law.com//default.aspx?page=9619 Government announces new law for increased data sharing (25.11.2008) http://www.out-law.com/page-9617 ICO to get powers to audit public bodies without consent (25.11.2008) http://www.out-law.com/page-9618 The Information Commissioner's inspection powers and funding arrangements under the Data Protection Act 1998 Summary of responses (24.11.2008) http://www.justice.gov.uk/docs/information-commissioner-consultation-respon… Why we don't need a security breach notification law in the UK (19.05.2008) http://www.out-law.com/page-9128 EDRigram: Data breach notification - different opinions in EU bodies ? (19.11.2008) http://www.edri.org/edri-gram/number6.22/data-breach-ec ============================================================ 8. Parliaments seem to use very little IT technology ============================================================ The findings of the World e-Parliament Report 2008 achieved by UNDESA and the Inter-Parliamentary Union on the use of information and communication technologies within 105 parliament assemblies from all over the world were presented on 25 November 2008, at the second high-level meeting of the Board of the Global Centre for ICT in Parliament. The Report is the first one of this kind and was meant to assess the level to which information and communication technologies are used by parliaments within their activities. It also used the information exchanged during the World e-Parliament Conference 2007 and the publicly available information related to the topic. The purpose of the report was to help "legislatures evaluate the potential benefits of ICT in supporting parliament's basic values of transparency, accessibility, accountability and effectiveness, and, at the same time, its representative, legislative and oversight functions. Its publication is intended to establish a shared knowledge base among the parliaments of the world and, most importantly, promote international dialogue on these matters." The issues tackled by the report were: the relationship between parliaments, ICT and the information society; innovation and leadership; management, planning and resources; infrastructures and services; documenting the legislative process; parliamentary websites; building a knowledge base for parliament; enhancement of the dialogue between parliaments and citizens and cooperation and coordination. According to the report, only 10% of the parliaments from EU, Africa, Latin America, Australia and Canada use ICT to make their activities known to their citizens. "For most parliaments, our survey has documented that there is a significant gap between what is possible with ICT and what has been accomplished," said Jeffrey Griffith, one of the authors. The study has shown that only 43% of the parliaments stated having document management systems and most of them find it difficult to keep their websites up to date and accessible to the wide public. Even when the sites displayed the texts of bills they lacked links to the relevant information. In most cases, but not in all, the level of the ICT use by a parliament appears to be related to the level of the national income. In Mr. Griffith's opinion, parliaments should use a similar model to Web 2.0 techniques used by the US presidential elections but also considered that in order to do that, strong political leadership, the active engagement of MPs and well-trained technical staff were necessary. "Attaining a high level of performance in the application of ICT is not only dependent on resources; it also requires strong political leadership, active engagement of members, a skilled secretariat, well-trained technical staff, and a sustained commitment to the strategic implementation of information and communication technologies in the legislative setting" says the World e-Parliament Report 2008. During the EP conference, Mechthild Rothe, vice-president of the European Parliament said that e-parliament strategies also had to guarantee a high level of IT security concerning the privacy of the citizens' personal data. She also made a presentation of the ICT tools used by the European Parliament including RRS feeds, podcasts, online streams of plenary sessions in 23 languages. This presentation came in contrast with the statements of the representatives of the Egyptian Parliament and the Pan-African Parliament who spoke of a "great digital divide" between the developed world and African countries. "There are technical and know-how obstacles in introducing ICT in the parliaments of the developing world, marred by ignorance, poverty and wars," said Ahmed Fathy Sorour, speaker of the Egyptian Parliament who was backed by Gertrude Mongella, President of the Pan-African Parliament. In her turn, she talked about the lack of dialogue and parliamentary representation which was one of the causes of conflicts such as the one presently going on in Congo. The survey also shows there is willingness from parliaments to improve their use of ICT technology and their awareness of the importance of the issue. The World e-Parliament Report 2008 also points out the "opportunities for parliaments to benefit from cooperating at the regional and global levels in the e-parliament domain. Existing and emerging parliamentary networks can sustain some of these efforts, but a worldwide dialogue is becoming increasingly essential. By offering coordinated support and training for those parliaments with fewer resources, increasing the opportunities for sharing expertise and software at a global level and providing greater access to parliamentary information resources, parliaments will be better positioned to fulfil citizens' legitimate expectations, achieve common goals and advance the principles of the World Summit on the Information Society." Parliaments are slow in going online, study shows (25.11.2008) http://euobserver.com/843/27175/?rk=1 World e-Parliament Report 2008 - Executive summary http://www.ictparliament.org/index.php?option=com_content&task=view&id=245 ============================================================ 9. Recommended Action ============================================================ Collective Redress: Commission seeks views on settling large scale consumer complaints The European Commission has published a Green Paper on Consumer Collective Redress on how to facilitate redress in situations where large numbers of consumers have been harmed by a single trader's practice which is in breach of consumer law. Violations of consumer rules could include overcharging consumers - through hidden charges or overbilling - misleading advertising on websites, or failing to provide compulsory information on financial products. These kinds of illegal practices, if they occur to a large number of consumers, can cause considerable damage to consumers, generate unfair competition and distort markets. The Green Paper identifies barriers to effective consumer redress in terms of access, effectiveness and affordability and presents various options to close the gaps identified. The options set out in the Green Paper seek to ensure that consumers who are victims of illegal commercial practices can get compensated for their losses, while avoiding unfounded claims. Comments on the Green Paper can be submitted until 1 March 2009. http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1800&format=H… The Green Paper on Consumer Collective Redress http://ec.europa.eu/consumers/redress_cons/greenpaper_en.pdf ============================================================ 10. Recommended Reading ============================================================ EDPS sees adoption of Data Protection Framework for police and judicial cooperation only as a first step http://www.edps.europa.eu/EDPSWEB/webdav/site/mySite/shared/Documents/EDPS/… The European Commission has published its report on the recent consultation on the review of the PSI Directive. http://ec.europa.eu/information_society/policy/psi/docs/pdfs/online_consult…; http://ec.europa.eu/information_society/policy/psi/online_consultation/revi…. ============================================================ 11. Agenda ============================================================ 3-6 December 2008, Hyderabad, India Third Internet Governance Forum http://www.intgovforum.org 6 December 2008, Berlin, Germany Open Everything http://openeverything.mixxt.de/ 9-10 December 2008, Madrid, Spain Future Internet Assembly http://www.future-internet.eu/home/future-internet-assembly/madrid-dec-2008… http://www.fi-madrid.eu/ 10 December 2008, Skopje, Macedonia Fourth International Conference e-Society.Mk. http://www.e-society.mk/ 10-11 December 2008: Tilburg, Netherlands Tilting perspectives on regulating technologies, Tilburg Institute for Law and Technology and Society, Tilburg University http://www.tilburguniversity.nl/tilt/conference 27-30 December 2008 Berlin, Germany 25C3: Nothing to hide The 25th Chaos Communication Congress http://events.ccc.de/congress/2008/ 16-17 January 2009, Brussels, Belgium Computers, Privacy & Data Protection conference CPDP 2009: Data Protection in A Profiled World? http://www.cpdpconferences.org/ 23 January 2008, Geneva, Switzerland Communia Workshop - Public Broadcasting and Alternative Licensing - Co-organized by the European Broadcasting Union and the Research Center for Information Law at the University of St. Gallen (FIR-HSG) http://www.communia-project.eu/node/163 28 January 2009, Europe-wide 3rd Data Protection Day http://www.coe.int/t/e/legal_affairs/legal_co-operation/data_protection/Dat… 18-20 March 2009, Athens, Greece WebSci'09: Society On-Line http://www.websci09.org/ 1-4 June 2009, Washington, DC, USA Computers Freedom and Privacy 2009 http://www.cfp2009.org/ 2-3 July 2009, Padova, Italy 3rd FLOSS International Workshop on Free/Libre Open Source Software Paper submission by 31 March 2009 http://www.decon.unipd.it/personale/curri/manenti/floss/floss09.html 13-16 August 2009, Vierhouten, The Netherlands Hacking at Random http://www.har2009.org/ 10-12 September 2009, Potsdam, Germany 5th ECPR General Conference, Potsdam Section: Protest Politics Panel: The Contentious Politics of Intellectual Property First proposals to be submitted by 1 February 2009 http://www.ecpr.org.uk/potsdam/default.asp ============================================================ 12. About ============================================================ EDRI-gram is a biweekly newsletter about digital civil rights in Europe. Currently EDRI has 29 members based or with offices in 18 different countries in Europe. European Digital Rights takes an active interest in developments in the EU accession countries and wants to share knowledge and awareness through the EDRI-grams. All contributions, suggestions for content, corrections or agenda-tips are most welcome. Errors are corrected as soon as possible and visibly on the EDRI website. Except where otherwise noted, this newsletter is licensed under the Creative Commons Attribution 3.0 License. See the full text at http://creativecommons.org/licenses/by/3.0/ Newsletter editor: Bogdan Manolea <edrigram(a)edri.org> Information about EDRI and its members: http://www.edri.org/ European Digital Rights needs your help in upholding digital rights in the EU. If you wish to help us promote digital rights, please consider making a private donation. http://www.edri.org/about/sponsoring - EDRI-gram subscription information subscribe by e-mail To: edri-news-request(a)edri.org Subject: subscribe You will receive an automated e-mail asking to confirm your request. unsubscribe by e-mail To: edri-news-request(a)edri.org Subject: unsubscribe - EDRI-gram in Macedonian EDRI-gram is also available partly in Macedonian, with delay. Translations are provided by Metamorphosis http://www.metamorphosis.org.mk/edrigram-mk.php - EDRI-gram in German EDRI-gram is also available in German, with delay. Translations are provided Andreas Krisch from the EDRI-member VIBE!AT - Austrian Association for Internet Users http://www.unwatched.org/ - Newsletter archive Back issues are available at: http://www.edri.org/edrigram - Help Please ask <edrigram(a)edri.org> if you have any problems with subscribing or unsubscribing. ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE

1 0

The Cultural and Spiritual Legacy of Fiat Inflation
by Mises Daily Article 06 Jul '18

06 Jul '18

<http://www.mises.org/fullstory.aspx?control=1570>http://www.mises.org/fullstory.aspx?control=1570 The Cultural and Spiritual Legacy of Fiat Inflation by J.G. H|lsmann [Posted July 28, 2004] The notion that inflation is harmful is a staple of economic science. But most textbooks underrate the extent of the harm, because they define inflation much too narrowly as a lasting decrease of the purchasing power of money (PPM), and also because they pay scant attention to the concrete forms of inflation. To appreciate the disruptive nature of inflation in its full extent we must keep in mind that it springs from a violation of the fundamental rules of society. Inflation is what happens when people increase the money supply by fraud, imposition, and breach of contract. Invariably it produces three characteristic consequences: (1) it benefits the perpetrators at the expense of all other money users; (2) it allows the accumulation of debt beyond the level debts could reach on the free market; and (3) it reduces the PPM below the level it would have reached on the free market. While these three consequences are bad enough, things get much worse once inflation is encouraged and promoted by the state (fiat inflation). The governments fiat makes inflation perennial, and as a result we observe the formation of inflation-specific institutions and habits. Thus fiat inflation leaves a characteristic cultural and spiritual stain on human society. In what follows, we will take a closer look at some aspects of this legacy. I. Hyper-Centralized Government Inflation benefits the government that controls it, not only at the expense of the population at large, but also at the expense of all secondary and tertiary governments. It is a well-known fact that the European kings, during the rise of their nation states in the 17th and 18th centuries, crushed the major vestiges of intermediate power. The democratic nation states of the 19th and 20th centuries completed the centralization of power that had been begun under the kings. The economic driving force of this process was inflation, which at that point was entirely in the hands of the central state apparatus. More than any other economic reason, it made the nation state irresistible. And thus it contributed, indirectly at least, to the popularity of nationalistic ideologies, which in the 20th century ushered into a frenetic worshipping of the nation state. Inflation spurs the growth of central governments. It allows these governments to grow larger than they could become in a free society. And it allows them to monopolize governmental functions to an extent that would not occur under a natural production of money. This comes at the expense of all forms of intermediate government, and of course at the expense of civil society at large. The inflation-sponsored centralization of power turns the average citizen more and more into an isolated social atom. All of his social bonds are controlled by the central state, which also provides most of the services that formerly were provided by other social entities such as family and local government. At the same time, the central direction of the state apparatus is removed from the daily life of its protigis. II. Fiat Inflation and War Among the most gruesome consequences of fiat money, and of paper money in particular, is its ability to extend the length of wars. The destructions of war have the healthy effect of cooling down initial war frenzies. The more protracted and destructive a war becomes, therefore, the less is the population inclined to support it financially through taxes and the purchase of public bonds. Fiat inflation allows the government to ignore the fiscal resistance of its citizens and to maintain the war effort on its present level, or even to increase that level. The government just prints the notes it needs to buy cannons and boots. This is exactly what happened in the two world wars of the 20th century, at least in the case of the European states. The governments of France, Germany, Italy, Russia, and the United Kingdom covered a large part of their expenses through inflation. It is of course difficult to evaluate any precise quantitative impact, but it is not unreasonable to assume that fiat inflation prolonged both wars by many months or even one or two years. If we consider that the killings have reached their climax toward the end of the war, we must assume that many millions of lives could have been saved. Many people believe that, in war, all means are just. In their eyes, fiat inflation is legitimate as a means to fend off lethal threats from a nation. But this argument is rather defective. It is not the case that all means are just in a war. There is in Catholic theology a theory of just war, which stresses exactly this point. Fiat inflation would certainly be illegitimate if less offensive means were available to attain the same end. And fact is that such means exist and have always been at the disposition of governments, for example, credit money and additional taxation. Another typical line of defense of fiat money in wartime is that the government might know better than the citizens just how close victory is at hand. The ignorant population grows weary of the war and tends to resist additional taxation. But the government is perfectly acquainted with the situation. Without fiat money, its hands would be tied up, with potentially disastrous consequences. The inflation just gives it the little extra something needed to win. It is of course conceivable that the government is better informed than its citizens. But it is difficult to see why this should be an obstacle in war finance. The most essential task of political leadership is to rally the masses behind its cause. Why should it be impossible for a government to spread its better information, thus convincing the populace of the need for additional taxes? This brings us to the following consideration. III. Inflation and Tyranny War is just the most extreme case in which fiat inflation allows governments to pursue their goals without genuine support from their citizens. The printing press allows the government to tap the property of its people without having obtained their consent, and in fact against their consent. What kind of government is it that arbitrarily takes the property of its citizens? Aristotle and many other political philosophers have called it tyranny. And monetary theorists from Oresme to Mises have pointed out that fiat inflation, considered as a tool of government finance, is the characteristic financial technique of tyranny. IV. Race to the Bottom in Monetary Organization As Austrian economists have argued in some detail, fiat inflation is an inherently unstable way of producing money because it turns moral hazard and irresponsibility into an institution. The result is frequently recurring economic crises. Past efforts to repair these unwelcome effects, yet without questioning the principle of fiat inflation per se, have entailed a peculiar evolution of monetary institutionssome sort of an institutional "race to the bottom." Important milestones of this process were fractional-reserve banking, national central banking, international central banking, and finally paper money. The devolution of monetary institutions has been on its way for centuries, and it has still not quite reached the absolute bottom, even though the process has accelerated very considerably in our age of paper money. V. Business Under Fiat Inflation Fiat inflation has a profound impact on corporate finance. It makes liabilities (credits) cheaper than they would be on a free market. This prompts entrepreneurs to finance their ventures to a greater extent than otherwise through credits, rather than through equity (the capital brought into the firm by its owners). In a natural system of money production, banks would grant credit only as financial intermediaries. That is, they could lend out only those sums of money that they had either saved themselves or which other people had saved and then lent to the banks. The bankers would of course be free to grant credits under any terms (interest, securities, duration) they like; but it would be suicidal for them to offer better terms than those that their own creditors had granted them. For example, if a bank receives a credit at 5 percent, it would be suicidal for it to lend this money at 4 percent. It follows that on a free market, profitable banking is constrained within fairly narrow limits, which in turn is determined by the savers. It is not possible for a bank to stay in business and to offer better terms than the savers who are most ready to part with their money for some time. But fractional-reserve banks can do precisely that. Since they can produce additional banknotes at virtually zero cost, they can grant credit at rates that are lower than the rates that would otherwise have prevailed. And the beneficiaries will therefore finance some ventures through debts that they would otherwise have financed with their own money, or which they would not have started at all. Paper money has very much the same effect, but in a far greater dimension. A paper-money producer can grant credits to virtually any extent and at virtually any terms. In the past few years, the Bank of Japan has offered credits at 0 percent interest, and it right now proceeds in some cases to actually pay people for taking its credits. It is obvious that few firms can afford to resist such offers. Competition is fierce in most industries, and the firms must seek to use the best terms available, lest they lose that "competitive edge" that can be decisive for profits and also for mere survival. It follows that fiat inflation makes business more dependent on banks than they otherwise would be. It creates greater hierarchy and central decision-making power than would exist on the free market. The entrepreneur who operates with 10 percent equity and 90 percent debts is not really an entrepreneur anymore. His creditors (usually bankers) are the true entrepreneurs who make all essential decisions. He is just a more or less well-paid executivea manager. Thus fiat inflation reduces the number of true entrepreneursindependent men who operate with their own money. Such men still exist in astonishing numbers, but they can only survive because their superior talents match the inferior financial terms with which they have to cope. They must be more innovative and/or work harder than their competitors. They know the price of independence and they are ready to pay it. Usually they are more attached to the family business and care more for their employees than the puppets of bankers. Because credits springing from fiat inflation provide an easy financial edge, they have the tendency to encourage reckless behavior by the chief executives. This is especially the case with managers of large corporations who have easy access to the capital markets. Their recklessness is often confused with innovativeness. The economist Josef Schumpeter has famously characterized fractional-reserve banking as some sort of a mainspring of innovative economic development, because it provides additional money for entrepreneurs with great ideas. It is conceivable that in some cases it played this role, but the odds are overwhelmingly on the other side. As a general rule, any new product and any thoroughgoing innovation in business organization is a threat for banks, because they are already more or less heavily invested in established companies, which produce the old products and use the old forms of organization. They have therefore every incentive to either prevent the innovation by declining to finance it, or to communicate the new ideas to their partners in the business world. Thus, factional-reserve banking makes business more conservative than it otherwise would be. It benefits the established firms at the expense of innovative newcomers. Innovation is much more likely to come from independent businessmen, especially if income taxation is low. VI. The Debt Yoke Some of the foregoing considerations also apply outside of the business world. Fiat inflation provides easy credits not only to governments and firms, but also to private persons. The mere fact that such credits are offered at all incites some people to go into debt who would otherwise have chosen not to do so. But easy credits become nearly irresistible in connection with another typical consequence of inflation, namely, the constantly rising price level. Whereas in former times the increase of prices has been barely noticeable, in our day all citizens of the western world are aware of the phenomenon. In countries such as Turkey or Brazil, where prices increase at annual rates of 80 to 100 percent, even younger people have personally experienced it. Such conditions impose a heavy penalty on cash savings. In the old days, saving was typically done in the form of hoarding gold and silver coins. It is true that such hoards did not provide any revenuethe metal was "barren"and that they therefore did not lend themselves to the lifestyle of rentiers. But in all other respects money hoards were a reliable and effective form of saving. Their purchasing power did not just evaporate in a few decades, and in times of economic growth they even gained some purchasing power. Most importantly, they were extremely suitable for ordinary people. Carpenters, masons, tailors, and farmers are usually not very astute observers of the international capital markets. Putting some gold coins under their pillow or into a safe deposit box saved them lots of sleepless nights, and it made them independent of financial intermediaries. Now compare this old-time scenario with our present situation. The contrast could not be starker. It would be completely pointless in our day to hoard dollar or euro notes to prepare for retirement. A man in his thirties who plans to retire thirty years from today (2004) must calculate with a depreciation factor in the order of 3. That is, he needs to save three dollars today to have the purchasing power of one of these present-day dollars when he retires. And the estimated depreciation factor of 3 is rather on the low side! It follows that the rational saving strategy for him is to go into debt in order to buy assets the price of which will increase with the inflation. This is exactly what happens today in most western countries. As soon as young people have a job and thus a halfway stable source of revenue, they take a credit to buy a housewhereas their great-grandfather might still have first accumulated savings for some thirty years and then bought his house in cash. Needless to say that the latter has always been the Christian way. In Saint Pauls letter to the Romans (13:8) we read: "Owe nothing to anyone, except to love one another; for the one who loves another has fulfilled the law." Things are not much better for those who have already accumulated some wealth. It is true that inflation does not force them into debt, but in any case it deprives them of the possibility of holding their savings in cash. Old people with a pension fund, widows, and the wardens of orphans must invest their money into the financial markets, lest its purchasing power evaporate under their noses. Thus they become dependent on intermediaries and on the vagaries of stock and bond pricing. It is clear that this state of affairs is very beneficial for those who derive their living from the financial markets. Stockbrokers, bond dealers, banks, mortgage corporations, and other "players" have reason to be thankful for the constant decline of moneys purchasing power under fiat inflation. But is this state of affairs also beneficial for the average citizen? In a certain sense, his debts and increased investment in the financial markets are beneficial for him, given our present inflationary regime. When the increase of the price level is perennial, private debt is for him the best available strategy. But this means of course that without government interventionism into the monetary system other strategies would be superior. The presence of central banks and paper money make debt-based financial strategies more attractive than strategies based on prior savings. It is not an exaggeration to say that, through their monetary policy, Western governments have pushed their citizens into a state of financial dependency unknown to any previous generation. Already in 1931, Pius XI stated: [. . .] it is obvious that not only is wealth concentrated in our times but an immense power and despotic economic dictatorship is consolidated in the hands of a few, who often are not owners but only the trustees and managing directors of invested funds which they administer according to their own arbitrary will and pleasure. This dictatorship is being most forcibly exercised by those who, since they hold the money and completely control it, control credit also and rule the lending of money. Hence they regulate the flow, so to speak, of the life-blood whereby the entire economic system lives, and have so firmly in their grasp the soul, as it were, of economic life that no one can breathe against their will.<http://www.mises.org/fullstory.aspx?control=1570#_ftn2>[1] One wonders what vocabulary Pius XI would have used to describe our present situation. The usual justification for this state of affairs is that it allegedly stimulates industrial development. The money hoards of former times were not only sterile; they were actually harmful from an economic point of view, because they deprived business of the means of payments they needed for investments. The role of inflation is to provide these means. However, money hoarding does not have any negative macroeconomic implications. It does definitely not stifle industrial investments. Hoarding increases the purchasing power of money and thus gives greater "weight" to the money units that remain in circulation. All goods and services can be bought, and all feasible investments can be made with these remaining units. The fundamental fact is that inflation does not bring into existence any additional resource. It merely changes the allocation of the existing resources. They no longer go to companies that are run by entrepreneurs who operate with their own money, but to business executives who run companies financed with bank credits. The net effect of the recent surge in household debt is therefore to throw entire populations into financial dependency. The moral implications are clear. Towering debts are incompatible with financial self-reliance and thus they tend to weaken self-reliance also in all other spheres. The debt-ridden individual eventually adopts the habit of turning to others for help, rather than maturing into an economic and moral anchor of his family, and of his wider community. Wishful thinking and submissiveness replace soberness and independent judgment. And what about the many cases in which families can no longer shoulder the debt load? Then the result is either despair or, on the contrary, scorn for all standards of financial sanity. VII. Some Spiritual Casualties of Fiat Inflation Fiat inflation constantly reduces the purchasing power of money. To some extent, it is possible for people to protect their savings against this trend, but this requires thorough financial knowledge, the time to constantly supervise ones investments, and a good dose of luck. People who lack one of these ingredients are likely to lose a substantial part of their assets. The savings of a lifetime often vanish in thin air during the last few years spent in retirement. The consequence is despair and the eradication of moral and social standards. But it would be wrong to infer that inflation produces this effect mainly among the elderly. As one writer observed: These effects are "especially strong among the youth. They learn to live in the present and scorn those who try to teach them old-fashioned morality and thrift. Inflation thereby encourages a mentality of immediate gratification that is plainly at variance with the discipline and eternal perspective required to exercise principles of biblical stewardshipsuch as long-term investment for the benefit of future generations."<http://www.mises.org/fullstory.aspx?control=1570#_ftn3>[2] Even those citizens who are blessed with knowledge, time, and luck to protect the substance of their savings cannot evade inflations harmful impact, because they have to adopt habits that are at odds with moral and spiritual health. Inflation forces them to spend much more time thinking about their money than they otherwise would. We have noticed already that the old way for ordinary citizens to make savings was the accumulation of cash. Under fiat inflation this strategy is suicidal. They must invest into assets the value of which grows during the inflation; the most practical way to do this is to buy stocks and bonds. But this entails many hours spent on comparing and selecting appropriate titles. And it compels them to be ever watchful and concerned about their money for the rest of their lives. They need to follow the financial news and monitor the price quotations on the financial markets. Similarly, people will tend to prolong the phase of their life in which they strive to earn money. And they will place relatively greater emphasis on monetary returns than on any other criterion for choosing their profession. For example, some of those who would rather be inclined to gardening will nevertheless seek an industrial employment because the latter offers greater long-run monetary returns. And more people will accept employment far from home, because it allows them to earn just some little extra money, than under a natural monetary system. The spiritual dimension of these inflation-induced habits seems to be obvious. Money and financial questions come to play an exaggerated role in the life of man. Inflation makes society materialistic. More and more people strive for money income at the expense of personal happiness. Inflation-induced geographical mobility artificially weakens family bonds and patriotic loyalty. Many of those who tend to be greedy, envious, and niggardly anyway fall prey to sin. Even those who are not so inclined by their natures will be exposed to temptations they would not otherwise have felt. And because the vagaries of the financial markets also provide a ready excuse for an excessively parsimonious use of ones money, donations for charitable institutions will decline. Then there is the fact that perennial inflation tends to deteriorate product quality. Every seller knows that it is difficult to sell the same physical product at higher prices than in previous years. But increasing money prices are unavoidable when the money supply is subject to relentless growth. So what do sellers do? In many cases the rescue comes through technological innovation, which allows for a cheaper production of the product, thus neutralizing or even overcompensating the countervailing influence of inflation. This is, for example, the case with personal computers and other equipment built with a large input of information technology. But in other industries, technological progress plays a much smaller role. Here the sellers confront the above-mentioned problem. They then fabricate an inferior product and sell it under the same name, along with the euphemisms that have become customary in commercial marketing. For example, they might offer their customers "light" coffee and "non-spicy" vegetableswhich translates into thin coffee and vegetables that have lost any trace of flavor. Similar product deterioration can be observed in the construction business. Countries plagued by perennial inflation seem to have a greater share of houses and streets that are in constant need of repair than other countries. In such an environment, people develop a more than sloppy attitude toward their language. If everything is what it is called, then it is difficult to explain the difference between truth and lie. Inflation tempts people to lie about their products, and perennial inflation encourages the habit of routine lies. The present writer has argued in other works that routine lies play a great role in fractional-reserve banking, the basic institution of the fiat money system. Fiat inflation seems to spread this habit like a cancer over the rest of the economy. VIII. Suffocating the Flame In most countries, the growth of the welfare state has been financed through the accumulation of public debt on a scale that would have been unthinkable without fiat inflation. A cursory glance at the historical record shows that the exponential growth of the welfare state, which in Europe started in the early 1970s, went in hand with the explosion of public debt. It is widely known that this development has been a major factor in the decline of the family. But it is commonly overlooked that the ultimate cause of this decline is fiat inflation. Perennial inflation slowly but assuredly destroys the family, thus suffocating the earthly flame of Christian morals. The Christian family is the most important "producer" of a certain type of morals. Family life is possible only if all members endorse norms such as the legitimacy of authority, the heterosexual union between man and woman, and the prohibition of incest. And Christian families are based on additional norms such as the love of the spouses for one another and for their offspring, the respect of children for their parents, the reality of the Triune God, the truth of the Christian faith, etc. Parents constantly repeat, emphasize, and live these norms. This daily experience "brainwashes" all family members into accepting them as the normal state of affairs. In the wider social sphere, then, these persons act as advocates of the same norms in business associations, clubs, and politics. Friends and foes of the traditional Christian family agree on these facts. It is among other things because they recognize the familys effectiveness in establishing social norms that Christians seek to protect it. And it is precisely for the same reason that advocates of moral license seek to destroy it. The welfare state has been their preferred tool for the past thirty years. Today the welfare state provides a great number of services that in former times were provided by families (and which, we may assume, would still be provided to a large extent by families if the welfare state ceased to exist). Education of the young, care for the elderly and the sick, assistance in times of emergenciesall of these services are today effectively "outsourced" to the state. The families have been degraded into small production units that share utility bills, cars, refrigerators, and of course the tax bill. The tax-financed welfare state then provides them with education and care.<http://www.mises.org/fullstory.aspx?control=1570#_ftn4>[3] >From an economic point of view, this arrangement is a pure waste of money. The fact is that the welfare state is inefficient; it provides comparatively lousy services at comparatively high costs. We need not dwell on the inability of government welfare agencies to provide the emotional and spiritual assistance that only springs from charity. Compassion cannot be bought. But the welfare state is also inefficient in purely economic terms. It operates through large bureaucracies and is therefore liable to lack incentives and economic criteria that would prevent the wasting of money. In the words of Pope John Paul II: By intervening directly and depriving society of its responsibility, the Social Assistance State leads to a loss of human energies and an inordinate increase of public agencies, which are dominated more by bureaucratic ways of thinking than by concern for serving their clients, and which are accompanied by an enormous increase in spending. In fact, it would appear that needs are best understood and satisfied by people who are closest to them and who act as neighbours to those in need. It should be added that certain kinds of demands often call for a response which is not simply material but which is capable of perceiving the deeper human need.<http://www.mises.org/fullstory.aspx?control=1570#_ftn5>[4] Everyone knows this from first-hand experience, and a great number of scientific studies drive home the same point. It is precisely because the welfare state is an inefficient economic arrangement that it must rely on taxes. If the welfare state had to compete with families on equal terms, it could not stay in business for any length of time. It has driven the family and private charities out of the "welfare market" because people are forced to pay for it anyway. They are forced to pay taxes, and they cannot prevent the government from floating ever-new loans, which absorb the capital that otherwise would be used for the production of different goods and services. The excessive welfare state of our days is an all-out direct attack on the producers of Christian morals. But it weakens these morals also in indirect ways, most notably by subsidizing bad moral examples. The fact is that some alternative "life styles" carry great economic risks and therefore tend to be more expensive than the traditional family arrangements. The welfare state socializes the costs of such behavior and therefore gives it far greater prominence than it would have in a free society. Rather than carrying an economic penalty, public license might then actually go hand in hand with economic advantages, because it dispenses the protagonists from the costs of family life (for example, the costs associated with raising children). With the backing of the welfare state, these protagonists may mock conservative morals as some sort of superstition that has no real-life impact. The spiritual dimension seems to be clear: The welfare state systematically exposes people to the temptation of believing that there are no time-tested moral precepts at all. Let us emphasize that the point of the preceding observations was not to attack welfare services, which are in fact an essential component of Christian societies. The point is, rather, that fiat inflation destroys the democratic control over the provision of these services; that this invariably leads to excessive growth of the aggregate welfare system and to excessive forms of welfare; and that this in turn is not without consequences for the moral and spiritual character of the population. The foregoing considerations are by no means an exhaustive account of the cultural and spiritual legacy of fiat inflation. But they should suffice to substantiate the main point: that fiat inflation is a powerhouse of social, economic, cultural, and spiritual destruction. ________________________ J.G. H|lsmann is senior fellow of the Mises Institute. This is an excerpt from his book forthcoming from the Acton Institute. <mailto:jgh@mises.org>jgh(a)mises.org. Comment on the Mises <http://www.mises.org/blog>blog. Notes <http://www.mises.org/fullstory.aspx?control=1570#_ftnref2>[1] Pius XI, <http://www.vatican.va/holy_father/pius_xi/encyclicals/documents/hf_p-xi_enc…>Quadragesimo Anno (1931), '' 105, 106. See also Deuteronomy 28: 12, 4344. <http://www.mises.org/fullstory.aspx?control=1570#_ftnref3>[2] Thomas Woods, "<http://www.acton.org/publicat/randl/article.php?id=474>Money and Morality: The Christian Moral Tradition and the Best Monetary Regime," Religion & Liberty, vol. 13, no. 5 (Sept./Oct. 2003). The author quotes Ludwig von Mises. <http://www.mises.org/fullstory.aspx?control=1570#_ftnref4>[3] In many countries it is today possible for families to deduct expenses for private care and private education from the annual tax bill. But ironically (or maybe not quite so ironically) this trend has reinforced the erosion of the family. For example, recent provisions of the U.S. tax code allow family budgets to increase through such deductionsbut only if the deductible services are not provided at home, but bought from other people. <http://www.mises.org/fullstory.aspx?control=1570#_ftnref5>[4] John Paul II, <http://www.vatican.va/holy_father/john_paul_ii/encyclicals/documents/hf_jp-…>Centesimus Annus, ' 48. In response to many requests, it is now possible to set your credit-card contribution to the Mises Institute to be recurring. You can easily set this up on-line with a donation starting at $10 per month. See the <https://www.mises.org/donate.asp>Membership Page. This is one way to ensure that your support for the Mises Institute is ongoing. <http://www.mises.org//fullstory.asp?printFriendly=Yes&control=1570>[Print Friendly Page] <http://www.mises.org/blog/> <http://www.mises.org/elist.asp>Mises Email List Services <https://www.mises.org/donate.asp>Join the Mises Institute <http://www.mises.org/store>Mises.org Store <http://www.mises.org/>Home | <http://www.mises.org/about.asp>About | <http://www.mises.org/elist.asp>Email List | <http://www.google.com/u/Mises>Search | <http://www.mises.org/contact.asp>Contact Us | <http://www.mises.org/journals.asp>Periodicals | <http://www.mises.org/articles.asp>Articles | <http://www.mises.org/fun.asp>Games & Fun <http://www.mises.org/news.asp>News | <http://www.mises.org/scholar.asp>Resources | <http://www.mises.org/catalog.asp>Catalog | <https://www.mises.org/donate.asp>Contributions | <http://www.mises.org/calendar.asp>Freedom Calendar You are subscribed as: rahettinga(a)earthlink.net Manage <http://mises.biglist.com/list/article/?p=prefs&pre=l&e=7669537&pw=miya781tml>your account. Unsubscribe <http://mises.biglist.com/list/article/?p=unsub&pre=l&e=7669537&pw=miya781tml>here or send email to <mailto:article-unsub-7669537@mises.biglist.com>this address. --- 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'

1 0

Re: Hacker strikes through student's router
by cyphrpunk 06 Jul '18

06 Jul '18

On 11/10/05, Anthony DiPierro <or(a)inbox.org> wrote: > Of course, that said, you should probably get permission from your ISP > before you run a wifi hotspot. And it's perfectly reasonable for a > university to ban students from setting up free/open wifi hotspots. And > those who run open wifi hotspots probably have to deal with abuse complaints > on a regular basis. > > One of the reasons companies go through all this is because they think > (reasonably in most circumstances) that they can profit from it. If only we > could figure out how to really spread anonymous e-money. Then we could > really start spreading Tor. What if we had a Tor network where exit node operators made Tor-money, and Tor-money was necessary to use the network? Or perhaps, Tor-money at least gave you priority in using the network, so all those P2P traders wouldn't slow you down so much? Maybe exit node operators could even sell their Tor-money for real cash, to potential Tor users. People tend to have two contradictory views about proposals like this. One is that such a Tor network would never work, because people would prefer to use the free one. The other is that free Tor networks will never work, because no one will take the heat to run an exit node. The point is that this proposal cuts the knot and creates a self-sustaining Tor-style network, one which rewards people who take the risk of running exit nodes, just as in Anthony's example about WiFi hotspots. One technical problem is verifying that a particular exit node is legit, so that its operator can get his Tor-bucks. It might be enough to put Tor-money in the packet so that the last node receives it, but then he could skim the cash without performing the service of letting the packets go out. Still, this would be easily detected and users could blacklist exit nodes which didn't perform, so it might be adequate. Obviously an ecash-integrated Tor network is an ambitious project, but it is something to think about if Tor starts running into problems with people not wanting to run exit nodes. CP ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.leitl.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE [demime 1.01d removed an attachment of type application/pgp-signature which had a name of signature.asc]

1 0

None
by None 06 Jul '18

06 Jul '18

1 0

None
by None 06 Jul '18

06 Jul '18

1 0

None
by None 06 Jul '18

06 Jul '18

1 0

None
by None 06 Jul '18

06 Jul '18

1 0