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Economic Secession Won't Succeed
by R. A. Hettinga 15 Apr '03

15 Apr '03

--- begin forwarded text List-Subscribe: <mailto:article-subscribe@mises.biglist.com> From: "Mises Daily Article" <article(a)mises.org> To: "Mises Daily Article" <article(a)mises.biglist.com> Subject: Economic Secession Won't Succeed Date: Tue, 15 Apr 2003 08:14:49 -0500 Importance: Normal <http://www.mises.org/fullstory.asp?control=1204>http://www.mises.org/fullstory.asp?control=1204 Economic Secession Won't Succeed By Paul Birch and Gene Callahan [Posted April 15, 2003] Some freedom-minded people pin their hope for liberty on withdrawing from an unfree world. In times of crisis, such as wars and recessions, this idea gains popularity. We might refer to this notion as "economic secession," borrowing the name from John Kennedy's <http://www.anti-state.com/article.php?article_id=395>article of the same title." Despairing of advancing the cause of liberty in society at large, they hope to be able to secure their own liberty anyway. They may <http://www7.mailordercentral.com/lfb/prodinfo.asp?number=IV7956&variation=&…>put their trust in new computer technologies, which they believe will let them hide money and economic transactions from the taxman. They may hope to withdraw into some remote location and "<http://csf.colorado.edu/forums/pfvs/2002II/msg00450.html>unplug from the grid." You can find ideas falling broadly under the umbrella of economic secession at <http://www.backwoodshome.com/>Backwoods Home Magazine, in the writings of <http://www.libertymls.com/gulch/>Claire Wolfe, in the many books on <http://www7.mailordercentral.com/lfb/prodinfo.asp?number=PV8398&variation=&…>financial privacy, <http://www7.mailordercentral.com/lfb/prodinfo.asp?number=CU8417&variation=&…>encryption, <http://www7.mailordercentral.com/lfb/prodinfo.asp?number=PV8287&variation=&…>becoming invisible, and so on. We don't mean to disparage someone who wants to move to the remote countryside, encrypt his email, or set up a numbered bank account in Bermuda. Such activities are not, in themselves, objectionable, and they may be a good choice for some people. But we do wish to point out that they do not solve the problem of the gradual erosion of liberty in our world. We will not discuss the issue of whether it would be morally sound to abandon our fellows and withdraw from the effort to improve human life in society. We don't need to do so, because the attempt fails on its own terms, for several reasons. First of all, "economic secessionists" often seem to confuse money with wealth. If they can hide their cash, they think, they can avoid taxes. But money is only useful in so far as you can exchange it for the economic goods and services you want to enjoy. In the long run you have to keep your real wealth where you live, or transfer it there. Otherwise it's worthless. Most real wealth is highly visible. The government of the place where you live or spend your time will be able to see this wealth and gain access to it; and thus can readily tax and regulate it. There is no sense in imagining that hiding your cash will get you off the hook; the government will simply seize your real assets for failure to pay taxes on them, as they already do today. In many countries, governments have in recent years found it convenient for political purposes to shift the burden of taxation away from income taxes, towards sales and property taxes; and this at a time of rising taxes overall. For example, in the past two decades, income tax rates in the U.K. have fallen by about 30%, but local property taxes (rates and council tax) have increased three or four fold. Thus we should not expect the taxation of real wealth to prove problematic, even in those unlikely scenarios in which it is supposed that the bulk of ordinary people's incomes could be successfully concealed. We would also point out that governments are increasingly forming tax collection cartels; there are no longer any real tax havens that the U.S. and other high-tax countries are not now bullying into submission. Ireland has come under pressure from other E.U. states for having "too low" a corporate tax rate. The U.S. <http://www.globalpolicy.org/nations/haven/usfight.htm>is pushing the I.M.F. and World Bank to crackdown on "money laundering." The O.E.C.D. <http://www.oecd.org/pdf/M00004000/M00004517.pdf>has been addressing the "problem" of countries that engage in "harmful tax competition." Even Switzerland, with its traditional and much-vaunted banking privacy, has caved in. Economic secessionists may think that making it more expensive for the government to collect taxes will reduce its incentive to do so. But taxation is not, for the most part, about the government "making money," because modern governments actually consume only a tiny fraction of the total tax revenue; rather it is about redirecting the spending of individuals, and thus the collective spending of the economy, in ways predicated upon the political goals of the regime. Typically, the cost of collecting a tax amounts to no more than a few percent of the revenue obtained; so the ability of governments to tax would not seriously be impeded until tax collection became at least fifty times more expensive (something the ready accessibility of real wealth makes most improbable). Note, by the way, that in order to promote their political aims governments may continue to collect particular taxes even when the monetary cost exceeds the monetary revenue. The marginal cost of collection, in cash terms, doesn't worry them. People rarely go into politics or public administration in order to make money. Many of them could become considerably wealthier in the private sector (in purely pecuniary terms, though not in terms of what they actually want). What they want is mostly influencewfor a wide variety of motives, both selfish and altruistic. They want to be (and in fact are) importantweven if that importance is often only that of being an important pain in the neck. That is why it is a mistake to think of government as primarily concerned with collecting as much tax revenue as possible, practicable, or profitable. That may be what bandits would dowbut to governments taxation is merely one of the tools with which society as a whole is constrained and governed. Even the fact that government actions can prompt us to seek tax shelters confirms their influence! Not only are we unable effectively to escape having the government tax us directly, we are also unable to escape the effect upon us of government taxes on others. Introductory economics classes teach that although the government may specify the legal incidence of a tax, its economic incidence is subsequently determined through the market. As Mises <http://www.econlib.org/library/Mises/msSApp.html#Epilogue>says: "It is the market, and not the revenue department, which decides upon whom the burden of the tax falls and how it affects production and consumption. The market and its inescapable law are supreme." Even if an individual citizen succeeds in concealing all of his wealth and income from the tax collector, there will be others who cannot or will not do so. Someone who is inclined to say, "Well, that's their problem," does not realize that he is paying those taxes as well. If the butcher is taxed, he pays more for meat. If the airlines are taxed, he pays more to fly. If capital gains are taxed in some countries, that will lower the returns on capital in "tax havens," just as taxing corporate bonds lowers the return on tax-free municipals. Furthermore, rearranging one's affairs to avoid or evade taxes (the former is legal, the latter illegal) carries its own burdens, whether in terms of actual costs, lower returns to capital, or foregone opportunities. The costs of tax avoidance and tax evasion are also taxes. What would happen if the man in the street were able to hide a larger fraction of his personal wealth or income? Would the government shrug its collective shoulders and reduce its spending? Hardly. It would merely assume that each taxpayer is hiding a similar fraction of his income and increase all tax assessments accordingly. This would penalize honesty, and in fostering anger against the tax evaders would in all likelihood encourage the introduction of ever more draconian and authoritarian laws. And the tax revenues would keep flowing just the same. Many secessionist apologists are misled by the existence of a small minority of people who operate on the black market or are otherwise able to shield much of their wealth from direct taxation; or by the fact that most people occasionally massage their tax returns a bit or pay tradesmen in cash for a small consideration. However, these transactions relate to only a small fraction of the national product. The tax revenues "lost" are not large; indeed, the argument above implies that there is no overall loss of revenue. Governments know all about itwand don't care. It doesn't threaten them. Indeed, the existence of black marketeers, tax shelters and tax evasion provides them with handy scapegoats whenever they needwor desirewto increase taxes or impose tougher regulations. All in all, to make economic secession work we should have to withdraw into autarky, foregoing the benefits of the division of labor. It is doubtful whether Thoreauesque self-sufficiency is any longer practicable in developed countries, for all but a minuscule fraction of the population. Conceivably one could still flee to Siberia or the jungles of New Guinea; and there live free from any burden of tax, other than the burden of grinding poverty and social isolation from one's self-imposed exile. We will not take exception to those who make such a choice. As Aristotle notes: "He who would live without the polis must be either a beast or a god." In either case, criticism would be pointless. If we are unprepared to take so drastic a step, we would do well to heed <http://www.econlib.org/library/Mises/msSContents.html>Mises's words, which echo John Donne's famous epigram that "No man is an island": "Society lives and acts only in individuals; it is nothing more than a certain attitude on their part. Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping towards destruction. Therefore everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us." Paul Birch lives in Cowes on the Isle of Wight, England. He is a freelance scientist and writer who has published many papers on space colonisation. He is also interested in political philosophy and maintains a <http://www.paulbirch.net/>website of his writings. Gene Callahan is author of <http://www.mises.org/store/product1.asp??SID=2&Product_ID=116>Economics for Real People. Send him <mailto:gcallah@erols.com>MAIL, and see his Mises.org <http://www.mises.org/articles.asp?mode=a&author=Callahan>Daily Articles Archive. He delivered the Henry Hazlitt Memorial Lecture at the Austrian Scholars Conference 9, March 13, 2003. Click <http://www.mises.org/video/ASC9/Callahan.wmv>HERE to view the online video version of his lecture. <http://www.mises.org//fullstory.asp?printFriendly=Yes&control=1204>[Print Friendly Page] <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 To unsubscribe, click here: <http://mises.biglist.com/unsub.php/article/rahettinga@earthlink.net> http://mises.biglist.com/unsub.php/article/rahettinga@earthlink.net or e-mail: <mailto:article-unsubscribe-rahettinga=earthlink.net@mises.biglist.com> article-unsubscribe-rahettinga=earthlink.net(a)mises.biglist.com --- end forwarded text -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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Re: Can you spell default? Roman walls have ears..
by Major Variola (ret) 15 Apr '03

15 Apr '03

At 09:34 PM 4/12/03 -0500, Jamie Lawrence wrote: >On Sat, 12 Apr 2003, Major Variola (ret) wrote: > >> Iraq owes a billion (US ) pounds (Sterling) to Russia [...] > >Without touching on the discussion on hand, can you please explain what >this means? > >I don't understand what US pounds Sterling are. > Fair nuff, mate. The Brits think a billion is something other than 1e9. So "billion" here meant 1e9. Pounds meant about a buck and a half to two, the going rate for Brit bucks AFAIK. Taint no such thang as US pounds Sterling. And we're supposed to be metric, according to Congress, twice :-)

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DMCA Crypto Software
by John Young 15 Apr '03

15 Apr '03

John Markoff reports today on Paul Kocher/Cryptography Research's proposed software protection of DMCA content: http://cryptome.org/dmca-kiss.htm There's an October 2002 patent application for a similar invention by Paul Kocher, et al: http://cryptome.org/kocher-etal.htm

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Re: date formats (was Re: Single Point of Weakness is in the Works.Thank you Major Tom.)
by Thomas Shaddack 15 Apr '03

15 Apr '03

> I've always preferred YYYY.MM.DD, this way you can sort things very > easily. If you write the names of the months, it doesn't translate well > to other languages, though it may be similar, *AND* more importantly from > a geek perspective, if you do a sort, April shows as the 1st month of the > year, before January - not good. All depends on what you want. YYYY-MM-DD (or variations, including YYMMDD) are good when there is a chance it could be needed to be sorted. > If you do the reverse DD.MM.YYYY you can't sort it either since the 1st > day of every month shows up 1st. Dumb. Friendly to non-geeks, but dumb. However, not all data are to be sorted. There are some applications where friendliness to non-geeks is more important than sortability (eg, when showing only one value anyway). Sometimes we have to sacrifice something to the users to get them out of our hair. > The worst annoyance I've seen is using Unix time as a timestamp on log > dates. It's the most unreadable of all formats. Sorts nicely though, but > what a bitch to read. (Unix time being the number of seconds in decimal > since 1/1/1970.) The logs are usually intended to be human-readable. However, as long as it is reasonably trivial to write a program to process the timestamps, it's merely annoying.

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Re: Single Point of Weakness is in the Works.Thank you Major Tom.
by Major Variola (ret) 15 Apr '03

15 Apr '03

At 11:15 PM 4/13/03 +0200, Thomas Shaddack wrote: >> Strike. Learn to use STANDARD TIME FORMATS, you pathetic ex-con >> sellout journalist. DD/MM/YYYY is an antiquated european format. > >...and MM/DD/YYYY is an antiquitated American format. Indeed. And ambiguous. I always write out the month, which confuses americans, and telling them that its ambiguous otherwise just confuses them more :-) I have settled for "I used to work with Europeans". >You won't believe how many people who should know what IT security is >about still live somewhere between 1900 and 1950. Or use master-keyed locks... >> > But Norton also describes the power grid's fractal network of > >> Someone teach this child about fractals. > >Why fractals? Because little Kevin used that big word. Isn't he cute? Too bad its inappropriate and gratuitous. >One comment I would have is that the growing intelligence of equipment >should mandate fail-safe operation, refusal to perform commands that would >put the node and its surrounding area to dangerous situation. Yes, we can all afford sanity checks in our code now. I would caution that sometimes you need to override the sanity checks, e.g., to cause a flood to save the dam. Note that overriding will often require you to go through the same control system ---not some big red lever you manually pull. Can't wait until Detroit sells Joe Sixpack a drive by wire car that thinks for him when it shouldn't, to say nothing of failing digitally (ie catastrophically). Eg, it's >better to cause traffic jam by setting all lights to red (or, even better, >blinking yellow, which means here that the traffic lights aren't >controlled) All-red stops everyone, forever, or until they start to think. Blinking red is what you mean. Blinking yellow isn't in the official lexicon AFAIK. All-black = blinking red but often taken as green, leading to red asphalt. ------- There is no god and Murphy is his prophet.

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ecash signature scheme?
by John Kane 15 Apr '03

15 Apr '03

recently asked on sci.crypt: > What kind of signature scheme is this? The RSA envelope is filled with > 00 || MD5-Hash(message) || 00 ... 00 > (padded on the right with 00s up to the RSA modulus length). David Wagner wrote: dw> I seem to remember that an early version of Digicash's dw> ecash protocol may have used this scheme Any recollection of whether this might be on the mark? http://groups.google.com/groups?selm=b7fkrv$ofg$1@agate.berkeley.edu http://groups.google.com/groups?selm=5a9000c2.0304140745.55ea14e2@posting.g… -- John Kane Boston, MA (eastern US) IETF-OpenPGP working group --- end forwarded text -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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ecash signature scheme?
by John Kane 15 Apr '03

15 Apr '03

recently asked on sci.crypt: > What kind of signature scheme is this? The RSA envelope is filled with > 00 || MD5-Hash(message) || 00 ... 00 > (padded on the right with 00s up to the RSA modulus length). David Wagner wrote: dw> I seem to remember that an early version of Digicash's dw> ecash protocol may have used this scheme Any recollection of whether this might be on the mark? http://groups.google.com/groups?selm=b7fkrv$ofg$1@agate.berkeley.edu http://groups.google.com/groups?selm=5a9000c2.0304140745.55ea14e2@posting.g… -- John Kane Boston, MA (eastern US) IETF-OpenPGP working group --- end forwarded text -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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Notes on "Defending Against an Internet-based Attack on the Physical World"
by Major Variola (ret) 15 Apr '03

15 Apr '03

http://www.avirubin.com/scripted.attacks.pdf is an interesting, clueful paper that suggests that by exploiting search engine APIs, one can find large numbers of dead-tree info request forms, parse them, and submit a victim's info such that said victim (or their deadtree post office) is overwhelmed with physical mail. Some small comments: 1. The "Turing Tests" (sec 5.3) which try to assure that a human is doing the submission have two weaknesses. First, visual tests (which OCR can't handle) discriminate against the visually impaired, FWIW. Second, OCR folks (and machine vision folks in general) are always trying, for their own purposes, to make OCR as capable as humans. The gaps, point-noise, odd fonts, and distractors in "catpcha.net" like tests are all surmountable challenges for machine vision. And once solved once, they are available for all, as Schneier once emphesized (the script kiddy / internet problem) 2. The deadtree postal system is tolerant (because of humans in the loop) of small misspellings and other errors. As a result, automated counter-systems (possibly including honeynets) which attempt to detect address flooding would have a harder time recognizing semantically but not literally identical addresses.. 3. The authors' claim that part of their motivation for publishing (after sitting on this exploit for a while) is the availability of search APIs (sec 2). Frankly I don't see how Google (or other) APIs gives an advantage over scripts which emulate browsers paging through searches, except perhaps being a bit more direct for programmers/scripters. Doing a bit more parsing of HTML search results eliminates the need for any special API -in fact, it may be more general, and we do favor nonproprietary open standards over someone's beta API. ... Additional case studies are needed, however, to determine which traits of chemical and biological terrorists might help identify them because charisma, paranoia, and grandiosity are alo found to varying degreees among, for example, leaders of political parties, large corporations, and academic depts. --John T Finn, _Science_ v 289 1 sept 2000

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Cisco Support for Lawful Intercept in IP Networks (fwd)
by J.A. Terranson 15 Apr '03

15 Apr '03

---------- Forwarded message ---------- Date: Mon, 14 Apr 2003 17:34:32 -0400 (EDT) From: Sean Donelan <sean(a)donelan.com> To: nanog(a)merit.edu Subject: Cisco Support for Lawful Intercept in IP Networks What are service providers doing concerning lawful intercept support in their networks? Fred Baker, et al published an internet draft this month (April 2003) containing a lawful intercept architecture. http://www.rfc-editor.org/internet-drafts/draft-baker-slem-architecture-00.… Has anyone gotten a real set of requirements from the FBI for lawful intercept in IP Networks? Would Cisco's proposed architecture work, or just result in buying more cisco equipment?

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ecash signature scheme?
by R. A. Hettinga 14 Apr '03

14 Apr '03

--- begin forwarded text

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