IP: [FP] Boiling the frog: Much will depend on 'electronic money'

--- begin forwarded text Delivered-To: ignition-point@majordomo.pobox.com From: "ScanThisNews" To: ignition-point@majordomo.pobox.com Subject: IP: [FP] Boiling the frog: Much will depend on 'electronic money' Date: Mon, 12 Oct 1998 20:27:18 -0500 Sender: owner-ignition-point@majordomo.pobox.com Precedence: list Reply-To: "ScanThisNews" ====================================================================== SCAN THIS NEWS 10/11/98 [Forwarded message] FROM MOUNTAIN MEDIA FOR IMMEDIATE RELEASE DATED OCT. 4, 1998 THE LIBERTARIAN, By Vin Suprynowicz Boiling the frog: Much will depend on the new 'electronic money' EDITORS: A version of this feature first appeared in the October edition of Las Vegas Magazine. An Internet press release (how trendy) from the folks at MasterCard International, datelined "Purchase, N.Y., July 22, 1998," informs us: "MasterCard International hosted today an online forum with thought leaders from global business, government and research organizations to discuss lifestyle changes that will occur as smart card technology gains acceptance over the next five years. "Representatives from IBM, Hitachi, British Telecommunications plc, the U.S. federal government's General Services Administration, The Tower Group and Emerge Online participated in the roundtable, which was moderated by Richard Phillimore, Senior Vice President of MasterCard's Chip Card Business unit. "'Five years from now, multi-application smart cards will be an established technology in the payments business,' Phillimore said. 'As the benefits of multi-application smart cards are proven in the marketplace, the conversion from magnetic stripe to chip-based payment cards will be very rapid. By the year 2010, we expect all of MasterCard's credit and debit cards and terminals will be chip-based.' "Smart cards will deliver increased consumer value and utility to today's credit cards, Phillimore added. 'Chip technology will enable cardholders to use their cards for many more purposes, such as electronic ticketing, loyalty programs, and secure remote shopping -- a true Lifestyle Card that can be tailored to meet the unique needs and preferences of a single individual.'" When mentioning those ominous-sounding "loyalty programs," I should point out, the online MasterCard gang are referring not to government loyalty oaths of the "am not now and never have been a member of the Communist Party" variety, but rather a system in which cardholders receive discounts for "loyally" shopping through one company -- the system probably familiar to most consumers today via those "discount club cards" issued by your supermarket, offering you 30 cents off a package of toilet paper if you let the teller scan your card at the checkout stand. Of course, the store gets something back in return for that discount. In addition to the obvious hope that you'll keep going back to the store whose discount card you carry (essentially, a surcharge is being applied to "hoppers" who show no store loyalty), the management can now easily track how many of its outlets you visit, and what you buy there. The initial commercial applications may be innocent enough -- "Let's save postage by only sending coupons for this new brand of breakfast cereal to the home addresses of our shoppers who already buy the more expensive competitor." But you don't have to be the kind who walks stooped over to avoid the black helicopters to foresee the day when the government inspectors may arrive, asking to see the electronic profiles of all customers in a given geographic area who have used the fast-spreading cards to buy anything from home AIDS test kits to hydroponic "grow lights" to "High Times" magazine to pistol ammunition. It's all stored in the computer, you know. And how long do you think Jack, your friendly local produce manager, is really going to refuse to let the FBI access his computer without a court order? About as long as it takes them to ask for his Social Security number and threaten to call their friends at the IRS, suggesting Jack may be in need of an immediate tax audit? The cheerful little MasterCard press release doesn't take long to broach the subject of "expanded uses" for the new cards with their embedded memory chips: "The panel also addressed the use of smart cards for identification purposes. Many agreed that identification was the 'killer application' that would encourage adoption of smart card programs. Kotaro Yamashita, COO of Financial Services at Hitachi, Ltd. said, 'We see identification applications issued by governments as being big in many places outside of Asia, for example Central America.' However, Marty Wagner, Associate Administrator of the Office of Government wide Policy at the U.S. General Services Administration (GSA) cautioned that 'National identity card programs could run into trouble in the U.S. due to privacy concerns.' " # # # The process of accustoming Americans to carrying around cards which can be used to buy anything from a candy car to a soda pop to a round-trip airline ticket to London -- but whose embedded chips will also relay to corporate and government snoops the social security number and other personal information (and resultant tax obligations) of anyone making that purchase -- is well underway. There's an old folk warning that if you throw a frog in boiling water he will quickly jump out. But if you put a frog in a pan of cold water and raise the temperature ever so slowly, the gradual warming will make the frog doze happily, triggering the soporific response he instinctively displays when the sun shines on his lily pad ... In fact, the frog will eventually cook to death, without ever waking up. Likewise, some mighty high-powered public relations types are figuring ways to emphasize the convenience of "electronic cash" - and downplay the effect it may have in removing any remaining privacy from the way you spend your pay. The goal? To cook the frog, without any ruckus. Convenience, convenience, convenience, was the happy spin Time magazine put on a new "single electronic card that may replace everything in your wallet," in their issue of April 27, 1998. As the magazine was listing all the bothersome stuff you now have to lug around - cash, ATM cards, credit cards, proof of insurance - it made a not-so-subtle swipe at anyone who would resist the happy consolidation of such burdens: "Your ID cards. PRESENT: You lug various bits of your legal identity. FUTURE: Non-conspiracists could consolidate pertinent info in one place." Get that? If you don't want the government tax man to see your bank balance and a record of how many times you've flown to Zurich or the Cayman Islands, if you don't want the theater manager to see your alimony payments or your concealed-carry handgun permit, if you don't want your boss to see your prescription for post-cancer-surgery drugs, if you don't want EVERYONE to gain a precise accounting of how much you spent last month at Frederick's of Hollywood, or renting X-rated videos, or shacked up in a motel room across town, or purchasing alcoholic beverages, or buying vaginal contraceptive foam (including which brand you prefer), why, you're just some loony "conspiracist." Also note that "could" ... as though we'll still have any choice. But why worry? Digital cash will be great, argues Joshua Cooper Ramo in the big "Future of Money" piece in the April 27 Time: "Think about the $2,000 check you send to your daughter at college for expenses. How is that money really spent? Books ... or beer? Electronic cash takes that relatively simple transaction -- passing an allowance -- and makes it into a much more intelligent process. ... "Your daughter can store the money any way she wants -- on her laptop, on a debit card, even (in the not too distant future) on a chip implanted under her skin. And, perhaps best of all, you can program the money to be spent only in specific ways. You might instruct some of the digits to go for books, some for food and some for movies. Unless you pass along a few digits that can be cashed at the local pub, she'll have to find someone else to buy the drinks." Ha ha. Kind of cute, isn't it? But look again. Isn't the underlying theme one of "control"? Try substituting a different scenario for Mr. Ramo's. How about: "Think about the $1,000 Social Security check your agency sends a retiree in Las Vegas. How is that money really spent? Food and lodging ... or blackjack, roulette, and Margaritas?" If the purpose of government retirement insurance is to make sure old folks have food and a roof over their head, doesn't the government have an OBLIGATION to "earmark" portions of those checks so they can only be used to buy certain things, once the new e-cash technology gives them that capability? Couldn't we set e-cards to freeze a recipient's account if she tried to use any of the "money" to pay for a second prescription of pain pills written by a doctor other than her ASSIGNED doctor, or to buy a naughty book about how to evade taxes, or how to move money into offshore accounts? For that matter, what if your boss started earmarking parts of your electronic paycheck for rent or groceries -- at certain stores that pay for the consideration -- all "for your own good," you understand? After all, the kind of soccer moms who elected Bill Clinton can be counted on to favor almost (start ital)any(end ital) additional Big Brother controls over those irresponsible men in their lives, frittering away their paychecks on bar tabs, dirty magazines, power tools, and fancy chrome doo-dads for their pickup trucks. # # # Donald S. McAlvany, editor of the economic and geopolitical newsletter "The McAlvany Intelligence Advisor," is a fellow who has been looking into the move toward trackable "electronic cash" for some time. The lead article in the July, 1998 edition of his 16-page newsletter is headlined "Toward a Cashless Society: Implementing an Electronic Currency in America," and spells out a very different view of these developing trends from the one embraced by the jovial publicists at Time: "The global socialists who dominate America and most of the governments of the western world today (especially Western Europe) have long had a goal of moving the world away from the use of cash and into an electronic funds currency system, wherein virtually all cash in use is 'electronic currency,' " writes Mr. McAlvany. "If all financial transactions are forced through an electronic banking system ... the ultimate 'people control' system could be established. ..." Citing George Orwell's classic novel "1984," Mr. McAlvany reminds us: "Privacy is a major element of freedom, without which people and nations cannot remain free. Today, we have dozens of privacy-destroying systems being put in place by governments all over the world. They include video camera surveillance in public places; electronic eavesdropping on computers, phones and faxes; dozens of computerized files on each adult American - compiled from credit card, banking, and tax records; physical surveillance of homes, in whole areas via satellite, helicopters, and other aircraft; the growing use of Social Security numbers to extract all kinds of information on Americans from business, banking, and government data cases; photo IDs required at airports; and the push by the Clinton Administration for a computerized (smart card) national identification card for all U.S. citizens. "But the greatest privacy-destroying system of all, one which would have made Big Brother's, Adolf Hitler's, Mao's, Lenin's or Stalin's mouths water is the elimination of cash and the forcing of all citizens into the computerized banking system for (start ital)all(end ital) transactions. Ultimately these transactions can be monitored, recorded, profiled, and used in 'people control.' If all of your personal transactions can be so tracked, a socialist government bent on identifying, profiling and controlling its 'politically incorrect' citizens or 'religious fanatics' or Bible-believing Christians; gun owners; critics of the government; non-tax compliers, can easily scrutinize and build a profile on such individuals. It can also, in the absence of a cash-spending alternative, deny the privilege to buy and sell to those who are politically or religiously incorrect." Since one of the main problems banks may have during the anticipated computer crisis brought about by the turning of the century is clearing checks written on other banks -- banks whose computers may not agree with the home bank's "fix" for the transition from year date 99 to year date 00 -- Mr. McAlvany suggests that crisis might present a perfect opportunity to effectively require bank customers to change over from paper checks to "electronic cash." "Remember that during the financial crisis of the 1930s, when Franklin Roosevelt presented the American people with the alternative of a bank holiday/gold confiscation/Draconian financial controls (start ital)or(end ital) financial destruction, they willingly chose the former and gave up a major portion of their financial freedom." # # # The removal of cash, of course, will be advertised as having many benefits. Since drug dealers buy and sell their product with suitcases full of hundred-dollar bills, it will be alleged that the switch will end the drug trade (as though a multi-billion-dollar industry won't promptly hire both fancy accountants and computer geniuses to figure out how to "go electronic" without throwing blips on the IRS radar screens -- or as though they won't just add newly "illegal" hundred-dollar bills to the list of contraband they now freely move outside official channels.) Expect a public relations campaign to expose the "health hazard" of all those dirty pennies and nickels you have lying around the house. Passed from hand to hand among AIDS patients and tuberculosis-ridden junkies, how can you let your children handle such stuff? Instead, buy Sean and Alysson a new pair of color-coordinated, his-and-hers Kiddie Smart Cards, which neatly deduct exactly $1.77 from their accounts when they buy lunch at school, without burdening them down with filthy, wasteful, inconvenient (and expensive to produce) coins ... coins they might otherwise save up, after all, to buy dirty magazines, or reefer, or who knows what else? Yep, it's all for your health, safety, and convenience. And why would anyone object ... unless, of course, they had something to (start ital)hide(end ital). What was your name again? And could I have your 18-digit bank tracking number, please? You (start ital)are(end ital) in this country legally, aren't you? Not some kind of a federal fugitive/deadbeat dad? There, that's better. See how easy things are when you cooperate? Just slide your card through the security/debit slot. Now pass your wrist over the scanner to make sure your embedded personal chip has the matching security code. Thank you; you may now move along. We know you have a choice when you dine out; thank you for patronizing Burger World. # # # A full transcript of the "smart card online forum" session referred to at the beginning of this essay, as well as a biography and smart card white paper from each chat participant, can be accessed at http://www.golinharris.com/mastercard. Subscriptions to The McAlvany Intelligence Advisor ("in no way involved in the tax resistance, militia, or sovereign citizens movements in the U.S.") run a substantial $115 per year. Send subscription info to P.O. Box 84904, Phoenix, Ariz. 85071, or telephone 800-528-0559. Vin Suprynowicz is the assistant editorial page editor of the Las Vegas Review-Journal. Readers may contact him via e-mail at vin@lvrj.com. Vin's twice-weekly newspaper column, "The Libertarian," is syndicated in the United States and Canada via Mountain Media Syndications, P.O. Box 4422, Las Vegas Nev. 89127. Watch for Vin's book, "Send in the Waco Killers," coming from Huntington Press in early 1999. *** Vin Suprynowicz, vin@lvrj.com Education rears disciples, imitators, and routinists, not pioneers of new ideas and creative geniuses. The schools are not nurseries of progress and improvement, but conservatories of tradition and unvarying modes of thought. -- Ludwig von Mises The most difficult struggle of all is the one within ourselves. Let us not get accustomed and adjusted to these conditions. The one who adjusts ceases to discriminate between good and evil. He becomes a slave in body and soul. Whatever may happen to you, remember always: Don't adjust! Revolt against the reality! -- Mordechai Anielewicz, Warsaw, 1943 * * * ======================================================================= Don't believe anything you read on the Net unless: 1) you can confirm it with another source, and/or 2) it is consistent with what you already know to be true. ======================================================================= Reply to: ======================================================================= To subscribe to the free Scan This News newsletter, send a message to and type "subscribe scan" in the BODY. Or, to be removed type "unsubscribe scan" in the message BODY. For additional instructions see www.efga.org/about/maillist.html ----------------------------------------------------------------------- "Scan This News" is Sponsored by S.C.A.N. 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