Re: Stewart Baker on new crypto rules
From: "Michael Froomkin - U.Miami School of Law" <froomkin@law.miami.edu>
http://www.steptoe.com/oped.htm
argues that industry won't accept any system that threatens to cut off backwards compatibility after 2 years, hence DES export liberalization will have to extend beyond the proposed period.
I take a slightly different moral. Baker (former NSA attorney) writes:
If buying key-recovery encryption means customers must give up all of their legacy encryption systems, key recovery products will carry a near-fatal burden in many markets where encryption is now used widely. The transition to key recovery will have to be gradual or it won't happen at all.
What I see this as is a call to come up with architectures that will allow transparent phase-in of government key access (so-called "key recovery") technology. The current HP proposal fits in very well with this model. The appear to be planning on using standard API's so that applications will be able to switch to using key escrow software without changing the applications themselves, just the OS. Maybe there could be a transition period where both the old and new crypto would both be accepted, then after a period of time the old wouldn't work any more. As Baker goes on to say:
Three years ago, no one in the PC world would have bought an operating system that didn't run MS-DOS. Three years from now, we'll be happy to buy an operating system that is backward-compatible with Windows 95 but not with MS-DOS. And then, at last, we'll throw out all our old DOS programs.
This suggests to me that we need to be vigilant in watching for systems that will allow for easy "drop in" of key escrow. Hal
On Wed, 20 Nov 1996, Hal Finney wrote:
This suggests to me that we need to be vigilant in watching for systems that will allow for easy "drop in" of key escrow.
I dunno. Drop in in some but not all cases will equal drop out. A. Michael Froomkin | +1 (305) 284-4285; +1 (305) 284-6506 (fax) Associate Professor of Law | U. Miami School of Law | froomkin@law.miami.edu P.O. Box 248087 | http://www.law.miami.edu/~froomkin Coral Gables, FL 33124 USA | It's warm here.
On Wed, 20 Nov 1996, Hal Finney wrote:
What I see this as is a call to come up with architectures that will allow transparent phase-in of government key access (so-called "key recovery") technology. The current HP proposal fits in very well with this model. The appear to be planning on using standard API's so that applications will be able to switch to using key escrow software without changing the applications themselves, just the OS. Maybe there could be a transition period where both the old and new crypto would both be accepted, then after a period of time the old wouldn't work any more.
Just so we are all clear about what HP is up to: in August, 1996, I attended a presentation by HP's policy person. He was touting the anti-four horsemen properties of HP/TIS/unnamed other's "voluntary" "key recovery" system. When I pointed out to him that voluntary GAK could not possibly defend against criminals using strong crypto, since such criminals are unlikely to register their keys with the "escrow" agency, he replied: "There are many possible interpretations of the words 'voluntary' and 'mandatory'." I am willing to testify to this under oath. I don't know what dictionary HP is using. Orwell himself must have written it. --Lucky
On Wed, 20 Nov 1996, Hal Finney wrote:
Just so we are all clear about what HP is up to: in August, 1996, I attended a presentation by HP's policy person. He was touting the anti-four horsemen properties of HP/TIS/unnamed other's "voluntary" "key recovery" system. When I pointed out to him that voluntary GAK could not possibly defend against criminals using strong crypto, since such criminals are unlikely to register their keys with the "escrow" agency, he replied:
"There are many possible interpretations of the words 'voluntary' and 'mandatory'."
I am willing to testify to this under oath.
I don't know what dictionary HP is using. Orwell himself must have written it.
Try Black's Law Dictionary, 6th Edition. The IRS uses it all the time.
On Thu, 21 Nov 1996, Jon Galt wrote:
Date: Thu, 21 Nov 96 11:02:30 EST From: Jon Galt <jongalt@pinn.net> To: shamrock@netcom.com Cc: cypherpunks@toad.com, froomkin@law.miami.edu Subject: Re: Stewart Baker on new crypto rules
On Wed, 20 Nov 1996, Hal Finney wrote:
Just so we are all clear about what HP is up to: in August, 1996, I attended a presentation by HP's policy person. He was touting the anti-four horsemen properties of HP/TIS/unnamed other's "voluntary" "key recovery" system. When I pointed out to him that voluntary GAK could not possibly defend against criminals using strong crypto, since such criminals are unlikely to register their keys with the "escrow" agency, he replied:
"There are many possible interpretations of the words 'voluntary' and 'mandatory'."
I am willing to testify to this under oath.
I don't know what dictionary HP is using. Orwell himself must have written it.
Try Black's Law Dictionary, 6th Edition. The IRS uses it all the time.
Or my favorate supreme court quote: Threat of loss, not hope of gain, is the essence of coercion. -- Forward complaints to : European Association of Envelope Manufactures Finger for Public Key Gutenbergstrasse 21;Postfach;CH-3001;Bern Vote Monarchist Switzerland
On Fri, 22 Nov 1996, `Jon Galt' wrote:
What an interesting topic for this list. I really must point out that most wealth in this country is first generation wealth - in other words, most wealth is EARNED, not "handed down".
Please back this statement up. The fact is, contrary to our grand self-image, America has one of the lowest rates of class mobility in the world. Just shy of forty percent of the wealth (in land and capital) in the U.S. is possessed by one percent of the population. This far outstrips, for example, Great Britain, where the top one percent of society holds 18% of the nation's wealth. Continuing down the line, the top 20% of the us population hold more than 80% of the nation's wealth. [Source New York Times, April 17. 1995, p.1] _However_, that's not what I came here to talk to you about tonight:
too much wealth in relation to those around them. Adam Back (and the cypherpunks?) is (are) against people being prevented from accumulating "too much" wealth in relation to those around them.
An oversimplification. Cypherpunks are in favor of people using technology to take their own privacy into their own hands. Anything outside the scope of this issue is an aside. Cypherpunks tend toward anarchism / libertarianism as a result of their strong bent toward personal freedom, but this generalization obscures the fact that cypherpunks is a _pragmatic_ group, addressing issues of importance to both left-leaning and right-leaning anarchist / libertarian types. To split the group on lines of economic principle is to undermine the value of this shared ground. Let's face it -- when it comes to privacy, the US and the world are in a state of crisis right now. It would be a serious mistake to let our disagreements on economic policy drive us from the fight for liberty. -- Jim Wise System Administrator GSAPP, Columbia University jim@santafe.arch.columbia.edu http://www.arch.columbia.edu/~jim * Finger for PGP public key *
On Sat, 23 Nov 1996, Jim Wise wrote:
On Fri, 22 Nov 1996, `Jon Galt' wrote:
What an interesting topic for this list. I really must point out that most wealth in this country is first generation wealth - in other words, most wealth is EARNED, not "handed down".
Please back this statement up. The fact is, contrary to our grand self-image, America has one of the lowest rates of class mobility in the world. Just shy of forty percent of the wealth (in land and capital) in the U.S. is possessed by one percent of the population. This far outstrips, for example, Great Britain, where the top one percent of society holds 18% of the nation's wealth. Continuing down the line, the top 20% of the us population hold more than 80% of the nation's wealth. [Source New York Times, April 17. 1995, p.1]
Yup. I agree with you here - every year Forbes puts out its list of the richest people in America. I'm too lazy to go digging under the coffee table to find the issue, but as I recall, a good number of the people on the list made their money the old-fasioned way - they inherited it. Also - most people inthis country do not have true "wealth" - most are fairly leveraged with mortgages and other loans, so their true net worth is not all that high. The "coupon-clipping" class is mostly "old money." -r.w.
Yup. I agree with you here - every year Forbes puts out its list of the richest people in America. I'm too lazy to go digging under the coffee table to find the issue, but as I recall, a good number of the people on the list made their money the old-fasioned way - they inherited it.
Also - most people inthis country do not have true "wealth" - most are fairly leveraged with mortgages and other loans, so their true net worth is not all that high.
The "coupon-clipping" class is mostly "old money."
Well since so many people are commenting on it, I'd better explain. I have heard a number of times that of all the millionaires in this country, the vast majority of them are first-generation millionaires. I'll certainly admit that that's different than saying most of the wealth is first-generation wealth. And sorry, but I can't give a specific source.
I have no doubt that the above is correct - but a million ($) just isn't what it used to be. Even if all the "millionaires" are 1st generation wealth, the million+ -aires certainly aren't. -r.w.
Yup. I agree with you here - every year Forbes puts out its list of the fairly leveraged with mortgages and other loans, so their true net worth is not all that high. The "coupon-clipping" class is mostly "old money." Well since so many people are commenting on it, I'd better explain. I have heard a number of times that of all the millionaires in this country, the vast majority of them are first-generation millionaires. I'll certainly admit that that's different than saying most of the wealth is first-generation wealth. And sorry, but I can't give a specific source. I have no doubt that the above is correct - but a million ($) just isn't what it used to be. Even if all the "millionaires" are 1st generation wealth, the million+ -aires certainly aren't.
Bill Gates. Sam Walton. 2 very large examples. Waltons heirs got most of his wealth, so they are second generation. While it may be that "most" of the wealth is controlled by few entities, exactly _what_ are those entities, and what does that wealth consist of? Real estate? Money in the bank? -or- things like stocks, bonds, and other _investments_? Petro, Christopher C. petro@suba.com <prefered for any non-list stuff> snow@smoke.suba.com
exactly _what_ are those entities, and what does that wealth consist of?
Real estate? Money in the bank? -or- things like stocks, bonds, and other _investments_? Petro, Christopher C. petro@suba.com <prefered for any non-list stuff> snow@smoke.suba.com
Take a look in the Forbes 400 listings of th of the most wealthy Americans. I'm sure you can find a copy at your local library. If not, there's a copy somewhere under my sofa, next to an old tennis ball covered with dog spit. The tennis ball, that is. Although one of the Hunts has a few teeth marks ... :) -r.w.
Some basic points on the thread 1. For wealth to be "handed down", it must be earned or confiscated first. Mao's widow lived quite well during Mao's life and for a while after his death. Also, if there was no direct way to pass wealth on to offspring, it would be consumed or destroyed by the generation which created it. You may not agree with the choice of the original Kennedys and Rockefellers, but limiting that choice is not without consequence - the wealth will still not end up where you want it, and a great amount will be left uncreated. 2. In a socialist society wealth is confiscated at gunpoint. In a capitalist society, I have to provide something that you want more than your wealth in order to obtain it. Bill Gates has lots of money because people buy Windows. They can have Linux for the price of a download or cheap CD. Are the people who choose to give $100 to Bill Gates evil? Why doesn't Bill Gates give me a copy of Windows 95 if I give $100 to Mother Theresa? Is Bill Gates evil? If Bill Gates received nothing for Windows, how would he pay his employees and manufacturers who develop and package it, or should they be content to be charitable slaves and starve as long as Mother Theresa gets the $100? Linux is "better" and free. Maybe we should dissolve Microsoft and take all it's wealth and give it to the poor and tell everyone to use Linux and stop wasting their wealth. Of course people might object, so we need to bring in the guns and tanks, just like Stalin needed to do to the uncharitable Ukranians. 3. If wealth isn't being transferred, it is most likely because Government has created a monopoly or oligopoly. If I have a better idea for a car, I cannot simply just build one, since any modification to the powertrain has to be certified by the EPA. So if I could get 2 Miles/gallon better mileage without a change in emissions for a $50 modification, I still have to spend over $1 Million satisfying the bureaucracy and generating no profit. The existing auto industries have no incentive to change this because these are sunk costs, and they can keep their oligopoly. 4. When you say wealth isn't being transferred, it is also generally untrue. While someone may be controlling it, their control is usually not to leave it under a matress (which would make my wealth comparatively more valuable). Microsoft has lots of money because the foundations and Nth generation wealthy are putting the funds into stocks and bonds of corporations like Microsoft and government debt. The companies are renting the wealth of others. They wouldn't stay wealthy long if all they engaged in was consumption. In this case, economies of scale work with investment - it takes a fixed amount of analysis to guarantee a greater profit, so $100 will not be invested as efficiently as $100 Million. 5. Government is the least efficient means of resolving the problem. The current welfare system is such that simply transferring the budget of all the programs would make every poor person middle class. Confiscating the wealth of the rich would likely be used employ more people generating endless debates about who to give it to, than actual beneficiaries. You can see this with some class action cases (e.g. asbestos) where the lawyers split up big fees, and the injured plaintiffs get only a token amount. 6. No one has given any reason why the dollar following the 10-millionth has less claim of ownership than the first 10-million. You can dislike the situation, but I would like to hear a *consistent* theory of property rights that holds a sliding scale of claim based on volume. Does the grocer with 200 tomatoes need to give away 20 because a store down the street has only 180? What if the situation is reversed the next day? tz@execpc.com finger tz@execpc.com for PGP key
Tom Zerucha wrote:
Some basic points on the thread
1. For wealth to be "handed down", it must be earned or confiscated first. Mao's widow lived quite well during Mao's life and for a while after his death.
Well China is nor more of an example of communism than Argentina is of Capitalism--they are both totalitarim regimes that use ideology as an excuse to plunder. It would be unfair for example to use Marcos wife (and her shoe collection) as an example of why capitalism doesn't work.
Also, if there was no direct way to pass wealth on to offspring, it would be consumed or destroyed by the generation which created it.
Perhaps by some--not most. Many die without wills--the wealthy tend to be much more careful with such things of course but you could allow provisions to have a percentage donated to non-political chartible organizations.
You may not agree with the choice of the original Kennedys and Rockefellers, but limiting that choice is not without consequence - the wealth will still not end up where you want it, and a great amount will be left uncreated.
I sincerely don't believe that. If you look at your above examples, or Bill Gates below, much of their motivation is not the accumulation of weath per se but rather power and performance. I know I would do much the same job (not that I'm in the wealthy) even if the salary were more or less--I enjoy it (I'm a programmer). Same is true for education--much of the motivation is either intrinsic or status oriented and has little or nothing to do with marketablity.
2. In a socialist society wealth is confiscated at gunpoint.
Not at all--no more or less so than in capatilistic societies.
In a capitalist society, I have to provide something that you want more than your wealth in order to obtain it.
That's true--as with all labor--but it is a matter of scale. Gates would do the same thing if you limited his income just for the sake of power accumulation--he's got all the money he could ever consume. That's not his real motive.
3. If wealth isn't being transferred, it is most likely because Government has created a monopoly or oligopoly. If I have a better idea for a car, I cannot simply just build one, since any modification to the powertrain has to be certified by the EPA. So if I could get 2 Miles/gallon better mileage without a change in emissions for a $50 modification, I still have to spend over $1 Million satisfying the bureaucracy and generating no profit. The existing auto industries have no incentive to change this because these are sunk costs, and they can keep their oligopoly.
Yes-our auto industry is a disgrace and I agree we do no favors protecting them or bailing them out. On the other hand goverment must protect against the creation of business monopoly which is even more stifling.
4. When you say wealth isn't being transferred, it is also generally untrue. While someone may be controlling it, their control is usually not to leave it under a matress (which would make my wealth comparatively more
Sorry to chop out so much about Microsoft--but sure most wealth is transferred in this country--that's a statisitical fact. Yes--there is consumption but when accumalation gets into the multi-millions that becomes irrelevant--money grows as you know--stocks, property, etc. and that is all that is passed down. There are few on either of these mailing lists that if given 10 million dollars could not sit on their ass for the rest of their lives consuming comfortably and watch their money double by the time they pass away.
5. Government is the least efficient means of resolving the problem. The
As inefficeint as it is it is really the only effective means. A simple 100% inheritance tax would be very helpful as would limitations on how much property a given individual (and a corporation is a virutal individual) may own.
6. No one has given any reason why the dollar following the 10-millionth has less claim of ownership than the first 10-million. You can dislike the situation, but I would like to hear a *consistent* theory of property rights that holds a sliding scale of claim based on volume. Does the grocer with 200 tomatoes need to give away 20 because a store down the street has only 180? What if the situation is reversed the next day?
Well the original issue we were discussing was the fact that a majority of wealth in the US in not earned--it is inherited. That can be changed very quickly with proper legislation. As to your other issue here--earnings and limitations on accumulation, much would be equalized without inheritance. But yes--there would still be accumulators--most would still produce regardless of limits because as I said their motives are not simply income--power, prestige, etc. all come in to play as well as the gratification that comes with winning. Gates enjoys his cover on Time Mag. much more than a few extra million a day. But the basic answer to your argument--from my standpoint--is that some people are extremely intellegent, others very gifted in other ways, others very dull witted, etc. Some possess artistic genius that can pay off immediately, others have none that is valued dollar wise by society. I sincerly don't believe one has the right to live better than the other--that the rewards, if different, sould be negligable. If I could make as much as I do know programming by working as a clerk in a convenience store or whatever I would still choose to do what I am doing. If you are in a different situation you're in the wrong career. Steve
On Tue, 26 Nov 1996, Stephen Boursy wrote:
Well the original issue we were discussing was the fact that a majority of wealth in the US in not earned--it is inherited. That can be changed very quickly with proper legislation.
It may also be an advantage. Anyone looking today at what passing wealth onto the offspring does to them would make them more likely to give it to someone else. (I don't agree with Ayn Rand on everything, but Atlas Shrugged has a short treatise on money, and one point she makes is that inherited wealth is always squandered unless those who inherit it are as good at handling it as the parent - I can also add, unless they go into politics and rig the game).
As to your other issue here--earnings and limitations on accumulation, much would be equalized without inheritance. But yes--there would still be accumulators--most would still produce regardless of limits because as I said their motives are not simply income--power, prestige, etc. all come in to play as well as the gratification that comes with winning. Gates enjoys his cover on Time Mag. much more than a few extra million a day.
I believe in strong laws to prevent the accumulation of power. Lord Acton (Power tends to corrupt) was a Classical Liberal. Wealth is one form of power, but it is self regulating in that you can only do so much damage until you go bankrupt. When you own the guns, there is much less limitation. Gates can buy Time and put his face on every week, but I don't think people would keep buying Time if Gates was the only feature. Time also puts Gates on because he is newsworthy.
But the basic answer to your argument--from my standpoint--is that some people are extremely intellegent, others very gifted in other ways, others very dull witted, etc. Some possess artistic genius that can pay off immediately, others have none that is valued dollar wise by society. I sincerly don't believe one has the right to live better than the other--that the rewards, if different, sould be negligable.
The problem IS one of value. When you say someone has a valuable talent, that is not valued "dollar-wise", what value does it have? If you are setting yourself up as god you can give an answer, but otherwise I don't think any of us have enough information. Price defines how valuable something ACUTALLY IS to society, not how much it would be valued in Utopia, or in a particular person's utopia. I like music of the period from Bach through Beethoven. I, as god, would discourage Sibelius and DeBussey from being played. You probably have different tastes, and as god, would favor different music. I express myself by buying recordings of Bach, Schubert, etc. You buy others. That is how the value is shown, and how rewards are equitably distributed. People like me paying for a CD of the goldberg variations send information in the form of price to those considering producing the recording. Rock Stars and Atheletes are far more overvalued (and tend to be corrupted by it) in a moral-philosophical sense, so should we close down all the stadia, and only produce classical CDs - this would be the first step toward your idea of a "just" society. I think there are a lot of stupid people out there who would be happy on half the income doing something they like. But if someone values money more than frustration, it is their choice, and I don't have the right to violate it. I like music, but am terrible at making it, so I program, which I also like instead, and I don't do ironwork which might pay well, but I don't enjoy. I am left to the terrible justice of my own choices.
If I could make as much as I do know programming by working as a clerk in a convenience store or whatever I would still choose to do what I am doing. If you are in a different situation you're in the wrong career.
Then I would suggest you live by your own words and become a store clerk and work on free software. You have no right to be happily employed doing something you enjoy while there are miserable clerks out there. You should free an existing clerk to pursue his dream for a while. Or is it "A free market for me, but not for thee"? I have a very good job BECAUSE it is what I like doing. I could easily double my income by changing my condition and battling uphill as an independent contractor. But I make a choice between money and contentment. We all do. And I cannot set up a better system. tz@execpc.com finger tz@execpc.com for PGP key
On Tue, 26 Nov 1996, Tom Zerucha wrote:
2. In a socialist society wealth is confiscated at gunpoint. In a capitalist society, I have to provide something that you want more than your wealth in order to obtain it. Bill Gates has lots of money because
You are confusing the difference between capitalism and socialism with that between authoritarianism and anarchism. If you think that money isn't taken at gunpoint in this society, try not paying taxes for a while... Or more subtly and more brutally, try not paying for food and shelter for a while... Conversely to suggest that all socialist economies rely on state enforcement contradicts generations of communal life among groups such as the Amish... A more accurate division, if you are looking for sweeping generalizations, is to say that all statist systems (and it is immaterial to me whether the state calls itself a `government', a `collective', or a `corporation') sustain themselves by theft, while in a free society, a more open system is possible. Were a truly free society to exist, you or I could choose our own economic system, rather than being coerced into whatever system is profitable for those currently in power. I tend to believe that a communal existance under such circumstances would be ideal. I suspect you would seek for capitalism. So be it. Of course, whether a system such as ours could survive without the national guard, an army, and a police state to keep the lower classes in line is another question...
4. When you say wealth isn't being transferred, it is also generally untrue. While someone may be controlling it, their control is usually not
Each year a smaller percentage of the population controls a larger percentage of the wealth, while the income and holdings of the average citizen drops. Wealth certainly is being transferred... In the wrong direction.
5. Government is the least efficient means of resolving the problem. The
I doubt you'll find very many (any?) on cypherpunks who would contest this. Again, you are confusing the difference between socialism and capitalism with that between statism and anarchism.
current welfare system is such that simply transferring the budget of all the programs would make every poor person middle class. Confiscating the wealth of the rich would likely be used employ more people generating endless debates about who to give it to, than actual beneficiaries. You
Actually there are plenty of beneficiaries. Mostly corporate. You do realize, I assume, that three times as much of your tax money goes to corporate welfare than to actual welfare... [Source: Michael Moore, ``Big Welfare Mamas'', in _Downsize_This_, NY 1996] -- Jim Wise System Administrator GSAPP, Columbia University jim@santafe.arch.columbia.edu http://www.arch.columbia.edu/~jim * Finger for PGP public key *
We DON'T live in a "capitalist" (free market, if you prefer) society. If we didn't have socalism transferring wealth, I would not need to pay taxes, nor worry about having government take my wealth at gunpoint. Saying that Argentina is "capitalist" is the mistake, not that it is an example where it does not work. I would like an example where socialism does work - by "work" I mean that resources are used efficiently. Hong Kong and Singapore exist. The latter is far from free, politically, but the economic freedom leads to efficient use of resources. The closest thing to a "working" socialist society I can think of is a monastary (many do become wealthy), but I don't think the majority of the population can emulate it. The Amish may be socialist, but are they economically efficient? Any real capitalist society will be inferior to an imaginary socialist utopia, just as cars are far more efficient where inertia and aerodynamics don't exist. Also, to define terms (for the purposes here, and to correct confusion from earlier posts): Socialism is where the government controls the means of production (this includes regulation, so that I may "own" a factory, but the government tells me what to produce, and/or how much and/or at what price). Capitalism (or pick another word) is where private individuals (potentially acting collectively in a corporation) control the means of production, and make the decisions of what and how much to produce, and what price to sell it at. Capital is a factor in production. By Capitalism, I don't mean corpratism. Corporations find it in their interest to pass protectionist laws and corporate welfare benefits and thus destroy free enterprise. If you can keep small businesses to a minimum, they will have less chance of becoming competitors. But corpratism requires government to set the product, quantity, or price, which is under my definition of socialism. I also don't mean anarchy, in the sense that I have to protect myself individually from violence, theft, and fraud. That is one of the few proper functions of government. Trade doesn't flourish when each monitary transaction is trumped by weapons. My point is that the Capitalist (free enterprise) society will be wealthier and happier than a socialist society, not that it will be perfect. Corporations will benefit from many things, even in a free enterprise society - and I hope they do, since (with the current bias against independent contractors - another socialist idea) I stand a better chance of being employed and making money the more healthy corporations compete for my labor. tz@execpc.com finger tz@execpc.com for PGP key
participants (10)
-
Black Unicorn -
Hal Finney -
Jim Wise -
Jon Galt -
Lucky Green -
Michael Froomkin - U.Miami School of Law -
Rabid Wombat -
snow -
Stephen Boursy -
Tom Zerucha