GC: Truth and Justice, Grapeshot and JDAMs, Money and Happiness

[R. A. Hettinga]

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Lex vincula justitiae -- Roman Aphorism

"Camels, fleas, and princes exist everywhere." -- Persian proverb 

"Some people say that money can't buy happiness. I've found that it
usually does, and, when it doesn't, it buys the most interesting
substitutes." -- Rhett Butler, 'Gone with the Wind' 

"Reality is not optional." -- Thomas Sowell 




Truth and Justice, Grapeshot and JDAMs, Money and Happiness 

Geodesic Capital
Robert Hettinga

Boston,
4/26/03


I tend to think in terms of finance and economics, and not law and
politics. Well, not legislation or regulation, anyway; private
agreement, private law, is actually necessary for civilization -- go
read the most of the shattered cuneiform on the floor of the Baghdad
Museum if you need a hint.

Even though most people think you can't *do* either finance and
economics without legislation and force monopoly, cypherpunks in
particular understand that this not necessarily the case in a world
of ubiquitous networks and strong financial cryptography. 


However, I'm not one to believe in grand conspiracies against Truth
and Justice, either. Even if violent repression is used to preserve
the status quo, the status quo is not immune to physical
environmental change, and, ultimately, the economics of a given
physical change is what makes most of the human world change. You
have to *pay* the guys with guns, after all, or they won't kill
people for you.

So, I think that, financial "corn-laws" or no, internet financial
cryptography must significantly change *finance*, that is, people
have to *make* money, and lots of it, or it's just "art", for lack of
a better word. It's not even politics, because it has no effect on
reality. Like art, it just becomes an entertaining waste of time.
Otherwise, one might as well plant fake bombs in a courthouse, or
dump mercaptan on the doorstep of the IRS, or hoover out somebody's
property records from Lexis and post it on a mail list. Or, for that
matter, decide that you're only going to use internet bearer
transaction technology to finance dope-dealers, or
child-pornographers, or terrorists, or father-rapers, or any other
shop-worn horseman the infocalypse is selling this week. There's no
serious money in it, for starters, and, if you make *everybody*
money, in theory at least, your market's bigger. :-). 


That's why I say that internet bearer protocols should be three
orders of magnitude cheaper to use than book-entry protocols, even
internet book-entry clearinghouses like PayPal -- or book-entry
financial cryptography protocols like Peppercoin -- or nothing will
happen, no matter what one's political intent is.

In fact, I started IBUC because I thought that those three orders of
magnitude were possible at a time when nobody else did, and I have
the arrows in my back -- and the creditors sitting back there as well
:-) -- to prove it. When I started the company, I thought that there
was enough capital sloshing around out there to give financial
progress a shove, and make lots of money by being there first,
because in three or five years the barriers to entry would be
completely down, and any cypherpunk worth his code could underwrite
bearer instruments on the net. It turns out that there wasn't much
capital out there, for internet payments, much less for internet
bearer transactions. All of the money we raised was just before the
bubble popped, from family, friends and friends of friends, and, just
before I pretty much quit trying to raise money at all, Declan
McCullagh had written an article on us that reminded me for all the
world of that feral kid in Mad Max, walking across a burned-over
post-apocalypse throwing that steel boomerang at fat guys with a
leather fetish. Which, in hindsight, was prescient by about 4 months,
since it was written in the middle of June 2001.

Nonetheless, we managed to get some financial operations consulting
work to keep the company afloat to keep thinking about it, though
that dried up, too, just before, and certainly after September 11th.
So, four (founded, by coincidence, I swear, on April 15, 1999) of
those three to five years have come and gone, the technology and
financial networks have just about grown into each other naturally,
and, at the moment, we're trying to be at least that first
cypherpunk, hopefully one of many. We'll see what happens.


Which brings me to happiness. People do what is in their own interest
at all times. Altruism is just another form of selfishness, for
instance, because people's lives are finite and one's reputation can
outlast one's life. Even if one uses a pseudonym, one's life, and
death, may be more pleasurable because of some altruistic sacrifice
or another, and you gotta die sooner or later anyway. As Ayn Rand
herself said once, life may be too painful if someone you love isn't
in it, so you'd rather give your life saving theirs.

On the macro level, the US is not the strongest and richest
nation-state in the world because it confiscated its wealth at the
point of a tank-barrel or missile-silo. It is the strongest
nation-state in the world because it *bought* those tanks, and
missiles, because its citizenry *earned* the money that was
confiscated, by taxation, and papered over with the outright fraud of
"social welfare", to build those weapons, mostly because of some
external threat, and in spite of the attendant graft and
budget-packing. And all of *that* was possible because the US is, to
date, the freest country, and thus the freest market, in the world.
It is the best place in the world for free people to maximize their
happiness. So far. 

To the extent that it continues to be so remains to be seen. It is,
frankly, orthogonal to whatever an individual's immediate *political*
motivations are, violent, or otherwise, hostile to the state, or
otherwise. Only outright economic results matter, and free people
make much more stuff than slaves do. Or at least the right kind of
stuff, as Mancur Olson demonstrated in "Power and Prosperity", his
book on the political economics of the Soviet state under Stalin.


Personally, I believe that, contrary to what God-Fearing
Conservatives and Reasonable Libertarians think, markets themselves
actually cause freedom. You may be born "owning" yourself all you
want, but freedom is not given to you by God, or anyone else.
*Nothing*, really, is actually given to us. Freedom is not, as most
people here and elsewhere believe, a "right". It may have to be
*taken* occasionally, but usually it is just bought and paid for,
sometimes with the blood of altruistic people, but most often with
what people earn after they feed, house, and clothe themselves and
their families: profit, in other words. Again, as they always are
about representing some triumph of socialism, Star Trek is wrong. The
Farenghis are the good guys. Acquisition *does* matter. :-).

But it's more fundamental than that. Much more than the platitude
says, freedom is *earned*, usually by doing something well enough
that people leave you alone about other things, or you won't do what
they want for them anymore, either passively by refusing to work, or
actively, by force of arms. And, even if that somebody has a gun at
your head, it's still in *their* interest to leave you alone
otherwise, if they want to get what they're after from you. As Mancur
Olsen says, a force monopolist, like any bandit, can't kill all the
people he steals from, or he'll run out of people to rob. Olson also
says that the optimum theft-rate for a force-monopolist is something
shy of 50% before the economy starts to fall over, by the way. Sound
familiar?



Contrary to popular belief, the richest force monopolists in the
world, the ones who are statistically most likely to live to spend
their money and give it to their children and otherwise be left in
peace, are the ones who are ostensibly *hired* to operate Western
free-market democracies, as kleptocratic as those governments still
are.

We just saw a failed example of force monopolist a few weeks ago in
Iraq, in fact, and we'll be seeing more soon, I expect. Like any bad
parasite -- and force monopolism *is* parasitism, and make no
mistake, it's not symbiosis as statists would have you believe -- Mr.
Hussein so severely weakened his "host" population, physically and
economically, that it could be easily killed, or at least violently
captured. Hussein was probably bombarded into fine organic mush in
the bargain. 

The fact that Iraq's population was "violently captured" -- and, one
would think, set free -- by a still socialist-riddled nominal
republic with the world's largest free-market economy was no
accident, however. 


Whatever one's Jeffersonian, or, more apparently, Jacksonian, motives
are about "fighting the power" with a cryptographic "revolution" --
or any other kind of "activism", technological, political, or
otherwise -- as if it were some kind of gallant Confederate cavalry
charge into massed Union grapeshot, or even Rhett Butler running the
blockade of Savannah, whatever, the *only* way that this stuff will
happen is by making *more* money than the alternative book-entry
transaction execution, clearing and settlement technologies.  *Much*
more money. Whether they're entrenched, or not; violently defended,
or not.

Then, if necessary, we can just *hire* the B52s and JDAMs to pound
*their* horse-drawn field artillery troops into fine organic mush
instead.


The stuff's not called financial cryptography for nothing, after all.

Cheers,
RAH

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-- 
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R. A. Hettinga <mailto: rah at 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'