DeseretCoin and altcoin decentralization +/- centralization

When I learned about DACs, it opened my mind to some of the possibilities for this technology applied to rewards and organization/management approaches.  Then a few weeks ago at the Utah Bitcoin Meetup someone introduced DeseretCoin where the coin would be for local Utah businesses, so they would be distributed by some trusted local person (non-governmental, thankfully).  This just brought to light in my mind how any aspect of an altcoin network can be centralized by their creator.

So many possibilities!

Another scheme for control -- from the winner of this year's TED Prize

Summary: To fight corruption, she is proposing even more draconian control of free trade, targeted at companies instead of government... and she just won the TED Prize for it.

I'm scared.

I saw the blurb about this TED talk on "openness" in business by Charmian Gooch, and I avoided it until I was in the right frame of mind for something political and inflammatory... and I finally watched it this morning and my fear was confirmed.  She claims it's much too easy to set up a company right now, so people can do it at-will and then hide behind layers of companies when doing nefarious things; the solution is a global (!) requirement that requires that we know exactly who is the responsible party behind each and every corporation created.

It looks like Charmian has done some impressive work on tough problems happening in some of the most unstable and poor places in the world, and furthermore she has founded an organization Global Witness which now has 80 people who are investigating these situations and all the surrounding corruption.  Magnificent!  I've just added their RSS to my watchdog list.

But let's look at why her plan is wrong-headed.  She's right that people can use these structures to hide; however, how can anyone believe that someone using it for this purpose is not going to find another way?  If this were ever implemented, I have a simple solution for anyone wanting to avoid responsibility: find someone you can pay to be the responsible party.  There are always people willing to do this kind of work... heck, TaskRabbit has created a business where you can hire people do do things for you like stand in line for the new iPhone... and even in the halls of Congress you'll find people who are paid by lobbyists to stand in line on their behalf.

So, let's talk about all the additional rules and regulations that need to be added (and enforced) to ensure that this scheme accomplishes her goal of stamping out corruption...

No way.  It makes me tired just thinking about it.

So let's skip ahead to the evils if we were ever to just take the first step she proposes.

• It leaves the fundamental corruption in place: without the support of people in state institutions (eg. lawmakers, police, bureaucrats) these kinds of abuses would be much fewer, much less heinous, and much harder to instigate.  This fundamental oversight makes her message sound like the RootStrikers initiative, which is focused all on a single issue of campaign finance while ignoring all the other spheres of power operating in government; at least they recognize the origin of the problem in the state institutions, but neither Charmian's talk nor the Global Witness issues say anything about that problem, so they're not even touching the core of the problem.

• Her proposal restricts trade and personal liberty.  Hong Kong has had phenomenal growth in prosperity primarily due to to the economic freedom there, where it's even easier to create a company that in the US.  Again, crooks will always game the system; however, it hurts society much more when more restrictions are thrown onto small-time operators who are trying to create prosperity.  As a small business owner, I can tell you how onerous it is to try and run a legitimate business while trying to understand the requirements, much less try to comply and force others to comply; I can also tell you the uses of creating multiple companies, so more requirements would definitely compound the burden.  Add to that the ways that incorrect filings and incompetence can affect you (with no repercussions to the responsible bureaucrats), and you've got a high bar to clear before you can prove that the costs outweigh the benefits.

• As I've pointed out, it'd be easy for criminals to get around this... meaning that the next step will be yet more regulations and barriers added.  Maybe everyone has to go into an office and talk face-to-face with a screener before getting approved to start any organization dealing with money; many already know where I'm going with this: it's a real burden to be forced to report in to a bureaucracy.  And of course this opens the door to even more interlocking requirements with agencies like the Treasury or the DMV where you cannot accept electronic money for work or your company car will be impounded if any of the responsible parties owes something to another bureaucratic arm.

• Even in "free" countries, state workers have proven their tendency to pursue individuals (eg. Catherine Engelbrecht) and whole industries (eg. payday lenders) that the governing party or leader just doesn't like.  I'm sure they would like nothing better than even easier access to every one of our business relationships.

• That last point shows how evil it would to give the state institutions even more access to our relationships; now let's point to some good reasons for anonymity.  The easy answer is as a counter the authority of a rogue state apparatus who can crack down on all individuals they deem as competition.  Come to think of it, most of the cases I can imagine are to avoid malicious state activity... and I personally distrust most states in the world today!  But another valid case is a truly democratic advocacy organization (eg. a DAC) where the individuals don't want everyone to know their membership for any number of reasons.  (I happen to believe the future belongs to more democratic and decentralized organizations.)

I believe we can get to a world where most of this information is open because it truly fosters trust and humanity, and I am an optimist.  However, when we entrust the state to enforce this kind of behavior, it's misplaced trust... and very dangerous.

How about this: let's make every single state relationship and transaction 100% transparent.  Once we have that, we'll great progress with the issues she described... and then we can talk about businesses.  Once we get rid of the politics-based influence and make all businesses more accountable to us the people, most of the large-scale evil simply cannot be supported; take a look and see how many of these abuses are obviously supported the state, and then ask me sometime about examples where those companies leverage their state influence more insidiously and secretly.

And now we get to why I'm so sad: she was awarded the TED Prize this year... and she got a standing ovation.  People really have so much faith in government that they applaud this power-grab.  Is that really the opinion in the world today?

Our kids are in trouble.

"I just do not trust other people."

• Synopsis: If you believe we need government to watch the other people you don't trust, you're giving extra authority to exactly those other people... and, worse, their bureaucratic organization.

Talking with my brother about getting rid of the state, he said he just couldn't go along because "I just do not trust other people."  (Or maybe he said that "people are stupid and selfish"... yeah, that sounds more like him.)  I have a typical response but forgot to use it: I'm much the same as you, and that's exactly why I don't want to give extra authority to other people... specifically lawmakers, and the military and police they control.  To me, it is much scarier to have a small set of people who have monopoly power over a police force and taxing authority and water management.

Isn't it much safer to have everyone watching out for everyone else?  It goes against many of our cherished ideals of a benevolent leadership.  We should be able to make the right kinds of laws and put the right kind of people in charge to make good decisions!  Everyone (including myself) believes that we know some of the right things to do and we have good ideas about things that should work well for everyone, and I think that leads us to have faith in rulers.  But the fact is that absolute, codified laws cannot cover all situations and human conditions... and the intended beneficial consequences that are claimed by politicians mask an iceberg of costs and unintended consequences that are hard to see but which drag down so many other parts of our communities.

And history has shown us how even the American government with the most noble of founders and foundational concepts can easily be corrupted, in every generation... and not only do we give improper power over our lives to corruptible people, but more critically we see how the system becomes self-serving to the point where bureaucratic incentives do not serve the public good.

A romp through contrary ideas of government's role

Woke up around 2 and couldn't sleep, so I came down and broke out some Ted talks.  This morning, what appealed to me were the government ones that showed a view contrary to mine:

• Mariana Mazzucato: Government -- investor, risk-taker, innovator

I'll grant that government funding and support has pushed advances in many fields.  However, the market-shaping that government does is inappropriate, driven mainly by bureaucratic and political interests; there are only so many good examples of innovation because government has been involved in every aspect of our lives!  The negatives and unintended consequences of so much intervention far outweigh the positives.  I believe we would be much better off without some of our current technology (including space and medicine and computers and atomic energy), growing at a pace that is supported by voluntary investment.

I'll agree, too, with the proposition that government-funded innovations and research should yield a return.  There is no excuse for privatization of resources that have been forcibly taken from taxpayers.  Of course, I recommend a slightly different take: the results of these investments should be made available to all, without restriction, rather than being employed privately by anyone, neither in a company boardroom nor in a government office nor in a military base.

• Michael Sandel: Why we shouldn't trust markets with our civic life

He's totally focused on the market of dollars and cents.  That's the market I trust the least.  So I guess I agree with him there!  But there are other markets that make appropriate foundations for our "civic life."

I was going to add this comment, but Steve already did... and I couldn't resist the prompt to expand on it:

• Steve Gottschalk

  Oct 21 2013: There is a prevalent assumption in this talk that the only kind of market there can be is a monetized one, which is a bit like saying age is the only way to measure a child's progress.

  • Nick Vahlkamp

    Nov 8 2013: your comment is completely opaque. could you elaborate? Markets mean money in this here USA.
    Are you referring to indulgences from the 10th century?

    • Trent Larson

      I believe he is talking about a broader meaning of market, eg. "one of the many varieties of systems... whereby parties engage in exchange" (Wikipedia). Any social exchange becomes a market, so we can talk about the market for singles to find a good time and even a mate; for students to find a fitting educational environment; for workers to find an appropriate job; for social change-makers to find fertile ground for their ideas; and even for children to find the place where they will be loved and accepted. All these are exchanges, and I think we'd agree that there are many more dimensions than raw money that influence these trades and implicit contracts.
      
      This is my complaint with Sandel's talk as well: he only discusses the market of money/currency... meaning, in the USA, the system of the Federal Reserve and the Federal Treasury (and the supporting laws regarding tracking, lobbying, etc). I believe that particular market is rather unjust... so I guess I'd agree with him on that one. But there are so many other motivators that drive people to exchange their time and attention and effort, and it would be great if we paid more attention to those markets... markets which will always be voluntary... markets which give genuine, lasting rewards to the participants as opposed to artifacts generated by organizations.
      
      And I'll go further: I trust the aggregate choices driven by our common humanity much more than I trust the military-industrial-financial complex that currently serves as our civic governance in the US. I believe that we can build civil systems based on these other markets, contracting with one another rather than with a police-enforced government. (Unfortunately, I also believe it'll take a few generations.)

Jefferson: "a little rebellion now and then is a good thing"

A friend of mine saw this note from Thomas Jefferson and thought I may have something to say about it:

"Societies exist under three forms sufficiently distinguishable. 1. Without government, as among our Indians. 2. Under governments wherein the will of every one has a just influence, as is the case in England in a slight degree, and in our states in a great one. 3. Under governments of force: as is the case in all other monarchies and in most of the other republics. To have an idea of the curse of existence under these last, they must be seen. It is a government of wolves over sheep. It is a problem, not clear in my mind, that the 1st. condition is not the best. But I believe it to be inconsistent with any great degree of population. The second state has a great deal of good in it. The mass of mankind under that enjoys a precious degree of liberty and happiness. It has it's evils too: the principal of which is the turbulence to which it is subject. But weigh this against the oppressions of monarchy, and it becomes nothing. Malo periculosam, libertatem quam quietam servitutem. Even this evil is productive of good. It prevents the degeneracy of government, and nourishes a general attention to the public affairs. I hold it that a little rebellion now and then is a good thing, and as necessary in the political world as storms in the physical." - Jefferson to James Madison, January 30, 1787

I think the American Experiment has shown that even a well-defined, limited set of powers will be expanded and abused by those who gain power (whether in a republic or a democracy).  This country has become become oppressive and violent.  So it's good to see that Jefferson recognized the need for a little rebellion.

But dismissing anarchy (ie. no government, option #1) shows a lack of imagination.  I might actually agree with him that it may not support the kind of society we have... I don't think we'd have atomic energy (or bombs) nor would we have the space technology we have today, and maybe we couldn't support such a large population, either.  However, I see that as an upside: power would not be concentrated in so few people's hands, families and communities would be more connected (out of necessity), and lives would be richer (in the spiritual sense, not an economic/comfortable sense).

It can be hard to see how to apply it, and it requires a massive rework of our social conventions.  For example, how can we get to where people will not be driven by fear to hire mercenaries to "protect our interests" in other people's lands (or states or even nearby cities)?  I'm afraid it'll require massive education before it'll work... probably spanning generations.  But it's really cool to think about it all... for example, the basis of possession as opposed to private property: http://dbzer0.com/blog/private-property-vs-possession/

Anyway, back to Jefferson's point: a little rebellion is a good thing.  I wholeheartedly agree.  And I think we're overdue for one.

I'm outraged at Turing's treatment, but it seems many haven't learned from it.

Most everyone agrees that the persecution of Alan Turing (for homosexual activity) was wrong.  However, I want to point out a mindset that I consider dangerous, and which will lead to more of this kind of oppression.  In explaining the House of Lords' rejection of a posthumous pardon, Lord McNally stated on Feb 2 that:

Alan Turing was properly convicted of what at the time was a criminal offence. He would have known that his offence was against the law and that he would be prosecuted.

Improper laws should not be supported.  We should not only abolish them, but also decry their creators and enforcers and declare that it was never right to support them in the first place.  Lord McNally's statement shows an opinion I see all too often: the support for laws just for the reason that they're laws.  I'm sorry, but I reject the idea that it is good to uphold oppression just to maintain order or just because it was decided by a group of so-called representatives; there is no virtue in unquestioning support of government rules.

Let's make it more popular to disobey bad laws (especially when done openly!).

I'd love to have a local museum! But I'd rather it be voluntary.

A friend of mine just wrote encouraging me to participate in an event that will help raise money and awareness of a local museum. I asked if the museum would be built or supported with taxpare funds. They wrote back:

"For your information, it is mandated in the Bountiful City code that we, yes the people, we have a right and responsibility to record, archive, preserve, and disseminate the history of our community. It is not only proper that we use tax payer money for this purpose, but it is our duty and our heritage to let our children and grandchildren know where we came from and how we got here. All across America we have buildings and lands bought and paid for by tax dollars that tells of the sacrifices of each generation in making America what it is today. If you don't believe this, then don't take your children to a National Park, museum, National Cemetery, or monument, because all of these were and are funded by tax dollars."

My response:

"You are absolutely right: we have many, many buildings, museums, monuments, and lands that are funded with taxpayer money, and I agree that these add to our heritage.

"However, I think even you must admit that our government (especially at the federal level) has frequently spent our money on these things inappropriately. For the sake of one goal (eg. "building heritage"), they benefit the few at the cost of many, and they use government force to do beneficial things which weakens the efforts of those who do good work on a voluntary basis. We can build a much stronger, more resilient community through projects that accomplish these things without force.

"For example, the South Davis Recreational Center and the Rogers Memorial Theater are good examples of burdens that our local Davis county government(s) have imposed or might impose on taxpayers and local businesses, affecting either the free use of their income or the freedom to compete fairly for people's attention.

"Feel free to keep me in the loop. I would love to be part of any voluntary initiative that improves our community like this!"

FYI: I promised to contribute to the next local, voluntary project my friend brings to my attention. Hold me to that. :-) I can't promise that to everyone, but I'll appreciate knowing any of these you send my way!

I disagree that IP rights are essential.

I disagree that IP rights are essential to growth, at least if they mean strong IP laws like in the US, since those are more often simply used by large companies with lawyers to bully newcomers rather than really building value. Technology nowadays is allowing us to focus on services and reputation, making distribution cheap; to continue to control the ownership of ideas and their delivery is to undermine the foundation of sharing, which is the foundation of the industry addressed in this article.

As an example, technology is enabling artists to spread their art around the world and make money from performances and other more personal approaches. The RIAA fights this with lawyers, which is their right for existing contracts; however, they have yet to show that it affects their business, and the system has also hamstrung many legitimate, innovative uses due to the heavy-handed approaches supported by government force.

Microsoft spread NOT because of IPR but rather due to effective pricing. And today’s service-oriented networks need freedom of open access, not artificially restrictive “property” rights.

There may be a way to create a rational IP system, but needs to be much more narrow and focused than any system in use today.

support for First Amendment is poor (but improving)

The First Amendment Center published their 2008 survey results about American's knowledge and opinions of the First Amendment.

Beware: they are frightening! People have very little knowledge of their freedoms, but worse of all they are willing to give up many of them. Thankfully, if you look at the numbers for the past few years, the trend seems to be improving (from my 2-minute scan of the data), though the improvement is very slight. This is not very encouraging news.

(Thanks to the Deseret News for their op-ed warning about American's attitudes.)

Hey, Feds: solve our problems!

I am more and more disappointed in our federal governmental situation, but only partly because federal politicians seem to think they need to avoid every crisis and solve every problem in society: I see more and more evidence like this "Presidential Challenge" that shows how many people really believe our national government could and should impose it's will to try and fix every injustice. (Disclaimer: the one about bin-Laden really is a valid project.)

All I can do is sigh.

Senator Bennett on health care (and the money crisis)

Attended an early-morning health-care speech with Senator Bennett.

First mentioned the money crisis (at someone's request):

• story about Cannon-Grant and their struggle to get money to avoid bank crash in 1893 money crisis
  
• Andrew Jackson destroyed Hamilton's national bank, resulting in a bunch of money panics (eg. 1893), so the Federal Reserve restored our national bank
• He is in the banking committee; calls to his office were 493 to 1 against the bailout; the 1 call was a car dealer who wouldn't be able to make payroll.

Then talked about a federal bill to address health care:

• Ron Wyden asked Bennett to co-sponsor Healthy Americans Act (AKA the Noah's Ark bill); core of agreement is that Republicans must give up bias against universal health care ("every American insured"), and Democrats will allow markets to run the system
• tax code affects this somehow... dictates something about 16(?) % of GDP...
• person putting up money is different from payer
• changes tax laws so that payer controls spending: employee can change HMO
• government will subsidize up to 400% of poverty
• every individual must have coverage (he says we already do with mandatory emergency service)
  
• employer gives money to employee tax-free
• feds must create a minimum standard of insurance for people to meet; cannot be proscriptive because it won't improve with time (and everyone will want in); plan must be actuarial equivalent to average federal employee plan
• won't address medicare yet
• HMO, fee-for-service, concierge plan, whatever; just cannot provide less service than federal plan
• very poor may benefit since those who help them navigate the bureaucracy could get paid
• best health care: Seattle, Rochester, SLC
• greatest cost control factor is quality
• story: daughter graduated, went to work idealistically at nursing home, called him complaining about medicare manager
• story: doctor would proscribe wrong procedure so that they could pay for right one
• story: Michael Leavitt & wife needed colonoscopy; hospital couldn't tell costs until after breakdown; got price easily (at half the cost) in Utah
• prediction: next president will be a senator (and will know the cloture rule)
• will give the money to medicaid recipients
• by CBO, will be revenue neutral for first 2 years and save money after that; other say it'll save 1 trillion in 10 years

This talk was very informative, and I got a sense Senator Bennett is one of those politicians with integrity (though I won't make a final judgement based on one talk :- ).

My own comments:

• It was interesting to hear about the constant money crises without a national bank. I'll have to see if that's true; it seems to be worse WITH a central bank and national management! Anyway, at least it looks like Senator Bennett has tried to understand the history of the system, and really thinks there is a crisis where government intervention is necessary for our security (rather than totally a knee-jerk reaction to Bernanke et al).
• He talked about Heber J. Grant's efforts to get money to ensure their bank would not fail, but he seems to miss the fact that his exemplar made things work without even asking for government assistance. He worked hard and almost failed, but succeeded at the last minute with his own creativity and persistence, which is what should be happening. Some will win; many will lose.
  
• I still don't like the idea of forcing every American to have health insurance, even if we currently struggle under some emergency laws. It's more government encroachment: suddenly, everyone will be forced to pay a certain amount to the government; nobody will be free to choose where to put their money and how much risk and responsibility to take over their own lives. It's best to roll back some of our current, overly protective laws.

Unfortunately, the way this is presented and the way they're planning, I'm willing to bet that this initiative (or something with a similar universal mandate) will pass. This is the age of government absolutism! It can leap over crises with a single bound! Speak loudly enough and I'm sure it'll be able to fix your problems, too (... for a small fee for everyone else... at least until the next administration...).

Big Bailout Bill

Here is the Library of Congress record of the bailout bill; a search for HR 1424 actually yields 6 versions; I believe this reflects how this bill began as one thing but was then used for more purposes. The White House site announces the bill's signing here, and it has a picture of Pres. Bush signing it. (This picture has it as part of a photo essay, but it keeps moving around.) For more friendly facts and summaries of the bill, you can go to the Open Congress site or GovTrack.us site; the latter includes line-by-line comparisons of versions of the bills.

Supreme Court is assuming unconstitutional steps to affect international relations

Roger Pilon wrote the forward to this past year's Cato Supreme Court Review. The last paragraph is a good summary (supported by the 10 preceding pages): I understand it to mean that the Court's intervention in some recent rulings mean they're taking jurisdiction over laws regarding foreigners in a way that is not authorized by the Constitution. (Furthermore, he says they are making improper rulings about wartime powers, which seems appropriate to me, but I must not understand it all. That part starts at the top of page "13", though it shows as page 7 if you read it in the PDF format from my link.)

two great graphics regarding the federal budget and bailouts

• The 2009 federal budget
• This year's federal rescues and expenditures compared
  

The annihilation of limited government is upon us.

This is a very sad time for me, and it's a watershed moment for America. After all the problems with large banks, the federal government has stepped in to save some of them and is about to do a whole lot more since last week's volatility. It's incredibly disheartening to see how far we've fallen from the ideals that have kept us free.

I am writing this note to publicly declare that I do not approve of the federal government's actions to save the banks. It realize that there would be catastrophic consequences if they did not, and our whole system as we know it might collapse in a way that could even surpass The Great Depression. That condition could take decades to overcome, and we would be a very poor country in the meantime... meaning that we would learn what true poverty is really like. I would absolutely choose that course because we would come out as strong a nation as we ever were, having kept our individual freedoms and responsibilities and learned valuable lessons about individual security and trustworthiness in the process.

However, what we are choosing instead is to try and ensure safety by subverting the basic rights of individuals to choose their own actions and live through the consequences. We're replacing our old ideals with a system where the government has all power to do as it wishes with any aspect of society. Even if this bailout plan isn't implemented, the fact that it is being seriously considered means that most of our politicians feel they can exert this power over our lives if they perceive a big crisis coming. There are no longer any limits; the only way now to limit what government does is to make front-page news and garner general public outrage so that a majority of politicians are motivated to act. American government has lost its moral compass.

So the future is bleak: our livelihood is subject to the whims of politics; we will be less free to make contracts with one another; and society in general will be much less prosperous and powerful because of the myriad ways that government force can stop associations and limit our range of actions. If people thought there was uncertainty from actions of irresponsible banks and traders, wait to see how much more uncertain will be everyone's future now that we have an all-powerful national government.

I suppose we've been headed this way for a while. It's incredibly sad to watch it happen in front of us, and to know we will have diminished power over our lives starting next week.

CEAG: a Bountiful (and expanding) government watchdog group

Last night I was introduced to the CEAG, a group watching how the Bountiful and Davis County governments are doing their work. They passed around a letter detailing some of the actions that Bountiful City has taken that were either not public or went directly against their stated plans. (I hope they put that flier up on their website soon; it was very informative.)

In the process of discussing issues, a few other specifics came out, one negative and one positive:

• Bountiful city council passed a mandatory recycling law without discussing other options, despite the fact they announced they would discuss other options.
  
• Davis County worked on funding for a regional theater, and they actually did everything in the proper way.
  

The discussion centered on how the group wanted to be a watchdog that makes sure everything is done in the right way. There was also discussion about financially supporting specific candidates, but not everyone is comfortable with the idea; endorsing candidates, maybe, but not choosing sides. (That's my personal view as well; I'm interested in a group that gives people good information for their own choices, but I'm not so interested if it is going to pick one specific candidate in each race. Hm... but maybe if there was a pot, divvied up to each candidate as much as they've proven themselves to have integrity, that might be interesting.)

Health care summit for Utah

The Utah Intergovernmental Roundtable (a U of U organization) is holding their annual summit next month. The topic this year is health care. What's cool is that they have representatives from national organizations like Cato and The Heritage Foundation, whose priorities I share. The cost is $50 per person.

Good approaches to illegal immigration for Utah

I've seen the effects of our onerous immigration system on some coworkers and friends. Someday I'll detail some of the difficult stories in people's lives caused by our bad policies so you can hear individual accounts. Thankfully, others are starting to raise their voices in favor of some better approaches, and not simply in favor of heavy-handed punishments that most people seem to advocate.

The Utah Foundation is a policy research institute for Utah, and they've published a few items about immigration. One is from the Sutherland Institute: it's a philosophical statement (with links to studies about the demographics of illegal immigrants) that describes why we should be compassionate and humane rather than unwelcoming. But there's more: a research brief that gives some quantitative measurements on the benefits and drawbacks of undocumented immigrants in our state; it refers to two studies from Texas, one of which concludes that "strict immigration reforms led to labor shortages, decreased employment, high costs of implementing reforms with little associated return, and high fiscal costs".

Both are very persuasive arguments to be careful and compassionate in the way we handle illegal immigration.

A contract involving environment and business concerns

This is a great story about people coming up with an agreement for a large tract of land to make sure it's both commercially and environmentally sustainable. Fantastic!

My Federal Congressional Delegation

I found my Senators Hatch and Bennett and Representative Rob Bishop here. For the House of Representatives, I'm in District 1 in Utah (the northernmost of the three).

Here are links to email them my opinion:

• Rob Bishop
• Orrin Hatch
• Bob Bennett