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.

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.

How do we get a voluntary society?

In my previous post, I put the word "let's" in the title, as if the achievement of anarchy were something that we could do in any of our lifetimes.  However, when I think of the two routes for our future, the outlook is grim:

• If we have a quick collapse, I imagine people are going to want to set up local governments and gather armies to preemptively "defend" their homeland and rights (eg. to water) because they're afraid for their future.  (In contrast, members of a voluntary society will depend on persuasion rather than force to get what they want.)
• If we have a gradual decline in central authority, the outlook could be better because people will slowly have to get used to working out their own solutions, but as I look at the trend in America (and other nations) it seems that people are choosing more authoritarianism the more they feel uncertain, so they spiral down the whirlpool of feeding the beast.

Basically, people's biggest argument to me is that "people cannot handle it," and I think they're not far off, but not for the reasons they think: people would do better than we suppose, but most are afraid of the idea that someone's not "in charge" or "doing something" and so they'll try to put up another government... even the ones that are self-sufficient would join the gang -- not because people wouldn't handle it but because of their fear that other people wouldn't handle it.

So maybe we'll never get there.  But I've gotta try.

Basically, it'll be a lot of work to show examples and change the majority mindset over time.  (Hm... I wonder if society will stay stable enough for these ideas to propagate!  Well, I've got to act as if they will.)  Seems I've got company in this opinion: here are calls for "gradualism" and for "methodology (not creeds)".  (Although I, like Rothbard, would gladly jump to the final goal if given the chance.)

So let's get pragmatic: let's spread around the activities that'll help us get there.  Join me there, and I'll join with you.

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!

Peer-to-Peer Lending: an awesome idea being strangled by federal overreach

Yesterday I revisited one of my favorite examples of internet technology tackling important social issues: Prosper.com, who brings lenders and borrowers together. It's exciting because this is my favorite application of the internet; it brings people face-to-face with one another, and shares personal successes and failures. And besides the rewards of helping one another individually, it is a remarkable social invention that will allow for more and more transparency as we work with one another.

Unfortunately, I was surprised to find the following notice:

"We are not accepting new lender registrations or new commitments from existing lenders at this time."

Sure enough, securities regulators have found that their business must be registered and monitored. I'm extremely sad. Jim Bruene from NetBanker.com has already explained why this type of thing is bad, including more examples of how this really puts a damper on innovation. I, for one, hunger for the opportunity to work with individuals rather than institutions, and I'm willing to accept the risk (and rewards) involved. How did my national government get the power to forbid this kind of trade? Actually, Jim says that our federal legislators didn't directly cause this problem, but rather the SEC decided to classify these loans such that they're in trouble. This is typical; if Congress can delegate the power

I'm not good at tirades, so I'll end here. I'm just very, very sad that this is going on, and getting worse.