The Libertarian Standard » Technology http://libertarianstandard.com Property - Prosperity - Peace Tue, 28 Oct 2014 18:35:49 +0000 en-US hourly 1 http://wordpress.org/?v=4.0 A new website and group blog of radical Austro-libertarians, shining the light of reason on truth and justice. The Libertarian Standard clean The Libertarian Standard thelibertarianstandard@gmail.com thelibertarianstandard@gmail.com (The Libertarian Standard) CC-BY Property - Prosperity - Peace libertarianism, anarchism, capitalism, free markets, liberty, private property, rights, Mises, Rothbard, Rand, antiwar, freedom The Libertarian Standard » Technology http://libertarianstandard.com/wp-content/plugins/powerpress/rss_default.jpg http://libertarianstandard.com/category/tech/ TV-G FreeSpeechMe: The Anti-Censorship Anti-Hijacking Free Software Dot-Bit Plug-in http://libertarianstandard.com/2014/02/18/freespeechme-the-anti-censorship-anti-hijacking-free-software-dot-bit-plug-in/ http://libertarianstandard.com/2014/02/18/freespeechme-the-anti-censorship-anti-hijacking-free-software-dot-bit-plug-in/#comments Tue, 18 Feb 2014 18:20:00 +0000 http://libertarianstandard.com/?p=13333 Lots of interesting developments in the liberty space of late, such as Bitcoin, and other projects like General GovernanceBlueseed, the Honduran Free Cities project, and Jeff Tucker’s imminent Liberty.me (I’m involved in GG and the latter).

An exciting new project I learned about recently is FreeSpeechMe (mirror), a project by libertarian Michael Dean and others.

This is a project to spread and improve Dot-Bit (.bit), “a new top-level domain that, unlike Dot-Com, Dot-Net, Dot-UK, etc., is NOT controlled by any government or corporation.” It only costs about 7 cents to register, using Namecoin (a derivative of BitCoin). To access a .bit domain, a browser plug-in can be used. This was discussed in detail in an discussion by Dean on the Ed and Ethan show the other day

Check out their IndieGoGo campaign; video is below. I just donated half a bitcoin to it.

More information including press release, video, program, and source code: http://www.freespeechme.org/ (mirror).

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The martyrdom of Aaron Swartz http://libertarianstandard.com/2014/01/16/the-martyrdom-of-aaron-swartz/ http://libertarianstandard.com/2014/01/16/the-martyrdom-of-aaron-swartz/#comments Thu, 16 Jan 2014 11:00:52 +0000 http://libertarianstandard.com/?p=12794 A little over a year ago, a 26-year-old programmer and activist was murdered. His name was Aaron Swartz, and although he was found hanged in his Brooklyn apartment, and his death ruled a suicide, there is little question whose hands are stained with his blood. He was pursued mercilessly by a bullying prosecutor with a long track record of ruining the lives of brilliant (and perhaps naive) young men who didn’t play by the state’s rules. And he was betrayed by an educational institution that once prided itself on not playing by the rules, either.

Those are some of the heartbreaking and infuriating insights from a story in this month’s edition of Boston magazine about Aaron Swartz’ arrest and indictment, his father Bob’s attempts to extricate his son from the legal mess, and the relentless pressure by federal prosecutors to make an example of him. The punishment they sought for Aaron was draconian even by the feds’ standards: 13 felony counts under the Computer Fraud and Abuse Act (CFAA), with a possible prison term of 35 years, and a $1 million fine. Bank robbers and terrorists have received more lenient sentences. But U. S. Attorney Carmen Ortiz declared that Swartz’ prosecution would serve as a warning to other “hackers” about “stealing” from computers.

Aaron SwartzWhat did Swartz “steal”, exactly? Nothing. He downloaded files from JSTOR, an online archive for academic journals. Swartz used the network at MIT, where his father served as an adviser, under its “open access” policy, which included its subscription to JSTOR. Swartz had long held the view that scientific research should be freely available and not locked away behind a paywall. This wasn’t even the first time Swartz had performed such a download; in 2008 he grabbed 2.7 million documents from PACER, a federal court document system that usually charged for such access, even though they were public records. That attracted the FBI’s attention, but they found Swartz had committed no crime.

Swartz in fact had devoted much of his young life to finding ways to liberate information. Some of his earliest work included coauthoring the RSS 1.0 specification, a syndication format for Web-based content; founding a company to create wiki-based technology, which eventually merged with Reddit; and co-founding Demand Progress, an online advocacy group known mainly for its opposition to the Stop Online Piracy Act (SOPA). Swartz had also worked with Lawrence Lessig, a law professor and an advocate for intellectual property reform, studying under him at Stanford and later as a research fellow at Harvard. Swartz aided Lessig in developing the Creative Commons alternative copyright framework.

Given Swartz’ professional credentials and his history of “hacktivism”, what made his bulk downloads from JSTOR any more egregious than his previous exploits? The fact that Secret Service agents responded to the report of a “security breach” in the MIT network provides a possible clue:

When the Secret Service arrived, Bob [Swartz] says, the first thing they asked was whether any of the university’s classified research was threatened.

It wasn’t, but the nature of Swartz’ download, from a laptop hidden in a utility closet, made it look more suspicious to the feds. And it’s not surprising that a university receiving nearly a billion dollars in federal grants might toe the line with regards to any demand from the government, its hacker ethic be damned.

Intellectual property enforcement also played a role in Swartz’ prosecution. JSTOR subscriptions are not cheap, costing schools up to $50,000 per year. But MIT had a policy that not only allowed anyone on campus to use their network, but did not require authentication to access JSTOR. It was only after Swartz’ bulk download that suddenly “unauthorized network access” became an issue, allowing him to be charged under the CFAA. At worst, Swartz cost JSTOR some bandwidth during his download (to its credit, JSTOR settled with Swartz out of court and pursued no further legal action), but he didn’t steal anything. The concept of intellectual property, and the framework used by the state to enforce copyright, rests on the logically bankrupt notion that downloading a copy of something without permission constitutes “theft”. Never mind that Swartz did have permission in this case — once he broke some imaginary and unwritten rule (“too many documents”, apparently), his action rose to the level of a felony in the federal government’s view. This preposterous reasoning was all prosecutors needed to go after Swartz.

It was Aaron’s misfortune that he did his deed in a district with one of the country’s most notorious cyber-crime prosecutors. Stephen Heymann, the lead prosecutor in Swartz’ case, is no stranger to ruining young men’s lives. In 1994 Heymann prosecuted a student, also at MIT, for creating a bulletin board system which allowed users to trade copyrighted software (a precursor to the file-sharing networks common today). His case was dismissed on grounds that he didn’t intend to profit from the downloads, which prompted Congress to strengthen the CFAA to allow prosecution even if profit wasn’t a motive.

Heymann later won the conviction of 16-year-old Jonathan James, who had gained access to NASA and Department of Defense systems, and became the first juvenile to be incarcerated (via house arrest) for hacking. Heymann again targeted James in 2008, in an investigation of an identity theft ring tied to break-ins of department store networks. Although the Secret Service never found any evidence James was involved in the hacks, he killed himself in 2008, saying he had “no faith in the ‘justice’ system.”

Nor should anyone else, really. The system has never been about “justice,” and it seemed even less so in the circumstances surrounding Aaron Swartz’ case. This case was about projecting government power and crushing anyone who dared to upset the status quo, as Swartz often did. And anyone wishing to remain in the elites’ good graces — like MIT, and most other public research universities — had best do whatever is necessary to please their masters. And despite their pleas of “neutrality” in this case, MIT administrators did exactly that. They provided Heymann with every scrap of information they had about Swartz’ activities, usually with just a phone call. Bob Swartz pleaded with them to negotiate a settlement, asking: “Why are you destroying my son?” The school never gave him a satisfactory answer.

With the arrogance characteristic of state prosecutors, Heymann seemed shocked at Swartz’ temerity to fight the charges. Most outrageously, he likened Swartz to a rapist:

Negotiations continued, but in the end Aaron told Heymann no. He would fight the felony charges and go to trial.

Later, Heymann would tell MIT that he was “dumbfounded” by Aaron’s decision, and claimed that Aaron was “systematically re-victimizing” the university by choosing to go through proceedings. Publicly criticizing MIT at a trial, Heymann said, was akin to “attacking a rape victim based on sleeping with other men.”

If anyone was “raped” in this scenario, it was Aaron. Humiliated, cut off from many of his friends — his relationship with his girlfriend, Quinn Norton, ended after Norton tried to talk to Heymann and wound up giving the prosecutor a key piece of evidence against him — and seeing no end to the persecution, Aaron Swartz decided to end it himself.

In the end, there were no winners. No one was ever hurt by Swartz’ actions, no vital national interest served, no copyrights protected, no damage to repair. Instead the world lost a brilliant young mind who understood better than most the power knowledge has to liberate the world. Perhaps the state understands that too, which is why it tries so desperately to crush those who attempt to set it free.

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Ponzi Argumentation: Gary North’s Rhetorical Mania http://libertarianstandard.com/2013/12/04/ponzi-argumentation-gary-norths-rhetorical-mania/ http://libertarianstandard.com/2013/12/04/ponzi-argumentation-gary-norths-rhetorical-mania/#comments Wed, 04 Dec 2013 16:09:25 +0000 http://libertarianstandard.com/?p=12724 Ponzi Argumentation:  Gary North’s Rhetorical Mania

by John Mather

Gary North has responded to my article critiquing his assertion that Bitcoin is the largest private Ponzi scheme in history.  North’s response is instructive as a lesson in rhetorical tactics.  It doesn’t, however, redeem North’s faulty arguments against Bitcoin.

To summarize, North frames my article as a personal attack on him rather than a critique of his Bitcoin arguments.  Then, despite saying he doesn’t know me, he condescendingly calls me a “kid” (untrue), a programmer (untrue), ignorant of the basics of debate (untrue), and a “space cadet” (I will let readers judge).  He also uses the rhetorical device of repeatedly saying I’m digging a hole for myself.  Repetition is an old technique employed by advertisers and politicians.  Repeat a claim over and over in hopes that people will come to believe it’s true.  All this rhetorical arm waving amounts to playground bullying rather than a substantive response to my critique.

A Bit of Progress

To North’s credit, he starts off by making a large concession to my critique.  He drops the Ponzi scheme claim and titles his response, “Digital Tulips: The Bitcoin Mania.” He devotes the introduction to reframing the debate by giving historical context about tulip mania.  He expresses discontent that I’ve held him to the actual definition of a Ponzi scheme, but “to keep Mr. Mather happy,” he agrees to abandon the Ponzi scheme framework.  I doubt North is concerned about humoring me, but I’m delighted he has let go of the Ponzi scheme canard.  This allows the discussion to move past Bitcoin being a scheme based on lies and deceit to a discussion about whether Bitcoin’s price volatility will drive it to what North claims is its value: zero.  We are making progress.

Unfortunately progress halts after this concession, as North unfurls a raft of of rhetorical gambits which serve to distract rather than inform the reader about the substance of the debate.  I will call them out one by one.

A Personal Attack!

North from the outset attempts to frame this debate about Bitcoin as a personal attack on him.  He advertises his article on his home page by writing, “A young man decided to take me apart in full public view.  This affords me an opportunity to have a little fun. . . ”  I issued no personal attacks against North, and I have no need to do so.  North of course has no idea what my age is, but by calling me “a young man” he can set up a “watch the old pro whip a young buck” rhetoric.  North continues the personal attack frame-up in the body of the response: “His article is published on a site run by Jeffrey Tucker.  Mr. Tucker was wise enough to get a stand-in for this hatchet job.”  After characterizing my article as a “hatchet job,” North continues:  “He dismisses me as if I am an economic ignoramus.”  If I thought North an economic ignoramus, I would not have written the critique in the first place.  In fact I explicitly stated, “North is widely recognized as an expert on Austrian economics, and I make no claim to the contrary.”  The issue is that North does not understand Bitcoin, not that he does not understand Austrian economics.  His ignorance about Bitcoin and misapplication of Austrian analysis to Bitcoin are the sources of my criticisms.  His rhetorical maneuvers fail to refute them.

If North can reframe a substantive debate as a personal attack, then he can appear justified in taking a posture which is personal and aggressive.  This is his strategy.  By saying I’m a “stand-in” for a “hatchet job,” he is making a personal attack on me and Mr. Tucker.  The fact is that I submitted this article, unsolicited by anyone, to multiple publishers.  I did not know where it would be published, though Tucker’s role as former editor at the Mises Institute and publisher at Laissez Faire Books seemed like an appropriate choice given this issue is about Bitcoin and Austrian Economics.  North’s discontent that the article was published publicly – “in full public view” – is odd.  When people disagree with North’s public statements, are they obligated to respond only to him personally?

Argument from Age Fallacy

In addition to the personal attack framing, North several times commits the “argument from age” fallacy.  Namely, because he’s older, he is therefore wiser and correct.  For this trick to work, though, he must first frame me as being young.  Hence he refers to me as “a young man” and a “kid” despite saying he’s never heard of me.  I have far more gray hair than not, but that of course has nothing to do with the substance of the debate.  I could be a teenager and be correct, or I could be older than North and wrong in all my arguments.  North goes back repeatedly to the argument from age fallacy, ending his article with “Old timers can see what’s coming.”  Old timers…. So that must settle it then?  It would be equally silly to say old timers didn’t see the car replacing the horse and buggy, or word processors replacing typewriters.  None of this is valid argumentation.

To recap thus far, he’s framed my article as a personal attack by a naïve youth who doesn’t know better.  He pairs the argument from age fallacy with another effective rhetorical device: repetition.  He continually issues “rules” as if to patronizingly share some tips with the young buck who dared challenge him.  Saying over and over that I’m digging a hole for myself is not a valid rebuttal of my arguments.  It’s up to readers to decide who is in a hole.  Constant repetition by North that my arguments are weak, without actually demonstrating that they are weak, is not a refutation.  It’s just a repetition gambit, and it distracts from the truth seeking process.

North’s first patronizing “tip” is to save the “rhetoric of condemnation for your conclusions.”  Mr. North has not followed his own advice.  He’s already framed this debate as a personal attack launched by a kid who has stupidly poked his stick in a hornet’s nest of truth.  Now I must be schooled in a “let the old pro show you how it’s done” way.  It’s clever posturing, and he closes his piece with a cute Youtube of an Alka-Selzer commercial to reinforce it.  It all makes for good entertainment.  The problem is, it’s just rhetorical arm waving.

Fiat Money ≠ Bitcoin

North says the heart of his article is that “fiat money is ‘spoken’ into existence.  It is not money developed over centuries in market transactions.”  He then equates Bitcoin to fiat money, calling it “wanna-be fiat money digits” that were “spoken into existence.”

This is blurry language that results in blurry thinking.  Fiat money’s key distinguishing characteristic is that it is mandated for use by fiat.  By state decree it must be accepted as money.  Bitcoin is not issued by fiat, and it is not used by fiat.  North seems bent on ignoring this distinction, but it doesn’t change the reality that people are using Bitcoin by choice and as an alternative to fiat money.  Further, some fiat money in the past has been commodity backed and fully redeemable (alas no more), not “spoken into existence.”  The fact that fiat money in the digital age can be instantly created at zero cost in any quantity (witness Japan’s quadrillion yen public debt) contrasts starkly with Bitcoin, which cannot be created instantly, is mined at the cost of enormous computing power, and is limited in total supply to 21 million bitcoins.

The fact that Bitcoin hasn’t “developed over centuries in market transactions” is simply not the crux of what determines whether or not it is a currency.  People’s demand to use it as a currency is the crux of whether or not it’s a currency.  It’s bizarre that North readily says that the US dollar is money, as if the fact that it used to have a commodity backing is the reason it is valued now.  Most people today don’t know any monetary history at all, and they give no thought whatsoever about whether dollars (or any other fiat money) is commodity backed or not.  North raises no objections to the other fiat currencies I mentioned as being money either, some of which have short histories and no commodity roots.   How about the Euro, a total fiat creation hatched in 1999 with no history whatsoever of commodity backing?

“Out of Nothing”

North does not refute my point that Bitcoin is not made “out of nothing.”  Instead he makes a pun about “specie” backing to avoid the fact that he’s made a specious argument.  North wants to play word games by simultaneously defending fiat currencies as money while saying that any private alternative cannot serve as currency unless it has had centuries of market transactions.  It’s simply not true, and North has not demonstrated otherwise.  But to confuse matters more, he says, “I reject fiat currencies that are not the product of long years of use in the free market.”  So he rejects them how?  By refusing to use Euros in Europe?  He wouldn’t get very far, but he at least could survive over there by using Bitcoin.

He continues to dodge the “out of nothing” argument by repeating that “Bitcoins were created out of nothing to perform a service.”  At some point I hope he will recognize that the utility he derives from his website and his ability to write his articles and earn a living from his subscribers are all a function of software, none of which is made out of nothing, and all of which perform a service.  Further, his computer’s processing power and the electricity it consumes is not “nothing” any more than the processing power and electricity that is used to mine bitcoins is nothing.

Fiat Currencies:  Stable and Easily Used?

North makes the surprising claim that fiat currencies are stable:  “My point is this: the volatility of Bitcoins’ price is an indication of why they will not replace central bank fiat currencies, which are easily used in trade, and which are — so far — stable in purchasing power.”  North categorically ignores the numerous fiat currencies around the world which have imploded in his lifetime.  Countless people have been financially wiped out by assuming the mindset of fiat stability.  Here is a long list of examples.

Despite North’s US-centric frame of reference, he still ignores the 96+% devaluation my grandmother has suffered, and the 50+% devaluation since the 1980s.  And we’re only a few years into the age of quantitative easing, so we can reasonably expect things to get much worse.  Bitcoin has been more volatile than US dollars, as I’ve noted, but it doesn’t mean that fiat currencies are stable.  It also doesn’t mean Bitcoin has to be more stable than the US dollar to serve as a currency.

North is also not giving a fair account about ease of use in trade compared to Bitcoin.  I bank internationally, and it is very difficult to do so.  Americans are barred from opening bank accounts in several countries due to FATCA and other reasons beyond the scope of this discussion.  And even when Americans find an international bank who will do business with them, it can take months to open an account.  Then once an account is open, you are charged fees for transferring money to the new account, and then fees again for exchanging your money to the local currency.  With Bitcoin, this is all completely avoided.  I can do business directly with any individual at any time, instantly.  Furthermore, if you walk into a bank and ask for, say, $10,000 out of your account, there’s a good chance you will be denied, questioned as to why you want the funds, and have a suspicious activity report filed.  This is not what I would characterize as “easily used in trade” when compared with Bitcoin.

False Dilemma:  Bitcoin or US Dollar

North continues, “The market has determined that the dollar is money. It has not determined that Bitcoins are money.”  Governments determine what is money by fiat, and the dollar is no exception.  There are a mountain of different fiat currencies in small geographic regions with transaction volumes that are a minute fraction of the US dollar.  I refer readers to this up-to-date list of 182 fiat currencies.

Yet North wants to make it seem like the choice is between the US dollar or Bitcoin, period.  North ignores the fact that Bitcoin is international, and its use is not by fiat.  Bitcoin may be in the same realm of the transaction volume of some of the small countries on that list of 182 currencies.  As time goes on, it’s possible Bitcoin will achieve a transaction volume that exceeds several countries on that list.  I don’t know, and neither does North.  It’s a false dilemma to say Bitcoin can’t be a currency unless it’s more used than the US dollar.  North does it anyway:  “Which is money: dollars or Bitcoins? The answer is obvious: dollars.”

Rule: Value is Subjective

North then goes on to issue a “rule” to me – another rhetorical device which is an argument from authority fallacy – I’m an expert, therefore I’m correct – which has nothing to do with the issue at hand.  He wrote in his original article, “Something that was valuable for its own sake, most likely gold or silver….”  This statement implies gold and silver have intrinsic value, but he takes offense that I call him on it.  He may have written a dozen books in the past on the subjective theory of value, but that is irrelevant to what he wrote in his article.  It would have been constructive to simply say his choice of words is not what he meant and move on.  Yet he says my criticism of him saying gold and silver are valuable for their own sake is an “attack on him” and “rhetoric” with “no supporting logic.”  Here is another of North’s diversionary tricks: when you can’t refute an argument, dismiss the argument as rhetoric.

Network Effect: Programmer Jargon?

North seems to enjoy making assumptions about me.  He appears to believe I’ve invented the term “network effect,” and that I am using it as a programmer.  Neither is true.  Network effect is a term used in economics.  I refer North to the externality Wikipedia entry in which network effects are discussed.  The entry also mentions Mises and Hayek, so I can assure North that no programming knowledge is necessary to understand it, despite him characterizing a network effect good as “programmers’ professional jargon.”  I also refer North again to the network effect entry which begins,  “In economics and business, a network effect (also called network externality or demand-side economies of scale) is the effect that one user of a good or service has on the value of that product to other people.”

In my distinction about network effect goods (and how money is one of them), he says I’m “beating a dead horse” with no actual refutation.  I will take that as agreement.  I do commit the error of making a typo on Carl Menger’s first name, to which North says I’m confused, despite the fact that I hyperlinked the name to the correct Carl Menger.  My apologies for the typo.

Back to Ponzi-ville

Though North at first seemed content to drop the Ponzi scheme claim, he returns to it by saying that he never claimed Bitcoin was a fraud (“I said it was not a fraud”), despite calling it the largest private Ponzi scheme in history and saying the creator(s) of it have been “siphoning off” money.  He does not address my actual point, and instead pulls out the “rule” rhetoric again:  “I see. We should buy Bitcoins as money because Bitcoins’ creators imitated the State.”  He continues to refuse to acknowledge the fundamental divide between fiat money which can be created instantly in any quantity and is foisted on the public by force, versus Bitcoin which is used voluntarily, has a hard limit on its quantity, and cannot be instantly created with a keystroke.  The fact that I point this out in my original article he, amusingly, cites as proof that I’m using his argument against him.  Of course if he had drawn these distinctions between Bitcoin and fiat money in the first place, I may not have felt compelled to write my critique.

News Flash:  Bitcoins NOT Used in Market Exchanges!

North continues his argument from authority fallacy by offering up another rule, claiming I have erred by agreeing that money develops out of market exchanges.  I maintain that Bitcoin is being used in market exchanges.  He disagrees:  “Bitcoins are not being used in market exchanges.”  I of course can point to numerous market providers of products and services which accept Bitcoin.  North could do his Christmas shopping on this site alone.  I know people who exchange Bitcoin every day for various goods and services.  He, on the other hand, makes the proclamation that they aren’t being used in market exchanges without offering any evidence whatsoever.

Further, North ignores the fact that as the price of Bitcoin rises, its purchasing power for goods and services increases.  If you can acquire a desired good or service directly with Bitcoin, why exchange Bitcoin for a fiat currency to make the purchase?  The only way to ignore this is to hold fast to the delusion:  “Bitcoins are not being used in market exchanges.”  I know people who pay rent with Bitcoin, buy food with Bitcoin, buy books online with Bitcoin, et cetera.  North provides no evidence to the contrary.

“Nothing to Consume” and Circular Logic

North completely ignores my criticism of his statement that a good has to be consumed in order to serve the customer.  Neither Bitcoin nor gold are consumed.  Instead he falls back to repetition of the rule rhetoric.

Next North invokes a circular reasoning fallacy to avoid addressing the error in his statement that “the fundamental characteristic of money is its relatively stable purchasing power.”  I again refer to readers to this list and his claim that fiat currencies are stable forms of money.  Purchasing power of fiat money has and will continue to fluctuate, at times wildly and unpredictably.  So it bears repeating:  The fundamental characteristic of money is that it’s the most widely demanded good in an economy.  The rising price of Bitcoin indicates that it’s being demanded more and more.  North claims this is proof that it is destined to be worthless.

Gold and Price Volatility: Confusing Causality

North and I agree that gold is not money, but he implies that it’s because the price is volatile. My pointing out the move from $35 to $1,910 doesn’t dissuade him from recommending it as an investment.  (I agree.)  Yet he says the dollar is stable from year to year.  Could the trillions and trillions of newly created dollars over the past few decades be accountable for gold’s massive price rise?  What is stable, the ounce of gold which has forever been the same, or the US dollar as a measuring stick for that ounce of gold?

Bait ‘n’ Switch

North attempts a bait and switch regarding my explanation that because Bitcoin has no yield, we will only know in retrospect whether it’s in a bubble or in an adoption phase as a currency.  He mistakenly tries to tie Bitcoin to real estate, which is a yielding asset.  I wrote, “During the adoption phase of any good as money, the purchasing power rapidly increases from its initial value as a non-monetary good as more and more people adopt it.”  Notice how North swaps in the word “fiat” for “good”:  “He is making this up. There are no records of any such private fiat money in history. All fiat monies have been extensions of previous government money systems or a previous commodity standard.”

My point was straightforward, but I will step through it to dispel the confusion North attempts to create.  If a person in a given economy believes that a good will be adopted as money, he may act on that speculation by purchasing the good in advance of it becoming money.  If he is correct in his prediction, he will see that good rapidly increase in purchasing power as it becomes money.  Why?  Because that good is in the process of becoming the most widely demanded good in the economy, which is the definition of money.  Bitcoin’s adoption as a borderless medium of exchange by more and more people around the world would cause its purchasing power to rapidly increase.

Ignoring Arguments is Not a Refutation

My comparison of the monetary traits of Bitcoin vs gold and silver is unaddressed by North in any substantive way.  He quotes part of my comparison (and for some reason inserts “Conclusion” into my discussion of durability) without refuting any of it.  But by now it’s easy to spot the tactic:  do not address my actual arguments.  Instead he says I’ve ignored “the entire history of monetary economies” without offering any basis or citing a single example.  Rather than using this opportunity to discuss monetary history, as I did with the continual silver debasement of the Roman denarius, he avoids the entire discussion.

He then goes on to say that legal tender laws are irrelevant to the US dollar’s role as money.  “No one has to accept them,” according to North.  Here’s a dictionary definition of legal tender:  “currency in specified denominations that a creditor must by law accept in redemption of a debt.”

Conclusion

Despite the barrage of rhetorical sound and fury pointed at me, the only valid criticism North offers of Bitcoin is its price volatility.  Because it’s been volatile, he reasons, it’s not being used for market exchange, and therefore can never be currency.  And because it can never be currency, he concludes, it is worthless and destined to collapse.  (Interestingly, because of fiat price volatility, he doesn’t believe he’ll ever see gold used as money, despite serving as currency for centuries.  He does not discuss why the price of gold has been so volatile in recent decades.)  North also does not mention the long history of defunct fiat currencies which he would have designated as money before their implosion.

I maintain that we cannot know Bitcoin’s future.  Its price ascent could be because it’s in a bubble, but it could also be indicative of its increasing adoption as a borderless currency alternative.

North criticizes me for not offering proof of the number of Bitcoin exchanges which take place, yet he claims without offering any proof that none are happening.  I suggest he inspect the public ledger of Bitcoin transactions, and I suggest he Google vendors who are offering goods and services using Bitcoin.  Perhaps he will also hear from readers who are using Bitcoin for market exchanges.  To wit North, in one of his personal swings at me, says I’m a “space cadet,” perhaps without being aware that Richard Branson will be accepting Bitcoin on Virgin Galactic space flights.

My point after all this remains the same, and I repeat it as a non-programmer, non-kid, long-time investor in gold and silver:  Gary North may claim the fate of Bitcoin is already sealed, but his arguments are not compelling.  As I said in my original article, if Bitcoin becomes defunct, the cause will not be explained by North’s faulty arguments against it.  For example, states could attempt to regulate Bitcoin out of use, even outlaw it.  This a risk factor North does not mention.  I’m open to changing my views, as we all should be, if shown better reasoning.  Until then, North’s rhetorical bluster remains hollow.  Here is my question for North:

John Mather is a fan of technology, gold and silver, Bitcoin, and Austrian economics.

Email him at john.mather182 [at] gmail.com.

 

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Watching Illegal TV in Turkey http://libertarianstandard.com/2013/10/14/watching-illegal-tv-in-turkey/ http://libertarianstandard.com/2013/10/14/watching-illegal-tv-in-turkey/#comments Mon, 14 Oct 2013 11:25:56 +0000 http://libertarianstandard.com/?p=12698 RightwingTV Last month, I wrote in the Libertarian Standard about Twilight Zone creator Rod Serling and the end of the Golden Age of Television and about Serling’s preference for government interference over that of the advertisers.

Last week the Freeman published my article "TV’s Third Golden Age," about our present era in which quality dramas are moving from cable TV to the Internet, where they finally enjoy less interference from both advertisers and government regulation. The Internet is freer than television ever was.

In that article, I also give a little more background on JFK’s assault against the TV industry and how the deregulation trend of the 1970s and ’80s produced TV’s second "golden age." (Can you guess what brought it to an end?)

Paul Cantor, The Invisible Hand in Popular CultureBecause I mention the University of Virginia’s Paul Cantor in the Freeman article (as I did in "The Golden Age at Twilight" and "Price Theory a la Rupert Murdoch" here at TLS, as well as in "Did Capitalism Give Us the Laugh Track?" in the Freeman), I emailed Professor Cantor a link to the article.

Having just returned from the annual meeting of the Property and Freedom Society in Bodrum, Turkey, Cantor wrote this wonderful reply (which I quote with his permission):

This is a terrific article and thanks for sending it to me (and mentioning me in it). I’m glad to see that Thompson seems to be on board with us on these issues. I own his book but haven’t read it yet. It’s nearing the top of my "to read" pile, and you’ve pushed it up a few places. It’s good that we’re not alone on these issues.

As I recall what you wrote about radio, all this could have happened back in the 1920s if a subscriber model had been adopted for radio instead of the broadcasting model. Essentially, we’re finally getting where we should have been in the first place — real consumers for TV. I notice that young people now have no interest in seeing TV as broadcasted. They want direct access and know how to get it. When I was at Hans-Hermann Hoppe‘s recent conference in Turkey, I was amazed at how current the young people from central and eastern Europe were with American TV — maybe one episode behind on BREAKING BAD. When I asked: "Is BREAKING BAD broadcast in your country?" they stared at me as if I were saying: "Do dinosaurs still roam the plains of Poland?" They were getting the show — well, frankly, I don’t know how they were getting the show, but it was definitely online and quite possibly illegal.

Paul

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Hedy Lamarr Bet on the Wrong Horse http://libertarianstandard.com/2013/08/01/hedy-lamarr-bet-on-the-wrong-horse/ http://libertarianstandard.com/2013/08/01/hedy-lamarr-bet-on-the-wrong-horse/#comments Thu, 01 Aug 2013 13:06:13 +0000 http://libertarianstandard.com/?p=12603 NakedHedwig

“Hedy stands naked in a field. She looks off-camera in dismay as her horse gallops away with the clothes she had draped over its back to take a dip in a woodland pond.”


That’s the opening line of my article “Putting Hedy Lamarr on Hold,” featured today in the Freeman.

I shared a draft with a writer friend of mine over the weekend. She is far more educated and literary than I am. She saw a parallel between the opening scene and the larger story that I confess I was not conscious of. I thought I’d just been going for sex appeal.

Here’s more of the opening:

She is not called Lamarr yet. That name will come later, in Hollywood. For now she is still Hedwig Kiesler, a Viennese teenager in Prague, playing her first starring role in a feature film, Ekstase (“Ecstasy,” 1933). The controversial Czechoslovakian film will become famous for Hedy’s nude scenes (which are not sexual) and its sex scenes (which show only her face, in close-up, in the throes of passion).

The film will give Hedy her first taste of fame. She will be known as the Ecstasy girl. An Austrian director will tell the press, “Hedy Kiesler is the most beautiful girl in the world.” Later, MGM movie mogul Louis B. Mayer will repeat the claim, using the name he insisted she change to: Hedy Lamarr.

But while the world of her time will remember her for her photogenic beauty, history will remember her as the inventor of frequency hopping, the foundational technology of today’s mobile phones and wireless Internet. [FULL ARTICLE]

FreemanHedyThe piece goes on to explain how Hedy invented frequency-hopping spread spectrum during World War II and why it took so long for that invention to usher in the wireless Internet age. Short answer: the government kept the technology secret for decades. Not only did Hedy Lamarr not see a cent from her invention; she didn’t even get credit for it until the end of the century.

So here’s what my writer friend said:

The more I think about it, the movie image you start with — Hedy looking at her runaway horse and thinking, ok now what? is exactly what you describe in your title: Hedy Lamarr on hold. She’s on hold in the movie (for a moment, I guess — given the movie title, I imagine that she’s not alone for long) and then her invention is on hold for a much longer time. … A Hollywood starlet and inventive genius who made millions in the market surrendered her most innovative idea to Leviathan, who stifled it. And she did so, ironically, because of a lack of imagination on her part — a naive faith that the state would protect and serve its citizens.

(By the way, I’m especially pleased that FEE decided not only to feature my article but also to use the image I put together for it!)

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Does capitalism make us dumb? http://libertarianstandard.com/2013/06/03/does-capitalism-make-us-dumb/ http://libertarianstandard.com/2013/06/03/does-capitalism-make-us-dumb/#comments Mon, 03 Jun 2013 12:06:12 +0000 http://libertarianstandard.com/?p=12538 201305301_laughdetail

The anti-capitalists contend that the market fosters whatever has the broadest appeal, even when the lowest common denominator indulges our basest appetites.

Defenders of freedom and markets tend to fall back on one of two strategies: either explaining why capitalism’s apparent vice is really a virtue (would we really prefer a system in which a self-selected elite got to plan the supply independent of demand?), or championing the products impugned by capitalism’s critics.

Ludwig von Mises took the first position. In The Anti-Capitalistic Mentality, he defended the popularity of detective stories not because of any inherent virtue in the genre but because murder mysteries were what the reading public wanted, whether or not the literati approved of their preferences.

Attempts at the second approach include compelling defenses of car culture, panegyrics to the Twinkie, even praise for shoddy products.

Some targets of disparagement, however, deserve a third approach.

One such target is the canned laughter of television comedies, which has been the object of critical censure for over half a century.

As University of Minnesota art history professor Karal Ann Marling says,

Most critics think that the laugh track is the worst thing that ever happened to the medium, because it treats the audience as though they were sheep who need to be told when something is funny — even if, in fact, it’s not very funny.

James Parker, entertainment columnist for the Atlantic, disagrees. In fact, he laments the laugh track’s recent decline:

Silence now encases the sitcom, the lovely, corny crackle of the laugh track having vaporized into little bathetic air pockets and farts of anticlimax. Enough, I say. This burlesque of naturalism has depleted us.… Who knew irony could be so cloying?

So do we file the laugh track in the same category into which Mises put pulp fiction?

Or should we instead follow the model of the staunch defenders, and explain why the elitists are simply wrong?

The third approach is to question the premise. Is the laugh track really a product of the market, or did it dominate TV comedies for decades because of government regulation of broadcast media?

In “Did Capitalism Give Us the Laugh Track?” I act as defense attorney in the case of The People versus Capitalism, pleading not guilty in the case of the laugh track.

Postscript:

Given the limited length of a Freeman article, I had to give an extremely condensed version of the history of broadcast media and cartelization. You can find a more thorough account of that story in my 2006 article for the Journal of Libertarian Studies: “Radio Free Rothbard,” available in PDF and HTML.

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TLS Podcast Picks: Cuba, Public Pensions, 3D Printing and IP http://libertarianstandard.com/2012/11/10/tls-podcast-picks-cuba-public-pensions-3d-printing-and-ip/ http://libertarianstandard.com/2012/11/10/tls-podcast-picks-cuba-public-pensions-3d-printing-and-ip/#comments Sun, 11 Nov 2012 03:39:56 +0000 http://libertarianstandard.com/?p=11981 Recommended podcasts:

Until the 1959 ouster of dictator Fulgencio Batista, Cuba’s legislature convened in the domed Capitolio building in Havana. Today it’s a symbol of a prerevolutionary Cuba that no one under the age of 50 experienced. © Paolo Pellegrin/National Geographic

  • Cuba’s New Now,” KERA Think (Nov. 8, 2012). Fascinating interview by the amazing KERA Think host, Krys Boyd: “What has changed in Cuba since Fidel Castro ostensibly stepped away from power and are the changes happening fast enough for the Cuban people? We’ll talk this hour with National Geographic Magazine contributor Cynthia Gorney, whose story “Cuba’s New Now” appears in the current issue of the magazine.”
  • Joshua Rauh on Public Pensions,” EconTalk. Chilling discussion of the looming public pension crisis, with host Russ Roberts: “Joshua Rauh, Professor of Finance at Stanford University’s Graduate School of Business and a senior fellow at Stanford University’s Hoover Institution, talks with EconTalk host Russ Roberts about the unfunded liabilities from state employee pensions. The publicly stated shortfall in revenue relative to promised pensions is about $1 trillion. Rauh estimates the number to be over $4 trillion. Rauh explains why that number is more realistic, how the problem grew in recent years, and how the fiscal situation might be fixed moving forward. He also discusses some of the political and legal choices that we are likely to face going forward as states face strained budgets from promises made in the past to retired workers.” My guess? States and localities will end up declaring bankruptcy to modify their pension obligations.
  • Chris Anderson on 3D Printing and the Maker Movement,” Surprisingly Free. “Chris Anderson, former Wired magazine editor-in-chief and author of Makers: The New Industrial Revolution, describes what he calls the maker movement. According to Anderson, modern technologies, such as 3D printing and open source design, are democratizing manufacturing. The same disruption that digital technologies brought to information goods like music, movies and publishing will soon make its way to the world of physical goods, he says.” A good discussion of IP implications of 3D printing begins around 14:00.
  • My recent Libertopia talk, Intellectual Nonsense: Fallacious Arguments for IP.
  • My interview, “Silver for the People Interview: Stephan Kinsella—Copyright Laws Cost the U.S. $Billions in Economic Growth” (at Libertopia, San Diego, Oct. 12, 2012).
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Blackmail, Copyright, Libel and Free Speech http://libertarianstandard.com/2012/08/31/blackmail-copyright-libel-and-free-speech/ http://libertarianstandard.com/2012/08/31/blackmail-copyright-libel-and-free-speech/#comments Fri, 31 Aug 2012 19:01:17 +0000 http://libertarianstandard.com/?p=11562 A recent Volokh post on Blackmail discusses the perennial question of when speech becomes constitutionally unprotected blackmail. The idea here is that there is a “tension” between blackmail law and free speech rights. And even though we know blackmail law suppresses free speech, most people are in favor of it anyway. Volokh calls this dilemma “one of the thorniest conceptual questions in all of jurisprudence” and summaries what is “sometimes called the Blackmail Paradox”. The blackmail paradox observes that A is generally free to publish embarrassing information about B, or to keep quiet about it; and A is free to ask B for money to do or refrain from doing something within A’s rights. Yet

if I ask you for money or a service in exchange for my not revealing embarrassing information about you, then that’s a crime.

What’s the explanation? Legal scholars have debated this for decades, and to my knowledge have not come up with a perfectly satisfactory answer.

I disagree with Volokh. The answer is simple: blackmail law is incompatible with individual rights and should not exist, as argued by Walter Block and Murray N. Rothbard.1 The paradox only arises when you try to justify free speech and a law that undermines it. Yes, there is a “tension” between such law and free speech; it should be resolved not by finding the right “balance,” but by rejecting the unlibertarian law altogether.

Intellectual property, in its various forms—including patent and trademark, but most especially copyright—also limits, chills, and suppresses freedom of speech and of the press. And thus in these cases too, mainstreamers and statists, who think we “must” have these laws, but who recognize the tension between them and civil liberties, fall back on the confused and utterly unprincipled “we must find a balance” approach. As Ayn Rand might say, you don’t want to find a balance between nutritious food and poison.

As noted, trademark and even patent, and ohter types of IP such as publicity rights, undermine freedom of speech.2 But the most pernicious in this respect is copyright, which threatens not only freedom of the press and freedom of speech, but Internet freedom itself.3 In the name of copyright, books are censored and suppressed and chilled.4 As noted, this is a vivid illustration of a situation where libertarians and classical liberals are forced to try to adopt a “balance” between fake, positive-law rights and libertarian rights. Once an artificial, non-libertarian right is enshrined in law, it necessarily invades the turf of real, negative rights, much like printing more money dilutes the value of existing money by way of inflation.

Even the courts recognize that copyright (and defamation) laws are incompatible with free speech and the First Amendment. This is actually an argument that these and related laws are unconstitutional. After all, federal legislation on trademark and defamation (libel)is not even authorized in the Constitution. So such laws are doubly unconstitutional: they are not authorized, and are hus ultra vires, and they are incompatible with the First Amendment. Copyright law, by contrast, is authorized in the Constitution. However, the Copyright Act is clearly incompatible with the First Amendendment. What is one to do, in the case of such a conflict? Well in this case, the First Amendment was ratified in 1791, two years after the Constitution and its copyright clause (1789). Therefore, to the extent of any conflict, the later-ratified provision takes precedence. In other words, the First Amendment makes copyright uconstitutional. Not that the courts see it that way, of course. But still.5

The point is: libertarians and others who believe in civil liberties, Internet freedom, freedom of speech and of hte press, should oppose positive state laws that are inconsistent with theese rights, including blackmail, defamation, trademark, and copyright law.

Addendum: Another “tension” in federal law is that between antitrust and trademark law. The former purports to oppose monopolies, while the latter grants them. See Pro-IP Libertarians Upset about FTC Poaching Patent TurfState Antitrust (anti-monopoly) law versus state IP (pro-monopoly) law. In this case, both IP and antitrust law need to go: IP law, because it forms monopolies that antitrust law claims to oppose; antitrust law, because it focuses on private companies, which cannot form true monopolies, and ignores the real monopolies formed by the state itself.

[C4SIF]


  1. See Rothbard, “Knowledge, True and False,” in the Ethics of Liberty; and various articles on blackmail on Block’s publications page (including our co-authored piece The Second Paradox of Blackmail), Defending the Undefendable, ch. 6, and Block’s Legalize Blackmail (Straylight, forthcoming 2012).  

  2. Trademark as Censorship: Newspaper Claims Satirical Blogger Mentioning Its Name Is Trademark Infringement; Copyright and Free Trade; Patents and CensorshipPatents Threaten To Silence A Little Girl, Literally; Cato/Reason/CEO brief opposing medical diagnostic process patents as violating freedom of speechWilt Chamberlain’s Family Tries To Block Film About His College Years, Claiming ‘Publicity Rights’Michael Jordan Sues Grocery Stores for Hall of Fame Congratulatory Ads. See also “Types of Intellectual Property.” 

  3. See Where does IP Rank Among the Worst State Laws?

  4. Howard Hughes, Copyright, and Censorship; The Patent, Copyright, Trademark, and Trade Secret Horror Files; Should Copyright Be Allowed to Override Speech Rights?; Libraries: Prepare to burn foreign books, courtesy copyright law; Paramount Trying to Ban “Godfather” Sequels with Copyright; Federalist Society Asks: What’s the Right Amount of Censorship?other posts

  5. Copyright Censorship versus Free Speech and Human Rights; Excessive Fines and the Eighth Amendment; Copyright is Unconstitutional

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Kinsella Interview on Net Neutrality: Austrian AV Club—Mises Institute Canada http://libertarianstandard.com/2012/08/26/kinsella-interview-on-net-neutrality-austrian-av-club-mises-institute-canada/ http://libertarianstandard.com/2012/08/26/kinsella-interview-on-net-neutrality-austrian-av-club-mises-institute-canada/#comments Mon, 27 Aug 2012 02:34:57 +0000 http://libertarianstandard.com/?p=11614 I was interviewed a couple weeks ago by Redmond Weissenberger, Director of the Ludwig von Mises Institute of Canada. We had a long-ranging discussion on the issue of net neutrality, and we touched on other issues as well including various ways the state impinges on Internet freedom, such as in the name of IP (SOPA, ACTA), child pornography, terrorism, online gambling, and so on.

For background on some of the issues discussed, see my posts Net Neutrality DevelopmentsKinsella on This Week in Law discussing IP, Net NeutralityAgainst Net Neutrality.

[C4SIF]

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Information longs to be free, but statists gonna state http://libertarianstandard.com/2012/08/13/information-longs-to-be-free-but-statists-gonna-state/ http://libertarianstandard.com/2012/08/13/information-longs-to-be-free-but-statists-gonna-state/#comments Mon, 13 Aug 2012 22:36:22 +0000 http://libertarianstandard.com/?p=11479 It is the tendency of the state to compile as much information as possible about its subjects, but to persecute individuals who collect and divulge information about its agents and the way they operate. The state and its supporters want to keep tabs on you, but angrily (and violently) protest when you try to keep track of state actors. In the news today we saw two examples of this:

  • WikiLeaks has fallen victim to a major distributed denial of service attack for which the regime apologists at Anti-Leaks have taken responsibility (though there is speculation about this being a state-sponsored action). The attack, now more than a week in duration, coincides with the whistle-blower site’s recent release of the lastest dump of documents gleaned from the Stratfor intelligence leak. Recently released documents detail a privately administered domestic intelligence-gathering operation called TrapWire. According to PC Magazine and Russia Today, the leaks reveal that the TrapWire program is designed to compile information on targets across the United States from a network of surveillance cameras, incorporating vehicle locations and behavioral data in order to detect patterns that may signal that someone is involved in undesirable activity. The companies behind TrapWire, Abraxas and Stratfor, are reportedly chock full of former U.S. intelligence officials still serving their former masters.
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