Pirates, arr!

Is it prudent to ask if Britain’s nuke subs, which also run Windows XP, have also been hit by ransomware?

Rick Falkvinge - 20 maj, 2017 - 20:00

Old World: Britain’s hospitals have been brought to a standstill because of ransomware infecting obsolete and unpatched Windows XP systems. The same obsolete operating system is powering Britain’s nuclear weapons arsenal. Is it prudent to ask if the British nuclear weapons submarines have been patched against this ransomware, or even hit by it?

As reported in January of last year, Britain’s nuclear submarines still run Windows XP. This is the outdated Microsoft operating system that was vulnerable to ransomware, and which is the reason that practically Britain’s entire healthcare is currently nonfunctional and at a standstill: they ran Windows XP, they did not upgrade, and they did not patch.

(A security patch for this vulnerability has been out since March. Getting hit in May is therefore inexcusable.)

I would argue that hospitals and nuclear weapons platforms are both “mission critical” for a government. It can be safely argued that one is more dangerous than the other, but in terms of how important to society it is to upgrade them and keep them current, they are playing in roughly the same division.

In other words, seeing how Britain has failed to patch its Windows XP systems in mission-critical hospitals, I do not have faith that they have patched all other mission-critical systems – specifically including their nuclear weapons platforms.

Of course, this would all be classified and nobody would ever admit to something like this happening, except possibly fifty years later. But we do know that Britain’s nuclear submarines run Windows XP, and that they had a contract for support which expired in July of last year, and which had an option to extend to July of this year. We also know that Microsoft has issued the security patch whether you are on support or not, so a support contract makes no difference in this case.

We’ve observed that the NSA has a catastrophic conflict between its mission and its methods: it cannot keep a nation safe by simultaneously keeping it unsafe (refusing to fix vulnerabilities).

We’ve also observed that NSA tools will leak to whomever may want them.

We’ve also observed that mission-critical systems routinely go unpatched.

We’ve observed that military systems are supposed to be kept separate from the Internet, but that this is frequently ignored. Besides, the same is largely true for mission-critical medical systems. Yes, those at the now-brought-to-standstill hospitals.

Let’s reword this to drive the point home. How likely is it that the United States NSA, through its persistent interest in keeping us unsafe, has managed to hand control of Britain’s nuclear weapons platforms to unknown ransomware authors, perhaps in Russia or Uzbekistan?

Of course, this is just speculation; it is not even hypothesis level. There would be no way for a civilian of knowing whether the subs are vulnerable, or worse, hit.

But given what has already happened, it is not rather relevant speculation that forces a few inconvenient questions?

Photo of the British HMS Vanguard submarine provided by the UK Government.

Syndicated Article
This article was previously published at Private Internet Access.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

The six worst hypocrisies of the copyright industry in the last decade

Rick Falkvinge - 12 maj, 2017 - 20:00

Copyright Monopoly: The copyright industry keeps pounding a simplistic message to legislators – that copyright law is simple and that nobody honest could ever break it, and that it’s easy to “tell right from wrong”. But when you look at the deeds of the copyright industry instead of their words, they don’t seem very eager to follow their own rules themselves – if nothing else, demonstrating in deed that those rules are outdated, silly, or both.

The copyright industry has been pushing for tougher penalties since at least 1905, and against access for the public to culture and knowledge since at least 1849, when they opposed public libraries in the UK. The message from this industry has been remarkably consistent. However, the actions of this industry are as consistently hypocritical as that lobbying message. Here are some of the worst recent examples:

Number six: The movie studios themselves are torrenting at a large scale all the time.

The news site TorrentFreak used a service that matched torrent swarms to the public IP addresses of the big movie studios, and found that basically every movie studio – not to mention every company in the copyright industry – is engaging in large scale piracy themselves. While this is presumably individual employees using company resources, and not official actions of the company, it’s still impossible for the IT sysadmins of these companies to not notice.

Here’s what TorrentFreak found Paramount Studios sharing. Credit: TorrentFreak.

Yes, this is the very behavior they argued that people should have their Internet access revoked for, that they engage in themselves on a large scale from their very headquarter offices.

Number five: Voddler, an early competitor to today’s Netflix, used a video player client that itself violated copyright.

Voddler, called Spotify-for-video at its heyday and frequently mentioned as a poster child in political debates about the copyright distribution monopolies, always pounded on the table saying how copyright was extremely important for blah, blah, and blah. Apparently, that importance only concerned Hollywood’s copyright, and not that of people who couldn’t defend themselves in a court of law.

(This was before Netflix had really shifted to what it is today, and video-on-demand over the Internet was not associated with the company Netflix at all.)

When Voddler put together its video player client, it did so by assembling code from the XBox Media Center – XBMC – and other free-software video repositories like ffmpeg and mplayer. However, these repositories were licensed under the free-software GNU Public License (GPL), which meant that anybody may use and reuse the code – but only under certain conditions. Specifically, any reuse must provide the same freedom-to-reuse in their turn, the freedom that they were offered to get there.

Voddler did not do this. They published something resembling a piece of source code for their client (equivalent to a Netflix player), but nobody was ever able to compile it, which makes whatever-it-was clearly not meet the licensing terms of the GPL.

The free-software community was outraged, Voddler got hacked and took its offerings down “for maintenance”, and tried to relaunch but never recovered from doing one thing and saying another entirely.

Number four: The lobbyist material to push the European Parliament to vote for ACTA, a draconian copyright-and-more treaty, was itself pirated.

ACTA was a global treaty designed to give the copyright industry a lot more power, pretty much like SOPA/PIPA was in the United States. It had been ratified across the globe, with only one major body still needed to approve it: the European Parliament. Predictably, the copyright industry went into overdrive in every committee meeting to have the Members of European Parliament give them stronger protectionist measures. This poster was used:

The pro-ACTA poster used in the European Parliament, itself a pirate copy.

The problem with this is that the poster contains artwork which wasn’t licensed, making the high-profile pro-copyright campaign in the very European Parliament a blatant copyright violation. Multiple people traced the origins of that photo; Jéremie Zimmermann of LQDN found it to be a publicity photo which was permitted to use only under certain conditions which were not met, and an unnamed Danish reporter even tracked down the shipping line, their image repository, and the individual photographer to find out if it had been licensed. It hadn’t.

Number three: Pirating the music for a famous anti-piracy video ad.

One of the most famous, and also most parodied, anti-piracy ads of all time used its music without permission to do so. In other words, it was a widely distributed pirate copy of that music, all while trying to push the message that downloading is “stealing” (which is itself a blatant lie, at least according to the US Supreme Court, which can be said to have some authority on that particular matter).

You would if you could.

The music for this ad was created in 2006 by the Dutch composer Melchior Rietveldt, and it was to be used exclusively at a local film festival. To his surprise, he discovered it was also used on an anti-piracy ad on a Harry Potter DVD the following year – and in thousands, if not millions, of other places, which went completely against the licensed rights.

In another twist on this story, when Rietveldt demanded royalties for the illegal use of his composition, the local copyright industry (represented by Jochem Gerrits) demanded that the composer signed up under Gerrits’ own label if he wanted to see a single cent, and Gerrits would also personally take one-third of the already-owed fees and fines in exchange for allowing Rietveldt to receive anything at all. The “offer” appeared to be business-as-usual in the copyright industry; anywhere else, we’d call it corruption and racketeering, if not outright fraud.

Number two: The logo of the French official anti-piracy authority was pirated.

Around 2008, the copyright industry was heavily pushing the concept of “three strikes” – that your entire household should be cut off from the Internet, sending you into exile from modern society, on three accusations – accusations – of sharing music and movies outside the monopolized channels. From collective punishment to presumption of innocence, this violated a whole truckload of principles of due process. Nevertheless, the copyright industry pushed ahead and managed to get it installed in one European country – France – before the European Parliament outlawed the practice completely as part of the so-called Telecoms Package.

The French authority responsible for cutting off citizens from the Internet when they had violated the monopolized distribution channels was called Hadopi, which in French tradition is an acronym for something like High Authority for Pretending We Are Very Important. When the authority for protecting copyright and standing tall for these monopolies was unveiled, amid pomp and trumpets, it turned out that their very logo was a pirate copy.

Specifically, they had used a font which had been exclusively licensed only to France Telecom, and which nobody else therefore had the right to use. This included the French Government and their authorities, such as the caught-with-the-hand-in-the-cookie-jar Hadopi.

So according to this very authority, its act of overt piracy should lead to the French Government having its Internet access revoked. You get one guess on whether that happened, or whether the copyright industry considers copyright law only to apply to the low common plebs and not to themselves.

Number one: Sony willfully planting pirated remote-control malware on millions of computers to “protect the concept of property rights”.

In 2005, computers had this thing called “autoplay” for CDs inserted into them: in order to be user-friendly, they would automatically run any code named Autoplay. Windows computers would also always run with Administrator privileges when any random user was logged in. This was not a very good combination.

Sony used this to distribute music CDs that were actually mixed-mode CDs — they contained both a small data track and the music they claimed to hold. And the small data track, when inserted into any Windows CD, immediately installed remote-control malware that let Sony control how the computer was used, from there on out. Specifically, it would refuse to do certain things with the Sony music that was inserted in the drive, for no obvious reason. It would also steal data from the computer and send that data to Sony.

This was the first time a major copyright studio willfully distributed a rootkit — a malicious remote-control program running invisibly with root privileges — with the objective to willfully infect its customers. It infected millions of computers. Sony distributed over 20 million CDs with the deliberate malware.

When they were held to answer for this, they first denied any wrongdoing whatsoever, claiming “we are doing this to protect the legitimacy of property rights” (!!), and later feigned ignorance: “The customers probably don’t know what a rootkit is anyway, so why should they care about it?”. Under immense public pressure, they published a removal program, which only made the problem worse.

At the end of this story, Sony was sentenced in a class-action lawsuit to distribute promotional material for its upcoming catalog as remedy for having willfully infected millions of computers, sending themselves data from those computers, and giving themselves administrative access to them.

Bruce Schneier has one of the best writeups on Sony’s malicious behavior, and also notes that Sony pirated GPL-licensed code when writing their malicious rootkit, as the icing on the cake of this story.

In summary, the copyright industry has been consistent experts at one single thing in the past decade: demonstrating in action that copyright law either shouldn’t be followed at all, or that the law only applies selectively to those who can’t afford to have protectionist law written on request to serve their interests.

Syndicated Article
This article was previously published at Private Internet Access.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

De-spamming service “Unroll” selling your inbox to Uber shows the importance of information hygiene, yet again

Rick Falkvinge - 3 maj, 2017 - 20:00

Privacy: It was a perfect service: sorting your mail and not just removing all spam for you, but also unsubscribing you from all of that spam garbage going forward. It kept your inbox perfectly clean. But behind the curtains, it also sold your inbox to the highest bidder.

Sometimes, you’re maliciously signed up to tens of thousands of mailing lists because somebody was annoyed with something you said, somewhere. The cost of doing so is low and it causes a ton of headache as you’re getting hundreds of spam per minute. Fortunately, most of those are double-opt-in confirmation mails — “click this link to confirm the subscription” — but maybe five percent are not, and those malicious signups will continue to clobber your inbox with noise.

Enter Unroll, which was the solution for this scenario: you gave it access to your mailbox, and it would not only detect and remove such unwanted spam, but also unsubscribe you from those tens of thousands of malicious subscriptions. Except, as it turns out, they also kept every single one of your mails, including those with passwords and other sensitive information, and sold them to the highest bidder.

It was just a short passage in an otherwise fascinating portrait of the Uber CEO made by New York Times:

So, the service Unroll was bought by Slice Intelligence. This is the first red flag: even if the service you signed up for were honest, their buyer may not be. (According to a quoted person below, Slice Intelligence bought Unroll specifically because they had access to tons of private mailboxes.)

This highlights the importance of information hygiene.

Information hygiene means that you’re aware not of what somebody claims to do with your data, but that you understand what they are able to do. For example, if a service promises to sort your email for you, then it necessarily must also be able to read all that email, for the action of sorting requires observation – and consequently, they are also able to sell your private mails to others. This is an ability they hold regardless of what they promise to do, or more relevantly, appear to promise to do.

The act of sorting requires observation. Therefore, any service sorting your data must also be able to read all your data.

In a blog post about the revelation that they sell inbox data, Unroll CEO states that “it was heartbreaking to see that some of our users were upset to learn about how we monetize our free service”. The comments are, predictably, furious: the top comment states that “this is a one-strike-I-leave-the-service kind of thing”.

That same top comment also states that it’s a big deal to give somebody access to their inbox. Doing so should always, always, be done with the awareness that they will at least read all of it (if nothing else, to determine which mails to read closer, to perform the promised service), and that any information, once read, cannot be unread – but can be processed, aggregated, sold, et cetera.

If you are providing your inbox to somebody else, and want privacy, you need to encrypt your mails, just like you’re encrypting your Internet connection to prevent others from eavesdropping on it.

At Hacker News, a person named Karl Katzke elaborates further:

I worked for a company that nearly acquired unroll.me. At the time, which was over three years ago, they had kept a copy of every single email of yours that you sent or received while a part of their service. Those emails were kept in a series of poorly secured S3 buckets. A large part of Slice buying unroll.me was for access to those email archives. Specifically, they wanted to look for keyword trends and for receipts from online purchases.

The founders of unroll.me were pretty dishonest, which is a large part of why the company I worked for declined to purchase the company. As an example, one of the problems was how the founders had valued and then diluted equity shares that employees held. To make a long story short, there weren’t any circumstances in which employees who held options or an equity stake would see any money.

I hope you weren’t emailed any legal documents or passwords written in the clear.

Take a moment to absorb that, and add to the fact that they had a useful service that many subscribed to, combined with that sloppiness (not to say bordering on malice) with people’s private data – and sprinkle the CEO’s “heartbrokedness” when users learned how they made money on top.

Last but not least, Unroll tries to deflect blame here by saying they’re only selling “anonymized” data. It must be remembered, that anonymization is hard. As in, really really really hard. Most data can be de-anonymized; strong anonymization is basically as hard as strong encryption, and most people doing anonymization are happy amateurs who do not understand the scope and difficulty of the task.

Privacy remains your own responsibility.

Syndicated Article
This article has previously been published at Private Internet Access.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

Blockstream having patents in Segwit makes all the weird pieces of the last three years fall perfectly into place

Rick Falkvinge - 1 maj, 2017 - 08:22

Activism: Based on Blockstream’s behavior in the Bitcoin community, I have become absolutely certain that Segwit contains patents that Blockstream and/or their owners have planned to use offensively. I base this not on having read the actual patents, for they can be kept secret for quite some time; I base this on observing Blockstream’s behavior, and having seen the exact same behavior many times before in the past 20 years from entities that all went bankrupt.

In a previous part of my career, I was making telecom standards. This meant meeting with lots of representatives from other companies somewhere on the globe once a month and negotiating what would go into the standard that we would all later follow.

I was a representative of Microsoft. I would meet with people from Nokia, Ericsson, AT&T, and many other corporate names you’d recognize instantly, in small groups to negotiate standards going forward.

One thing that was quite clear in these negotiations was that everybody was trying to get as much as possible of their own patent portfolio into the industry standard, while still trying to maintain a façade of arguing purely on technical merits. Some were good at it. Some were not very good at it at all.

One of the dead-sure telltale signs of the latter was that somebody would argue that feature X should use mechanism Y (where they had undisclosed patent encumbrance) based on a technical argument that made no sense. When us technical experts in the room pointed out how the argument made no sense, they would repeat that feature X should absolutely use mechanism Y, but now based on a completely new rationale, which didn’t make any sense either.

The real reason they were pushing so hard for mechanism Y, of course, was that they had patents covering mechanism Y and wanted their patented technology to go into the industry standard, but they were unable to make a coherent argument that withstood technical scrutiny for why it was the preferable solution at hand, with or without such encumbrance.

In other word, classic goalpost moving.

As a technical team made up of many people from different companies, there would come a time when our patience ran out with assuming good faith for the fake technical rationale presented to get something patented into the standard, as we knew it was made up on the spot but sort of had to play along — but only up to a point, if the party losing the technical argument didn’t give in, didn’t play their part of the game we all knew was happening.

But there’s more to Blockstream’s behavior than just moving technical goalposts.

As I later came into politics, I saw this pattern much clearer – it was in basically every decision in politics. We called it “high reasons and low reasons”. The “high”, or “noble”, reason would be the one you presented to the world for wanting X as policy. The “low” reason, meanwhile, was the one that made you give a damn in the first place about it. These were often not connected at all.

You could spot these “high-vs-low reason” conflicts in the tiny details. For example, somebody would argue for new invasive surveillance to combat terrorism, or so they would say. And then you read a little closer, and the bill text actually says “terrorism and other crimes“, an important part which nobody paid attention to. Two years after passing, it turns out that the new surveillance powers were used 98% to fight ordinary teenagers sharing music and movies with each other, and that the original bill sponsor was heavily in bed with the copyright industry.

So the exact same pattern of having one overt and one covert reason was present in politics as well, unsurprisingly. But there’s also another pattern here, one that we shall return to: “We want this feature because of X, or because of any other reason”.

But first, let’s compress the last three years of dialogue between Blockstream and the non-Blockstream bitcoin community:

[BS] We’re developing Lightning as a Layer-2 solution! It will require some really cool additional features!
[com] Ok, sounds good, but we need to scale on-chain soon too.
[BS] We’ve come up with this Segwit package to enable the Lightning Network. It’s kind of a hack, but it solves malleability and quadratic hashing. It has a small scaling bonus as well, but it’s not really intended as a scaling solution, so we don’t like it being talked of as such.
[com] Sure, let’s do that and also increase the blocksize limit.
[BS] We hear that you want to increase the block size.
[com] Yes. A 20 megabyte limit would be appropriate at this time.
[BS] We propose two megabytes, for a later increase to four and eight.
[com] That’s ridiculous, but alright, as long as we’re scaling exponentially.
[BS] Actually, we changed our mind. We’re not increasing the blocksize limit at all.
[com] Fine, we’ll all switch to Bitcoin Classic instead.
[BS] Hello Miners! Will you sign this agreement to only run Core software in exchange for us promising a two-megabyte non-witness-data hardfork?
[miners] Well, maybe, but only if the CEO of Blockstream signs.
[Adam] *signs as CEO of Blockstream*
[miners] Okay. Let’s see how much honor you have.
[Adam] *revokes signature immediately to sign as “Individual”*
[miners] That’s dishonorable, but we’re not going to be dishonorable just because you are.
[BS] Actually, we changed our mind, we’re not going to deliver a two-megabyte hardfork to you either.
[com] Looking more closely at Segwit, it’s a really ugly hack. It’s dead in the water. Give it up.
[BS] Segwit will get 95% support! We have talked to ALL the best companies!
[com] There is already 20% in opposition to Segwit. It’s impossible for it to achieve 95%.
[BS] Segwit is THE SCALING solution! It is an ACTUAL blocksize increase!
[com] We need a compromise to end this stalemate.
[BS] Segwit WAS and IS the compromise! There must be no blocksize limit increase! Segwit is the blocksize increase!

//falkvinge.net/wp-content/uploads/2017/04/movinggoalposts2.mp4

This is just a short excerpt. I could go on and on, showing how Blockstream said that node count was completely negligible when Bitcoin Classic nodes started to pick up and how hashrate was the only valid measure, and how Blockstream is now talking – no, yelling – the exact opposite, when Bitcoin Unlimited is at 40%+ of hashrate.

This pattern is utterly typical for somebody hiding encumbrance in what they’re trying to achieve – for if Segwit locks in, it’s in bitcoin for eternity because of the way the chain is permanent, whether those parts of the chain are used by a particular actor or not.

There’s even more to it. It’s also typical for an actor who’s deflecting like this to try to invoke external enemies. Warhawks in governments have done the same over and over when they want to go to war: be aggressive about a narrative, call out anybody who challenges the narrative as a traitor and a saboteur, and beat the drums of war. It’s tribal, but it works. In this case, Blockstream have singled out two individuals as “enemies”, and people who want to be part of the community are encouraged to be aggressive against them. It’s practically straight out of scenes of the movie 1984.

All to get patents into bitcoin, regardless of whether you burn it and its community to the ground in the process.

That’s the only way their behavior makes sense, and it makes utter and complete sense in that way. I want to emphasize again that I have not read any of the Blockstream patent applications, and it would be pointless to do so as they can be kept secret for something like 18 months, so I wouldn’t have access to the full set anyway. But based on Blockstream’s behavior, I can say with dead certainty that I’ve seen this exact behavior many times in the past, and it’s always when somebody has a dual set of reasons – one for presentation and palate and another that drives the actual course of action.

With that said, Blockstream has something called a “Defensive Patent Pledge”. It’s a piece of legal text that basically says that they will only use their patents for defensive action, or for any other action.

Did you get that last part?

That’s a construction which is eerily similar to “terrorism and other crimes”, where that “and other crimes” creates a superset of “terrorism”, and therefore even makes the first part completely superfluous.

Politican says: “Terrorism and other crimes.”
The public hears: “Terrorism.”
What it really means: “Any crime including jaywalking.”

The Blockstream patent pledge has exactly this pattern: Blockstream will only use their patents defensively, or in any other way that Blockstream sees fitting.

Blockstream says: “For defense only, or any other reason.”
The public hears: “For defense only.”
What it really means: “For any reason whatsoever.”

Let’s assume good faith here for a moment, and that Greg Maxwell and Adam Back of Blockstream really don’t have any intention to use patents offensively, and that they’re underwriting the patent pledge with all their personal credibility.

It’s still not worth anything.

In the event that Blockstream goes bankrupt, all the assets – including these patents – will go to a liquidator, whose job it is to make the most money out of the assets on the table, and they are not bound by any promise that the pre-bankruptcy management gave.

Moreover, the owners of Blockstream may — and I predict will — replace the management, in which case the personal promises from the individuals that have been replaced have no weight whatsoever on the new management. If a company makes a statement to its intentions, it is also free to make the opposite statement at a future date, and is likely to do so when other people are speaking for the company.

This leads us to ask who the owners of Blockstream are: who would have something to gain from pulling the owner card and replacing such a management?

Ah.

The owners of Blockstream are the classic financial institutions, specifically AXA, that have everything to lose from cryptocurrency gaining ground.

And they have bought (“invested in”) a company, which has an opportunity to get patents into the bitcoin blockchain, thereby being able to either outright ban people from using it, or collect a heavy rent from anybody and everybody who uses it.

The conclusion is unescapable here: Blockstream’s constant goalpost shifting has had the underlying goal to have Blockstream’s owners effectively own bitcoin through patent encumbrance.

As horrifying as that statement is, it’s the only way – the only way – that the actions of the past three years make perfect sense.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

Bitcoin’s Unlimited Potential Lies in an Apolitical Core

Rick Falkvinge - 30 april, 2017 - 21:00

Bitcoin – Nozomi Hayase: The ongoing Bitcoin block size debate has accelerated into a kind of civil war. From threats of a 51% attack to online trolls and controversy over the allegation of covert AsicBoost usage, disagreements on scaling solutions have created a toxic environment in the community. With a divide created by slogans of bigger or smaller blocks with Bitcoin Unlimited vs. Core memes, the ecosystem growing around this technology has started to resemble the craziness of party politics.

Guest Article
This is an article by Nozomi Hayase, a writer who has been covering issues of freedom of speech, transparency and decentralized movements.

We have seen a failure of national politics. From the 2008 financial meltdown and bank bailouts to cycles of austerity, unprecedented levels of corruption spawned a global crisis of legitimacy of institutions and governments. This only seems to have gotten worse.

In the US, at the center of financial and political power, the populace has been trapped by a corporate sponsored political charade, with a rigged presidential primary and election of the lesser of two evils. More and more, people are beginning to wake up to the broken promises and failed policies of their leaders, creating conflicts and instability in regions around the world. While solutions provided in the electoral arena have repeatedly shown to be ineffective, Bitcoin presented an alternative -a departure from this system of politics.

Politics as Systems of Power

So what is politics? What are the characteristics of governance designed by it? The Oxford Dictionary defines politics as “activities associated with the governance of a country or area, especially the debate between parties having power.” Politics is inherently associated with power and is a means to organize society through leaders gaining control over the majority.

Western liberal democracy is politically engineered governance. Its fundamental feature is centralization. Rules made from the top are enforced and changes in the system require permission from those who are in positions of authority.

Historian Howard Zinn (1970) noted how:

“In modern times, when social control rests on ‘the consent of the governed’, force is kept in abeyance for emergencies, and everyday control is exercised by a set of rules, a fabric of values passed on from one generation to another by the priests and teachers of the society.” (p. 6)

This command-control style of governance works in hierarchies and is antithetical to democratic values. The integrity of the system depends on success of rulers to foster obedience of those in the network and prevent people from dissenting. For this, managing perception and public opinion through mass media becomes necessary and the system operates under the appearance of democracy, making force of control covert and invisible.

In Democracy INC: The Press and Law in the Corporate Rationalization of the Public Sphere, professor of journalism David S. Allen (2005) described the role of professionals in facilitating this managed democracy. He noted how the creation of expert knowledge is essential in this machination. Science has become a methodology to back professional legitimacy, as “individuals began to regard professional judgments, often supported by scientific data as unquestionable” (p. 54).

The Creed of Objectivity

Professionals with expert knowledge perform the role of trusted third parties who are supposed to represent the interests of citizens and make decisions on their behalf. Here, the knowledge produced in social science, such as economics, political science and psychology are often used to maintain the status quo of power structures. From Alan Greenspan to Ben Bernanke and now Janet Yellen, economists who are appointed by the US President as chair of the Federal Reserve get to decide monetary policy for the country and exercise influence through central banks around the world. What validates their expert knowledge is an epistemological foundation called the creed of objectivity.

Social science has incorporated empirical and positivist methodology of natural science and claimed the ability to form knowledge in a similar way as physical science. With this, researchers assert neutrality as if he or she transcends race, class or any personal bias. Yet, they are embedded within cultural values and their purported value-free objectivity is not actually possible. One’s subjective agendas and personal views do not magically disappear by simply claiming it to be so.

Without transparency that ensures disclosure of researchers’ bias, this creed of objectivity becomes a cloak that hides their motivations. This stance of objectivity closes off any feedback and the assertions that are not tested are promoted as universally applicable truth. Money in this representative democracy becomes political money, legitimatized by state authority and tied to monetary policies of investment banks and corporations that run government behind the scenes.

Replacing Politics with Math

Now, a breakthrough of computer science has found a way to crack this closed logic of control. Bitcoin opens a path for changing the world without taking power. The whitepaper published under the pseudonym Satoshi Nakamoto put forward a vision of a “peer-to-peer version of electronic cash”, based on cryptographic proof, rather than relying on a trusted third party. The underpinning of this innovation was a science of asymmetrical security that provides a strong armory against violence, exploitation and extreme selfishness through a mechanism of consensus.

Richard Feynman, a theoretical physicist once said that scientific integrity is learning to not fool ourselves. He noted, “The first principle is that you must not fool yourself—and you are the easiest person to fool”. In natural science, researchers are given honest feedback from the real world and nature through observation, repeated testing and experiments. On the other hand, social scientists explore dimensions more divorced from physical reality, and in their claim of neutrality, they can become blind to their own bias. This would influence the outcome of their studies and they more easily distort facts with personal opinions and emotions.

This creed of objectivity in social science has shown itself to be vulnerable to tendencies toward deception, while math is a property that is impervious to manipulation. Math cannot be fooled, as it does not respond to lies and threats. Computer science relies on solid data, rigorous testing and peer-review. This gives each person an opportunity to engage in honest work to overcome self-deception and build strong security, even as strong as the laws in the physical world.

Cypherpunks; Scientists with a Moral Code

In the existing model of governance, inherent weakness of the creed of objectivity made the system vulnerable to tyranny of the few. Economic incentives set up by a professional class made the right to free speech exclusive for the beneficiaries of this managed democracy, suppressing any views that challenge this authority. Those privileged in the system call these perspectives subjective, relegating them to mere opinion. This doctrine of false objectivity that has been predominant in academia has conditioned researchers to remain impartial. This turned the populace into passive observers, preventing them from fully connecting with their passion and values.

In the foundation of Bitcoin development, there lies a particular philosophy that revolts against this restriction of free speech imposed by central authority. In the paper The Moral Character of Cryptographic Work published in 2015, eminent computer scientist Phillip Rogaway brought forward the moral obligation of cryptographers and their importance, especially in the post-Snowden era. In this, he described a group that emerged in the late 1980’s who saw the potential of cryptography in shifting power relations between the individual and the state. These are the cypherpunks who held a belief that “cryptography can be a key tool for protecting individual autonomy threatened by power”.

In an interview with Trace Mayer, applied cryptographer and inventor of Hashcash, Adam Back who was cited in Satoshi’s whitepaper, talked about the “positive social implications arising from cryptography”. He described the ethos of cypherpunks as writing code to bring the rights we enjoy offline into the online world. The idea is that lobbying politicians and promoting issues through the press would be a slow uphill battle. So, instead of engaging in legal and political systems, Back noted that they could simply “deploy technology and help people do what they consider to be their legal right” and society would later adjust itself to reflect these values. The cypherpunks, with their adamant claim of subjective domains, apply real objective knowledge that comes from math to bring change.

Solidifying Technology’s Core

As the forced network effect of petrodollar hegemony begins to loosen, the empire fuels aggression, with more wars and sanctions. While this system of representation weakens, the logic of control from the old world began infiltrating the Bitcoin ecosystem. Regulators try to reach cryptocurrency through exchanges, and by enforcing KYC (Know Your Costumer) create a fertile soil for government surveillance and privacy erosion. Centralization creeps in through industrial mining and patents on hardware, with a trend toward state and corporate backed monopolies. All the while, established media keep writing obituaries on Bitcoin, wishing to declare the death of this new money they can’t understand.

Politics that spread through the crypto-community have been hijacking discussions on technical development. With PR, name-calling and smear campaigns, a vocal minority engages in social engineering, distracting developers who are engineering security. This drama that some perceive as Bitcoin’s existential threat brings a crisis, yet at the same time is giving us all an opportunity to solidify our commitment to this technology’s fundamentals.

Bitcoin as a premise of stateless money has brought many people together. These are free market enthusiasts, traders, libertarians, engineers, venture capitalists, anarchists and artists. Bitcoin is a disruptive technology that has large political implications. Yet, for it to manifest its true potential, we must not forget its roots in its apolitical nature –solid science. This apolitical nature is not a bug, but a feature. This is what makes Bitcoin stateless money, censorship resistant, unseizable and permissionless.

Imagination from Computer Science

Legal scholar and inventor of bit-gold Nick Szabo once noted: “Computer science gives you far more leverage to change the world than any other study in our age.” Social issues and questions of democracy have been a philosophical quandary that are generally tackled politically. They were not considered to be the purview of science. Yet now, imagination from computer science has come forward to help us work on solving these problems.

Our commitment to decentralization keeps this consensus algorithm running across the global network and allows all to participate in this scientific endeavor of Proof of Work – to show the world that equality, fraternity and freedom are not just ideals, but unshakable universal truths.

So, let us call a ceasefire in this political battle and engage with the honest work of collaborative efforts of writing code. By moving from a system of power to a consensus of equal peers, together we can find solutions to overcome challenges. From this secure foundation provided by this technology’s core, unlimited potential can be unleashed, which creates divergent currencies to carry the wishes and desires of many communities. Where politicians and leaders have failed, Bitcoin succeeds. Our surrender to this scientific process opens a door for development of protocol and gives innovation a chance for humanity to save itself from the mess we have created.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

What Australia can learn from Europe’s failure with Data Retention

Rick Falkvinge - 24 april, 2017 - 20:00

Australia: This month, Australia’s law mandating telecommunications data retention went into effect. It is clear that Australia learned absolutely nothing from Europe’s abysmal 10-year failure with this exact law before it was finally struck down by courts as utterly incompatible with human rights at the core of its idea. Here’s how Australia can fail a little faster on this horrendous concept by realizing it’s just not inexcusable, it doesn’t even work.

In the wake of the 2004 Madrid bombings, a handful of hawks saw their opportunity to pass unprecedented mass surveillance legislation, where people could be retroactively wiretapped – something that was only possible if everybody was continuously wiretapped, all the time, so it could be retroactively reviewed. Now, actual wiretapping would not have flown, so they went with the politically-new word “metadata”, which didn’t sound nearly as bad but was conceivably much worse because it was machine-sortable: Everybody’s communications metadata would be stored for a long time with the sole objective of using it against them.

It was just four people – as little as four people out of five hundred million – who were ultimately driving this disaster into being in Europe, much through deception and Potemkin façades. In Sweden, the concept was driven pretty much only by the then-minister-of-Justice Thomas Bodström, and skilled activists at the time traced how he couldn’t get the Swedish Parliament to approve anything like it (for good reason), so he went for the infamous legislative “Brussels Boomerang” instead: make it a federal law at the EU level, and tie the hands of the Swedish Parliament to do it regardless of their opinion. There were three other like-minded people from other states, and that was all it took for the proposal to gain momentum at the Brussels level.

On December 14, 2005, the European Parliament approved a mandate for all states to implement “telecommunications data retention”, or as it would be more accurately described, “preemptive ongoing wiretapping of everybody in case we decide we want it later”. The purpose is to combat “terrorism and other crimes”. That little “and other crimes” turned out to include basically everything, up to and including jaywalking – and in practice, it would be almost exclusively used to hunt ordinary people sharing music and movies outside of the monopolized copyright channels.

So all of a sudden, everybody’s activity was recorded – along with timestamps and their precise geographical position – whenever they did the most minute form of communication. It was a mass tracker.

The problem is that surveillance of innocents in case they should become suspects later is fundamentally incompatible with a democracy.

However, this one didn’t go over well in Europe, even with a decision from the federal European parliament. A full one-third of European states – nine out of 27 – refused to implement the preemptive surveillance of innocents, seeing it for what it was. In other states like Germany, it was implemented and immediately struck down by their constitutional court, for good reasons.

In pushing for acceptance, there was no shortage of Potemkin façades and misdirection from politicians. An example of the talking points used:

“Telecom companies have always recorded this”: No, they haven’t. In fact, they have been absolutely, positively banned from recording any of this, except – except for what was absolutely needed for billing purposes. Data retention switched bulk collection of everything from “absolutely forbidden” to “mandatory”, and that’s not the small change they wanted to pretend it was.

“It’s not government surveillance, it’s the telecoms recording your activity”: As if conscripting a corporation into a most unwilling agent of the government made it not the government’s action any more. This is a particularly disgusting way to deflect responsibility for your actions.

“It’s necessary to prevent terrorism”: Except it was absolutely useless for this, and used in practice only to punish ordinary file-sharing people.

On the other side of the fence, you had a few diligent politicians like Malte Spitz in Germany, who used his own data to show people just how horrible the tracking was – he made a YouTube video showing that he could essentially be followed block by block as he was going about his daily business, and also held a TED Talk about it.

Activists also kept pushing, relentlessly, providing actual data that politicians didn’t want to exist. The German AK Vorrat – loosely translated as “working group, data retention” – was one of the more visible ones, and who pointed out that the collected data had only hade a difference in 0.006 percent of criminal cases.

Zero point zero zero six per cent.

In most countries, that’s the equivalent of hiring two or three extra investigative police officers, but at the cost of ordinary police pay instead of the data retention’s cost of about a billion dollars per year (or much more). In other words, the data retention is not even effective in the best of cases – neither for police operations nor for cost-efficiency. You could have solved something like 1,000 times more additional crimes for the same amount of money, just by hiring regular investigating police officers doing ordinary honest police work instead of treating everybody as a suspect.

Now, fortunately, it wasn’t just activists pushing back. Since the governments had audaciously told the telecoms operators to foot the entire bill for this, they were not happy and had a real financial interest in scuttling this construct. That, in the end, is what caused the data retention’s undoing.

It was billions of dollars of cost for the telcos that was the ultimate driver to end data retention. It was the human rights principles that gave those telcos the right of way in court.

Because the telcos challenged the mandate to retain data – the most customer-focused ones flat out refused to comply, saying “take us to court”. The government didn’t, but took them to their own authorities instead (the US FCC equivalent), at which point the telcos took those authorities to court.

And won.

Once the courts had ruled that telcos were no longer required to store all metadata, and importantly, absorb all the cost for doing so, data retention was dead in practice. But it would take another couple of years to really drive the point home.

The legal escalation went all the way to the European Court of Justice (ECJ), which is the European equivalent of a Supreme Court. This escalation took a decade in total, but on April 8, 2014, the European Court of Justice ruled that the Data Retention Directive – the EU “federal law” – so utterly incompatible with human rights, that the court didn’t just declare it not in effect from that date; the ECJ ruled that it had never been in effect, annulling it retroactively and effectively erasing it from existence as a mark of shame. The court couldn’t have put its foot down any harder.

Most politicians in European states at the time noted that while they were now not mandated to preemptively violate every citizen’s privacy, there was not yet any ruling banning them at a federal level from doing so, and they sought to tweak details in their “safeguards” to keep the constructs. This missed the point of the ECJ entirely:

The problem isn’t that the data isn’t properly secured, or who has access to it and when. The problem is that surveillance of innocents in case they should become suspects later is fundamentally incompatible with a democracy. It is the core idea that is broken and unacceptable, not the details of implementation.

This disconnect baffled the courts entirely, as their key point had been made perfectly clear in the 2014 ruling: such a construct is incompatible with a democracy. Why did politicians persist in pretending it was a matter of implementation details, and not the core idea? More importantly, why was this still happening in individual states, even though there was no more federal directive mandating it?

Hawk politicians in those individual states were arguing that while the European states were no longer required to have data retention at the federal level, they were also not forbidden from having it as a state initiative, and continued it on the state level that had been initiated by the federal law now shredded by the ECJ. This position at the state level could only have come from somebody who didn’t read the fuming verdict from the European Court of Justice in 2014, as it tore up the Data Retention Directive by its roots and lit it ritually ablaze expressed in the strongest anger that judicial language is capable of expressing.

So in the judicial equivalent of “didn’t you morons hear us the first time”, the ECJ finally ruled in December of 2016 that all European states are utterly forbidden from mandating data retention from its telecommunications providers. This gave the telcos who had been objecting all along wind in their sails, and most of them deleted all the collected data on the same day to trumpet fanfares and advertising. Meanwhile, the politicians who had been advocating these violations of human rights muttered increasingly incoherently, and have not been heard from again so far, six months later.

In conclusion, while Europe had its turn with the hated Data Retention, it would take the courts twelve years to undo it. Let us at least hope that others can learn from this mistake and not have to do all of it all over again.

Privacy remains your own responsibility, as always.

Syndicated Article
This article was previously published at Private Internet Access.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

With laptops banned onboard aircraft, your data is no longer yours if you fly

Rick Falkvinge - 23 april, 2017 - 20:00

Privacy: New US regulations ban laptops on board some aircraft, requiring laptops to be in checked luggage. One of the first things you learn in information security is that if an adversary has had physical access to your computer, then it is not your computer anymore. This effectively means that the US three-letter agencies are taking themselves the right to compromise any computer from any traveler on these flights.

According to the United States Ministry of Peace Department of Homeland Security, which bills the ban as a “change to carry-on items” that affect “ten out of the more than 250 airports that serve the United States internationally”, there is a “security enhancement” because explosives can now be built into “consumer items”, and therefore laptops must now be banned from carry-on luggage and instead checked in.

When looking at this justification, the DHS notably fails to describe how it would be any safer flying with such alleged explosives in checked luggage rather than carry-on luggage onboard the same aircraft. In other words, the justification is utter nonsense, and so, there must be a different reason they issue this edict that they’re not writing about.

“The aviation security enhancements will include requiring that all personal electronic devices larger than a cell phone or smart phone be placed in checked baggage at 10 airports where flights are departing for the United States.”

When Microsoft (finally) trained every single one of their employees in security in the big so-called “security push” around the turn of the century, there were about a dozen insights that they really hammered home, again and again. One of the most important ones related to this was the simple insight of “if an adversary has had physical access to your computer, then it’s not your computer anymore”.

After all, if somebody has had physical access to the machine itself, then they will have been able to do everything from installing hardware keyloggers to booting the machine from USB and possibly get root access to some part of the filesystem – even on a fully encrypted GNU/Linux system, there is a small bootstrap portion that is unencrypted, and which can be compromised with assorted malware if somebody has physical access. They could conceivably even have replaced the entire processor or motherboard with hostile versions.

This is a much more probable reason for requiring all exploitable electronics to be outside of passengers’ field of view.

Remember that both the NSA and the CIA have a history of routinely pwning devices, even from the factory, or intercepting them while being shipped from the factory. (There was one incident where this was revealed last year, after the courier’s package tracking page showed how a new keyboard shipped to a Tor developer had taken a detour around the entire country, with a remarkable two-day stop – marked “delivered” – at a known NSA infiltration facility.)

Now imagine that the laptops and other large computing devices of these travelers — remember that the Tor developer in question was an American citizen! — that these devices will be required to be surrendered to the TSA, the CIA, the NSA, the TLA, and the WTF for several hours while inflight. It’s just not your device anymore when you get it back from the aircraft’s luggage hold – if it was ever there.

If your laptop has been checked in and has been in the TSA’s control, it can no longer be considered your laptop. Any further login to the compromised laptop will compromise your encrypted data, too.

The choice of the ten particular airports is also interesting. It’s the key airports of Dubai, Turkey, Egypt, Saudi Arabia, Kuwait… all predominantly Muslim countries. Some have pointed this out as racial profiling, but there are signs it may be something else entirely and more worrying.

For example, the Intercept presents the measure as a “muslim laptop ban”. The might or might not be an accurate framing, but the worrying part is that this is a best case scenario. More likely, it is a so-called “political test balloon” to check for how much protesting erupts, and to put it bluntly, if they get away with it. If they do, then this can be a precursor to a much wider ban on in-flight laptops – or, as you would more correctly have it, a much wider access for three-letter agencies to people’s laptops and data.

Syndicated Article
This article was previously posted at Private Internet Access.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

Airport: “We’re tracking every single footstep you take and can connect it to your mail address, but your privacy is safe because we say so”

Rick Falkvinge - 15 april, 2017 - 20:00

Netherlands: A sign on the revolving entrance to a European airport, one sign among many, says “the airport employs wi-fi and bluetooth tracking; your privacy is ensured”. The vast majority of people have no idea what this is, and just see it as one sign among many like “no smoking”. But this cryptic term is an indoor mass real-time positioning for every individual in the area at the sub-footstep level, and the airport knows who many of the individuals are.

When your mobile phone has wifi activated, it transmits a network identity signal – a MAC address – continuously in asking its environment for which Wi-Fi networks are available in the area, looking for known networks to connect to. It is possible to use a network of wi-fi base stations in a limited area to pinpoint the exact physical location of your phone in that physical area – by comparing the signal strength of your phone’s identity ping from multiple stations receiving it, and knowing where those stations are, your phone’s location can be calculated in microseconds with sub-footstep accuracy. And as your phone keps pinging its environment to search for wi-fi networks, the end effect is that your movements are tracked basically down to the footstep level in physical space and the second level on the timeline.

We know this because it caught some rare attention when the sub-footstep individual realtime tracking was rolled out citywide in a mid-size town in Europe, and was cracked down on by that state’s Privacy Board (thankfully).

Let’s take that again: sub-footstep-level identified realtime tracking has already been in place in major cities at the city level.

That’s why it’s positively infuriating to see this vague statement on an airport door, and knowing what it means, but also knowing that it has been deliberately worded to make 99% of people even reading it not understand what it means. And most people won’t even read it.

“This terminal uses a Wi-Fi and Bluetooth-based tracking system. Your privacy is ensured.” Also, war is peace, freedom is slavery, and ignorance is strength. My privacy is “ensured”? Am I supposed to be grateful because you’re not yet demanding a blood sample?

Your privacy is ensured “because we say so”, apparently.

It gets worse. Your phone is continuously broadcasting its MAC address, right? But the airport has no way of knowing which MAC address belongs to which person, right? So even though this is bad, the airport doesn’t know how you moved, when, and where, and how fast, and with whom… right?

Except, the tracking is done with a Wi-Fi network, remember? Which you can and will connect to, because it broadcasts the name “Free Airport Wi-Fi”. And the only thing you need to provide this network in order to get free and fast net access, thereby connecting with the very MAC address which has been tracked, is your email address.

…and suddenly the airport can connect your physical movements to your email address, and therefore most likely to your identity. It now has the ability to know how you moved through the airport, where you ate, whom you met with, for how long, the list that goes on, a list that shouldn’t be there. The only safeguard against it not doing so and using it against you is a vague “trust us”.

It’s not a random small countryside airport, either. It is Amsterdam-Schiphol, which is the 12th largest airport in the world, and the third largest in Europe after London-Heathrow and Paris-Charles-de-Gaulle.

Your privacy remains your own responsibility.

Syndicated Article
This article has previously been published at Private Internet Access.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

Would U.S. Congress find it acceptable that their phonecalls were recorded, sold, and published?

Rick Falkvinge - 10 april, 2017 - 20:00

Repression: The United States Congress has decided that Internet Service Providers shall be Common Carriers but without the obligations of a Common Carrier. Specifically, which was the shocker recently – telephone secrets don’t apply as they do with other telecommunications providers, and ISPs are also free to modify anything they like without liability for it. This was an unexpected development of the FCC upgrading the Internet to a so-called Title II Utility. But what would happen if we took this to its conclusion and started publishing Congress’ intercepted phone calls, as they have decided can be done with Internet traffic?

The United States Congress decided that Internet Service Providers can not just monitor and sell your Internet traffic, but also modify it, which has been met with a justified storm of criticism. Some of the blowback states that “this has been the case for a long time and up until recently”, and this Congress decision merely “restores” things to how they were before – and this is where it gets interesting: what happened “recently” – more specifically on June 12, 2015 – and which Congress seemed fit to reverse, was that the FCC ruled the Internet to be a so-called Title II Utility: a utility on par with the telephone network. This FCC ruling turned the Internet Service Providers into so-called Common Carriers.

When you’re communicating on the telephone network, the telco can’t record and sell your conversations. Privacy laws prevent this.

What makes it reasonable, then, that a voice call which is technically transmitted over the Internet can be recorded and sold? Where just the method of transmission is different?

Here’s the kicker in this context – most telco voicecalls are already transmitted over the Internet. It’s simply much cheaper for telcos to use the simple Internet TCP/IP network for transmission than their own expensive and complicated SS7 network, so this migration has been silently going on for the past two decades.

This leads us to the following question:

Since Congress’ telephone calls are most likely transmitted over the Internet, would they find it acceptable that those telephone calls were recorded, sold, and published, as they have just decided?

Of course, they would go ballistic. They would feel… betrayed. Violated. Just as we feel, because we understand the decision they made, and they don’t.

It is hard to overstate the technical illiteracy of today’s lawmakers. They are basically behaving like a drunken elephant trumpeting about in a porcelain factory.

To give you one concrete example of this, the UK Home Secretary went on record saying there has to be people who understand the necessary hashtags to prevent hate speech from getting published on the Internet.

Yes, you read that right. The. Necessary. Hashtags. And this is the person ultimately responsible for these issues. Would you trust their decisions to be well informed?

When working in the European Parliament, I observed lawmakers get their email printed for them by their secretary and handed to them as papers on their desk. These are the people making federal law about the Internet.

Today’s lawmakers are basically behaving like a drunken elephant trumpeting about in a porcelain factory.

As a side note, this was observed as early as 2006, when the protests against the (first) raid against The Pirate Bay had signs saying “give us back our servers, or we’ll take your fax machine”.

Going back to the question how lawmakers would react if their phonecalls were published, they would probably press charges for wiretapping, revealing that they just created two laws that are completely in conflict with each other, and highlighting what we’ve already concluded: the expectation of privacy comes from making a phonecall, and not from a deep understanding about how that phonecall is going to be transmitted at the technical level – whether it’s routed through the expensive telco SS7 networks (not okay to eavesdrop) or the inexpensive TCP/IP networks (okay to eavesdrop, modify, and sell, now).

This is where we’re getting to the heart of the issue: Lawmakers don’t understand Analog Equivalent Rights.

They don’t understand that it’s completely reasonable for our children to have at least the same minimum of civil liberties as our parents had, as it translates to their everyday environment. This obviously includes an expectation of privacy when holding a private conversation, regardless of the transmission technology used under the hood.

Privacy remains your own responsibility.

Syndicated Article
This article has previously appeared at Private Internet Access.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

When good loses to lawful: this thing about proper legal procedures with indefensible outcomes

Rick Falkvinge - 31 mars, 2017 - 20:00

Repression: It’s interesting to watch people rushing to defend the legal processes in last week’s story about a man jailed indefinitely for refusing to decrypt, and who are asserting that everything is in order. In doing so, they point at individual details of the legal process and say there’s nothing odd about the details, and disregard the outcome that somebody is in fact indefinitely in jail, without charges, for encryption. It doesn’t matter if each and every step is defensible: if that’s the outcome, the system as a whole is really really bad, including the individual steps.

Lots of people were rushing to defend the fact that a man is in jail indefinitely for refusing to decrypt, and trying to spin the story as though this definitely didn’t mean that you can be put in jail for encryption. This is the worst kind of “good bureaucrat” behavior – one who can’t see an evil outcome right when it’s in front of them, just because the individual steps are familiar.

@Falkvinge @MayaKaczorowski no it hasn't. It's not that broad, it's about them compelling someone to turn over evidence—compulsion under 5A

— Whitney Merrill (@wbm312) March 21, 2017

Here’s an example. “He was ordered to turn over evidence, but didn’t, and so the judge had a right to hold him in contempt of court”. Yes, and the outcome is still that somebody was put in prison indefinitely for encryption. Regardless of who had what right along the way, the entire chain of such rights is unambiguously evil and really bad – including the individual, procedurally correct steps making up that chain.

@Falkvinge @MayaKaczorowski no it has a significant legal distinction. It's not settled law, I gave a talk on this at Shmoocon in 2015.

— Whitney Merrill (@wbm312) March 21, 2017

Here’s another example: “There’s no law saying that encryption is illegal, and the legal community is divided on whether this is correct.” That’s factually true but doesn’t change things a bit: when you can be put in prison indefinitely without charges for encrypting, somebody saying “that may or may not happen” is not contradicting the fact that it can, in fact, happen – as proven by the fact that is has already happened, if nothing else. And when you can be put in jail for encryption, the net effect is that it’s been outlawed — even if you sometimes aren’t.

@Falkvinge @Carlos_Perez No, they've just upheld their right to ask you to decrypt so they can examine the evidence.

— Walter Williams (@LESecurity) March 21, 2017

Another: “No, they’ve just demanded the evidence as they have a right to do, and if he doesn’t produce it, he can be held in contempt of court.” If this their right results in somebody being imprisoned indefinitely without charges for encryption, then again, the system is broken, and that is regardless of whether each and every step along the way is formally correct.

Yet a fourth reaction – with no example on Twitter just here – has been “yes, the fifth amendment is supposed to work like this”: as if this was something that concerned only the Fifth Amendment, or only the United States of America.

This knee jerk reaction of defending the situation as “procedurally correct”, when somebody is indefinitely in jail without charges for refusing to decrypt, is the absolutely worst possible approach – it is the “but it is lawful” approach, without regard for consequences. It is the “good bureaucrat” reaction.

It is absolutely crucial to understand that lawful does not mean moral or good. There’s lawful good and lawful evil, and they are not the same thing. Often, you must choose between lawful and ethical. Somebody who produces an evil result, as here, by following the law to the letter is choosing to uphold an evil system, and when push comes to shove, following instructions is never a defense – neither morally nor legally.

But the judge, Theodor Seidel, said as he pronounced the sentences [against the former Berlin Wall guards], “Not everything that is legal is right.”

It is this trickery with procedure to produce (un)desirable outcomes that is common in the worst parts of politics, the inability to focus on what’s actually happening but instead trying to justify the procedure leading up to the evil result. “The marriages were lawful”, as the prison guard said on the record.

Isaac Asimov explores this a lot in his Robot series of novels – how changing small parameters of procedures, and have everybody follow procedure, can lead to dramatically evil outcomes. One famous example from his novels is how a roboticist designs an autonomous fighter craft powered by AI – and which is designed to assume that other ships like it are also robots which can be destroyed in warfare, but which isn’t the case since they’ll be human-piloted enemies, leading to a clear violation of the First Law which the robotic fighter craft can’t knowingly break — so it is designed to do so unwittingly by following procedure.

This is what happens when procedure is followed, and principle lost.

Don’t let that happen.

Syndicated Article
This article was previously published at Private Internet Access.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

With shock appeals ruling, the United States has effectively outlawed file encryption

Rick Falkvinge - 28 mars, 2017 - 20:00

Privacy: An appeals court has denied the appeal of a person who is jailed indefinitely for refusing to decrypt files. The man has not been charged with anything, but was ordered to hand over the unencrypted contents on police assertion of what the contents were. When this can result in lifetime imprisonment under “contempt of court”, the United States has effectively outlawed file-level encryption – without even going through Congress.

Last week, a US Appeals Court ruled against the person now detained for almost 18 months for refusing to decrypt a hard drive. The man has not been charged with anything, but authorities assert that the drive contains child pornography, and they want to charge him for it. As this is a toxic subject that easily spins off into threads of its own, for the sake of argument here and for sticking to the 10,000-foot principles, let’s say the authorities instead claim there are documents showing tax evasion on the drive. The principles would be the same.

Authorities are justifying the continued detention of this person – this uncharged person – with two arguments that are seemingly contradictory: First, they say they already know in detail what documents are on the drive, so the person’s guilt is a “foregone conclusion”, and second, they refuse to charge him until they have said documents decrypted. This does not make sense: either they have enough evidence to charge, in which case they should, or they don’t have enough evidence, in which case there’s also not enough evidence to claim with this kind of certainty there are illegal documents on the drive.

In any case, this loss in the Appeals Court effectively means that file- and volume-level encryption is now illegal in the United States.

Without going through Congress, without public debate, without anything, the fuzzy “contempt of court” has been used to outlaw encryption of files. When authorities can jail you indefinitely – indefinitely! – for encrypting files out of their reach, the net effect of this is that file level encryption has been outlawed.

So were there illegal documents on the drive? We don’t know. That’s the whole point. But we do know that you can be sent to prison on a mere assertion of what’s on your drive, without even a charge – effectively for life, even worse than the UK law which will jail you for up to five years for refusing to decrypt and which at least has some semblance of due process.

The point here isn’t that the man “was probably a monster”. The point is that the authorities claimed that there was something on his encrypted drive, and used that assertion as justification to send him to prison for life (unless he complies), with no charges filed. There’s absolutely nothing saying the same US authorities won’t claim the same thing about your drive tomorrow. Falsely, most likely. The point is that, with this ruling, it doesn’t matter.

Syndicated Article
This article has previously appeared at Private Internet Access.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

Great: Now your sex toys are used to spy on you and sell your private habits, too

Rick Falkvinge - 22 mars, 2017 - 20:00

The makers of an Internet-connected sex toy have settled to pay a small amount to some 300,000 owners of a vibrator which was used to spy on their sex habits, which the manufacturer collected as individually identifiable data. Additionally, the bluetooth-controlled sex toy device was utterly insecure, allowing remote anonymous administration. In the mess of IoT devices spying on us, we now need to add the bedroom.

In Las Vegas in 2016, at Defcon, hackers g0ldfisk and followr originally disclosed the We-Vibe vibrator vulnerability, observing that anybody in bluetooth range could take control of the device. As the duo noted during their presentation, such an intrusion would amount to sexual assault – meaning we can now add sexual assault to the list of possible consequences of unsecured IoT devices.

This vulnerability – along with a shockingly audacious and undisclosed data collection about its users’ sexual habits, like temperature and sexual intensity, collected insecurely as identifiable data connected to their e-mail addresses – has led up to the class action lawsuit, which has been settled now. The manufacturer, We-Vibe, will pay four million Canadian dollars – expecting this to result in maybe C$500 for a violated individual at best.

The lawyers for the anonymous plaintiffs contended that the app, “incredibly,” collected users’ email addresses, allowing the company “to link the usage information to specific customer accounts.” — US NPR

This is just the start of devices made by engineering morons who may understand their original field – sex toys – but have absolutely no clue about Internet-level security. They are not alone: corporations as large as the biggest banks enjoyed the comfort of having a private network up until just recently, and have had to wake up in a hurry to the fact that all input must be regarded as hostile until proven friendly. The engineering principle of “your code is the last piece of code standing” was something that woke Microsoft up as late as fifteen years ago, and they were late in the IT game, but that’s nothing compared to non-IT players wanting in on the Internet of Things and the Fun Profitable Apps who still haven’t learned.

We can add sexual assault to the list of possible consequences of insecure IoT devices.

Maybe the most egregious thing about all this is that the vibrator maker continues to collect the private data, just with a “clarified” privacy policy, where two things immediately stand out. First, the collection of sex habit data is opt-out, meaning that your sex life will be spied on unless you take active action to not have it be so (having this “opt-out” is strictly illegal in several parts of the world, and for good reason). Second, they reserve the right to sell such data to anyone they like, but dress it in language suggesting the opposite: “We will never sell your usage data to a third party … except for as specified in our policy”. That last part makes the first part completely useless; what this means is “we will sell your usage data to a third party as specified”.

Maybe the most egregious thing about this story is that the vibrator maker continues to collect the private data, just with an obscure-and-opt-out privacy policy saying so.

Your privacy indeed remains your own responsibility.

Syndicated Article
This article was previously published at Private Internet Access.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

Old world squanders opportunity to tame bitcoin a little

Rick Falkvinge - 18 mars, 2017 - 20:00

Bitcoin: The American SEC, which oversees financial institutions, has rejected a bid to create a traditional trading fund (an ETF) based on bitcoin. The trading fund was the initiative of the Winklevoss brothers, who had seen this as a way to bring bitcoin to the masses and make money in the process. While a lot of the bitcoin world talked about the ETF, caring too much about the approval of the old world is ultimately misguided.

The bitcoin community had been awash in buzz all week about the Securities and Exchange Commission (SEC) promising a decision by March 11 on whether the Bitcoin ETF had governmental approval or not. The decision was delivered at 21:00 UTC on Friday, and the bitcoin exchange rate took an immediate nosedive, from 1300 USD per coin earlier in the day to below 1000. It has since recovered to just under 1200.

It should be noted that other similar constructs, with non-American names, exist elsewhere since some time ago. For example, bitcoin is already traded as a security like this on the Stockholm Nasdaq exchange, where it was first to launch.

At the end of the day, though, seeking the approval of the SEC and other governmental financial bodies is ultimately misguided. Bitcoin was specifically designed to not submit or yield to their jurisdiction; bitcoin was designed to replace the old corrupt financial world. Thinking of bitcoin’s success in terms of uptake by the old world is like measuring the success of mammals in terms of their approval by dinosaurs.

Thinking of bitcoin’s success in terms of approval by the SEC is like measuring the success of mammals in terms of their approval by dinosaurs.

The SEC justified their decision by noting that bitcoin cannot be regulated enough to meet approval standards. In other words, they denied the bitcoin ETF’s stamp of approval of the old world specifically because bitcoin does not submit to the rules and the frauds of the old financial world.

That, if anything, shows that bitcoin is working exactly as intended. And in this decision, the SEC squandered an opportunity to delay their own replacement a little: if they had brought bitcoin into the old world, it would replace the old world at a slower pace.

Syndicated Article
This article has previously appeared at Private Internet Access.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

Switzerland proposes net censorship to protect domestic gambling against competition

Rick Falkvinge - 11 mars, 2017 - 20:00

Corruption: In a surprise move, Switzerland has a bill passing through parliament that would introduce net censorship to protect domestic gambling against foreign competition. This is as dangerous as it is misguided and utterly ineffective, and it is alarming to see that even a strong democracy like Switzerland not seeing censorship for what it is, especially when it’s being used for protectionist means.

This Swiss bill, which has moved through several legislative steps and is on its way to becoming law, mirrors similarly misinformed initiatives in other countries. It is still something of a shock to see it happen in Switzerland, which is known for having a very strong protection of civil rights.

A recurring theme in facepalms like this is how legislators don’t understand that the Internet is inherently borderless, in combination with everything on the Internet being private communications. There just isn’t something on the Internet that is “a commercial service” that isn’t also private communications while using said service – and thus, blocking a foreign commercial service on the net is indistinguishable from general censorship of certain private correspondence.

Blocking a foreign commercial service on the net is indistinguishable from general censorship of certain private correspondence.

What’s particularly interesting is to observe how legislators are bending over backwards to explain how this is “not censorship”, even to public state media, which is a telltale sign they’re well aware of 1) that it technically is censorship, and 2) that such censorship is illegal, and 3) that they therefore must bend every definition in existence to get away with doing it anyway.

Other countries have tried similar bills. In Sweden, there was a bill in 2008 trying the same thing which was summarily discarded, which didn’t deter the local lobbyists; another was just initiated with the same purpose.

The real danger lies in establishing the idea that censorship can be an acceptable method of protecting an industry’s legacy market position against competition.

At the end of the day, the efforts are utterly futile, as such censorship is trivially circumventable by using a VPN; sometimes even just by changing your DNS settings to use a public uncensored DNS server. But the danger isn’t in its ineffectiveness; the real danger lies in establishing the idea that censorship can be an acceptable method of protecting an industry’s legacy market position against competition.

Privacy and free speech remain your own responsibility.

Syndicated Article
This article was previously published at Private Internet Access.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

Is it reasonable for a private industry to demand governmental censorship power over general communications?

Rick Falkvinge - 5 mars, 2017 - 20:00

Copyright Monopoly: The copyright industry is tryingagain – to forcefully conscript Internet Service Providers into doing their bidding. This time, the RIAA and other organizations are demanding “filtering”, which is a pretty word for censorship, of anything they don’t want people to send to each other privately.

Ask yourself this one question: is it any shade of reasonable that a private industry gets a governmental mandate to silence our phonecalls when we talk about things that the private industry in question don’t want us to talk about? Because that’s exactly what the copyright industry is demanding here, exactly what they’re demanding, as applied to the Internet.

This demand is so audacious, so revolting, so utterly despicable I don’t really know where to start. These are rent-seeking parasites* who are so completely shameless they claim they have a moral high horse in demanding censorship of general private communications when it goes against their profit interests.

This is completely in line with my previous column about how the copyright industry is so bothered by civil liberties and due process, they are trying to circumvent and eliminate both. In particular, note how this fits with the line of action of having ISPs be governmentally forced to be non-accountable thugs of the copyright industry.

It’s important to notice three things here:

First, it is not reasonable to prevent transmission of a particular movie or music, even if it breaks the law. We have a judicial system where somebody is punished after the fact, and after something called due process. This demand is Minority Report pre-crime bullshit.

Second, this completely eliminates fair use as a concept. There are millions of cases where publishing something on YouTube is illegal in one context (say, just sharing it), and completely legal in another context (say, providing political commentary on the exact same piece). Blanket censorship, as the copyright industry demands here, would be completely blind to all the exceptions to copyright distribution monopolies – exceptions without which the copyright monopoly would be in direct conflict with the First Amendment in the US and freedom of speech in general elsewhere. These exceptions, which are rights and not defenses, are what allows the copyright monopoly to even exist from a constitutional standpoint. Blanket, automated censorship would just strike out this entire field, which is exactly what the copyright industry wants (until somebody would challenge its following constitutionality, but still).

Third, copyright law is immensely complex, and cases are frequently being decided in Supreme Courts. Despite this, the copyright industry likes to pretend that it’s dead simple, and basically they’re arguing it’s dead simple because the copyright industry is always in the right. (Hint: they’re not.) So instead of due process in a proper judicial system, you would have an automated censorship process at worst, and being casually decided by a minimum-wage clerk at best.

These are the same things the copyright industry is pushing for in Europe under the notion of changing “notice-and-takedown” to “notice-and-staydown“, which is nothing but blanket governmentally-sanctioned censorship completely ignores all the checks and balances that have been struck over the years, decades, centuries.

Why are we literally letting a cartoon industry regulate our most important infrastructure?

Note that this doesn’t even go into the shamelessness of wanting to dump your problems on somebody else – the cost for any website operator and ISP to fulfill these insane demands would be enormous, just because the copyright industry thinks it is more important than the Internet. Why are we literally letting a cartoon industry regulate our most important infrastructure?

On the other hand, the blame isn’t really with the copyright industry: they’ve just learned that they get what they want when they throw a tantrum, after all. The real problem and the blame lie with the politicians who keep giving them whatever they ask for just because they’re loud.

Privacy and freedom of speech remain your own responsibility.

Syndicated Article
This article has previously appeared at Private Internet Access.

*) When somebody is demanding – and getting away with – getting extensive private levying privileges on things like an iPhone and a Playstation because they once complained about the cassette tape, making single mothers pay a premium for their kids’ game console so that record executives won’t have to change, I don’t think twice about calling them out as parasites.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

Why Google is making a mistake in demoting “pirate” sites from search results

Rick Falkvinge - 4 mars, 2017 - 20:00

Copyright Monopoly: Google has agreed to demote so-called “pirate” sites from its search results, at the demands of the copyright industry. All experience from the past 600 years says this is a mistake.

A story in Ars Technica and elsewhere celebrates that Google will hide the sites people are looking for, because there are others that don’t want people in general to find them. When phrased like this, it becomes obvious that Google has little or nothing to gain from this move, and that throwing whiners a bone of meat to make them shut up is a mistake, for two reasons working together.

Reason #1: The easy-to-use, friendly sites are what people are actually looking for, and legality is utterly secondary. 70% of young men in Sweden state they’re using video services outside of the copyright distribution monopolies. That effectively means that every household is doing it: Every. Single. One. It’s considered completely socially acceptable: the copyright distribution monopoly enjoys less acceptance even than speed limits. (Far less, even.)

Google is choosing to bring less value to its customers in this move, and that’s never a good business move. Whether somebody else approves of what people are looking for is completely beside the point. There are tons of vested interests who would seek to prevent people from finding certain information.

“Beware of he who would deny you access to information, for in his heart, he dreams himself your master.” — Commissioner Pravin Lal

Reason #2: Appeasement has not worked toward the copyright industry at any time in history for the past 600 years; they always come back demanding more and more and more, simply because it has worked for them for the past 600 years. You’re just not getting anything from giving them what they’re throwing a tantrum over, because they’ll be back the next day and throw the same kind of tantrum over the next inch of territory.

This is the same reason that a flat cultural extra fee for “allowing” or “permitting” personal downloads outside of the copyright distribution monopoly, an idea that pops up every so often, would be a huge mistake: free uploading (and therefore personal sharing) would still be prohibited, and therefore, such a scheme would just give the copyright industry a perpetual free income in return for no effort or progress at all, an income they could (and would) use to fund further curtailment of liberty.

Syndicated Article
This article has previously appeared at Private Internet Access.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

A Simplified Taxless State: A Proposal (part 3 of 3)

Rick Falkvinge - 3 mars, 2017 - 20:00

Civil Liberties: In this three-part series, I’m going to show how a state can be a pure market actor and not require taxation. The state will still have an income – cynics would call it taxes under any other name – but the key difference is that the income is obtained through market means, based on a state’s USP, and not through coercion by force. This leads to a society where the state does not need to know anybody’s income, wealth, or transactions, leading to the obsolescence of most registers and reporting requirements (including the elimination of a corporate register), and where a “black market” is a contradiction in terms, as the state does not interfere with the market it is a natural part of. It also means an end to victimless crimes by its very nature.

Recap

In part one, we observed that there are different tiers of land ownership, where a higher-tier owner (say, a landlord) has the say over which lower-tier land owners get to believe they own the land – and that the highest-tier land owner are today’s states (countries), which are the only actors capable of repelling other tier-one land owners. Thus, a state is the only actor capable of owning land, and can therefore lease it to lower-tier actors to generate income.

In part two, we see that this proposal leads to a low-friction economy where there are no taxation, reporting, or recording burdens on any transaction, and which therefore is in prime state to maximize the sheer quantity of value-optimizing voluntary transactions, thereby creating wealth better than the economies in competing states. Further, we observe that all taxes – income tax, corporate tax, sales tax, etc – go out the window. In turn, we also see that there is no tax wedge at all which would prevent profitability of division of labor, and therefore, this proposal also enables an efficiency optimization not present anywhere else.

Part Three: How a land lease would work

This leads us to the question of how such land leases would work in practice, since it’s absolutely crucial to get the incentives right. We want to encourage development and land improvement that facilitates additional trade, after all. We also want to facilitate urbanization, as physical proximity of people naturally increase the number of trades taking place. This is therefore a proposal with all its possible flaws for further development.

Absent a tabula rasa state where there is no existing ownership or lease of land plots, a proposal like this must relate to the previous order of things. It is therefore desirable to mimic the current tier-two ownership of land as closely as possible, maybe even to the point of calling the lease a “land ownership tax” under any other name. Economies do not respond well to changes to fundamental frameworks and we want to minimize systemic disruption while optimizing wealth and efficiency potentials.

In particular, we want to ensure that market actors feel secure in investing in their land plots – to make sure that there’s no yearly bidding process or similar where they can be overbid after having spent enormous amounts improving their plot. Therefore, it’s important that a lease lasts until surrendered one way or the other – closely mimicking the way we think of ownership. However, the lease contract can and would typically stipulate that pricing will vary with market conditions – possibly within a limited scope, to reduce risk to land improvement on the plot.

When a lease expires, though – either due to being surrendered or due to serious lapse of payment – the plot can be auctioned off to a new lease for proper price discovery, and this can be weighted in to the general price landscape of the area. More on this later.

Thus, only a very small part of the population would have to deal with the state at all. The rest would have a functioning economy that just needed to feed landlords for their lease costs, and that could work however they please to set up a low-friction economy.

Grandfathering and Initial Pricing

This leads to the question of how you phase in a system like this. Realistically, you’d need a lot of political capital and a desire to move the entire state construct in this direction, so we can safely assume that a lot of the current state expenditure will be cut rather unceremoniously. Regardless, at the end of the day, you’ll have a budget which states an income you desire for this state construct. Let’s call this number X for now – an income which will need to come from land leases, and only from land leases.

I propose this X be divided across all current plots of land by area, weighted by the square root of nearby population density, so that the total leasing price arrives at X plus some safety margin of about 5%. This solves a number of problems and doesn’t solve a few others:

First, leasing the plot price proportional to land area makes sense – that 1 km² costs half of 2 km².

Second, making land significantly more expensive in cities than out on the countryside also makes obvious sense (hence the weighting by “nearby population density” – a number which will be single-digit on the countryside and four- or five-digit in the cities).

Third, why weight by the square root of population density, rather than linearly? This is actually rather important, because if the weighting was linear, you would not gain from trying to stack people more densely together in land improvement. But when weighting logarithmically, by using the square root, we’re creating an enormous incentive to use land in the cities more effectively, to house more people per square meter – essentially a developer getting more rent income at a lower land cost. If the weighting was linear, an increase in people would correspond to a linear increase in land cost, removing this incentive.

What this doesn’t factor in – can’t factor in – are the sparsely populated and hugely expensive areas, akin to the mansion area in Beverly Hills. It also doesn’t factor in resource deposits (a gold mine in the wilderness would be dirt cheap, and this may need adjustment to enter ballpark of reason). But the next section fixes that over time.

In any case, with this weighting, we can set our initial state income from contractual land lease by applying X over the respective plot weights. This assumes, of course, that the existing plot owners choose to agree to those leases – but most plots of land should find a customer, and the 5% safety margin above is to factor in a certain initial healthy vacancy.

Adding market incentives to pricing

After the initial pricing, when leases are terminated by the customer (or the customer defaults on payment), land plots can be auctioned for lease moving forward. This creates a price discovery mechanism for the general area that can be factored in to the nearby plot lease pricing according to some to-be-determined mechanism that’s left as a minor implementation detail.

We’re also creating a secondary market where customers can trade leases directly between themselves, in what was previously buying and selling plots of land in tier-two ownership. This also assists in price discovery and highlights value differentials in the market.

Problems and considerations

With a shift in how you regard a state as large as this proposal, there are a number of problems and questions to consider.

One of the first is whether someone can opt out of the lease entirely and still occupy the land, excluding others from its utility. The answer to that question, under this proposal, would be no. Such a mechanism would create an incentive to let all the border plots of land pay for the military defense of the entire country. It’s noteworthy, that under Land Value Tax philosophy which is similar in implementation but not philosophy, a payment for lease of the land is also a compensation to the community for a right to exclude other people of the same community from said land – after all, land property is of a completely different type than property you can hold in your hand and move physically, like an apple. But this proposal focuses primarily on the state as a fair market actor, rather than justifying a taxation with some obligation to compensate others for exclusion.

Still, in the realm of politics, this proposal takes the state construct 75% of the way toward such an opt-out being possible in the future.

A second good question is whether this isn’t just a reset button on state power, and which would enable the state to slowly grow back over time. This may be true, even if the proposal severely hinders such a growback by getting rid not only of taxation mechanisms, but also of the taxation discovery mechanisms (transaction reporting and recording infrastructure). That said, a hostile takeover could build such structures back over a 20-30 year period. But expressed differently, if you did have a reset button on the state’s ability to commit violence, would you not push it?

A third question that has popped up is the existence of a social safety net. There’s nothing in this proposal that precludes the state from providing civil services. For myself, I’m a warm proponent of Friedrich Hayek’s and Milton Friedman’s proposal of a Universal Basic Income to all citizens, as it does not require any bureaucracy at all for qualification, and allows the recipients to provide price discovery in how such a small basic income is best spent.

Conclusion

A state can be a pure market actor and not require taxation. This enables enormous gains in efficiency, as the tax wedge can be completely eliminated, and enables wealth creation through maximization of the quantity of voluntary trades. Doing so does not preclude civil services or a social safety net. The proposal also allows for the elimination of all state databases except the citizen registry and the land registry, drastically reducing bureaucracy, and eliminates victimless crimes just by its nature of being a market actor.

Syndicated Article
This article was previously published on Steemit with about fifty comments.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

A Simplified Taxless State: A Proposal (part 2 of 3)

Rick Falkvinge - 2 mars, 2017 - 20:00

Civil Liberties: In this three-part series, I’m going to show how a state can be a pure market actor and not require taxation. The state will still have an income – cynics would call it taxes under any other name – but the key difference is that the income is obtained through market means, based on a state’s USP, and not through coercion by force. This leads to a society where the state does not need to know anybody’s income, wealth, or transactions, leading to the obsolescence of most registers and reporting requirements (including the elimination of a corporate register), and where a “black market” is a contradiction in terms, as the state does not interfere with the market it is a natural part of. It also means an end to victimless crimes by its very nature.

Part Two: A low-friction voluntary economy

In the first part of this series, I introduced necessary new way of thinking of land ownership – how there are tier-one and tier-two land owners, and a nation-state is the only type of entity capable of owning land, on the basis that it’s the only type of entity able to maintain a military capable of repelling other tier-one land owners (other countries).

This leads us to part two, where I elaborate on the gains this brings, given that one accepts the premise that the state owns all land (even if it pretends to give sub-ownership, that’s still sub-ownership, as argued in part one). This means that people who formally lease a land plot pay a lease for that plot to the state. Everything is voluntary and on market terms, and this gives the state an income with which to uphold basic internal and external security, civil services, and a social safety net (probably universal basic income) to its liking – but just as probably not enough money to employ scores of unnecessary bureaucrats and gender study battalions.

(Let’s skip for now exactly what a land lease will look like – I’ll be returning to some basic thoughts around that and possible models in part three.)

Wealth is created in the quantity of voluntary trades

Remember how, if we want to create wealth in a nation, our objective is to maximize the quantity of voluntary trades? This means we should enable people to trade how they want, when they want, what they want, and without any burden of taxing, recording, or reporting any of it.

This structure, where the state gets all its income from voluntary land lease and nowhere else, enables a society to have exactly that.

There is no longer any need for bookkeeping regulation. There is no longer any need for banking regulation. There is no car register. Apart from leasing land, there are no forms whatsoever.

Gold bullion with the Bank of England. Did not really need taxation to be collected.

The state gets its income at the bottom of the stack, literally on ground level of the economy. Every other cost must be enough to cover that land lease. The rest of the economy can work exactly how it wants, and will work exactly how it wants.

There are no income taxes, which leads to people being able to make income how and when they please, from one or many sources. There are therefore no personal tax declaration and no tax return forms. There is no corporate registry and therefore no corporate taxes either — investment and bankruptcy protection can be well handled contractually — and therefore no bookkeeping requirements. There are no authority forms whatsoever for regular everyday business over and above the state income, which is land lease and only land lease.

(Obviously, corporations could keep proper bookkeeping anyway. If they want to. In any form they want. That’s the whole point! Maybe there are better forms of bookkeeping today than the double Venetian bookkeeping from 1495. Yes, you read that right: fourteen ninety-five.)

Imagine the amount of trade that can happen if you just allow it to happen, if you don’t burden it down with recording and reporting requirements for every single transaction – if you don’t have to care about any one single transaction and can have the state work just fine anyway!

This also means that there’s no tax wedge at all into the efficiency gains from division of labor. If there’s a few percent of efficiency to gain from exchanging services, there’s no longer a state which makes that unprofitable before there’s a 150% gain – or more usually a 500% gain. Imagine the efficiency gains unlocked!

As a corollary, imagine the wealth that can be built if you remove all – all – obstacles to trade like this! It has the potential to be running circles around a traditional society with an overdeveloped sense of bureaucratic order.

In part three, we’ll return more precisely to a few models of how the land lease could work in terms of market pricing and trade. There’s also the important question on how to value land improvements.

Victimless crimes cease to exist

As a final note on this part, it is absolutely key that the Simplified Taxless State remains a non-privileged market actor, even if it is also the arbiter between market actors in another role. By this, I mean that the state is strictly prohibited from inventing “collective problems” and give itself the right to use force against citizens to “solve” those problems. This has the very important side effect that the state can’t enforce arbitrary behavioral rules against citizens where there’s no victim, and therefore, no claim.

In other words, in just that definition of the state duty, we have introduced a requirement onto the definition of a crime: There must be a victim pressing charges. This basically means that everything except crimes against life, liberty, and property cease to be criminalized immediately – just as it should be. There is no reason for a state to interfere with somebody exercising their property rights to manufacture slippers, a chair, or a DVD from their own materials. There is no reason for a state to interfere with voluntary trade of goods and services, except moralistic reasons, which should go out the window yesterday anyway.

Oh, and what about pollution, which is the most common objection to this? How would this scheme handle pollution? That’s actually one of the easiest things in this entire picture. Remember how, when you lease a residence, you’re liable for any damages caused to the residence by you during your lease? The exact same standard boilerplate could just as well apply to a land lease, and it’s as simple as that.

In part three, we’ll look more at the land leases that make up the state’s voluntary income. Read part three.

Syndicated Article
This article was previously published on Steemit with about fifty comments.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

A Simplified Taxless State: A Proposal (part 1 of 3)

Rick Falkvinge - 1 mars, 2017 - 20:00

Liberty: In this three-part series, I’m going to show how a state can be a pure market actor and not require taxation. The state will still have an income – cynics would call it taxes under any other name – but the key difference is that the income is obtained through market means, based on a state’s USP, and not through coercion by force. This leads to a society where the state does not need to know anybody’s income, wealth, or transactions, leading to the obsolescence of most registers and reporting requirements (including the elimination of a corporate register), and where a “black market” is a contradiction in terms, as the state does not interfere with the market it is a natural part of. It also means an end to victimless crimes by its very nature.

What is a state’s unique selling point? What can a state construct do, that nobody else can do (or do nearly as well)?

I would argue that the value proposition of a state consists of three unique activities:

  • Defend the territory from aggression from other state actors which want to control the territory;
  • Act as an arbiter in civil disputes, enforcing arbitration with force where necessary; and
  • Defend actors in territory from aggression from other actors in the territory.

The problems with this set of state activities started when the state found out it was able to abuse its power as arbiter of civil disputes to give itself preferential treatment as a market actor, something we would describe as corruption in everyday terms. (Technically speaking, a state can’t think, so it was nobles and kings of flesh and blood who walked down this path, but let’s talk in terms of abstractions for the sake of simplicity.)

In any case, these are three things that a state is uniquely positioned to do well. A state that does this, and only this, is known as a Night-watchman state. However, as we shall see, when the state is treated as a market actor, it gets the ability to offer some other services over and above this basic set like various civil services – but only on market terms, never coercively.

What is land property, when you look at it up close?

In order to model the Simplified Taxless State, we need to remodel our view of land ownership based on some harsh realities. To do this, we need to compare the property rights of land to the property rights of objects.

If the Russian Embassy were to steal an object from me here in Berlin, I would be able to seek redress and have Berlin order the property returned (or the value thereof), and the Russian Embassy in Berlin would have to comply, being on Berlin soil and Berlin jurisdiction. In this dispute, the Russian Embassy and I are equal-level market actors with Berlin as arbiter of a dispute.

However, a plot of land I have in Berlin is written into the Berlin ledger (land register), which – important! – assumes that the ledger itself is the authoritative source of who owns what land in a particular Berlin-controlled territory. If Russia were to steal that plot of land,from Berlin – or from Germany – and directly from the ledger that says I own it, thereby negating the ledger’s authoritativeness over what-used-to-be-my-plot-of-land.

It has happened in the past, after all.

In this scenario, my plot of land would be transferred from the Berlin ledger to the Russian ledger, and that Russian ledger would completely disregard what the Berlin ledger asserted about “ownership”. And unlike the case with the object where I can seek redress in a dispute, there is no international arbitration for land ownership between states’ ledgers except brute military force. You own what you defend.

Thus, we can talk of tier-one and tier-two land owners, where tier-one owners are those land owners capable of defending their territory against state-level aggression (or capable of performing state-level aggression), and tier-two land owners are those who are somehow at the mercy of the tier-one owners retaining ownership of the land the tier-two owners think they own, but actually don’t when push comes to shove.

In cleartext, a state-level actor is the only type of actor capable of owning land. Within a state, there is arbitration for when tier-two “owners” are in dispute over a piece of territory. But between states, there is no international arbitration of land ownership – brutal aggression decides who owns what (whether one approves of that fact or not). When tier-two “owners” are in dispute, it is not much different from when two children are fighting over who gets to use family property: at the end of the day, it’s still the adults’ property.

If one accepts this reality – that the state is the only actor capable of owning land within its territory, and all other territorial actors are at the mercy of the state retaining ownership of that land – then one can also stop pretending that a tier-two ownership of land, an “ownership” within a state, defended by a state, and contingent on a state, is on the same level as a tier-one ownership of land.

And if the state is the only actor capable of owning land, then that land can be leased at market rates, thus giving the state an income with which to defend such territory and fulfill its three obligations on it – obligations possibly even specified as part of the lease. We’ll be looking closely at such income structures in parts two and three of this series, and how they encourage urbanization, resilience, and free trade.

In practical terms, absent a tabula rasa state like Liberland, a change like this can be a hard sell politically and make many enemies, as it obviously changes existing wealth structures and removes subsidies that are taken for granted. People who have “owned” land for generations (and have had it defended for free) will no longer have such a service provided for free, subsidized by coercive taxation of others. Therefore, it needs to be said that while this can easily be portrayed as a seizure of property from its current owners, it is not: it is an acknowledgement of the reality described above, that land owners operate in different tiers, and that a “land owner” on any tier below the first is completely at the mercy of the ledger maintained by the state — a ledger which would not be respected by a different state should it seize the territory in question.

Such a rethinking of land property, were it difficult to portray as the acknowledgement of tier-two property, could also be framed as a rewriting of tax rules: doing this while calling it “revising the taxation framework” would be completely within the bounds of the current corrupt state construct, but would set it on a path to rapidly and completely eliminate the coercive taxation construct as such and to make it very difficult to rebuild such state corruption, absent the databases and infrastructure supporting taxation.

What this means is not only that the state needs to behave as a market actor among many, but also that it can’t arbitrarily raise its income by the popular-but-harmful notion of “raising taxes”. Instead, a state has as much income as the market will determine (by auction, or by vacancy), and will have to adjust ambitions to actual capacity.

In parts two and three of this series, we’ll examine how such a remodeling to market principles results in a possible eradication of not just all taxes, but also all the supporting structures required for collecting taxes: the only databases necessary are a citizenship register and a land register. There’s no further need for a car register, a corporate register, coercive bookkeeping requirements, income reporting, tax returns, and so on. We’ll also look at a complete elimination of victimless-so-called-crimes as a result of the Simplified Taxless State.

Continue to part two >>

(For people on the traditional left in politics, this proposal can also be called a Simplified Fair State, as the state doesn’t give itself preferential treatment in the market. Words are important and “fair” is classically a left-wing buzzword like “taxless” would be for libertarians.)

Syndicated Article
This article was previously published on Steemit with almost a hundred comments.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!

The Wealth of a Nation: Why Capitalism Works

Rick Falkvinge - 28 februari, 2017 - 20:00

New World: Politicians and policymakers don’t understand where wealth comes from. They don’t understand the very basics of why capitalism works, they don’t understand how the wealth of a nation can increase – and as a result, almost every single policy is counterproductive to a country’s competitiveness. This is despite the observation that the free market builds wealth due to one of the simplest of reasons, and once policymakers understand this, a completely different support structure would emerge.

Politicians and activists frequently regard the economy as a zero-sum game, where somebody must lose for another to gain. This is despite the quite trivial observation that we have built quite a lot of wealth from the Ice Age up until present day, and almost nobody is as bad off today as everybody was during the Ice Age. In this, it is baffling why politicians and pundits focus on redistribution, when the focus should be building of wealth.

But it’s counterintuitive for politicians to focus on building wealth, because doing so requires relinquishing control. Regulators can’t build wealth and competitiveness. They can only destroy it to various degrees. A lot of this comes from not understanding just why, and how, capitalism and the free market works to increase overall wealth, and not just redistribute it.

The free market brings 179,000 people out of extreme poverty every day. Not politicians. Not foreign aid. Not seized and redistributed wealth (minus the usual cuts to the redistributors). In my work in the European Parliament and elsewhere, I have rarely met a politician who understands the very fundamentals of why capitalism builds wealth – despite it being so ridiculously simple.

Capitalism works because it is voluntary.

It works because people seek to maximize their wealth, on a completely subjective basis. Some people value free time, some value money, some value happiness, some value rare Pokémon. That’s fine, all of it. The only thing you need to do as a politician is to get out of the way of millions of people trying to maximize their own value by trading something with other people.

In order to maximize overall wealth, you want to maximize the quantity of voluntary trades. That’s it.

Since every trade is voluntary, both voluntary parties consider themselves gaining in value from the transaction. This is key. As a result, a voluntary transaction adds value to the nation as a whole. Every voluntary trade adds a small bit of value, with both parties having gained from it, and maximizing wealth is about merely maximizing these voluntary trades on a purely quantitative basis. The more trades you have, the more increases in value you get.

Now, every person’s perception of “value” is arguably subjective. Some of it can be measured in terms of GDP, other subjective value is just happiness in various forms. The good part about the many forms of value is that you don’t have to concern yourself with this at all; people’s completely subjective understanding of value is much better than yours when distributed across millions of people.

The distributed free market is better even at determining and valuing the precise definitions of “value” than any bureaucrat has ever been.

Now, compare this with how politicians today try to “build wealth” or “create jobs” and thump themselves over the chest about it.

It usually involves creating horrible burdens on every single transaction. At a minimum, a receipt must be created (usually with penalties for not offering it). Moreover, transactions must be summarized to some kind of tax authority at regular intervals, and often to more than one authority. Meticulous bookkeeping is required – not for your sake, but for the sake of authorities. All this creates a wet blanket of unhappiness smothering the will to make voluntary transactions.

And then, of course, other politicians have the idea that regulated transactions are good for wealth, transactions which aren’t voluntary and therefore contain at least one losing party, if not two. These don’t build wealth. They may make the politician or regulator look good, but they aren’t a transaction in the free-market sense because they’re not voluntarily agreed upon by two consenting parties.

To top this off, all of the burden is usually directed toward subsidizing obsolete industries because they’re a vested interest and/or contributed a lot to somebody’s election campaign.

Politicians basically behave toward the free market and wealth-building like drunken elephants trumpeting about in a porcelain factory.

No, I don’t have an illustration for that.

Let’s do a thought experiment if we really wanted to create wealth in a nation, and just quantitively maximize the number of voluntary trades. How far can we go in making a nation competitive in this measure?

We’re eliminating all requirements to tell authorities about your transactions. No wet blanket of despair. That means no income taxes, no sales taxes, no bookkeeping requirements. You let people trade and be happy. This means you can’t have a corporate registry, there’s no regulation of employment (as that’s a special form of regular transaction), there’s possibly not even a concept of a corporation at all. There’s just people trading and taking entrepreneurial investment risks. Such risks can be detailed contractually in a project-by-project basis to eliminate the need for bankruptcy law and therefore the need for corporate legal entities and the heavy supporting authority bureaucracy.

There is still a need for a social safety net of some kind, not for compassion reasons, but for straightforward competitiveness reasons. You could solve this with a universal basic income like Friedrich Hayek and Milton Friedman have suggested. That would also be cheaper than building a bureaucracy for somehow determining who’s “worthy” of support. With such a general safety net, you create competitiveness for the nation overall as a lot more people will try out business ideas in entrepreneurship.

Society as a whole benefits from a risk-positive environment, and if you can provide a mechanism where anybody can try any stupid commercial idea without risking becoming homeless and indebted, more people will innovate and take risks – and the society using this mechanism will get a competitive edge.

So what you need is a population register with people who qualify for UBI (citizens or similar). You also need a land registry, for reasons I’ll be returning to. But that’s it. All other registers can be scrapped. Every one. Car plates, driver’s licenses, corporate registers, boat registers, every other database that requires data collection, and therefore puts obstacles in the way of maximizing the sheer quantitative amount of voluntary trades.

All this is perfectly doable today. It’s just that politicians think that Regulating More is the answer to creating wealth. It’s not, obviously. They Regulate More instead of focusing on something really simple – like the mere quantity of voluntary trades – and just doing everything possible to maximize that number, to get rid of obstacles for voluntary trades. As it turns out, you don’t even need taxes. Taxes require paperwork. There are ways to fund a state-construct maintenance that don’t require taxation and therefore don’t require paperwork.

I’ll be returning to that with a proposal for a Simplified Taxless State in a three-part series over the coming days.

Syndicated Article
This article was previously published on Steemit with almost a hundred comments.

(This is a post from Falkvinge on Liberty, obtained via RSS at this feed.)

Kategorier: Pirates, arr!
Prenumerera på innehåll