From: mpd@netcom.com (Mike Duvos)
Date: Wed, 3 Aug 94 16:05:26 PDT
To: cypherpunks@toad.com
Subject: Re: Egalitarianism vs. Strong Cryptography
In-Reply-To: <9408032148.AA13199@snark.imsi.com>
Message-ID: <199408032305.QAA18526@netcom15.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain


Perry E. Metzger <perry@imsi.com> writes:

 > Not that I wanted to get in to this, but Mike was begging
 > for it.

 > If I told you that I could save you tens of thousands of
 > dollars a year just by using some simple to use software,
 > would you do it? Well, if you had some simple to use
 > software system that allowed you to escape from the above
 > ground economy, you could personally save tens of thousands
 > a year.

I am not convinced such software exists, that most major
businesses would offer to interface with it, or that it would of
necessity be "simple" or "easy to use".  Once standards are
created for commerce over the Net and the collection of the VAT,
you are pretty much locked into using them if you wish to do
business with any vendor of significant size.

 > What makes you think the VAT will be small?

Bear in mind we are talking about a Utopian society of the future
with a downsized government.  Trying to support the current level
of wasteful government spending from a VAT would send people
fleeing for the borders.

 > What makes you think it will be inconvenient? I know of two
 > pizza places in Manhattan where they very likely don't pay
 > taxes and where you can also buy drugs.

I know of some places on the Internet where I can chat with
people using a version of Unix talk which encrypts.  But if I
want to talk to some random person, I am probably stuck with
using the default version which does not.  I have little hope of
convincing people to make the encrypted one a standard, in spite
of the fact that all they would have to do is spend a few minutes
to FTP it.

Encrypting everytime I use "talk" is therefore somewhat
inconvenient.  A complete escape from the above-ground economy in
a society heavily dependent on electronic transactions would be
even more so.  Again, you are free to try, but most people
probably won't bother.

 > The underground economy in the U.S. is huge -- enormous, in
 > fact. Most of us interact with it every day without even
 > realizing it. As a small example, the clothing manufacture
 > industry in New York survives on illegal factories running
 > almost entirely underground. Ever tip a waiter in cash? Ever
 > pay for a haircut in cash? Ever make a purchase from a Mom &
 > Pop grocery in cash?

The size of the underground economy is largely a function of the
repressive and outrageous monetary and tax system we have in this
country. When families can barely make ends meet with all the
adults working multiple full-time jobs, there is an enormous
incentive to shave costs.

In a society where taxes were managable, and put to a use all
citizens felt was worthy, such forces would be much less and
there would be enormous peer pressure on individual citizens to
do their fair share.  Kind of like the days when income tax was
two percent and functioned on the honor system.

Just decriminalizing drug use and the sex industry would get rid
of a very large chunk of the underground economy.

 > Tim will likely pay his broker to churn his account in
 > Switzerland and do just as well. He'll have a credit card
 > from a bank in the Bahamas. He'll probably do just fine
 > watching HBO and Showtime, too.

The majority of US citizens who use local financial services and
get their cable TV through a wire from the street will generate
all the revenue we need.  We could even give Tim a guaranteed
annual income.

-- 
     Mike Duvos         $    PGP 2.6 Public Key available     $
     mpd@netcom.com     $    via Finger.                      $