From: mpd@netcom.com (Mike Duvos)
Date: Wed, 3 Aug 94 13:56:00 PDT
To: cypherpunks@toad.com
Subject: Re: Egalitarianism vs. Strong Cryptography
In-Reply-To: <199408031702.KAA29908@netcom3.netcom.com>
Message-ID: <199408032055.NAA15886@netcom6.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain


Timothy C. May writes:

 > (Good sentiments about small government elided....)

Thank-you.

 >> Taxation should be small, uniform, and applied to
 >> transactions and never to the earnings of individuals. ... A
 >> VAT would do the trick nicely and could be easily built into
 >> the DigiCash system of the future.

 > Not the untraceable cash systems most of us are interested
 > in, that's for sure. Since transactions between "Alice" and
 > "Bob" are invisible to outsiders, and they may not even know
 > the identity of the other, then it's hard to imagine how the
 > Tax Man interjects himself.

The theoretical possibility of untraceable cash systems and the
absence of legal sanctions against those who use them do not
imply that such systems will become the standard in the future.
Even in the obnoxious political climate which prevails in this
country today, strong crypto is in the hands of only a few
percent of the citizens.  In a society with a "user-friendly"
government, most people wouldn't even be interested.

If given a choice between ordering a pizza by clicking ones air
mouse while tuned to the Pizza Channel, and ordering one via
Tim's Strong Crypto Pizza Service in order to avoid a small VAT,
most people will choose the easy way.

A good analogy to this in our current society is the enforcement
of copyright laws.  Most people buy paperback books instead of
xeroxing them because they are reasonably priced and it isn't
worth the aggrevation.  If paperback books cost $100, this would
no longer be the case.  Most people buy computer software priced
under $100 instead of copying it from a friend because they get a
nice set of bound printed manuals.

Network shopping services which use strong crypto and
non-standard DigiCash protocols to avoid a painless VAT will have
poor propagation, limited access, negative PR, and few customers.
It's like trying to set up your machine on the Internet without
using TCP/IP.  Few people will take the trouble to talk to you
and you won't be able to talk to anyone else. Sure you could do
it, but why bother?

 > Unless of course some "escrow" system is mandated, and
 > independent schemes are extirpated ruthlessly. Not a pretty
 > sight.

Neither of these things will be necessary to get the majority of
the population to use the default means of doing things.  You
greatly underestimate the power of human sloth.

 > In the crypto anarchist future I envision, this will never
 > happen. Mike and his friends are of course free to donate
 > some or all of their earnings to provide a "guaranteed
 > annual income" for others, but not me.

Again Tim and his friends are free to conduct all their
transactions via unbreakable protocols of their own construction,
avoid all taxes, and do business only with others who cooperate.
As long as the percentage of similarly minded individuals is
appropriately small, it has no real effect on society and
probably costs a lot less than an enforcement agency would.

Of course Tim won't be watching HBO or Showtime, shopping with a
major credit card, or helping his broker churn his account at
Smith-Barney.  Not my problem.

You are never going to get the majority of people in this country
to agree to design the default protocols for commerce on the Net
with the specific intent of making it possible for people to
avoid taxes using strong cryptography.  You'd have more luck
persuading them to tear up their health insurance or burn down
their houses.

 > Huh? This paragraph does not compute.

I seem to have accidently deleted a word somewhere.  Oh well.

 >> Thus strong crypto, egalitarianism, less government, and
 >> tolerable taxes can all live happily together in our future.

 >In your dreams.

Many good ideas have started with dreams.  Benzene rings, for
instance.

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