From: Duncan Frissell <frissell@panix.com>
Date: Thu, 29 Feb 1996 06:52:35 +0800
To: cypherpunks@toad.com
Subject: "Physical Reality II"
Message-ID: <2.2.32.19960228213546.00682c64@panix.com>
MIME-Version: 1.0
Content-Type: text/plain



Bad Boys, Bad Boys
Whatcha gonna do? 
Whatcha gonna do when they come for you? 
Bad Boys, Bad Boys

repeat endlessly.

We did 1) & 2) yesterday.  Here are some more points.

3)  There must be a reason for them to come "for you".  They need motivation.

As people go through their ordinary day-to-day lives, they do a lot of
things that weaken government control mechanisms without directly
confronting them.  The whole development of modern capitalism, the modern
finance markets, and the modern telecoms environment are examples of the
wild flowers of individual power growing up in the garden of the state
economy.  

Note that governments used to control wages, prices, interest rates, and
capital flows.  In the US, we had Regulation Q which capped the interest
rates banks and S&Ls could pay.  Ownership of gold by Americans was banned.
Most European countries had strict exchange controls as did most of the 3rd
world.  Computers which made money market mutual funds possible and
telecommunications which made rapid funds transfer possible ended most of
these controls without any violent confrontations.  If you are borrowing
"overnight funds" from Tokyo, it's a little difficult to seize them because
they disappear at midnight.  If a restriction is easy to bypass, it tends to
die.  Controls on capital flows have died because the holders of capital
don't have to pay attention to those controls.

The first phase of the electronic revolution freed the large financial
institutions that could afford to play the international funds transfer
game.  Retail electronic funds transfer will free everybody else.

Now this liberation of money may not seem to mean much but if money is free,
it results in other freedoms.  It is hard to control people who have control
of their own funds.  They can just move on you.

Obviously, the ease of creating artificial entities and the use of some of
the privacy protecting tools pioneered by cypherpunks can play a role in
hiding out from the Bad Boys as well.  Everything that makes a target harder
to find reduces the number of hits.  Louis Freeh complained during the great
net kiddie porn bust of 1995 that some of the perps had encrypted their
files and this made them harder to prosecute.

In general, the sheer growth of business and communications makes it much
harder to identify investigatory targets.  As markets, networks, and
communications double and then double again, the Bad Boys have too much
territory to search.  They get spread too thin. 

<More Tomorrow> 

DCF