From: Jim Choate <ravage@EINSTEIN.ssz.com>
Date: Fri, 23 Oct 1998 21:59:52 +0800
To: cypherpunks@EINSTEIN.ssz.com (Cypherpunks Distributed Remailer)
Subject: Re: dbts: The Economic Cause of Privacy (fwd)
Message-ID: <199810231328.IAA11609@einstein.ssz.com>
MIME-Version: 1.0
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Forwarded message:

> Date: Thu, 22 Oct 1998 14:25:16 +0200
> From: Anonymous <nobody@replay.com>
> From: bman@barn.pct
> Subject: Re: dbts: The Economic Cause of Privacy

> There is no financial privacy because because those who would like such thing
> have less power (hired guns) than those who would not like it.

That is certainly a valid way of looking at the situation after the laws are
enacted. However, the situation leading up to the laws being created
probably didn't involve (c)overt violent implications. I would posit that we
have no financial privacy is because prior to now (pre-ubiquitous computers)
there was a significant cost in compiling the information because copies had
to be made, people involved, etc. This is all going away.

The base infrastructure changed radicaly and this is bound to effect those
aspects that rely (recognized or not) on specific characteristics (eg cost
to retrieve a single page) will see their 'balance of power' change.

> be lost, and population harvesting (aka taxing) would have to be radically
> changed, and that is expensive. The system is self-supporting.

One potential view of this situation is that the tax burden in a
post-computer economy is significantly different than in a pre-computer
economy. In particular examine the primary source of taxes. Individuals look
to become very ephemeral entities in the near term increasing the costs to
the regulators (local, county, state, federal, special) to monitor
compliance. What is needed is a long-lived, well know contact point between
the source of funds wishing to be taxed and the sink of those same funds.
The most obvious is the business or entity sourcing funds. Because of
regulatory issues such organizations need plenty of documentation in order
to do business. Business has as one of its principle goals long-term profit
(excluding short-term business only for convenience and brevity) which
implies long-term existance. In a computer managed economy the primary tax
point should be the retailer or VAR passed along to the consumer via
increased prices (compensated for by increased paychecks). This also has the
potential for eliminating (or at least reducing significantly) the amount of
registration and forms that need to be done. Such issues could be taken care
of at the time of transaction and anonymously. This could also be used to
impliment a flat tax system that automaticaly takes care of those who are poor.
Exempt basic housing, food and clothing items much like now. Since the poorer
members of society don't buy things like CD's and new jackets each year they
aren't burdened by those tax responsibilties.

> Idea that somehow smart algorithms will bring financial privacy is a good starting
> point for cryptoaddict's wet dream, but in reality has the same chance of
> success as survival rate of armed citizens against the government. Zero.

Hm, I thought that's how this country was formed 200+ years ago...

Actualy people will bring financial privacy via smart algorithms (perhaps).
This will occur when there is either a compeling reason to do it or there is
simply no other way to reach the next platue of technology/civil gestalt.

> Use of government-controlled, issued and supervised payment methods/instruments
> is in place because it is proscribed, not because "money/checks, etc. exist".

True, history traces money back to the dawn of human history when the
concept of government is not really applicable (though despot might be). The
groups were simply too small and non-interactive with other groups to really
class them as a full blown economy. As those groups grew and increased their
interactivity the need for regulating the economy became clearer and
clearer. Those who took on the job obviously wanted something for their
labors so taxes were born. As time went on the roll of taxes increased to
include civil support.

> Money is a highly artificial entity in the first place. It is "natural" to
> use currency-binded valuation as it is natural to go to church. And theorizing
> on money and economy in general has similarities to religious rituals.

Without getting into what natural means (I can't take another theism
discussion right now); there must be something 'natural' or universal about
money since widely seperate and uncommunicative societies have invented the
concept when other as simple technologies didn't translate (compare the 
Egyptian and Aztec use of the wheel - the Aztecs didn't though they knew of
it by using it on toys).

> Therefore constructing computer-assisted anon payment schemes "because it is
> cheaper that way" is pointless.

Not if one of your goals is to decrease cost. This won't suffice for the
sole motivation however. So at least to some degree we agree.

> Money is not there to make your life easier.
> Money exists so that you can be taxed and conditioned to desired behaviour at
> minimal cost.

I'll have to disagree. Money exists to ease the transfer of goods across
geographic and social boundaries, it's a level of abstraction above straight
barter. Taxation is a mechanism for those geographic an social boundaries to
continue to exist while hopefuly providing useful services.

> The only way for society (or loosely coupled individuals) to function without
> abstractions like money (that need organized gun power to maintain) is direct
> exchange of goods and services with enforcement based on close relationships
> between parties. Has been tried, several thousand years ago, and such societies
> were annihilated by others who did organize. Which seems to be the fate of any
> anarchism in general.

These sorts of societal arrangements historicaly don't support the thesis of
anarchism being the root cause of the failure. As a matter of fact,
historicaly there is no example (not even the Icelandic Anarchists traded
with the mainland to a great degree) of a interacting set of societies that
supported an economy involving a anarchy that I am aware of. There are
plenty of examples where (near) anarchist societies have destroyed economies
and socieities.

The primary problem is one of wastage. In a barter economy the amount of
value implicit in every exchange varies greatly. If you trade a chicken for
a duck from one customer and a pig from another, does that mean they should
trade a duck for a pig between themselves? Since the pig farmer doesn't want
a duck since he bought a chicken from me how does the duck vendor entice the
pig owner into buying his duck (especialy when he needs the pig to feed his
family as this is his last duck and pigs are bigger than ducks). Then there
is the issue of geography and how a duck is worth less in the middle of
duck-raising land than in the middle of no-ducks-to-be-seen land.

Money stabalizes the swings in the individual transactions and causes the
economic system as a whole to be more stable and predictable. Perhaps what
we really need to be looking for is a economic model that is dynamic but
predictable to a very great degree. Though I must admit that looks
suspicously like some sort of communism/socialism 'share everything equaly'
style of governments. Though, if you could seperate the monetary aspects of
a government from the legal/social side it could work. Probably at least one
of the seperate-but-equal aspects of a polycratic model;

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