When local government meets high tech sovereigns

Sometimes I think city government is sleeping at the wheel when it comes to technology and capital flows. During its lucid moments, government will fall back on its 1960s playbook of economic development by announcing plans to bring back manufacturing jobs that pay better wages than the service sector jobs that replaced factory work and eviscerated wages. This narrative may have worked in a locality that was created to take advantage of proximity to a local natural resource where factories could then convert the resources into goods for local and other markets, but for a city like a 21st century Atlanta, that narrative is disingenuous.

Atlanta’s “natural resource” today is information. Workers who know how to find, extract, organize, and distribute information are going to be the one’s who obtain employment and the higher wages that come along with work in the information sector. This demand for an information-centric political economy, I believe, is being driven by the changing tastes of capital. Capital wants its goods and services delivered conveniently and its production customized.

Information technology allows capital to target funds directly to high-value driven information entrepreneurs that can deliver a product that was designed, manufactured, packaged in, and delivered from multiple jurisdictions. Capital has no love for mass appeal. Why deal with crowded banks, malls, car dealerships, or grocery stores when extra minutes of leisure can be carved out by the manufacturing and service delivery efficiencies provided by Tesla, Uber, Grubhub, and Insta-cart.

Along with these efficiencies in product manufacturing and delivery come smaller work forces or work forces outside of the jurisdiction of local governments. Local governments have been the front line defense of investor capital from disgruntled labor. They regulate labor union speech during strikes. Where there is violence they arrest the rowdy. However, in an information age where there are a greater number of tech shops employing smaller numbers of non-unionized information workers versus a handful of large factories employing thousands of unionized lower-skilled workers, there is less demand for the police powers of local government. Disgruntled employees at today’s tech shops simply take their information knowledge somewhere else or create their own firm.

Eventually government starts tossing and turning in its sleep. It sees its “labor clamp down” requests severely diminished. Higher incomes start translating into reduced need for government services from garbage removal to security. Higher income earning citizens may consider pooling resources to support campaigns of candidates who agree to reducing tax burdens are, too the extreme, support carving out or “leasing sovereignty” to higher income communities.

Question is, how will those with no capital react to the erection of this wall of individual sovereignty?

The Earth is a frickin’ pancake and space is disease and death wrapped in darkness and silence, damn it.

The Earth is a flat, round, spinning pancake with the continents centered in the middle. Many argue that there is evidence that the Earth is round and that flat Earth theorists are wrong in their assessment. Since I am taking no sides in the debate, I will make these observations and move on from the subject.

First, for those vociferously arguing that the Earth is “round”, you should excuse yourself from the argument immediately. None of the broad categories of scientists you cite argue that the Earth is round, implying it to be a circle.

The Earth is more of an oblate sphere. If you keep arguing that it is round, then you open up yourself to an easy rebuttal by flat Earthers, one that would have them concede that the Earth, as I described earlier, is a flat, round, spinning pancake.

So, in short, shut the fuck up, because if you are going to accuse Flat Earth theorists of not understanding science, you are simply a kettle calling another black because you haven’t addressed a primary question of definition.

This leads to the second and most important point. Ninety-nine percent of those arguing that the Earth is round have no direct evidence of the Earth’s shape. They make the crucial error of relying on the value judgments of scientists that, for the most part, have only mathematical proofs supporting their arguments. The value judgments that spawned their arguments have never been directly challenged by you. You simply accept them because they speak a near incomprehensible language to describe an apparently complex subject and they have dazzled you with a long list of alphabet soup following their names.

Humans, especially Westerners who are significantly detached from nature, have not equipped themselves with the tools of analysis where they can draw their own conclusions. Most, especially within the atheist community, rely on the mathematical scriptures written by the high priests in the Church of Science. They are just as bad as your run-of-the-mill religious schlemiel.

The takeaway: stay in your fucking lane. Stop criticizing other people’s arguments unless you are thoroughly equipped with and appreciate the proper use of the tools of individual analysis. This includes each individual’s ability to see, smell, touch, hear…to perceive. You should be able to extract, study, organize, and package information for yourself and only pay an expert when you simply don’t have the time to do so. Most of you can cook but because of time constraints, you eat out. That still doesn’t excuse you from putting together the basics of a meal, including the use of appliances, utensils, and ingredients.

Learn to measure and understand what is right in front of you, and then you can expand.

Happy anniversary, World Wide Web. Now, let’s go back to 1988

On 12 March 1989, Tim Berners-Lee publishes a proposal to link hypertext with transmission control protocol, the basis for the world wide web. On 6 August 1991, he launches the first web page. Prior to his proposal, the internet was pretty much a niche hideout for academics and military researchers. Berners-Lee’s proposal helped introduce ‘democracy’ to the original dark web of interconnected computers.

Democratizing digital information via open network architectures unleashed the digital demons that Mr Berners-Lee would like to see regulated today. We went from a relatively simpler system where Dr James Haywood Rolling Jr could send Dr Marshall Shepherd samples of research that could add artistic flavor to the otherwise drab depiction of weather patterns, to the current system where an 18-year old dressed in psychedelic garb can do the booty clap in front of a smartphone and send the images live from Accra. Using this information, the Digital Daemons, i.e. #Facebook#Google, and #Twitter, can create profiles based on every ‘like’ the booty clapper receives and market services and products to consumers.

Closer inspection of the history of the world wide web and Mr Berners-Lee’s criticism of today’s social media/social network companies exposes a downside of the premise that the Digital Daemons are negatively impacting global connectivity via the internet. Mr Berners-Lee is concerned that the one-half of the planet currently not connected to the internet may be at a disadvantage culturally and economically and that connecting to the Flying Spaghetti Monster that is the world wide web may be the developing world’s salvation.

Ironically, it is that arrogant premise that the world needs to be connected to a single standard that drove European colonial expansion across the globe and spawned a global financial system anchored by the Bank of International Settlements, the World Bank, and the International Monetary Fund to replace the colonizer when Europe entered its post-World War II decline. Whether he realizes it or not, Mr Berners-Lee’s liberal position on digital connectivity is steeped in the European DNA for conquest.

If Mr Berners-Lee and other progressives are so bloody concerned about the negative impact the Digital Daemons are having on access to and distribution of information, they should push for an internet that existed pre-1989 where communities of value-based information exchangers created their own databases, and protocols and criteria for membership in these groups. Ironically, under that type of scenario, application of net neutrality rules based on Title II of the Communications Act would be valid because the administrators and owners of the databases could more easily be defined as consumers of telecommunications in some type of corporate form.

Sometimes you have to go back to your past to find a solution to a current dilemma. Happy Anniversary, World Wide Web.

The Russian attack on democracy was ineffective because they don’t understand democracy.

American democracy is about the creation of a political marketplace where the taxpayer receives certain protective services in exchange for her vote. These services include police services, fire services, transportation services, commercial trade platforms, cultural services, legal and regulatory frameworks, and education services, to name a few. They are delivered by local, state, and federal governments and their costs are recovered by government in the form of property, sales, and income taxes and other fees.

Politicians squabble before, during, and after the election season on how best these services should be delivered, how much the government should pay to deliver them, and how much of the bill the taxpayer should foot for the government’s efforts. Classical liberal, progressive, and conservative philosophies collide during these debates and the clash of perspective is most apparent during election season when more people are paying attention. To secure the majority of voter approval for position and philosophy, politicians engage in the blood sport of electioneering, a blood sport that includes embellishments, character assassinations, and a lot of misinformation.

Reports abound of how a Russian firm, the Internet Research Agency, entered the political fray between 2014 and 2016 and used social media posts, tweets, and blogs to upset the elections. Their activity during an election year would have been business as usual were it not for their status as foreign agents conducting these activities. Whether or not they upset the political markets with their activity will be hard to determine.

For example, will investigators be able to say that the cost of the exchange of the vote for services increased due to Russian interference? I see no data that describes politicians seeking higher taxes for government spending as a result of any information provided by Russian trolls.

Did any information introduced into the political markets by the Internet Research Agency cause voters to leave the market? I have heard one argument that black voter participation fell because of Russian disinformation about Hillary Clinton. Hillary Clinton has drawn the ire of some blacks as a result of her description of black teenagers as “predators” and her Clinton Foundation taking financial advantage of earthquake relief efforts in Haiti. It is questionable whether any additional misinformation by the Russians could have created any further negative view of Mrs Clinton by blacks. She may have done enough on her own.

American democracy bases societal cohesion on the vote, the ability of the masses to elect its leaders. Leaders promise, as I laid out before, protective services. But what would happen to the democratically-based cohesion if the dependence of Americans on protective services were drastically reduced or eliminated? What if more Americans had 3-D printers and could manufacture their own tools or furniture? What if more Americans grew their own vegetables in their own apartments? What if more Americans were able to take advantage of devices that use unlicensed spectrum in order to form their own local communications networks and reduce their communications expenses? What if more Americans used solar or wind to energize their homes? What if engineers could design apartment buildings such that each unit could take advantage of solar energy?

A true attack on American democracy would be a demonstration of how to live independent of the political elites that thrive on the electorate’s unwillingness to be or ignorance of independence. Whether a democracy or an authoritarian regime, nation-states are about centralizing power. When they attack each other, destroying the core is all that is needed for the knockout punch. Given the Russian Federation’s history of allowing true freedom, an attack on democracy based on independent sovereignty would be thinking way outside the box.

No, American democracy was never really attacked by the Russians. It simply got poked by a player who didn’t have the legal credentials to enter the ring.

 

Will Congress regulate.@facebook like a public utility? Given its potential benefit to partisan politics, probably not. #socialmedia

The Wall Street Journal’s Holman Jenkins, Jr. posted an article last Friday about Facebook’s apparent maturity as a business given its focus on regulatory issues such as the potential of Congress to regulate the social media company like a public utility. Mr Jenkins points out that Facebook’s fear of regulation, a fear shared by other “tech” companies, comes from the attention that large companies draw to themselves as the result of centralization of power. In this case, Facebook is perceived as one of the few central nodes of power in the digital space (along with fellow FANGs; Amazon, Netflix, and Google). Issue is, does Facebook have a monopoly status that justifies “public utility” regulation. My answer is no.

The classic argument for regulating a firm as a public utility is that the public has an interest in benefiting from the use of the public’s rights-of-way including the efficiencies that flow from making such uses exclusive to one firm in a given territory. Electric and water utilities quickly come to mind when we discuss public utilities and rights-of-way. Would you rather see your streets and driveways dug up to provide multiple pipes from multiple water or electricity suppliers or would you rather one supplier who is forced to comply with a pricing model that creates a competitive price and rate of return on the assets used by the utility to produce a good? For the most part, society has settled for the latter. We don’t like the idea of having an excess number of utility lines running overhead or into our residences for aesthetic or safety reasons.

Does Facebook fall into this public utility model? No, it does not. According to Facebook, the company makes almost all of its revenue from the sale of advertisement. Facebook uses its algorithms to identify potential viewers of content or purchasers of services for its advertisers and display ads these ads to content viewers and services purchasers in exchange for an advertising fee. Ad services, including the delivery of advertisements to consumers, by Facebook’s admission is a competitive business. Unlike electricity transmission and distribution, ad delivery is not a monopolized industry. As Mr Jenkins points out in his piece, ads are ads, digital or otherwise, and Facebook is no where near dominating a $540 billion advertising industry.

Even if Facebook had a monopoly on the delivery of advertisements or advertisement services, would a regulator risk creating a state action by regulating Facebook’s advertising services? Bearing in mind that the latest buzz around Facebook ads was spawned by the delivery of advertisement messaging produced by Russian nationals allegedly designed to disrupt and defraud the American electorate, would Congress require that Facebook vet the firm generating advertisement content? Would Congress risk the overturn of legislation requiring Facebook vet advertisers if found violating the First Amendment?

I think that even advertisers confident that their messaging does not violate the public interest would think twice about placing advertisements on Facebook’s platform. More important, from the perspective of the regulator, an administrative agency would not to create the risk of creating First Amendment violations and having to defend those violations in court. As the U.S. Supreme Court held in Edenfield v. Fane:

“The commercial market place, like other spheres of our social and cultural life, provides a forum where ideas and information flourish. Some of the ideas and information are vital, some of slight worth. But the general rule is that the speaker and the audience, not the government, assess the value of the information presented. Thus, even a communication that does no more than propose a commercial transaction is entitled to the coverage of the First Amendment.” 113 S.Ct. 1792, 1798 (1993)

Finally, political parties may not want to impede the returns to electioneering that social media has been providing for the past decade. According to the Brookings Institution, since the 2008 national elections, political parties have been determining how best to convert the amplification and engagement created by social media during a campaign season into two-year and four-year governance.  Political parties have been encouraged to use social media in a number of ways including the following:

  • Acknowledging that the electorate is using social media as a “trust filter” of political news and information;
  • Realizing that politicians have decreasing control over debate topics and that control is shifting to social networks;
  • Making continued use of social media platforms to directly engage constituents;
  • Using social media platforms as “virtual surveys” of constituent sentiment and gauging feedback from the surveys; and
  • Leveraging ordinary citizens’ use of social media to persuade the electorate.

It is 2018 and Congress should view social media that has greater benefits as an electioneering tool if it is not regulated. From a regulatory perspective, there is no economic or legal justification for regulating social media as a public utility.

When the #internet was just for #academics….#broadband

Democrats are wary of Facebook, Google, and Twitter. Hillary Clinton’s loss in the November 2016 elections allegedly compounded by a misinformation game played by the Russians via social media has the Democrats in Congress asking themselves if a little more transparency i.e. regulation of social media practices is necessary in order to prevent any more shenanigans from Russia.

In the net neutrality debates, Democrats and grass roots progressives have taken the position that due to their gatekeeper position, internet access providers such as AT&T, Comcast, and Verizon are in a position to negatively impact the innovative internet portal and social media services that Facebook and Google provide. Democrats argue that we don’t want to discourage the creation of the next Facebook by allowing Comcast to throttle speeds from potential upstarts or block a consumer’s access to the new Twitter. Now these members of Congress appear a bit wary of the cat that they have been snuggling up to; being scraped by the FANGs (Facebook, Amazon, Netflix, Google) is not fun.

What I find ironic is that these congressmen were no where to be found as the FANGs were busy building a business model on acquiring consumer data from the droppings that consumers leave all over the internet. This data collection didn’t impact the politicians, who thrive on political intelligence so having a master information collector or two on their donor page didn’t hurt. It wasn’t until the FANGs messed with the source of a politician’s livelihood i.e. the vote, that the FANGs fell under deeper scrutiny.

It is up to the individual to choose whether to use FANG services. I have little to no use for Facebook myself. Amazon, Google, and Netflix deliver pretty much what they promise: logistics and content. What’s amusing is that highly educated, professionals in the Congress have yet to figure out the business model that social media relies on for its survival.

I think it is best that the internet go back to what it was meant to be: a way to connect information seekers with data. The irony is that internet service providers have been providing their networks as a part of the larger data transmission scheme for over two decades but seem to be catching the most heat from congressmen that support the companies providing the most abuse.

When Bitcoin becomes a transmitter of valuable information

Bitcoin is not for speculation. Bitcoin is about the transmission and exchange of valuable information attached to a digital currency that measures the value of the information. The volatility we are seeing in the market for Bitcoin is based on the fear of missing out on a pop in value.

I think in the near future what will eventually drive the value of Bitcoin is the underlying value of the information that the individual sovereign either possesses or can produce. It is likely that person A holding Bitcoin may look at person B who allegedly has some information, x, and determine that the person B’s information or ability to generate useful information has no value. Think of someone in London approached by someone from Somalia who wishes to trade in Somalian currency. The Londoner wouldn’t touch it.

You may argue that scenario already occurs in the real world, that trader A is not required to transact with trader B. In a centralized world, trader B would bring a discrimination grievance against trader A for refusing to trade. In a decentralized, voluntaryist cyber world, no matter how much cryptocurrency you hold, the value of your true currency, the information that you possess or can produce, will determine your digital currency’s value.

As for the speculators, the error they make is using valuation methods created in a centralized, coercive political economy to assess the value of a currency designed for a decentralized cyber society. A speculators are enjoying the upside of Bitcoin’s market appreciation, but as the currency becomes more expensive and reaches its 21 million digital currency cap, will these speculators be able to purchase any more of the currency? Or, will they be able to ride out the inflationary characteristic the coin takes on should it become a matter of two few Bitcoin chasing too many goods? Will lower income individuals who may have made their first purchases with their credit cards be able to recover the dollar value of the coin in order to pay off increasing interest rates?

Not to mention the competing currencies that will eventually knock off Bitcoin from its perch. As technology improves such that “information rich” individuals create their own cryptocurrency, individual sovereignty will be complete. Just like western nations trade with each other based primarily on similar values and culture, the information rich will do the same. As the value of their currency increases so to will the demand from vendors who will likely prefer hold in reserve the currency of the information rich versus the “information poor.”

I believe that the information poor or “information losers” who were lucky to get a few pieces of a coin in the early days will not be able to participate on either side of a cyber trade in the future. Their focus should be on building their information gathering tools versus pursuing a quick fix, get rich path.

Cyber space will remain decentralized by the silos created by the information rich will prove daunting for the information poor.