I don’t see a knowledge economy. I see a knowledge industry.

The term “knowledge economy” gets thrown around a lot. When you combine the term with other terms such as “artificial intelligence” and “machine learning”, you can be left with the impression that unless you have an engineering degree or know how to code, then you will be left to wonder the streets of dystopia, meandering through blithe in search of value or meaning. The knowledge economy, based on how it is presented, sounds like a place carved out for the information elite. I don’t take the dreaded scenario seriously because the knowledge economy does not exist. This acknowledgment is important because embracing this position provides a platform for creating social policy that effectively distributes knowledge as what it is: a capital input.

The United States has gone from an agrarian economy to an industrial economy to a services economy. The labels imply that for some type of output, crops, that there are rules for the extraction, packaging, and distribution of capital necessary for producing an end product, food, and for packaging and distributing to its final destination, the end-user. Once it is consumed, it is either gone immediately or depreciating to zero value over some period of time. There is some range of exclusivity involved in its consumption. We cannot say that for knowledge.

Knowledge results from a combination of information and experience. It is about “knowing how” to do something. It is an awareness of a process behind creating some result. While the “know how” could be protected by the laws of intellectual property, acquiring information, “the noise” and human experience garnered from deciphering through the noise to find a valuable nugget of information, cannot be constrained. The rules of economy are designed to bring society closer to some certainty over how resources will be extracted and distributed, but the open environment around knowledge makes strict rules useless.

Public policy can craft rules that make packaged knowledge exclusive to the creator and owner i.e, copyrights for artistic work or patents protecting applied scientific processes, but there are different paths to creating knowledge resulting sometimes in creating similar but not same packages. Knowledge protection is limited.

For this reason, knowledge can be built upon, expand. There is really no final consumption. Knowledge is reused, modified, improved over time. Rules of economics are not as applicable as they were in agrarian or industrial society.

Knowledge is more input than it is final product. This is why, to me, the term “knowledge economy” is weak. Knowledge has been an input during each of America’s economic phases. America’s increased reliance on information and communications technology over the past fifty years doesn’t mean that “knowledge” gets to claim its own economy.

Markets can be made for knowledge. A consultant takes her insights, advice, and publications into the knowledge market where she hopes she receives an offer that compensates her for the time spent creating the knowledge product and/or presenting the knowledge product.

As for the consumer of the knowledge product, he is taking a gamble that any action plan, output or final product generated by the knowledge creates positive value or profit. The more information the consultant and the purchaser have on the forecasted value of returns on the knowledge, the more accurate the market price for the knowledge.

If anything, we may be in a “learning economy” where consumers are also becoming producers either of their own content or more durable products. The knowledge industry is one of its platforms where knowledge as input is bought and sold.

Opt-in, Opt-out policy appropriate for addressing online privacy

In May 2017, U.S. Representative Marsha Blackburn introduced H.R.2520, the Browser Act, a bill designed to provide consumers with some control over the use of their personal information. Specifically, consumers that use broadband access services or websites or applications providing subscription, purchase, account, or search engine services are provided, depending on the sensitivity of personal information, the choice to opt-in or opt-out of policies used by these services to manage consumer information.

For sensitive information, opt-in approval must be expressly granted by the consumer. Sensitive information includes:

  • financial information;
  • health information;
  • information about children under the age of thirteen;
  • social security numbers information;
  • information regarding a consumer’s geo-location;
  • web browsing information: or
  • information on the history of usage of software programs or mobile applications.

Consumers must be provided the opportunity to give opt-out approval for non-sensitive information.

Mrs Blackburn’s intent with the legislation is to equalize broadband access providers and edge content providers under the eyes of the Federal Trade Commission, the federal agency responsible for consumer protection and anti-trust law enforcement. In my opinion, this is not a far off from former Federal Communications Commission chairman Tom Wheeler’s goal of openness and transparency throughout the entire internet ecosystem; from consumer to broadband access provider to websites provided by edge providers.

What Mrs Blackburn’s bill also does is address information asymmetries, where edge content providers are viewed as having more knowledge on the value of consumer information that they extract from websites than the consumer does herself. The consumer cannot answer the question, “Is the value of the information I receive from online, x, greater than the value of the information that I give up, p, where that information is private?

It is not readily apparent whether H.R.2520 was also designed to save the consumer from asking this question: ” Why should I pay for an economic good i.e. privacy that isn’t Google’s to sell in the first place?”

Professor Caleb S. Fuller of Grove City College describes privacy as an economic good, something that the consumer wants more of. Most consumers are not willing to pay to protect this good, even though they know that firms like Google are collecting this information for free. For example, according to Professor Fuller’s research, 90% of Google’s users know that their “mouse droppings” are being tracked.While 29% of Google’s users don’t mind being tracked, 71% do. Their reasoning, according to Professor Fuller includes the fear of price discrimination based on their information; the receipt of spam advertising; the risk of identity theft; and the “dis-utility in just not knowing who knows what.”

One equitable solution, in my opinion, would be for Google and other edge providers to pay their subscribers to provide private data. Google could provide an offering schedule based on the sensitivity of the information it wishes to purchase. Consumers would have to consider the value of the privacy they give up in exchange for the value obtained from accessing web content. I wouldn’t expect every consumer to sell their data. Google will wisely set limits on its offers and a significant portion of consumers unable to get a price they want will settle for the old private data for access exchange that they have been conducting for two decades.

The opt-in, opt-out policy mitigates the work that the consumer should put in to determine the value of her data, but gives her the final say over how her private data can be used. Unfortunately this is also the down side where the market won’t be used to truly determine the real value that can be sold.

Trump uses broadband to shore up and keep his rural base

During a speech in Nashville, Tennessee, President Donald Trump announced that he had signed an executive order designed to increase broadband access to 23 million underserved residents of rural America. The initiative involves recommitting to prior attempts to use federal facilities as sites for commercial wireless broadband facilities. Streamlining siting policy for broadband infrastructure by using federal property is seen as a way to “reduce barriers to capital investment, remove obstacles to broadband services, and more efficiently employ government resources.”

Mr Trump’s announcement was made at the American Farm Bureau Federation’s annual convention just prior to the President heading further south to attend the national football championship game in the undisputed capital of the south, Atlanta. The southern flavor of the event is further flavored by the two southern teams that are playing, the University of Georgia and the University of Alabama. In my view, the convention, announcement, and attendance at the game is a great kickoff for the 2018 midterms, where getting out Mr Trump’s base will be crucial not only for the elections this November, but for the 2020 elections as well.

This may be the first of many salvos during the 2018 campaign. The connectivity and inclusion of rural America has also been the concern of Ajit Pai, chairman of the Federal Communications Commission.  Mr Pai is from the Midwest and has placed closing the digital divide high on his priority list arguably being a close second in priority to overturning the Commission’s net neutrality rules, which were repealed last month. He fervently believes that high-speed broadband access to the internet can level the economic playing field for rural residents.

The connectivity issue goes beyond technology and economics. According to an article in The Washington Post, rural Americans feel deeply estranged from their fellow Americans that live in urban areas.  Almost seven out of ten Americans living in rural areas find their values out of sync with the values of big city dwellers. The federal government is perceived by rural America as favoring urban dwellers over them.

And it doesn’t appear that rural Americans want to connect with urban Americans, broadband connectivity or not. They appear satisfied by their own social fabric, comfortable in their culture, one that sees each of them looking out for the other.

Broadband connectivity may improve their ability to move goods to markets, but it may also further enhance internal rural bonds. And given Mr Trumps penchant for social media, especially Twitter, rural America will be able to maintain a connection with the only urban dweller that matters to them.

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.

What happens when the State abandons black Americans?

In their book, The Sovereign Individual: Mastering the Transition to the Information Age, James Dale Davidson and Lord William Rees-Mogg describe the demise of the welfare state with the political changes the information age will bring about. Those who can garner, manipulate, organize, distribute, and monetize information and use today’s digital technology to deploy this new capital from anywhere in the world will be able to achieve a level of individual sovereignty such that the protection services of the old nation-state will no longer be needed. The internet, cyberspace, will be their new jurisdiction, and with capital in the form of information, they will be able to carve out a minimized or tax-free environment in whatever physical jurisdiction they choose.

Information losers, according to Davidson and Rees-Mogg, won’t like this new world. This information-based economy will challenge their welfare state “employee” status. It is a welfare state employee status because in exchange for the “work” that they do at the polls i.e. their vote, information losers are awarded with transfer payments such as Medicaid, Medicare, food stamps, and low-income housing. As the hoarders of the new capital, information, choose lower tax jurisdictions, information losers are left holding the bag containing reduced benefits, the result of a lowered tax base.

The recent tax reform legislation passed by a GOP-led Congress and signed by President Donald Trump is a small indicator of the leverage the wealthy have, especially those who make their income as sole proprietors or partners in a business where they are now beneficiaries of a 20% reduction in the taxes they would normally pay on pass-through income. Congress and the President will now have to reduce or eliminate programs made infeasible by a $1.5 billion tax cut.

There is no guarantee that tax cut goody bags will be continually given out in the future. If the GOP loses both chambers of Congress in this year’s midterms, then Democrats will pursue a rewrite of the tax reform, or at least put on a good show effort.  I say a good show effort because the response by the wealthy will be, “Remember the two trillion dollars we have stashed overseas? How about we keep it there?”

Black Americans are not in the information age game even though blacks over-index on social media sites and, as a proportion of their population, own as many smartphones as whites and Latinos. Black Americans are under-indexed when it comes to employment in information technology. In an article for The Huffington Post, Jamal Simmons noted that black women may be able to scrape up $36,000 for a tech start-up, but white males scrape up on average $1.3 million in start-up funds.

And while blacks and Latinos continue to represent low single-digit proportions of actual STEM employees (technologists, mathematicians, engineers), there are plenty of black consumers of entertainment content on Facebook and Instagram. This content is low value. It differs from information which can be used as an input for production.

You may ask, “Don’t blacks have a right to consume entertainment?” My answer would be, “It’s not about rights to consumer content. It’s about channeling as much time and energy into mining and distributing information that creates knowledge that solves the deep well of problems in the black community.

Meanwhile, the State apparatus that blacks have disproportionately relied on for economic support and political protection is becoming bankrupt. Based on this recent tax reform, one would not sound too cynical in concluding that the GOP was in cahoots with the plot to blow it all up.  The information winners will not think twice about leaving information losers behind.

A person living in the internet shouldn’t have to pay taxes

Nyota Uhura is on a quest to digitize herself. She creates digital product on her laptop, transmits her finished product to her clients via the internet, and gets paid primarily in cryptocurrency. Every now and then she accepts fiat currency issued by a nation-state in part because as a mini-sovereign she likes to have a reserve currency for emergency use or in case a hole-in-the-wall restaurant on a south Florida beach doesn’t accept BitCoin.

She probably spends too much time socializing in cyberspace. Facebook and Instagram keep her in touch with her brothers and sisters in Congo or her cousins in Brooklyn. As a busy creative she sends out for food via Uber Eats and uses Uber or Lyft to get around.

She is not naive about the public safety protection that Atlanta markets to its residents. She has a home security service that she communicates with via broadband. She uses her laptop as a surveillance camera courtesy of her broadband access provider. She keeps a shotgun and feels confident in her self-defense skills. If she were a pilot, she would avoid Atlanta’s biggest amenity, Hartsfield-Jackson International Airport and opt for the smaller Charlie Brown airfield.

Why then, she asks, should she even pay taxes?

Her friends rebuttal is that she should contribute to the public services that she uses to get around; that she should pay for use of the streets and use of the police protection. On a national level, she should support Medicare and the national defense, and social security because these programs help provide security for her future.

And she should be ashamed of herself for not showing the ultimate allegiance to her government by avoiding the use of America’s fiat currency. Her failure to use it, they argue, only negatively impacts the nation’s economy by devaluing the dollar through shrunken demand.

Nyota expected the canned rebuttal from her friends and family. She responds, however, with a rebuttal they are not prepared for, one based on value. Being coerced by a false sense of duty and obligation to pay for sub-par protection services makes no sense to her. She hasn’t bought in on the police’s public relations campaign that they are there to protect the public and would like her taxes reduced by whatever the city assesses as her contribution. She has no enemies in Russia, North Korea, Syria, Afghanistan, Iraq, or Iran other than the enemies created by U.S. policy. Since she didn’t create these enemies, she would also like her taxes reduced by the amount of her contribution to these services.

Nyota pays a sales tax when she eats a cheat meal at McDonald’s. She also contributes to the transportation tax when she pays her Uber driver for a lift to the grocery store. She literally works in another jurisdiction, cyberspace, and because of this, Nyota believes she should not have to pay a federal income tax, especially to a government that provides low value protection services.

A strong legal and political argument will have to be crafted and promoted to bring about these changes, but at least Nyota is thinking about exit.

ISPs got there first. Let it go …

People and associations protesting against the Federal Communications Commission’s reversal of its network neutrality rules are really railing against the fact that current large broadband access providers entrenched themselves between the consumers of communications services and global networks in some before anyone else could. AT&T, Comcast, Charter, and Verizon used private capital and government charters and licenses to carve out territory within which they deployed the networks that connect consumers to that near invisible cloud of interconnected computers that we call the internet. I can’t hate on them for being first.

Net neutrality rules proponents want to dampen this advantage by preventing broadband access providers from blocking traffic from particular content providers; preventing broadband providers from slowing down the speed at which data flows from particular content providers; prohibiting content providers from entering agreements with broadband providers that allow a higher priority be placed on a particular content provider’s traffic; and making transparent to consumers the management practices of broadband providers including pricing, terms, and conditions of service.

The irony of these rules as proposed by allegedly freedom loving advocates is that they are designed to restrict how broadband access providers are to ascertain the value of the traffic that they are requested to transmit across their networks. Businesses assess the value of product, services, goods, information coming across property for determining how much of that value they can extract for themselves. The value extracted hopefully covers the cost of doing business plus profit. Broadband access providers do the same thing, assessing the value of the digital traffic coming across its networks and extracting value in the form of compensation. The greater the value, the greater the compensation.

On the consumer side, how she evaluates value is subject to her personal marginal utility of benefits, to coin the standard economic phrase and accompanying argument. To her, watching African American women twerk at a party on Instagram brings value, but should a doctor consuming video traffic that documents surgery have to risk her video running at a slower speed than a twerker’s in order to comply with a faulty notion of equality of content?

My bias is toward information that actually results in societal improvement, and while I have no problem enjoying the female form, society as a whole gets more mileage where information that helps us better manage our capital and health takes a priority to a cat video or gyrating ass.

Society also gets more mileage where producers and consumers are free to determine what communications they exchange and the terms and conditions of that exchange. This is the problem when we don’t separate content, which is designed to keep people momentarily contented, with information, which should be designed to continuously inform. We have a lot of content floating across our global interconnected networks, and network neutrality rules proponents use the freedom of expression argument to ensure this content gets equal treatment. Prioritizing content on the internet should not be looked at as an attack on freedom of expression, not when there are other outlets available for expression.

What the network neutrality rules proponents always leave out of their argument is the value of the expressions being shared. If they are that serious about their voices being heard over a particular medium such as the internet, then maybe they should put together the capital and construct the technology that ensures their equal access or expression.