Leave Now

It’s good to go to a different place, even if the place is only in your dreams.  But perhaps the most far-away places are those in our dreams. They are far away in time, they embrace another reality, another universe sometimes.  And they are real because they aren’t always what we want.  Did I really want to lull myself back into the volley-ball game at school, the court larger than it is now, larger than it had ever been and me watchng from the sidelines as I always did because I never could fathom or drive myself to play a competitive sport.  I did not get up, I slept for 16 hours without stopping and I think life is a competitive sport, do I really want to play it?


I feel as if I must do something.  The intensity of the impatientness tearing at my skin is painful.  I almost feel as if I must jump up in the warm oppressive classroom and declare the absurd, the pet-lover’s manifesto or the definitive guide to scatology, perhaps even the undying nature of true love.  Then, feeling spent, I wish to collapse and let inertia saturate me.  The moment I begin to prepare for the leap of faith that will re-define for the world my peculiar madness I am restrained by the loss of energy from contemplating the leap itself. My madness is the fear of baring the madness within.

Deep Space

I saw the Deep Space Nine episode where Jadzia-Dax meets the current host of the symbiont who’s former host was the wife of one of her symbiont’s prior hosts.  This is the best Deep Space Nine episode I’ve seen so far, it revives so many concepts I thought I’d given up.  Jadzia and Lenara’s kiss is the most perfect romantic scene I’ve ever seen on television (and perhaps second only to the butterfly scene in Arau’s “A walk in the clouds”).  And I believe in soul-mates again, but do we really need a literalization of the transmigration to believe in an ever-lasting love?  Even this quaalification won’t diminish my new-found naivete.  I believe.

You only lose if you’re attached.

Every so often I find myself feeling as if I’ve lost something.  I begin to search my pockets, checking on my keys, my wallet and the tokens I carry with me.  I’ve not lost anything over the past few days (except my spectacles, which I kept by my bed yesterday and can’t find today, I suspect I’ve been sleep-walking, something I’ve never done before), in fact I’ve carried things with me I shouldn’t have.  This is a sense of loss, but I can’t say what I’m to make of it, I may have partial explanations that rest on received conceptions of the self, but nothing firm.  Meanwhile I continue to search my pockets every so often.  It isn’t a part of me that’s missing, but an appendage I use to function in the world.

First Amendment Rights and the CDA

On February 8th, 1996 President Clinton signed into law the bill known as the Telecommunications Act of 1996, technically S. 652/H.R. 1555. Most of the 200 page bill deals with various amendments and changes to the Telecommunications Act of 1934, but stuck away around page 150 is the section called Title V “OBSCENITY AND VIOLENCE SUBTITLE A–OBSCENE, HARASSING, AND  WRONGFUL UTILIZATION OF TELECOMMUNICATIONS FACILITIES” and within it Sec. 507 “Clarification of current laws regarding communication of obscene materials through the use of computers.” People who have followed the fortunes of Senator Exon’s proposed amendment to the Telecommunications Act, will find this section familiar. In fact Sec. 507 is the Exon amendment duly altered twice after uproars that arose last year. When the Communications Decency Act, (CDA) was proposed last year, it’s incorporation into the then in progress Telecommunications Bill was approved in the Senate by a vote of 84 to 16. Packaged within the much larger Telecommunications Act, the CDA has been signed into law. Perhaps this says something about the reality of politics, yet it’s a little too late to bother about that. Right now we must evaluate the possible effects of this bill.

A number of organizations have already looked closely at the CDA. The American Civil Liberties Union, the Electronic Privacy Information Center and a number of other civil liberties organizations including the Electronic Frontier Foundation filed a case with the District Court of Eastern Pennsylvania claiming the CDA is unconstitutional. On February 15th, Judge Buckwalter granted a partial Temporary Restraining Order to the ACLU and other plaintiffs in the case stating the law was “unconstitutionally vague”. The TRO will not prevent the prosecution of persons who place or provide “indecent” material on a computer network where a minor can read or view it. Undoubtedly, this is an important decision, but the TRO leaves standing other sections of the Act. Amidst all the gloom, we have a little to be thankful for, the CDA in its present form does not make service providers fully responsible for the content transmitted over their networks. This is a change from previous versions of the CDA which sought to make all computer network operators liable for anything and everything transmitted over their wires, perhaps in the hope that this would spur “voluntary” censorship. Even in its present form, however, the CDA will only exempt a computer network operator from liability if she is unaware of the activities of her users and or has “taken in good faith reasonable, effective and appropriate actions under the circumstances to restrict or prevent access by minors”. In effect, the operator of a computer network is not afforded the same immunity granted to a local telephone operator. Before she is free from liability under this law, the computer network operator has to take the extra step of verifying a user’s age. The network access provider is not given the protection a common carrier is afforded though it is acknowledged that she may have no editorial control.

A large proportion of the confusion in free speech law seems to stem from the form the communication takes, not its function or content. For instance, the “indecency” clause cannot be applied to the print media and a court cannot indict a newspaper for publishing material that may be “indecent” or “patently offensive as measured by contemporary community standards”. Yet, if the same article is made available over a computer network and the on-line newspaper is accessible to minors, the content provider can be fined and imprisoned for up to two years. This sounds Orwellian, but it is the case across a broad variety of media, teletext is not granted the same First Amendment protection as a newspaper, a radio broadcast is subject to much more regulation than a book, and cable TV is treated very differently from broadcast television. Some aspects of these differences in regulation do appear reasonable and others seem quite unreasonable. In particular, it has often been suggested that the appropriate paradigm for the Internet is a library and not the broadcast media. Similarly it has been held that electronic mail be granted the same protections surface mail is.

Part of the problem seems to be the search for paradigms, trying to find analogies for the new media, see what form of old media is closest to the new. The problem is that the new media may use a telephone or television wire to facilitate communication, yet perform the exact same function as a print publication does. At times it almost seems as if the law treats the “freedom of the press” as exactly that, the freedom of printing presses and nothing else. Laws it seems, must be refashioned with the advent of every new technology.

Some of the controversy surrounds the nature of the content and the definition of “community standards”. The suit filed by the ACLU relied, in part, on affidavits provided by a number organizations disemination information about AIDS over computer networks. The providers of such health and safety information are concerned that some of their material may be “indecent” and a number of them stated they “did not understand what indecent or ‘patently offensive’ meant”. It would indeed be quite unreasonable to demand that such services require all users to identify themselves and verify their age. Not only would this be contrary to the nature of the service, which demands anonymity, it would be quite expensive to impliment. This is just one example of how the CDA might affect speech we would consider valuable to protect; other instances range from silencing a forum on breast cancer to hounding writers distributing drafts of works in progress over computer networks.

It is abundantly clear that the federal government and indeed the Supreme Court itself are prone to deal with electronic and paper communication in very different ways. In 1928 the Supreme Court held that warrantless wiretapping was not unconstitutional because “[t]here was no searching [and there] was no seizure”. Apparently the Fourth Amendment was not applicable in the case of wiretaps since “[t]he United States takes no such care of telegraph or telephone messages as of mailed sealed letters” (Olmstead v. United States, 277 US 438, 464 [1928]). Apparently, if it’s electronic, it’s fair game. In 1967 (Katz v. United States, 389 US 347 [1967]), the Court had changed its views and now held that the Fourth Amendment “protects people not places”, consequently warrantless wiretapping was made illegal. We must now consider with all seriousness whether the CDA and indeed the government’s response to Computer Mediated Communication in general is not simply a rerun of the wiretapping case. The US federal government’s position on encryption technology and content on the Net would suggest that it is. If we are about to enter another era of unreasonable legislation we must be aware that this legislation will dramatically influence the evolution of the new media and might even stifle its development altogether. This is a serious question and the exponential growth of Computer Mediated Communication leads me to believe that many people will be affected by government policies pertaining to CMC in the future. Those among us who have not had the opportunity to use the new media will find themselves absorbed in it in a few years, it is then that the effects of these laws will becomes completely apparent.

The CDA was proposed by a retiring senator who was shocked at some of the material he found available on the Internet. He decided the best way to express his concern about the digital environment his grand-daughter would be to pass a broad bill to illegalize all “indecency” on the Net. The generations that are going to be most affected by these new laws have had no say in the matter, decisions have been made on their behalf by people who know very little about the new medium. Sen. James Exon (D-Neb) knows little about Computer Mediated Communication, at 75 it is unlikely that he will live to see the long-term effects of the CDA. The former governor of Nebraska retires from the Senate this year, but unless the law is repealed, he will have left behind as a legacy the Communications Decency Act of 1996, something future generations will have to grapple with for many years to come.

The most intrusive section of the CDA has been restrained, for the time being, but the rest of the act is still law. How is one expected to posit “contemporary community standards” on a network that spans the entire globe? Does that concept have any meaning at all in such a context? Where does the line between the political and the personal lie? Is a declaration of one’s sexual orientation “indecent”? How is one to function as an adult in a world which is by default restricted to content appropriate for a child?

These are questions we must answer, and answer fast. Unless there is a discourse beyond the rather narrow circle of dedicated computer users, we might see the medium shackled as it tries to hobble its way into the next century. The future of computer networks concerns each and everyone of us, very intimately. Almost every aspect of our lives is linked, or will soon be linked, to the new communication technologies. The Communications Decency Act of 1996 will have ramifications for all of us, if not tomorrow, then definitely next year.

This article draws heavily on Robert Corn-Revere’s paper “Lost on the Infobahn: The need for a Coherent First Amendment Approach”, presented at the 1994 Telecommunications Policy Research Conference.

Further references can be found at Electronic Frontier Foundation ; American Civil Liberties Union ; Cato Institute A paper by Robert Corn-Revere, “New Age Comstockery: Exon vs the Internet” can be viewed at http://www.cato.org/pa232es.html

Borges’ Dream

One of the earliest promises of a large-scale computer network was that it would make the dream of a digital library possible.  It seems as if that vision is slowly, hesitantly coming alive.

Those of us who are interested in issues of literacy and access to knowledge have been closely following the growth of what are called E-text (Electronic Text) projects.  The broad aim of these projects is to translate information from traditional paper media to electronic media to make such texts available over global computer networks.  The benefits of such a “translation” are enormous, both for the scholar and the individual.

Perhaps the most important aspect of these projects is their ability to preserve fragile documents that might otherwise be lost.  Printed paper is subject to numerous hazards, is difficult to reproduce and eventually deteriorates.  An Electronic book, however, can be reproduced at the push of a button and is exceptionally cheap to store.  At $.50 per Megabyte of magnetic storage media, it costs only a dollar to store 1,000 pages of text.  Since it is easy to copy electronic-texts it becomes unnecessary to physically ship books through the post, one has only to send a copy of the original (a perfect copy, no possibility of a generation loss unlike photocopies) over a network to the person who is interested in the content.

None of these things are new, many people have been aware of them for decades, but we are seeing a proliferation of such libraries only at the present time.  This is partly due to the increasing importance of computer networks in our society and the technological advances made over the past few years.  As computers and networks become ubiquitous it is only a matter of time before a large part of the knowledge now contained in, and constrained by, the shelves in our libraries will become mobile.

In an electronic library one would not be told “the book has been checked out”.  At an electronic book-store no book can be sold-out, no book can be out of print.  Yet these possibilities force us to ask other questions, specifically ones related to copyright.  If it is possible to make a perfect copy of a book by pushing one button, how is one to enforce copyright laws.  This is an important question and it is being tackled by publishers the world over as they experiment with solutions like encrypting the text or making it viewable only with software that would not permit copying.  Solutions will be found by those who have the greatest incentive to develop them, namely publishers.

Most E-Text projects today concentrate on books that are no longer protected by copyright, i.e. they are under public domain.  So one can find the complete works of William Shakespeare, Aesop’s Fables or Adam Smith’s “The Wealth of Nations” in digital libraries across the globe. Most of these libraries do not charge users access fees, in a sense it is not worth doing so.  Managing a fee-structure would probably cost too much.  Since these projects are largely run by volunteers and with the assistance of donations, there is no desire to earn revenue from them. In any case, translating a book to E-text is so cheap that it is not necessary to charge for access.

There are a number of problems with the vision of large scale digital libraries.  It is uncertain whether many people will make the transition from reading books printed on paper to those on viewed on screen.  There are concerns that large amounts of time spent in front of antiquated computer screens may be harmful to the eyes.  With the present level of computer technology it’s difficult to see how you could curl up in bed with a electronic book.

A particular concern today is the accessibility of E-Texts.  Some E-Text projects store books in one format and others decide to present them in others.  It is possible that some books may not be accessible to certain people because they lack the software necessary to view them.  It is possible that certain formats that are popular today (HTML for instance) may not be around forever and we wonder what will happen to E-Texts stored in those formats.  Hopefully tools will develop that will permit translation between different formats.

Some of these concerns might be invalidated as technological advances are made, others may not.  It is difficult to imagine a world without paper books (though this might just save our forests), and I for one will hold on to every volume I own.  What is perhaps more likely is that this medium will compliment the traditional paper media.  It certainly has many advantages, it is cheaper, easier to transport and copy and increases access to rare and out of print books.  One point that is often not made is that electronic books are accessible to disabled persons (such as the blind) while the printed page may not be.  These are all significant advantages and I do expect to see many more electronic texts in the future.

But perhaps the factor that will convince most of us of its superiority is the fact that students might be able to read books on computers for far less than it would cost to buy them.

More information on Electronic Texts, and links to various digital libraries can be found at http://www.nyu.edu/pages/advocacy/info/etexts.html

Computer Advocacy @ NYU http://www.nyu.edu/pages/advocacy/

This post was originally published in the Washington Square News


Capitalism, Socialism and Democracy

Review of “Capitalism, Socialism and Democracy“, Joseph A. Schumpeter;
Harper Torchbooks, 1976; ISBN: 0061330086

The man of system… seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chessboard.  He does not consider that the pieces upon the chessboard have no other principle of motion besides that which the hand impresses upon them; but that, in the great chessboard of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it.  If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful.  If they are opposite or different, the game will go on miserably and the society must be at all times in the highest degree of disorder.

Adam Smith: The Theory of Moral Sentiments, Part 6, Chapter 2.

Schumpeter is of course aware of this argument and acknowledges its validity, yet the kind of society he conceives in “Capitalism, Socialism and Democracy” will not, he predicts, have to content with any such difficulties.  This is of course easily demonstrated in Schumpeter’s taxis.  The socialist engine is clearly much more conducive to promoting authoritarian discipline, and this is, for Schumpeter, one of its great merits.  Yet the valuation of a command economy is one of the many claims Schumpeter makes that are questionable.

Schumpeter goes to great pains to demonstrate to us the great efficiency of the capitalist system.  He is entirely convinced that Capitalism is the sole explanation for us being where we are.  With his characteristic candidness he dismisses all arguments that fail to bestow laurels on Capitalism.  Yet beginning from this conviction, Schumpeter goes on to indulge in a socio/psychological analysis and finally tells us that

“… the ever-rising standards of life and particularly the leisure that modern capitalism provides for the fully employed workman… well, there is no need for me to finish the sentence or to elaborate one of the tritest, oldest and most stodgy of all arguments which  unfortunately is but too true.  Secular improvement that is taken for granted and coupled with individual insecurity that is acutely resented is of course the best recipe for breeding social unrest.”[pg. 145]

So, beginning with an acute analysis of Marx and a piercing critique of Marxist economics, Schumpeter finally declares the Marxist prophecy to be true.

It would be quite futile to argue against any such theory, and to an extent the rest of this tract is formulated by this pivotal statement. Schumpeter has reconciled himself with the inevitability of an increasing demand for Socialism, and as he himself notes this is because “Political criticism cannot be met effectively by rational argument.”[pg. 144]  As the book progresses however, Schumpeter modifies his stance somewhat and we find various defences of Socialism that come rather unexpectedly after the first two sections of the book.  This may be simply an attempt by an eternal optimist to see a half-full glass where there is nothing at all, but this is the portion of this tract that needs to be looked at most closely.

If there is one thing Schumpeter cannot be accused of, it is lack of thoroughness.  He has challenged almost all, and answered many, criticisms of the socialist schema in this rather wide ranging book.  Yet there are a few that he has shrugged off rather flippantly and it is here that we must focus our attention.  Along with all the other dismissals that Schumpeter hands out to economists and social scientists of all persuasions, he has answered the Hayekian critique in a few sentences [185], and Mises’s reservations concerning the socialist order with equal brevity [172-3].  Schumpeter’s responses do not do justice to the Austrian critique.

Unanswered questions

Schumpeter details an elaborate plan involving vouchers and price-fixing which a socialist state could adopt in order to make distribution a “distinct operation” that “in logic at least, is completely severed from production.” [173]  Schumpeter then goes on to claim that though this separation may become a determining factor as far as the society’s attitudes are concerned, it is completely arbitrary from the economic standpoint.  By separating distribution and production, however, Schumpeter’s hypothetical socialist state is forced to find a replacement for the price system that will convey information regarding the market to those making production decisions.  The tool that is readily available is of course an efficient bureaucracy infused with an adequate amount of espirit de corps.  Schumpeter fails to realize however that a bureaucracy cannot but be less responsive than the price system.  Renouncing the market price system entails giving up the most effective information dispersal mechanism we have chanced upon.  Despite his claims to the contrary [185], this bureaucracy will not function as efficiently or rationally as the market does.  Again contrary to Schumpeter’s expectations, such a bureaucracy will not require less intelligent managers than a modern capitalist enterprise; at worst it would require omnipotent beings, and at best those with very different thinking capacities.  Schumpeter fails to tackle the problem of gathering particular information for such a bureaucracy to process, and with rather irritating confidence declares that certain macro-economic variables, and other production data would suffice.  With surprising naiivete, Schumpeter assures us that it would be possible to set up a system of incentives to ensure that the bureaucracy makes the right decisions.  Of course this only makes us ask the question of a higher authority, and in the socialist schema there is always a higher authority.  So we finally have to put this question to those on the top. What are your criteria for making decisions?  The answer can only be that there are no criteria, that there are no laws, no rules, that all decisions are made arbitrarily as the “needs of the moment” dictate.  So much is implied in the Mises-Hayek doctrine.

Of course it is rather easy to see where Schumpeter has derived his vision of the “socialist engine” as a big enterprise from.  After all it with St. Simon that the imagery of the “one workshop” originated [F. A. Hayek, The Counter-Revolution of Science, pg. 121].  (Curiously, this is the one figure Schumpeter fails to denegrate, treats with positive veneration [307] and goes to the lengths of adopting an apologetic tone.)  Yet Schumpeter can hardly, at this juncture, defend this concept solely on the basis of its origins and he does not.  Not
surprisingly, Schumpeter has another surprise in store for us.  In perfect harmony with the refined Marxist prophecy Schumpeter declares that the capitalist system has itself created an environment where individuals are being trained to accept the all-encompassing bureaucracy.  Big business becomes for Schumpeter, the progenitor of the state economy. Ignoring all the problems such a claim presents, (the promiscuity of small businesses in new and emerging technologies, the phenomenon of consultants to provide small enterprises with the expertise they lack, the re-emergence of the self-employed entrepreneur in all fields…) it is rather amusing that Schumpeter informs us, countering Marx, of the white collar workers resistance to socialization.  The driving force behind this almost unanimous clamour for the “socialization of the economy” is Schumpeter’s (and in his view society’s) thirst for stability.  Writing in the post-depression moment, Schumpeter has perhaps been greatly shaken by, what appears to him to be, the naturally catastrophic undulations of the capitalist structure.  So Schumpeter opts for a system that places direct control in the hands of a few authorities, and by his thinking, consequently involves less arbitrariness, more “rationality”, less “creative destruction” and more stability.  The irony of it all is that Schumpeter is forced to acknowledge the need for regular changes, or repairs, to be undertaken on the socialist engine and (considering the bureaucratic aversion towards change in the absence of a direct threat to its own survival) this can only increase the uncertainty and friction he wants so much to avoid.

Even if we do accept that socialism might provide us with more stability, it becomes necessary to ask: At what cost?  Interestingly, Schumpeter has reversed Mises’ argument somewhat and in a rather fiery response to Keynesian economics and other “half-way” socialist measures, condemns them as mere platitudes that will only serve to delay the inevitable socialization of society and must be opposed by all true socialists.

But the question remains; at what cost?  Quite candidly, Schumpeter acknowledges that democracy becomes dispensable in a socialist environment.  This argument is preceded by a rather incisive analysis of what democracy is commonly understood to be and its own inherent limitations.  Yet, after concluding with this analysis Schumpeter does acknowledge that any form of democracy is quite incompatible with full-fledged socialism.  Once we are done with destroying this cherished myth, Schumpeter goes on to applaud the virtues of the socialist engine embodied in its ability to “impose hardships” [210], “eradicate the bourgeois separation of powers”, “empower social admonishment” [215], “insert the stock of the bourgeois extraction into its proper place within that machine” [207].  Sadly, Schumpeter seems to have rationalized the loss of individual freedom this would entail.  Paradoxically, he appears to be very concerned about rights abuses in Russia, yet even this concern is qualified by an elaboration on the uniqueness of the Russian situation, in that Russia was not a fully-evolved capitalist economy on the eve of the Bolshevik revolution.  None of this detracts however, from the fact that Schumpeter does not protest the subjection of the individual in the interests of “society”.  Rather, he would go as far as to suggest that such subjection of the individual is rational and desireable in that it enables society to harness the abilities of each individual more effectively.  The validity of that claim is highly questionable.

Despite all the reservations one may have about the thesis presented in the book, it is almost impossible to refuse to acknowledge Schumpeter’s thoroughness.  This book is a quite comprehensive discourse on Socialism, and one can hardly accuse Schumpeter of setting his sights too low.  It must also be said that the book is a delight to read, if only to taste Schumpeter’s irreverence.

The piece was written in Fall 1995 as an assignment in Prof. Kirzner’s
course on the “Foundations of Capitalism”.

Information sources for Economists

Since this is my page I must add links to my own papers. None of them are what would generally be considered “economic” in nature or content. Nevertheless they may shed some light on something obscurely related to economics.

But the great number [of the Athenian Assembly] cried out that it was monstrous if the people were to be prevented from doing whatever they wished… Then the Prytanes, stricken with fear, agreed to put the question–all of them except Socrates, the son of Sophroniscus; and he said that in no case would he act except in accordance with the law

Xenophon, Helenica, I, vii, 12-16; as quoted in F. A. Hayek, “Law, Legislation and Liberty, Volume 3: The Political Order of a Free People”

One might as well attempt to grasp the game of poker entirely by the use of the nathamatics of probability

Vannevar Bush, As we may think

And here are some other useful sites for Economists on the web.

Hayek’s The Road to Serfdom

The page numbers refer to the Fiftieth Anniversary Edition, University of Chicago Press; 1994; ISBN: 0226320618.

The Road to Serfdom

In the original introduction to “The Road to Serfdom“, Hayek describes this book as a “pamphlet”, which he wrote in his spare time. Yet as Hayek himself was aware much later, this book contained the gist of the argument to which he was to devote the rest of his life. “The Road to Serfdom” deals with so much material that it would be futile to attempt a review of the book in five pages, I can at most enumerate its most striking features and try to string them together in a semblance of order.

Order seems like a good place to begin. Many years after “The Road to Serfdom” was published, Hayek wrote the first volume of “Law, Legislation and Liberty” and gave it the title “Rules and Order”. The concept of the rule of law remains central to Hayek’s later work, and his emphasis on this institution is apparent in “The Road to Serfdom”. Hayek is convinced that the rules of the game cannot be arbitrary if individuals are to be able to function within a working market order. Though circumstances are constantly changing, the entities within any structure must be aware of limitations on other players if they are to be capable of forming plans. For Hayek these limitations are essentially restrictions on the powers of government to coerce specific individuals in order to achieve a particular outcome. Hayek contends that if we permit the state to invade the individual’s private sphere “in the interest of society”, the incentives to engage in market activity will largely disappear.

This argument that the rule of law serves as a means to facilitate the formation of plans which individuals can attempt to realize in the market, is supplemented by Hayek’s understanding of the nature of arbitrary power. Hayek does not fail to remind us of the dangers inherent in a structure that relies on the use of arbitrary power to achieve broadly defined objectives. Under a system where “society’s interests” are represented by the state, and where these interests take precedence over individual rights, we can be sure that these objectives will soon be perverted and the powers conferred on the state used to serve ends that they were not intended to serve. In Hayek’s own words, in a situation where the state is expected to plan out and solve the problems of the economic sphere, “As the coercive power of the state will alone decide who is to have what, the only power worth having will be a share in the exercise of the directing power” [pg. 92, F. A. Hayek, The Road to Serfdom, 1994]. Since it will often be necessary to exercise this power ruthlessly, Hayek believes that only those who are capable of using brute force shall be appointed to or attain positions of power, the gentler amongst the population would tend to drift away from posts where the use of force would be necessary. We can see how in replacing the dynamic of unaligned forces that constitute the market with a strict hierarchy it becomes necessary that the hierarchy have a ruler. Thus Hayek’s conclusion (and that of many socialists) that such a structure would of necessity turn into a totalitarian order.

Unlike the situation in a free market, a consistently planned order would force us to adhere to a common set of values. Whereas the market is capable of serving the needs and desires of numerous individuals by a process that achieves a relative ordering of these values with the aid of the price system, an enforced order would force us to choose “whether it shall be we who decide what is more, and what is less important for us, or whether this is to be decided by the planner” [pg. 100]. Thus the individual effectively abrogates all right to self-determination. If all actions are intended to serve one set of purposes, it is easy to see how the process of determining these ends constitutes the complete loss of individual liberty. Hayek is well aware that the degree of concurrence towards desirable ends that such a system requires simply does not exist. This is why we are warned of relying on the democratic procedure to guard against a deterioration to a totalitarian order. Once it has been demonstrated that such a system cannot function if it requires the approval of a large proportion of the population, the need for such approval will itself be questioned.

Since Hayek ascribes to the Mengerian notion that “civilization advances by extending the number of important operations we an perform without thinking about them” [pg 87, The Counter-revolution of Science, quote from A. N. Whitehead], a planned economy seems to him a step back as far as solving the “economic problem” is concerned. Since we would by opting for a planned economy, be refusing the services of the price system as a tool to convey pertinent information in a concise form, a planned economy would involve a degree of complexity that cannot perhaps be comprehended or abstracted by the human mind. In a mercurial environment –which the economic sphere is, if only because of our constantly shifting tastes and desires– it is essential that responses be quick and effective. Yet by making economic decisions on a large scale subject to conscious thought, indeed by giving such movements the character of a decision, destroying the only institutions capable of producing such responses. As Prof. Boettke notes in another essay on this book “rather than spontaneous adaptation” such an order ” requires conscious adaptation, and there are epistemological limits to this procedure”. As always Hayek remains aware of the sort of effect an imposed economic order will have on our understanding of our needs, how these are to be satisfied, and the very concept of justice itself. The market process Hayek believes is highly “impersonal”, yet an imposed order cannot but recognize the differences between individuals and treat them in different ways. In such circumstances it is highly likely that an individual’s dissatisfaction with her/his position will be channeled into attempts to improve that position by petitioning the state. If such attempts are unsuccessful however, it is easy to see how a violent conflict might arise between the individual and the authorities, or even among groups that have alienated themselves from one another. As Hayek himself stresses “Although competition and justice may have little else in common, it is as much a commendation of competition as it is of justice that it is no respecter of persons”.

“The Road to Serfdom” may appear to some as a prophetic text. Indeed Hayek’s convictions are portrayed with such strength that it is easy to believe Hayek is outlining a sequence of developments that is inevitable. Yet this book is not a prophecy, nor is it a theory of history and the nation-state. It is however an analysis of the sort of institutions that might develop in an environment where the individual is not free to choose. As such it demonstrates tendencies, not immutable consequences. After all, as Hayek himself said “if we can regain the belief in the power of ideas which was the mark of liberalism at its best, the battle is not lost” [The Intellectuals and Socialism].

This paper was written in Fall 1995 for Prof. Israel Kirzner’s class
“Foundations of Capitalism”. One grammatical error has been

PGP and Cryptography

“In furtherance of world peace and the security and foreign policy of the United States, the president is authorized to control the import and the export of defense articles and defense services and to provide foreign policy guidance to persons of the United States involved in the export and import of such articles and services.”  –Arms Export Control Act (22 USC Sec.2778)

Sounds pretty harmless right.  After all, it is in the interest of world peace.  But things are not always what they seem, especially in the murky world of federal law.  The provisions in the Arms Export Control Act have been applied to all sorts of exports of cryptographic material, material which most reasonable people would hesitate to call “arms”.

What is cryptography?  Cryptography is literally “secret writing”.  It is the art of encoding or enciphering material such that it is unreadable to anyone except those who have the “key” to decode it.  So what is the US federal government doing restricting the export of complicated locks? This is something many of us fail to understand. After all, locks are used to protect one’s property and who’d think of them as being harmful to world peace?  And we’re not even talking of physical locks here. Cryptography will only encode information, and is information in itself.

The Department of State has however used these laws to restrict the distribution of cryptographic material to foreign nationals, and to an extent attempted to control its application within this country.  The reason we cannot transmit data over computer networks as securely as we would like, with as much ease as we demand is precisely because of laws such as this.  These laws will not permit software authors to implement freely available cryptographic techniques to make transmissions over networks as secure as they can be.  If someone wants true security in transmission they currently have to encode the data manually and then transmit it.  Ideally this should all be done behind the scenes so that the user will not have to be concerned about it.  Precisely because it is such a bother, most users on computer networks do not care to encrypt information they transmit over computer networks.  Quite obviously this means that all e-mail you send, all files you transfer can be read by anyone while in transit.  Why doesn’t the US federal government want you to have access to the best locks available?

But it seems rather silly to ask such a question.  Of course we know why they don’t want your conversations to be secure.  For the exact same reasons that they want you to use a cryptographic system (the clipper chip) to which they always have a back-door, i.e. one that is not completely secure.  It is also why the federal government would like to pass the “wiretap” bill forcing telecommunications companies to invest in producing switching exchanges that will permit federal agents to listen in on your phone calls whenever they want to.  And they want to subsidise the telephone companies as they go about doing this.  what the federal govenrment really wants to do is use your taxes to spy on you.  Sound like big brother yet?

Thankfully there are people who are fighting govenrment regulation and action that will threaten your privacy.  One such individual is Phil Zimmerman.  Phil Zimmerman is the author of PGP (Pretty Good Privacy), an encryption program that is currently imossible to crack.  Phil Zimmerman has made PGP available to the world free of cost for a number of years.  He has been spending large amounts of time further improving this program to provide people all over the country with the degree of privacy that they desire.  Phil sounds like a nice guy doesn’t he?  But the Department of State doesn’t think so.  They’re accusing Phil and a number of other people involved with PGP of exporting munitions outside of the US.  The Department of State considers PGP a threat to “world peace”.  Incidentally the law invoked against Phil (International Traffic in Arms Control Regulations, ITAR) classifies Automatic Teller Machines as “Auxilliary Military Equipment”.  Yes those machines you use to get money from your account at night are considered lethal.

Phil Zimmerman is apparently being prosecuted because software he has written may have found its way outside the country.  This is undeniable; it must have.  After all, “information wants to be free”.  The point is however, that Phil has not been directly involved in any such distribution.  These can only be called “trumped up charges”.  Other questions are raised of course, questions that had been asked during the cold war.  Is it really in the interest of humanity that we hoard our knowledge and force each nation to re-invent the wheel?  Is it not much more desireable that the international academic community share its finding so as to minimize wasteful repetition of research efforts?  The US government doesn’t seem to think so.  The Department of State has turned down requests from academics who wished to post their own work on cryptography on worldwide discussion groups.  On the other hand the US supreme court has upheld the right of a publication to print instructions on constructing a homemade nuclear bomb, we can only hope that the judiciary will display similar judgement and guard our rights when these cases do come to court.  As is to be expected, the department of State has managed to find all sorts of excuses to delay hearings in most of these cases.

But this isn’t all, these laws constitute an infringement of free speech as well.  In it’s “Munitions Control Newsletter, No. 80”, the department of state stated: “The public is reminded that professional and academic presentations and informal discussions, as well as demonstrations of equipment, constituting disclosure of cryptologic technical data are prohibited without the prior approval of this office.”  What this means is that any foreign students at NYU who may have taken a course in advanced algorithm design, and their instructors, may have violated US federal regulation.  Something must be wrong here, after all the first amendment grants us the right to free speech right?

Phil Karn wrote a book on cryptography called “Applied Cryptography” that was distributed within the US with a floppy disk containing some programs that were described (and printed) in the book.  When Karn tried to distribute the book outside the US however, the Department of State did not permit him to sell the floppy disk with the book.  This seemed rather silly because the C code on the disks was printed in the book anyway.  But this tells us something about the federal government’s thinking.  Though the information may be the same, they are apt to treat printed matter and digital data in very different ways.  Why?  Because they can.

The federal government does not wish to stunt the growth of the computer industry, in fact various departments are working towards assisting companies in this sector become more viable in the global market.  The federal government has also for a number of years supported the activities of real defense manufacturers and encouraged the export of advanced weapons to countries all over the world.  Obviously world peace is not as much of a value when we’re considering a government supported company, but world peace is of prime importance when an individual attempts to disseminate information.  But the federal government works in mysterious ways.  What is of great concern however is that those rights which are afforded to the print media are not afforded to digital media.  With a very warped reading of the First amendment, the federal government has managed to convince itself that Computer Mediated Communication is not protected speech, and that it can therefore run rough-shod over the individual’s right to speak on a computer network. This becomes very clear when we understand that it is politically impossible for the federal government to censor the press, but that the populace in general knows so little about the digital medium that laws restricting free speech in a networked environment become non-issues. Yet, as the world becomes networked, or webbed or whatever, all of us will have to rely on computers and telecommunications to accomplish much of our work.  How would you like to have your telephone conversations tapped, or your faxes intercepted and read, or your e-mail opened?  The US govenrment cannot open your surface mail and we must ensure that no-one can read your computereized correspondence either.

We must remember that it was a struggle to pass the First amendment and it will be a struggle to pass a “Telecommunications privacy bill of rights” as well.  The government’s attitude on this is clear, in a letter to the administrators of the acadmeic computer network BITNET, the Commerce department stated that : “You have mentioned that BITNET does not monitor traffic on the network.  It is a non-secure network.” The question of course is non-secure for whom?  Is a netowrk that ensures privacy to its users, non-secure for them?  Of course not.  Is it non-secure for a tyrannical state?  Pirobably.  We must remember that free speech has been a value this country has been founded on.  The Federalist Papers, essays that moulded the future of this country were published anonymously.  If an individual’s right to privacy is not protected, the world will soon be an unbearable place.

Those interested in finding out more about these issues may wish to search the excellent archives maintained by the Electronic Frontier Foundation, http://www.eff.org/.  The Phil Zimmerman Legal Defense fund can be found at http://www.netresponse/zldf/.  I maintain a page that contains information related to these issues.

Occassionaly, I want to share something with the world.