I refuse to give up my freedom

I tend to borrow and remix from the thoughts of TechDirt founder Mike Masnick, Pirate Party founder Rick Falkvinge, science fiction writer Cory Doctorow and cartoonist and Question Copyright founder Nina Paley when thinking about how copyright and patent laws are increasingly obsolete and counter productive not only to our economy but to our freedom as well.  However, a recent discussion about International Talk Like a Pirate Day prompted me to write up a, likely incomplete, summary of my thoughts.  So here goes:

"It is more complex than the idea that people want to steal from musicians.

We have to keep in mind that the existing music system established a few gatekeepers that were able to capture much of the money we pay for music.  The order that people got paid was:

  1. first the music industry (esp. the big players),
  2. second the small number of musicians who "made it",
  3. third a somewhat larger number of musicians who were luckly to get slightly better than minimum wage,
  4. finally the vast majority made no money at all or did it for the love of playing music.

Now, with the Internet, musicians are able to connect with their fans and ask them to support the music (and musicians) they love directly. Gatekeepers are going away as a result and musicians will be better off.

Will all musicians thrive?  No, but more will do better than their processors did.

Will musicians need to look at other ways of getting fans to support them, than buying the music that can be easily copied? Yes. Tours are one means. Using tools like Kickstarter to have fans pay for musicians to create something new is another. Selling the unique and scarce items that musicians can create will be more common: suggesting the background of a song, personal concerts, signed disks, individual frames of music videos are but a few methods that could be tried and often have been tried successfully.

Leading all this is that people like to create, and now more people have the tools and ability to develop the skills they need to create. 72 hours of video are uploaded to YouTube every minute.  Some of it is a copy, some is remixed, but most of the videos are ones that people create for their friends or to express themselves. For me, a future where more people can create and share is exciting and better than a world of gatekeepers and big name musicians.

Ultimately, the only way we will maintain this old and dying system is to spy on what everyone sends out over the Internet, censor our communications and lock every digital file so that no one can share. That is the world the huge entertainment companies and their mouthpieces such as the RIAA, MPAA and Chamber of Commerce want and it would be a sad, poor world indeed.

I refuse to give up my freedom so that a few gatekeepers and stick-in-the-mud musicians don't have to change and innovate."

About that North Pole ice cap

It has been in the news of late that the North Pole ice cap has shrunk to the smallest size ever recorded. The previous minimum was in 2007.

Climate change denialists maintain that it is just normal variation and if you look at maps of the North Pole from the 1920s, 30s and 40s, the size of ice cap was similarly small. Indeed, the extent of the ice cap did hit a minimum in 1938 based on those maps.

Thankfully the Artic Sea Ice Blog went over those maps and the latest satellite images and pointed out that the extent of the ice cap now is still much smaller than it was in the old maps.  But the comments were even better since one of the commentators pointed to this map that overlays the satellite data on the 1938 map:

One needs to be careful when comparing the current maps, which are more accurate in both space and time, with the older maps which the reflect the more limited ability people had to observe the North Pole ice cap.

Even still, it makes the point quite vividly, doesn't it?

Organizing a CryptoParty in Somerville, wanna help?

I am working with others to hold a CryptoParty on Sunday, Oct. 21 from noon-6pm. It will be held at The Sprouts, 339R Summer St., Somerville near Davis Square and the Davis Square MBTA stop.
We are planning to hold hands-on workshops on topics such as:

  • Using Tor and the Tor Browser Bundle
  • PGP/GnuPG key generation & use
  • Using Truecrypt and LUKS
  • Using SSL and authentication
  • Using VPNs

You can find out more at the Boston CryptoParty wiki page. If you are interested in participating or want to help teach on one of the topics, please contact me via twitter, email jokeefe@jamesokeefe.org or call/txt (617) 863-0385.

As PBS extolls arbitrage, is wealth looting next?

I didn't intend to have my next post focus on arbitrage and rentiers, but as I prepared to deal with several items I have put off in favor of sleeping the last few days, I just couldn't resist.

Last night, my wife was watching Market Warriors, a PBS show that seems to have been spun off from Antiques Roadshow. Various intermediate buyers/sellers comb flea markets and try to get the best price they can on the antiques they buy so in order to sell them at auction for a higher price. They have various constraints they have to abide by. In between the haggling, the narrator makes comments on the buying/selling process, negotiations and something about the items the participants have chosen.

They should have just called the show Arbitrage, as striped of the commentary, that is all the participants are doing. As they Marxists' M-C-M' equation says, they are using money to buy commodities to make more money. Watching stock or bond traders negotiate their deals would have been far more exciting and illuminating about the inner purpose of financial capitalism.

Which brings me to the latest Q&A with Michael Hudson about his book The Bubble and Beyond: Fictitious Capital, Debt Deflation and Global Crisis. In the Q&A, he ties the huge debts (especially private debts) we have developed since 1980, with the increasing amount of money the financial sector is siphoning off from the goods economy. The following excerpt summarizes our current march on the road to debt servitude:

But instead of supporting productive industry by extending credit to increase tangible capital investment, the banking system has extended credit mainly (about 80 percent in the United States and most English-speaking countries) to buy real estate and load it down with debt. The result is that rental income is used to pay interest to the banks rather than to pay taxes. This forces governments to tax wages, profits and sales. That increases the cost of living and doing business, on top of the interest charge.

In search of this loan market, banks have come to back untaxing real estate and deregulating monopolies, so that their economic rent can be paid to the banks as interest by customers eager buy these rights – and charge even higher rents or raise prices even further without making a new capital investment of their own. Instead of financing industry, U.S. banks don’t make loans for what can be produced in the future. They make loans against collateral already in place – including entire companies with high-interest “junk” bonds. The target company is obliged to pay the debt that the corporate raider takes on. The raider then is “free” to downsize and outsource the work force, squeeze the budget and hope to come out with a capital gain after paying off the banks and bondholders. The process is more extractive than productive.

While the financial industry has led the way in extracting economic rents from their customers and other sectors of the economy, other sectors are catching up.  Increasingly we see patents being used to extract economic rents, whether with the Apple-Samsung ruling or with patent trolls, rather than by actually innovating and creating more useful products. 

With artbitrage covered, perhaps PBS will come up with a new show that extolls the virtues of rent seeking.  I think Wealthy Looters would be a good title.

The question for us, though, is whether we want an economy that encourages invovation and spreading the wealth we all create as widely as possible or whether we want a rentier tollbooth economy controlled and milked by the wealthy.

UPDATED: 2007 State, Local & Federal Tax Rates by Income

A while ago I put together a spreadsheet of the tax rates that people at different income classes paid and kept meaning to post it once I looked at similar data from the 1950s or 1960s, when the actual tax rates that the wealthy paid were much higher.  However, with the latest Romney clandestine video, it seemed a fitting time to post it.

The data is from 2007 and it includes Federal, State and Local taxes.  My sources were:

You can find my google spreadsheet with all of the numbers (as well as some extrapolations if you remove certain tax breaks) here.  I had to do some calculations to break out some of the higher income ranges for the Federal data, but the computations are pretty straightforward.

Before I go to the charts, a bit of commentary.  

State taxes, especially sales and property, are regressive and that helps to skew the taxes so the poor pay more and the wealthy less.  Some states have a high enough income tax to offset that disparity, but many states do not have an income tax, or have a flat tax, such Massachusetts.

FICA (Social Security, Medicare, etc.) taxes are payroll taxes that only apply to wage income, but the total amount a tax payer has to pay is capped at $110,100 of income (as of 2012).  However, the Earned Income Tax Credit helps to offset the FICA taxes and you can see that from the Federal tax rate chart below where income tax rates are negative for those earning less than $18,000.  Also, the long-term capital gains taxes are paid at a flat rate that is not progressive, unlike Federal income taxes which rise with the income of the tax payer.

These issues, as well as others, ensure that the tax rates the wealthy pay are not that much higher than someone in the middle class.  

On to the summary charts.

State, Local & Federal Tax Rate by Income Range

State & Local Tax Rate by Income Range

Federal Tax Rate by Income Range


I see via Ezra Klein (via friends on Facebook) that Citizens for Tax Justice already has this info in a summary form for 2011. I'll poke around and see if they have the rates for the 1950s and 1960s.


How to kill standalone social networks

Yasssu has an interesting interview with Eben Moglen about a variety of topics including government surveillance, privacy, and sharing:

The topic that drew my attention to the video was his contention that Facebook would only last for about ten years before the open web and open alternatives to it won out. He cites Diaspora, GNU Social and other efforts as the tools that are leading the way to that change and I generally agree with him. However, the flaw I see with that approach is that the variety of social services that are available is increasing at a rate that a canned aggregation service will not be able to keep up. What is needed is an api for:

  1. who is your friend or who you follow and thus who you trust;
  2. the different services to share updates you make on the service;
  3. the different services to talk to talk to an aggregator.

Item 1 can leverage OpenId and OAuth and there are projects such as Portable Contacts, DiSo, FOAF and XHTML Friends Network that can be built upon (or rebuilt) to provide the secure social connection information.
Item 2 requires a defined api and a willingness for social services to support it. However, RSS is pretty prevalent, so building off of that shouldn’t be a complete jump into the dark.
I am not convinced that Item 3 is desirable even on a local level. Rather, the only thing I think we need to host is our public and private connection information. Once we have that information, it would be possible to use a javascript browser plug in that pulls in our connection information and builds a status page of what our friends are doing.
With these tools in place, we won’t need Facebook, Google+ or other specific social network services to act as a man in the middle to our social lives on the net.
I do like his suggestion that we all have our own plugin computers running a server like FreedomBox that act as VPN, host our website, etc.
He touches on a wide variety of other points that I find useful and his quotes are direct and pithy, so please to take the time to watch it.