Back to: Trust Me (I'm a kettle) | Forward to: Over-Extended Metaphor for the day

Why I want Bitcoin to die in a fire

Bitcoin just crashed 50% today, on news that the Chinese government has banned local exchanges from accepting deposits in Yuan. BtC was trading over $1000 yesterday; now it's down to $500 and still falling.

Good.

I want Bitcoin to die in a fire: this is a start, but it's not sufficient. Let me give you a round-up below the cut.

Like all currency systems, Bitcoin comes with an implicit political agenda attached. Decisions we take about how to manage money, taxation, and the economy have consequences: by its consequences you may judge a finance system. Our current global system is pretty crap, but I submit that Bitcoin is worst.

For starters, BtC is inherently deflationary. There is an upper limit on the number of bitcoins that can ever be created ('mined', in the jargon: new bitcoins are created by carrying out mathematical operations which become progressively harder as the bitcoin space is explored—like calculating ever-larger prime numbers, they get further apart). This means the the cost of generating new Bitcoins rises over time, so that the value of Bitcoins rise relative to the available goods and services in the market. Less money chasing stuff; less cash for everybody to spend (as the supply of stuff out-grows the supply of money). Hint: Deflation and Inflation are two very different things; in particular, deflation is not the opposite of inflation (although you can't have both deflation and inflation simultaneously—you get one disease or the other).

Bitcoin is designed to be verifiable (forgery-resistant) but pretty much untraceable, and very easy to hide. Easier than a bunch of gold coins, anyway. And easier to ship to the opposite side of the planet at the push of a button.

Libertarians love it because it pushes the same buttons as their gold fetish and it doesn't look like a "Fiat currency". You can visualize it as some kind of scarce precious data resource, sort of a digital equivalent of gold. Nation-states don't control the supply of it, so it promises to bypass central banks.

But there are a number of huge down-sides. Here's a link-farm to the high points:

Mining BtC has a carbon footprint from hell (as they get more computationally expensive to generate, electricity consumption soars). This essay has some questionable numbers, but the underlying principle is sound.

Bitcoin mining software is now being distributed as malware because using someone else's computer to mine BitCoins is easier than buying a farm of your own mining hardware.

Bitcoin violates Gresham's law: Stolen electricity will drive out honest mining. (So the greatest benefits accrue to the most ruthless criminals.)

Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography).

It's also inherently damaging to the fabric of civil society. You think our wonderful investment bankers aren't paying their fair share of taxes? Bitcoin is pretty much designed for tax evasion. Moreover, The Gini coefficient of the Bitcoin economy is ghastly, and getting worse, to an extent that makes a sub-Saharan African kleptocracy look like a socialist utopia, and the "if this goes on" linear extrapolations imply that BtC will badly damage stable governance, not to mention redistributive taxation systems and social security/pension nets if its value continues to soar (as it seems designed to do due to its deflationary properties).

To editorialize briefly, BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions. Which is fine if you're a Libertarian, but I tend to take the stance that Libertarianism is like Leninism: a fascinating, internally consistent political theory with some good underlying points that, regrettably, makes prescriptions about how to run human society that can only work if we replace real messy human beings with frictionless spherical humanoids of uniform density (because it relies on simplifying assumptions about human behaviour which are unfortunately wrong).

TL:DR; the current banking industry and late-period capitalism may suck, but replacing it with Bitcoin would be like swapping out a hangnail for Fournier's gangrene. (NSFL danger: do not click that link)

902 Comments

1:

Bitcoin = Digital Tulip Bulbs.

2:

The best snarky name I've read for BtC is "Dunning-Krugerrands".

3:

If we didn't have the banking issue we have had recently then the BitCoins would have been almost exclusively used by the less savory part of society. But as we did have the problem the BotCoins appeared to be a proper alternative, I can kind of understand that. I do agree with mr Stross though. No matter who controls the currency, they all seem like money grabbing bastards. If it is proper money, you can at least find out where they live...

4:

The bitcoin people are about to get a harsh lesson in why you want a central bank.

As long as bitcoin was deflationary (i.e. the price of goods and services was going down, in terms of bitcoins, i.e. the value of bitcoins was going up), everyone was happy. And the fact that there was no central bank to prevent run-away deflation was considered a good thing. This is because everyone was looking at bitcoin as an investment, not as a currency. But once things turn inflationary (i.e the value of bitcoins is going down), it turns out there is no central bank to prevent runaway inflation either.

For fun, calculate what the inflation rate has to be for a currency to lose half it's value in a 24-hour period. Lets just say that Zimbabwe and the Weimar Republic should no longer be the (ahem) gold standards for runaway inflation.

The thing about the inevtiable, it has a bad habit of actually happenning.

5:

I see it as something of a prototype for digital currencies. It is very inflated (though that doesn't stop me from wishing I had mined a few years ago when I first heard about it.)

The flaws of bitcoin aside, I think we'll see more private currencies in the future. Governments are doing their best to regulate them or outright ban them, but I'm not sure how successful they will be in the long run.

6:

On the down side, due to its deflationary nature, it's hard to think that Bitcoins will ever fully die off, at this point. I think it crossed the threshold of stability, and since BtC will always get slightly more valuable with time, I think we're stuck with them. They'll sit in the background, bubble up from time to time, and mostly just be a nuisance.

7:

No. Bitcoin could only be considered equivalent to tulip bulbs it tulip bulbs were Triffids and had been unleashed on the Dutch as a weapon of sabotage.

8:

Charlie, are you actually worried that Bitcoin might win? Because I don't see how it possibly can.

9:

A lot of people who should know better seem to think it's a good thing.

I'm not saying all cryptocurrencies are inherently bad. But Bitcoin in particular was designed with an agenda in mind, to further certain ideological goals that I consider to be toxic.

10:

Hmmm.

Or BitCoin could actually be a False Flag operation. To control a globally unregulated digital currency you need a globally regulated internet - a mandatory surveillance program on every computer (hard-wired into the CPU, obviously).

How is this for a horror scenario? :-)

11:

http://pando.com/2013/12/16/bitcoin-has-a-dark-side-its-carbon-footprint/ does not make for a good source. They are using bad information in compiling their report.

The report uses energy consumption numbers from https://blockchain.info/stats which are pretty much made up. DO you really think that the entire Bitcoin network is mining at a $19 million a day loss? Energy consumption numbers listed on that page are not sourced from anywhere.

12:

The destruction of the redistributive welfare state would indeed be bad. But I don't read that as BitCoin's agenda. It seems more like an unfortunate side-effect of the real agenda, which is destroying the crony-capitalist banking system that led to the 2008 collapse (if it pisses off and/or nobbles the "surveillance-industrial complex" along the way, all the better.)

I think these last two goals are eminently worthy and I'd love to hear proposals for executing them without the unintended side-effects on the welfare state.

13:

since BtC will always get slightly more valuable with time

I think that's a dangerous statement to make in view of its extreme volatility. Yeah, if you mean the long term price trend with the bubbling stripped out, that's plausible, but you're looking for a small signal buried in a lot of noise.

(Or in other words, it depends on from where you draw the line. Start when it was valued at less than a dollar, you may find it never drops below that point. Start from yesterday's $1000 level, and it may be it never reaches it again.)

14:
very easy to hide

Well, strictly speaking, it is impossible to hide, since all transactions and thus all accounts are fully public. Anyone can check the amount in your wallet.

The only difficulty is figuring out which among the 2^4096 wallets is yours. Once that is known, tracing becomes a little more tractable. Most traces will start at the currency trading place, where your account is definitively not anonymous.

(oh, and I hate goldbugs as well)

15:

I don't think they're smart enough to do that (for any value of "they" less pervasive and creepy than the Bavarian Illuminati, Robert Anton Wilson version).

My impression is that the TLAs like the NSA or GCHQ have some really smart, well-adjusted folks running around, but there's so much Shit Happening that all they can do is stay in reactive mode the whole time. They have huge management overheads -- too many committee meetings and classification levels -- not to mention some degree of legal constraints and oversight (even if it's not transparent or accessible to those of us on the outside) that would hamper really fiendish long-range plots like this. Anyway, why would they bother? All they'd need to do is nobble the CEOs of Intel and ARM Holdings and that's 95% of the job done.

Bitcoin to me looks more like the work of one of the scary-bright early 1990s cypherpunks -- I've heard Nick Szabo mentioned as a possible "true name" for "Satoshi Nakamoto". (I'm pretty sure it's not the work of he who goes by the handle Mencius Moldbug these days -- he has his own politically-disruptive software project on the go -- or Tim May or, or, um, blanking on names.)

16:

I largely agree, but there's a couple of points on which you're not quite correct:

  • Bitcoin's carbon footprint is less about the increasing difficulty, and more about the nature of mining: it's configured so that no matter how much processing power is thrown at it, the amount of currency generated remains the same. As more people add miners, it gets less efficient. A single machine would produce as many bitcoins per day as the entire planet's collective computing infrastructure.

  • Because CPU mining is so much slower than using dedicated hardware, people distributing malware aren't likely to earn much at all - so the thieves won't prosper.

17:

Once upon a time, small change, things like pennies, didn't have a consistent exchange rate with national currencies. The coins were too expensive for national governments to produce consistently, leading to shortages and inflation, and it disproportionately affected the poor, who used small change for their transactions. Over the centuries, people hoped to profit from schemes to mint small change during shortages -- sometimes legally, sometimes not.

Bitcoin is the Bizarro-world mirror image of that. Expensive, a plaything for the rich, easy to produce, but inherently deflationary. There is a constant, though: the schemes to profit.

However, like the variable value of a penny, there appear to be ways to tame it. Of course, those methods will cause Bitcoin to lose its comparative advantage in the black market and among ideologically-motivated speculators. Too bad, so sad.

18:

Triffids in Tulip-er Holland... I would read that novella.

19:

Charlie,

I am a great admirer of your work, so it really pains me to see that you've made this post based on fundamentally inaccurate information.

Your primary assertion "Mining BtC has a carbon footprint from hell" is based on untrue 'research' published by the site bitcarbon.org, which is referenced by the source article you link to.

Bitcarbon based their entire calculation on a wildly-inaccurate, very outdated guesstimate of power consumption they found at https://blockchain.info/stats

Clearly neither Bitcarbon, nor your source, made any effort to verify this number (despite a note at blockchain.info pointing out that it is probably not reliable). This totally undermines their data and brings all of their claims into question.

The fact is that the hardware that Bitcoin transaction processors are using today is 50-100x more efficient than it was a year ago. Although the difficulty of the work is increasing, the power consumption is not. In addition, far less power is being lost as waste heat.

https://news.ycombinator.com/item?id=6829860

http://bitcoin.stackexchange.com/questions/10060/how-much-energy-will-the-bitcoin-network-eventually-consume

Moreover, any financial network has operating costs. It costs billions merely to print banknotes. What does it cost to store and transport them securely? What is the cost of running a bank with all its physical branches and staff? Do you also wish them to "die in a fire"?

I hope this information will be helpful, and I look forward to your response.

Mike

ps I use bitcoin and I am far from being a libertarian.

20:
I think that's a dangerous statement to make in view of its extreme volatility.

It's not in view of the volatility, but in view of its acceptability.

Bitcoin can be considered as a currency, traded among banking accounts for financial transactions on the currency market (BTC China, Kraken, all are currency marketplaces, not "bitcoin banks"). Or it can be considered as a money, traded in exchange for goods and services.

Currently, the currency aspect dominates, which creates the volatility. Most currency markets have a dampening effect because the currency is backed by a money, and the free-flowing currency is usually small compared to the GDP of the associated economy. Not so much with Bitcoin.

As (if) the monetary economy around Bitcoin develops, it will come to dominate the flow of currency, and that's when the deflationary effects kick in. We're currently in a regime where the currency traders have a massive influence (fluctuate), plus a deflationary bubble : the amount of goods and services offered for bitcoins grow a lot faster than the amount of bitcoins mined.

So, I do expect for the medium term the ratio of bitcoin/€ (or $) to go up. Unless you get enough uncertainty in the system to break down that deflationnary bubble.

Anyone up for breaking SHA-256?

21:

There is a constant, though: the schemes to profit.

Yeah. "I can't think of anything economically useful or valuable to do, so I think I'll just try and manufacture money instead." Even the bankers issuing subprime loans and bundling them as CDOs and similar instruments tried to kid themselves they were helping people buy their homes. Whereas the bitcoin miners seem to me to have motives closer to the coin-clippers and forgers of old.

Pity we don't have someone of the calibre of Sir Isaac Newton hammering their asses.

22:

Uh, Charlie, this is satire ? I read your supposed-drunken-charlie-turd-tweets, so I'm not entirly sure about it.

  • "...Bitcoin to die in a fire" -> a digital one ?

  • "Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography)." -> oh noes, you did it.

  • "Bitcoin mining software is now being distributed as malware" oh noes 2.0 !

  • "imply that BtC will badly damage stable governance" -> dear...

Anyway, satire or not, I'm ok with you going Trotskyism and I'm eagerly awaiting the re-release of accelerando under the guidance of the fifth international !

23:

And we have a clear winner in the first-libertarian-to-show-up sweepstakes!

24:

My work here today is done.

I shall shortly retire to the pub ...

25:

I don't think they're smart enough to do that (for any value of "they" less pervasive and creepy than the Bavarian Illuminati, Robert Anton Wilson version).

My impression is that the TLAs like the NSA or GCHQ have some really smart, well-adjusted folks running around, but there's so much Shit Happening that all they can do is stay in reactive mode the whole time.

All right, perhaps not a False Flag. But very convenient for a certain reactive mode which may involve destroying even more privacy to save the economy from the horrors of Bitcoin. Also may facilitate intelligence cooperation between Western countries and China, which is not a good thing.

26:

Damm me to - thats the next genre to "borrow" for the laundry the "cosy catastrophe" obviously a post case nightmare green book.

Maybe mutant variants of skunk plants mutate and start wandering around Amsterdam - maybe that Dutch guy from avid could get promoted.

27:

The super-skunk they sell in Ams is definitely toxic, yes: ambulatory hemp plants in a Laundry novel? Yeah, I think I need to file that away for a rainy day.

(In other news: I'm taking a day off writing today, but expect to pass the halfway mark on Merchant Princes #8 some time on Saturday.)

28:

The average return on a hacked desktop running a bitcoin mining malware is in the cents/month. I'm not even convinced it is more valuable as a bitcoin miner or a spambot - I suspect the spam activity would be more remunerative.

29:

"Less money chasing stuff; less cash for everybody to spend (as the supply of stuff out-grows the supply of money)."

There is enough bitcoin for everyone to use. 2.1 quadrillion units after you divide a bitcoin to the eighth decimal place. So this idea of there not being enough for people to spend is logicaly false. This was the only economic point you had. I'm all for supply and demand free markets. The alternative interventions are evil.

30:

Bitcoin is one of those things that never quite made sense to me. That we don't really know who invented it, it seems too good to be true and everyone is flocking to it makes it seem like something straight out of a fairy tale. And fairy tales seldom go well for foolish mortals.

31:

While I’m no expert, I suspect that, when push comes to shove, the untraceability and tax avoidance are going to prove very overrated.

Since it’s a peer-to-peer protocol, there’s nothing stopping the IRS (and its equivalents) from sitting on the network and logging the IP addresses of miners. The use of out-of-country exchanges may make everything else hard for the IRS to track, but if they crack down on the miners, that’s going to seriously undermine the system.

32:

I agree with most of this except:

"Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography)"

Really, BTC allows them to emerge? Because there were not markets for assassins, drugs, or child-porn before BTC?

Generally my opinion is; while BTC has many flaws, I think competeing currencies are a good thing economically. We need more, but are stifled by the central-bank monopoly. I hope BTC opens the door for better things.....

33:

omg, first time ever someone called me a libertarian.

I shall have a beer, too. sigh

(If your pub accepts btc, I'll buy you the first pint from the 0.75 btc I own. Bought them a year ago via a swiss paypal account via a now defunct german bitcoin trading site, which was registered in London and had its account in poland. true story.)

((otherwise, if you ever come to Hannover, I'll buy you a nice Herrenhäuser payed with hard euros))

34:

You drove by from Hacker News, didn't you? Confess!

35:

Come to think of it, that's a good question. How are people paying for illegal stuff on the net now? This is something I never even wanted to risk googling but if child porn rings are turning a profit, someone's paying them somehow and it ain't in hand-written IOU's. Do they use credit cards? If so, how? Aside from the unforgivable ick factor of what's being bought and sold, there's an interesting technical problem here.

36:
There is enough bitcoin for everyone to use. 2.1 quadrillion units after you divide a bitcoin to the eighth decimal place.

You are mistaking the total amount for the individual value.

The total amount of bitcoins is fixed. However, if you use it as a money, i.e. for goods and services, the amount of those goods and services available for that money is NOT fixed. So the cost, which is simply the ratio of amount/good is completely tied to the goods. In an economy, the ratio of goods+services vs available money is an important indicator of the working of the economy. Read the pointers given by our host on inflation and deflation to see what a change in that ratio does to an economy.

One of the points (which is sold as a "very good point") is that the monetary policy of the Bitcoin Central Bank is hardcoded, and cannot be changed (except by an unlikely consensus of almost every bitcoin software user and writer). Conversely, an unflexible monetary policy... well, it's a bit of what's causing right now the euro woes (Central Banks refusing to change their policies in response to facts, and sticking to theories).

Right now, it's not a problem. It's not a problem because there is NO Bitcoin economy sphere; every single bitcoin actor (customers, sellers) operate in a sphere where alternate payment methods abound and in fact dominate their economic function (save for all those "bitcoin lotteries! Win thousands for cents!"). So those alternate moneys stabilize the non-existent bitcoin economy.

38:

Yup. You will note that most credit card transactions go through two agencies -- Visa and Mastercard -- who are easily leaned on not to handle payments for stuff governments disapprove of. Paypal are similarly problematic. Any centralized lending or credit agency is vulnerable to a single point attack, and banking regulations are the fulcrum.

Now, whether you think this is a bad thing or a good thing is the real question.

I'm not happy about payments to wikileaks being blocked by governments leaning on credit card agencies and Paypal. But I am totally cool with governments not allowing markets in anonymous assassination to emerge. Note that this is an essentially political issue.

The key problem with bitcoin is that it erodes the power of states to regulate. Which might look nice at first wrt. being able to help those nice wikileaks freedom-of-speech folks out, but begins to look a bit different when the tax revenue base implodes and takes down the social security net, medicare/medicaid/the NHS, pensions, police/fire/ambulance provisions, road repairs, and so on.

39:

Bitcoin is currently being used as part of the ransom payment scheme in the CryptoLocker Malware scam, and directed at lawyers in British Columbia, Canada.

The scheme eventually requires a money-laundering vendor, and so brings bitcoin onto the radar of folks who worry about money laundering. Said people in BC are, of course, inclined to listen to enraged members of the Bar (;-))

Thus: technologies which are designed to be attractive nuisances are also attractive to the nuisance-removal people. If the nuisance starts being life- or wealth-threatening, then it becomes "interesting" to crown attorneys and police forces.

--dave

40:

Wow ! This is an ignorant rant.

Almost every point made is totally incorrect.

It is central planning (e.g. central banking) that relies on a gross oversimplification of society NOT libertarianism. Do you even have a definition of libertarianism ?

Do you hate left and right libertarians equally ? What about anarcho-capitalists ? Or maybe geo-libertarians are the true evil ? Competition IS NOT EVIL. Force from the top is evil.

41:

Bitcoin strikes me as useful in confronting libertarians with the consequences of their theories. It turns out that a truly unregulated market in money is epically boom-and-bust, intensely unequal, full of crooks, a means to make crime pay, and a quick way to lose your shirt. Who'da thunk.

42:

With regard to the criminal mining (use of malware to mine bitcoins) I think this will this will almost completely disappear in the near term. Due to the changing nature of the complexity of the bitcoin mining process, the ability of commodity hardware to mine a dollar value of bitcoins in a week is so low that mining bitcoins is likely not an efficient use of a compromised computer. If I were a cyber criminal and I had a couple hundred computers I would likely be able to make more money with the computer sending spam or engaged some other type of fraud (click fraud comes to mind but it could be whatever) That I think you will see very little of that criminal misuse going forward.

With regard to bitcoins being investment currency. There seams to be an endless legions of investors in the bitcoin thrall and they are all missing the point. The value of bitcoin is going to go up and down but in an unpredictable manner making it a poor investment. However, as a transaction currency it can work very well. as a transaction currency its volatility is problmatic. If the volatility issue moderates it will have a huge impact in micro transactions and other types of web transactions. I see it as a potential PayPal killer.

43:

"Bitcoin is pretty much designed for tax evasion."

So is cash (Bitcoin is basically digital cash), are you going to ban cash transactions too?

44:

And we have a clear winner in the frothing crank competition!

Roll up! Roll up! The freak show is coming to town!

(NB: The comment this is a reply to is borderline for a yellow card. I'd appreciate it if the visitors would take time out to review the moderation policy; it might save us some annoyance later ...)

45:

Oh also, it would be really interesting to see who's been shorting BTC just before the big busts.

46:
Do they use credit cards?

Usually more like money orders.

One of the thing you need to understand when trying to use "untraceables bitcoins" is that every amount is fully traced. Someone paying with bitcoin a shady site full of child porn will have the transaction from a wallet he uses to a wallet the porn operator uses visible for essentially the entire existence of Bitcoin.

Once the Feds unwrap something like Silkroad, they get the number of the wallet where your bitcoin ended, and can trace back all people who sent bitcoins. At the other end, you probably got your bitcoins by going to a marketplace, putting down some € there, and getting bitcoins transferred from the marketplace account to yours. So the police notices that the transaction chain goes from Silkroad to Kraken, they send a subpoena to Kraken to identify who did the transaction crediting your initial wallet, and you're done.

(you can attempt to obfuscate the path leading from purchase to spending using intermediate wallets, splitting and combining amounts, but unless you manage to implicate "mules", i.e. wallets of people unrelated to you thru which the amount flows, you don't have a Caiman Island banking trust to hide any of the transactions).

47:

This is kind of a "money spent on space exploration could have been better spent on more worthwhile things" kind of logical fallacy argument, but... I read that the raw computation power used for mining bitcoins is now exa-obscene (and, granted, we already waste a lot of monies on video games and horrible movies). Couldn't we expend that computing power on more worthwhile projects? Anyone have an idea how many protein folding solutions, or controlled fusion simulations, or BEC spin resonance scenarios, etc., bitcoin processing could have done so far?

48:

You should probably get more acquainted with the concept of "Level 3 Assets" since we taxpayers have assumed such a large stake in them.

A Level 3 Asset is priced indirectly by a model, which can be proprietary. That is, the value of a Level 3 Asset can be pretty much whatever the binary black-box code I wrote say is is, all this is legal and fine with GAAP!

Now, during the financial crisis, banks could deposit these things with central banks as a collateral for new loans - which effectively means turning these things into real money. Knowing how the banks operate it is logical that they would hurry up and produce as much as these things that they possibly could while the going was good. Then deposit at the FED, in return they get proper bonds, that trade on a real exchange, and they are "capitalised" again.

If one checks with ISDA, who keeps a sort-of check on the unregulated derivatives market, indeed the "value" of the derivatives increased during and after the financial crisis.

Modern Finance is like "Fraud all the way down"!

49:

My current theory is that bitcoin is designed to cull libertarians from the herd. Get them using a fiat currency, then show them the power of deflation.

50:

Your argument makes two claims: (1) Bitcoin makes it harder for governments to control where people spend their money, (2) Bitcoin makes it harder for governments to tax their citizens.

Claim 1 is probably true, as long as the purchases are not illegal (donating to wikileaks was not illegal but merely blocked). The US government has been fairly effective at tracing Bitcoins used in illegal transactions. That is, they know you donated to wikileaks, but they can't prevent you without charging you with a crime after the fact.

Claim 1 does not imply Claim 2. I've talked to some US banking regulators and they don't think taxing Bitcoin is a serious problem. In fact when compared with cash or valuable objects such as gold, Bitcoin is far easier to trace and tax. Everything would be easier for the IRS if tax dodgers switched to Bitcoin.

The question is not if you can tax Bitcoin, clearly you can, the question is at what point does it make sense to tax Bitcoin. Do you tax each time bitcoins move from one wallet to another? If so at what exchange rate. My personal view is that Bitcoins will probably be taxed, like stocks, when you cash them into local currency and/or when you purchase something with them (sales tax).

I worry that you may be confusing the political ambitions of Nakamoto with the actual realities of Bitcoin.

51:

About black market online payments now, here's an interesting overview from Brian Krebs from back in May. http://krebsonsecurity.com/2013/05/underweb-payments-post-liberty-reserve/

He points out how Bitcoin's volatility makes it undesirable as a payment mechanism.

Before LibertyMarket, there was eGold.

For discussions of dark payments in the physical world, take a look at Loretta Napoleoni's Rogue Economics - http://www.amazon.com/Rogue-Economics-Loretta-Napoleoni/dp/1583228241. For example, one direct effect of the Patriot Act was greater difficulty hiding large transfers of cash in USD. The first order unintended consequence was a drive by the Colombian drug cartels into the Euro. The second-order consequence was new business relationships between the cartels and the 'ndrangheta. The third-order consequence was increased distribution of cocaine across Europe.

The Krebs article is an illustration of Napoleoni's core argument: underground/illegal economies move faster than nation-states can react.

52:

You're being more tolerant than I would with a drive-by who's being actively personally insulting.

53:

Let's try to refute your points one by one:

"Mining BtC has a carbon footprint from hell (as they get more computationally expensive to generate, electricity consumption soars)"

Bitcoin is not not necessarily going to be more computationally expensive to generate. The difficulty could also decrease in the future or it could remain the same as it is now. Also, the electricity is not wasted, it provides integrity and security for the entire bitcoin payment network. How much resources do you think banks spend to keep their deposits safe from hacking and physical theft? Do you also consider those resources wasted?

"Bitcoin mining software is now being distributed as malware because using someone else's computer to mine BitCoins is easier than buying a farm of your own mining hardware."

It's not easier (otherwise, everyone would do it). It's maybe cheaper, but it's also illegal and can land you in jail. Mining BTC's on stock computer is also not very effective and the profits will decrease in the future if the difficulty of mining would rise.

"Bitcoin violates Gresham's law: Stolen electricity will drive out honest mining. (So the greatest benefits accrue to the most ruthless criminals.)"

Botnets make very small portion of the mining market. As stated above, cpu mining is very ineffective and can in no serious way compete with mining on specialized hardware (ASIC chips). See https://blockchain.info/pools for current stats. Botnets would be some portion of the "unknown", in other words - less then 14%.

"Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography)."

Bitcoin lack of regulation is a myth. You write about china regulating bitcoin in this very article. Other existing regulations (KYC/AML laws, MSB licences, income/capital gain taxes etc.) already apply to bitcoin. Bitcoin lacks central authority but this in no way means that it is somehow extempt from our legal framework. Drugs should be legal anyway so i consider drug markets one of the good things bitcoin enabled. Assassination/child pornography/weapons are different matter but those markets already existed before bitcoin and i don't think bitcoin had any effect on their size. Ever tried to ship some illegal weapons via mail service over borders?

"It's also inherently damaging to the fabric of civil society. You think our wonderful investment bankers aren't paying their fair share of taxes? Bitcoin is pretty much designed for tax evasion."

Bitcoin is like cash. I agree with you that it is (relatively) easy to avoid paying taxes using cash or bitcoins. There are two solutions: 1) ban financial privacy, make reporting of every transaction mandatory so it can be taxed properly. Bitcoin actualy helps with this solution as every transaction is already public in blockchain. The only step remaining is to enforce proper registration of bitcoin addresses with their owners (and ban transactions from/to unregistered addresses) 2) reform tax laws so we actually tax the things that make sense - land and physical property. there is no reason to tax income, financial transactions, sales, gifts, inheritance, capital gain, alcohol/tobacco consumption, gambling, import and export etc. (you name it). It makes no sense. If people did more of those activities, there would be no harm as those activities are not limited resources. Taxing land/properties and other limited resources on the other hand makes sense. They are limited so we want them to be utilized effectively. We don't want rich people to squat large areas of land or lucrative buildings in city centers without using them properly. As a bonus, with limited resources you can easily keep track who owns them and who should pay taxes on them. You also keep the financial privacy. This would be my preffered solution.

54:

Maybe the NSA created bitcoins simply to root out people that they can later squeeze - or bust to meet KPI's?

Bitcoins are created by smart people and there is a sort-of inverted NSA-ish logick in creating anonymous money that has the path the money took embedded into it every time it is "spent". Like placing a GPS chip with memory in every dollar bill, but much cheaper and less prone to whining from the people who support potential terrorists by being against surveillance.

55:

To be honest, I rather think our gracious host may be missing the positive side of experimental currencies, and of tax avoidance measures of all kinds. Experimental currencies are good because they keep the idealists poor and the libertarians are kept thinking.

Tax havens or tax dodges are similarly a good thing because they limit how much tax a government can extort. France is currently re-discovering the Laffer Curve; the UK is a net beneficiary here as quite a few rich French businessmen are decamping to these shores to avoid excessively stupid and greedy taxation.

All Bitcoin does is gives the over-taxed a greater plurality of ways of avoiding tax, whilst remaining rich. If you remove these ways, then two things happen. The aspiring rich quite often simply give up on the idea, and the government then loses these potential tax revenues entirely. Other more criminally minded people go into politics, and the political sphere then starts to resemble modern Russia, where politics, money and criminality are inextricably linked.

It all really comes down to how you keep a government honest, and the only way thus discovered is to allow citizens to legally escape taxation if they but expend some effort to do so. Any other path seems to lead to eventual ruin.

56:

OGH said

"And we have a clear winner in the first-libertarian-to-show-up sweepstakes!"

and also

"And we have a clear winner in the frothing crank competition!"

I think OGH is getting a tad bored with writing non-stop, and decided to take a break and see what he can flush out of the woodwork. And boy, is it working.

57:

This isn't quite the answer to your question, but addresses pieces of it. In fact, "how do we deal with the money from our completely illegal enterprise" is a huge issue, and back in the 1990s the U.S. government started a fake bank, laundered money for drug dealers for a while, and then arrested hundreds of people using the information they got: http://www.npr.org/blogs/money/2012/11/20/165590860/episode-418-how-the-government-set-up-a-fake-bank-to-launder-drug-money

(It's a really fascinating piece, about 20 minutes long.)

58:

Bitcoin is ideal tool for a task like this because despite the fact that it is "anonymous", as soon as one account become "dirty", all the related accounts can be easily tracked and if some of them is associated with real person somehow then bah!

59:

Oh, yes, please explain to me how tax evasion is a moral good. Oh yes, the poor overtaxed rich.

Which may be the same guys that evade around 79 billion € per year in Spain while we cut all social services for the ones that pay they taxes religiously because you cant evade your pitiful paycheck.

But really, lets give the poor wealth creators a break.

60:

The power figure you are quoting is wrong by a factor of at least 100. It's based on the data on this page:

https://blockchain.info/stats

Note in their assumptions they say:

"Electricity consumption is estimated based on power consumption of 650 Watts per gigahash and electricity price of 15 cent per kilowatt hour. In reality some miners will be more or less efficient."

This is based on GPU mining, which hardly anyone is doing any more. Most people are using ASICs and a more realistic power figure is 2-3 Watts per gigahash, and the most efficient units are 0.6 Watts per gigahash.

Take note that on that page it also states that miners are losing nearly $19M per day on electricity spending based on their power estimate.

61:

The Laffer curve is of course unrelated to the matter of tax dodging and tax avoidance. Moreover, last I read, if you ran the maths (something libertarians and their ilk are loath to do) you end up with the top rate tax level somewhere north of 50%.

62:

I've been following the Bitcoin saga on and off for over two years now. (started June 2011 or so) I keep expecting it to go down in flames, and it keeps rebounding. I have no idea how it keeps going. I remember when $30 per Bitcoin was the astounding high it would never hit again before a terrible crash. Now it hit $1000 and crashed again? Geez.

All the points brought up in the article are the same things I've been seeing sensible people say about Bitcoin from the beginning. And yet it keeps gaining an odd form of legitimacy. Someone's going to write a hell of a dissertation about it in a decade or two, I think.

I don't think it's a deliberate operation to bring down the banks, though. Before the first craze hit it was just a cryptographic toy, a "hey look at this" program. Then the libertarians got a hold of it and made a community around it. It's about then that Bitcoin goes nuts and starts on the boom and bust cycle we see today.

As for the future...I'd like it to go down in flames, but every time it has so far it rises again a few months later, like a phoenix born from neckbeards and fedoras. I've given up trying to predict when the inherent problems are going to catch up with it. Now I'm just hoping my dad doesn't get involved...it was bad enough when he was obsessed with buying gold.

63:

Actually, it looks like I may be mistaken, they appear to be basing this on bitcarbon, which says:

"...the carbon footprint of the Bitcoin mining network will be proportional to the exchange rate of Bitcoin assuming that 90% of the dollar value of Bitcoin is spent on electricity."

but I think based on more reasonable power usage estimates that number should be somewhere around 10% not 90%.

64:

Seems to be rebounding now. Or at least got to 600$

I think the yoyo is very profitable and somebody figured out that no ammount of reality is going to make the true believers go away... for now at least. So every crash is an investment opportunity...

65:

"Going Gault"...I still wonder - who mowed John Gault's lawn? Objectivist immigrants?

66:

Of course that may end up being a game of chicken...

67:

Even the bankers issuing subprime loans and bundling them as CDOs and similar instruments tried to kid themselves they were helping people buy their homes.

Hahahaha! I just snorted my(dumb brewed)tea. You haven't worked on/dealt with Wall Street, have you?

Bitcoin may well not be the answer, but I would very much like a transaction mechanism that is anonymous and not vulnerable to simple theft. I am personally sick and tired of stores collecting my purchasing information. I don't want to have to go to ATMs to get cash that could be stolen. I don't trust S/W companies to offer no strings attached electronic wallets.

I want convenience and anonymity. Is that too much to ask for?

68:

Those criticising Bitcoin for its 21 million max property have missed a few things. If your design criteria for a currency is a p2p system with no central authority, then the way to bootstrap it leaves you with few options. Halving the reward every four years is a very elegant option, and in some ways the only one that really works.

But this is such a complex system that I just don't have the energy to elaborate on it here, since I think I came to this party way too late for anyone to listen.

I have studied Bitcoin extensively for over three years, and I believe it will be as big as the internet in how it will change things.

Of course it will bring out scary things, such as assassination markets, but the genie is out of the box, and the benefits are huge compared to the drawbacks. Again, compare it to what people said about the internet when it hit mainstream! "But it will be filled with porn and violence".

So, the Gini coefficient is high. It has been out in the open for FIVE FUCKING YEARS. It is not OUR fault that you guys didn't pay attention until now. But the whole discussion is stupid. Bitcoin is a niche currency, why does it matter if it isn't evenly spread over the land to everyone?

69:

Now, whether you think this is a bad thing or a good thing is the real question.

I think this will boil down to what the primary terror was for each person in their formative years. If you grow up with weak and ineffectual government, you want someone to come in and protect you from the bandits and corporations that are abusing you. If you grow up with strong government, you may see them as the problem and want the free market to come in and save you.

We'll always be familiar with the failings of the current system and only see the marketing brochure for the new system, not yet knowing what the shortfalls will be until we make the switch.

70:

Bitcoin is also a major Economics 101 fail. With a mildly inflationary currency, there is a really good incentive to invest in new business, expansion, etc - if you just sit on the money, it slowly loses value, but if you invest, you may be able to make money, or at least stay ahead of the inflation curve.

With a deflationary currency, there's no longer the incentive to build that new factory, launch that startup, buy shares in a company, take a risk - just sit on the currency and it becomes more valuable (for loose definitions of valuable, in the case of Bitcoin)

At least with gold, mining more gold creates some jobs, and the increase in difficulty is probably closer to linear... think of gold as an O(n) currency, bitcoin is closer to O(n^2).

(Having said that, starting a competitor is tempting. Just make sure to mine the easy stuff for yourself first, then sell it off as the suckers move in)

71:

It's really only the techno-libertarian types that are interested in bitcoin. As a group libertarians tend to be rather conservative when it comes to ways of storing wealth. You'd find gold and land is much more popular. Or ammunition, with the survivalist types. :)

72:

And while civilization crumbles under the death rays of the evil bitcoin empire.. Mark Zuckerberg alone still holds more money in his piggybank than the peak bitcoin market cap.

Anyway. Don't let minor factoids like that get in the way of a perfectly fine frothing...

73:

(Having said that, starting a competitor is tempting. Just make sure to mine the easy stuff for yourself first, then sell it off as the suckers move in)

All altcoins are traded against each other, so it doesn't matter.

Me, I regret I missed the dogecoin train. Wow. So crypto. Much value.

74:

I haven't seen anyone mention my favorite nickname for Bitcoin, courtesy the commentariat (or possibly the host, Yves Smith) at Naked Capitalism: prosecution futures.

75:

France is currently re-discovering the Laffer Curve;

Ding! You said "Laffer curve". I say "crank". Put it another way: we've had 30 years of "trickle down" and I have yet to see any sign of the Gini coefficient diminishing.

This may be a feature, not a bug, in your weltanschauung, but I for one would prefer to be an average citizen in a social-democratic utopia than a billionaire cowering behind barbed wire in a hellish kleptocracy.

76:

The BitCoin pattern of repeating peak-and-crash has some interesting implications. Let's say there's two types of buyers: True Believers and Speculators. The True Believers plan to buy and hold until the crypto-currency utopia comes true; the Speculators plan to sell as close to the top as they can.

We start with low-value BitCoins, and assume both types drift in at equal rates. As more people invest, the value starts to climb, drawing in more people in the usual bubble pattern. Then it bursts -- bad news, random fluctuation downward, whatever. The price starts dropping. At this point, the Speculators start to sell, but the True Believers see only cheap coins, and buy instead. The price bottoms out when all the Speculators have left the market, and the cycle repeats.

The net effect is that the Speculators end up with all the USD, and the True Believers with all the BitCoins. The whole system acts as a mechanism for the Speculators to extract value.

77:

My unique-visits-per-day metric was dropping.

Also, today's a no-writing-novel day (I've cranked out 44% of a novel in 23 days; I need some recharge time). Finally, the Bitcoin buzz has been getting on my tits all week; it was time to strike out.

78:

My hypothesis: when the social elevators are thin enough, capillary forces prevail and wealth actually flows up.

79:

The Invisible Hand of the Market mowed John Galt's Lawn. With tweezers.

80:

The lawns of true Objectivists don't need to be mowed.

81:

If one did computation in a building requiring heating, and if the power was nuclear, then it might be a reasonable way to keep warm at low carbon cost.

As to the rest, I'm still not sure bit coin is money rather than commodity (and alarmed at the idea that money is a commodity).

82:

Well yes, that would appear to describe Disaster Capitalism as currently practiced in the western world quite cogently. (We're in the midst of the biggest transfer of wealth from the poor to the rich since the 1930s. Probably since the 19th century.)

83:

Guessing the CIA released bitcoin to distract bugs like me from gold and silver - get us to sell our metals to keep prices down and replenish gov't stockpiles so they can pay back Germany's gold, then crush the bitcoiners in a burst bubble.

84:

This nerd deleted my comment, and is against free and open source software? I bet you use a mac, fascist. I was just providing the people any easy way to dispose of their coins to fuel the fire that bitcoin can die in. - 1CJfPXHMtwdqoJGHyBkuaJ3Q14N9TiYrzV

Bitcoin wasn't created with a political agenda, it was created as an easier way to send money online. That's like saying that SMS or Email was created with a political agenda.

So are you going to be a wiener and delete this comment again, or try to make actual disscussion?

Love and peace, S. Nakamoto

85:

What are your thoughts on dogecoin? doge have no political agendas. shibe just want to go to the moon.

http://reddit.com/r/dogecoin

wow

86:

I keep seeing "a computer is not very efficient in mining BitCoins" as an argument against malware mining. The authors seem to be conveniently forgetting that malware ideally does not target "a" computer. It targets "every possible computer accessible". If you get thousands or millions of machines to do something inefficiently, it starts to get much more efficient. Case in point: Google uses thousands upon thousands of relatively cheap rackmounts to do supercomputer-style parallel calculations. Malware mining is a fabulous deal for the perpetrators: they invest in building the engine, and let all the owners of infected machines pay the bill for it.

87:

Yellow card

Please read the moderation policy before you comment again, S. Nakamoto.

Hint: this is not the United States, I'm not the government, and you have no absolute right of free speech on this private blog which I pay for out of my own money and run for my own amusement. If you want to exercise your free speech rights, go get your own blog.

Yes, I'm using a Mac. (And I wear black. JUST LIKE HITLER.)

All technologies come with an implied political agenda, if only because they rely on infrastructure that has logistic prerequisites -- pipes or wires in the ground/overhead, folks in uniform to run around delivering those telegrams, whatever.

88:

Charlie, you really should consider switching from a mac to a computer that respects your freedoms. Use of proprietary technologies like those that come from apple restrict your freedom and don't really allow you to use your device to the fullest.

I suggest checking out some operation systems listed here - https://www.gnu.org/distros/free-distros.html

and perhaps switching from a mac to a lemote - http://www.lemote.com/en/ with open hardware.

Thanks and have a nice day, S. Nakamoto

89:

Yes Charlie, definitely switch to one of those distros if you want to spend all your time tuning the operating system and not working...

90:

I think we reached the Poe's Law point.

91:

While it's true that these operating systems are not the childrens toy equivalent of computers like macs are, most people with at least a fifth of a brain can use one. I would reccomend trisquel to the more "simple minded"

Hugs and kisses, Satoshi N.

92:

Dude, I spent quite a few years as Linux/software libre columnist for the second best selling monthly newsstand computer magazine in the UK. I quit a decade ago; found I prefer an environment that helps me Get Stuff Done, rather than endlessly recompiling kernel modules.

In my prehistory I got a CS degree and worked for a UNIX house.

Grandmother, eggs, sucking thereof: if granny chooses not to suck eggs because they taste bad and smell rotten, you might consider respecting her choice.

(I am now off to the pub to drink warm beer that smells faintly of rotten eggs. Because I can.)

93:

Charlie, why would you ever quit doing gods work? Did they nsa pay you to stop fighting for electronic freedom?

Enjoy your beer, S. Nakamoto

94:

Nah, no way this is a real person.

95:

I suppose the only way to prove this would be to add captcha support to the comment box, but i promise that I am as human as you.

011100110111010001101111011100000010000001110100011100100111100101101001011011100110011100100000011101000110111100100000011000100110110001101111011101110010000001101101011110010010000001100011011011110111011001100101011100100010000001100100011101010110010001100101

love and kiss. s. nakamoto

96:

Clarification: it's a troll.

97:

(S)he is funny though; perhaps we should keep them as a pet?

98:

If you grow up with strong government, you may see them as the problem and want the free market to come in and save you.

And if you grow up in your parent's basement, then you are shaped by an environment where the fundamental constraints on what you want to do are shaped neither by scarcity nor malignance, but by genuine good intent. Your relatives probably don't wan't you to spend all day smoking pot and playing video games; in some cases they will over-estimate just how much of a bad thing that is. And even if they are right, it's not like anyone facing such hectoring is going to admit it.

Pretty much every libertarian position can be understood in that frame of restrictive but benevolent authority being the root of all 'real' problems. It's a rare parent who literally tortures their kids, so torture is, at best, not a 'real' issue, not a priority. But many make them do stuff for their health, so mandatory health insurance is a big deal. Pretty much no parents kill their child with drones, many read their diaries. And so on.

So to libertarians, Bitcoin is like wages from a fast food job as opposed to an allowance; lets you buy what you want without someone else having a veto. Only money that doesn't judge you can be considered entirely yours...

99:

"Let's say there's two types of buyers: True Believers and Speculators..."

My sense was that the earlier spike (early this year) was driven by speculators. But this one appears to have been neither -- rather, people in China using it pragmatically as a way to move currency around without the government noticing. Thus the impact of Chinese regulation.

The "deflation" argument only bites if there's a full-on bitcoin economy, and I don't think we're any closer to that than we were on bitcoin's first day.

One model of "bitcoin success" is as low-friction cash, accepted as alternative currency more or less everywhere. In this form the fixed supply doesn't matter, because most users are buy-here-sell-there-immediately. The people who are holding big pools are one-time winners, much like anybody who got in on the ground floor of something. (People who bought Apple stock in 2005, etc.)

(Then there's the argument over how untraceable people really want their cash to be -- see the Sheep Marketplace story from a couple weeks back.)

I guess the point is that the value of the system is very dependent on external factors. Bitcoin is not going to break banks, or nation-states, or the world, because it's not that different from anything that currently exists: it's not absolutely untraceable, it's not absolutely unregulateable, it doesn't have exactly zero transaction costs. It will wind up fitting in somewhere. This is a boring position to take in a political argument, I know.

(On the other hand, the unbounded capital cost of mining is pretty damning. Regardless of whether that one carbon article was accurate, it is still true that there's an arms race to burn money on mining.)

100:

Well, Bitcoin is volatile, at least partly because there aren't many people trading it. I'm sure there will be many more ups and downs. It will be more interesting to see what it does long term. I think the main problem for it will be that states are likely to outlaw exchange between it and their currencies, like China did.

Other than that you're mainly blaming Bitcoin for crimes commited using it, as they wouldn't otherwise occur.

The policy of central banks maintaining a low rate of inflation is not so great if you're not clever enough to do trading in high return, high risk investments. As it is, it is currently very difficult to save money as savings accounts do not pay enough to beat inflation.

In theory a currency with a fixed supply would deflate at exactly the rate of economic growth, which would be harmless and beneficial for savers.

101:

Charlie @ 23 Libertarianism, like Leninism, is an attractive, internally consistent ideology which provides a prescription for achieving a utopian society populated entirely by frictionless perfectly spherical human beings. Or so it is said ....

102:

osmosis @ 29 What, pray is a "free" market? They are all rigged, in favour of the biggest & most corrupt. BitCoin is even MORE rigged in favour of the .... That is the problem, as stated by OGH. Now what?

103:

Looking at your classification of what should and should not be taxed, I am not sure that I want to find out the consequences of your proposals.

reform tax laws so we actually tax the things that make sense - land and physical property. there is no reason to tax income, financial transactions, sales, gifts, inheritance, capital gain, alcohol/tobacco consumption, gambling, import and export etc. (you name it). It makes no sense. Yes, you're correct that land and physical property are a different sort of resource, but I have heard enough stories of the ills arising from a dependence on land taxes.

I'm not sure just what you mean by "property". Is it limited to assets fixed to the land, such as a house, or does it (at the other extreme) include the pen in my pocket? Are they to be taxed on acquisition, or is there an annual payment?

Frankly, having had to deal with some of this sort of thing at the bookkeeping level, I'd rather have an income tax system, as a matter of practical administration. How do you even assess the value of real estate, just as a starting question.

There's quite a few points you make which don't sound crazy. They can be argued about. But when you play your final card, you suddenly look as honest as the poker player who produces five aces.

104:

Assumption: The "miners" are physically situated inside the USA's domains. Even of they are now, they won't be if what you suggest looks like happening .../.

105:

My hats off to you for having the vast brass stones to fight libertarians on the internet. I agree completely that BitCoin is ridiculous. I especially wonder if the whole thing is funded on a myopic nerd-boy assumption that people are ready to (and should) trust algorithms rather than governments.

I can't really expand any of my substanitial thoughts now, but let me leave my favorite literary-bitcoin conundrum here:

Was Ellen Ullman's cypherpunk boyfriend described in her amazing memoir "Close to the Machine," a proto-bitcoin guy? She describes him working on crypto-currency...

106:

@ 40 I think OGH won't like you when he returns - also, please read my quote # 100 on Libertarianism?

107:

@ 53 Your loony-libertarianism is showing: 2) reform tax laws so we actually tax the things that make sense - land and physical property. there is no reason to tax ... Some of us would disagree, profoundly with that statement. I would have to leave my home of 65 years, because I could not afford the tx. You know what you can do with your suggestion. Also, income tax is PROGRESSIVE - the more you earn the more you pay.

108:

I actually don't have any particular issue with the underlying concept behind Bitcoin; in fact I think at least two of Charlie's points (the underlying ideological basis being dubious at best and the mechanism for determining its worth making no sense whatsoever) could be just as fairly applied to the twenty-pound note I just exchanged for some Christmas spirit. (From the off-license.)

But where it's gone wrong, I feel, is that nearly everyone doing anything serious with it appear to be using it as a get-rich-quick cheme instead of an actual currency. See the ridiculously unpredictable exchange rate.

109:

The point about power consumption may be true. The difference seems rather too large to be plausible, but I'm no expert. And I have no idea if you are. So, cite please.

And what does a suitable ASIC cost? I know, in a general sense, what you're talking about. And, when I Googled on ASIC, the top of the list was an advert for a company offering to do the work for you at $10.18 per gigahash. Which is a heck of a lot of kWh. (Watts oer gigahash is a useless number to quote.)

60 kWh per gigahash is crazy (and how many gigahashes per BtC?), so we can assume the energy cost is much less than $10. Allow for profit, too. But that company offers deals of up to 1000 gigahashes per second.

(If it were joules per gigahash I could get somewhere with your figures.)

110:

@103

Maybe they won’t be in the US, but they have to be somewhere. It would be an unusual government that wouldn’t want its cut.

111:

"when the tax revenue base implodes and takes down the social security net, medicare/medicaid/the NHS, pensions, police/fire/ambulance provisions, road repairs, and so on."

It also takes down the state's ability to wage illegal wars and spy on its citizens. This would be a good thing.

112:

How about a pure purchase tax? The only way I've come up with of fiddling that is to pay actual cash for part of $item, and sooner or later the fact that someone's got more money than their profit on sales explains has got to show up.

113:

Which implies that you see a certain equivalence or perhaps prioritise the spying and war thing. Of course the biggest country to engage in such also has the lease social safety nets...

114:

Sataoshi / nakamoto What is this "god" of which you speak? Undetectable by any means, IIRC. Charlie reminded you that : WE ARE NOT IN THE USSA, okay? Please try to remember this - that your parochial state's rules are not universal.

Unless, of course, you are just trolling, in which case - have a nice day!

115:

@ 110 "A good thing" Really - no spying, no illegal wars, & no state at all, merely what Hobbes referred to as "And in that state of Nature..."

Like Charlie said, excanging a hangnail for, euw....

I suggest your priorities are skewed

116:

The linked article does not measure the Gini coefficient for the Bitcoin economy. It looks at the distribution of Bitcoin amongst wallets. There is not a one-to-one mapping of wallets to humans. One large wallet may serve thousands of people, for instance - a trading exchange with thousands of clients. And multiple wallets may be owned by an individual, as a method of reducing the risk of loss.

I know of no study that measures the real Gini coefficient of the Bitcoin economy. I have no doubt that there are individuals with great personal Bitcoin fortunes, but have no way of knowing how that compares with the traditional economy. I am also sure that there are a multitude of Bitpaupers, folks who, wanting to see what it was all about, went to a Bitcoin faucet and solved captchas for a pittance.

Just to say where I come from on the Bitcoin issue: I'm a practical, selfish American lefty, that is, I prefer some collective social welfare to the idea of having to defend the homestead myself against the hungry masses. I generally favor Bitcoin. I can find nothing in Bitcoin that is incompatible with modern finance and governance except that it removes the capacity of a government to print more money. And it provides a benefit of a fully transparent ledger of all transactions everywhere.

There is a significant segment of the Bitcoin culture that runs libertarian, but that doesn't make Bitcoin a libertarian tool. For comparison consider the substantial intersection between libertarians and proponents of Universal Basic Income.

117:

I think you are heading into a spherical economist mode of thinking. A limited supply of digital tokens would only work if they were used for every transaction, so that the value of everything could be counted. And that would mean it would have to be the only medium of exchange. No barter, and no gifts. No unwanted Christmas presents may be sold on eBay.

No arbitrage.

Which means no financial markets.

Your idea depends on perpetually perfect knowledge, which is impossible, as we understand physics today.

118:

If I may derail the conversation for a moment, I'd like to point out that OGH has refuted Godwin's Law with that comment, to the point that he has won the argument (as Mr. Satoshi subsequent posts clearly show) while mentioning a certain Charlie Chaplin lookalike from Austria.

119:

But, without the other elements, how many of us would be alive to experience the good thing?

120:

Full disclosure: I'm a card-carrying Libertarian.

I thought BitCoin was a bad idea. I did think it was a form of cognitive dissonance for my fellow libertarians to blast fiat currency as worthless paper, then embrace money that consists of nothing more than 1's and 0's. And what is to stop other private entities from designing their own currency systems at will? If BitCoin "works" today, somebody else would develop "ByteBuck" tomorrow, and perhaps "GigaCash" after that. Money ceases to have value when it is no longer scarce.

121:

Doesn't make much less sense than embracing currency that consists of rare, aesthetically pleasing but not ultimately very useful metal, though. Not if you're deluding yourself it's any less of a fiat currency, anyway.

122:

Did they nsa pay you to stop fighting for electronic freedom?

You could always ask my co-author Cory Doctorow ...

123:

Okay, time for a little thought experiment.

A little over half of all possible BTC have been mined so far. Imagine those who currently hold those BTC just hold onto them until all BTC have been mined, and don't do any further mining. They just sit on their massively deflationary asset, like you DO when you have a massively deflationary asset.

Now imagine that everyone, every single person on Earth, simultaneously decides to go with BtC for their transactions. Since the people holding the current half are just sitting on them, the rest of the world has to mine, distribute, and then use the remaining half of the BTC space, to run the world's economy.

Let's ignore the USD-BTC or whatever other conversion rate for the moment. Assume that by the time the BTC space is mined out, the entire world economy is being denominated entirely in BTC itself.

Now, at this point, the holders of the first half of the BTC supply wake up from their hibernation, and realize that their dream has come true: They own half of the ENTIRE WORLD'S money supply.

In this sense, BTC bugs and goldbugs are pretty much hoping for the same thing. If their little pet boutique currency becomes a dominant currency, then the demand for the currency goes WAY up, making it massively deflationary even beyond any internal deflationary nature the currency may have baked in. They are hoping for everyone else to get suckered into the market they have already stockpiled.

This hasn't really happened with BTC. If you think the BTC price trajectory has been stratospheric so far, imagine what it would look like if it was actually taken seriously and it turned into a real currency, thus requiring tens/hundreds/thousands of millions of people to buy into it, in order to have some to use as currency. Imagine what that kind of buying pressure would do to the USD (or whatever) to BTC conversion price.

It's the hope of roping in those tens/hundreds/thousands-of-millions of suckers that is keeping BTC-bugs warm at night.

124:

I do have an O-level in economics.

I reckon it puts me several steps ahead of some of the unfamiliar comment writers here.

What I learned about statistics and probability also puts me ahead of some politicians. And remember, a Smith & Wesson beats five aces.

125:

Pretty much all currency has no real value in itself, the value comes from other people being willing to trade things for it. It problem comes with money supply, and the ability to increase it by fiat. Libertarians have concerns with governments being able to create money at will, and feel that gold is more reliable since it is difficult to increase the supply rapidly. Though that has problems of its own, which we saw in the US in the 19th century with the whole gold vs. silver debate.

126:

I suggest to you that the people of Iraq and Afghanistan, not to mention the families of all the western combatants who dies or were maimed, would be more than happy to make that trade.

127:

I'm a libertarian, and I'm one of those who thinks the hype around bitcoin is silly. I'm all for private currencies, but the price of bitcoin is nonsense - pure speculation.

And since you mention basic income, I'm one of the libertarians who supports that too, for various reasons. Though I know others who think it is the worst idea ever.

128:

One interesting angle is that the time required to confirm a Bitcoin transaction as part of the blockchain imposes a time limit on transactions of the kind envisaged by a Tobin tax - I wonder about the ratio of wasteful computation used in bitcoin mining compared to high speed trading in conventional stock and currency markets. Looking at Coinbase, the VC-backed bitcoin to dollars exchange company, they make it about as easy to sign up as etrade - somewhat cumbersome, and requiring bank and credit card details, as well as a US SSN. They also have a $5 spiff for getting others to sign up, following the original Paypal idea. Thing is, both the spiff and the trading threshold for winning it ($100) are denominated in US dollars, so they aren't even using Bitcoin as a currency of account themselves.

129:

Possibly more than are alive today, if we allow for the millions slaughtered in the 20th century by governments.

130:

Well, they will run out of coins to mine in the foreseeable future, correct? And I think the inherently deflationary nature of bitcoins will kill them off as anything other than an exchange medium, and that will also keep them volatile. And it seems that they can be tracked.

What I would worry about is the next one, something that isn't inherently deflationary (perhaps mildly inflationary?), is anonymous (as long as you don't spend the same unit twice (worked out so long ago the patents are probably expired by now), etc.

Frankly, I expect a better grade of rant from you, even if I think you are wrong. Or will the current trilogy put you into an even darker mood? :-) Please keep up the good interesting work!

131:

The problem is that the banks create money by fiat too, so which is to be master? So far it's the banks most of the time, which doesn't help normal people much.

132:

Bitcoin is a piece of software which tries to implement a particular SFnal future. One in which the world currency is de-centralized, deflationary, and all early bitcoin adopters own their own planetoids, and all visitors are automatically charged for the air they breath.

Thing is, the real world is more complicated than that. Assuming Bitcoin did manage to become an important currency, countries would naturally try to regulate it. In 30 years, by the time bitcoin mining has slowed right down the legal system will be fully caught up to the internet.

Bitcoin tries to make its code the law (as Lessig used to say), but the law can certainly affect its code.

The law could, for example, require that bitcoin be changed to stop increasing the difficulty of mining new blocks. Then bitcoin is suddenly an inflationary currency. This would be a hard fork in the block chain, but one enforced by financial regulators. Miners would be tracked down and forced to comply. Some would perhaps go underground and run the deflationary bitcoin network on TOR hidden services. Lots of possible ways it could play out.

That's only one scenario, covering one of the many problems with Bitcoin. So it seems to me that Bitcoin should be a gold mine for Science Fiction authors, if nothing else..

133:

Beanie babies.

134:

If BitCoin "works" today, somebody else would develop "ByteBuck" tomorrow, and perhaps "GigaCash" after that.

You won't believe me...

135:

So it seems to me that Bitcoin should be a gold mine for Science Fiction authors, if nothing else..

Not read "Neptune's Brood" yet, have you?

(It's not Bitcoin; it's a different type of cryptocurrency, designed to promote a different political agenda -- intsterstellar colonization in a no-FTL, no-relativistic-travel universe.)

136:

Fair question.

First let me say that i'm no expert on taxes and related laws so consider this as my amateur opinion derived from the current state of affairs and i'm open to constructive critique.

Also let me apologize to other readers for this slightly offtopic comment as i thing it is only remotely related to bitcoin.

When thinking about how to make a good tax system i consider several points: 1) what is the purpose of taxes, 2) how much should we pay and 3) how to best collect them.

ad 1) The main purpose of tax system should be IMO to prevent few people from monopolizing scarce resources such as land, natural resources, air frequencies etc. If you own such resources, you should utilize them for the benefit of the whole society, earn money for the services you provide using them and pay taxes. If you fail to earn enough you should sell the resources to someone else as it means that you are not using them effectively enough. Second purpose is to fund government and services it provides. This can also be accomplished by other means (state owned companies come to mind) Third purpose is to (to some extent) help decrease differences in wealth distribution among people.

ad 2) From the purposes above it follows that i support progressive tax. But how high should it be exactly? I can't answer that. I'd like effective government which provides socialized education, healthcare, welfare, which supports culture and sport activities and other more basic services like infrastructure building, law enforcement, justice system, defense etc. All of this costs something but with the economic growth of the last decades (before the 2008 crisis) i think we could afford reasonable levels of those services with 25%-35% income tax. The problem today is that there is no tax limit. Governments are constantly increasing taxes and introducing new taxes to compensate for their own inefficiencies, the lack of economic growth and their inability to properly collect taxes. I think that government fiscal responsibility should be part of the constitution. If government fails to reach balanced budget it should decrease its own spending and not increase taxes.

ad 3) There should be simple way to determine how much taxes everyone needs to pay. System we have today is far from that. It basically depends on the honesty of every citizen to report his income and tax it. Of course the tax office do some checks so if you buy a house with no reported income they'll probably go after you. But generally for large companies it is very easy to avoid paying taxes using tax heavens, shell companies, hollywood accounting, paying for bogus consultant services, using bitcoin etc. This is IMO not sustainable and fair system. Also there are too many taxes. From ethical point of view taxes are very questionable. I can agree to pay honest tax from my income or property, but taxing my habits like smoking or drinking? Or money transactions and sales? Or whatever random activity someone in the government dislikes? This is IMO too much. I talked about scarce resources - the good thing about them is that they are scarce. Some central authority can keep track of them and their owners. If we payed taxes from them, they would be hard or impossible to avoid. The payment should be annual and progressive. Tax from land needed for personal living should be very low or even zero, but if you own big industrial complex you should pay much more. There could be other factors to determine the correct amount - for example how lucrative the resource is (land in countryside is cheaper than in city center etc.) But again, don't expect exact amounts from me, there are many things that must be considered and i don't imagine that i know them all. Also i mentioned houses and other property in my previous post. That was probably a mistake as houses are no scarce resources, the land below them is. So the houses and other physical property (like the pen in your pocket you mentioned) don't fit well in my tax scheme and should be extempt:)

137:

I like my money slow, and my post-human women fast.

138:

Off-topic: Charlie, please bring Freya back. She was way funnier than Neptune's Brood protagonists.

139:

Curiously history does NOT support the assertion that the modern nation state is more violent; today you are far less likely to die by violence (state-administered or otherwise) than you were in the 18th century. The difference appears to be the ubiquity of violence in those days, arguably from the absence of a state enforcing its monopoly on the legitimate use of force. (Thank you, Herr Weber.)

It would appear then that a stateless society does not reduce violence but rather shifts violence from a relatively few incidents of mass-produced tragedies to many more artisanal, bespoke, hand-crafted tragedies. #HipsterCrime

-- Steve

140:

Charlie, You must like stirring up the hornets nest. Between this and your comments on space colonization, I'm surprised the Promethean awards even list your books. Or are you setting this up as a honeypot/tar-baby for the libertarians, crypto currency folks and space colonization types?

Anyway, to all those that said bitcoin mining via malware isn't that profitable (comments 16, 28, 42 and 53), have you ever heard the phrase "stolen goods are never sold at a loss?" Because comment 86 got it right - they may make pennies, but its free to the malware director and they're working on a large scale.

141:

I agree with you mostly, but want to point out that there is no need to change the modern western taxation process in any way to accommodate the use of Bitcoin in place of government issued currency.

Imagine if Bitcoin were "The Coin of the Realm", that is, you are paid in it and you use it for most of your purchases. My government would simply require my employer to withhold a percentage prior to the delivery of my pay and to provide accurate payroll books to the revenue service on pain of legal action. Far easier for a government to regulate a thousand companies than audit a million taxpayers.

This is exactly as it is done today with government-issued currency.

And for the minority that work "off the books", a system of self-reporting, audits and penalties for tax cheats will suffice.

Exactly as it is done today with cash-only workers.

142:

I've had reservations about Bitcoin, mostly related to the long term issues of deflationary currency as medium of exchange, however, it may actually make sense as a store of value. I am interested in the development of demurrage currencies like Freicoin, although I think the problematic thing would would be in mass adoption. Bitcoin may have enough advantages (first mover, transaction cost, non-fiat) to offset its theoretical structural disadvantage. I guess we'll have to see.

Regarding the energy costs of mining, the current lowest-economically-feasible (calculated by the ability to breakeven from mining) ASIC is 1.5W/GH and the current best is 0.6W/GH - the calculations you link are based on 650W/GH so off by a factor of 400-1000+. It's probably not that hard and I don't think anyone has really plugged in the numbers into figuring out power costs / transaction, but as mentioned in a previous comment, it's probably less carbon intensive than how money is currently shipped around.

The flip side of all this mining compute power is that it's economically undesirable to use zombie networks for mining vs other more profitable ventures.

A bunch of your issues against Bitcoin revolve around anonymity/lack of regulation, but I think the reality of the situation is very different from what you lay out.

It's almost impossible to get anonymous bitcoins: mining connected to a mining pool on Tor, or exchanging cash via LocalBitcoins, again w/ Tor. These are dependent mostly on the (questionably) anonymous properties of Tor and cash. If you are acquiring Bitcoin via an exchange like Coinbase, Bitstamp, etc you are pretty much required to hook up your bank account/provide identification, and reported to FinCEN or whatever your local regulatory agency is. What we're seeing now (like the China regulation you started out with!) is increasing regulation of BTC/local currency exchange.

Bitcoin-to-Bitcoin transactions, by protocol, are completely traceable as every single transaction is stored in the blockchain forever. As we've seen, once there are known addresses or transactions it's trivial to unwind or do network analysis to identify wallets, especially for government/regulatory agencies (or those engaging in huge dragnet surveillance/digital intrusion operations, ahem).

The same techniques used to bring down something like Silk Road and things like existing CP operations will be just as effective against other illegal markets. These techniques are actually aided by the aforementioned traceability aspects of Bitcoin and probably one of the reasons that LE/govt is supportive of Bitcoin adoption vs truly anonymous P2P cryptocurrencies like Zerocoin.

I suppose that Bitcoin could be used for large scale international money laundering, assuming one can easily spend BTC or convert BTC into currency sans regulation (again, unlikely anywhere except where currency conversion wouldn't be a problem in the first place) but you'd already need to have an infrastructure for moving/distributing a lot of off-the-books cash and the wherewithal to create a huge mining operation (which would still be traceable without a lot of opsec) and I don't think Bitcoin is any more conducive to that than any other global digital currency would be.

To me, Bitcoin-like (P2P cryptocurrencies) do have issues - can Proof of Stake work better than Proof of work? (ppcoin) Can PoW be useful computation? (see primecoin, but imagine if mining/transaction verification was linked to say Folding at Home/protein discovery) Can cryptocurrency be linked in a way that's internal and resistant-to-gaming to something like energy input or usage or can it otherwise be stabilized when bootstrapped?

I think the positive thing about Bitcoin is both in driving a big interest in analysis of the fundamental qualities people want in a currency, and providing a huge-step-up in terms of a platform/framework for creating/testing out different cryptocurrencies.

To me, Dogecoin points to the future - a world where it's ridiculously easy to instantiate and use semi-private Rushkoffian barter currencies, which nicely sidesteps a lot of the unsolved macro-economic issues.

143:

@110 You appear to be assuming a sudden transition to a flat rate property tax system. Start with a low rate tax on real estate owned plus a large allowance (a few million or so) applicable only to your primary residence and associated farmland. Every year raise the real estate tax rate and the income tax personal allowance. Lower the allowance for your personal residence as property prices fall.

While income tax is in theory progressive it is also much easier to game than a property tax. Beyond a certain point tax avoidance turns it regressive.

144:

More to the point, it's fundamentally wrong. The basic purpose of taxation is to fund government expenditure, so any equitable system of taxation should raise no more than is required to balance the budget (after allowing for interest and repayments on borrowings).

145:

While bitcoin supporters tend to hate the idea of inflation, there are others coins that have inflation built in to encourage spending -- a kind of progressive version of bitcoin.

Here's a random example of a coin designed around a specific economic philosophy:

Unlike Bitcoin, Freicoin has a demurrage fee that ensures its circulation and bearers of the currency pay this fee automatically. This demurrage fee was proposed by Silvio Gesell to eliminate the privileged position held by money compared with capital goods, which is the underlying cause of the boom/bust business cycle and the entrenchment of the financial elite, and has been tested several times with positive results. http://freico.in/

(no idea if that has merit but it was the one that stuck in my head because it was so clearly articulated on their homepage)

146:

My two cents -

There's something fundamentally wrong in using an object of speculation as the exchange currency, in that when it's going deflationary the velocity slows or stops as people start speculating rather than spending it.

For a speculative item that's great behavior. As the exchange unit in a real economic system, where the value to the system and its participants is in the velocity of value and not its static value, it's a horrible mistake.

I've had this argument with people who are serious Libertarian to the Extropian extreme, and most don't get it, and the ones that do tend to be more concerned with the political agenda Bitcoin was aimed at (I think, and Charlie is suggesting). I think this makes that set of people incompetent to plan an economy 2.0.

There may well be deeper economist-capable serious L's out there. Szabo and May aren't on the list of those I've had this discussion with.

147:

... this seems to be an even better troll bait than "cult of justice"!

Thanks for this rant. Up to now I was open-minded and mildly curious about Bitcoin; after reading this I think Bitcoin is obsolete. Main point that did it for me is that Bitcoin appears to promote hoarding instead of getting things done. IMHO money should undergo inflation at the same rate as society produces goods.

148:

I'm not convinced by that argument either. I can't find the original source now :-( but I've seen it argued that, since the invention of income tax, inflation is a mechanism whereby governments take more of your money, whilst pretending to take less. See also "fiscal drag" in this context.

149:

The basic purpose of taxation is to fund government expenditure

I don't think so. The purpose of taxation is suppress certain economic behavior and favor other. That's way it's called "Steuer" in German, which means "steer". It's also a way to redistribute wealth.

150:

Not according to the entire history of taxation of the UK, what with medieval parliaments voting kings the money to keep him in the correct style and defend the nation, through to income taxes being introduced to fight Napoleon. The idea of using taxes to change behaviour is comparatively new, although I think it was probably so used for some spirits back in the 18/19th centuries.
But anyway, both definitions are not mutually exclusive. The UK government currently collects taxes so that it can spend it on people's pensions, for instance.

151:

Growing and selling narcotics is economic activity. By your argument any sensible government should allow and regulate this activity since only by doing so can they tax, and hence direct it.

Also, by your argument, there is nothing wrong with a government running a budget/taxation surplus simply in order to build up reserves of capital.

152:

Charlie,

remember your bad dream about the "The Ruling Party" ?

Do you think one of them will give a shit (redact if you like) about the carbon footprint of bitcoin mining, contemplating this amusing fact on the wooden planks on his yacht near St.Tropez ? Do you think the nsa/gchq is concerned about mining botnets while hacking your BT routers ? In another corner some traders from a shadow bank, wondering about a "utter lack of regulation". And of course our corrupt governments, always longing for "stable governance". All of them feasting on money backed by seven billion happy believers...

I don't get it - is your rant an appeal to the greater good ?

Stefan

153:

Andreas Vox writes: I don't think so. The purpose of taxation is suppress certain economic behavior and favor other. That's way it's called "Steuer" in German, which means "steer". It's also a way to redistribute wealth.

It has many, many possible purposes, and people tend to see the ones they disagree with when they're objecting to it. Liberals scream about wars funded, and tax breaks for oil companies; conservatives, about wealth transfer to the poor etc.

Until the recent medicare increases, California was roughly 4 parts school funding, 1 part prison funding, 1 part roads funding, 1 part medicare, 1 part everything else. One can have detail arguments across the liberal-conservative-libertarian spectra about any parts of those, but those are all widely acknowledged to be legitimate things the government should fund.

154:

Methinks thou dost protest a wee bit too much.

Several of the contentions seem to fit just as well with cash. It has long been preferable to do dubious things like tax evasion and paying for immoral things (whether pornography, sexual favours or hit-people) using cash. I kind of doubt that Bitcoin is, in practice, as anonymous as cash.

The complaints about energy footprint don't seem to fit well with what's actually going on. It would be illogical for people to be paying for hardware (ASICs and FPGAs) for Bitcoin mining if they were paying more for electricity than they were collecting from selling Bitcoin. So it appears to me that something's off with the numbers here. The ASIC-based miners seem to get several orders of magnitude of improved hash rates, which seems like it isn't being accounted for.

Further, I don't think that the "stolen computing infrastructure" part is of much ongoing relevance. The escalation of ASIC/FPGA-based mining makes botnets decreasingly effective. They might be collecting a few cents per day per bot, but they can't be getting more than a few Mhashes/second per bot, and the ASIC-based systems get enough orders of magnitude more hashes that I suspect that the aggregations aren't going to be terribly effective. If Bitcoin difficulty rates go up further, that drops the profitability from pennies per day to pennies per year, and will make a botnet builder look for activities with higher payoffs. At some point, forwarding spam is more worthwhile.

155:

My thoughts can be summed up as:

1) Developments towards untraceable/untaxable/etc. mediums of exchange are generally a good thing - in the tug of war that is society. Governments, the powerful, and the rich (which tend to end up being the same people) tend towards draconian control and oversight which both stifles any real freedom and turns everyone into practical slaves. Anything that unsettles them helps to slow that process; maybe even reverse. This is a good thing, no matter the strawman of OGH as to what might happen if it went all the way in the other direction.

2) Because of constrained nature of bitcoins, the people who 'mined' early gained value that now is out of all proportion to the 'work' they did. Since they tended to be techies, and the people piling in now tend to be libtards, that constitutes a transfer of cold hard cash from the libtards to the techies. Eventually either the government will screw up bitcoins, or people will realise there is no inherent value (tulips) and the libtards will end up holding nothing. Thus I approve of them giving the techies their money in exchange for nothing.

Here's hoping for a new bitcoin replacement, but one that is actually connected to the creation of value (OGH played with it as 'reputation') rather than the con which is money creation by banks and government fiat. Now THAT would be disruptive - unseating bankers from their place wallowing in the trough...

156:

Growing and selling narcotics is economic activity. By your argument any sensible government should allow and regulate this activity since only by doing so can they tax, and hence direct it.

I think there are other good reasons why it's a good idea to legalize narcotics and regulate the market. I would use a more direct regulation though (licensed sellers, procedures to bring medical help to users), not through taxes.

Also, by your argument, there is nothing wrong with a government running a budget/taxation surplus simply in order to build up reserves of capital.

Why would a democratic government want to have a budget surplus? Any gains in the public sector are balanced by losses in the private sector, and people who experience losses are poor voters. Government debt means private wealth. If you wish to level that, it's easier to allow inflation.

157:
If you get thousands or millions of machines to do something inefficiently, it starts to get much more efficient.

Actually, it's plain economical theory.

At current hash/s difficulty, the average mom-n-pop desktop computer infected with malware should yield about a few cents month in average. And the computer would be pretty much visibly infected and locked up at full cycle, i.e. quickly diagnosed, brought to the nearest kid without a "I will not fix your computer" tee-shirt, and cleaned out.

The question becomes: will this botnet-controlled computer be worth more to me as a bitcoin miner or as a spambot?

158:

Developments towards untraceable/untaxable/etc. mediums of exchange are generally a good thing - in the tug of war that is society.

I think your understanding of society is lacking. Societies tend to be a little more complex than a "tug of war". Also, why do you think taxes are evil? Are you against roads, schools and social security? What about laws? Do you want to see them enforced?

159:

Not all heat is waisted. It's -10C in Montreal right now. A mining rig help to heat the house.

160:

Oh there are so many many many many many problems with just property taxes... not least of which you stop owning property, crash the property market and do everything with long term leases...

Plus not everybody owns property, and it makes owning property in retirement practically impossible.

Taxes should be on economic activity, anything else is really bollocks.

I'm with Charlie - it's a shiny techno form of gold buggery and just as stupid.

161:

Also, by your argument, there is nothing wrong with a government running a budget/taxation surplus simply in order to build up reserves of capital.

If you're stupid enough to have a system whereby the government can't borrow or print money itself, then the prudent thing to do is for a government to run up reserves of capital so they can deal with emergencies. Anything else would be a potential problem.

One of the problems we're facing is we're in a recession after decades of imbecilic fiscal management during which trillions of dollars have been transferred to smaller and smaller numbers of private citizens all while reducing the ability of the governments to deal with collapses in demand.

162:

After a bit of thought:- 1) Agreed, but I think the argument about taxes still stands (actually, making it a source of tax revenue rather than a cost in terms of police time etc works for both our arguments).

2) I'm not suggesting that a democratic government necessarily wants to have a budget surplus; I'm saying that if your argument holds then they may be forced to run one in order to direct the economy the way they want even though they acknowledge the negatives of them doing so.

163:

Wait, aren't the reliance on property taxes in local government in the USA causing problems with stuff, e.g. school funding because the recession means property is worth less or people have less money to pay, and various other things, basically you end up with cratering funding for schools.

164:

Since you're quoting me, you're "preaching at the choir"; Andreas is the one who's arguing for a system where taxation is used as a means of "punishing bad activity" rather than of funding spending programmes. That's not to say hat I believe that accumulating more and more when you atlready have more than you can ever spend short of giving it away is a moral thing to do.

165:

Well, I'm actually ok with both. Imposing high taxes on things you want to stop people doing does work. Tobacco, alcohol, etc...

But then my libertarian (with a very tiny tiny l) side comes out and I think it would make sense to prohibit less things and tax and regulate them instead.

166:

RE:It's not Bitcoin; it's a different type of cryptocurrency, designed to promote a different political agenda -- intsterstellar colonization in a no-FTL, no-relativistic-travel universe.

I think you're wrong about your own book Charlie, I am 99% certain that the word bitcoin is used in Neptunes Brood(but in a generic sense, as in "a bitcoin", not Bitcoin.

I only have the dead tree edition so I can't just do a string search, but maybe you can do it.

Also I've recently heard of an(maybe dodgy depending on your opinion of Foreign exchange controls)interesting use-case for Bitcoin. A friend invited me to come with him to a Bitcoin Meetup and there I met a guy who said that he used Bitcoin to bypass his countries exchange controls to get all his money out after he emigrated and just put it into a bank right here(apparently the bank just asked him for proof that it was legitimately earned and after that was established, said "OK, it's not our job to enforce other countries export controls". I'm still a bit skeptical, but looking a the policies of the various Bitcoin exchanges, there don't appear to be any show-stoppers. Anyone care to comment?

167:

The real fun with bitcoins is once you get over the whole "it's a new currency!" sham and get to the meat of it: it's a commodity.

Made of a hash-string.

That can only be "sold" and converted to actual money by selling to someone else who believes the "bitcoin dream".

Which means it's functionally no different from a ponzi scheme at the moment.

The hope bitcoiners seem to harbour is that one day bitcoin will be usuable for all the things they want to buy aside from all the child prostitute drug-mule assassins they're (presumably) currently buying the stuff, which paints the most hilarious picture coming out of the concept of bitcoins.

You see, the people in this thread saying "it's about time buttcoiners learned" are ignorant of the way that bitcoin crashes about once or so a month - back in april it bottomed out at $10 from a high of a few hundred, and this halving of its total "price" is in that trend; by the end of the week it'll probably spike up to 75% of its old price, then crash even harder, as new suckers buy into bitcoins after this "crash", which in turn will send up the price of buying bitcoins AGAIN, then people will try to cash out, find it hard to do so because everyone's waiting for a low to hop onboard the bitcoin wagon, and the price will drop further than it is now due to that lack of demand and all the burnt investors will start slowly selling out to new suckers so as to divest themselves of the sudden exposure to risk their bitcoin wallet represents.

So try to imagine a real currency that was that volatile; You get up on sunday with a wallet with 5 bitcoins in it and can buy a car for 2 bitcoins, by friday the car dealer pays the salesman who sold the car his 50% commission of 1 bitcoin, and on saturday the salesman who sold the car is made homeless because 1 bitcoin can't buy a cup of tea in a cheap cafe let alone pay his backrent.

168:

Did the bank BUY the bitcoins off him or something? The problem, from an investor's standpoint, with bitcoins is that you can only "turn" it into real money by convincing someone to buy your bitcoins FOR real money.

It's why a lot of bitcoiners are such fervent evangelists, they NEED you to buy bitcoins off them to make any money, otherwise they're just people with a load of useless hash-strings and less money than they started with.

169:

Mistress, deliver us from popular etymologies...

Actually, the German term for steering would be "das Steuer", e.g. a neutral substantive, while taxations is "die Steuer", a feminine. Though there might be variantly gendered variants of both I'm not aware of.

http://de.wiktionary.org/wiki/Steuer

If you follow some of the links in this article, you arrive at Grimm's dictionary, where both have seperate entries, e.g. "die Steuer"

http://woerterbuchnetz.de/DWB/?sigle=DWB&mode=Vernetzung&lemid=GS46092

and "das Steuer"

http://woerterbuchnetz.de/DWB/?sigle=DWB&mode=Vernetzung&lemid=GS46093

Actually, both go back to the Old High German stiurna, which meant something like "help, buttress, carrying structure, pale, support". You have some remnants of this in the German verb "beisteuern", e.g. "contribute".

So the German term "die Steuer" is more about giving financial support to someone.

And as already said, may the mistress deliver us from wrong but "eingängigen"[1] etymologies.

[1] Sorry to say, Grimm's doesn't say if this is related to "der Eingang", e.g. "intrance", or "ein Gang", e.g. "one Way", e.g. somewhat stubborn, simple...

170:

One nitpick: bitcoin transactions aren't hard to trace. In fact, they are extremely easy to trace (...to addresses, which can usually be trivially associated with people or organizations), because the entire history is in a public file that everybody with a bitcoin implementation has a copy of. It's just that a lot of people (some of whom are journalists, and most of whom either don't have a strong background in cryptography or haven't paid much attention to the specs) believe it to be hard to trace. As a result, people who would otherwise be buying or selling illegal services with difficult-to-trace bills or coins are instead essentially writing their entire transaction history into the public domain and broadcasting it to the world. As soon as law enforcement gets a bit more hip to the mechanics of it, I suspect parsing the blockchain to track down attempted money laundering and to track down the sale of narcotics and child porn will become commonplace (since it's much easier to do than other mechanisms of tracing the flow of funds).

As for everything else you said -- I can't really disagree, fundamentally.

171:

Honestly BtC was somewhat acceptable to me when I started hearing the "it's a commodity" retort from the BtC zealots. Problem is: they use that argument (or imply it) and then a mere few minutes later tout Coinbase as the economical messiah - which treats BtC as a currency.

The problem with us computer nerds is that we have this false belief that being a nerd in this industry qualifies you as one in another. Sadly, it doesn't.

After acknowledging my general ignorance, the bare basics I learnt in high school told me that one thing a currency should strive to be is representative of the volume of an economy ("volume" basically means "number of transactions" for the uneducated). BtC is too volatile to represent any form of transaction; in fact the only volume I believe it is representing is that of our greed.

Either way I have seen more people agreeing with you in the comments than bigots (I am sure more bigots will be arriving shortly though), which gives me some hope in the human race.

172:

For fun, calculate what the inflation rate has to be for a currency to lose half it's value in a 24-hour period. Lets just say that Zimbabwe and the Weimar Republic should no longer be the (ahem) gold standards for runaway inflation.

I dono. I have two 500,000,000 dollar Zimbabwe notes pinned above my desk. They came with expiration dates. :)

173:

A significant issue with BtC is that the transfer points between the Bitcoin world and the 'regular economy' are extremely susceptible to DDOS (and associated manipulation) due to their small size and lack of government sanction (while people can and have attempted to DDOS the NYSE, they piss off a lot of economically and politically powerful people when they do so, plus the NYSE has way more resources than a typical BtC exchange to mitigate attacks).

This means that the barrier to entry for market manipulation is way lower than it is to manipulate, say, the international copper market.

174:

I'm not sure bitcoin is deflationary in the way you state. Sure, the number of bitcoins is limited. But there's nothing to stop anyone from setting up a similar new virtual currency, called say bitcojn1. Once this exists, the only advantage bitcoin has over bitcoin1 is that bitcoin was there first. But since one would be able to trade bitcoin1s for bitcoins, the new bitcoin1s can be used for anything that bitcoins can be used for. The only parameter would be the bitcoin/bitcoin1 exchange rate, and since the 2 currencies are identical (in terms of total number that can exist etc) why should this not ultimately tend to 1:1? But then the same holds for bitcoin2....

I wrote the above before I read #134 by finagi... At the moment I see bitcoin is at $522 while Junkcoin stands at one $0.0083. Maybe the latter should have chosen a more appealing name.

175:

Did the bank BUY the bitcoins off him or something? The problem, from an investor's standpoint, with bitcoins is that you can only "turn" it into real money by convincing someone to buy your bitcoins FOR real money. He sold it at a Bitcoin exchange of course, but when the money was deposited into his bank account, it automatically triggered a laundering investigation because it was over $10000. Apparently he just told them that it was his money that he got out of the country via Bitcoin and provided proof(via bank statements, etc.) and they were fine with it. This is the bit that I find worthy of skepticism, but on the other hand, as far as I can tell, Western banks have no duty to enforce third world exchange controls

176:

This is a problem, but it goes way deeper than this. The BitCoin network itself is vulnerable to DDoS when it computes transactions. Bad mining nodes can insert spurious or incorrect transactions into the system; while they'll be caught and rolled back, a fairly small number of nodes could slow transaction confirmation down to a crawl. Any reasonably sized botnet could make BitCoin essentially unusable for everyone.

177:

Is Usenet archived properly anywhere? I know Google Groups bought out Deja, but every time I look there for old stuff I remember posting there are huge holes.

Me, I first got online in 1996 & gravitated fairly rapidly to alt.anarchism, where I promptly found myself embroiled in an argument with... Jim Bell, author of "Assassination Politics", referenced in one of the creepier links above. Well, I say 'argument' - my side of it consisted mainly of polite variations on "are you fucking kidding?" and "look at yourself!". It made an interesting introduction to the wide world of anarchists, or at least people who play them on the Internet.

178:

2) I'm not suggesting that a democratic government necessarily wants to have a budget surplus; I'm saying that if your argument holds then they may be forced to run one in order to direct the economy the way they want

Err, down? Budget surplus drains wealth from the private sector, unless you have a trade surplus that covers both state surplus and private sector gains.

179:

Strawman, Andreas Vox.

I never said I was against taxation, I said that those in governments/with money/in positions of power tend to reduce freedom and shift taxes onto the prols over time.

Imperfect though they are, bitcoins tend to pull in the other direction.

Since I consider it a dynamic equilibrium, I consider them a good thing - although a functioning democracy where the GMP couldn't get away with those tricks would be preferable. We don't live in that world.

180:

I guess you're right. I admit I just repeated something a teacher said once and didn't look it up :-)

181:

I said that those in governments/with money/in positions of power tend to reduce freedom and shift taxes onto the prols over time.

Imperfect though they are, bitcoins tend to pull in the other direction.

How would that happen? I doubt very much that Bitcoin will ever reduce the tax burden for Joe Worker; instead it's just another way for the rich&powerful to avoid taxes and launder money.

182:

'drains wealth' - that rather assumes that government activity is something of a zero sum game, and that a surplus isn't available to do things with that.

The logic of the Bush II tax cuts was the surplus was money belonging to the people that had to be paid back, except, there was a debt that needed paying down and then Bush II went on a spending spree that would make a drunken sailor blush.

The fact is the private sector can't handle collapses in demand as well as a government and having access to emergency funds above and beyond the cost of running a government can be useful.

Not to mention, there are multiplier effects of government spending that I've come to believe are, in fact, better than leaving it all up to the private sector.

183:

I agree completely here. I think we're arguing the same points but your quotes are better to link through :)

184:

My two favourite things about bitcoin -

  • MtGox apparently stands for Magic the Gathering online exchange

  • google results for selling bitcoin

Also I like the triffid/tulip thing. That's third.

But, you know, I thinks fans of bitcoin should keep buying them. Knock yersells out.

185:

Whenever I read anarchically minded people taking about how the victims of state violence around the world would of course much prefer some anarcho-capitalist world of ubiquitous firepower and all, I think of things like this picture of Kabul, Afghanistan, in 1972.

I grew up knowing a lot of refugees: boat people from Vietnam, the families of judges and administrators targeted by the big drug gangs in Columbia and Venezuela, the families of Chilean academicians targeted by Sendero Luminoso, fascists, or both, and so on. That Kabul scene is what they pretty much all wanted. The women aren't packing heat; they're unarmed and confident. The scene is clean. Everybody has clothes that fit and are in good condition. And in practice, this is the fruit of good government and a pretty strong measure of social order. The desired opposite, for lots of people, isn't the state removed but the state improved.

186:

I think pro-bitcoin and anti-bitcoin sentiments predicated on the idea that it will destroy governments by tax starvation are mistaken. The government doesn't need to track down your crypto-identity and unmask your transactions to get you for tax evasion, just show that your spending is inconsistent with declared income and savings. How can you pay for life's necessities and niceties with a large quantity of bitcoin? Surely no more easily than you can do so with cash in the local currency.

If you're renting housing the revenue service can bust you if you're not declaring the source of your ability to pay that rent. If you're buying real estate you have to pax property taxes in local currency and there's a public record of you owning it, so again they can make sure you are paying taxes annually and declaring the income that went to the original purchase.

Travel by train or plane creates records.

Buying, leasing, or renting a motor vehicle creates records.

Buying and maintaining insurance policies creates records.

Paying tuition creates records.

Paying for cable TV, internet access, phone service water, sewer, electricity, and natural gas utilities creates records.

Buying or selling stocks and bonds creates records.

Paying for medical services and prescription drugs creates records (if you are so unfortunate to live in a place where this is how things are done).

How much tax can a middle class or richer household dodge after we've placed housing, transportation, education, utilities, insurance, and investment in the normal economy as off limits for anonymous spending opportunities? All of life's major expenses leave records that can show you are spending more than you've declared in income. I'm left with comparatively minor expenses like groceries, gasoline, appliances, and clothing as opportunities to spend undeclared income. I'll still be paying sales tax on those things -- the only dodge is the payroll, income, or investment taxes that should have been paid on the money used to purchase the goods.

To get the undeclared buying power in the first place you either have to be a successful bitcoin speculator or conduct business in bitcoin with another tax dodger, aware that you will have no recourse to the law if the arrangement goes sour. Oh, and you have to get the BTC converted to your local currency without raising money laundering alerts, since most walk-in businesses don't accept BTC directly. That sounds like a large increase in risk and effort for a very modest reduction in taxation. I don't think it's a problem that should keep revenue officials awake at night.

187:

Wait, aren't the reliance on property taxes in local government in the USA causing problems with stuff, e.g. school funding because the recession means property is worth less or people have less money to pay, and various other things, basically you end up with cratering funding for schools.

Yes. But it's a bit more than that. Income taxes also go down. And local and state governments can't really print money. Yes they can issue bonds but if you are already in deep dodo then the bonds come at a high price and are a tough sell.

Which is why some will argue that the federal government should finance schools country wide. Which gives heart burn to some and at least pause to me. Refer back to CS's comment about trading a system with problems for one that appears all nice and shiny but not yet implemented.

Which leads others to say maybe we should break up the country. :) :(

Many in Texas are all for it. Many outside of California are all for them leaving. But they really don't get it.

Oh, well.

188:

I think you've got the realities of bitcoin right, but I think you've got the motivations of the creator(s) wrong. I don't think bitcoin was designed out of some Libertarian ideal. I think it was designed to appeal to those sensibilities, to make it easy to create some particularly zealous advocates, but I'm convinced the whole thing is a cynical money-making scheme at its heart. That's the only explanation for the extreme deflationary nature of bitcoins that makes sense to me. The creator(s) must have known that it would make it a terrible currency; it's a pretty huge disincentive to spend your money when you know it's going to be worth substantially more tomorrow. But moreover, bitcoins are going to fade out of existence entirely in not that long. Their intangible nature makes bitcoins really easy to entirely destroy, and since there's a cap on the number of bitcoins that will ever exist, they'll just dwindle away as they're lost in hard drive crashes or forgotten and destroyed in computer upgrades.

Meanwhile, the creator and very early adopters are swimming in the things from the early days when they were trivial to create and no one else was doing it. They were banking on enough suckers buying into the promises of their broken system to make them rich; sadly, they were right.

189:

The Bitcoin network collects a small fee for each transaction, paid to the miners that maintain the network. Bring plenty of money if you are planning on a DDoS attack.

190:

Nope. It's just that everytime an purported etymology is used as an argument, my spider sense goes. Having some close family members into the teaching persuasion going off about some plain or social pedagogue chanting words or purporting etymologies and thinking it explains something about their hidden meaning makes for us thinking it as a practice little above dancing your name. Barely.

Oh, it also makes for "pedagogue" itself becoming something of an insult with said talks.

And, BTW, shit, it seems like Eurythmy somewhat looks like my EBM dance style. Damn.

191:

Charlie, while I think your rant/analysis/whatever is quite on-target, I guess I'd make some qualifiers.

BTW, I have to get some more informations about the fundamentals of bitcoins to make some comments, e.g. if all bitcoins are created equal or if there is some way to differentiate old, "easily computed" bitcoins from the newer, "more tricky" ones, which might translate into different values. Another factor is the resilience concerning advances in new algorithms and hardware. People thinking bitcoins are going to bring down $BIG_GOVERMINT financially might remember some of us think the first to have a quantum computer is likely to be one of the TLAs...

For the carbon foot-print, it depends somewhat on the type of electricity generation used, and this is likely to reflect pricing somewhat. For a similar example, look at aluminium production,

http://dspace.mit.edu/bitstream/handle/1721.1/3603/mitjpspgc_rpt44.pdf?sequence=1

where the amount of hydroelectricity used quite factors into emissions:

http://www.carbontrust.com/media/38366/ctc790-international-carbon-flows_-aluminium.pdf

Historically, there has been a tendency to use cheap energy sources for processes like this, including exporting said processes to regions with cheap energy. For a breaakup of costs of electricity generation by type, see:

http://en.wikipedia.org/wiki/Cost_of_electricity_by_source

As we see, one of the cheapest kinds of electricity is natural gas, where the advent of fracking might play into the price of natural gas. If fracking is curtailed, that'd mean natural gas generated electricity becoming more expensive, making other ways of generating electricity competitive.

On another note, producing and exporting bitcoins needs little infrastructure, e.g. you need no power lines, or roads, rails and like to transport energy intensive goods, just an internet uplink. So maybe some of the unpractical renewable scenarios we're talking about, e.g. photovoltaics in the Sahara, might work, even without of, say, an aluminium industry. Yes, I know that one has a host of other problems, but it's just as a starting point. Or we could get India to finally build its thorium fuelled reactors. Come on, I'm approaching middle age, leave me some dreams, OK? Actually, later on other energy-intensive industries could follow suit BTW.

For the unsupervised markets, as I guess most of us here, I'm in favour of decriminalization and legalization of all drugs, though I'd prefer some supervision, e.g. sale only to people above a certain age. Also, there might be some problems with nefarious uses of potent pharmaceuticals, e.g. using said substances on unwilling participants, alcohol is still the date-rape drugs No.1, but I guess it's still more easy to get a few mgs of flunitrazepam into somebody than a few ten ml ethanol, and sedating your children with drugs is not that unheard of[1].

Looking at the screenshots from SilkRoad et al., some of the drugs seem to be diverted from prescriptions; you might argue which on is more toxic, feigning symptoms to get medications to trade, thus sowing distrust between physician and patient and likely deriving some sufferers from medications, or stealing medications from granny and thus leaving her in pain...

On the child pornography market, going after the news section, many of those seem to use a mixture of barter and gift economy, e.g. "You show me yours, I show you mine". And there is a quite sick idea of getting media to barter, though according to some of the discussions on the relation of the persecution of child pornography to the curtailing of child sexual abuse, little of the media coming up with said sharing is new, most is quite old, with some showing no minors at all and quite some exploiting some grey areas[2]:

http://en.wikipedia.org/wiki/Color_Climax_Corporation

AFAIR there were cases of child pornography produced for the internet, but this was, again IIRC, more a case of narcisissm than barter[3].

Still, we might argue that with the alternative of motivating further child sexual abuse to produce child pornography to share, it would be preferable to not outlaw all alternative ways of paying for it. Of course still persecuting it with full force.

For the assasination market, well, theoretically there is also the barter economy alternative, though I'm not aware of that one happening outside Books by Patricia Highsmith and adaptations.

http://en.wikipedia.org/wiki/Strangers_on_a_Train_(novel)

BTW I guess most of the guys involved don't know what they are playing with, it seems like they think it's a way to scare of politicians; now the politicians in question already are on quite some hitlists, and we didn't need bitcoins to motivate one Lee Harvey Oswald to shoot Kennedy. So politicians are already somewhat hardened targets, with bodyguards and tight security.

OTOH, there is nothing inherently dissuading people from going after the usual Right Libertarian poster guys. Plus they are much softer targets.

Then again, Right Libertarians and thinking things through is a complicated matter...

OK, just some musings.

[1] E.g. with clonidine like with Rebecca Riley, where it likely lead to death:

http://en.wikipedia.org/wiki/Rebecca_Riley

Afaik clonidine has quite a therapeutic index, but 32 mg a day, with maximum dosage for adults 1,2 mg?

[2]As I always say to my pharmacist when speaking about why only retarded MPh not fit for injection or intranasal use is official for adults in Germany, or what might happen with loperamide interacting with my other mediations and crossing my BBB, or whatever, there are things I'm not proud of knowing about...

[3] The guy was caught because he was identifiable on the photos, even though he used a Photoshop filter. Speaking about Dunning-Kruger...

192:

Charlie, there's an odd emphasis here on the destructive power of having each Bitcoin acquire an increasingly high nominal dollar value. Deflation can be a problem when it's fast enough to screw over debtors and transfer their real income to creditors, but with Bitcoin any deflation comes from natural growth in the global value of real goods (or in the fraction of goods that people want to pay for with Bitcoin rather than with paper currency). It's hard to imagine that happening fast enough to really be a problem for debtors. It's also a self-correcting problem as long as there are competing currencies -- if you need to borrow money, but you worry that Bitcoin deflates too fast to be safe for you to borrow in, then don't borrow in Bitcoins -- borrow in dollars, and repay your loans in dollars, and then (if you wish) convert your dollars to bitcoins when you actually go and buy something.

The gardeviance piece you link to as evidence of a threat to stable governance reads almost as if gardeviance believes that the more a currency deflates, the more it tends to push out competing currencies and make them less relevant. However, this is simply untrue -- when people speak of a currency "increasing in value," they simply mean that one unit of the currency can be exchanged for a larger volume of goods than before -- they do not mean that the currency will be more useful, popular, high-traffic, or trusted than it was before. I cannot think of any reason why deflation (in and of itself) would actually tend to help an electronic currency supplant paper currencies.

193:
  • Petrocurrency wars propping up fiat currencies have a carbon footprint from hell.

  • Exporting inflation (and making brown people shoulder the brunt of fiat) is easier than taxing your population into responsible activities.

  • Fiat violates its own utility because of Gresham's law - rapidly depreciating currency gets spent while real assets of value get hoarded and kept out of rotation

  • No blacker market exists than the one that is powered by the "highy regulated" fiat currency of today (drugs, child porn, slavery, human experimentation, warfare, etc)

  • Every single transaction regarding bitcoin is logged and is publicly available, unlike fiat currency today. (Perhaps one should stop thinking of taxation in terms of the peak nationalism of the 1950s and more in terms of social yields from frictionless markets)

194:

Maybe so, though whether that's necessarily a disadvantage is up for debate. But the fact remains that the main reason gold has any value is because a large group of people have made a collective decision to assign one to it based on... Well, I don't really know; force of habit probably.

195:

One aspect — both the original article and the bulk of the discussion are based on what might be called the official bitcoin narrative. However, it's not the truth — it's more of a cover story, really...

I'm pretty sure that in pretty much every important way, the official bitcoin story is false.

  • The decreasing rate at which bitcoins are produced is not some intrinsic mathematical property of the algorithm, but a deliberate design choice. Worse, it's hard to come up with any reason for this design choice, other than the obvious one of allocating big chunks of wealth to early adopters, as #187 suggested. The standard story glosses over this to an astonishing degree.

  • There is, in fact, a central bank, or rather half a dozen entities which between them control the majority (~85%) of the supposedly-distributed decision-making power. These "mining pools" can and do make decisions to manage the currency, for instance when a new release of the software inadvertently causes problems. Other parties, such as the authors of the standard client, are also pretty powerful and have also publicly used their power to manage the currency.

  • The anonymity of bitcoin transactions is highly doubtful. So far I've only heard of motivated individuals tracking single exceptionally large transfers, but bulk statistical deanonymisation should be pretty successful if anyone can be bothered.

So, what's left?

A pyramid scheme designed to appeal to libertarians is the most likely explanation. As such schemes go it was clever and wildly successful, but hardly a civilisation-level threat.

196:

This is a good post about how badly bitcoin misses the point of what make up the majority of the world's problems with banking.

https://al3x.net/2013/12/18/bitcoin.html

My own takeaway is that bitcoin vs. postal banking is the big cyberfantasy vs. meatspace political fight we ought to be having right now.

197:

The 3 Billion POOREST people on the planet will be the ones who benefit most from Bitcoin. Alas, your ideology denies you from seeing this.

Libertarianism was designed to work with real messy humans and to correct the problems of idealism that have utterly failed us so far- for instance, the travesty that is "governance" in "democracies" like the USA. In fact, libertarianism, properly understood, is the one weapon against poverty that has actually worked with "messy" humans.

Unlike, for instance, Marxism, Libertarianism is based on science, specifically the science of economics... and this is why libertarianism has worked so well historically, to the extent that it has tried... very libertarian countries, like the USA have succeeded while countries that pursued marxism have failed.

In 20 years, when bitcoin is as successful as the internet has been, your essay will long be forgotten.

But your marxism will still be threatening to impoverish people.

Ironically, the first people who will be helped by bitcoin are not the drug peddlers and "evil" tax evaders that have your nickers in a bunch....

No, the people most helped by bitcoin will be the poor peasants in countries ruined by Marxism which inevitably results in currency controls. Venezuelans will be able to protect their income. Argentinians will be able to trade for dollars at a real exchange rate. Chinese will be able to preserve their money. Indians who have long been forced to use gold jewelry due to currency controls, and have paid a high cost for doing so, will be able to save even more of their money.

At some point, constantly seeing socialists rail against every technology that gives humans more freedom, you have to ask.

At what point do we admit that socialists are really just evil people who hate the poor?

Why do you hate the poor, Charlie?

Why do you want the poor to "die in a fire"?

198:

Libertarianism was designed

Heh.

199:

@160: In the long run I see crashing the property market as a feature not a bug. I proposed replacing income tax graually to prevent people being caught in negative equity. The large allowance for your personal residence I proposed should prevent most of the other problems you suggest. Own your own home pay no tax. Rent it and your landlord has to pay the full amount and pass the cost on to you.

200:

Engineer -

You are apparently not sufficiently educated on economics or how Bitcoin works - and doesn't - to understand the nature of the criticism.

Let us put the libertarianism / liberal/socialist control/taxation issue completely aside for the moment. We must of necessity turn to the degree to which Bitcoin fails utterly at the design and implementation level at being a viable currency within a functioning economic system.

Its limited nature and discovery mechanism, inflexibility, and deflationary structural tendency are almost exactly what's wrong with gold as a medium of exchange. It fulfills all the characteristics of a speculative commodity, not a currency. Its velocity tendency is regressive; the entire POINT of a currency is that the value of the economy is money supply times velocity. Deflation, due both to speculative behavior and the limiting nature, is absolutely the worst thing you can do for velocity. This aspect of Bitcoin's design - or anti-design - makes it a horrible awful viciously self-destructive thing to try and use as a currency.

It's so bad that it brings to mind the question of whether that was an intentional design feature of a malign designer, cloaked in extropian libertarianism, or merely an incomplete understanding of the use case and needed features (or, possibly, the best solution they could come up with at the time, intending that it be a 1.0-ish bridge to a 2.0-ish future with another solution).

Please don't go all slavishly libertarian on us. I'm libertarian, but I understand economy. I'm libertarian, but I understand the value of an organized society and rule of law in stabilizing and growing economies, societies, and individual liberty. Out-libertarianing me is kicking yourself in the balls.

201:

I'm a libertarian and I don't really see Bitcoin as an issue at all. It is just one more competing commodity in a huge marketplace. Bitcoin is no more likely to create a libertarian utopia (or enable the collapse of civilization into roving gangs of heavily-armed child pornographers/drug lords) than pork belly futures, Google stock, 1 ounce bars of platinum, or General Motors bonds.

Personally, I suspect Mr. Stross is having a bit of fun with the people he anticipates showing up for this post.

202:

Unlike, for instance, Marxism, Libertarianism is based on science, specifically the science of economics...

ROFL: "science of economics"... which one?

203:

sqferryman COUNT - you can count? How many dead? Yes, each indicidual one may be a tragedy, but what proportion of the country or world population? Now compare with previous times. Sorry, but this is an old, tired & fundamentally WRONG argument. Please don't do it again, huh?

204:

paws @ 151 An excellent idea! Legalise & regulate & tax all drugs. Distribution through your local pharmacies. Drug dealers cut off at the knees, drug-related deaths & injuries plummett (Since most of siad events come from impure, unregulated uncontrolled substances that are NOT waht they claim to be) crime gors down, police can chase real violent criminals & tax e=returns go up. What's not to like?

205:

Ian S @ 155 Here's hoping for a new bitcoin replacement, but one that is actually connected to the creation of value (OGH played with it as 'reputation')

I wonder, oh yes, of course, here it is:

Who steals my purse steals trash; 'tis something, nothing; 'Twas mine, 'tis his, and has been slave to thousands; But he that filches from me my good name Robs me of that which not enriches him, And makes me poor indeed. "Othello" Act III, Sc3.

206:

Regardning hoarding and money as a store of value:

Currently we save for pension or our next car by buying and saving/hoarding gold, stocks, bonds, property or shares in funds. Then we need to sell some of that to live as a pensioner or to buy a car, since we use money (SEK, USD, EUR, GBP) for that. But this split is artificial. There is no real reason why we can't buy a coffee at Starbucks with 0.005 of a GOOG stock, or with a credit card backed by my stash of gold. This is just a software and legal problem.

With Bitcoin, this artificial split is removed. I can save for pension with Bitcoin, AND buy an ice cream with it. Same same.

207:

Could you write in understandable English, please?

208:

"Engineer" I strongly suggest you go back & read my post that was @ 100, but now appears to be #101, regarding "Libertarianism". Pretty please?

209:

Legalise & regulate & tax all drugs.... What's not to like?

Well, what about all the prison wards facing unemployment?

210:

Err, down? Budget surplus drains wealth from the private sector, unless you have a trade surplus that covers both state surplus and private sector gains.

Where do I suggest otherwise? Not only do I understand the issue; I was the one who started from the position that the purpose of taxation was to fund expenditure rather than to make money for the government.

211:

Unlike, for instance, Marxism, Libertarianism is based on science, specifically the science of economics So few words, so many FAILs it's hard to know where to start.

Possibly with the implied claim that Libertarianism isn't just another political theory? Maybe the statement that economics is a science rather than a branch of political theory? How about the obvious failure to understand that Marxism is not only a theory, but one which was not even supported by Marx himself as an organisational paradigm for an actual society?...

212:

Thanks Greg, an excellent summary of the advantages of a legalised and regulated narcotics trade.

208 (presently) @Andreas - I presume you meant "prison warders"? On that assumption, wouldn't it be better to reduce the prison population (which this does) and allow us to train said warders in skills which they could then pass on to the remaining inmates, starting with skills in teaching basic literacy and numeracy since, while I can't be bothered searching for it, ISTR that something like 50% of robberies (street muggings, pickpocketings, burglaries, thefts of or from vehicles) are committed by persons who are functionally illiterate and/or innumerate?
213:

Charlie @87:

(And I wear black. JUST LIKE HITLER.)

Actually, Hitler seldom wore black, and never after 1939.

In the early days Hitler mostly wore suits in various colors, or very occasionally the Schutzstaffel black uniform for SS functions. After 1939 he exclusively wore the brown Party uniform, which he said he would wear for the duration of the war.

I, however, wear mostly black, which prevents my wife from exclaiming "you're not going to wear that shirt with those pants, are you?" and looking about in fear that the Color Police are going to break down the door and arrest me for unlawful color combinations, or something...

214:
So few words, so many FAILs it's hard to know where to start.

I must admit I feel tempted to appeal to fractal weirdness, too...

Funny thing is, most Marxists would say the same, since part of Marxism derives from an economical analysis. A heterodox one, but then, the economic schools Right Libertarians use are not that orthodox either. Of course, add in some philosophy, where both have a pedigree going down to Hegel, if we assume Right Libertarians mangled Stirner somewhat[1].

Add that Marx was somewhat into the "dieing off of the state" in his early writings, and there is some room for strange bedfellows.

BTW, may I remind some of our friends not that versed in political history that bolshevism is a part of, not including all of marxism, and marxism is a part of, not including all of what is called "the political Left", though there are some quite "rightist" writers quite indepted to Marx, so there is even some overlap with "the political Right".

Actually, historically quite a few of the guys calling for protectionism, wsome degree of workers' protection and a solid taxation base in Europe were not called Marxists, but something else. Namely Conservatives...

[1] Interesting guy BTW. Seems some of his fans got into a fracas with Hirschfeld about the idea of Homosexuality, negating his idea of a "third sex" and going for a somewhat "Ancient Greek" model.

215:

There is an extant photo of Hitler wearing leather.

If you are that way inclined.

But her never work a black kilt.

216:

Actually, I guess quite a few pharmacists wouldn't be that happy, though then, others might welcome the added profit.

I know of one case where a pharmacist in Italy denied a guy with a prescription for finasteride against male pattern baldness, to be paid by the guy himself, of course. Funny thing is, at least in this case there might have been a psychosocial indication, CBT is nice and all, and IMHO most people grow somewhat more accepting of their bodies in the long run, but putting the midlife crisis some years ahead is an important option...

217:

YOU FIEND!

I was nearly done with singing a certain song every few minutes. Now everybody:

"Springtime for Hitler and Germany..."

218:

#208 (presently) @Andreas - I presume you meant "prison warders"? On that assumption, wouldn't it be better to reduce the prison population (which this does) and allow us to train said warders in skills which they could then pass on to the remaining inmates, starting with skills in teaching basic literacy and numeracy

Yes, prison warders (non-native English here). My comment was tongue-in-cheek. I generally approve of drug legalization and see finding new jobs for prison personnel as a minor problem (AFAIK the majority of prison inmates are there for drug related crimes, so you'd have to close a lot of prisons if you legalize drugs).

I'm not convinced that former prison warders are best material for teachers, though...

219:

The poster-child for imprisonment of drug users is the USA, and it's hard to avoid thinking that the US prison system has no room for rehabilitation.

Somebody who leaves school functionally illiterate isn't a problem you need blame on a prison system. That primary failure mode needs fixing. But a prison system that cannot act to remedy the problem is a failure too.

Maybe the school should be liable for damages, if a convicted ex-pupil is illiterate.

220:

The problem with this rant is that you basically come off exactly like the crazy bitcoin fanatics that do want to take down the banking system, you're just equally far off in the other direction in thinking that 1.) it actually will take down banks, and 2.) that most people who use bitcoin want to take down banks. Neither are true.

"Bitcoin comes with an implicit political agenda attached"

Uh, no? Some of the people who like bitcoin have an agenda (yes, possibly including its creator). However, bitcoin itself is mostly just about fast, easy, verifiable money transference. It happens to also be sorta anonymous. You know, like cash. Of course, there's 185 times as much cash just in the United States as all the current bitcoins in the world, so it's really a drop in the bucket of anonymous transactions.

"BtC is inherently deflationary"

1.) So? 2.) Not infinitely... it's a commodity, like gold. Is gold deflationary? Sorta? But it's not $1 million an ounce. There's a point where people just won't pay more for it. Same is true for bitcoin. Also, unlike a fiat currency of a nation, there's no economy depending on bitcoin as their sole currency. It's not going to drag any country's economy into a standstill because it is increasing in price... just as gold's deflationary tendency isn't ruining the US economy.

"Mining uses a lot of electricity"

So do banks. Except there's specific economic pressure on miners to make their rigs as efficient as possible... and this only increases as bitcoins get more difficult to mine. Mining has gotten a few orders of magnitude as energy efficient today as it was in the beginning. Miners can't just charge fees and raise interest rates to make more money. The only reason it has been economically viable to mine is because bitcoin has skyrocketed.... and it's still right on the line of not being profitable for many people.

"Bitcoin mining software as malware"

What the... what? Lots of things are malware, why does that make bitcoin bad? Does malware "virus checkers" make antivirus software bad? This makes no sense.

"Stolen electricity will drive out honest mining"

Uh... it already takes specialized hardware, and the biggest miners are making whole rooms and buildings into miniing shops. You can't steal that much electricity. If some guy wants to put a mining rig in his office's server closet, that's not going to affect normal miners in any significant way.

"Bitcoin facilitates assassination and drugs and child pornography"

Seriously, we're back to this? Cash, 185x as much of it in the US. Is assassination really a pressing problem in this day and age? I get the child porn thing, but bitcoin isn't exactly going to make it explode in popularity.

"Bitcoin is pretty much designed for tax evasion"

Again... hello, cash. Yes, it's easier to sell stuff online for bitcoin. But there's still a million cash only businesses out there that seem to pay their taxes just fine.

You seem to assume people are naturally thieves, crooks, and druggies. I think most people are naturally honest and good. You seem to think we need some kind of father figure watching over us, steering us away from the bad things, whereas I think most people avoid bad things as a matter of course. Yes, some small portion of people will use bitcoin to do bad things. But that can be said of every technology.

221:

I needed to disambiguate that because a "prison ward" is a real thing in its own right, specifically a part of a prison where inmates requiring hospitalisation but not surgery are treated. It wasn't your English, but the fact that the specific mistake referred to a different actual concept to the main implication.

222:

Or, more specifically, Lederhosen, which are a part of Austrian national dress, and carry all the sexual implications of a bowl of soup!

223:

I was looking up how much gold there is in the world. Was there enough to bury a dragon?

I found an article which estimated that the total value of all the gold mined by man was slightly less than the annual NASA budget. It used a price of about $300 per troy ounce, and the figure is much higher now: about $1200.

It does go up and down a bit, and the rate of change is nothing like as high as for Bitcoin.

And, in current money, Apollo cost about $109 billion over 15 years, though that does include the tech development and infrastructure, some of it still in use. Capital rather than operating costs.

And the US DoD budget, a couple of years ago, was $680 billion

Can the US dollar depend on any "hard" asset, such as Gold? There just isn't enough of it. You could make a promise to pay gold for banknotes, but that's not all the money circulating. We're stuck with some sort of fractional reserve banking.

How many Bitcoins can there be? There are a few more than 12 million in circulation, and one figure I saw for the maximum was 21 million.

So just to pay the US Defense budget, a Bitcoin needs to be worth $32,000

Boys, I learned to use a slide rule in my distant youth, and you need to be able to do a rough calculation in your head to fix the decimal point. I know it sounds like a "kids today" thing, but there's so much craziness in the modern world that seems to depend on people not grasping what the numbers mean. To me, Bitcoin looks like another one of those headline political lunacies where the numbers just don't add up.

I can almost forgive some of the politics here, but you're not doing the arithmetic.

224:

Never let it be said that I let reality get in the way of mocking a Nazi.

225:

I didn't learn to use a slide rule, but one of my childhood friends was an old school mathematics teacher who taught proper mental arithmetic when she was teaching. The same "estimate and refine" principle applies, she and I could do "sums" at similar speed, and I'd agree these figures at a first order level.

Having said that, I'm going to return to inflation, and point out that most inflation in the World has occurred since the major industrial economies came off the "Gold Standard".

226:

But what about dogecoin? so crypto, very currency. such wow.

Seriously though, as a non-libertarian non-BTC-owner, I have to disagree with most of your points other than the deflationary aspect. It's a killer point and very important that more people understand it, but the rest is trolling. Magnificent trolling.

I think that you are confusing the stated political goals of some of the louder BTC advocates with the actual effects of BTC, and as a corollary and function of your (perfectly reasonable) disgust with those views/goals, are predicting the demise of BTC out of wishful thinking rather than particularly insightful analysis.

227:

Having said that, I'm going to return to inflation, and point out that most inflation in the World has occurred since the major industrial economies came off the "Gold Standard".

Which inflation, US$? Historical data shows more violent changes between inflation/deflation before 1950.

Also, what's wrong with moderate inflation (2-5%)?

228:

"For starters, BtC is inherently deflationary" Yea that's a great thing about BtC, deflation is better than inflation. No more cheap shortcut for holding debt.

Lack of regulation can easily be fixed. The chain is public so government can always backtrack who made what purchase. Naturally having to pay taxes and disabling the use for criminals will lower the value of a BtC, but it will also become more stable.

The carbon footprint of regular banks is much bigger, they have massive buildings, IT systems to process transactions, etc...

If the malware is not for BtC it's for something else, fact remains that users should keep an eye on their system and developers should make software more secure.

BtC gives the people freedom, where centralized banking gives control to big monolithic institutions that abuse it.

Just because I'm - apparently - a libertarian does not mean I'm wrong.

229:

Yea that's a great thing about BtC, deflation is better than inflation. No more cheap shortcut for holding debt.

Oh dear Cthulhu, not another one who thinks deflation is the opposite of inflation!

I despair. No, really. Deflation fucks up borrowers: but borrowers are not just dead-beats with maxed out credit cards. Most such borrowers are businesses trying to issue bonds or raise loans in order to underwrite expansion. Upshot: deflation fucks growth. It also screws anyone who owes anyone anything, and rewards people who happen to have cash for leaving said cash in a sock under the bed, rather than circulating it. Lack of circulating money is bad insofar as it leads to a spiral of increasing deflation and an economic slowdown as everyone becomes very reluctant to spend anything.

We haven't had debt-deflation in the developed world -- except in some highly specialized areas (the cost of microelectronics, for example, over the past 30 years) -- for the best part of a century. Otherwise we'd recognize just how toxic it is: arguably worse than hyperinflation.

BtC gives the people freedom

Doubleplusgood quackspeak, comrade! The Party approves!

230:
Yea that's a great thing about BtC, deflation is better than inflation.

Tell that to the spanish. Or the irish. Or most of the eurozone periphery countries who are currently undergoing a massive internal deflation, with the attendant results of massive unemployment (but the banks and everyone with savings get richer).

231:

That's what you'd expect, since money creation occurs through lending, and there's been a lot more lending and such since then. See for instance the various measures of the money stock.

If you go for a gold or other linked currency, you risk deflation and damaging the economy through lack of demand; if you go for an unlinked one, you risk bubbles through excess borrowing. Although I might be wrong, was the USA on gold in 1929?

232:
Although I might be wrong, was the USA on gold in 1929?

It was. US left the gold system in 1971.

233:
The coin limit is created because WE THE MINERS want that limit.

Good. Now, what is the decision mechanism that will lead to this?

Trying to switch the block validation algorithm so that, say, a fixed reward occurs forever requires the cooperation of a "significant" pool of miners. Otherwise, you get a block chain split, with one chain having halved reward and said valid by "old school miners", while the other chain has fixed reward, is considered valid by "new school miners". And both reject the other's validity.

At that point, you have forked Bitcoin. There's now two bitcoin chains, both separate, both independent. But unlike forks like Litecoin or Whatever coins, you're trying to start from an existing pool of money. Suddenly, everyone has an equivalent amount Oldbitcoins and Newbitcoins. Which they can spend completely independently. But otherwise, it's completely identical to, say, "we the miners" deciding to switch from Bitcoin to Litecoin.

(unless you think that there's enough peer pressure among competing miners to convince enough of them to switch and kill the use of Oldbitcoin currency. Good luck with that)

234:
  • Don’t blame drugs and child pornography (etc) on BTC
  • I don’t think anyone has as a goal to replace ”the current banking industry” with BTC - rather have it existing alongside it to easily and swiftly transfer ”worth” between two individuals
  • 235:

    Not at all. I'm all for arbitrage, and multiple currencies. But something that there is a limited supply of is quite a good thing to hold long term, as a store of wealth, not an investment.

    Investments are fine for people who understand what they are investing in and understand the risk. Sometimes people just want to store wealth. It's a perfectly wholesome thing to do.

    236:

    Secular deflation is caused by growth. You might as well argue that because computers get cheaper every year for the same spec, nobody will buy computers and it will lead to a downward spiral in the computer industry.

    There is no reason for deflation to "fuck up borrowers". Lenders just set the interest rates to compensate for deflation. Of course, this is a lot easier when rates are set by the market and not artificially controlled by central banks.

    237:

    ADMINISTRATIVE NOTE: The ban hammer is now being wielded, and comments un-published, by the Censorship Committee. Targets are explicit violations of the moderation policy, drive-by flamings, and pointless trollery. YHBW. HAND. HTH.

    238:

    Lack of circulating money is bad

    Even though I'm not an economist (more of an engineer), it seems to me from what I've read economics that the point of money is to circulate. Our current economy just won't work when the money gets accumulated in some place. It's even in the simplified picture found in most basic economy books: money circulates through the economy. I know it's a simplified picture, but even then it seems to be often forgotten.

    So, making a deflationary money, where, as you said, it's smarter to keep hold of all money you can get your hands on, because it'll be worth more tomorrow, will just kill the economy.

    It also seems to me that this is one of the problems in the current economic situation: many big players are hoarding money instead of spending it.

    239:

    I don't think that's even possible. Wealth is based on an agreement between individuals and society. In capitalism it relies on the society enforcing debts and guaranteeing price stability. Since no one guarantees the price stability of Bitcoins, it might not be such a good medium to "store wealth". Just imagine that in a year some Virtual Cowry Currency becomes popular and a lot of people convert from Bitcoins to the new currency. What will your Bitcoins be worth then?

    240:

    Wait, what do people think of as deflation and inflation? THe last historian of economics by training I spoke to defined inflation simply as an increase in prices. Deflation is generally regarded as the opposite.

    241:

    "Violent changes between inflation and deflation", or economic instability caused by money supply constraints.

    Reasons for this rather than permanent inflation are already discussed.

    242:

    Mark Zuckerberg alone still holds more money in his piggybank than the peak bitcoin market cap.

    I'm not so sure that is true. Most of Z's "money" is in Facebook stock. Which means in many ways his wealth is tied up in just another form of BtC. I bet his actual cash on hand isn't more than a few million or so.

    243:

    Is that what happened to the person who claimed to be a miner, and yet apparently didn't understand that there's a limit to the number of units of anything that can be represented by an integer in an N-bit register?

    244:

    and point out that most inflation in the World has occurred since the major industrial economies came off the "Gold Standard".

    And what would the world look like if we all had kept the gold standard. With it's limits on the supply of money. Would the world have more or less poverty than it does today?

    245:

    It would be different. People like, for examples, OGH, Ken McLeod, Harry Turtledove... derive some of their income from speculating as to exactly how it would be different.

    I'm not advocating the Gold Standard; just observing the practical effects of coming off it.

    246:

    Secular deflation is caused by growth. You might as well argue that because computers get cheaper every year for the same spec, nobody will buy computers and it will lead to a downward spiral in the computer industry.

    Increase in productivity is only a minor reason for deflation (and if deflation was limited to productivity raises it might be ok). But deflation caused by people hoarding money and banks not giving credit is a different matter, and is definitely detrimental to growth.

    There is no reason for deflation to "fuck up borrowers". Lenders just set the interest rates to compensate for deflation.

    Oh yes, lenders will give me €10,000 at -1% since we live in a deflationary period and I can't be expected to pay back the same €10,000 (or even more) in five years time. Get real.

    247:

    That was my point. From everything I understand having a currency that's fixed in it's supply will almost always keep the poor poor. If not poorer until we figure out how to keep the population from growing. Our current system has it's warts but as OGH has commented it works better than a fixed currency system.

    And as OGH has noted elsewhere, many of these fantasies of the future require killing off 90% of the worlds population. Mostly those talks were about energy options but to bring the relative number of poor out of poverty with a fixed currency seems to require just getting rid of them. The poor that is.

    248:

    The Concise OED defines deflation as the reduction of prices in an economy.

    Before I looked that up, I'd have said that it was a reduction in demand rather than prices. For example, individual pieces of consumer electronics are still getting cheaper year on year, but demand is running at such levels that the value of that market as a whole is still increasing.

    249:

    THIS!! That is all I have to say.

    250:

    Actually, since Bitcoins are not individually discrete, they're uncounted.

    The Bitcoin Bank's software limit on number representation does not directly limit the number of bitcoins that can circulate; it limits the current balance that can reside in any bitcoin wallet. You can get more bitcoins, they just have to be in another wallet. The absolute number of "bitcoins" that can "exist" would be equal to that representation limit, times the number of possible accounts.

    Which is greater than the number of particles in this Universe and a fairly chunk of adjacent ones.

    251:

    I replied by comment here : http://www.antipope.org/charlie/blog-static/2013/12/why-i-want-bitcoin-to-die-in-a.html

    Summery :

    Almost all your concerns are addressable by nation states simply accepting that BitCoin like currency represents a reality check on their corrupt central banking, law enforcement, etc. policies though. There is however an enormous problem with BitCoin's Gini coefficient and the inequality large scale adoption would create.

    We should therefore create a "lefty coin" that encodes progressive ideas about inflation, etc. into the currency structure. In this way, nation that eventually make their national currencies emulate bitcoin, except without the wasted electricity, etc., will have a progressive model to follow rather than a crazy libertarian one.

    252:

    THe last historian of economics by training I spoke to defined inflation simply as an increase in prices. Deflation is generally regarded as the opposite.

    That's a gross over-simplification.

    Inflation: prices rise, but they're able to do so because the money supply is also expanding. (This gives rise to the justification for using monetary policy to control inflation -- which doesn't work terribly well on its own.) Deflation: the money supply is shrinking (either because demand for whatever the currency is based on -- i.e. gold -- is rising, making money more expensive, or because money is being pulled out of circulation, e.g. in a misguided attempt to counteract inflation). So money becomes more valuable if you hold it. Nobody wants to buy anything, assets depreciate, interest payments on loans rise as a proportion of the value of whatever the loan is secured against, and so on.

    It's probably worth distinguishing some types of commodity deflation (microprocessors get cheaper by 20-50%/year; maybe we discover new copper reserves so the price of copper crashes) which a working economy can survive from fiscal deflation (money supply shrinks) which is a recipe for stagnation and depression.

    253:

    Congrats Charlie. You've successfully trolled probably thousands of people, hundreds of which have commented on how you are wrong, or right, or whatever. I was a bit perturbed by your post, but then I read the first hundred or so comments. I went away, and I realised that you had to be trolling. It doesn't matter if you are right or wrong, does it. :)

    Disclaimer: I like the idea of Bitcoin, or something like it. For many reasons, not least that it's an alternative payment system to the credit card + Paypal oligopoly. So even if it's not a currency, it can still be used to transfer wealth, far cheaper than the alternatives, and much harder to shut down. I also have about 70 bitcoins (mostly from doing some web work back in 2011), worth about $35000 if you take one coin as $500. I've never spent any, or converted them to "real" money, but I have given perhaps 30 bitcoins to various causes (including the FSF, EFF (who then went and gave them to the Bitcoin Foundation, before accepting them again...), and the Freenet and Tor projects).

    Political disclaimer: While I'm not a libertarian in the (apparently peculiarly American and Internet only) "if only we had a truly free market, it would all be wonderful" sense, I am a proponent of "small is beautiful", and so naturally oppose big governments and big corporations.

    Regarding deflation there are Bitcoin-alts that actually implement an inflationary model. I've not bothered to study them closely, because of two things: 1. the only thing you can buy with them is other alt-coins and bitcoins. 2. Even if I mined or otherwise obtained a stack, they would loose all their value before the currency became widespread enough for me to spend them on something I actually want to buy. (Also, I personally think that slight deflation is far better than rampant inflation. Though slight inflation, perhaps tied to the number of people alive, might be even better.)

    Bitcoin is not anonymous (at most, it's pseudonymous) and I don't know of any trustworthy laundry (or "mixer"). But I can't think of any way to make a truly anonymous cryptocurrency that doesn't track transactions (it's a very clever way of solving the double-spending issue that exists with any cryptocurrency). It's also not easy to hide them if you actually want to do something with them, because there is a growing chain of transactions that can be traced back. This fact has been used to prosecute Silk Road users in Australia among other countries.

    I disagree with other aspects of you post as well. But I can't be bothered exploring them. I'll simply conclude with: I think that Bitcoin (or something like it) is much more of a positive for society than it's non-existence. It's far more of a danger to the financial "industry" (that actually produces nothing, and is far more damaging to society than any fringe currency can ever dream of, witness the "global financial crash" of 2008) than it is to government control, taxation, etc.

    (Also, I got a 500 error when attempting to post. By my count, this post would have been post 252 or 253 if the post had succeeded.)

    254:

    Congrats Charlie. You've successfully trolled probably thousands of people

    Er, rather more than that. Over 19,000 direct twitter followers; over 65,000 page views yesterday. Then you have to factor in RSS syndication, slashdot, Hacker News, and Reddit. I reckon I'm into six digits and rising rapidly :)

    Note that I'm not against cryptocurrencies per se. I just think that Bitcoin is a terrible one, because it encodes certain political/economic assumptions about the world we live in which are ultimately toxic.

    255:

    That sort of depends; is it a successful troll if people are not moved to comment, or head off on discussions about economics rather than Bitcoin?

    256:

    If you own the blog, it's troll-baiting, if you don't, it's trolling.

    IIRC the definition of trolling is "posting sharp comments with the sole purpose of causing extreme emotional reactions" or so. Which might be a bit wide since it also covers authors of exciting books and preaching.

    257:

    Well, Charles, I think you've missed some things about BitCoin.

    The first is that the deflationary aspect of bitcoin is an "accidental" byproduct of Satoshi's design. Satoshi wanted to create a real version of decentralized Chaumian digital cash, and he knew that all sorts of speculators and libertarians would come running if there was the collective belief that the value of a coin would inherently appreciate. So this limited feature of Bitcoin was a way to accelerate the adoption of this first global digital cash.

    And that alone is important: Prior to 2007, did the vast majority of people understand that it was possible to create a decentralized currency? And a currency where new "coins" could be minted without some centralized authority?

    Note too that Satoshi didn't design BitCoin to peak at (say) 1 Billion coins (a different design would have allowed that). He chose a finite lifetime under the assumption that Bitcoin would just lead the way for other future digital currencies.

    As new Chaumian currencies arise, they will not have to be deflationary by design. Indeed, they will support a variety of different modes for determining how much new money can be made. They'll support a wide variety of centralized and decentralized mechanisms for how much to "mint".

    As for the "4 horsemen of the infocalypse", Bitcoin is actually neutral: It doesn't HAVE TO be anonymous, but it supports anonymity based on higher-level services, etc...Arguing against that is like arguing against free speech because of all the bad things terrorists, etc... will say with that freedom.

    258:

    Frankly, the reason I would like Bitcoin to die in a fire is much more simple that all that.

    I kinda agree with Mr Stross but with the full knowledge that what Bitcoin is, really, is marginal. Irrelevant. It will not transform anything, be the standard for anything, transform the world, etc.

    What it has become, on the other hand, is a microcosm of all the wrong things about money and investment today. What it has become is just a waste of time and money for people to gamble on without absolutely nothing of real value in it. But boy, can I get rich quick! Or not! Wait, I'm rich again! No wait not!

    At a pathetically low level, yes, is not Goldman Sachs, but well. I dont know if the creator or creators of it had this in mind when they started it, if they wanted something different, to solve a need and/or to embody some belief about the role, function or future of money (and that is political, by itself) or what.

    But what they got is a scaled down and simplified model of the idiocy of investment in all its bubble-making glory.

    259:

    "[Libertarianism] relies on simplifying assumptions about human behaviour which are unfortunately wrong"

    Wow. It's as if the facts behind this indictment are blatantly obvious, otherwise at least one example would have been provided. In other words, Libertarians are naive because their assumptions are naive. Gotcha! We need the nanny state because... we need the nanny state! I cannot be trusted because... Libertarians are crazy! Let's keep forking over more hard earned cash to our beloved Big Brother and being such a damn nuisance!

    Bitcoin has serious problems, but those problems are not the fault of libertarian ideology. Just as the problems created by central banks are not the fault of any single ideology. At least bitcoin is an attempt to address some of those problems.

    260:

    Heh, I didn't realise you had such a large Twitter following, and I underestimated the other forums.

    You might not like Bitcoin, but can you see that (as someone on /. put it, and as g.emory alludes above), this is version 1.0. There are so many alternatives that could not have been possible without Bitcoin. So, Bitcoin may be awful, but it has enabled its successor already (perhaps one of the existing alt-coins with built-in inflation). And I'm looking forward to a crypto-future, where money is out of the hands of the big corporations.

    261:

    That's right, but it's amazing how many people think inflation occurs only when governments print money, never mind the banks creating it in a bubble. Also, in case anyone reading doesn't know, Monetarism doesn't work, it's been tried and failed.

    Paws #255 - heading off on discussing economics relavant to currencies/ money is probably one desired outcome, certainly more than the usual strange attractors.

    262:

    I still can't decide if digital currencies are either a good or a terrible idea, but most of the points made in this article are based on misinformed facts. And that is putting it mildly.

    For example, how exacly are Bitcoins "pretty much designed for tax evasion"? Bitcoins are, at their core, not much more than digital cash... where all transactions are authenticated via a P2P network. That means that BTC transactions are, sooner or later, public. We've seen news about big transactions pop up all over this year. All you need to do to tax efficently is to set up a transaction node and keep track of users and wallets to tax - hobbysts are doing this already. It is definitely a minor job for a government.

    This is one of my pet peeves with BTC, in fact. There's zero privacy when it comes to transactions, which i'm pretty sure violates Habeas Datas and Bank Secrecy acts in pretty much each country out there. I have nothing to hide, but then again, i don't want everyone knowing about my financial status either.

    263:

    nate finch @ 219 Sorry, you (& a lot of both bitcoin & goldbugs) don't seem to get it, at all, do you? ALL currencies are "FIAT" currencies. What is Gold's inherent value - really? It's very useful in old-fashioned photography (as well as Silver) and for some electrical contactors etc. But it's only "money" because people AGREE THAT IT IS "Money". The same is true of any $Money_Commodity so to speak. Which destroys the argument, somewhat - doesn't it?

    264:

    How will money be out of the hands of big corporations though? What would be the mechanism, when all the wealth is in their hands? The advantage of currency controlled by the government is that ultimately, it's one person, one vote, despite corrupting influences like lobby groups, etc. Currency systems like bitcoins, by devolving directly to one $, one vote, will not afford the majority the power to make changes.

    265:

    To be fair, the proposed top marginal tax rate in France of 75% is right around the revenue-maximizing rate (in the United States) of 73% (more here), so it's possible that such a rate would be high enough to be slightly self-defeating.

    266:

    also # 228-230 The other poster-child for deflation is err ... 1929-36 (approx) Purchasing power of money went up & peoples wages, even if they were in work, were cut. So nice.

    267: 236

    Exactly backwards. Prices of goods dropping is not deflation - certainly not if it is a result of increaded production/manufacturing/distribution efficiency.

    268:

    One annoying artifact of history teaching is that so much coverage is given to the bout of hyperflation in Weimar Germany in the 1920s. Certainly the classic 'wheelbarrows of money' picture is impactful. But hyperinflation was a brief episode, it was survived by Weimar, and indeed, Weimar Germany prospered economically because of it, wiping out 900% government debt.

    Comparatively little attention is paid, however, to the deflation of the great depression in the early 30's...

    269:

    @ 259 OK - I ran inot a USAian Libertartian a week or so back ... he suggested that all guvmint controls were evil. He was trying to argue against food (& drink & presumably drug) purity standards & enforcement. This is the level of lunacy that some US-Libertarians descend to. OTOH, there is far too much guvmint interference & enforcement in areas that are none of its business, such as shown up by the Snowden revelations. But, being against the antics of the NSA & friends does not mean that you want no food safety controls ... Can you see the difference?

    270:

    Interesting idea from John Michael Greer's often annoying The Wealth of Nature (tl;dr: he's a peak oil guy who seems to be getting more doctrinaire as his beard gets longer, but he does have some good ideas).

    Riffing on EF Schumacher's Small is Beautiful, Greer proposes not one but three economies, each with different rules. I'm pitching them out here as a way to help talk about the problems with Bitcoin.

    The Primary Economy is Earth and the biosphere: it provides us with such things as energy captured from sunlight (food), water, air to breathe, gravity, radiation shielding, decomposition of our wastes, and goods and services for the Secondary Economy, which I'll get to in a minute. Primarily these are renewable resources, and are roughly the equivalent of income in conventional economics. Humans are utterly dependent on the Primary Economy. We can degrade it or improve parts of it through skilled work (soil building to make farmlands and the like). To the extent that it can be monetized, it's at least three times larger than the Secondary Economy, in terms of goods and services provided to humans.

    Then there's the Secondary Economy, which is what most economists regard as the only economy: the economy of real goods. This system is secondary because it depends entirely on the Primary Economy above, plus non-renewable resources we dig up (such as the fossilized sunlight of fossil fuels). If the Primary Economy is the equivalent of income, the Secondary Economy is the equivalent of capital in a capitalist system. If you want a healthy business, you want to run on income, not on drawing down your capital by burning through non-renewable resources.

    Finally there's Greer's Tertiary Economy, the financial market. At its base is debt, the promise to pay for something at a future time, possibly with interest, possibly without. Now there's nothing inherently wrong with a Tertiary Economy, because such promises are the basis for any society: help me now, I'll help you later. Money is simply where we quantify such promises, so that we can compare them. How many promised bushels of wheat is a promised cow worth, and can I make a trade? The problem is that money isn't a real good, it's an unreal idea, and there's no physical limit on how much money can be created. The only limit is demand, how much other people are willing to accept from the creator. If I can get you to accept my trillion dollar bond, I'm a trillion dollars richer, until I have to pay you back.

    When people start making money by moving money around, you can get things like financial bubbles,at the end of which a bunch of money--unfulfillable promises, basically--disappear, impoverishing anyone who traded real goods for these broken promises.

    The problems begin when you insist that there is one economy, not three (or more), measure them all by one yardstick, and assume they all operate by the same rules. The last is particularly important. Primary goods like energy can't be created from nothing. They can be concentrated, dispersed, improved or degraded, but they can't be externalized into nothing, nor can they be conjured up in a financier's ledger. Unfortunately, when you conflate all three economies, you get problems. For example, right now there's so much money that, if it was all used to buy real goods, it would cripple the Secondary Economy and seriously degrade the Primary Economy. Indeed, most money has to be squirreled away in virtual financial instruments just to keep it from wrecking everything in a wave of hyperinflation. Eventually all of that money will disappear. It's not real, after all, it's just promises to pay later, and the human species has survived with only primary and secondary economies for tens of thousands of years. In the meantime, we're struggling with how to deal with it, trying to save the useful parts of money while controlling the (literally ballooning) problems.

    Getting back to the issue of Bitcoin, I'd suggest that thinking of it as a phenomenon of the Tertiary financial economy makes its problems easier to talk about: it's more subject to speculation than anything backed by real goods or national threats of force. As Charlie originally noted, it's a promise to pay that's weighted with a lot of philosophical baggage that many of us find at least partially objectionable.

    271:

    A couple of things...

    1) Anyone claiming that BtC is anonymous is a fool, a liar, or both. All transactions are public for all time... and connecting a datasets like that to real names is the current favorite sport of a large section of the computer science research community. Anyone who thinks the large number of possible wallets protects them from identification is kidding themselves. I expect the first prosecutions for BtC-assisted tax invasion to come within the next couple of years, and I expect them to be prosecuted on the basis of the blockchain and bank records.

    2) It is theoretically possible to launder BtC through other crypto-currencies. However, I don't think it's practicable at a scale large enough to represent a threat, for two reasons. First, none of the alternates are large enough, nor do they show any sign of growing large enough. Second, they are all based on the BtC protocol, public blockchain and all. See my first point.

    3) BtC is a remarkably shitty medium of exchange and will remain so into the foreseeable future. Why on earth would any remotely sensible person take or make a loan in a currency whose value might change by 50% in 24 hours? How about a salary, or any other medium to long term obligation? Given such volatility, there's no way for a monetary economy in legal goods to develop around it, which means that speculation will continue to rule the market, which means it will remain extraordinarily volatile.

    4) As noted elsewhere, all money is collective consensual hallucination. It's money because we agree it is, and further agree to denominate our material obligations in it. All gold and silver are to money is a Neolithic anti-counterfeiting hack. Goldbugs fail because they miss the first bit and mistake the anti-counterfeiting hack for holy writ.

    272:

    Thank you. "The Laffer Curve" is wrong in detail, but Laffer had a point. A top tax rate of 75% will drive people away, or simply initiate (even more inventive) cheating. The trick with taxes is to make them: a] Progressive b] Fair c] Not so high that people are induced to cheat or flee. d] SIMPLE

    Re point [c] & Laffer, I would suggest that a top (integrated) tax rate of 60% is as high as one should go. Some people would say 50%, but that's all right too - we can argue about the details. as for [b]&[a] it should be obvious why these are necessary requirements, with the added proviso, that the poorest should not be paying any taxes at all. As for [d] - if you have your first three ducks in a row, then this makes paying taxes easy, reduces the amount of time wasted by accountants [ NOTE ] and, since there will always be antisocial types who try to cheat or game the system - makes it easier to catch those who do try to benefit at others' expense.

    [NOTE: My wife is a Tax Accontant - & she, & all her assocoaites would LOVE a simpler tax system - even according to them, the syatem at present is very close to broken { IS broken in the USA } - and less work. There still would be work for them, but it is presently completely bonkers.

    273:

    I half-believe two different conspiracy theories about BitCoin:

    1) It is a deliberate parody of gold.

    2) It was created by the NSA as a way to comprehensively test the security of SHA-256 and future hash algorithms.

    274:

    I disagree. It is subject to speculation, yes, but not for philosophical reasons. Right now the market for Bitcoins is very small and prices fluctuate widly because of it - a mid sized transaction can easily impact the market. Add to that the fact BTC sees little use as currency: most users speculate with future price rises (see the Winklevoss twins for an example) and just store Bitcoins away.

    In the end, technically here's little separating Bitcoins from other flat currencies. Its widespread adoption or failure will depend on factors other the fact that it is digital in nature. And it is certainly not a "weapon" or a "way to avoid taxes". Take it as an experiment if you like; i'm certainly very interested to see how it usage pans out in time.

    275:

    They are covered in astroturf...

    276:

    So I get that you're exaggerating for effect, but I think you shot pretty far wide of the mark.

  • You assert that Bitcoin is worse than our current system. The current system is responsible for rendering entire towns and cities bankrupt, causing hundreds of thousands of people to lose their homes, and on and on. And that's just in the last decade. The sins of Btc you list are a pittance against that.

  • Bitcoins being deflationary is bad for people who hold bitcoins exclusively. It's approximately the same error as holding exactly one stock in your portfolio. My sympathy for people who do either is pretty limited.

  • Bitcoins' ability to be "hidden" is still unproven. We already have one example of someone using relatively simple techniques to track bitcoins and I imagine more will be invented. This is measured against the ability of banks to launder billions, hide money from drug kingpins and evade embargoes on arms sales. And that's just the last two years I'm talking about. I see no scenario under which Bitcoin malfeasance could possibly approach the scale of fraud associated with, say, LIBOR.

  • I'll ignore the carbon footprint thing as others have responded to it, except to say you could make the same argument about online poker, World of Warcraft, or Facebook. All have questionable social value, definite downsides, and all eat way more electricity than Bitcoin mining.

  • Bitcoin mining software is now being distributed as malware. Wait let me fix that for you... "Software is now being distributed as malware." Also PDFs, Excel workbooks, and on and on.

  • "Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography)." Let me fix that one, too: "Bitcoin's utter lack of regulation eases really hideous markets that already exist, just like Craigslist, BBSes, and the back pages of printed magazines."

  • I could go on and on, but the point is that you're heaping sins on Bitcoin that are not unique or even particularly bad with Btc. But you appear to be blaming the car for the fact that its driver used it get away from a bank robbery.

    277:

    Well, but all that sounds precisely as a good set of reasons NOT to use it as currency. What kind of circunstances do you imagine would make it be adopted as one?

    278:

    If Bitcoin is intended to be a Chaumian currency, then it fails at a cryptographic level - as it's not a zero-knowledge crendential-based system. It transmits far too much information to be an effective digital cash.

    279:

    Deflation fucks up borrowers

    Agreed, for any proper legal tender.

    But is there any chance that anybody would ever create any sort of debt instrument denominated in Bitcoin? The idea of lending or borrowing in Bitcoin seems insane even by internet-troll standards, given its architecture of semi-anonymity and irrevocability, and its observed volatility. And if debt is never, ever denominated in Bitcoin, how harmful would deflation be? (This is not an argument for Bitcoin disguised as a question; I actually don't know the answer to this.)

    280:

    That'a great question. To be honest there's no forseable scenario in the near future where Bitcoins stabilize in price. Notice that i said "near": a critical mass of mined BTCs and associated transactions will be necessary before it actually starts working as a stable currency. We're not quite there yet, and we could possibly never be.

    But again, this has nothing to do with the technical merits of Bitcoins themselves. It is something completely new and revolutionary which might very well work or fail spectacularly. Remember, BTCs are only 4 years old...

    281:

    You say "Our current global system is pretty crap". It IS crap in many ways: Because gov't can print money at will: 1. It punishes savers (typically older people) 2. Gov't keeps spending money from next gen it doesn't have. 3. G'ovt keeps spending money on wars when it can't govern it's own house. 4. G'ovt spends money on surveillance of people who find the whole system objectionable. Certainly not the constitutional democracy we inherited. 5. G'ovt ignores (if fact steals) hard currency (Gold) that is demanded legal tender in constitution. Aren't bit's easier to hide?

    The only solution it to decentralize. Centralization whether it was communist Russia or our newly found Orwellian state will fail because it is too top heavy.

    Bitcoin isn't ideal, but at least there is a chance a meritocracy could emerge. Right now we are guaranteed failure.

    282:

    Ah, I think I missed a word or two in that post. What it prevents corporations from controlling money. At present, three corporations can cut off most international money transfer for things like buying over the Internet.

    And I disagree that it moves the system towards one dollar one vote. That's the system that's already existing in at least (from an outsider's perspective) in the USA (and to greater and lesser extents in other "representative democracies" (a great lie of the modern age, they are generally neither)).

    283:

    I came across this on Twitter, and OGH may have also seen it by now:

    A report on the Jupiter Bitcoin mining hardware

    Report date: 6th December, before the crash.

    Price, when available: $5000

    Bitcoin production rate: 3 days per Bitcoin

    Power cost: $4 per day

    So, it will take about 30 days, at current prices, to produce enough Bitcoin to pay for the hardware, and about $120 of electricity.

    The company which makes them said it cost $3.5 million, so they must have sold 700, minimum, or they wouldn't be still in the business. That's about 230 BtC per day, there were reported to be 5400 mined yesterday, and the manufacturer claims their customers are producing 70% of Bitcoins.

    So the old generation might have got them over $20 million of income.

    There's something that feels off about the figures from the article, but selling the Mining hardware looks rather good business, like selling hard-wearing pants to gold miners.

    Oh, and there was a pic in the article, showing the screen of the computer acting as a monitor. The box was producing 677 gigahashes per second.

    It certainly makes the energy/bitcoin figures Charlie used look badly out of date. But the Mining business has a big hardware cost.

    284:

    I confess I'm just slightly disappointed that there's no Nu-Money, Crypto-currency called either 'Flaxscrip' or 'Hempscrip', mentioned in http://coinmarketcap.com/ or a currency that is deliberately designed to lose value the longer you hold onto it((fnord)). Why mine a crypto-metal when you could grow a virtual herb?

    Brothers Wilson, Shea, Malaclypse and others had a lot to say about the magic involved in the official monetary systems. Most of them seem to have a magic wand somewhere in the process that blesses the object, transactions or whatever and turns them from base metal or numbers into "Money". It would appear that Bitcoin's magic wand is a bit flaky. Still, like Old Lodge Skins said in Little Big Man; "sometimes the magic works, sometimes it doesn't".

    285:

    I'm a happy man today because I've waited a long time for someone to say what you did about Bitcoin. That little 50% drop in its value is also some cause for optimism if not celebration. ;)

    Since I build computers, it would have been easy to get into the so-called mining right at the beginning but the disinclination to do anything that disgusts me predicated against it.

    Thank you for being a voice of sanity.

    286:

    I tried to make some sense of the argument, but all I could think of was "he's playing the think of the children card!" and couldn't even read the other reasons. This is either your worst blog post, or your best troll :)

    287:

    Either I've missed something or you have. I'll cheerfully agree (3), but (5) does not apply because not everyone is USian.

    288:

    OK, this may be a naive question, but why are they selling this hardware? Once they've bought the materials and built the kit, surely it makes more sense to keep it and mine BtC themselves?

    289:

    Exactly. And even gold's supply isn't really limited: We dig more out of the ground every year. Goldbugs like it, however, because it just isn't worth significantly upping the rate at which gold is mined, so it LOOKS like a finite resource. Indeed, the problem with gold is that it doesn't really scale with the rate of global wealth creation.

    If they wanted to use some sort of atom for a currency, the obvious choice would be silicon, which is a nice proxy of the amount of computer chips and optical fiber being created each year. But of course, goldbugs wouldn't bother with that because the amount of silicon they could buy would never impact demand and/or price.

    290:

    You might think that.

    I see two possibilities:

    a) It's an esoteric but very effective way of shorting BitCoin,

    b) They're ploughing the profits from the mining farms they sell into building extras and running them for themselves, without telling anyone (sell miners at a 10-20% profit, use profits to buy miners).

    291:

    Hey, don't worry. Bitcoin is GOING to die in the fire... You see, Bitcoin believers also continue to insist on two other "features" as being good.

    1) That, by default, bitcoin is irreversible.

    2) That, by design, bitcoin is unlinked to an existing currency.

    The result of these two decisions means the Bitcoin community doesn't understand that "Bitcoin is cheaper for financial transactions" is a lie and never will be true:

    Because its volatile, sellers use a service like Bitpay (costing 1%) [1] which turns the bitcoins back to dollars, because you don't want to be holding that radioactive hot potato. Even 2-3% daily volatility, let alone 20-30%, is enough that this will occur.

    Because sellers are converting BTC to dollars, buyers must go the other way for the system to balance!

    Yet because Bitcoin is irreversible, buying Bitcoins is necessarily hard: you can't just log into your bank account and buy Bitcoins, and you never will, because if you could hackers would corrupt your computer, steal your login, and take your money, turn it into Bitcoin, and run [2].

    Thus best path to buy bitcoins involves cash, which means the buyer's cost is 2-3%.

    So 1% + 2-3%, and a Bitcoin transaction costs MORE than a credit card transaction! Plus a heck of a lot more hastle.

    Then again, Bitcoin is small: Even at current value, the amount "mined" is valued at less than $2M/day. Peak new beanie baby sales were over $3M/day...

    [1] Yes, its easy for sellers to do this (and charge the Crypto-libertarians an extra 20% for the privilege), but its important to know that such sellers are not really taking Bitcoins, but charging in dollars, taking Bitcoins and immediately turning them into dollars.

    [2] If an attacker is on your computer they can access your wallet, take the Bitcoin, and run. "Please don't store Bitcoins on an internet connected device, regardless of it is your own or a service's."

    Yes, you should NOT store your Bitcoins on an internet connected computer. THIS is the currency of the Internet?

    292:

    There is a cryptocurrency that loses value the longer you hold it. It's called Freicoin, after Silvio Gesell's idea of Freigeld (which also loses value the longer you hold it).

    It's a reasonably good idea (anything used to purchase things that rot and corrode should also rot and corrode lest people just hoard the money instead), but in a world with zero transaction cost, the hoarders will just move their money over to the highest valued deflationary unit they can find instead.

    293:

    Personally speaking, it would'be been nice to have got into this bubble when it started. Bubbles aren't bad (For you) if you get in on the upswing. I keep missing all the bubbles. And as for value, it's not like we've seen a multitude of unlikely things become valuable in the last 20 years (People's collected public journals will be worth billions? No sci fi author predicted that one)

    As for the deflation thing, it seems like the only way to encourage people to be early adopters. A fiat virtual currency backed by nothing that also inflates is gonna be a hard sell...

    I've also read a few articles on other, non libertarian aspects. For example someone made the point Muslims might latch onto it because the low transaction fees satisfy Koranic edicts. I also skimmed a Marxist interpretation of bitcoins recently, it seemed positive.

    294:

    Don't forget option #3:

    When in a gold rush, don't dig for gold, sell shovels and blue jeans...

    Actual mining is a red-queens-race with so many people that really, the profit ends up accruing reliably to those selling the mining rigs.

    295:

    I see the weak anonymity of Bitcoin as a feature, not a bug. I don't use Bitcoin, but there are times when I would appreciate some sort of on-line payment system with weak anonymity. By "weak anonymity" I mean that, while law enforcement can breach the anonymity with some effort if necessary, it is robust against sales and marketing attacks and casual, lazy surveillance.

    Currently, if I pay for something with PayPal, the recipient gets my real name and a real, permanent email address, which potentially subjects me to spam. If I pay with a credit card, the recipient gets my real name and a real physical billing address, which might subject me to junk mail or persistent unwanted monthly "subscription" charges hidden in fine the print somewhere. Either one has the possibility of leaking data over into social media without my explicit permission and/or logging my purchase with various data brokers for later ad targeting and price discrimination.

    These sorts of risks discourage me from, e.g., purchasing music or other content on-line directly from authors and musicians, or from small start-up outfits that don't have well established reputations for less aggressive marketing.

    In countries with proper data protection laws, these dangers might be mitigated, and are thus possibly less relevant to some of the readers here. Being in the US, I have no such protections. And in any event the law don't protect you when your vendor gets hacked, however.

    TL;DR: I'd be more willing to pay $8 US in some anonymous electronic currency to, say, Charlie Stross LLC, for a direct download, than I would be to give him my credit card information.

    296:

    Is it possible to tell whether BitCoin trades are being conducted by machines or humans? Which brings me to: Do any of the trading algorithms ever trade in BitCoin? I tend to suspect machines whenever anything on the exchanges starts yo-yo'ing for no reason ... unless the yo-yo-ing is specifically intended to get more people trading so that the exchange can take its cut.

    I don't see the appeal of BitCoin although it seems to make sense that a purely electronic currency might eventually become the standard/universal. And, because this currency seems to be based entirely on intellectual output, i.e., less subject to limits than some mineral/finite resource, it should grow stronger as most modern economies produce intellectual rather than materials goods/services. (Why did the creator of this currency put a ceiling on it? To see what other currency/exchange principles might spin-off, or what?) However, the transaction/exchanges described by posters suggest that its market is very limited, specifically, too homogenous.

    In any case, it's a good real-world exercise in seeing what crawls out when you bait your trap with 'a-get-rich-fast-and-hide-your-sins-from-neighbors/wealth-from-taxes' promise. Evidence in favor of government-backed currency.

    297:

    Not really. Being digital in nature you can't really tell wheter a transaction was made by a human or a computer process.

    A little known fact about Bitcoins (Charlie, i'm looking your way :) is that transactions are scripted programs which can be modified. Right now all transactions are simply of the "X pays Y 20 bitcoins", but this practically unknown feature opens a doorway to complex financial instruments based on digital currency. Smart contracts, auctions, you name it.

    As i said before i have no idea if Bitcoins will ever take off. But the concept alone is fascinating.

    298:

    I can't see any reason why you shouldn't run a more or less conventional on-line auction in Bitcoin rather than, say, Vietnamese Dong.

    299:

    David Cameron's "protect the children" internet censorship might be awkward for transactions based on the Vietnamese Dong.

    Which is a distraction.

    And a cheap joke.

    But you're right. All the workings of an auction, or any of these complex financial instruments, are based on some token that the parties agree on. How many pork belly futures do you think are actually delivered? But people do agree what they are, well enough that when the delivery point comes, something can happen. You could do that with Bitcoin, but would a market work? It's not just what your token is.

    300:

    I picked a random (but real) currency deliberately to make the point that an auction is a simple POS transaction, very much like buying something in a shop.

    A Futures market (and these are or were real commodities markets) is only complicated by the fact that the physical goods do not exist when we make the initial trade. If you're paying me, say £10 per kg for lamb to be delivered next September, that's a Futures trade. You're acting in the hope that lamb will be scarce, and you'll be able to immediately sell your Future to an abatoir or wholesale butchery for, say £12/kg. I'm acting in the hope that it will be sufficiently plentiful that I can make up any shortfall between what I breed and fatten and what I've sold you at, say £8/kg. If you're right, your advantage is that you stand to make 20% on capital employed, and if I'm right, mine is that I get cashflow to breed and fatten stock on now, and to make a profit on any shortfall.

    301:

    You mean the internet filter that blocks sex advice websites? That's definitely worth a rant, although obviously this is Charlie's ranting space.

    302:

    Bitcoin has all the fun of the gold standard only with the effects cranked up to warp 11. The overall deflationary trend in particular sucks as deflation kicks ordinary people in the teeth. Just ask William Jennings Bryan. The

    (Note to goldbugs: "it's shiny" isn't a less arbitrary source of value than "because the government with the big army says so". Also, leaving bankers in charge of the money supply in practice has worked much better than leaving it in the hands of miners and happenstance)

    As for money laundering, Bitcoin is like cash except with an important difference: Bitcoins do not take up physical space. It's much, much easier to launder US$10 million when you can keep it in a thumb drive instead of a storage locker. This isn't a hypothetical either, shady folks really do have the problem of securing large stacks of cash.

    303:

    It's much, much easier to launder US$10 million when you can keep it in a thumb drive instead of a storage locker.

    If you doubt this, get a stack of 20 notes of an arbitrary but common denomination (or mixed denominations will work if all notes are the same size in your local currency), fold them in half, and measure he stack thickness. Now consider that 1E6 currency units of them will likely be about 1E5 times that depth if in a single stack.

    304:

    I slipped a decimal in my last; it should be 1E7 currency units.

    305:

    I have a minor difference about Leninism. I agree with you, not that that is of interest ;) but would go farther. I don't think it is even internally consistent. It may be consistent from a logical point of view, but not from a systems point of view. (But maybe 'possible' should be used for the systems case rather than 'consistent'.)

    An essential feature of every stable system is the presence of both positive and negative feedback loops. This feature is lacking in all forms of communism, though in 'village cooperative' types the feedback is actually there in the village social milieu.

    The classic communist idea is "from each according to his abilities, to each according to his needs". This is a simple expression of two disconnected, uncontrolled systems. Some workers will end up working themselves to death, and those who are good at 'needing' will acquire an infinite amount of goods.

    In practice this can be seen in the wealth of leaders of nations that practice any form of socialism, from Brezhnev who is said to have owned a large fleet of Ferraris, to Hollande of France today, who turns out to have acquired a mysteriously large amount of wealth.

    In practice, the feedback that must be there goes through the political system instead of the economy - bribery of and extortion by public officials, nepotism, political prisons, etc. (Also black markets relieve some of the force.) This is already too long so I won't blather on any more, hoping that the essential ideas are visible.

    306:

    What you're describing is speculation on the futures market, which of course happens. The original point of futures though was to hedge risk, and in ideal circumstances both parties benefit. For example, when a wheat farmer sells a future he gets immediate cash that she can use to run the farm and grow her wheat, while the flour manufacturer that buys it has a guaranteed price for raw materials it can plan around.

    As an aside, commodity futures are a type of derivative, so the instruments have their place. Of course, so does regulation; if the fancy mortgage CDOs were standardized and regulated the way futures are life would have been much easier when the real estate bubble popped.

    307:

    Have you read the original paper ? There is no hidden agenda behind this as speculated by you and the media. The mainstream narrative has focused on use cases of bit coin which is not related to the original intent of bit coin as a currency or protocol. This is the only technology which has come close to disrupting the financial industry . Bitcoin is not intended to replace Fiat , it is intended to replace financial intermediaries who charge way too much with very minimal value add. Try making an international money transfer . In spite of all technological advances MSB's charge way too much !

    308:

    Did you miss the point about the instability of Bitcoin - Fiat currency exchange rates? Would you actually accept an offer to pay you in an exchange medium that could be worth half of what it was when it left me, when you received it?

    309:

    I see Bitcoin (no capital "c") as a technical solution to a legacy payment system not designed for the Internet. Many people with a political agenda attach themselves to it and try to claim people that use it agree with their political views. Those who looks at Bitcoin as a political tool or only as an investment vehicle tend to misunderstand and misinterpret Bitcoin.

    310:

    I did some figuring on this sort of thing when I was researching for Nanowrimo this year. There was a news story that claimed 20 billion Euro in cash had been flown into Moscow from Iraq, and was sitting in an airport warehouse.

    There are enough 500 Euro notes that have been printed, and the volume and weight are low enough to fit on a plane. But it's still not very plausible. Can you use that much money without being tracked down?

    The chances are that the notes have not been rebundled between the printer and the airport, so they have consecutive numbers, which would be known, and are worth enough to have the numbers checked by a bank.

    Cash is not always anonymous.

    And this is on a whole different scale to the classic American numbers racket and florist's shop. It's about three times the turnover of the Las Vegas strip, according to one set of figure I just found, and Las Vegas was allegedl;y set up my the American Mafia.

    And while the LSE has the volume, it is no help getting the money from physical cash to the electronic form they use.

    Scale matters. Whatever you want to do.

    311:

    As per my #308 (timed some 18 minutes before your message), Bitcoin is not a viable exchange mechanism whilst its value against other currencies is so volatile.

    312:

    Note for USians; the Euro-USD exchange rate is about 2 to one, so ask yourself how many times you could spend a $1_000 bill without getting looked at funny, or possibly a cop on your @$$.

    313:

    (breaking SHA256)

    I tried years ago when bitcoin was worth cents per unit. It's not that easy.

    314:

    paws4thot @ 303: If you doubt this, get a stack of 20 notes of an arbitrary but common denomination (or mixed denominations will work if all notes are the same size in your local currency), fold them in half, and measure he stack thickness.

    My post was supposed to include a link to a picture of US$200 million of seized cash, or at least a good chunk of it. D'oh!

    315:
    The coin limit is created because WE THE MINERS want that limit. Good. Now, what is the decision mechanism that will lead to this?

    The mining pools.

    Anything that's agreed on by (a) the authors of the standard client, and (b) BTC Guild and GHash.IO, will become the future of the currency.

    Even if there's some lingering disagreement, there will be no double-spending, because both sides will continue to process all ordinary transactions. Only the "mining" transactions will be in dispute (or payments to/from particular wallets, or whatever). There's incentive for the miners to pick the winning side, because mining on the losing side is a waste of money, so I'd expect a clear winner to emerge pretty quickly.

    Whoever controls more than 50% of the mining wins. BTC Guild and GHash.IO between them account for 55-60% of mining.

    https://blockchain.info/pools doesn't look all that different to a national parliament in a country with proportional representation.

    316:

    Oops, I meant to say I replied by comment here : http://www.metafilter.com/134528/Sell-Mortimer-Sell#5338722

    Again, any nation could kill BTC by creating a state subsidized transaction network with a touch of pseudo-anonymity and other desirable features, thus resolving the the environmental concerns.

    317:

    Nobody would have been willing to seriously accept a fiat currency that's inflatable by the creator; the reason you trust government fiat currencies is that most governments usually don't think the temporary economic benefits of hyperinflation are worth the long-term damage, with obvious exceptions over the last few decades like Russia, Mexico, Argentina, Israel, Zimbabwe, Nicaragua, Venezuela, etc. An inflatable Bitcoin would have vanished from existence like the Beenz and Flooz marketing currencies did. Mexican 500-peso coins stuck around long after the government dropped three zeroes off the currency, because they were size that parking meters were designed for during a few years of financial stability. There was one board game that used Nicaraguan 50,000-cordoba bills, because you simply couldn't print Monopoly money that fancy for what they were worth.

    Ronald Reagan's "conservative" economics probably only inflated the US currency by a factor of 3-4, and wiped out most of the increase in the US national debt as well as a lot of personal savings. My first retail job paid a minimum wage of $1.60/hour, and the US minimum wage didn't keep up with inflation except maybe for a few cities like San Francisco that have higher-than-national minimum wages, but also have rents which have significantly exceeded inflation.

    318:

    To ask the question a different way; what properties would we like a digital currency to have? Suppose we wanted a currency in which tax evasion is impossible, that treats individuals and companies on a roughly equal footing? Could we build a crypto currency that makes taxation of revenue automatic and verifiable? Maybe the pragmatic solution is to assume bitcoin, litecoin and the like will be used nefariously, and tax conversion to and from bitcoin at ~30% to offset the costs of social problems it will create, then let people do what they like with it once they have it.

    The main reason why bitcoin will never be more than a curiosity is because the courts won't enforce debts owed in bitcoin, and bitcoin can't be tendered for a debt. If I owe someone money, they could take me to court, and conversely if I offer to pay a debt with legal tender, the debt is discharged and the other party has no grounds to sue. Of course, no one is going to take you to court over pocket change quantities of money, and no one can take you to court if your only reason for holding bitcoins was to buy illegal goods.

    Bitcoin is always going to be restricted to trivial items in which you could afford to be ripped off occasionally without it being a disaster, and for drugs and contraband in which recourse to the courts could never be an option. I predict we'll never be able to buy a house or a car directly using bitcoins (without converting them to legal tender).

    319:

    Why call them Bitcoin then? loving the book as i read through it BTW

    You are going to get lynched when the BTC circle jerkers arrive i mine myself but try telling them anything other then BTC is the best thing since sliced bread and out come the picthforks.

    BTC will never replace the big currency's but provides a digital way of anonymous transactions so of course will attract drug sellers, filehsaring sites etc. It could continue on or die in a tulip mania (anyone remember netbeans) unfortunately a lot of the good points get drowned out in people price speculating and being general dicks.

    On the carbon footprint that is coming down all the time as ASIC based equipment is being made. What i find interesting is that if joe start up can make SHA-256 smashers what about the alphabet agency's? they can effectively create a private BTC test net and as long as it matches the same power could effectively create a mirror to show where transactions are going. Remember they the whole EFF DES debacle?

    Personally though i think the carbon footprint point is moot. Large banks have hige data centers running inefficient kit (i have been in a few!) and it is too volatile as a store of wealth for tax evasion at the moment.

    320:

    France is not a socialist economy. Not even remotely.

    Just because the party in power is called "socialist" does not make France a socialist economy -- just like the US so-called "conservatives" can display astonishingly innovative takes on some issues.

    The fantasy that France is a "socialist country" whose economy is on its knees is a USAyan right-wing canard that has all the merits of the views that French old communists have on the USA. Namely, if I had a cent for every time a French predicts the collapse of the USA within a few months, and a eurocent for every time a USAyan predicts the imminent collapse of France, I would have a great many euros and a great many worthless dollars.

    321:

    Not that good, €1.37 = $1.00 today, but the basic point is sound. A €500 banknote is a big lump of cash, and it is associated with a lot of curious uses.

    The 500 Euro Note (Wikipedia) looks to be a good, if slightly dated, summary. There are reported to be a huge number in Spain. And what of Cyprus? The banking crisis has been linked to Russian tax evasion.

    As far as money laundering and anonymity go, Bitcoin and physical cash face the same problem of transfer into the mainstream virtual currency system. I suppose you can see it as a sort of phase-change, like water to steam.

    322:

    The status of Bitcoin in the courts might not be as flimsy as you think. There is statute law on financial instruments (always on the fiddle, eh?) and contracts which doesn't explicitly include Bitcoin, but Contract Law depends on an exchange of value. I reckon the lawyers would do well out of any dispute, but Bitcoin is not outside the remit of the Courts.

    "Legal Tender" is a term which can be misunderstood. To pull the trick you seem to be thinking of, you have to offer payment in physical cash. So a stack of $100 bills is legal tender, a bankers check isn't.

    The concept is part of the idea of fiat currency. Historically, in the days of gold coin in circulation, it was part of what made copper and silver coinage possible. In Victorian England, silver coin did have a bullion value, but the law on coinage set an artificial value, and both silver and copper coin were legal tender only up to a specific maximum value. Other countries had silver-based coinage. Switzerland, Italy, Belgium, and France had currencies based on a silver coin of the same size: the Eurozone is nothing so new.

    (And then we get into bi-metallism and the political sub-text of The Wizard of Oz: does Bitcoin have an equivalent of the Yellow Brick Road?)

    323:

    Another alternative is that this is just another attempt to make 'Money' real in people's heads, when in fact money is not real. It is an artifice used to make people think they are giving and receiving value for their work. Money is a talisman that has you under it's spell. You think that's silly, go burn some money fool, I dare you too. Burn it right down the serial numbers if you must so you can go try and redeem the serial numbers for new bills. You wound't even do that for the fear that your captors represent in your mind. In that respect it also a fear based taismanic system, so it has two layers of control built into it. BtC is silly, gold standards are silly and all forms of currency are silly, especially when you attach a debt system to them. But don't let me rain on your parade of self indulging masturbatory intellectualism, go on and prop up more fallacious notions in your heads and reinforce those ego attachments, it's not like your alone in that endeavor. And no I will not be reading replies and responding to this comment because it is fruitless, the dead are the dead and they have no thoughts of their own.

    324:

    The classic communist idea is "from each according to his abilities, to each according to his needs".

    Which is to Leninism as The Sermon on the Mount is to the Roman Catholic Church. Hint: Leninism purports to be a shortcut to achieving communism, through specific strategies -- such as the leading role of the Vanguard Party, seizure of power, rule by decree, forcible expropriation of private property, etc. -- all in the name of achieving an equitable distribution of Jam Tomorrow for Everybody. (Which looked fine and dandy right up until it ran into the thorny question of who exactly made up the Vanguard Party, and what their motivations were.)

    As Professor Keynes pointed out decades ago, we should already be so productive that we could get by comfortably -- fed, clothed, housed, and with a modicum of shiny toys -- on an average working week of 5-10 hours. Instead of which we're heading into an automated grim meathook future where those with jobs work as many hours as they can to prove their worthiness, and those who don't have jobs are left to rot. Gearing our sense of self-worth against financial prosperity is a major problem in our society (and one that Marx noticed: while his prescription was very vague -- he wasn't terribly interested in running society, more in diagnosing what was wrong with 19th century industrial capitalism -- it seems to me to have focussed more around achieving a halcyon state in which nobody exploited anybody else's alienated labour and everybody got to do what they wanted).

    325:

    Not that good, €1.37 = $1.00 today, but the basic point is sound.

    Err, you wish ;-)

    €1.00 = US$1.37

    327:

    The classic communist idea is "from each according to his abilities, to each according to his needs". This is a simple expression of two disconnected, uncontrolled systems. Some workers will end up working themselves to death, and those who are good at 'needing' will acquire an infinite amount of goods.

    I don't think that's a sound interpretation of this idea. "Working to death" definitely isn't the same as "according to his/her abilities". Instead this means that more able individuals are supposed to produce more according to their enhanced abilities.

    Likewise, "to each according to his/her needs" means that everyone's basic needs should be met independently if they find a job or not. It does not mean "to each according to his wishes".

    Lenin is also attributed with the quote "who doesn't work shall not eat", which is not something I would agree with.

    328: 321 and #325 - I was trying to convert between Euro and US$ using UK£ to $currency tables, in my head, at 00:24 local. Yes the error is there and mine, but the point stands that it's a suspiciously large single note to offer in a transaction.
    329:

    I don't think that's a sound interpretation of this idea. "Working to death" definitely isn't the same as "according to his/her abilities". Instead this means that more able individuals are supposed to produce more according to their enhanced abilities

    With the note that it also means that if labouring is all you're competent to do then you must be a labourer, but if, say, you're a good software engineer then you get to do that instead, chemists get to do chemistry if there are chemistry jobs available (and something else requiring literacy/numeracy if there aren't)...

    330:

    cath3ik at 320,

    When assorted people make pronouncements of the impending collapse of the Uu to me, i remind them that the Euro was valued one to one with the dollar when it was introduced, and suggest they take a look at the exchange rate now.

    This has made me very unpopular in certain quarters with certain people.

    331:

    FWIW: I was born in Scotland. I have scots ancestry of approximately average levels of tightness (tho my dad always said "never fuck with the taxman... right up to the day he died of a lung cancer mostly purchased from same). I am very much a big-government, social-safety-net for all left-libertarian chap. And I love Bitcoin. And I see no contradiction in that. Because it is not going to drive out fiat. Because it is not going to noticeably damage governments' ability to sell bonds, and pay wages in fiat, and impose currency controls as required. Because it provides basically zero facility to be evil that the real bad guys don't already have with their laundered cash and their numbered swiss bank accounts. Because it is an innovation and a competitor in a field with few innovations since the Medicis, and it may kick off an era of innovation that benefits everyone (Chiemgauers are cooler, but who uses them...) I'm gonna respectfully disagree 100% with Charlie on this one.

    332:

    There's some point in that, but the biggest issue with the Eurozone is that there are too many too weak economies in it. If, say Greece and Italy could be expelled from the Eurozone, the currency would be significantly stronger.

    333:

    Paws4thot,

    To be sure. but simply forcing certain people to look at the issue rather than allowing them to shelter in the hermetic bubble echo chamber is often considered a spirited defense of the euro, it seems.

    334:

    I agree your point about the present exchange rates; I was looking at the underlying issue(s) around why the Euro is not stronger.

    335:

    Paws4thot,

    Indeed. But there is perfect and then there is good. And I glumly think that the EU may be in better long-term shape than the USA.

    336:

    @302:

    Bitcoin is like cash except with an important difference: Bitcoins do not take up physical space.

    I've talked with several people who bought gold and/or silver, for a hedge against inflation, shtf, whatever.

    When I ask whether they bought bars, coins, or wire, they start telling me about the certificates they bought online somewhere, which assure them they are really the owners of some physical gold, somewhere. But they've never seen it, and don't know where it might be found.

    Further questioning usually results in a "failure to communicate" session.

    But, like Bitcoin, I strongly suspect their gold has no physical existence other than the hardware it takes to instantiate it in webspace...

    337:

    @272: The trick with taxes is to make them: a] Progressive

    b] Fair

    Born to fail, since progressive taxation is unfair by definition.

    A "fair" tax would be to take the budget, divide by the total of the population (including the aged, infirm, prisoners, and children) and tax them all equally.

    Very few people seem to want that much fairness.

    338: 336 - For me that would depend on the name of the dealer who issued the bullion certificate. There are reputable bullion dealers as well as crooks, just like there are in more or less any other business you care to name.
    339: 337 - Let me quote from Adam Smith's "An Enquiry Into the Nature and Causes of The Wealth of Nations" in answer to that nonsense.

    He said (possibly slightly paraphrased by me) "A Poll Tax, if rigourously enforced, would be highly efficient to collect. It would not, however, be proposed by a government who took good account of the people."

    340:

    Looks like the US-based online retailer Overstock.com is planning to start accepting Bitcoin in 2014: http://www.ft.com/intl/cms/s/0/d5f2f096-6907-11e3-996a-00144feabdc0.html?siteedition=intl#axzz2nxTQGoVT

    The decision was made by the CEO, based on his own political beliefs:

    “I think a healthy monetary system at the end of the day isn’t an upside down pyramid based on the whim of a government official, but is based on something that they can’t control,” Mr Byrne said.

    341:

    Damn, this is a depressing discussion. Apparently I'm an idiot who, instead of feeling all pleased with myself for pulling my money out of Iceland just days before the crash, should have been putting it into Bitcoins instead.

    Oh well - I'm sure that it won't be the last opportunity that I miss. These days I mostly put my money into guns and valve amplifiers, as they are commodities that reliably appreciate in value.

    342:

    I tend to be of the Max Keiser school of thought. The world's financial system is a Ponzi scheme run by some few super-rich, in collusion with States, via central banks.

    The super-rich like it because they can cream off debt repayment when it's at it's highest value, States like it because they can use it to indenture future generations to pay for their cloud-Cuckoo-land vote-catching promises du jour.

    It's the primary source of the peculiar phenomenon of us living in a world of abundance but still feeling like we're on treadmills. Basically, the extra value we produce is stolen from us, in a way not too dissimilar from the Marxist idea of stolen surplus value (but Marx laid the blame on private property in the means of production - i.e. capitalism - per se, whereas the blame in fact lies in the collusion and cronyism of government and big business, i.e. it's more a fault of perverse incentives set up by the State, in the first instance, and as a system it's as old as the hills, it just works to enslave us all more efficiently - becomes more salient - with higher technology).

    It's also the primary source of consumerism run rampant - basically more has to be gouged out of the earth to satisfy the debt monster, and our psychology messed with, and statistics mismanaged and massaged.

    Anything which breaks this debt system is bound to be good.

    Bitcoin is not The One in this regard. Nothing is The One, and the end of the old system will come by a thousand cuts - by, e.g., the large pension funds and large capitalist stakeholders diversifying portfolios, avoiding the bond market, and using other forms of money in general, and holding more and more transactions outside the system.

    But Bitcoin is a helper in this regard - part of the solvent. I look forward to other forms of digital money in the near future. Caveat emptor and may the best one win.

    343:

    But from what I've read, Marx recognised that the state was basically just capitalists in charge of everything, so I don't really see how you differ.

    344:

    " ... Suppose we wanted a currency in which tax evasion is impossible, that treats individuals and companies on a roughly equal footing?"

    Good question -- from the posts I've read here, it seems that the BitCoin transactions are like regressive taxation ... because of the fixed cost per transaction, anyone with a small number of BitCoins, ends up paying a huge premium (percentage-wise) on anything they purchase/trade. And any large corporation/trader of BitCoins actually ends up winning (making money) just by amassing large quantities of goods and then trading them out piece-meal so long as they sell at slightly above the transaction cost.

    Interesting distribution-channel effect.

    345:

    As far as I can tell, the Eurozone was more or less the world's very first empire-by-stealth, created to prevent the Second World War breaking out ever again. To be fair, WW2 will not ever break out again, but it won't be the Eurozone stopping it.

    The main problem with the Eurozone is corruption: the entire edifice is corrupt through and through simply because of the way it operates internally; it pulls in huge volumes of tax (raised in part by the drastically flawed Value Added Tax; see also Carousel Fraud) and then pushes this money out again; in the middle quite a lot tends to go walkies in strange and mysterious ways.

    The Eurozone is also a bureaucratic paradise; the very deepest tenet held there is that the fundamental basic building block of the universe is paperwork. If the paperwork is correct, then everything must be correct; the recent horsemeat scandal ought to be a lesson in why this is a daft idea.

    Combining Bitcoins and the Eurozone won't fix either; they're both broken by design. To my mind, the term "dodgy as fuck" is the best way to view Bitcoins, which is why I do not own any.

    346:

    Ok, I didn't previously have a definite position, but I now say we dust off and Nuke the site from orbit. It's the only way to be sure!

    347:

    Dear AItOawkhqNwupf5SV3SbmWfKf2SXvMI0WLKaQzk

    I think you may have confused the European Union, which has developed over more than 60 years, through a series of agreements on, initially, trade, and extending to a directly elected Parliament representing a population of half a billion people, with the Eurozone, a group of 17 countries, mostly within the EU, with a population of 332 million.

    And you speak of a slow-to-act system of government as though it is bad thing. Some would beg to differ. And, just between you and me, we have rather a lot of Socialists in Europe, and rather a lot of state intervention in such matters of health care.

    Yes, not having another war in Europe is something we are inclined to feel strongly about. Every time we Europeans raised a standing army, we started having wars, and we have realised that there are better things to do with our wealth. Every major Army of Europe has, at one time or another, crossed the Rhine. Even the Russians.

    We have decided it was getting tedious.

    348:

    Additional note on this - The EU is actually a bloc of 27 nations, by which I mean countries having their own representation at the United Nations, at this time.

    Obviously, not all of them are also in the EuroZone.

    349:

    I don't see how the EU is particularly corrupt. At least compared to Russia, China or the USA, it seems to be doing fairly well on that respect. Yes, the European Union is a large continental empire; not only is it a contemporary and promising one, but it is also the only empire in history to have risen purely peacefully. It is ruling half a billion people and counting, and you expect no bureaucracy? Bureaucracy is a good thing; the opposite of bureaucracy is Somalia.

    In its entire existence, the EU has not launched a war of aggression, and it has not lost a war either. The USA have managed to lose two in the last decade.

    If anything is wrong in the EU, it is actually that its members keep playing petty them-against-us games, country against country: Germany running an export economy to the expense of Greece and then moaning that Greece runs a deficit while she is doing so well; the UK building its little xenophobic surveillance dystopia and acting on behalf of her US masters; or numerous other instances of the same flavour.

    Blaming the EU because things are not ideal is 1) neglecting that it is not doing so bad at all (and consistently reinforcing itself with each crisis, has anyone noticed? The Ukranian seem to have...), and 2) blaming problems on something when the solution is more of that thing.

    350:

    Para 3 - I may have mentioned this earlier, or on another forum, but the issue with Greece, Germany and the Euro is that Greece can not afford to maintain a 1:1 exchange rate with Germany, or maintain the same growth rate, but has ceded all the economic controls that allowed the 2 nations currency to float relative to each other.

    Para 4 - You've implied this but not said it, but the EU actually has nations (Turkey and Ukraine for sure) actively applying to join up.

    351:

    TRX @ 337 I call TROLLING! Progressive taxes ARE fair - they take more from those able to afford it, & less from the poor. Or do you disagree? If so, expect several commentators ( & possibly OGH) to dump on your head ....

    352:

    cath @349 The EU is fundamentally corporate-corrupt. The directives concerning EVERY DAMN THING are arrived at by lobbying from really big business, to everyone else's detriment. Corporate statism, in fact, & not nice. It's also turning into a big employers' ramp, with "guaranteed minimum wages", but really low ones for most people. The Gini coefficient is going the wrong way across a lot of EU states, both inside & out of the Euro.

    It started out so well, too! I was strongly in favour from before I left school (1964) until about 3 years back. Now, I've changed sides, and think it's fucked, & that Britain would be better off out - like Switzerland & Norway ....

    353:

    the UK building its little xenophobic surveillance dystopia and acting on behalf of her US masters Many members of the Intelligence community would laugh hysterically at the thought of the French complaining that other countries were abusing surveillance techniques to the benefit of national interests...

    354:

    The European Union's bureacracy is actually tiny, a few thousand employees or so including the janitors and tealadies. Most of the work of the EU is carried out by staff seconded by the various nation states and doing what their national governments tell them rather than adhering to some kind of EU hivelike supermind that outsiders (and especially Americans) assume it to be. Mostly it's a talking shop.

    As for the Rhine-crossing measure of peace, it is currently sixy-eight years since the last such reset of the counter in 1945. That is the longest period of peace known going back to Roman times; the records are spotty once you go past 300 B.C. or thereabouts.

    355:

    A "fair" tax would be to take the budget, divide by the total of the population (including the aged, infirm, prisoners, and children) and tax them all equally.

    Aye, and it's only fair that it's forbidden for rich and poor people alike to sleep under bridges.You might as well define a "fair" system where taxes are proportional to age or height.

    356:

    The directives concerning EVERY DAMN THING are arrived at by lobbying from really big business, to everyone else's detriment.

    You think that's different in the US or other states? Or multinational orgs like WTO?

    357:

    When did the Russians cross the Rhine? Was it in the Napoleonic wars? I can't think of any other time when actual Russians were pootling about western Europe.

    358:

    Hm, going through the list of invasions, maybe Antonia is talking about this:

    http://en.wikipedia.org/wiki/Anglo-Russian_Invasion_of_Holland

    Technically, the landing was west of the IJsselmeer, where the Ijssel is part of the Rhine delta.

    359:

    If Von Neumann machine (Maker-Bot on steroids style) autonomous robots that were solar powered started mining Bit-Coins, how long would it be until we humans became irrelevant entirely?

    360:

    This post has gone viral, you know. And, I finally got around to croaking out some thoughts on the matter. They're up on my own blog, but here's a copy for you-all.

    It's troll's gold—a curse to the holder, and to those who desire it. It's deflationary, which means it's an inherently poor currency to do business in; it comes with a built-in sales tax. It provides an incentive for employers and debtors to delay payment as long as possible. It's money that comes with a built-in discouragement to exchange, and half the work of money is as a medium of exchange.

    Science fiction writer Charlie Stross brought this up on his blog, and the post jumped the science fiction ghetto wall—it got cited on /., and David Atkins over at Hullabaloo picked it up.

    And, yes, Bitcoin could become a problem. It was intended, after all to implement both the crypto-anarchist and goldbug agenda. But, really, isn't this what the biggest global banks have already done? Finance, beyond the control of the most powerful governments, and corrupting those governments. I do not think Bitcoin could make matters much worse, in that regard. Yet…

    There's a dark side to Keynesian economics. Keynes-Hicks models provide tools which hold out the promise of an economy without booms and busts, without bubbles and depressions, without a 1%. Conversely, though, Keynesian management can be used to enable an aristocracy, to insure that money will only be a store of value who are connected with the people who run the system. A new tool of class oppression, in other words.

    But there's a deeper darkness. Without the "somewhat comprehensive socialization of investment" that Keynesian economic management requires, a money economy is like a climate system, with arbitrary and unpredictable weather, vast storms, freezes, booms and busts. And that is what crypto-anarchists want to make a permanent condition.

    Well. I do not think that is too likely. But a new aristocracy? Is that not what a faction of the world's very wealthy are working to create?

    361:

    VAT specifically is actually a pretty well designed tax, it's essentially a better designed sales tax. The way in which it is paid at multiple levels and then claimed back acts as a self-enforcement mechanism, any evasion not at the final stage gets revealed when the business purchaser attempts to claim back the tax. If there is evasion at the final stage then that business has already paid a large part of the total tax due so the amount evaded is relatively small. This means that a VAT can be levied at a substantially higher level before tax evasion becomes a serious problem compared to a simple sales tax levied only on the final sale to the consumer (somewhere above 20% as opposed to about 10%).

    362:

    What it comes down to is that if the average person ignores Bitcoin, it will never hurt them (apart from being a way for shitstains to launder money in ever-more-limited ways) because it doesn't really make sense to borrow any amount denominated in any deflationary asset. What that means is that it can simply never grow to take over any real currency system. That's why we haven't really had a strict gold standard in nearly a century and why we haven't had any gold standard for 40 years.

    And as you noted, Bitcoin escalates the stakes without any brake for the wastoids and griefers that feed off the amateur investor so it will mostly be the participants who are hurt as well as anyone who does business with them. It's the self-generated endgame for pseudo-libertarian idiots at the hands of the kind of people who have always preyed on them: scam artists.

    Long term, as long as the exchanges continue to operate Bitcoin will remain a non-real-but-tradeable asset with a value that varies wildly. Like penny-stocks it will be a toy for market fiddlers and cranks. It will never be a useful currency. As a contrast to state currencies it will only serve as a cautionary example of an alternative.

    363:
    Many members of the Intelligence community would laugh hysterically at the thought of the French complaining that other countries were abusing surveillance techniques to the benefit of national interests...

    1) If you are saying that to push back at me, I have never indicated that I am French or that I have any sort of loyalty towards France. I just happen to know the country better than some here and I take the liberty of interjecting when things go totally at odds with reality, for the benefit of those interested in things that are not completely faith-based.

    On the other hand, I can disclose that as a non-UK citizen, I am an unabashed anglophile -- Savile Row suits, British-designed furniture, as-good-as-I-can-manage Cambridge accent, the whole nine yards.

    2) Many accusations against the French services are impossible to verify, and emitted at convenient times by rival powers caught red-handed. Caveat emptor.

    Now that we have cleared issues of form...

    3) France is very comparable to the UK in terms of pervasive surveillance and in terms of submission to the USA. On the second point, France maintains a facade of independence, while the UK is more or less officially a US missile base, but the intelligence services and the military are tied to their US counterparts, and the politicians are utterly servile. The affair of Morales' plane was utterly sickening, and speaking of planes, despite her protests of purity on matters of torture (at least since 1962...), France was involved in CIA renditions. France has a surveillance programme of its own citizens that the DGSE itself calls "a-legal" (because, see, it's not illegal as in "explicitly forbidden", and under certain interpretations of the mission statement and of the law, you could come up with excuses that could convince John Yoo, David Addington and Dick Cheney).

    But that was not exactly the point I was trying to make. These things are common to France and the UK. But to these things, the UK adds an explicitly xenophobic ruling party (deportation add truck, will to limit immigration from EU citizens -- though on that respect France is doing great with the treatment of Roma), an overt surveillance society complete with pervasive cameras and trigger-happy cops that forbid citizens to take photographs for no discernable reason, and the political will to question EU membership and even the fucking Human Rights Act.

    France has a history of using repugnant means, some of which directly threaten democracy itself, and she has a tendency to short-sighted self-serving positions that weaken the EU construction. The UK, I believe, have jumped overboard and are now hesitating only on how to balance their hatred for EU membership and the harm they can cause her from inside.

    I love the UK, I really do. But my impression is that it would be better off leaving, go on a honeymoon with the USA, and come back in 60 years after seeing the consequences.

    364:
    The EU is fundamentally corporate-corrupt. (...) The directives concerning EVERY DAMN THING are arrived at by lobbying from really big business

    That is just not true. Big business has a bone in that game, obviously, and their bark a lot. And the occasionally fail. See how it turned out for ACTA, for instance.

    You might deplore certain decisions, or find the balance unduly tipped on one side, and I would listen to you -- potentially agree. But saying that the EU is fundamentally corporate-corrupt is pushing the caricature beyond recognition.

    The Gini coefficient is going the wrong way across a lot of EU states, both inside & out of the Euro.

    The Gini coefficient is going tits up everywhere in developed countries. That is a side effect of globalisation and deregulation -- which, incidentally, is a global trend whereby developing countries and transition economies are catching up with developed countries. The fundamental, underlying process is not only inevitable, it is a damn good thing to happen. It just so happens that we have a political trend of post-thatcherite short-termism that makes the process more traumatic that it needs to be for the populations of developed countries. And in that respect, the EU has a massive stabilising and mitigating influence. Like many eurosceptics, you are blaming the plaster cast for a broken limb.

    The problem with the EU is that it has become a convenient scapegoat for politicians implementing unpopular policies: "I did not mean to put that legislation that happens my big-business pals, the eeeeevil European directive (that actually stipulates a much weaker subset of the measures) made me do it". And the other trend is the "spoiled brat" effect, whereby some become so obsessed with the differences between the actual and the ideal EU that they lose track of the fact that the EU is not bad at all in the absolute; if you do not believe me, go ask people who are in a position to compare the EU to other spheres of influence, like in Ukraine.

    like Switzerland

    Switzerland works in part by annoying nobody too much -- it's "do no harm" side that gave us some international institutions and the Red Cross. It is also a cynical, self-serving and arrogant little European province that is in fact subsidised by the rest of the world though tax-dodging schemes and has the cheek to go tell others how they should behave (reality check, Heidi, if everybody was a tax haven, everybody would be poor; you are so rich because others do not behave like you).

    Switzerland is out of the EU because it serves the interests of a minority of tax-haven bankers and of a handful of illiterate xenophobic peasants in the tiny original cantons, whose political power is disproportionate; last time it was asked, the majority of the population wanted to join the EU -- the country was kept out if it by the same sort of electoral bugs that have given us Georges Bush Junior for President of the USA with a minority of the electorate. The "real economy" (based on manufacturing things and offering services of intrinsic value rather than side effects of national borders) is overwhelmingly in favour of joining the EU.

    The Swiss model works because Switzerland lives in extremely particular conditions -- small population, very small territory, huge cash flow, relative isolation, neutrality and detachment from the affairs of the world. I am not convinced it is the best possible model for Switzerland herself, and I guarantee that it would be a catastrophic model for a regional power.

    365:

    But that was not exactly the point I was trying to make. These things are common to France and the UK. But to these things, the UK adds an explicitly xenophobic ruling party (deportation add truck, will to limit immigration from EU citizens -- though on that respect France is doing great with the treatment of Roma), an overt surveillance society complete with pervasive cameras and trigger-happy cops that forbid citizens to take photographs for no discernable reason, and the political will to question EU membership and even the fucking Human Rights Act

    I think you're referring to how the Con party is letting its foreign and immigration policy be led by the "Daily Heil" and the crypto-Fascists of the self-styled "UK Independence Party".

    Personally, I do have some concerns over the EU, but those reflect a feeling that the original idea of a free trade zone with minimal border and immigration controls is suffering from advanced feature creep.

    366:

    The EU is not a free-trade and free-circulation zone. You are referring to the Common Market. The European Union is a proto-superpower currently in its aggregation phase.

    I believe that it is a fundamental British misunderstanding to see the European construction process as aiming to institutionalise the dynamic equilibrium by which the UK played France against Germany to ensure that nothing coherent emerges in Europe. That is not the case. We want a modern, peaceful and enlightened superstate in Europe, which entails a political backbone to it. Which is needed to promote things like Human Rights and sustainable development, which you obviously cannot trust to Western countries -- and much less to other large powers, which will inevitably grow in influence as the dominance of the USA declines over the 21st Century.

    367:

    @ 356 Of course I don't think it is different in kind. But I do think it's different in scale & influence. It is becoming very pervasive & a real nuisance.

    [ guthrie @ 357 Imperial Russian troops arrived in, or just outside Paris in 1814, IIRC ]

    cath @ 364 When corporate EU decisions, taken for the specific benefit of certain agrobusiness giants then detrimentally affect small, privete growers, allotment holders & home gardeners (And/but ... similar cases can be cited across all areas), then one sits up & takes notice. This is entirely about corrupt profit & removing choice & freedom of action from individuals, forcing them into the rigged public "market". What's not to loathe about this state of affairs?

    Unfortunately, I agree with you about Gini coefficient, but I think the EU is making things worse - just my opinion, though.

    Possibly correct about Die Schweitz, but I note you carefully ignore Norway?

    368:

    paws OBJECTION! You have swallowed the 3-party lie that all UKIP supporters are automatically disenchanted right-wingers, longing for the 1950's ... You should meet the Old Labour voters down on the plots ... who have all turned (as far as I can see) rabidly anti-EU in the past 2-5 years. There are aspects of UKIP official policy I don't like, & I'd think VERY carefully about voting for them in a Westminster election { They have christianity, they want to cancel HS2 etc ... and our local - Labour MP - is very good as a constituency rep. } But, come the Euro elections this Spring, I'm going to vote UKIP, quite deliberately, to give the other bastards a kicking.

    Please also remember that there was, & is a perfectly valid Labour/Socialist objection to the EU, as advertised by Anthony Wedgwood Benn, too. One, that with which, in my increasing age, I find my self in greater & greater sympathy.

    369:

    Don't cheapen your article by typing TL:DR at the bottom of it! It contains some nice insight into the issues behind it all. On a related note, people need to stop being afraid of writing (and reading) essays - it's how intelligent commentary is passed around our society.

    370:

    It is true that agriculture has serious problems, but it is just one aspect of economy. If you want to see something really unhealthy, contemplate the relationships between oil giants and US politicians.

    I am not saying that the European Union is an ideal paradise. I am saying that it is the closest thing we have to it, and that it is therefore logical to work on that, rather than on things that are proven failures (like the French or British Empires, who not only failed abysmally to live up to their humanist values, but are now completely gutted of their power).

    I have never lived in Norway, so I chose not to comment on that I know not. The only thing I can say is that Norway is obviously not a superpower; and that is what we need the European Union to be.

    371:

    Utterly huge clue - The organisation which the UK joined in the 1970s was called the "European Economic Community". The one which we held a referendum on staying in, where most people voted in favour, was still called the EEC.

    It did not claim to, for example, have powers to over-rule the member nations highest courts.

    372:

    Greg, this is my opinion, based on how the leaders of UKIP present themselves in public. I trust you noted the associated reference to the "Daily Heil".

    Here in Scotland, we don't believe that that Little Englander 1950s ever existed!

    (I'd agree with you about Xtianity, cancelling HS2 etc being bad ideas)

    373:

    You're going to have to define 'superpower' for us, because the one I think of when you say that has killed millions of foreigners for fun and profit over the last 60 years and exerted a baleful influence upon development in the 3rd world. Presumably you'd like an EU superpower to be nicer and fluffier, but the question is how to achieve that, given the limitations on the EU and the internal problems it has.

    374:

    Greg, Norway's prosperity has nothing to do with whether or not it's in the EU. Norway is rich because it has more North Sea oil and gas than the UK, and less than a tenth of our population.

    375:

    Well I think that the answer lies within your question: "the limitations on the EU and the internal problems it has". These should prevent it from turning into another China or Putin's Russia. As for preventing it from turning into another USA, I would count on differences in culture and history (memory of suffering from wars, memory of making others suffer and reaping what they sowed, different legal system, different attitude towards Science and Jeezuz, absence of a Presidential institution aggregating power over decades, geographic proximity to different cultures, etc.).

    376:

    A good example of how the principle of commensiality works in relation to the EU and its memberstates is here:

    EU makes laws detrimental to allotment owners and beneficial to agricorps.

    If westminster wants to protect allotment owners, Westminster is fully entitled, empowered, and indeed expected to then pass legislature that overturns the EU law and sets national law in the UK to something it deems beneficial to allotment owners.

    Notably, Westminster doesn't do this, so where does the problem lie?

    It's why Cameron's nonsense about "renegotiating powers back from brussels" is complete nonsense - either he means the UK withdrawing from the european convention on human rights, or he means that he's going to present the UK with the very principle of commensiality that it currently operates on wrt the EU.

    377:

    Greg, your allotment problem is quite simple and nothing to do with the EU. It's valuable land in urban areas, made available to residents so they can have kitchen gardens. By definition, this land is NOT MAKING MONEY FOR THE CONSTRUCTION INDUSTRY, of whom Cameron is a very close chum (as, to be fair, were his predecessors). Defending the public interest against the nice friendly people with the bags of money isn't something you can reasonably expect a former PR-boy turned corporate shill to prioritize, so the passing of EU regulations on farming is used as a pretext in the UK for transferring wealth (in the form of land) to cronies.

    You are (again) confusing your interests (allotments) with the national interest, as perceived by our lords and masters, who are passing the buck and blaming the EU, as is SOP.

    378:

    The difference is that the State definitely has some power and agenda of its own, which is contingent on the vote. The very early, classical liberal Marx recognized this, but the later Marx with his theory-mania forgot it.

    Essentially, there is nothing wrong with capitalism per se - i.e. with the principle that the means of production can be in private hands. It actually doesn't matter who owns the means of production so long as they run them productively.

    The evil always comes with collusion between a subset of capitalists and the State.

    Mainly it's two types: the industrial and the financial. The industrial types lobby for new laws to restrict their competition, and the State disguises those laws as beneficial to the majority. The financial types keep the debt cycle going in a way that benefits the State first of all, them second, with everyone else further down the food chain effectively indentured to service the debt.

    379:

    [DELETED PER MODERATION POLICY -- corporate PR equivalent to spam]

    380:

    Lose money fast! Buy Bitcoin! (And exclamation points.)

    381:

    Inflation: prices rise, but they're able to do so because the money supply is also expanding.

    Well not necessarily. Let's take out standard equation of exchange, MV = PT, where M is the supply of money, V is the velocity of money, P is the "price level", and T is the "real value" of aggregate transactions.

    We see that if M is held constant, and T is held constant, it is perfectly possible for P (prices) to rise if V also rises.

    We also see that it is possible for P to rise if the product of M and V is held constant and the real value of transactions shrinks.

    So there really is nothing wrong with defining "inflation" as "a rise in the price of commodities" and "deflation" as "a fall in the price of commodities". Yes, moderate deflation leads to vastly more negative outcomes than moderate inflation (which is widely, and probably correctly, believed to be a good thing), but the outcome of something is not the same as the thing itself.

    382:

    Charlie Sorry, but you are misinformed. Nothing at all to do with building over useful agricultural land. Everything to do with the careful allowance, after lobbying at EU level, that "industrial" farmers can use certain substances, & we can't - even though they are safe (If used properly). Followed, immediatley, by a big-business attempt to stop private persons growing things - "because they spread plant diseases" - because we can't stop Blight (legally) any more. A classic stitch-up, in fact. There is now an attempt being made to freeze out small seed producers & exchange-arrangements, in a similar manner, again for the big boys' profit & restricting our choice. The corruption is open & unchallenged, because we don't have the money.

    383:

    paws I remember the 1950's - & I KNOW they didn't exist like that, either - nor would I want to go back - except for some rare steam traction over certain railway lines (ahem) ....

    384:

    Greg, ref Charlie's #377, what in your last replied to makes anything of that untrue?

    385:

    You say that, and I immediately think of working an A3 and a Deltic hard over Shap and Beatock.

    386:

    I am going to try and define "superpower", and please read carefully.

    A Superpower is an entity with the resources to carry out very large external projects without worsening the comfort of its population. One example of such a situation is fighting a significant war on the far side of the world without weakening home defence, instituting a controlled war economy, or neglecting existing treaty commitments. Another example is putting a man on the Moon.

    While these projects include significant investment in means of production; research and factories and training; the investment is not the primary purpose.

    The Falklands War might qualify as such a project. It sets a lower bound, at least. Arguably, it was done with the residue of superpower status. Iraq and Afghanistan might count for the USA, though the economic effects on the USA look significant.

    Can a country lose and regain super power status? Maybe it can.

    This would imply that the UK was a superpower from the mid-18th Century until at least 1914. It might be argued that a credible invasion threat that forces special measures suspends the superpower status. Has the USA stopped being a superpower because of the internal security reaction to 9/11?

    It's not just military force. Has the building of High-Speed Rail across the EU been a qualifying project?

    387:

    Some chemicals while reasonably safe if properly handled with appropriate safety equipment and training may by beyond the capabilities of a typical amateur to use safely. They may be highly toxic in the short term while being non-persistent or they may be explosive, or they may require specific follow-ups to remove residue or minimise the development of resistance &c. There are good reasons in various cases for restricting the use of some chemicals.

    The prohibitions on the amateur use of certain chemicals has nothing intrinsically to do with the EU, it just happens that under the single market these kind of regulations are done at a common EU-wide level rather than national level. It is fairly likely that broadly similar regulations would be enacted whatever tier of government were responsible. The reason for doing it at an EU basis is that having slightly differing national regulations acts as a non-tariff barrier to trade so in order to get the full benefits of a large free trade zone it is necessary for most technical regulation to be uniform throughout the market.

    388:

    Greg, you maybe aren't aware of all the reulations which farmers have to follow to be allowed to use those chemicals.

    We have to get training and get a certificate to prove we are trained. That includes demonstrating we know how to figure out the correct dose, and use the application equipment, and knowing the required protective clothing.

    We're not allowed to store pesticides in the same building as foodstuffs, and there are a couple of other requirements to minimise pollution of, for instance, there is a fire.

    Your typical allotment holder doesn't need to be trained or assessed, and is buying the pesticides in Tesco, dropping them in the same trolley as the weekly food shopping.

    Some of the chemicals are the same, but that squirt-bottle with pre-mixed glyphosate weedkiller is on a whole different scale to those 25-litre containers of undiluted glyphosate the farmer handles.

    And do Tesco provide the overalls and other protective clothing?

    Incidentally, the sort of applicator used on an allotment needs a different certificate of competence from the applicators used to deal with a 10-hectare field.

    I'm not going to deny the politics are there, but we farmers didn't get a free pass on pesticides.

    389:

    With recent revelations that the NSA paid RSA (the company) to build weaknesses into their implementation of RSA (the cryptosystem), does anyone really think that the cryptosystems at the heart of Bitcoin can be relied on? And would anyone be happy to trust a change?

    390:

    A lot of pesticides are very similar to chemical-warfare agents, indeed a plant manufacturing agricultural pesticides can be easily reconfigured to produce a range of military-use chemical nasties with the same feedstocks.

    I wonder if there's a kitchen-top conversion process some urban terrorist types might employ to convert glyphosphate or other organophosphate chemicals into something that could be used in a dirty bomb? Poison a few hundred people, kill a few dozen, get some Tesco vouchers and lots of publicity for the Cause. After that Greg would have even more problems getting some weedkiller for his allotment off-the-shelf.

    391:

    All these bad EU laws that our politicians complain about have been enacted into UK law by these politicians. And then they want us to leave the EU and trust them to enact good laws.

    392:

    Corporate capture of regulators happens at whatever level is cheapest for the corporations involved - in the context of europe's many multinational agricorps, that's at the EU level.

    Of course having said that... Westminster can still pass legislature to allow allotment owners to handle the chemicals you want. You might want to write to your MP about it (or an anti-EU tory backbencher), see what happens. Get some other allotmenters who are upset about this to join you in doing so.

    The anti-EU wing of parliament has more clout and power to make primary legislature than it's going to have for a long while, so now's the time to act.

    393: 387 and #388 - Greg and I both have immediate family who worked in the explosives industry. We know about "dangerous" chemicals thank you very much.

    I think we'd agree that the most dangerous chemicals are those held by people who think they know it all because they've been on a 1 week training course.

    394:

    Almost all terrible reasons to hate Bitcoin.

    Personally, as a libertarian, I think bitcoin has problems operating as a currency due to it's volatility. Currencies need to be stable in value to work.

    But the idea that it's bad because it makes it hard for the government to prohibit certain kinds of transactions is idiotic. You're just saying "bitcoin is bad because libertarians like it". But cash is equally untraceable. It's not like you can't pay for assassination with cold hard US dollars. Or child porn. Or drugs. All bitcoin does it is makes it difficult to associate your bank account and name with an online transaction. So government can't have a perfect record of exactly who bought what over what website, forever. The horror.

    As for the central banking thing, it's quite a perfect experiment to see if you really need a human political agency to be making decisions about when to increase the money supply, and who to give it to. A currency like bitcoin could just as easily increase the mining rate according to some formula in order to stabilize the currency's value, or circulation rate. And disctribute the currency equally throughout society, instead of handing it to large investment banks at a 0% interest rate.

    395:

    Ok, I'll bite, since I'm here.

    2) Well done; you've diagnosed a problem that's been brought out several times already in the comments.

    3) Er no, cash is not as untracable as Bitcoin. Or did you just seriously suggest that I can legally scan a bank note and print my own? Or maybe that people actually do pay for assassinations et al over the unterweb using credit cards?

    4) Given Bitcoin's notoriously unstable exchange rates I think it's well demonstrated that some management is necessary. Given that a person claiming to be a managing miner has claimed that the present mining algorithms are what they want, personal self-interest apparently doesn't work (at least as well as political agency).

    396:

    Charlie, totally agree with your view on bit coin. Economically it is irrelevant - a dangerous toy that will be used by criminals and speculators.

    We live in a corrupt system where we have allowed the most corrupt people in the world (investment bankers) sole control of the most important control levers of our money supply.

    Other than coins and notes which only represent 3% of the "money" in circulation banks are the sole agencies able to widen or contract our money supply. This is what causes the business cycle - the banks lend and lend and lend widening the money supply until inflation picks up and then central banks raise policy interest rates until the banks stop lending and growth slows. If central banks don't do this in time as in 2007 then we get an balance sheet recession as all the banks go pop. This is because we have completely failed to regulate banks and they can lend out 30-40 times as much as they hold as deposits. If the value of the collateral they lend against drops by only 3% then the banks go bankrupt and our economies crumble.

    After 2008 banks were still so crippled they wouldn't lend. Hence we wobbled on the edge of deflation. Catastrophic for citizens and shows up in our falling living standards.

    Allowing banks to Widen the money supply in this way is obviously insane and in the uk we miss out on tax revenue of £200bn a year by not taxing these operations. What we need is either to regulate banks properly so the money supply widens based on the needs of citizens and not oligarchs or a democratically regulated money supply controlled by our elected governments.

    Government spending is the other way to regulate the economy if we insist on persisting with allowing bankers free reign over our economy. Governments are never resource constrained. After 2008 governments should have stepped in to spend and widen the money supply to replace the lack of lending by the crippled banks.

    Governments aren't resource constrained and government debt can always be cancelled at will with no adverse effect. Governments spending can crowd out productive private sector investment and cause inflation but neither of those conditions apply at the moment. We have 5 million citizen under-utilised and images are falling. The money supply is not expanding rapidly.

    The uk government should immediately cancel 40% of its debt - all the gilts held in the Asset Purchase Facility and should embark on a program of public spending and infrastructure truck tree modernisation until unemployment is near zero and wages are rising again.

    If then we start getting inflation interest rates can be raised and then after that banks should be required to hold greater deposits to cover their risky lending. Only after that should governments back off from investment programs..

    Of course these things won't happen. Our current Tory government gets 50% of its funding from bankers and the rest from people who benefit from austerity - lower wages mean greater profit margins to these "people". They also get to buy up whatever profitable buts of the public sector are sold off at A song.

    We live in an evil and corrupt society.

    397:

    Allow me to worry you.

    Do you hope to retire some day? If so, do you take advantage of the tax breaks of a pension fund? If so, then part (an increasing part as you near a likely retirement age) of your personal fund, and most or all of any annuity are or will be based on Gilts. Your idea has just trashed the Gilts market, and hence the annuities market, and hence your retirement income.

    398:

    We'll that doesn't work very we'll does it? When gilt yields are lower than inflation (as they have been for last 6 years) this guarantees that pension annuities have real terms drop in value.

    If pension funds can get yield from gilts they will be forced to invest in equity to provide return. I would rather my pension was based on investment in companies that employ people and provide useful products than being subsidised by tax payers.

    Gilts are a hangover form the Breton woods era and perform no useful function in economic systems without fixed exchange rates.

    399:

    So would I, in principle. In practice, part of the reason for annuities being so strongly based on the Gilts market is to provide stability of the resultant income.

    400:

    The stagnation of the financial markets exemplified by the low return on Gilts is part of why we need a genuine boom. That's why corporate pension systems are failing.

    I don't know that Keynes would work when the factories are in China. The money isn't going to circulate locally.

    There's no way Bitcoin can be big enough to matter to the world, not without some multiplier mechanism. What might that be? I know, lets use Bitcoin to fund the assassination of bankers.

    401:

    Pension funds have always held diversified portfolios- gilt yields have often underperformed equities for long periods of time

    http://www.thisismoney.co.uk/money/investing/article-2097825/Credit-Suisse-stock-market-returns-1900-The-24-year-spell-UK-shares-failed.html

    Corporate bonds are also often better long term investments and don't rely on a tax payer subsidy.

    402:

    About the only reason I would buy any lol

    403:

    What is it with libertarians? We live in a world in unregulated trading has crashed the global economy and still you ask for more data and more experiments. It is like climate denialism. Enough, already. Keynesian economics has passed numerous experimental tests. Time to accept it and move on.

    Charlie worries about markets in dark things. Me, I worry about (to misquote myself) an economy like a climate system, with arbitrary and unpredictable weather, vast storms, freezes, burns, droughts. This isn't a maybe thing; we know that without fiscal and monetary policy that is what we will get. And the very wealthy can work that system in their favor, so that only they will be able to save. And that is one possible future, and it ends with our civilization drowned.

    Seriously, libertarians, wtf?

    404:

    I think it may be a form of dyslexia, or selective short term memory loss, since they're quite capable of restating arguments that were "asked and answered" upthread?

    405:

    Not sure whether you are being intentionally ironic, but in addition to calculus and physics, Sir Isaac Newton was quite the devotee of alchemy, the pseudo-science that proposed transmuting dross into gold..

    Newton would be one of the most dodgy figures on any subject having to do with monetarism or currency.

    406:

    You seem to have missed the fact that he spent about the last thirty years of his life as master of the mint. Read Thomas Levenson's "Newton and the Counterfeiter."

    Levenson packs into 165 pages a story it takes Neal Stephenson 3000 pages of the baroque cycle to tell.

    407:

    No, we live in a world where the apparatus purportedly created by governments for regulation of trading has been subverted by large banking and trading corporations so as to socialize their business risk and privatize their business rewards. This is regulatory capture on a scale unimagined by the economists who first warned of it. In other words, corporatism, where regulations are written to protect and eliminate risk for the large, politically well-connected institutions.

    21st century corporatism is about as far from a libertarian economic system as a pure communist state control of the economy.

    Corporatism is a failure condition of governments powerful enough to enforce Keynesian style economic controls. If you have a state with the power to enact fiscal and monetary policy on a national (and sometimes international level), you have a state that will eventually fall victim to regulatory capture. To prevent this, the typical approach is to make a state's regulatory regime more powerful and independent. But by doing that, it just becomes a more tempting target for regulatory capture.

    The libertarian solution is to accept that the "arbitrary and unpredictable weather" of a free market economy, as a least worst alternative to government control or corporate control.

    Would a libertarian solution work in practice any better than what we have now? I'm not sure. I am not so blind to history as not to see the problems with a totally unregulated market. However, I am sure that a strong libertarian representation in government would serve as a balance worst aspects of government control and/or corporate control of the economy.

    408:

    Levenson packs into 165 pages a story it takes Neal Stephenson 3000 pages to tell What was that about turning dross (well ok wood pulp) into gold again?

    409:

    Short history lesson for you. Greenspan became head of the Federal Reserve. He then, with the connivance of Billy Bob Clinton, dismantled the Yousay's Banking Control regulations, in particular repealing the Glass-Steagall Act of 1933. Piling Ossa on Pelion, Greedy Gordon Brown did similarly with the UK's, saying "It will be alright; the banks know what they're doing." The banks then turned secured debt into an "investment vehicle" and started trading it in, to the extent that some people were obtaining 130% mortgages based on their own unsubstantiated declarations of salary. 10 years later, the resultant property bubble burst, and we're now living with the consequences.

    Whilst it involved stocks and shares, something similar happened in the 1920s, culminating in the Wall Street Crash in 1929, and the passing of Glass-Steagall.

    TL;DR version - Libertarianism has been tried in banking regulation at least twice and failed spectacularly both times.

    410:

    Brett @ 387 & others The particuolar fungicide I'm thinking of ... unsafe to eat or drink, not a good idea to spray on your face .... otherwise OK. But STILL not allowed to use it. As for other dangerous substances... someone mentioned explosives .. err .. My late father was drafted to be a civil servant in 1941 - he was sent to the biggest explosives factory (at the time) in Europe - Ardeer. What he didn't know about making things go bang ( & just as important, making sure they DIDN'T go bang when not wanted to ) wasn't worth knowing. The fake "H&S" so-called "arguments" are just that ... fake. They are just more agrobusiness attempts to control the enrire market & make sure we have no choice. Look, of the vartietis of just POTATO ( Never mind Tomato, or capsicum or raspberry or .... ) that I eat, only two are available on the open market, & then at inflated prices. The rest are "allotment-only" or "private sale-only" types. They taste wonderful, but are not ahem "commercially" viable. What the EU & the corporations are trying to do, is remove that option from our plates, & palates, so they can force their overpriced, untasty, mass-produced muck down out throats. Now, I'm an unabashed omivore, but, ONE: I still like my veg... & TWO: imagine you are a vegetarian, & this narrowing of your options is forced on you? For corporations' gain & profit, & for no other reason?

    411:

    fridgepunk THANK YOU It's a classic case of regulatory capture & follow-up enforcement, for the detriment of the many to the enrichment of the few. ( Said he, re-donning his ancient Shop Steward's hat) Yes, me - let me tell you that there is nothing that a UK employer dislikes more than an active Trade Unionist or shop-steward who is NOT a mamber of the Labour ( or further-to-the-left-politically) party. It crosses their wires. Having, say, a shop steward who demands the workers' legitimate capitalist (Their labour is their capital) rights ... gets them all in a tizzy. let me tell you. Been there, done that, got the T-shirt & the pay-off, too!

    412:

    Err, Greg, I guess you're speaking about Bordeaux mixture again:

    http://en.wikipedia.org/wiki/Bordeaux_mixture

    Personally, I don't think heavy metals such a good way of dealing with mildew and like. Though I guess quite a few "organic farming" types might disagree, err. But then, this are usually the same guys eschewing "toxic" medications and using plutonium in homeopathy. And of course it could be worse:

    http://en.wikipedia.org/wiki/Copper(II)_arsenate

    Still, I prefer my fungicides really "organic". Like in "carbon compound" organic. Though then again, I prefer them somewhat safer then this stuff:

    http://en.wikipedia.org/wiki/Rotenone

    Money quotes: "Rotenone is sold as an organic pesticide dust for gardens."

    "In 2000, injecting rotenone into rats was reported to cause the development of symptoms similar to those of Parkinson's disease (PD)."

    Which BTW just shows both the legislation and its execution relating to chemicals is broken on so many levels when you remember the fun you had when buying some formaldehyde for tissue preservation. Though I guess compared to scientific illiteracy, the EU has little to do with it...

    413:

    Err, glyphosate is no phosphate ester, and it is not an organophoshate insecticide. It's a herbicide, and there is some phosphorous in it, still, I don't see how this is going to alkylate any esterases easily.

    As for your idea about modifying insecticides into CW agents, quite a few of the organophosphates substitute the double-bound oxygen of the phosphate for sulfur, with insects oxidising them back again to the more toxic form and humans doing so to a lesser degree.

    So you might have some fun with some malathion, some peroxide and some catalysator. Though then, Aum Shinrikyo showed even full-fledged CW agents like Sarin are tricky to use.

    414:

    Like most sensible folks, I'm in general agreement with Charlie's sentiments here. To wit, the point that Bruce Sterling made long ago to the effect that most of the supposedly wonderful glibertarian anarcho-syndicalist anonymity tech developments tend to wind up getting used by wealthy elites to subvert civil society.

    Sci fi geeks tend to fantasize about creating glibertarian stateless paradises with these kinds of fantasy technologies (back in the day it was public key crypto, or Temporary Autonomous Zones, or Sealand stateless platforms; nowadays it's bittorent's recent serverless chat using public keys at usernames, or Bitcoin). But the glibertarian stateless paradises never seem to materialize. Unless you count Somalia (which no sane person does). What we get instead is the most tech-savvy wealthiest nation-states and the richest global elites using these new form of privacy tech to launch malware attacks (think Stutznet) and spy on everyone (latest NSA revelation claims the NSA even has the ability to alter amounts in foreign bank accounts, presumably by hacking) and most of all to hide money from the taxman (viz., the 2008 leak from that Swiss bank employee Herve Falciani).

    That said, Charlie tosses out a lot of false flags here.

    [1] Charlie claims

    Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography).

    Sorry, that's a completely bogus scare tactic. There are already really hideous markets in assassination and drugs and child pornography. Sometimes in all three at once. Apparently if you head to certain markets in Pakistan and Afghanistan, you can use unrefined opium to buy child sex slaves and get someone killed. Meanwhile, Barack Obama spends each morning deciding which 17-year old girls to murder by drone without a trial or charges, according to this article. Between tor and VPNs and encrypted hard drives, kiddy porn is now a global commodity, unless you hadn't paid attention to the massive amount of underage kiddy porn allegedly being produced in Russia and the former Soviet republics. See "The creepy world of model scouts" in Jezebel online, 9 March 2012, or "The "Natasha" Trade - The Transnational Shadow Market of Trafficking in Women," Donna Hughes, Journal of International Affairs, 2000. As for drug trafficking, it's worth noting that poppy cultivation has risen by 1500% in Afghanistan since the American occupation. So the big trigger for drug cultivation here is not Bitcoin but American warmongering.

    Kiddy porn and the drug trade and the assassination market and white slavery are all bad things, but there are plenty of ways to pay for these things anonymously right now. Conflict diamonds, gold bullion, krugerrands, U.S. dollars in cash, you name it. Bitcoin seems like a very small drop in a very large bucket.

    To put it bluntly, if people like the American contractors who paid for 12-year-old sex slaves in Afghanistan want to do that sort of thing, they're going to be able to do it just as easily with cash U.S. dollars as with Bitcoins. So tossing out scare stories about Bitcoin getting used for drugs or human trafficking are just a red herring. That's a kissing cousin of the old saw that "we must re-engineer the internet to eliminate anonymity because it can be used by pervs to lure teenage girls to meet them." Anything can be used for bad purposes. Should we ban duct tape because serial killers can use it to tie up victims? Should be stop manufacturing shovels because mafiosi can use 'em to dig graves for their hit victims in the Nevada desert? The point here is that many American policies contribute much more to scourges like sex trafficking or the international drug trade than Bitcoin -- specifically, U.S. global military adventurism.

    Claims by uninformed commenters that 'cash is not as untraceable as Bitcoins' are simply ignorant. You can use cash to buy conflict diamonds or gold bars or you can simply launder your U.S. dollars or Euros through a non-profit foundation which conveniently enough builds hospitals for the poor in the Cayman Islands. The hospital, however, never seems to get built...but your donation does show up under another name in a Cayman Islands bank, where you can extract it untraceably in any form you wish, or wire to it any point in the world in any form, including bearer bonds. Which once agains are untraceable. Silly ignorant people on this forum yammer on about "how could you carry 20 billion in dollars across borders" whilst ignoring the very real fact that people can and have been carrying billions in bearer bonds across these selfsame borders for many decades. You can fit ten billion in bearer bonds inside a manila folder with room left over for one of Charlie's books. If you doubt this, check out The Guardian article "How a big US bank laundered billions from Mexico's murderous drug gangs," 2 April 2011.

    [2] Charlie goes on to shriek: "Bitcoin is pretty much designed for tax evasion." Once again, a total red herring. Earth to Charlie: come in Charlie...the entire international banking system as it currently exists is pretty much designed for tax evasion. The entire Cayman Islands government maintains itself in the black by serving as a scheme for tax evasion for arms merchants, drug kingpins, human traffickers, and who-knows-what-else. So by screaming about Bitcoin, Charlie is locking the barn door loooooooooooong after the horse has left. If you're serious about getting rid of tax evasion worldwide, Charles (and I think that's a good idea) your big objective should be to entirely re-engineer our current opaque corrupt grotesquely unfair global financial system, and we should rewrite global laws on charities and non-profits too while we're at it. Bitcoin is so far down on the list of mechanisms for money laundering that it's not visible without a microscope.

    [3] The claim "Bitcoin is inherently deflationary" is a complete falsehood as far as the general market is concerned. Bitcoin is designed to rise in value relative to other currencies, but that's an entirely different issue from economy-wide deflation. Here, Charles reveals that he simply doesn't grasp the economic meaning of inflation or deflation. Inflation or deflation become problematic only when they affect an entire nation. But the rise or drop of one currency relative to another represents no meaningful problem at all, economically speaking, as long as the rate of inflation or deflation don't hit an exponential curve. If the U.S. economy switched to Bitcoin tomorrow, deflation would indeed become a severe problem. But deflation in the convertible value of Bitcoins is a non-issue, because if Bitcoin rises to (say) 1 million dollars per Bitcoin this will simply cause people to buy one millionth of a Bitcoin per dollar instead of one thousandth of a Bitcoin as today.

    Can Charlie provide me an economic model that shows some damage to the U.S. economy or any other economy because Bitcoin rises in value relative to the U.S. dollar?

    In order to do this, Charlie would have to show us e.g. that when the British pound sterling rises in relation to the U.S. dollar that this somehow hurts the U.S. economy. That's nonsense, and basic Econ 101 tells us why. In a world of floating currencies these kinds of imbalances self-adjust by changing the balance of trade. Imports become less expensive and exports become more expensive, so it all works out.

    Since the size of the Bitcoin economy is minuscule compared to the U.S. economy, the entire "problem" of deflation in Bitcoin relative to the U.S. dollar is a complete non-issue. If any when the size of the Bitcoin economy grows to some appreciable fraction of the U.S. economy, then we might have to worry. But right now the U.S. has a 15 trillion dollar GDP. How long before Bitcoin approaches that value? Don't hold your breath.

    [4] Charlie's claims about "Gresham's law" with regard to Bitcoin are just ignorant. Clearly Charlie doesn't know what Gresham's law means. Gresham's law refers to currency debasement; it states that bad currency tends to drive out good currency -- but this only applies to minted currencies, not to fiat currencies printed by printing presses. The example Charlie gives of Bitcoin miners making money by mining Bitcoins has nothing to do with Gresham's Law because the Bitcoins produced by mining are every bit as legitimate and as fungible as any other Bitcoin. Gresham's Law would only apply if we were talking about counterfeiting Bitcoins technologically -- but as far as I know, Bitcoins are reasonably secure against counterfeiting, though probably 100% counterfeit-proof. No currency is completely counterfeit-proof, not even the U.S. currency. (Look at some articles about North Korea's spookily perfect counterfeit U.S. 100 dollar bills if you don't believe me.)

    Bottom line on this post?

    Usually Charlie is pretty close to the mark, but this post is a combination of disingenuous scare tactics ("Think of the children!"), bogus numbers (the carbon footprint from hell is pure misdirection with a bunch of fabulation added in for good measure, as many others have remarked), red herrings based on crap economics ("Bitcoin is deflationary!" -- crazy American overseas interventions are far more likely to hurt the U.S. dollar than anything Bitcoin does) and pure flummery (the GINI coefficient of the Bitcoin economy is terrible -- yeah, Charlie, so is the GINI coefficient of the iPhone app economy. Gonna ban iPhones because of that? The GINI coefficient of tech entrepreneurs is horrible, what with their private jets and hundred-million-dollar mansions. Gonna shut down Silicon Valley for that reason?).

    Once again, I certainly agree with Charlie's general gist here. We need to ban tax evasion, money laundering, and find ways of shutting down international drug trafficking and money laundering and sex trafficking. Bitcoin, though, is mostly a non-issue here.

    Here are my suggestions (for what it's worth):

    To ban sex trafficking, stop the U.S. from invading third world countries. Most of the underage girls getting sold into sex slavery are 'whores of war,' kids whose parents got killed. To shut down international sex trafficking, stop insanity like the 2003 Iraq invasion by the United States.

    To shut down tax evasion, institute a VAT tax and treat capital gains as earned income for tax purposes. Also, ban all private banks from refusing to disclose their depositors' accounts.

    If we're seriously worried about carbon footprints...people: cap and trade! Sign the goddamn Kyoto Treaty! And for cripes sake stop all these foreign wars. The U.S. military is the real "carbon footprint from hell."

    If you're concerned about GINI coefficients, let's enact some serious financial reforms -- starting with putting the corrupt Wall Street criminals in prison. We haven't even restored the goddamn Glass-Steagall laws from 1932 or put a federal usury limit on interest rates America. (Ronald Reagan eliminated the usury cap in 1982 when American interest rates spiked above 20%. And now predatory loan storefronts can legally charge 50% per month in many states.)

    If you're worried about Gresham's Law, stop running up insane American deficits due to our out-of-control military spending. America currently pisses away more than a trillion dollars a year on its worthless useless bloated corrupt military, and the Pentagon has never successfully passed an audit.

    415:

    Greenspan became head of the Federal Reserve. He then, with the connivance of Billy Bob Clinton, dismantled ... 10 years later, the resultant property bubble burst, and we're now living with the consequences.

    Greenspan has since recanted of some of his beliefs.

    But not all. :(

    416:

    I think selling miners is a very good way to max profits in the whole BitCoin scheme. It is the Next Gen that is (always) worth the most. The next BitCoin is by design much easy to find than BitCoin+1. So you want to be the fastest to the next coin. The Next Gen miners are by definition, the fastest way to the next coin. It works like this.

    1) Develop the Next Gen miner 2) Use it to find the next BitCoin ( and +1, +2...) and at the same time, start on Next Gen+1 miner. 3) Once Next Gen+1 is ready, start selling models of the current Next Gen miner to the general public while using Next Gen+1 to find BitCoins.

    Wash, rinse, repeat.

    I would not be surprised if the people who own the cutting edge on miners are not the same people who started this whole thing. It is actually quite brilliant, money from nothing and all that.

    417:

    But, being against the antics of the NSA & friends does not mean that you want no food safety controls ...

    Why not? If the NSA can act against your interests, then why couldn't the department of food safety? If you found out that McDonalds was buying them off, susceptible to the same sort of corruption and lack of accountability that has plagued the NSA, what government program would you go run behind?

    The problem is that the government is so huge, you would have no idea that the same antics were happening in other agencies. Sure there's oversight, but congressmen are only thinking about their constituents and their pocket books. They voted for a health care law with so many loopholes and special interest carve-outs that it's a no-brainer why it's negatively affecting so many Americans.

    Although it might sound like utter nonsense to you, without food safety agencies, you would still be able to buy fresh eggs and and be able properly bake your chicken. Food-poisoning patrons doesn't make the best business plan. And no libertarian wouldn't support using the legal system to throw the book at reckless businesses. Society already has plenty of checks and balances outside of a power-hungry central government. They don't need more control over every facet of our lives.

    418:

    @414

    Why do you feel the need to deflect to "Obama is just as bad" and make false claims about Bitcoin's tendency to deflation? Then why in the next breath do you claim that Bitcoin's deflation is no problem? Why do you gloss over the only non-deflationary scenario of BC, where its price crashes? You might want to read the macro section of an Econ 103 textbook to refresh yourself. If you can't borrow or tax using a currency, it's not going to complete the loop and will never be anything more than a very volatile asset used to launder value generated in the real economy and divert substantial funds to the pump-dump criminal cabal who run the market.

    Charlie was applying Gresham's law to power consumption and you completely missed his point, which I grant was somewhat analogous and easy to miss for someone who hasn't studied econ very much outside a BC chatroom. Chalk one up for your own ignorance. Applying Gresham's law as specifically intended would mean that fiat currency will always drive out deflationary and volatile craptocurrencies without suffering the disadvantage of questionable asset certificates, so there's that. As I stated in my own comment above, BC is no threat to national currencies. The only way something like it might work is if we all become centrally-planned zombies who don't really need currency, banks, or financing. Good luck with that.

    419:

    The government bailed out the banks for their bad business decisions with public money. If you think that is somehow part of a libertarian economic model, you are misinformed. That's pure corporatism--socialization of risk and privatization of profit.

    420:

    I don't think you're making bad points, but I'm wondering if we've been reading the same comment thread.

    Bitcoin does make a difference for certain criminal activities. It's a tradeable token, just like cash, or a bearer bond. All can be traced: there is a serial number or equivalent. But Bitcoin allows you to hand over the tokens without physical risk. If you go to a street-corner to buy drugs with cash, or to pick up a prostitute, you are in a high-risk situation.

    Similarly if you have to go to the right market in Afghanistan with a wad of cash.

    But for something that can be sent in the mail, a virtual payment method such as Bitcoin changes the whole balance of risk.

    But, while cash has that pesky serial number, it only comes to the attention of the authorities when it passes through a bank, that transition from a physical token to the virtual world. You might be able to infer that a banknote going into a bank is drug money, and you might know who took that banknote out onto the street, but you don't know what happened on the street.

    On the other hand, the way that Bitcoin works, you have a record of those transactions, even if you can't be sure of the parties or the context.

    And there is a certain sort of paedophile crime which depends on the internet, even if the lawyers sometimes obscure that. (British Law has come to class downloading a paedophile image as making that image, a crime defined in the days of photography. It allows seizure of the hardware used.) Bitcoin is a way of paying for those downloads, which funds the creation of new images. But, unlike photography, there's no original image. You cannot destroy the negative because, discounting image resolution and compression, digital images are equally original. How many of the images circulated this year, detected, and counted by the Police, were created this year? I am not sure if anyone has reliable data, but the statistics might show if Bitcoin has had an effect. Has the rate of new image creation changed?

    Personally, I am beginning to wonder if Bitcoin is backed by somebody such as the NSA. Another agency sponsored TOR to provide a secure over-the-internet channel for their spies to use. A crypto-based money system is surely useful too.

    421:

    Trottelreiner: NONE OF THE ABOVE. And I certainly wouldn't go anywhere near "Rotenone", thank you, very much. Nasty stuff. Fortunately, the one I'm thinking of is (just) still available (no questions asked) by mail-order & I've stocke up - as have a lot of other people, so FUCK the Eu & their stupid laws. Just hope no sneak informs on us & gets us £500 fines & jail. Yes, it's that bad - not just regulatory capture, but perverse criminalisation of private persons for commercial gain. You will note, that I'm carefully not naming the substance?

    TYhe attempted prohibition of small seed-ditributors & private exchanges (!) is more of the same old.

    422:

    I was thinking of chalk in bread, or non-safe oils in butter & margarine & other known scams. Or filthy kitchens, hidden from the public, with roaches, mice & rats ..... These are why you need food safety laws ....

    423:

    Oh dearie me... Some twat from "Demos" has written in the torygraph on the inevitabilty of Bitconn, sorry Bitcoin.

    424:
    You will note, that I'm carefully not naming the substance?

    I am, though problem is this means I don't know the actual compound and can't compare the risks involved. And having some aging experience with laboratory-fu, I know different people judge risks by specific substances quite differentially. And might label things somewhat different, too, lately, we looked up the ingredients of some sausages, one source said it contained sodium nitrite, the actual list didn't say anything about conservants, but mentioned "mineral".

    So please excuse me if I'm not that convinced till I know the substance in question.

    425:

    (3) Are you seriously claiming, despite the discussion in some 420 (at time of writing) other comments, that changes in the value of currency1 wrt currency2 are not at least potentially problematic for all holders of one or both currencies?

    426:

    Pretty much all food safety law stems from a Scottish case (name eludes me right now) where a woman sued successfully over finding a dead insect in a bottle of soda. And you're still arguing against food safety laws?

    427:

    &LTwhoosh&gt The government bailed out the banks for their bad business decisions with public money. If you think that is somehow part of a libertarian economic model, you are misinformed. That's pure corporatism--socialization of risk and privatization of profit.

    That folks, was my point about trusting banks to operate sensibly under a Libertarian regulatory regime going over Mr Henderson's head.

    428:

    I'd trust Greg on this one. We both have blood relatives who worked for Nobel Explosives, and when messing up means "removal of fingers" if you're lucky and "removal of life from you and everyone else in the building" if you make a big mistake, you tend to very careful with and respectful of every chemical.

    429:

    He was also quite the devotee of hanging, drawing, and quartering as a punishment for counterfeiters during his decades running the Royal Mint, during which period he reissued and stabilized the currency ...

    430:

    Oh yes, there's still some scare stories floating around about Sodium Nitrite.

    Sodium Nitrate (NaNO3) and Sodium Nitrite (NaNO2) are both curing agents, used in products such as bacon and sausages. And both are found naturally in vegetables. Nitrates in general are also used in fertilisers. The Nitrite is a permitted food additive in the EU (E250) at low levels, as is Potassium Nitrite (E249), while Sodium Nitrate is E251.

    So I can see why a food manufacturer might use a less obvious name on a label, but they really should be using the E250 number.

    431:

    Err, I tend to trust Greg, though please remember argumentum ab auctoritate is always somewhat problematic.

    Thing is, chemical safety is a tricky issue. And let's remember that quite a few substances show their blessings only after several years; cue to the chemists of old washing their hands with benzene. Or the caution most biochemists show when handling ethidium bromide, which might be prudent or maybe paranoia:

    http://www.labnews.co.uk/features/a-toxic-death-for-ethidium-bromide/

    On the pesticide front, I still haven't made up my mind about glyphosate, where some beekeepers say it's very toxic to bees and official documents say the tensid used are more toxic then the stuff itself. Add to this beekepers have a vested interest of prohibiting GMOs if they want to sell their honey as "organic" and like, so while I don't necessarily trust $BIGINDUSTRY, I don't trust the other side either. Exempla ad nauseam abound.

    432:

    Banks are both wielding enormous power, and crucial to the working on the contemporary economy. The Libertarian ideology, as I see it, consists in saying that bankers should be allowed to have as much fun as possible, but that banks should not be bailed out in case of problem because that is how economy works.

    That is akin to saying that the pilot of an A380 should be trusted to perform loopings if he develops the fantasy to do so, but that onboard computers should not intervene to prevent a tailspin because, hey, physics!

    433:

    without food safety agencies, you would still be able to buy fresh eggs and and be able properly bake your chicken. Food-poisoning patrons doesn't make the best business plan.

    Which is patent rubbish, as witness the salmonella in eggs epidemic in the 1980s (anyone else remember why Edwina Curry was forced out of office in 1988? (The only Tory minister to be hounded out of her post for telling the truth, as far as I can recall.)

    434:

    AFAIK nitrites are implicated in the production of nitrosamines, which are not that high on my menu.

    Also AFAIK, they are quite good at keeping Clostridium botulinum at bay. Appreciating functioning muscle contraction in most tissues, breathing apparatus included, I care more for this than any later cancer...

    As for not using the E numbers, even without the "all natural" sticker I might have guessed why they were not mentioned...

    http://pipeline.corante.com/archives/2013/06/21/eight_toxic_foods_a_little_chemical_education.php

    If you excuse me, I have somewhat gotten over headdesking for daily examples of chemophobia...

    435:

    It seems moderately clear to me that any working Libertarian system is dependent on a sane, educated, population, which doesn't fall for the sort of inane claims I have seen in this thread. If personal choice is essential, it had better be based on good evidence.

    I wonder what the combination of Libertarianism and religion would come out like. Religions vary enormously, and some sub-sects in a Libertarian milieu would be free to evolve into unpleasant swivel-eyed lunacy. The worst excesses of religion are blatantly incompatible with Libertarian ideals, but which would win the meme-clash. If you allow, or require, intervention to protect others from harm, might not worshiping the wrong God be harmful?

    Most religions have a mix of laudable ideals with scary dangerous thinking. And Libertarianism seems to me to be short on mechanisms to cope with that.

    436:

    It seems moderately clear to me that any working Libertarian system is dependent on a sane, educated, population, which doesn't fall for the sort of inane claims I have seen in this thread. ... I wonder what the combination of Libertarianism and religion would come out like.

    Hypothesis: consider the way the roots of the Scottish Enlightenment lay in a very odd theocracy -- protestant extremists who believed in burning witches and hanging atheists for heresy on the one hand but wanted to achieve 100% literacy (in the 17th century!) on the other, so that the people could read the bible for themselves. The results, a little way down the line, was the birth of the modern, insofar as the modern is a complex of memes that agree on the desirability of improving the human condition, learning more about our universe, and ultimately making things better. The theological justification for this was the idea of building the kingdom of god on Earth; but it gave us stuff like Adam Smith and Hume and a ridiculously large scientific/engineering renaissance (for such a small, poor country).

    Now. If you start with a small, relatively homogeneous, highly literate and well-educated population, could you make libertarianism work? I suspect the answer is possibly -- as long as they agreed to cooperate on the essential prerequisites: namely, the need for equality of opportunity, provided by giving everyone a good general education for free. (Which would not necessarily resemble any current schooling model, given that schooling is more about enforced obedience training to indoctrinate the next generation of industrial serfs, with an elite status version to train the next generation of owners.)

    Given a sane, educated population trained to think for themselves and act independently, then yes, I suspect a libertarian model might work.

    The only fly in the ointment is that the societies I can think of who come closest to meeting those initial requirements tend to go in almost exactly the opposite direction. (Examples I'm thinking of: Iceland, Norway, the Netherlands ...) I wonder why? Heh.

    437:

    Now. If you start with a small, relatively homogeneous, highly literate and well-educated population, could you make libertarianism work? I suspect the answer is possibly -- as long as they agreed to cooperate on the essential prerequisites: namely, the need for equality of opportunity, provided by giving everyone a good general education for free.

    &ltLibertarian>OHNOEZ; U iz steeling UR munneyz 2 edumicate teh dedbeetz!!&lt/end&gt

    438:

    Donohue v Stevenson, it was a decomposing snail in a bottle of Ginger Beer.

    439:

    A big hunk of the reason libertarianism is infested with the Bad Crazy among Americans seems to me to arise because of the USA's original sin -- slavery. It left a toxic legacy of inequality and racism, which, along with protestant variant doctrines such as the prosperity gospel, convinced a large proportion of the non-African-American population are convinced that poor people are poor because they're wicked and evil and deserve to be poor, not because they've been systematically shat upon.

    Thanks to the role of epigenetic modulation in utero it takes generations to fix the inherited component of the consequences of systematic abuse. Not to mention the cultural/memetic consequences, both for the abused and the abusers. Desegregation and the end of Jim Crow were a necessary precondition for long-term healing to begin ... but it's a terribly long way from finished, and the ongoing "poor = undeserving" meme in US society makes deprivation a self-fulfilling prophecy (while salving the consciences of the unfairly privileged).

    See also "perfectly spherical humans of uniform radius and density".

    440:

    Thanks; the name of the case had genuinely eluded me. It was well enough known that I was sure someone else could fill in the particulars from the outline.

    441:

    Cryptocurrencies are probably here to stay now. It is up to society to figure out ways to deal with them. I was about to purchase Stross's Neptune's Brood using bitcoin from a bookseller I found in Germany. After reading this blog post I will probably never purchase any Stross material again. That's just how individual choice works.

    442:

    You know that's a book about cryptocurrency, right?

    443:

    Many of your criticisms seem valid; but I wonder if there's a silver lining. The mere existence of cryptocurrencies (not necessarily Bitcoin, but others with fewer problems), giving people alternatives, might force governments to be less intrusive in what they do with their currencies and banking, just as the existence of free software forced Microsoft et al to clean up their act somewhat.

    I make no claims to sociological or economic sophistication. Just a thought I wanted to throw out there. Sorry if someone's already brought it up, there are too many comments to read.

    444:

    Aye, heard about it on Reddit's /r/Bitcoin. I'll probably survive without it though. Plenty of software writing to do...

    445:

    Which would not necessarily resemble any current schooling model, given that schooling is more about enforced obedience training to indoctrinate the next generation of industrial serfs, with an elite status version to train the next generation of owners

    Been around schools and teachers, lately? As a group, teachers are about the least-likely supporters of the above hypothesis... And certainly, it doesn't reflect either the aspirations or the reality of the current syllabus. Either in the schools you might class as elite, or those you might class as training serfs.

    ...The politest response I can think of is to ask why you put forward that assertion? I'm the son of a teacher, the friend of several, a parent with an interest in my childrens' education, and an experienced instructor who at one point after the telecom bubble burst, started the road to becoming a teacher.

    446:

    Charlie, TBH, it was not about crypto-currency. It was first about adventures in a space chapel, and then about adventures in a water world. Crypto-currency was in the background.

    Also, you never explained how exactly slow money works. A "bitcoin" protocol was mentioned, but you don't need an interstellar colony to generate bitcoin.

    447:

    Been around schools and teachers, lately?

    Nah, just having a 1970s flashback to my own school days ... which, I fear, were shared by one Michael Gove, albeit with fonder memories: I suspect he'd like to inflict them on the next generation in turn.

    448:

    It appears Charlie is big on original sin in relation to organization, just like bitcoin's libertarian ideology poisons the well for him, education's industrial revolution roots have some unavoidable cruft that cannot be easily removed.

    Sure teachers NOW don't identify with this scenario, but it's implicit in the system.

    Speaking for myself, I've just finished a EFL teaching course and I feel more skeptical of the classroom environment than I ever was (And I wasn't a big fan to being with)

    The problem is, we don't properly understand learning, so we default to a hodgepodge of tricks that seem to make sense and at least provide measurable metrics.

    I had a bit of an epiphany watching Boulet (Of bouletcorp.com fame, Charlie knows who he is) drawing an illustration https://www.youtube.com/watch?v=zDBOVrGG3ug

    Now there's no way an art teacher can teach you how to do THAT. The man is using no construction or sketching or perspective guidelines, he's just going straight to ink from his head to the paper. This is the visual art equivalent of total language fluency, and just like the art school teacher, we try to break down what is going on, add technical terms and build up a scaffolding to blindly guide our pupils towards magical "fluency", which is something that happens largely on it's own in some mysterious way in the brain, often despite our best efforts to get in the way.

    We need to completely overhaul teaching and learning. A nice start would be by first figuring out what exactly it is.

    449:

    Sounds like you skimmed over the infodumps (and/or missed the references to Chaum and zero-knowledge proofs). I should probably have avoided the "bitcoin" word and stuck with "digicash" (Chaum's original circa-1990 idea), but went for familiar-to-the-public terminology when I was writing it in 2011-12. Sigh.

    450:

    Well, it sounds a fair bit like the less ept parts of mine.

    451:

    Sounds like you skimmed over the infodumps

    I didn't, but infodumps are called infodumps for a reason. They are there for the author to feel better, not because they are important. The story is about a Hero searching for the Artifact while the Villain is searching for a Hero. The story is background-independent, in other words. :-)

    (and/or missed the references to Chaum and zero-knowledge proofs)

    Just did a search, and the word "chaum" does not appear in NB. "Knowledge" appears, but never with "zero" attached.

    452:

    The problem is, we don't properly understand learning, so we default to a hodgepodge of tricks that seem to make sense and at least provide measurable metrics.

    I think learning is understood well enough in psychology and biosciences, that knowledge is just not applied to school models. Three hints:

    In current school systems, do students learn because they are curious or because they are forced to? Given that humans are curious by nature, shouldn't curiosity be the main motivating factor in school? By contrast I've the impression that the first thing kids learn in school is to forget curiosity.

    How much energy in schools is spent on controlling what students learn instead of supporting them in learning itself? Modern bioscience says that pressure doesn't aid learning.

    Metrics for learning? Don't get me started! I'll just quote a saying: Pigs don't gain any weight by putting them on the scales every day.

    453:

    I may, or may not, have done so here at some time, but I have been known to refer to parts of certain other authors' works as "death by Powerpoint". This refers to an infodump, which is written in a style that implies that the character infodumping is making a presentation at a meeting.

    454:

    I am a little older than OGH, and have a similar feeling. What I recall of my teachers is that most of them seemed horribly old, and the world they had trained in was different.

    More realistically, it may be the early years of education that matter most, that set the pattern, and the teachers I had in Primary School were around 40 years older than I was, maybe more. I wonder if their professional standards had been kept up to date. There's much more re-training these days.

    The world is changing again. It always does, of course. Will the products of Gove's educational fetishes be able to adapt to change? Will they be able to keep learning? They will need to.

    I am not a Libertarian of the sort OGH points at, more an Anarchist, and what I recall seemed to be the instillation of a culture of unthinking obedience. And this was a Grammar School, we were supposed to be the elite.

    455:

    Although it might sound like utter nonsense to you, without food safety agencies, you would still be able to buy fresh eggs and and be able properly bake your chicken. Food-poisoning patrons doesn't make the best business plan.

    "Utter nonsense" is a polite way of describing what it seems like to me, yes.

    I would really recommend learning a bit about the history of food, in either England or America. Food adulteration was rife in both during the 19th century, before both regulation and effective enforcement of the same curbed the worst excesses. Based on experience, we can't rely on self-policing by food sellers.

    Some recommendations:

    "Food in History" by Reah Tannahill Weaver "The Poisoners Handbook" by Deborah Blum

    456:

    Sure, we've known the good routes to learning for millennia: a combination of tutoring (one on one teaching with a teacher and a student who get along) and free play and experimentation in mixed-age and mixed-skill groups, so that students can help each other learn.

    Problem is, only the wealthy, the home-schooled and some grad students get this kind of education now. This is me speaking from a long time teaching in grad school.

    The problem with education is that we're experimenting with methods that try to simultaneously maximize cost-savings and efficacy. These are mutually exclusive goals to a large degree. Some people thrive in this environment, some do not, but it's what we get when we're trying to optimize suboptimal systems.

    457:

    I would really recommend learning a bit about the history of food, in either England or America. Food adulteration was rife in both during the 19th century, before both regulation and effective enforcement of the same curbed the worst excesses. Based on experience, we can't rely on self-policing by food sellers.

    Not even this year we couldn't, as I remarked in this cartoon. But for a scarifying look at the meat industry almost 100 years earlier, albeit in the US, I recommend Upton Sinclair's novel The Jungle.

    By the way, an acquaintance of mine is a chef. He quite put me off my coffee yesterday when the talk turned to meat preparation, and he told me that most supermarket chicken is injected with pork fat. If so, why? Why does bread need more than salt, water, yeast, and flour? Why does mayonnaise need more than olive oil and egg? Etc. etc.

    458:

    Re Prisoners/Warders (Guards/Corrections Officers)

    It is a Truism in the United States that the only difference between the Guards and the Inmates is the color of the Uniforms; Maybe the Guards are the ones that finished 8th Grade (Which seems to come with a High School Diploma in the US if they just show up long enough these days).

    When I WORKED at a major (US State) correctional facility, there was a Guard who had a Brother in for Murder in another facility. And another (Guard) who was innumerate. He literally had trouble counting on his fingers.

    Not really promising educator material.

    But they have to make a living somehow, in default of a guaranteed income.

    459:

    Actually, the US quit circulating Gold in 1933; Another of those FDR "Betrayals" according to Right Wing Nuts. And they took the Silver out of the currency (coinage) in 1964.

    All proper preparedness freaks have a couple of rolls of "Proper" pre 1964 silver Quarters/Dimes squirled away in their gun cabinets.

    460:

    Did someone mention alchemy? At the time of Newton, alchemy was entirely mainstream; not everyone thought it worked, but many did, including famous chymists like Robert Boyle. This was a result of having inadequate theories of the formation of matter and metals.

    Now to tie it back to the original post and many comments on here - a lot of people have inadequate ideas about how money is formed.

    So basically saying Newton was mad because he practised alchemy is totally wrong, because you're ignoring the historical context.

    461:

    As far as the mayonnaise goes, the stuff you buy in the shops needs a few additions to stabilise the emulsion. Extra egg yolk (some of the proteins stabilise the emulsion), for one brand.

    That sort of thing is also necessary to cope with variations in the natural products, so as to deliver a consistent input to the process. Baked bread needs careful use of different wheat varieties, including hard red wheat from North America with very high levels of protein. You can adjust timings when you cook in your own oven.

    462:

    But for a scarifying look at the meat industry almost 100 years earlier, albeit in the US, I recommend Upton Sinclair's novel The Jungle.

    The thought just occurred that this can legitimately be described as a grim meathook past.

    Also that something in the writing technique made me feel more empathy with the characters than with those in almost any piece of SF, even SF whose characters suffer more than Sinclair's.

    463:

    Not even this year we couldn't, as I remarked in this cartoon. I'd suggest a mid-range Cotes du Rhone, or a low end Vacqueyras.

    464:

    K Foundation did not burn any money at all. They donated it to the government. If they had been smarter they would have bought £1m of machine tools and destroyed them.

    465:

    Contemporary reports all said the money was physically burnt.

    466:

    Since money is just IOUs by the treasury, that's the same as donating. Kind of a burnt offering, so to say.

    467:

    Contemporary reports all said the money was physically burnt.

    The article and photo seem to back that up (I haven't bothered to watch the video). I'm not personally familiar with the K Foundation, myself.

    On the other hand, the Rolling Jubilee debt forgiveness scheme is approaching fifteen million US dollars of actually helping people, on what is obviously a shoestring operation. It's not clear if there's any way of efficiently scaling up this idea.

    468:

    If they had been smarter they would have bought £1m of machine tools and destroyed them.

    For a million dollars you could buy enough weapons to cause billions dollars of damage, if you are ruthless enough.

    469:

    One car bomb at a state of the art wafer fab would be enough

    470:

    My view of all this? "Cry 'Havoc!', and let slip the dogs of war"

    471:

    Actually, AFAIK there are quite a few people, myself included, who think it quite likely Newton was mad because of him practising alchemy. But as a causating agent. Mercury vapours are not that healthy, you know...

    Which, BTW, is one of the areas where my laissez-faire attitude towards chemical experimentation and, err, recreational psychopharmacology interacts with common sense; methamphetamine is bad enough already compared to other stimulants, but if you use an amalgam[1] or other heavy metal to get a product fit for human consumption, you better be careful and do some workup. And as Randy put it in "My Name is Earl", "People who make meth shouldn't do meth. It's always the second batch that blows up." So some control seems necessary.

    [1] Err, for details, google for "Synthetic Reductions in Clandestine Amphetamine and Methamphetamine Laboratories - A Review". Meks for some background when discussing "Breaking Bad" at work...

    472:

    Well, if you want an easy synthesis go for MDMA

    473:

    For the pork fat in chickens, personal experience says fat enhances taste and helps with heat distribution. Actually, there seem to be some recipes around how to do it with different fats:

    http://www.bbq-brethren.com/forum/showthread.php?t=120785

    I guess you could also buy chickens without the fat, but

    a) quite a few people unaware how to process chicken b) quite a few people, somewhat intersecting with a), not having the time to do it

    explains why you can get it already injected. Oh, and of course it might help with chickens somewhat too lean.

    Thing is, you have to balance concern for food purity with avoiding chemophobia. Botulinum and aflatoxins are not that high on my menu, and mold might take only a few days to grow.

    And compared to age-old methods like smoking,

    http://en.wikipedia.org/wiki/Smoking_(cooking)#Health_risks

    at least we know somewhat more specifically what these ingredients are. And then there is the trade off, avoiding cancer vs. no more jerky, a hard choice.

    For the bread, it somewhat depends on the recipe and taste, and AFAIR leavening with yeast takes some time. Please note some of those leavening agents have been used for quite some time, so we might argue they are as traditional as, say, yeast.

    474:

    Actually, short version, if MDMA is so easy to make, why is it so rare on the market? Long version, AFAIK the synthetic methods in the literature for MDMA and methamphetamine somewhat overlap, plus the educts are somewhat more difficult to get by. I can think of quite a few uses for benzaldehyd, piperonal, not so much. Might explain why AFAIR most XTC pills contain no MDMA, and from an economic angle, I guess the market for pure stimulant amphetamines is somewhat bigger than the one for entactogens, which might siphon educts somewhat.

    As for releasing agents in general, some time ago my neurologist proposed switching from MPh to amphetamine, let's just say I wasn't that thrilled...

    BTW, guess next time I buy some formaldehyde as a fixating agent, I should really resist explaining what you COULD do with the stuff I buy...

    475:

    I think you don't have a good idea of just how large a state of the art wafer fab is. Look up the Samsung Austin fab on Google Earth. The facility is 2.3 million square feet.

    A car bomb would break a lot of glass and damage some equipment. You would do more real damage to the fab if you used it to cut power. Though I suspect that there is one hell of a backup power system on site.

    476:

    It's most usually interpreted as one or both of an artistic or political statement, rather than an attempt to pay down part of the National Debt.

    477:

    I'm inclined to doubt that the Clean Room areas would be directly vulnerable to blast damage, but I can see there being an interruption in production while they make sure all is OK. There might be places where having the builders in gets awkward. Do you want dust being tracked around?

    And then I wonder what the consequences would be if the window blown in was that of the staff canteen.

    It could all be very disruptive.

    478:

    MDMA is not rare on the market. Wholesale price (last time I talked to a big dealer) was around £2000 per kg

    479:

    Could you quote me a price in Bitcoin?

    480:

    Beg to differ. By way of example...

    My mother was trained as a Primary School teacher at Jordanhill in the early 1960s (and further at Moray House in the 1990s); the "teaching to read" mechanism was phonics; learning the sound for each letter, and giving the child a fallback mechanism then they encounter unfamiliar words.

    In England, the Educationalists decided that such old-fashioned techniques smacked of rote learning, and that children could be taught more effectively using "look and say" - teaching them the shapes of commonly used words, so that they could start reading very basic books, more quickly. There was a minor problem with this - while it worked, it didn't work so well. However, the Educationalists Had Spoken. A generation of Primary teachers had been taught, had practised "Look and Say", and other countries used it too... A friend has moved from Scotland back to France; her child has gone from Scottish P1 to a French first year primary, with frustrations over teaching methods.

    In the past decade, phonics has regained ground. Teaching authorities in deprived areas like Clydebank managed to increase literacy significantly, by going back to Phonics-based methods. Government started to ask "so - why not use phonics?".

    Unfortunately, this is the point where the Teachers' Unions kick in. Reacting strongly to any suggestion that their methods should be "directed", you start to see claims that Government is "interfering in the classroom". University educationalists start to claim that phonics is "unsupported by evidence", etc, etc.

    So; when Teachers' Unions complain of interference, they may be quite right in some areas - but utterly wrong in others.

    If you want interference, the Scottish Government has recently changed the syllabus - primary school history now includes more studying of the "Scottish Wars of Independence" (not the terms used when teaching it at Univeristy, according to a good friend). Now, why do you think that should suddenly come to the fore?

    481:

    Real criminals don't use BC. They deal in 500 Euro notes.

    482:

    That puts it on par pricewise with uncut cocaine m8, so you may need to recalibrate what "rare" constitutes.

    483:

    ...the Scottish Government has recently changed the syllabus - primary school history now includes more studying of the "Scottish Wars of Independence"...

    Granted, there may be an ulterior motive there! But that's local history, and therefore a reasonable thing to teach. In my area kids get taught about the Lewis &amp Clark Expedition, which is locally relevant; if kids in Scotland got much on that someone would be wasting their time.

    484:

    There was an explorer who did much the same as Lewis & Clark across Canada, so there are alternative stories which could be told as an example of that sort of history. And I recall a snippet about the settlement of Canada. The dustbowl in Canada came about because the first explorers passed through in unusually wet times.

    It's a bit like that "History of the World" that Andrew Marr fronted last year, where they picked some unexpected stories. Well, maybe a few unexpected stories would be a good idea in history teaching, rather than a localised 1066 And All That run of stories. Why does the example of a water empire have to be Egypt or Mesopotamia?

    Sellars & Yeatman are still amusing, but that narrow History of England approach teaches some awkward attitudes.

    Can anyone really learn from the history of just one country? Or even one continent? Andrew Marr did a compare and contrast on slavery in the USA and serfs in Russia.

    Compare and contrast the USA and Canada. The Canadian governments were hardly wonderful in how they treated the natives, but they were better than the US government. What did slavery do to the USA, even if they fought a civil war to be rid of it?

    And can history ignore Gandhi or Mandela, and the racism in South Africa that they both fought?

    Henry VIII matters, and so do his wives, because of the dispute with the Pope over divorce, but it isn't a Tudor TV soap about a rich man and a chain of wives which is they history.

    But history is the subject for good stories. OGH just writes history that hasn't happened yet.

    485:

    @418 remarks:

    Why do you feel the need to deflect to "Obama is just as bad" and make false claims about Bitcoin's tendency to deflation?

    This deserves a serious discussion, as it seems to me (just speaking for myself) that Charlie is ignoring the much larger elephant in the room by talking about Bitcoin.

    To respond directly:

    I feel the need to discuss Obama instead of Bitcoin because, quite frankly, Barack Obama or the next American president has a great deal more power to order assassinations and start unjust wars of aggression which create war orphans who wind up in sex trafficking rings as underage whores than all the Bitcoin users on the planet. Seriously: take a look at what JSOC is doing. Permit me to quote from former Gen. Stanely McChrystal on the U.S. death squads running amok in Afhgnaistan: "We have shot an amazing number of people, but to my knowledge, none has ever proven to be a threat." Source: The New York Times, 27 March 2010.

    Can you name an amazing number of people who have been shot by Bitcoin assassins? I can't. Even if a runaway Bitcoin assassination market develops, it's wildly unlikely that it would ever succeed in killing even a fraction of the number of innocent people currently being murder by American death squads worldwide -- and that's not to mention genocidal tactics like the "shock and awe" of the Iraq war, which the British periodical Lancet estimates murdered upwards of 600,000 Iraqi civilians.

    If Charlie and you and the rest of us are serious about wanting to avoid assassination of innocent people, permit me to suggest that the wildly out-of-control U.S. military and the CIA's drone fleet is a much bigger concern than Bitcoin, and is likely to remain so for the foreseeable future.

    As for your claims about Gresham's law, the issue involves the debasement of currency. Whose currency will be debased by Bitcoin usage? It's simply not credible.

    Then why in the next breath do you claim that Bitcoin's deflation is no problem?

    Because deflation or inflation in any currency only becomes problematic insofar as it can be exchanged for another currency, and insofar as the size of the market for the currency approaches the size of the market for any other currency. The scare article to which Charlie links never provides us with any evidence, nor any economic justification, to explain why when Bitcoins approach 1 million dollars per coin this will destabilize other currencies.

    It's far more likely that if everyone starts using Bitcoins, the major nation-states will use deep packet sniffing to ID Bitcoin transfers and seize the accounts to which the Bitcoin wallets are being converted.

    Why do you gloss over the only non-deflationary scenario of BC, where its price crashes?

    Because Charlie was talking, and the inaccurate scare-tactic article to which he linked, was talking about outlandish scenarios where one Bitcoin equals millions or billions of dollars and the entire global national financial system melts down.

    You might want to read the macro section of an Econ 103 textbook to refresh yourself. If you can't borrow or tax using a currency, it's not going to complete the loop and will never be anything more than a very volatile asset used to launder value generated in the real economy and divert substantial funds to the pump-dump criminal cabal who run the market.

    The first part of your comment involves a vacuous ad hominem insult, and thus semantically void. The second part of your comment involves the classic fallacy of begging the question: you assume in your question the answer which you seek.

    But clearly Bitcoin is interconvertible with other currencies. It always has been and as far the evidence goes, it always will be.

    As for your final clause "a very volatile asset used to launder value generated in the real economy and divert substantial funds to the pump-dump criminal cabal who run the market" actually describes all currencies in an age of financially opaque globalized capitalism in which the GDP 'shadow economy' is estimated at between 10 to 100 times the size of the actual world GDP. No one knows for certain the size of the shadow economy. And no one knows much about the current risks and arbitrage and leverage used by private equity firms throughout the world economy. What we do know is that wayyyyyy back in 1997, Long Term Capital run by a pair of Nobel laureates in economics, Merton and Scholes, managed to run up enough leverage in risky casino capitalism betting that it almost blew up the world economy. The problem is worse today, and nothing has been done to reform our globalized casino capitalism crapshoot. So it's only a matter of time before the world economy blows up again, probably worse than in 2008-9. See the book When Genius Failed for more details.

    if you don't believe me when I assure you that all currencies are now turning into highly volatile crap, read the Forbes article "Big Banks and Derivatives: Why Another Financial Crisis Is Inevitable," Forbes, 8 January 2013.

    All global currencies are, in the wake of the gross deregulation and crony-capitalism control fraud of the last 30 years, "a very volatile asset used to launder value generated in the real economy and divert substantial funds to the pump-dump criminal cabal who run the market," remains a much bigger concern than Bitcoin.

    Charlie was applying Gresham's law to power consumption and you completely missed his point, which I grant was somewhat analogous and easy to miss for someone who hasn't studied econ very much outside a BC chatroom. Chalk one up for your own ignorance.

    This is more ad hominem insult, and thus vacant of meaning.

    Applying Gresham's law as specifically intended would mean that fiat currency will always drive out deflationary and volatile craptocurrencies [sic] without suffering the disadvantage of questionable asset certificates, so there's that. As I stated in my own comment above, BC is no threat to national currencies.

    But then you must immediately agree with my criticisms of Charlie's article, musn't you? After all, Charlie links to a scare-tactic article which very specifically claims that Bitcoin will destablize major national currencies.

    Please follow the logic: if you claim that Bitcoin is no threat to national currencies, but Charlie cites and links to an article claiming that Bitcoin will destroy national currencies, than you must clearly be agreeing with me and disagreeing with Charlie.

    The only way something like it might work is if we all become centrally-planned zombies who don't really need currency, banks, or financing. Good luck with that.

    If there is some meaning in those two sentences, it seems well hidden. What do you mean by "something like it might work"? You provide no evidence or logic to support your assertion.

    But to return to what seems to me really the central point here, I think that Charlie is missing a number of elephants in the room.

    The first elephant would be encryption technology. Surely we can agree, can we not, that once strong encryption becomes viable and user-friendly and cheap, cryptocurrencies become inevitable?

    It seems to me that Charlie's criticisms of Bitcoin therefore logically necessarily become criticisms of encryption technology eo ipso. But this degenerates into a call for a centrally-controlled rigidly policed internet in which anonymity is impossible, and it seems to me that we are all very much against that.

    Moreover, it seems to me that even a centrally controlled rigidly-policed internet could never really banish anonymity. For example, Cory Doctorow's hypothetical distro Paranoid Linux which masks messages as random UDP packets (or the like) and statistically masks its activities as noise to evade deep packet inspection seems technically possible. Current cryptosystems already have the ability to manipulate the statistics of encrypted messages to avoid standing out as patterned data, so this is not much of a stretch.

    So the first elephant in the room is that in coming out against a cryptosystem which allows anonymous currencies, Charlie is (without quite realizing it) coming out against strong encryption and an open internet. But that seems quite untenable. It is like trying to eliminate the drug trade by shutting down drug production, or like trying to end copyright infringement by trying to shut down bittorrent trackers. To paraphrase Obi Wan Kenobi: "The bittorent trackers are easily frightened, but they will soon be back, and in greater numbers." This is a fight no one can win. No individual, and no nation-state. It is a fight against an entire technology. And as we know, technologies like strong encryption cannot be uninvented.

    The second elephant in the room is that Charlie rails against a number of things which we all agree are grotesque: assassinations, sex slavery, the international drug trade, and so on. These things are evil, certainly. But I am making the same point here that Bruce Sterling has made many times -- the real engines behind global assassination markets and sex slavery and drug trades are national governments... And specifically the ostentible law enforcement arms of national governments, which invariably wind up becomes the worst criminals of all. As Sterling has noted with many pieces of evidence from the Zeta cartel that started out as an elite anti-drug group to the crashed Learjet full of 3 tons of cocaine that traced back to a front company for the CIA, anti-terror groups invariably become the worst terrorists, and anti-drug groups become the worst drug runners. The movie Whistleblower from 2011 was based on a true story of a woman who brought to justice UN peacekeepers running underage whores out of war-torn Bosnia. This is far from the exception. It's the rule.

    I see a distressing tendency to fixate on gizmos and ignore systemic decay. The ugly chaos on the Internet today isn't about this hole or that hole, or this patch or that patch, it's about massive failures of governance. Look at your e-mail today: that flood of theft and abuse and malware. We can't call that a civilization. Law and order has broken down. We should feel ashamed about this, not sit on our hands like born victims till some techie finds some magic wand.

    Source: "Bruce vs. Bruce: Q&A with Bruce Schneier and Bruce Sterling," DelRey Online, 2004.

    Governance is the issue. Not technologies like strong crypto. We're suffering from lawlessness and moral rot at the highest levels of nation-states like America, and that's infinitely more dangerous than hypothetical Bitcoin assassination markets...in large part because those assassination markets are likely to be created and encouraged by the lawless elements of nation-states' "black ops" security arms.

    As Bruce Sterling points out:

    Where's the historical perspective? When I was born 50 years ago, Stalin, a mass murderer, was making hydrogen bombs galore. Am I supposed to shake and shiver all over because some gang or small government might get a Bomb? That's bad, but it's far less terrifying than a dire situation I already survived.

    Source: "Bruce vs. Bruce," op. cit.

    The real skinny on Charlie's rant against Bitcoin is once again hammered home by Sterling:

    So, the truth is out there, but nobody’s gonna clean up all that falsehood. There is no visible way to make a clean break with the gigantic, ongoing institutional deceits. There’s no mechanism by which any such honesty could be imposed. It’s like reforming polygamy in the Ottoman Empire.
    Even if the proles rise up in a wave, busily Twittering away, you’re gonna get an Arab Spring, followed by a regretful military coup once people figure out that networks just aren’t governments.
    Even the electronic civil lib contingent is lying to themselves. They’re sore and indignant now, mostly because they weren’t consulted — but if the NSA released PRISM as a 99-cent Google Android app, they’d be all over it. Because they are electronic first, and civil as a very distant second.
    They’d be utterly thrilled to have the NSA’s vast technical power at their own command. They’d never piously set that technical capacity aside, just because of some elderly declaration of universal human rights from 1947. If the NSA released their heaps of prying spycode as open-source code, Silicon Valley would be all over that, instantly. They’d put a kid-friendly graphic front-end on it. They’d port it right into the cloud.
    Computers were invented as crypto-ware and spy-ware and control-ware. That’s what Alan Turing was all about. That’s where computing came from, that’s the scene’s original sin, and also its poisoned apple.
    There’s not a coherent force on Earth that wants to cork up that bottle. They all just want another slug out of that bottle — and they’d rather like to paste their own personal, prestige label onto the bottle’s glass. You know, like your own attractive face, pasted on the humming planetary big iron of Facebook.

    Source: "The Ecuadorian Library: or, The Blast Shack after Three Years," Bruce Sterling, Geek Empire website, 2013.

    "The civil liberty contingent" means you, Charles Stross.

    Whenever you see national drug trade or assassination markets or sex trafficking, you can be sure that major elite law enforcement is involved in supporting and protecting it, and national governments are supporting it with their policies. And that's one hell of a lot scarier to me than Bitcoin. Sometimes the support is quite explicit, too. For example, U.S. troops guard the poppy fields of major Afghanistan drug traders as part of a quid pro quo to prop up the current corrupt Afghan government. See "U.S. Troops Patrolling Poppy Fields In Afghanistan," 18 October 2012.

    It's puzzling that Charlie would go off on a tear against a minor player like Bitcoin (which I don't like either, but see as inevitable, since strong ecnryption necessarily leads to cryptocurrencies) rather than these other much larger issues. And especially inasmuch as Charlie's essential criticisms boil down to the bad consequences of strong crypto -- that's just daft. Strong crypto is not going away, so why go on a tear against it? Strong crypto cannot be uninvented. It's here to stay. This means that we must do what we can to mitigate the dark underbelly of strong crypto, and that starts (it seems to me) with holding accountable lawless nation states like America and its Al Capone military and black ops and national 'security' (so-called) agencies.

    486:

    I have been around school teachers fairly recently, helping out. My experience was in one single school, over several classes and over several months (so you can judge how representative my sample has to be). The place was a European social-democracy.

    Students were split into a stratified hierarchy of classes -- the "more deserving" getting a strong common syllabus completed with options like Latin, Economics, Science, etc. The intermediate had a watered-down version, with fewer options which were more oriented towards manual labour -- wood or metal working. A third range had limited and watered-down theoretical courses and even more get-slave-fast courses. Which entails a number of remarks:

    1) a student bad at everything would be sent to manual labour classes, mixed with students good at it. The view was apparently that you cannot mix good and bad students in a Latin class for fear of hindering the learning of an almost completely useless language, but you can pair the village idiot with a potential future Masamune.

    2) students are directed in these classes at a very early age. Basically, at that point, you are discriminating those who get strong support of their parents from those who do not. The two-word term for that is "social reproduction" -- workers' kids get to be workers, doctors' kids get to be doctors.

    3) the class hierarchy stems out of a balance between being inclusive and favouring the good students. Keeping everybody together would probably have its drawbacks. Things being what they are, students of the lower classes develop complexes of inferiority, while the upper class develops an incredible smugness. Potential employers, who provide internships for the lower classes, had started refusing students from the lowest class altogether -- imagine the effect on a 14-year-old kid.

    4) Some of the upper-class students are in fact idiots. But being oriented in the upper classes is seen as a path towards social well-being amongst parents, so unless the student actively pisses everybody off and sabotages their own grades, they do not get sent to other classes.

    That was for the conditioning for social obedience/dominance. Now on to the intrinsic sin of mass education...

    Mass education (one teacher for several tens of students) entails the oppression of the many by the one. As a teacher, you teachings are wide and superficial -- you only get to scratch the surface of what you know in a field, but you will also have to teach in fields for which you are not especially competent, or even for which you have only general culture knowledge. This is a sure road to mental illness, as the feeling of all-knowledge mixes with the frustrations of discipline enforcement and of getting older in front of an ever-renewing youth.

    The discipline, in particular, is rooted in the physical coercion of a vulnerable category of people to implement an incredibly totalitarian control over the individual -- where else do people have to ask in public for toilet privileges? This system stems entirely from a randomly assigned characteristic of individuals: those born earlier get wide-ranging powers over the others and achieve submission, like in the Stanford experiment.

    In short: education is an aim in itself, and mass education is necessary to provide education to all -- one-on-one apprenticeship is not possible. What I find amazing is that the military has such things as conscious objectors and pacifist movements, while the totalitarian education system has at best a few parents whining in the narrow interest of their own brats. Everybody understands that it is in the nature of the Army of killing people and that it makes it at beast a necessary evil; why don't more people understand that humiliation and psychological trauma are not pathological side-effects of the education system, but are consubstantial with mass education?

    487:

    Governance is the issue. Not technologies like strong crypto.

    Interesting points. I half-agree ... but also half-disagree.

    Firstly, yes, we have corrupt, bad, governance. (I think over the past 50 years we've discovered a failure mode inherent in representative democracy, and it's not the simple Heinleinian nostrum that "once the voters discover they can vote for bread and circuses it's all over" -- if that was the case, social security nets globally would be getting stronger, not weaker. What we've actually discovered is that sufficiently subtle and pervasive communications media make it possible for folks with power and/or money to manipulate the electoral system at multiple levels to deliver desired outcomes, namely ever-increasing concentration of more power and money.) But the opposite of bad governance is not no governance. (No -- or minimal -- governance is the libertarian goal; I disagree with libertarianism, as should be obvious.) The opposite of bad governance is good governance. What constitutes good governance is, of course, open to debate.

    Second disagreement: I tend to agree with Karl Schroeder that technologies are not neutral. They come with politics attached.

    If you want mass automobile ownership, you're buying into the road construction business, General Motors, the oil industry (or its successor, probably the lithium battery industry on present showing), anti-jaywalking laws and marginalization of other modes of transport, suburban sprawl, and a huge raft of other interest groups and lobbies who are financial beneficiaries of the automobile, while beating down on rivals.

    If you want railroads, you're buying into steel, coal (and later centralized electrical generation systems), eminent domain for confiscation of land to build rights-of-way along, long term monopolies on permanent ways to allow investment costs to be recouped, ramping property prices in central business districts close to major hub stations, and so on.

    If you want internetworking ... what are the political stakeholdings you're exhibiting partiality to, and what are the alternatives you're suppressing?

    488:

    Metachromatic in 485: Because deflation or inflation in any currency only becomes problematic insofar as it can be exchanged for another currency, and insofar as the size of the market for the currency approaches the size of the market for any other currency. The scare article to which Charlie links never provides us with any evidence, nor any economic justification, to explain why when Bitcoins approach 1 million dollars per coin this will destabilize other currencies.

    You're missing the point.

    Bitcoin (in particular, and not cybercash in general or as a concept, anonymous or not and crypto / hash / whatever or not) being deflationary makes it not a currency. It's being used as such with slight good effect, but if it remains deflationary its value as an exchange medium (currency) drops to approximately zero, for widely explained reasons. Deflationary currency is hoarded rather than spent.

    If it's a digital crypto hash equivalent of gold or tulips or pork bellies, fine. If you intend for it to be a currency, it can't be inherently deflationary, or you're screwing the pooch. That is not related to its relative size compared to dollar/euro/pound/rmb/yen/swiss franc/etc. The issues with it not being a currency affect its use as a currency even if it's not substantial in total money supply compared to any or all the real-world currencies.

    Gold is often convertible for goods and services. So are tulips and pork bellies. But they're not money (currency).

    This may sound or feel overly argumentative, given that it's convertible. And regards to Bitcoin and the current day, there's no real practical effect of this. What this demonstrates, however, is Charlie's deeper (and perhaps not as clearly articulated) argument - that Bitcoin's backers don't understand economics well enough to design a real, viable e-currency system, and Bitcoin's fanboys don't understand econoics well enough to tell the difference. We lack a credible, long term e-currency answer to the questions posed here. Until we do, the crypto-fanboy "Yay! Bitcoin!" is self-destructive, even though that may not be evident or significant yet in any real sense.

    But the emperor has no clothes. Regardless of abuses of anonymity and the like, we need people who understand economics and currencies and the like actually trying to spec out a viable cybercurrency.

    489:

    Further on this, currency can be (historically has been) made of or backed by precious metals and/or gems. Today, it basically represents an agreement by ~7E9 people that this piece of paper has the same intrinsic value as, say, a loaf of bread, or 2 of those bits of paper with a different nation's currency symbols on them. Anywhere except Zimbabwe, this agreement held yesterday, holds today, and will hold tomorrow.

    What would make Bitcoin at least somewhat credible would be if it was more or less stable at 1 Bitcoin = N $currency.

    490:

    What's this? DEA baiting?

    491:

    I rather suspect that nothing, except for ultimate crash and burn, is certain about Bitcoin. As I have said before, the early history of the currency indicates that right at the start some criminals who didn't quite understand how it worked were involved. What occurred were some huge transactions in Bitcoins, the recipients of which then seem to have engaged in typical transaction fuzzing (rapidly moving small amounts of money about here, there and yon then back to the original account) which works with normal currencies, but not with Bitcoin.

    In other words, it started out dirty, and hasn't gotten any better since. It is also inherently deflationary, as there is a set limit on Bitcoin numbers and no means to recover any which have been lost (see also numpty landfilling a hard drive containing a Bitcoin wallet). It is being used for criminality because it is convenient, and for no other reason.

    All of this makes Bitcoin a dubious investment, but it does not invalidate a digital currency similar to Bitcoin which lacks the inherent bad design. I honestly do not think that the inventor of Bitcoin thought it anything more than an experiment, to see what would happen to it; I reckon that he's as astounded as anyone by the Bitcoin bubble.

    492:

    @439:

    the USA's original sin -- slavery.

    If slavery is the USA's "original sin", it is shared by most of the English-speaking world.

    Before 1776, we were Britons, under the same crown and law as anyone in England. British law and custom allowed slavery, and the colonial empire of the day was based on that, not just British America.

    Industrialization let the home islands dispense with slavery early, but that's a shaky moral high ground to stand on.

    493:

    Before 1776, we were Britons, under the same crown and law as anyone in England. British law and custom allowed slavery,

    Not actually true: the Mansfield decision in the Somersett Case of 1772 effectively ruled that chattel slavery was unsupported by English law and all slaves in England were thereby emancipated. Abolitionism was already gathering ground in England at that time, and by 1807 the Admiralty moved to interdict the slave trade: that's partly why the price of slaves entered an inflationary spiral in the deep south in the 19th century.

    I'll grant you the moral high ground was shaky, but England moved towards abolitionism before the industrial revolution was really under way.

    494: 492 and #493 - It also ignores the point that Britons were the market for slaves prior to 1776; it was other Africans enslaving their fellows and treating them as a commodity by selling them for use as forced labour.

    Also, I've been unable to find any mention of slavery trials under Scots Law, only under English.

    495:

    Charlie,

    close to 500 comments, I suggest that you write three novels to summarize the whole thing:

    1) something like "Atlas Shrugged", but the other way round (thesis) 2) something like Spinrad's "The Iron Dream", but regarding the libertarians (antithesis) and 3) something you intended to write as the third volume of this triology the NSA wrecked (synthesis)

    Hegel will be proud of you and I guess it is after the third volume that we will finally know about your position on governance, technologies and all the things in between.

    Because you have confused 95 percent of your readers.

    496:

    Now that just may be "stunt writing"! Having said which, I'd buy it for £30.

    497:

    496: Do you think he still accepts GBP ? I say 50 €.

    498:

    Nah, too busy right now creeping up on the 50% milestone in the new Merchant Princes trilogy. (Which is shaping up to be a meta-commentary on surveillance states and government ...)

    499:

    "(Which is shaping up to be a meta-commentary on surveillance states and government ...)"

    now this is good news !

    500:

    News to make my day brighter!! :-D

    Mind you, I'd said that consistently since the original version of Trade of Queens.

    501:

    Well, consider: the new Merchant Princes is set circa 2020, in the aftermath of the events of "The Trade of Queens".

    Now. How much more paranoid do you think the US government is going to be in that time line than in ours ...?

    (Obligatory reading: anything and everything about the East German Stasi, anything and everything from the Snowden leaks. Mix, spin, extrude!)

    502:

    Oops, so much missed - skipping down-&-up:

    Cath @ 486 I've been a teacher - & I favour selection (preferably within a big school) but the experiance you describe is horrible - where was it?

    Slavery in Scotland & elsewhere Scots' law being different from English There were certainly slaves (usually "white") until as late as 1799 - working in coal mines. Many Scots' were sold into indentured servitude/slavery after the battle of Worcester .... It is also possible that one of the prime monetary considerations of the "freedom-loving" people who delared independance in 1776 was the freedom to own slaves, as, following the Mansfield decision, they could see which way the wind was blowing.

    Oh, chemical/industrial safety, yes .. I also worked in a commercial research lab for 18 years ... every 2-3 months for some years, I had to handle moderately concentrated HF. Precautions were taken ..... Some people were not so careful - I remember the chemists being careless with Bromine in the corridors on one occasion, then there was the time we got a new (by the then standards) whizzy radition-detector which went dollally, whilst its' holder was walking past some offices. On investigation, it turned out that inside said office, there was an old pestle, which had been used (during WWII) for grinding up the materials for luminious paint (which would have included Radium, in those days). Oh & the time I found about 600g of Picric Acid, fortunately, it was damp ..... Yes, being (one of the) Safety Representatives (& a shop steward) could be interesting.

    Charlie @ 501 Yes, old joke, but are you paranoid ENOUGH?

    503:

    I'd sort of got most of that; my main thinking was that there was more life in the story lines unless no recce flight ever went USA - Grunmarkt - New Britain.

    504:

    Slavery & Scotland - I wasn't claiming that slavery never existed in Scotland: All I was saying was that the cited case law was all English law, and Scots law is different (as any lawyer who've ever tried to deal with case law the other side of the border will confirm).

    I've had my own cases of "things going wrong in the lab" despite never having worked in one after college:- 1) Making aqua regia, and having my fingertips died acid yellow for several months thanks to an earlier student's lack of care. 2) Visiting an old chemistry master, sniffing the air in the corridor, and advising him to check on what his 6th form (USian High School Seniors) were up to. Then the smell of Toluene reached him and he agreed. They were titrating from a Toluene solution, using a Bunsen and not using a fume cupboard.

    505:

    Ah sounds rather like the German model (and the old UK style grammar / secondary modern) which until recently if you got put on the vocational track made actually going to university rather difficult.

    As some one on HN commented funny how its all the brown Germans who tended to end up in the vocational schools.

    Ironically if my family had stayed in Birmingham my mum commented (after a stiff G&T) that she would have tried to pull strings (grandfather was a headmaster) to get me into Edward VII :-)

    For non uk peeps that is (Tolkiens alma mater) and one of the top one or two schools in the UK the other being the oratory where Tony B went.

    506:

    I've been a teacher - & I favour selection (preferably within a big school)

    I've been a pupil and favour selection within big schools too.

    My secondary school had been one of the earliest to go Comprehensive and peaked at 1800 pupils while I was there. First year was almost entirely mixed ability classes as the differences between primary schools got ironed out. Second year started to pair classes for some subjects, third year paired for more subjects and grouped in fours for some. The size of the school meant that all four classes of a group could be taught the same subject at the same time so you might be in the "top" class for one subject but a lower class for a different subject in the next timetable period. I was good at Maths and Sciences, adequate at English and History, but got bounced all the way down for French. Conversely a couple of friends didn't do well in numerate subjects but had a real flair for History.

    507:

    Charlie,

    Paranoid? The USA? Given what happened, paranoia may require new parameters.

    I doubt that any other government in the world views the events in question with any equanimity.

    "It t happened to them, it can happen to us."

    508:

    I remmeber my mother saying she'd never stopped using phonics, when all that brewed up in the late 90's or so. She was teaching from circa 1970 onwards to P1-3, mostly in Edinburgh and nearby areas.

    509:

    I don't think we differ that much. In my opinion, the best way to teach anything is "whatever way works." In a one-on-one setting, there's rich feedback from the student about whether he or she is learning, and the teacher can adapt until the student learns. This assumes that the teacher is capable of adapting and the student is capable of learning a particular subject, but it's the ideal. Playing with peers is also useful, because (as the medical students know) you don't know it until you've taught it, and students of varying ages and abilities are less competitive and less bullying than groups of students who are the same age and achievement level.

    When you get many students and one teacher, the amount of feedback per student necessarily decreases, and that's where standardized methods that work for most students creep in. This always excludes some students for whom a particular method does not work, and hence the system as a whole is suboptimal.

    My point is not saying that there's one teaching method that's better than another. There's no one perfect system. The problem is lack of feedback and adaptive teaching methods when you've got one teacher and many students.

    To pick my own example, I had to teach myself to read, after my teacher (who prided herself on being able to teach literacy) gave up on me. Once other students stopped hogging the materials I needed, I worked through them at my own pace and taught myself.

    510:

    Actually, most Germans would argue going to a "Gesamtschule" (comprehensive school) is not the worst that could happen to you, that one goes to the "Hauptschule", and some statistics seem to agree:

    http://en.wikipedia.org/wiki/Comprehensive_school#Unfairness

    Personally, I somewhat got the idea children went there for a variety of reasons, part of it was socioeconomical, which might explain the high proportion of migrants, we had quite a few people with Turkish ancestry at our "Gymnasium", but the parents of most of those were physicians and like. Part of it was personal convictions, the German Social Democrats liked comprehensives, so it was something of a party line for some to send their children there. Part, err, one way of dealing with misfits (yours truly included) was to send them to another school, which could mean boarding school, but wuite often comprehensive.

    Actually, most of the goths and metalheads I recall from old went to comprehensive, though that might be a local artifact.

    Problem is, as hinted at it depends quite on the socioeconomic status of your parents which education you get and which school you go to in Germany, yours truly had one of these nice "not fit for 'Gymnasium'" papers, parents somewhat well off, I went to "Gymnasium" nonetheless. Guess I wouldn't have been that lucky if my father was working in industry.

    BTW, even the teacher who gave this remark said lack of intelligence was no issue, but it was my somewhat, err, erratic social behaviour. Come to think about it, there is an impulse to punch in the face of the next "conservative" who keeps waxing about autism and ADHD being artifacts of our modern way of education where everybody has to learn everything and which disregards personal differences, condescendingplatitudes, a place for everybody, and everybody at his place, rabulistics, everything was better yesterday, pseudointellectualism.

    Problem is, IMHO the educational schools boil down to:

    "Conservatives": Keep women at home, have some stratification in school, if our children can't be well off, at least they are better off than the other ones.

    "Liberals"(note to Americans: our "liberals" are a mixed bunch, some leftist social liberals, somewhat marginalized, some fiscal conservatives, which seem to be the majority, even some libertarians): Less stress on traditional gender roles, more on stratification.

    Social Democrats: Intervene in education quite early, to create faithful party members who are competent wage slav^w, err, productive industrial workers devoid of conflicting obligations. Free women from homework and education, then they can work, because work defines your worth. BTW, please try not to look at the industrialists supporting us because they want more workers for lower wages. What the hell is paternalism?

    Greens: Somewhat similar to Social Democrats, but substitute "self-actualization" for "work". Which means yoga courses for our clientel. Of course, for those unenlightened, materialistic women who have no high-paying jobs (actually, the Greens have the highest earning voters, similar to our "liberals"), this again means work.

    Since I mentioned the term "work" quite often, we had one party that was in favor of a basic income, the Pirate party. Mentioning those guys usually gets somewhat. err, emotional reactions...

    511:

    Err, I forgot the Left Party, though I'd have to look them up.

    512:

    Presumably by coincidence, a US comic strip did a Bitcoin joke today: "We don't need money! We'll use Bitcoin!"

    513:

    Forget about bitcoin! Buy gold Canadian Maple Leaf coins! There are different series for everyone. For the purity fetishist there's a series with 99.999 percent purity.

    For those who wish to actually handle the coins or (bathe in them) there are slightly less pure series with a bit of Titanium in them. That way you can fondle them without leaving marks.

    Just try doing THAT with your precious bitcoins!

    Yes, you too can jump in a money bin full of coins like Uncle Scrooge (Roope Ankka in Finland, oncle Picsou in France, Paperon de' Paperoni in Italy, etc.) and yet come out golden, if you buy Canada's finest, the gold Maple Leaf.

    514:

    My point appears to be going over your head, as well.

    The banks were operating sensibly in the political and regulatory environment they were under. It's just that that environment incentive seeminly nonsensical decisions. The managers of the large banks knew they were "too big to fail" and that both the outgoing and incoming administrations were bought and paid for.

    From there perspective, there was no downside to their risky and sometimes illegal business decisions. If they paid off--profit! bonuses! good times! If they did not, well, the taxpayer would just take it up the ass, and--(slightly lower) profit! (slightly lower) bonuses! good times (eventually)!

    And to top it off, many of those banks used federal bailout money to snap up weaker competitors, ensuring that should this happen again, they would be even bigger, and even more dangerous to let fail.

    Bernie Madoff was a piker compared to these guys. They took the taxpayers for more than a trillion dollars and nobody went to jail, and only token fines were ever paid.

    I will freely admit there are problems with libertarian ideas. (I don't expect any political theory to be THE ANSWER.) But complaining that regulatory capture and massive central government bailouts of the banking industry are somehow a failure of libertarian ideas is nonsensical.

    Corporatism != Libertarianism

    What you are claiming makes about as much sense as saying: "We nationalized the means of production and distribution and the economy collapsed. Therefore, we have proved libertarian economic ideas can not work."

    515:

    something like Spinrad's "The Iron Dream", but regarding the libertarians (antithesis)

    I propose that such a work must include scenes of jack-booted thugs from the Department of Freedom kicking down doors in the middle of the night to haul away "enemies of liberty".

    516:

    True but...

    Consider this. Why are the Anglos (English, Irish, Scots) the most racists of ethnic groups in the USA? The Scotch-Irish (basically protestant Irish immigrants) were among the most vehemently pro-slavery ethnic group in America and post-civil war, the biggest supporters of Jim Crow. Even to this day, the culture area known as Greater Appalachia (aka the hillbilly belt), which is overwhelmingly Scotch-Irish, is the only area where large number of people who voted for Kerry in 2004 did not vote for Obama in 2008.

    If you look at ethic maps of the USA, it is clear that the North is dominated by Germans and the South by Brits. Basically, in the USA circa civil war African slaves were liberated by Germans (and later in the war, large numbers of freed African slaves) fighting English and Scots and Irish.

    Serious question, any idea why? Speaking solely from ethnic perspective (itself a racist point of view) why in the USA are the Germans the good guys and the Brits the bad guys?

    FYI, hillbilly belt - West Virginia, Western North Carolina, Kentucky, Tennessee, Arkansas, Southern Missouri, Oklahoma, North Texas.

    517:

    I'd prefer not to go into too much details, just let us say that mjwalshe77 at 505 is not far off.

    What I described was my take on the thing. There are way for one of the vocational-oriented children to sweat his ass into the higher classes -- at least theoretically, I have never been introduced to a student who had. And there are rather good sides to this stratified system, and there would be perverse effects in a common trunk.

    But what I find frightening is the naked statement that one of these orientations is better than the other. I am not naive and I realise that society discriminates against manual labour, but you'd maybe expect children to be naive enough to ignore that at least in their personal interactions; in fact, the system is quite nakedly stratified (one layer above the other), and what teachers do not make plain enough, parents will explain in no uncertain terms. This results in 12 to 15-year old children walking like they own the school and looking down at their fellows from other classes, or others being locked in submissiveness and inferiority complexes at a very early age and right when puberty makes them most vulnerable. You'd believe yourself in Brave New World:

    Alpha children wear grey. They work much harder than we do, because they're so frightfully clever. I'm awfully glad I'm a Beta, because I don't work so hard. And then we are much better than the Gammas and Deltas. Gammas are stupid. They all wear green, and Delta children wear khaki. Oh no, I don't want to play with Delta children. And Epsilons are still worse. They're too stupid to be able to read or write. Besides they wear black, which is such a beastly color. I'm so glad I'm a Beta. (*)

    You find the same sort of relationship between the students (as a group or individually) on one side, and the teachers on the other, but with the added perversity of the explicit power of coercion. The result is that student will naturally grow into a sort of resistance movement -- watching your every steps, the slightest quirk of personality, originality or self-expression, and unconsciously making damaging comments, or even consciously using it as weapons against you. Which is only natural given the totalitarian environment they live in, but is a sure road to paranoia for the teacher. This creates an environment of oppressive conformity and constant surveillance.

    And the fellow teachers... Imagine an old fart who has done well at school because he was always neat, obedient and hard-working, but is a cretin incapable of actually understanding the syllabus, and too intellectually lazy to build himself an actual culture. Make him a teacher, growing old over the years in the frustrations of enforcing discipline and the inferiority complexes of teaching one or two students clearly more intelligent than himself every year. Stew and give promotions for seniority. Arrive at that school as an over-qualified aid, fall under his authority and enjoy. For added fun, make him also a brute, a racist or something of the sort. You only need one like that, but chances are they will come in flocks.

    If I had to describe a school in a few words, it would be the same I'd use for a barrack. Only the Army is more open to what lies ahead for you, nobody compels you into joining, and there is no taboo like "it is so enriching and important for your future so shut up".

    (*) Note that I distinctly remember being a student in a similar environment, where I was beaten daily by my proletarian fellows (probably because I was unconsciously radiating signs of privilege and was a symbol of what they understood to be oppression), and looking forward with glee at the exams that would send them into vocational classes where I would not have to suffer them. Now I am ashamed of having ever harboured such feelings -- you just don't theorise marxist theses quite as nicely as a 12-year-old in the middle of a circle of people beating you.

    518:

    cath YICK! I suppose I'm fortunate ... I went to a true Grammar School, but it was always appreciated, even there, that skilled mechanical-trades (for want of a better description) were valuable, & it had (for the period) very good workshops. I learnt some useful skills there - which re-surfaced when I went to an industrial lab, & we had (often) to fabricate our own equipment! So there was some appreciation of skills that were not "purely intellectual" If it had a failing, it was a prevelant one of the period - the vile team games & school spurts lack-of-mentality (shudder - even after 54 years, it gives me the creeps)

    519:

    Well, if you actually had a valid point, then it might be valid to complain that I'd missed it.

    Since, under the libertarian (and sufficiently wrong-headed that not even USian conservatives all thought it was a good idea, see references to Glass-Steagal again) regulatory regime, treating debt as an investment vehicle was not illegal (just a bad idea; see reference to creating a bubble market) most of your argument is wrong.

    What you are claiming makes about as much sense as saying: "We nationalized the means of production and distribution and the economy collapsed. Therefore, we have proved libertarian economic ideas can not work."

    Well, that's just blatant nonsense isn't it? Either you realised this and were trying to trip me up by claiming that Marxist-socialism is Libertarianism, or you don't know the difference.

    In case it was an attempted trip, what I was saying was "they were trusted to self-regulate responsibly and proved unworthy of that trust, on at least 2 separate occasions. That is why we can not trust them."

    520:

    The actual final cost of the bank bailout will be at worst small and at best negative (we may make an overall profit). The interest on the loans, the insurance charges (a tax now levied on the banks to account for the value of the, now explicit, state guarantees) and sale of the shares acquired should be about the same as the cash loaned. Several of the banks pay insurance charges without having used the loan facility.

    The owners of the banks that actually needed rescuing lost some or all of their holding when the banks were partly or wholly nationalised. Existing shareholders retained 0% of Northern Rock and Bradford & Bingley, 16% of RBS and 57% of Lloyds Banking Group (Lloyds TSB had been sound until it took over HBOS which was in a much worse position than anyone realised). In other words there was a substantial downside to needing to0 use the financial support.

    The freezing of the credit market and the following recession is what cost the money, not the bailout. Not bailing out the banks would have exacerbated the damage.

    521:

    Thanks for that Brett.

    522:

    I'm not going to even suggest that this is a complete answer, but these groups were probably amongst the most socially conservative even before they immigrated, and then got tied up in the whole "manifest destiny" thing?

    523:

    ... whereas the manifest destiny Germans stayed home?

    Godwin in two.

    524:

    Very probably yes.

    525:

    Err, please be aware it is quite possible for racism revealing itself in arguing some other group racist. And German extreme rightists going about US slaves are not that uncommon.

    On another note, fighting against Arab slave trade was somewhat a topic in German Empire colonial propaganda. Though of course, we had to get the Blacks used to labor, err, where is my sarcasm tag.

    Not that I think the German Empire much better or worse than Victorian England regarding human rights. Though then, I guess there is a certain tendency to think oneself much better than others and later on behaving much worse, with the resulting cognitive dissonance even paradoxically reinforcing said behaviour. Antisemitism in Poland is a real and sad phenomenon, but German coverage seems somewhat overtly, err, enthusiastic compared to similar fringe groups in other Eastern European countries. Though that might be somewhat my POV, just had to explain to my brother why I thought the armia krajowa sticker i used to "liberate" the rucksack bought from the wrong selller was ok.

    whatever, i think this thing with the splinter and the bar is hardly a german speciality.

    526:

    Victorian England and human rights can perhaps best be studied through the lens of persons like Evelyn Baring, First Earl of Cromer -- as colonial governor of Egypt he banned the wearing of the veil, among other things -- he was a harsh critic of Muslim misogyny -- and, on coming home to the UK, he became a stalwart advocate and leader of the National League for Opposing Woman Suffrage. Which is to say: uncivilized beastly colonial peoples didn't have the the right to oppress womenfolk, but womenfolk certainly weren't equal and giving them civil rights could only end in disaster.

    527:

    German colonial policy was notably brutal compared to other colonial rule, in the case of the treatment of the Herero in Namibia it amounted to genocide.

    It isn't true that they were all the same. As a general rule Britain and France had the most benign rule of the colonial powers, for example both tended to deeply involve the local populace in government unlike, say, the Belgians (the bloody chaos in the DRC in part stems from there being virtually no university educated Congolese at independence). Britain had a tendency to use indirect rule leaving the local elites in place while France had a concept of integrating the colonies into France (French Guiana for example) and as such needed to educate the local populace into becoming French.

    528:

    sounds quite familiar, both with past and present. names omitted to protect the guilty.

    the actual comparison in this case though was to show the German Empire of the friedrichs and wilhelms was not the empire of evil we have in a certain later incarnation. it was no absolute monarchy either, it was a constitutional one. that is bad enough already, but as we all know, it can always grow worse. actually, it was good enough that it seems like one of my ancestors moved to the, err, german occupied part of poland from the russian occupied one. for the bad sides, err, where to start...

    529:

    I don't think the Germans were allowed to give colonial empire a proper go. German colonies were nonexistent before 1870 and nonexistent after 1918. And what these colonies totted up to seems to have been pretty much buggerall.

    The British Empire was on a far bigger scale both in time and space. Ruling for centuries over vast and populous territories it was bound to oppress, exploit and kill far more people than the Germans had any chance to.

    Still, according to Wikipedia: 'The Herero and Namaqua Genocide is considered to have been the first genocide of the 20th century. It took place between 1904 and 1907 in German South-West Africa (modern day Namibia), during the Herero Wars.'

    530:

    amen to the genocide on the herero, btw trotha even went to far for at least part of german sentiment:

    http://en.wikipedia.org/wiki/Lothar_von_Trotha

    as for the british and frensh being better, funny thing is, quite a few germans see it the other way around. you notice something?

    at least, if we look at the number of dead hereros and namas, about 34.000 to 100.000, that is not that far from the number of dead kikuyus in the mau mau uprising, where numbers go from 20.000 to 100.000. and of course, we can't talk about numbers if there aren't any, like with india 1857.

    as with france, there were about 6000 deaths alone with the setif massacre in algier:

    http://en.wikipedia.org/wiki/Sétif_massacre

    and please note that "making them french" is quite likely to fulfill the modern definition of genocide, e.g.

    "any of the following acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group, as such: killing members of the group; causing serious bodily or mental harm to members of the group; deliberately inflicting on the group conditions of life, calculated to bring about its physical destruction in whole or in part; imposing measures intended to prevent births within the group; [and] forcibly transferring children of the group to another group."

    though of course all of this pales in comparison to belgian congo.

    531:
    and please note that "making them french" is quite likely to fulfill the modern definition of genocide, e.g.

    Hmm, it is more complicated than that. The official position was that the "Muslim" population (indigenous Algerians) could have their own customs and local institutions, and a special legal regimen; but were otherwise entitled to the same status of a metropolitan French citizen upon request. The population was to be slowly assimilated through education, public service and modern industrial practices. The famous slogan comes to mind: "Le travail, c'est la France; ici nous sommes français, nous travaillons" -- "Labour is France; here we are French, we work".

    Except, of course, that the people working like this were effectively a slave cast, and that europeanised Algerians were ostracised by all but the most enlightened members of the French colonial establishment -- before the war; once it started, nobody could trust anyone.

    Nonetheless, I recently talked with an elderly French who had served his National service in Algeria, near Egypt; he said it was striking that in Egyptian villages the British rule was almost invisible, while all Algerian villages had received modern schools and post offices.

    532:

    err, don't get me wrong, i think the german empire was a constitutional monarchy having an unnatural union with democracy, with voting rights somewhat curtailed to men with property. it also had quite some strains of oligarchy. minorities were treated with an air of paternalism, sometimes benevolant protection, sometimes exclusion and forced assimilation. and it could go on a genocidal rampage when abroad. it was somewhat fair for its day though, which is why quite some people immigrated for political or economic reasons. funny thing is, quite some descendants of those wax about economic refugees today.

    err, sorry again, that was the British Empire i was talking about. care to explain the differences to the german one?

    533:

    well, sorry for the in accuracies. actually, i was also somewhat extrapolating from what i know about french language policy:

    http://en.wikipedia.org/wiki/Language_policy_in_France

    534:

    You're overlooking the scale factor. You run a vast empire for a couple of centuries obviously you're going to knock off 50000 or so now and again. Including 50000+ white South Africans, by the by. When you have control of some pissant place for five minutes and still manage to slaughter everybody, that doesn't look good.

    535:

    hm, that could make for an interesting calculation; divide number of deads in revolts, famines and like by number of people ruled over. tricky, but seems worthwhile.

    btw, you might overestimate the lifetime of the second britiah empire colonies somewhat, e.g. uganda became a colony at the same time as deutsch-südwestafrika. and colial policy there included some examples of how not to do protecting the environment...

    http://en.wikipedia.org/wiki/Ik_people

    536:

    75: Well, it depends which (whose) Gini coefficient you mean. In the developed world, inequality is increasing.

    Globally? The picture looks quite different; the developed world middle class are becoming relatively poorer, whilst a vast swathe of the global poor have become substantially relatively richer.

    http://heymancenter.org/files/events/milanovic.pdf

    Global Gini is trending towards materially greater equality.

    537:

    With respect to Libertarianism and almost all other "isms", I paraphrase Von Moltke's warning about battle plans. To wit, no ideology survives first contact with human beings.

    538:

    I've tried to explain my point in several different posts as best I can. One more time, then you can declare victory and leave, if you so desire.

    My understanding is that you are asserting the the financial crisis of 2008-2009 was the result of libertarian economic ideas being put into practice.

    I strongly disagree with that thesis. The economic policies that led to the crisis were not libertarian. They were no more libertarian than "nationalization of the means of production and distribution". In other words, that economic policy was far removed from libertarianism (albeit on a different axis of the political spectrum) as Marxist-socialism is. (I was using that as a metaphor in my previous post--it was not an attempted rhetorical trap for you to fall into.)

    De-regulation without responsibility is not a libertarian policy. Such a regime is corporatism, where risk is socialized and reward is privatized. Note the word "socialized" there. When that word turns up, you can usually safely bet you are not dealing with a libertarian policy.

    You say that "they [the large banks, I presume] were trusted to self-regulate responsibly and proved unworthy of that trust, on at least 2 separate occasions. That is why we can not trust them". But deregulation by itself is not a magic fix. (There are no magic fixes in any political system and anyone who tells says so is either naive or lying.)

    For deregulation to have any beneficial economic effects, deregulated industries can't be allowed to socialize risk. If they managers or owners of deregulated industries know they will be bailed out, then they will act in ways that would not normally be economically rational (such as speculating in sub-prime mortgage securities).

    A better way--and in the long term, less corrosive--to approach such a financial crisis would be for government to act as an insurer and bail out bank account holders, and let the large banks fail.

    Alternatively, you could treat the problem with a "too big to fail = too big to live" law where any corporation that goes to the government for a bailout is automatically treated as a quasi-monopoly. As the price of the bailout, corporations would have to be broken up into smaller, separate businesses with a requirement that the executive management be fired.

    A "too big to fail = too big to live" law would protect the comparatively innocent lower-level employees and stockholders as well as the account holders.

    What the current regulatory regime in the US ensures is that the banks will be banned from the bad behaviors that led to the last financial crisis, and develop brand new bad behaviors. These new bad behaviors will not have been regulated against, because--they didn't exist when the laws and rules were written. The new bad behaviors will spread like wildfire through the now-even more consolidated, more "to big to fail" banking industry (banking industry still run for the most part by the same people) until the new bubble blows up, creating the next crash.

    539:

    I'm speaking of the way the bank bailout was handled in the US; not the UK. Based on what you are reporting, it was handled better in the UK, with penalties on the investors (and presumably the management which is responsible to them). That is the sort of approach that will incentivize better behavior in the future.

    540:

    You are quite correct. While I am a libertarian, I recognize that no political theory is the the answer. I advocate for libertarian ideas because 1) I think many of them will make for a better society for all, and 2) they provide a needed counterbalance to the tendency of the state to accrete power unto itself.

    The real danger is the incestuously connected political-corporate-media class that becomes the permanent "party in power".

    541:

    I just had to say THANK YOU for your comment on libertarianism. Believe me, I would love to live in a world where it works. A perfect world. But since it isn't, it won't. I've just never seen sometime Wii made a critique that was so close to what I've been saying for as long as I can remember. Not to say I'm a genius, out have all the answers, cuz I sure as sh*t don't.

    My understanding of bitcoin is that everyone has to keep the log of all transactions, ad infinitum. Ergo, it's got a limited shelflife, I don't know about all the economic or moral implications- I'm a little torn on those issues- and as for power consumption, I'd need some reliable numbers. But you can't have a system where every user has to maintain an ever-increasing database, forever, that just can't be maintained. I'm all for alternate currencies on a limited scale, especially local systems, like the kind of work-barter-trade thing I can't think of the name for right now, in lieu of the end of the our current bankster monopoly that rules the world to the great detriment of humanity. But that's what I'm really hoping for, and until then, digital alt currencies will always be just a controversial half-measure, imo.

    542:

    You are quite correct. While I am a libertarian, I recognize that no political theory is the the answer. I advocate for libertarian ideas because 1) I think many of them will make for a better society for all, and 2) they provide a needed counterbalance to the tendency of the state to accrete power unto itself.

    The real danger is the incestuously connected political-corporate-media class that becomes the permanent "party in power".

    Yeah, that last sentence. I'm not a libertarian, and one reason is that I do a fair amount of activism where I actually get to watch local legislators work.

    Here's the thing: being a politician is work. I couldn't stand to be insulted to my face (primarily by libertarians, at least in the meetings I'm in), and thank them for their input. I'm not that tough. Nor am I so interested in fixing problems for people that I'd put up with that crap.

    Not that all politicians are good people. They're just people, and they run the spectrum from good to bad. However, the job of the politician is not something you can learn in a weekend course. Learning to do it well takes many years.

    This is especially true where I am in California. Here there are about 100 different languages spoken and some of the most complex environmental problems in the US (water, power, fires, earthquakes, and then the fluffy bunny stuff). Here, it takes years to figure out what will work and often decades to put it in practice.

    One of the stupidest things voters in California did was to enact term limits. The politicians stopped caring about learning how to do their current jobs properly and became entirely interested in making sure they had another job lined up after they termed out. The people who know what's going on now are the lobbyists, the senior bureaucrats, and some activists, and state government gets yanked around badly as uninformed politicians make bad decisions under the influence of these unelected experts, because the pols simply didn't have the time or inclination to learn how to do anything like a good job.

    While it may have felt good to the libertarians to throw the bums out, the quality of decision-making went straight into the toilet when term limits were enacted. Things went better when we had crooks like Willie Brown running things. Yes, he took favors and allegedly bribes, but he was pretty good about helping to keep the state working. In pure, brutal pragmatic terms, term limits were and are a failure in terms of improving governance. We're going to spend another decade or two getting rid of them so that our successors can form another group of "incestous" people who are willing to spend a decade or two fixing the next batch of big problems that comes up.

    543:

    For, by my count, the 3rd time, I am not just talking about the 2007/08 crisis. The Libertarian banking regulation -> bubble market -> financial crisis cycle has played out in full twice in the last century and in part at least twice more that I can think of. Please go and actually learn some financial history rather than broken recording at me.

    544:

    TARP, the US rescue scheme, was based wholly on loans rather than a mixture of loans and equity, the final cost situation is however pretty similar. The costs of not doing it are massive and the cost of doing it are low to negative. Rescuing the banking sector in an emergency is a no-brainer.

    Too big to fail is a red herring as the actual problem is interconnectedness and the consequent contagion the US experienced a devastating bank run in 1930 caused by the failure of Bank of United States the 14th largest and almost wholly confined to small banks. The run eventually destroyed about 40% of the banking sector.

    A large diversified bank is far less vulnerable to failure as they are more likely to have operations that were not severely affected. The way that banks operate means that a high degree of interconnectedness is inevitable and we have known since the 1820s that speedy central bank intervention is a quick effective and profitable method of preventing this.

    545:

    Clearly, we each feel that the other is missing the point, so there is no purpose in continuing. It has been an interesting debate for which I thank you.

    546:

    Comparing the french & german empires to the british is problematic for the simple reason that the british empire evolved around one very simple plan:

    Step 1: Make sure a fuck ton of trade was constantly moving to and through Britain. Step 2: ??? Step 3: PROFIT!

    Both France and Germany acquired empires for the prestige of having empires with no real POINT to having them, and thus sort of bought into all the hollow justifications for empire building that the british came up with and tried to make those their purpose.

    France then tried to bring the liberating freedom and stability of 19th century parisian governance to places that had no infrastructure and where people were deprived of any ability to affect the local governance, and french settlers were tried under different laws from natives, leading to precisely the sort of trouble that always causes. And all that happening in between the parisian government collapsing and revolving for whatever reason it was that week, leading in turn to confusion and inconsistency to any plans to "develop" the natives along whatever line of paternalist bullshit this week's governor had.

    Meanwhile Germany sort of wanted to have a british style privately developed, corporation owned colony type of deal, but fucked up the execution and most of the corporations went bankrupt. And when they had to make them all crown colonies and tried to seize lands from locals rather suddenly, thus leading to large scale rebellions that the loopy aristocrat governors put down via measures that tended to have mortality rates in the 50-70% band for the local populaces. Which obviously of course further fucked up the productivity of the colonies and made them even worse net losses for the german state to run, but the german state felt they HAD to run them to compete with the other great powers and THEIR colonies.

    547:

    I'll agree that and likewise. Thank you and good Morning (advisedly; I'm in the same time zone as the server).

    548:

    I'm not sure it's relevant, but there is a discussion going on over at "Big Think" about poverty, exploitation & Libertarianism. One of the commenters seems to be a real Libertaryloon Look Right here The debate seems, err vigorous.

    P.S. "Big Think is very US-biassed, but some blog-threads, especially the "Strange Maps" blog, are worth a read.

    549:

    As a general rule Britain and France had the most benign rule of the colonial powers, for example both tended to deeply involve the local populace in government

    Looks to me that the British just had a more refined and sustainable approach to brutality than the Germans with their direct and ugly way. After reading recent accounts of the Mau Mau rebellion and from the little I know about India and Algeria I'd definitely not call those rules "benign".

    550:

    A large diversified bank is far less vulnerable to failure as they are more likely to have operations that were not severely affected. The way that banks operate means that a high degree of interconnectedness is inevitable and we have known since the 1820s that speedy central bank intervention is a quick effective and profitable method of preventing this.

    No, I think recent experiences with derivatives show that diversification does not help against failure. The liabilities even in a minor section of a bank's business can still bring the whole bank down. Diversification just adds to the interconnectedness.

    I agree that state intervention is necessary in a crisis. But a bail-out should be treated as a special mode of bankruptcy: ownership of the bank goes directly to the state without compensation, state provides new management and keeps the bank in business with public money, any contracts of the bank can be voided at the new management's discretion (especially old manager contracts and bonuses), after stabilization the bank is re-privatized. Since owners and managers get the short draw in this scheme it should provide a good incentive for more responsible behavior in the future.

    551:

    Maybe and maybe not - Are we defining "minor section" in terms of number of employees, number of customers, turnover, profit&loss...? I'd submit that the critical factors in how a section affects the bank as a whole are turnover and/or profit&loss, and the sections where those numbers are highest tend to have relatively small numbers of customers and staff.

    552:

    CryptoCafe [REST OF COMMENT DELETED AS SPAM -- the moderators]

    553:

    Thanks, but mushroom stroganov to start, turkey and trimmings, and Christmas pudding sounds much more appitising than Spam, Spam, Spam, Spam, Spam, Spam, eggs, chips and Spam for lunch today!

    554:

    I left the topic of that comment intact, just so that anyone reading this knows that it's associated with spammers. The content, not so much ...

    555:

    ... And in other news, I just passed the 50,000 word mark in the middle volume of the new Merchant Princes trilogy. Which, as each book is supposed to be 100,000 words long (plus or minus 10%) means I'm officially past the halfway point in the entire project!

    The rest of the December 25th workday is therefore cancelled while I go and celebrate a real achievement.

    (Also: I began writing the first draft of this one on November 25th, so it's half a novel in one month. There's a bunch more work to do, but the deadline -- to hand in a whole trilogy by September 1st -- is looking achievable.)

    556: 554 and #555 - Cheers.

    Happy Christmas (or belated happy Solstice if you prefer) and a guid New Year to Feorag and you (and Fluff, cats, relatives...). "Season of good will" does not extend to spammers, whom I will mock regardless, probably using the Monty Python "Spam" sketch.

    And :-D and have a large virtual drink on me for now. If our timings mesh, how about a real one at Eastercon?

    557:

    Diversification does help. Of the four that had to be rescued the two worst affected were Northern Rock and Bradford & Bingley both former building societies and almost entirely focused on mortgages. HBOS, which was the source of Lloyds problems was the product of the merger of Bank of Scotland and the Halifax, the Halifax was another former building society so the whole business was much more focussed on mortgages than usual amoungst large banks. Only RBS was a really diversified bank. Incidentally investment banking wasn't the problem Northern Rock and Bradford & Bingley had no investment banking interests while HBOS had only a small investment arm, only RBS did much. The other large banks and Nationwide building society were able to survive without needing support. Standard Chartered (UK headquartered and listed business focussed almost entirely on Africa and south Asia) was virtually untouched, HSBC had enough profitable third world interests that it absorbed the losses. Barclays had got onto trouble and borrowed from the Dubai royal family at a somewhat higher interest rate in order to avoid the equity terms of the UK support offer. Santander and Nationwide were able to use the availability of support to reassure their counterparties so they didn't need to borrow directly. Lloyds TSB would have been fine without the merger with HBOS.

    Getting into trouble was generally a product of an excessive focus on Mortgages and a fairly reckless attitude to risk. Building Societies were more tightly regulated than banks as mortgage lenders, there is an association between loosening regulation and banking crises. I suspect what happens is that the building societies that had converted into banks didn't have adequate internal mechanisms for assessing risk when previously all the business they had been allowed to do was safe they were no longer forbidden from doing some business that was actually sound however as a consequence they were now able to some business they really shouldn't do. In the same market the banks that offered mortgages were better at avoiding bad deals.

    558:

    Benign as in a benign tumour or benign Malaria, not nearly as bad as a malignant tumour or malignant Malaria but still pretty unpleasant.

    559:

    I was thinking of this example. AFAIU the 2008/2009 crisis was caused by a massive re-labeling of bad credits into good credits but those didn't have as large a lever as some over derivatives.

    560:

    Actually, IIRC German colonies were more of a private enterprise than a gouvernment one; I'm quoting somewhat from memory here, and if this subthread shows anything, it's never to underestimate the reality excursions of national narratives, which also tend to color professional historians somewhat.

    But AFAIR, Bismarck was not that much into colonies, and he thought them a likely point of controversy with other powers; again AFAIR, his foreign policy somewhat boiled down to "be good friends with Austrians, British and Russians, try to isolate France", which makes sense if you remember the German unification of 1871 went with a war with France.

    OTOH, some groups though colonies were part of a proper empire (using empire as in "Holy Roman Empire", not "colonial empire"), and there were some associations, which overlapped with other fringe right groups. So quite a few of the German colonies started out as private ownings, IMHO similar to like Belgian Congo. And some of the details make for amusing reading. For very black humor values of "amusing":

    http://en.wikipedia.org/wiki/Carl_Peters

    "He used local girls as concubines and, when he discovered that his lover Jagodja had an affair with his man-servant Mabruk, he had both of them sentenced for theft and treason and hanged by a drumhead court-martial and their home villages destroyed. The incident, at first not reported by Peters, provoked resistance by the local Chaga people and again necessitated costly military action."

    I have no illusions about the nature of German colonial enterprised, I have no illusions about the other colonial powers either. Or about some of the regimes that followed, quite often with quite some intervention of the former overlords.

    Whatever, coming back to the double standards we employ on non caucasian skeletons in closets self-owned and foreign, the German gouvernment decided the killing of Hereros was no genocide, since the legal framework of judging genocides only exists since 1948 (I'm paraphrasing somewhat, the actual note is somewhat less inflammatory). Though I guess quite a few of the guys using this excuse will be angry about denying Armenians...

    561:

    Ah right; that does answer my question. That section was large in terms of the amount of Barings total business that it did, although it would seem small in terms of staff employed. I'd also submit that it supports my argument that banking is a field that requires careful regulation, since had the regulators (or even the management in this case) done their jobs properly, the collapse would have been avoided.

    562:

    FYI, hillbilly belt - West Virginia, Western North Carolina, Kentucky, Tennessee, Arkansas, Southern Missouri, Oklahoma, North Texas.

    This is like saying Charlie is a part of the London population group.

    Eastern KY and TN are a part of the Appalachian "hillbilly" group. Middle and western KY and TN are definitely not. And about as long a drive to the mountain ends of the states as Charlie has to get to London.

    Oklahoma???? N. Texas?????? Say what?

    563:

    whereas the manifest destiny Germans stayed home?

    Interesting. Many Germans immigrated to Texas. :)

    564:

    Remember to apply the correct metric: "to an American, a hundred years is a long time; to a Brit, a hundred miles is a long distance".

    By which rule of thumb, in the context of that "hillbilly belt" metaphor I come from Massachusetts, and I moved to Oregon.

    565:

    My point was that far eastern KY and TN are incredibly distinct cultures from the central and western areas of those states.

    I grew up in far western KY. I visited the eastern mountains at times in my 20s. Foreign lands.

    566:

    While it may have felt good to the libertarians to throw the bums out, the quality of decision-making went straight into the toilet when term limits were enacted.

    I never thought of this as a libertarian thing. (USA here). I've seen it come from various groups that fall into both the R and D camps who think of it as a way to remove big money from the equation.

    My opinion is it put big money more into the issue as you get staffs and elected officials who have no idea how to get things done or write good legislation. And by good I'm not referring to ideology. I mean workable.

    Around here we've gone from a 200K city to nearly 1 million in 25 years. The City council is starting to ask for things other than 1 secretary and 1 lawyer shared by 8 people. There is now acknowledgement by many a staff to just sort though the deluge of papers might help out. Except for the Tea Party and D's who think everything can be run as if it's a PTA meeting at the local elementary school.

    Heck we might not have wasted 10s of millions of $ on an aborted new 911/city admin building that will never be built.

    567:

    At least in Texas and the surrounding states, "North Texas" is just another term for the Dallas-Fort Worth metropolitan area--the fourth-largest in the United States. I live there (in an inner suburb of Dallas) and I can attest that "hillbilly" is wildly inaccurate.

    568:

    Term Limits was a Republican thing mostly until the Republicans gained control of the House and decided that maybe it wasn't such a good idea after all.

    Speaking of congressional term limits, to the best of my knowledge some libertarians think its a good idea, while some (like myself) don't think it is worth tinkering with the Constitution to change. And that's what it would take at a federal level. The US Supreme court struck down state mandated congressional term limits in U.S. Term Limits, Inc. v. Thornton in 1995.

    569:

    What's being described (inaccurately as the "hillbilly belt") is a band of red on a colored map of the US showing shifts in voter patterns in the US presidential elections comparing 2004 and 2008, that stretches from southern west Virginia through north Texas (though not as far as I can tell Oklahoma). The red also included southern Louisiana and parts of the Florida panhandle. The NYTimes had this chart on a voting shift tab on their 2008 presidential election results page. I've heard it called the "apparent bigot belt". A plausible alternative explanation would be welcome.

    570:

    edit to my last post; definitely the red band in the election shift map includes Oklahoma.

    571:

    That supports the point I was making. Barings was vulnerable as it was a pure investment bank with negligible interests outside speculation. When I mentioned diversified banks I was thinking of the giants like HSBC or Barclays or NatWest with interests in investment bankrolling retail banking and other financial services in a wide range of countries.

    573:

    A plausible alternative explanation would be welcome.

    From where I sit this is another case of "if you're not voting D you must be ignorant/stupid/racists/whatever.

    In incredibly general terms in the US people on the east and west coasts tend to vote D and in the middle vote R.

    And many people commenting on politics in the US tend to use the most derogatory stereo typing of the other side to explain why they are voting the "wrong" way. So I guess in their mind calling R voters hillbillies explains it away. And on the other side you get such phrases as bleeding heart liberals and similar.

    It's all just name calling.

    574:

    I live there (in an inner suburb of Dallas) and I can attest that "hillbilly" is wildly inaccurate.

    Yep. I visit there somewhat regularly. My wife works there during the week and commutes home to NC most weekends.

    Now there is a much higher incidence of sightings of pointy toed boots and large wide brimmed hats on people compared to the rest of the US. Even on men wearing business suits. But to call them hillbilly would mean re-defining the term in ways that would likely exclude folks who live in the Appalachian mountains.

    Now there is a term that seemed to originate in the area I like. "All hat, no cattle." :)

    575:

    Cue call for The Beverley Hillbillies ... complete with Ce-ment pond ( Swimming Pool ) etc ... Oh dear.

    576:

    No, though that's interesting too. This one, from 2008: http://elections.nytimes.com/2008/results/president/map.html

    577:

    This is not about the general political alignment in the U.S., this is about shifts in alignment between the 2004 and 2008 U.S. presidential elections. (Bush vs Kerry compared with McCain vs Obama.)

    578:

    True, it wasn't a strictly libertarian thing, but there's still this core thought that someone who's new to the system will do a better job than someone who's been in a political system for a while. If you're framework is that politics corrupts, this idea seems logical. The unspoken assumption is that politics is easy, any go-getter can do a good job governing, and the only reason to hang out in office is to see how much money and power you can get.

    My experience as an outside observer is that politics is anything but easy. Political systems are complicated accretionary beasts, they're fundamentally illogical (due to having been built up by whatever most people would accept at a particular moment in time, not what makes sense right now), and it takes time to figure out how they work, much less amass a power base to do anything. It's certainly easy to be corrupted by money in such a system, but it's just as possible to not be corrupted, especially if one finds the various means of power that do not involve money (cf public opinion, the law, connections, etc.).

    Note that I'm not arguing for life-time tenure in politics. There is, indeed, a time to throw each bum out. I just think, based on experience, that term limits not only do not keep money out of politics (since it means that everyone pol is looking for campaign cash all the time), they also mean that the lobbyists know what's going on, while the politicians they lobby do not. That's a far worse setup than having a modestly corrupt politician who does know what's going on making policy.

    My bias here is that good governance adds value: crises that are survivable with good governance become disasters with inadequate governance, and good governance can keep many crises from happening in the first place.

    579:
    Although it might sound like utter nonsense to you, without food safety agencies, you would still be able to buy fresh eggs and and be able properly bake your chicken. Food-poisoning patrons doesn't make the best business plan. And no libertarian wouldn't support using the legal system to throw the book at reckless businesses. Society already has plenty of checks and balances outside of a power-hungry central government. They don't need *more* control over every facet of our lives.

    So where would they sue, and on what grounds?

    Because, first of all, the legal system, the courts, as it is otherwise known, happens to be the third branch of … you know … government. Isn't "using the legal system" nothing but giving government (the third branch of it) total control over whatever facet of your life you bring to court? You know, the judge—a government official, no less—gets to decide who wins your argument with whoever you're taking to court, and you totally submit yourself under their decision. Wow!

    And second of all, how is the judge going to determine who's right, and whether your rights were infringed by the food-poisoning patron? I mean, if—as you are advocating—there are no food safety regulations to begin with, what grounds do you have to sue in the first place? And if the judge does hand down a decision, it will be according to laws and regulations created by … oops, there it is again … the government (its first branch, this time). Bad!

    Sorry, but whining about government control over your life and taking refuge to the legal system in the same paragraph is a FAIL.

    If you're a libertarian, that's not a possible course of action. If you're a libertarian, your course of action is to die from the food poisoning, and

    580:

    Oops, accidentally hit 'Submit'. Here's the last paragraph again, this time complete.

    If you're a libertarian, that's not a possible course of action. If you're a libertarian, your course of action is to die from the food poisoning, and hope that your fellow libertarians take this as a warning and don't use that patron. But keep the government out of your business. All branches of it, please.

    581:

    I'd need to read all 581 and counting comments again to make sure of finding it, but there is discussion of how UK Food Safety (and Health and Safety) law arose from one case where someone found a decomposing snail in their bottle of ginger beer and sued (successfully). USian law being based on British (mostly English), that seems to indicate that there is precedent for expecting your food to be unadulterated by "foreign" materials.

    582:

    About once a year there's the "man bites dog" story about someone finding something interesting in a burger from one of the big burger chains.

    My families business (that my father didn't stay with after college) was for 150+ years farming with a slaughter house business as a part of it. Even if you did things very cleanly with properly most folks would blanch at what goes on behind the doors. As a kid I thought it was neat and would sneak back to watch and drive my mother nuts. :)

    583:

    This is not about the general political alignment in the U.S.....

    But the sub topic was the over simplification of why people act the way they do. Calling the area from western NC to Oklahoma a "hillbilly belt" would might have caused OGH to call such statements racist if applied to as broad an area of the UK. At the minimum it was definitely and extreme putting down a large group of people who don't vote the way some think they should.

    584:

    Sorry, DavidL, but that's just deflection, pure and simple. Call it the racist belt if you like, but the fact of the matter is, race does seem to be a factor here. I know - I have relatives in the Bootheel.

    Now, you've played this name-calling schtick before; but the fact of the matter is, that's just saying there's really no difference between the two parties and the people that support them. So: you can either admit that there are substantial differences between the two parties, and in particular, the current Republican party is the party of crazy, and people might listen to what you have to say.

    Or you can insist that people believe you instead of their lyin' eyes, and that there really isn't any significant differences between the two parties, especially in terms of race (and women and LGBT and etc.). At which point, people will - quite rightly - tune out what you have to say.

    To forestall the endgame reply, that you don't care whether people listen to what you have to say: If that's the case, then please stop sharing.

    585:

    What really sticks in my craw is this line:

    At the minimum it was definitely and extreme putting down a large group of people who don't vote the way some think they should.

    Yeah, well, the guys who voted against the Voting Rights act didn't vote 'the way I think they should'. But that makes them some seriously racist, seriously bad people. Iow, this schtick of pretending issues like these are just differences of opinion and all opinions are equally valid is the argument of someone who doesn't have a leg to stand on. Especially ironic is the cultural relativism on behalf of the party of cultural absolutes.

    586:

    I was talking about calling a very large group of people hillbillies. And in no way shape or form does the label apply. People calling them such are basically trying to dismiss a large group of people with a very broad wrong brush. You're turning it into an argument about racism and whether or not they were for the voting right act.

    Their position on that issue doesn't make them hillbillies.

    Good grief.

    587:

    Charlie: So design a better cryptocurrency and describe it in one of your stories to inspire replacements!

    I've got some ideas, including one I call "red/green coins" that might solve several of the problems you point to, with potential to be explosively popular.

    And there are others out there with other ideas, who've already implemented their ideas (mixed in with many hopeful scammers, I suspect):

    http://www.cryptocoincharts.info/v2/coins/info

    588:

    heteromeles There's the problem, though of corrupt civil servants with their own agenda / regulatory capture. I commented on this in another thread The link indicates how senior Brit officials conspired to attempt to close down virtually ALL of our remaining railway system in the early 70's led by the vile Serpell - & how they were frustrated. There's no one "magic bullet" solution to this problem, I'm afraid.

    589:

    My point is that there is actually a law that says (specific example taken from general) "beefburgers shall be made from beef and not wood shavings". You just have to prove the existence of wood shavings in your burger and the burger joint has done something criminally wrong, rather than having to not only prove the existence of the wood shavings, but that it was not reasonable to expect them in your burger... in civil court.

    590:

    A little late comment - holidays and all that. For Scots court cases on slavery see Knight v Wedderburn [1778], which is referenced towards the end of the wiki entry on Somersett's Case. National Archives Scotland has a short piece on that and two earlier cases. http://www.nas.gov.uk/about/071022.asp

    591:

    Thanks for that; my point was one of completeness on my part.

    592:

    Of course. I don't think there's a form of government that's immune to corruption. However, to put it in a rather prejudicial form, minimizing the size of bureaucracies and taking away regulations is the equivalent of taking away a state's immune system: national AIDS, as it were. Too often, it seems that this is the goal of libertarians.

    It's sad to work with smart, honest regulators who are overwhelmed by a combination of personnel cuts and work overload. They're less effective, and the sector they oversee gets into trouble. It's normal for people to whine about the poor "service" they get from agencies in these situations, and to use that as a pretext for calling for their abolition. To me, this is analogous to whining about all those resources your immune system is wasting, resources that could go to having more kids or being more active in extreme sports. It sounds great in practice, until something infects you.

    Worse, corruption doesn't go away when you downsize agencies. It just means that each corrupt person has more power and less oversight. This isn't an argument for total bureaucracy either, because that's as useless as an overactive immune system. There's usually a reasonable balance in the middle, but again, the right number isn't obvious, is usually subject to competing interests and negotiations, and thus requires (again) experienced politicians to help make things work.

    593:

    There's actually a nice, libertarian way to deal with this situation, based on Somalian traditional law, Xeer. Similar arrangements have been used around the world.

    If someone suffers food poisoning from tainted food, his clan judge and the clan judge of the tainted food provider meet, the case is discussed in front of them, and a suitable recompense is decided upon, based on tradition and whatever the people involved can negotiate as "fair." If the parties accept, that's it. Some form of monetary or livestock compensation changes hands and life goes on. If they don't accept, it escalates, more judges and more clansmen are drawn in, and it can ultimately end in violence if one side doesn't like the peaceful options available.

    In this case, legal judgements are backed by all adult Somali clansmen being armed and being required to fight (under harsh penalty if they do not) to make sure that verdicts are enforced. Yes, a fight over food poisoning could lead to a clan war with people dying, and those deaths will spawn further cases that can make things even worse.

    Note that in tradition-based, non-state justice systems, the death rate from violence is far higher than where a nation takes over the rule of law and monopolizes violence. This is one non-trivial reason why people are willing to submit to living in a nation, even a bad one.

    As one Somali noted in a radio interview, the nice thing about a rule of law in a democratic society is that you can vote for who you think is right. Under Xeer and traditional Somali politics, you're required to support your kin no matter what you think of the merits of a particular case, or, for that matter, the skills of a particular politician. In other words, you're less free, because relatives and relationships take the place of a uniform legal code.

    Still, the only book I've read about Somali Xeer was written by a libertarian who extolled the system's virtues. While I think that book is a great reference for those writing historical fiction, I'm not sure that Somalia is the stateless paradise that some libertarians make it out to be.

    594:

    Charlie,

    This is a rather thoughtful article on Bitcoin.

    http://www.digitopoly.org/2013/12/24/time-for-a-little-bitcoin-discussion/

    I'd be interested in your comments on it.

    595:

    Anyone who thinks governments result in killing should do a little research in forensic archaeology.

    It turns out that pre-State groups (neolithic or hunter-gatherer) have a remarkably consistent mortality pattern. About 1/3 of adult male skeletons from those groups show evidence of being killed by other human beings. The rate for adult females is about half that.

    These are certainly underestimates, since soft-tissue damage doesn't show up on the bones. Eg., Otzi the Iceman, who turned out to have been shot in the back with an arrow and to have defense cuts on his forearms.

    Before the State, they didn't have big wars: no Verdun, no Stalingrad. But they had continual lower-level lethal violence that added up, over any given individual's lifespan, to a high chance of getting killed.

    So if you were born in 1896, you stood a better chance of avoiding violent death if you were born in Germany or Russia than if you were born in an uncontacted New Guinea highland village.

    The invention of the State made violence a government monopoly. Like any other government monopoly, this resulted in increased prices and lower availability... 8-).

    596:

    Why I'm neither a libertarian or a social democrat: both philosophies rest on assumptions that are simply false.

    Eg., left to themselves, people will not refrain from "initiating violence". They'll kill each other like weasels in a box, all the time, restrained only by the threat of retaliation through blood feud or something similar.

    Human beings are simply like that; it's our default condition. While I'm OK with going armed (I've carried what Brits call a flick-knife since I was in my teens) I really don't want a substantial risk of ambush every time I go to the coffee shop and do my email.

    Not to mention the fact that people without State or quasi-State institutions tend to get dispossessed and/or killed and/or enslaved by people who do have them, which is why we live on a planet dominated by State-level organizations. I like having a big, powerful organization back me up against other people's big, powerful organizations.

    As for social democracy: the "Good Years" of 1945-75 simply weren't sustainable. The "Winter of Discontent" in 1979 and its US equivalents were inevitable.

    Imagining otherwise is like jumping off the observation platform on the 120th floor and expecting that lovely floating feeling to continue indefinitely.

    It was all the product of a specific convergence of historical circumstances (the economic recovery from WWII, the Cold War, relatively homogenous societies with high levels of social trust, etc.) which simply cannot be recalled.

    Nostalgia is rarely a politically productive emotion.

    Both ideologies (and many, many more) suffer from the illusion that human society can be known, controlled and planned, with predictable results from a set of policies. Since this is just not so, they necessarily fail.

    597:

    @485

    If you wish to make every thread on the internet into a long screed of floppo that deflects to Tea Party talking points, then by all means, deflect away, just don't expect everyone to take either the floppo or the deflection very seriously.

    My comment:

    "Charlie was applying Gresham's law to power consumption and you completely missed his point, which I grant was somewhat analogous and easy to miss for someone who hasn't studied econ very much outside a BC chatroom. Chalk one up for your own ignorance."

    stands.

    Your complaint, "This is more ad hominem insult, and thus vacant of meaning." is simply more craven deflection, and tellingly vacant of response. You show, repeatedly, a lack of understanding of currency issues and an unwillingness to address the problem of falling price levels, finance under deflation, and every other reason why the world abandoned deflationary currencies. These are also basic problems with the neo-paleo-classical-Teaper ideal and until you and your buddies can understand them and respond, you have nothing of notice for everyone else. You've already ad hominem'd yourself and made your comments unworthy of attention outside your little clique.

    598:

    Anyone who thinks governments result in killing should do a little research in forensic archaeology.

    It turns out that pre-State groups (neolithic or hunter-gatherer) have a remarkably consistent mortality pattern. About 1/3 of adult male skeletons from those groups show evidence of being killed by other human beings. The rate for adult females is about half that.

    This makes me want to verbalise a cry of despair, only I don't know how. Why have these societies evolved (I use the word with as derogatory a meaning as possible) to need so much killing? Is it the result of some disfunctional religion? What do the killers think they're achieving?

    I felt the same despair when reading about the Kanun of Lek in Ismail Kadare's Broken April and Robert Carver's The Accursed Mountains. I think it was Carver who tells the story of an engineering student who always wore a little curtain over his face to hide the space where his nose had been. Had been before it was cut off in revenge for a longing glance that the student's brother cast at the sister of the person who cut it off. (I may have the relationships wrong, but not the idea.)

    I think it's also Carver who talks about having to walk to the hairdresser under the protection of covering fire from another member of your family, for much the same reason. WHY is it so important that Adnan kill Bajram if Bajram's brother glances at Adnan's sister???

    599:

    Well, if you go by Stephen Pinker's analysis, the good news is that we're getting a lot less violent over time, and this is an ongoing progression. One hypothesized mechanism is that in addition to domesticating animals, humans need to domesticate themselves -- those who don't show domestication traits (such as trainability, docility, cooperation, and lack of murderous rage) tend to get killed off by the neighbours. And human self-domestication is a necessary precondition for living in complex societies. (It's speculated that prior to self-domestication, our ancestors lived in tribal/family groups and engaged in internecine warfare, much like troupes of chimpanzees today.)

    600:

    Charlie @ 699 What does one do about societies where everyone who wanted to die gloriously for the emperor get their chance ... & the nation became almost aggressively pacifist (if you see what I mean) but did not change in any other way at all? So that women are, just, maginally citizens, where the(hereditary) head of state's spouse has been sidelined & smeared as "Inferior/Mad" (Because they seem only to have daughters) and where people who go & work abroad for any time are regarded with permanent suspicion, never mind, shock/horror MARRYING one (of either sex/either way round, too). As you've probably worked out by now, I'm talking of a specific nation-state. What is their future, because they are patently not adapting, as the rest of us are. [ Oh, & their "justice" system is a really black farce. ]

    601:

    I'm surprised the Krugman's take hasn't come up: Bits and Barbarism. Saw it last Monday, but was without internet access the rest of the week.

    602:

    Meanwhile in Chile, A group of self-described anarchists, libertarians and Ron Paul supporters fleeing the crumbling world economic system have founded Galt's Gulch, a community in Chile inspired by Ayn Rand's "Atlas Shrugged" — and with an economy based entirely on Bitcoin. Or that's the goal, anyway

    Oh, good grief!

    603:

    (It's speculated that prior to self-domestication, our ancestors lived in tribal/family groups and engaged in internecine warfare, much like troupes of chimpanzees today.)

    I've not read much modern research about chimpanzee behaviour, but I just Googled "chimpanzee warfare". Here's an excerpt from "Chimps Engage in 'War' for Turf" by Jennifer Viegas:

    Once an infant is removed from its mother, the attacker "generally kills the infant fairly quickly either with a bite to the head or by biting the stomach and disemboweling it." The infant is then sometimes cannibalized, with the meat shared as the chimpanzees would do after killing red colobus monkey prey during hunts.

    Arthur C. Clarke once wrote a short story called "An Ape About the House" about Dorcas, a genetically-engineered chimp who turns out to have more artistic talent in its feet than its wannabe-artist owner has exhibited in a whole gallery-full of daubs. On the evidence of my Google search, any budding chimp artist should be taking instruction from Edvard Munch.

    604:

    While I think Stephen Pinker's analysis is right, I'd suggest that the answer's more complicated than evolution. It's one of the parts of Jared Diamond's The World Until Yesterday that I happen to like: the relationship between war and justice in non-state societies.

    Here's the deal: yes, people in non-state societies are far more likely to die of violence than are people in states, even accounting for world wars and civil wars. There are two big classes of said violence: domestic violence (predominantly violence between spouses and family members, much as it is today), and those that result from legal disputes and resulting feuds. In Papua New Guinea before statehood (and possibly even today), arguments over who owns a particular farm can start a war, and they're far from alone. The Somalis have the same issues, and if you read, say, the Icelandic Sagas or other old stories (The Iliad, anyone), you'll see similar patterns.

    The issue is that there is no monopoly on violence in non-state societies: if someone in your kin group wants justice, if negotiations fail, you have to take up arms and enforce the ruling (literally en force). If you die enforcing said justice, your death has to either be compensated for (blood money), or someone on the other side has to die. Then that death has to be avenged. And so on, until the feud ends. It doesn't particularly matter if you think your relative has the right in the original case: your job is to support him in getting his justice, just as he would be responsible for helping you obtain justice.

    I'm not clear whether domestic violence or legal violence kills more people in non-state societies, but it appears to be the latter. That's the problem with primitive justice: the two paths of justice are negotiated settlements and violence. There are no other options, such as imprisonment.

    This is the good side of a government having a monopoly on the use of force and the implementation of justice. The government doesn't have a personal stake in the conflict, and generally it tries to administer justice impartially, because that best supports their role as the independent arbiter of justice and violence. It can also support alternatives to killing, such as incarceration, police and social service intervention in domestic disputes, interminable lawsuits, and so forth. One good thing about state societies is that we've replaced a good proportion of our warriors with lawyers. The feuds may be just as interminable, but no one is injured when lawyers fight.

    As for why we're getting more peaceful, it's certainly not genetic shifts. However, you have to remember that culture is another form of inheritance, and our culture is getting less violent. We're socialized from infancy not to be violent, and it works for most people most of the time. As noted above, we're now more likely to use lawyers than to pick up arms to get "our rights."

    One bitter offshoot of state violence is that our soldiers suffer from PTSD in fairly high numbers. So far as I know, no one's found evidence of violence-induced PTSD in non-state societies. People there are socialized from infancy to be warriors, because with no one monopolizing violence, every male (if not every person) has to be willing and able to fight. Conversely, soldiers in our society are socialized to be non-violent until they are 18, at which point they are resocialized to be violent in basic training, then exposed to violence in warfare. It's quite likely that PTSD results the conflict between early socialization and later training (as well as the still-later transition back to a non-violent civilian life). Culture shapes brains, and not everyone successfully handles the transition between non-violence and violence.

    605:

    It is plain to me that people don't kill each other like weasels. The key of course it to try and create circumstances that encourage not doing so.
    Also, nobody but a fool thinks that you can control all things and people, and nostalgia is politically productive for the people using it in their politics.

    606:

    I'm talking of a specific nation-state. What is their future, because they are patently not adapting, as the rest of us are.

    Their future is that of "Saturn's Children". No, really. I know who you're talking about; they have a total fertility rate of 1.1 and are looking at their population halving by 2100. They could fix it ... but to do so would require either (a) a wave of state-sponsored feminism the like of which we haven't seen (part of the problem is women being reluctant to marry due to loss of what precarious status/jobs they've got, and a culture where a married woman is basically expected to slave for her husband for life), or (b) a radical change of attitude to immigration (not likely), or (c) robots everywhere. And guess which option this particular culture is pursuing with enthusiasm? Yes, Freya has a future in Japan ...

    607:

    This is the good side of a government having a monopoly on the use of force and the implementation of justice. The government doesn't have a personal stake in the conflict, and generally it tries to administer justice impartially, because that best supports their role as the independent arbiter of justice and violence.

    As I get older I get more and more cynical about the impartiality of the justice system. At least here in the US. This system isn't populated by robots. It's populated by people. Mostly people from the local area. (Local can be from 20 miles around or 200 it's still local.) And these local people tend to bring along loyalties, prejudices, and all the other baggage that makes the system not quite impartial.

    608:

    I should note that Pinker's thesis is horrendously flawed by his uncritical acceptance of ancient casualty figures, which were routinely inflated by writers of the time, often by the millions.

    It's not really a serious book.

    609:

    "makes prescriptions about how to run human society that can only work if we replace real messy human beings with frictionless spherical humanoids of uniform density (because it relies on simplifying assumptions about human behaviour which are unfortunately wrong."

    And, Gee, how come the "Leninists at the top always except themselves from the rules they made -- unless one of them gets too friendly with the other's moll?

    610:

    I, for one, welcome our New York Times blog-reading drive-by commenters.

    However, a bit more coherency would be welcome, y'know? We're not mind-readers here: I'm not sure what point you were trying to make.

    611:

    Well, what I got from that was "Leninist == anyone in power whom edrenojr doesn't like".

    612:

    Agreed. Real state justice is imperfect. Diamond even makes the point that there are some disputes that non-state justice handles better. These are typically the situations when a sincere apology and covering the damages will solve the problem, but grinding through a tedious law suit to recover damages will only worsen it.

    Still, state justice has its advantages. It's better than going to war to recover what you can't win a suit (or because you win but the other side refuses to settle), in part because the level of collateral damage is lower, and in part because not everyone has to be a warrior in a state.

    613:

    Brings to mind a case written about in the paper a month or so ago.

    About a property dispute in northeastern NC. Clear land titles exist for an owner back over 100 years ago. But multiple generations later with many deaths with no wills ownerships is, shall we say, cloudy at times. Someone bought some of the property back in the 80s from what records indicated was the owner. But apparently not everyone in the extended family agreed. And some of them have squatted on the property and destroyed things of the new owners. They have lost in every court they've been in at all levels. And two of them are now in jail by refusing to abide by the rulings. Basically they are becoming the longest serving civil contempt prisoners in the US. They refuse to agree that they have lost and will not go back and squat on the property.

    The people who bought it in the 80s are sort of stuck as who would buy this now? And their original ideas of development are also in the toilet.

    614:

    Author statement: "Deflation and Inflation are two very different things; in particular, deflation is not the opposite of inflation"

    First sentence from linked Wikipedia articles of inflation and deflation: Inflation- "In economics, inflation is a persistent increase in the general price level of goods and services in an economy over a period of time" Deflation- "In economics, deflation is a decrease in the general price level of goods and services."

    Author response?

    615:

    Thanks, Charlie. "Saturn's Children" huh? Or do you think they'll spot it in time & change course? There's certainly no sign of it, at all, at present. Someone I know well is sometimes involved in Far-East financial dealings, & she says that Japan has a "European" facade, unlike China, but that doing deals & business with the Chinese is a lot easier. The Chinese appear to have reverted to type, & are a whole nation of Barrow-Boys, who will, nonetheless respect a "deal" once one is actually agreed on - Which sounds horribly familiar/similar to us, doesn't it? Whereas, in Japan, "face" is still all, foreigners are still inferior gai-jin - see the Olympus scandal for reference.

    616:

    Author response: wikipedia oversimplifies.

    Inflation usually corresponds to an increase in the circulating money supply -- someone is printing banknotes with enthusiasm, or freeing up some other source of value, e.g. by monetizing some resource that was hitherto unavailable. It's a self-reinforcing problem: prices rise -- both prices of goods, and prices of money, i.e. interest rates -- so profits rise too; but then employees need more wages to buy bread, so wages rise. Nobody wants to hang onto money because it'll be worth less tomorrow, so it gets spent faster, and the circulation of money through the economy accelerates. Inflation erodes the value of cash-in-hand.

    Deflation happens when the circulating money supply shrinks relative to the goods and services in the marketplace. Prices fall; profits fall: employers put the squeeze on wages, too, and interest rates trend to zero or go negative. Existing borrowers get badly bruised because their loan repayments soar relative to their income. Nobody with money wants to spend anything, because the money will be worth more tomorrow: so the circulation of money through the economy slows right down, and you end up with a depression.

    The key point is that there are two aspects to both inflation and deflation: prices, and the money supply. And they're not in simple opposition -- you can't get price changes under control purely by throttling the money supply (monetarism), and you can't control the money supply by modulating the productive side of the economy. If you get things wrong, it's possible to have an inflationary economy that also experiences stagnation, i.e. prices keep going up while growth goes negative (we had this in the 70s). And it's kind of hard to see how you can have economic growth in a deflationary cycle (again: see Japan, 1990-2013).

    617:

    Japan already has millions of robots in service helping out the elderly and infirm. They're called "escaratas" and "eruvatas". Every little 2-platform railway station with ten one-car trains a day service in Japan has had lifts and/or escalators fitted for decades. In other news Haymarket station in Edinburgh, the second-busiest station in Scotland according to some reports finally got lifts and escalators a couple of weeks ago after 150 years or so of operations.

    As for Japan's economy they had a significant trade surplus until recently but they've had to import a lot more fossil fuels to cover their shut-down nuclear generating plants which has helped drive them into a deficit. That surplus paid for a lot of apparent stagnation in its economy and kept the unemployment figures down around 4% or so (that figure includes members of the Japan Self-Defence Forces as being in the military is not regarded as a real job as it's unproductive).

    618:

    Here is how to turn Bitcoin into a true digital currency: http://tinyurl.com/m57hd2z

    Modern money is obligation and the system for tracking obligation transfers. The bitcoin protocol provides only the tracking part, but not the obligation (bitcoins do not have any intrinsic value nor do they represent obligation)

    619:

    I assume you are referring to those nasty little foreigners who refuse to embrace the "vibrant multicultural community" model of Western societies and who do not intend to breed like rabbits until they meet Malthus.

    Well, in 100 years Japan will still be Japan, both ethnically and culturally. Which is more than can be said for Britain. You may dislike the Japanese for being that way, but it is *their* choice. Not yours.

    620:

    dirk In case you hadn't noticed all "Western" societies have(on average, over time) falling birth-rates & slowly declining population projections. But not falling off a cliff, the way Japan is doing. It's to do with increased healthy life-expectancty, material well-being & other common factors. So your claim of breeding like rabbits until meeting Malthus is false.

    621:

    As soon as we stop breeding like rabbits we import people to make up the numbers. Japan doesn't. I prefer their approach to population control.

    622:

    And what is this covert sneering racism surfacing periodically through this blog topic? Is it OK as long as it targets "politically incorrect" groups?

    623:

    It's more a case of "what this situation needs is a white man in charge" than simple skin-colour racism. Japan, a nation with low unemployment, a vibrant industrial and commercial business enviroment, a high per-capita GNP, universal healthcare and education, 100% literacy etc. etc. isn't doing all the things that trashed the world economy a few years back so it's obviously wrong and needs fixing by the super-geniuses who oversaw the most recent global depression and its aftermath.

    The falling population and ageing cohorts in Japan are a problem, yes, but not something that can be fixed by white folks telling them what to do about it. Then again it's a nation mostly composed of mountains with half the population of the US compressed into the same land area as California. A fit person could walk across Tokyo in half a day and that city has 36 million people living in it. Depopulation through ageing is not totally a bad thing in such a crowded nation.

    624:

    http://www.newsobserver.com/2013/12/14/3457617/for-two-carteret-county-men-waterfront.html

    I think this is the case to which you refer. It took a bit of effort to Google it from a rather vague reference. The term served so far for contempt is three years.

    625:

    written by a hermetically-sealed Socialist for hermetically-sealed Socialists

    It shouldn't be surprising that BtC has a political agenda:

    Its whole point.. (so it seems to this non-expert) ..is to have a store of wealth that can't be (immorally) co-opted by the government.

    (That is one of the most important features of a good store of value: No matter who thinks that what one produces belongs to others.. (thereby violating property rights - which, BTW, are recognised by the US Constitution (oh - and is the only moral way in a society) ) ..a proper store of value is not vulnerable to their predation. )

    (Whether BtC is deflationary is an issue that I doubt - but, more importantly, is irrelevant to my comments, which are aimed at the invalid philosophical stance of the author.)

    a few further comments:

    o Carbon-footprint is an issue only for anti-Man Leftist control-freaks - together with their flocks of uncritical sheep.

    o Name something digital and valuable that's not targeted by malware: BtC is not a bit outstanding in this regard.

    o Gresham's Law: Let's see: Would an actual (valid) store of money (eg: gold) drive out the (paper) dollar? (Yes.) That's not a strike against the former; it's a demonstration of the dishonesty of governments' using the money supply as just another means of expropriating wealth from the producers, for the purpose of (immoral) redistribution.

    o hideous markets: It is not a valid function of government to regulate anything: Regulations punish the innocent (more precisely, the )

    o damaging to the fabric of civil society: What's damaging to the fabric of civil society is a government that has appropriated power in obvious violation of our (the US's) Constitution. (adhering to which made the US not only the only morally-founded country in history, but also (causally also) the most wealth-creating country in history, until the Socialists came into power)

    o taxes: ...are an immoral plundering of private property (except perhaps those to finance the proper functions of government)

    o Gini coefficient: takes as axiomatic that the levels of income across individuals should be flat. That notion is just one of the new ways that Socialists are trying to fool the people. Income levels should be nothing other than equal to the value produced by each individual. Else is theft.

    o "relies on simplifying assumptions about human behaviour which are unfortunately wrong": The author no doubt could - or has - expand/ed on this at length, but I would urge him to consider the difference between simplifying assumptions and identified essence. My comments herein are based on proven principles (which can be validly derived only from the essences of the entities involved). That way of thinking is the diametric opposite of today's so-called pragmatism, which is based on the Rousseauian/Kantian fabrication (explicitly for the purpose of saving religion) that no one can really know anything for sure.

    626:

    I'm on the opposite end of the political spectrum here (and yes, I read your commenting policy, so I know my comments might be deleted because they annoy you, but here they are anyway):

    I think the western liberal state and its regulations and taxation policies have caused far more harm than they have provided benefits. Libertarians are in the minority and likely will remain there. So I'm not counting on the political process to help me achieve my societal goals, I'm relying on technology. That's why I love Bitcoin, because like the Internet it gives people the ability to ignore stupid laws (which by my standard are most laws).

    If technologies like Bitcoin weaken the state's ability to enforce its ever-growing collection of arcane regulations, than that's a good thing in my world. The only thing I want to see burn in a fire is the modern liberal/progressive state with all its offensive characteristics (socialist wealth redistribution policies, punitive taxation, inflationary monetary policy, oppressive regulatory regime, etc).

    Liberals will argue that because the majority seems to want these rules (I have have doubts there, but that's a separate topic), I am somehow obliged to follow them due to the democratic principle. Libertarians will argue that the constitution was designed to avoid such a tyranny of the majority and has been systematically undermined since Roosevelt chose to ignore most limits on federal power with his New Deal. I'm in that camp. Just because a bunch of people in Washington tell me I can't buy this product or sell that product or that owe them this much money, it doesn't mean that I have an ethical obligation to follow those rules. I may forced to abide by them, but if technology allows me to opt out with impunity, I will gladly do so.

    627:

    And in commenter pmh232 we have a new winner of the woodentop award for doctrinaire libertarian quackspeaker!

    Excellent display of self-confidence: I suspect a chunk of Randian objectivist thinking is at work here (note the appeal to pure logic -- "My comments herein are based on proven principles which can be validly derived only from the essences of the entities involved" -- over observable reality.)

    Libertarians are the gift that keeps on giving, if by "gift" you mean "mountain of dogshit".

    628:

    Conment 626 was submitted by me, Stefan Roever. Just read it again and I don't know why Google put a weird URL in for my name. I did not intend it to be an anonymous comment.

    629:

    I am particularly impressed by the poster's ability to make bullet points in his comments when the posting software doesn't support bullet points as a typographical feature. What's next, ASCII Powerpoint slides?

    630:

    I wasn't really trying to make it a research project. :) I wasn't even sure when I had read the article.

    You said: The term served so far for contempt is three years.

    From the article Davis and Reels are now among the longest-serving civil contempt prisoners in U.S. history, and their stand looks increasingly futile after the N.C. Supreme Court refused in October to hear their appeal.

    My point was to show what can happen when folks refuse to deal with the state method of conflict resolution.

    631:

    What I am seeing from current politics is a flood of lies from those in power, bolstered by an apparent inability to change their behaviour when they are discovered.

    Our leaders are of the generation which were exposed to computers, but not to the mass internet.

    Now, just read this paragraph carefully, and think how it might look to somebody in University around 1984: I looked up a few books I remembered as being Libertarian, and found that The Probability Broach was nominally published in 1980, actually released just in time for Christmas 1979, between the elections of Margaret Thatcher and Ronald Reagan. This book, and its sequels, exposed many people to Libertarian ideals. All this can be checked from sources such as Wikipedia. The book doesn't have any great influence from the soon-to-explode use of computers, and it is well before people became conscious of the Internet. Yes, there were mailing lists and Usenet, but the idea of even a dial-up connection was no more than a dim glow on the horizon. The Libertarian is essentially pre-computer, and examples of computerised management seem to have been associated with left-wing movements, which were anathema to him.

    I can tell you now that banks were using computers to shift money around in the 1970s. That's what an ATM machine depends on. It has to be able to read an ID number of a card, confirm it matches with the PIN entered on the keypad, supply the cash requested, and debit the correct bank account. I was reading descriptions of the infrastructre in Dr. Dobbs Journal. Stafford Beer, a few years before, had been using telex machines for a cybernetic system of industrial management.

    I don't recall any mention of that in The Probability Broach. There's no explanation of how big projects are organised in that society, beyond a mention of volunteers and a hand-waved, quasi-magical, cry of "Freedom!"

    It was a fun read.

    Well, P.G. Wodehouse made a world of the idle rich that was more fun to read about. Whatever you claim about parasites, any major project needs huge numbers of people to be organised. Look at what OGH has written about how many people it needs to establish a viable colony on another planet.

    Heinlein's Farmer in the Sky feels more real, because, however much he glosses over, he shows an awareness of the complexities of creating viable farmland off-planet. The Galt's Gulch Gang appearing in this blog don't seem to realise how much needs to be organised for a loaf of bread, or for a nut and bolt.

    But the biggest problem we have is that the Libertarian world of The Probability Broach is a couple of centuries old at the time the book it set. It is firmly in the other leg of the trousers of time, and the crotch seam is somewhere around 1790. Which is still after a hundred years of the development of industry and capitalism. It's set at the time that Congress authorised the original six frigates of the US Navy. I find it a little difficult to understand how a world already that committed to the path of industrial organisation could go down the Libertarian leg-way.

    So there we are. In 1980 we were hearing about how wonderful liberty was, and the internet wasn't even on the scene. It was fouyr years before Apple launched the Macintosh, with never a mention of the complex organisation needed to produce a computer. Did Steve Jobs ever lift a screwdriver? Maybe he did, in the garage, but he never made a screw thread. He knew what they cost. He knew he could not make them himself.

    The Libertarians don't seem to have even that tenuous grip on the real world. They have founded their system of belief on a myth, which was contrary to reality even as it was being promulgated.

    And if you want to say I am not real, so be it. But you can track my trail as easily across the Internet as I can trace yours. I have said things, as you have, and our words are, in this place, what makes us real.

    But are your words your own, or are you the zombie parrot of a madwomen who collected fools the way some accumulate cats?

    632:

    I think I am going to go and write a novel about the Pope sending a time-travelling assassin into the past to kill Ayn Rand before she can seduce Alan Greenspan. Unfortunately, nothing changes because Greenspan was the hack writer who ghost-wrote Atlas Shrugged in his spare time, while working as an economist.

    633:

    What I am seeing from current politics is a flood of lies from those in power, bolstered by an apparent inability to change their behaviour when they are discovered.

    You do understand there's nothing new about this?

    In my personal opinion the "60s" happened in the US because TV new exploded the myths of those in power. ANd every year it gets harder and harder to hide your foibles from the world at large. Which is why places like Cuba, China, Russia, etc... keep advocating for better controls over information on the internet. And yes I know western democracies advocate the same thing at times only just not so overly or sweeping in initial implementation.

    634:

    I was excited to read an article with a negative angle on Bitcoin because I'm in a niche of society that is all praise towards Bitcoin. Unfortunately, this article was pretty rubbish (although I'm sure quite legitimate looking to those that don't understand the mechanics and details of Bitcoin, upon which many of the author's arguments are based.) Inaccuracies from the article: 1. Author claims that inflation and deflation are not opposite of one-another. False. By definition inflation is the persistent increase in the general price level of goods and services in an economy over a period of time. Deflation is the opposite in that it has an identical definition, except "increase" is replaced with "decrease" (which by the way, are opposites.) Perhaps the author means the effects of the two aren't opposite one-another, but he doesn’t provide any details or examples of what his point is here so I shouldn’t try to understand and possibly make a mistake. Author, please explain your thoughts here because I’d love to understand where this point was going. Until then, this point was being used to defend that Bitcoin's deflationary nature is bad, so I'll strike that point out until I hear a legitimate argument. 2. "Bitcoin is designed to be verifiable but pretty much untraceable." False. Every transaction is logged for all eternity and distributed to everyone as part of the blockchain. Unless Bitcoin becomes the major currency that the world uses, people will eventually need/want to convert Bitcoin to other currencies. Our legal systems force banks to provide proof of identity when depositing, withdrawing, or converting currencies and will ultimately provide the link from a Bitcoin user's wallet id to their identity. And, even if Bitcoin were to become the only currency used, I suspect it would be pretty trivial to analyze the blockchain to determine people's identity. As a recipient of a payment, it is trivial to link a wallet id to the person that I know just sent the money. As a third party, an attack similar to the one used to determine the identity of Netflix users could be used. It is even nicely explained here: http://www.cs.utexas.edu/~shmat/shmat_oak08netflix.pdf. 3. "Mining BtC has a carbon footprint from hell". I don't disagree, however keep in mind that this is a one-time cost to establish the currency. Once the predetermined coins are created there is no more mining required. In fact, as long as the value of 1 coin is less than the cost of the energy to mine it, mining won't happen (unless people are being irrational, but that's not a problem with Bitcoin much like how a person that leaves their lights turned on while they're on vacation isn't a problem with light bulbs.) In the interest of having a discussion, not a debate, I will admit that I don’t understand how computing the blockchain with so much redundancy is going to be a cost-effective way to conduct transactions. I hypothesize that the solution to this will be that individuals won’t be verifying the block chain themselves. Rather, banks, nations, or other agencies will benefit from an economy of scale since they can compute the blockchain once and offer transactions to an unlimited number of end-users. For computer people, computing the block chain is O(n) where n is the number of transactions. If everyone on the planet computed the block chain themselves, that would be O(n*p) where p is the population. But, if the population is the number of banks rather than the number of citizens, that number is drastically reduced. Furthermore, banks could outsource their blockchain computations to a centralized agency that further benefits from the economy of scale. This does, however, have its limits. For the sake of redundancy and not allowing a single party to have so much power over the system, it is best to keep p >> 1. There’s a tradeoff between redundancy/security and power usage. A cost benefit curve applies, and the system will eventually find the steady state between the two. In short, energy usage will be optimally low such that other success criterion are maximized (minimizing transaction time, minimizing transaction cost, maximizing transaction , maximizing ecosystem safety, etc.) It’s possible that energy usage will be higher than our current system of ACH transfers, wire transfers, credit cards transactions, credit card billing etc., but with the extra costs come with it extra benefits. In conclusion, if society as a whole values the benefits more than the cost, then digital currencies will continue to gain popularity. If they don’t, then the author has nothing to worry about – in his own words, “Bitcoin will die in a fire.” 4. "Bitcoin mining software is now being distributed as malware". Sure, it's lucrative business. So are ATM skimmers, identity theft, and numerous other white collar theft schemes. Not sure what the author’s point is. There will always be people motivated to do bad things for "easy" money. Whether the “money” paid for illegal product or service is USD, gold bars, or Bitcoin doesn’t matter. 5. "Bitcoin violates Gresham's law". Ditto my response to #4, just consider “bad things” to be energy theft rather than ATM skimming, for example. 6. "Bitcoin's utter lack of regulation permits really hideouts markets to emerge". I don't believe that the difficulty of acquiring a drug is the primary deterrent to more folks not starting to use bad drugs. Keeping in mind that there will always be some folks who decide to break the law and use drugs anyways, don't we want a system in place that will let them do that as safely as possible (for example, a drug deal gone bad resulting in murder or the consumer receiving a different or higher concentration drug than promised)? Silk Road had rating systems in place so reputable drug dealers could be used rather than those that are more likely to be selling (more) dangerous products. Additionally, as someone not involved in the underground drug market whatsoever, I’d prefer not to pass by drug deals happening in plain sight on the street downtown (yes, this does happen to me on a weekly basis as I’m walking around 3rd and Pike in Seattle.) As for child pornography and assassinations, I think regardless of the currency used to pay for the illicit good, the best bet for law enforcement would be to 7. "Bitcoin is pretty much designed for tax evasion". False. It is designed for tax evasion no more than a dollar bill printed on a piece of paper is. The author so clearly misunderstands Bitcoin that I don't even know what to say to this point. Bitcoin is a currency. The USD is a currency. Tax evasion is a thing people do, not currencies. We quantify how much someone has evaded in terms of the quantity of a currency but that is the extent to which each is linked. The author is correct to identify that Bitcoin currently has an immature ecosystem surrounding it (laws are slow to catch up to technology and banks won't build infrastructure around Bitcoin until they have some more confidence that it won't be outlawed [whatever that might mean, this is huge discussion by itself] overnight.

    635:

    The actual record seems to be H Beatty Chadwick who spent 14 years in prison for refusing to comply with a court order to pay $2.5 million into court during a divorce. He claimed he had lost it, the court beloved he was hiding it. He was eventually released in 2009 when the court decided he would never comply, which creates some perverse incentives.

    http://abcnews.go.com/2020/t/story?id=8101209&ref=http%3A%2F%2Fwww.google.co.uk%2Fsearch%3Fie%3DUTF-8%26source%3Dandroid-browser%26hl%3Den-GB%26q%3Dbeatty%2Bchadwick%2Bcontempt%26gws_rd%3Dcr%26ei%3DpJXAUp_IOOvY7AaM_IGwCA

    636:

    Our leaders are of the generation which were exposed to computers, but not to the mass internet.

    Antonia, David Cameron, Ed Milliband and Nick Clegg are all younger than OGH, and hence than myself, Greg T, Bellinghman, Nojay... Even the POTUS is only 1 year older than I am.

    It does slightly weaken your argument when it starts with a statement I can blow this big a hole in in 5 minutes flat.

    637:

    Anyone who thinks they can defend Bitcoin - Explain why a deflationary economy is good for anyone who does not have a large and hence appreciating stash of that currency. Until this post is answer to Charlie's, and/or my, satisfaction, I think we can assume you've been drinking Koolaid rather than studying economics.

    638:

    @ 626 { Stefan Roever ) The only thing I want to see burn in a fire is the modern liberal/progressive state Including ... VOTES for WOMEN! Universal Healthcare (Unless you are a "citizen" of the backwards USSA) Employment laws that, at least, restrict the slaveowning tendencies of too-many employers Food safety regulations (see previous discussion) The removal of the death penalty ( Because what, otherwise, do you do WHEN you get it wrong. Etc ... Please enumerate what is wrong with any of these. errr ... liberal/progrssive ideas? Says a leftwing tory, who sometimes switches to rabid peoples workers party mode .....if pushed far enough.

    639:

    Mr. Stross, if someone had posted here "Socialists are the gift that keeps on giving, if by 'gift' you mean 'mountain of dogshit'", would you have yellow carded them?

    You have made clear that you disagree with most aspects of libertarian politics, and that it is your blog and you have the right to run it according to your preferences. I dispute none of that (indeed, it would be most un-libertarian of me to do so).

    However, I would ask that you consider erring on the side of greater civility when discussing ideas you disagree with. You don't have to, of course. You are free to ignore me, ban me, or excoriate me. It is your blog, after all.

    But here is why I think it would be to your benefit to consider it:

    1) Blogs that discuss controversial political or social issues tend to fall into an echo chamber where people with ideologies that differ from those "accepted" on that blog stop reading or commenting, leaving a core group of people who pretty much agree with each other on everything repeating the same opinions.

    People with contrasting opinions that you might want to persuade to your views tend to leave or, hearing that the forum is hostile to them, never come by. Even worse for the blog, it can accumulate a group of readers that don't discuss issues so much as sit around and high five each other over how much smarter they are than "those" people.

    2) Your books have a fair number of libertarian-leaning readers, even more so than the norm for the science fiction field. I don't know why. Perhaps it is because many libertarians tend to enjoy discussion of ideas, even ideas that they don't agree with, and your books are about something--not another excercise in taking the plot coupon to the seven magic hole punches and then delivering it to the God of Coupons for the reward. Some of your libertarian readership may also stem from one of of the largest libertarian-leaning blogs in the US (Instapundit) regularly recommending and referencing your books.

    But nonetheless libertarians are part of your readership. I know the amount of money you make from any one sale is miniscule. But treating that part of your audience with respect and consideration (even while writing about why their politics are wrong) is likely to pay off financially, at least to a small to medium degree. You may not think such a tradeoff is worthwhile. Again, it is your blog and you can make the choices you want to with it.

    Barring financial setbacks or an unexpected major change in my personal tastes, I'm going to continue to buy your books one way or another, because I enjoy them. And continue reading and commenting on your blog. This is not a "I'm going to hold my breath and take my toys and go home" post. It is just a request to engage with ideas that you reject with a higher level of respect than to reject them as "dogshit".

    640:

    I dont understand why people want the monetary system to work in one or the other way to improve on a social cause, for example, redistribute wealth and/or protect the poor from the savers and so on. From a technocratic point of view I'd say: (a) the monetary system should be optimised only to facilitate investments, production, trade and commerce. (b) All (perceived) social injustices, including the byproducts of (a), are to be compensated/remedied by the tax system. With the tax system re-distribution of wealth is implemented.

    If you try to mix the two, things get cluttered and less effective. If you try and redistribute wealth through the workings of the monetary system, I see 3 drawbacks: (1) you run the risks of making the monetary system less efficient for business and trade, which is a negative for society as whole; (2) the monetary system is a indiscriminate blunt tool when used to redistribute wealth between groups of society. The tax system can be tuned much more precise in targeting certain groups (based on age, ethnics, geo-location, family situation) that society thinks should be supported or pay more tax.; (3) if you do introduce inflation to redistribute wealth, you get a lot of voters that see their purchasing powers and pensions eroded, so they'll demand 'compensation'. So all western societies have a whole army of people calculating 'real' inflation numbers and each year the silly rituals of negotiations between unions and employers for inflation-compensations are played out for the media. (rinse and repeat). Such waste of energy. wow.

    Summary: An productive economy should have a predictable, stable monetary system [and thus, why not based on a crypto-currency?]. All social inequalities should be tackled by the tax system, and only by the tax system. Mixing the two makes them both cluttered, thus less effective.

    (Also, separating these two concerns keeps a more clear devision line between the roles of economists on one side and politicians on the other. Economists should help in making society efficient. Politicians should concern themselves about fairness. Economists should not join the discussion of the fair level of redistribution of wealth or even the desirability of it (example Krugman)).

    641:

    Carl @ 639 has a point. Charlie I know this is your watering hole but that was unusual for you. Could you please not do it again? And Carl, you're the second libertarian besides Radley Balko I've ever agreed with.

    642:

    Well, let's take these one by one:

    • Votes for women: I'm more worried about what we let the state regulate than about who gets to vote for the people that then make the regulations. The maximum extent of state authority I'd be willing to accept is a minarchist state as described in Robert Nozick's "Anarchy, State and Utopia" (his response to John Rawl's "A Theory of Justice"). Since our current political system is so far removed from that minimalist ideal, I don't vote as not to give the politicians the idea that somehow I condone their meddling in my affairs. And I since I don't vote, I can't really say I care who else can.

    • Universal healthcare: A crime against humanity in my opinion. Poor service at a high societal price. And worse, the main reason for lack of innovation in the health care sector, thus ultimately killing people.

    • Employment laws: In a free society, most people would be educated and wealthy enough to be able to negotiate a fair employment agreement. Biggest harm done in the current system is that minimum wage laws price a lot of people out of the market.

    • Food safety: Not the government's business. Private testing agencies would do a far better job. The bigger problem is drug safety though: The FDA probably kills 10 people for every one person they save by delaying and preventing innovation the pharmaceutical sector.

    • Death penalty: Complicated issue. I'm against the death penalty, but mainly because I don't trust a government run legal system not to fuck up.

    Obviously you won't agree, and I don't expect you to, nor do I need you to. All I want is to be left alone. Let the progressives pay for their own "innovations". I'll buy my services on the free market.

    Ever wonder what the biggest difference between progressive and libertarian philosophy is? Libertarians don't need anybody else to buy into their vision, they just want to be left alone. Progressives can't tolerate anyone opting out of their vision for the world, ostensibly because everyone needs to pay their "fair share" of a dream that's not shared by all. But I suspect that in reality it's because the people that do the actual work in society are the ones most likely to opt out of paying for someone else's fantasy. And Bitcoin may just allow them to do that :-)

    643:

    In other words, tribal Papua New Guinea:

    You'd like to live in a place where there is no hereditary elite (tribal PNG), where everyone's voice is heard (tribal PNG), where everyone has to work for a living and/or starve (tribal PNG), where no one cares whether the medicine they're taking is going to kill them or not, because it's all they have (tribal PNG), where the status of women is irrelevant or "separate but equal" (tribal PNG), and where everyone is armed and trained from birth in the use of arms (tribal PNG), because there are no laws, only customs and highly intelligent men to interpret them (tribal PNG).

    This is not to knock the Papuans, who made the best of one of the worst ecological deals on the planet. I'm being deliberately mocking, because what you're proposing is great--for a neolithic society based on villages of no more than 200 people, where justice tends to degenerate into generations' long violent feuds. On a planet where one person can slowly kill tens of thousands of people through being stupid, careless, or malicious (and as a student of mycology, I can think of a bunch of them), it's so radically insufficient as to be worth nothing of scorn.

    644:

    Okay, I'm spoiled for choice on questionable or just nutty remarks from the post up at #625, but I'd like to point out this one:

    o hideous markets: It is not a valid function of government to regulate anything:

    Just what does he think the functions of governments are, anyway? As a hint, yes, governments really do have socially useful functions; they do not exist solely to tax cranky internet Libertarians.

    I might point out that governments are generally agreed to have the responsibility of defending their populations, and that not all threats come from invading armies or rabid bears, but someone might object to that as unfair government interference in Libertarians' natural gun nut rights...

    645:

    Employment laws: In a free society, most people would be educated and wealthy enough to be able to negotiate a fair employment agreement. Biggest harm done in the current system is that minimum wage laws price a lot of people out of the market.

    But I can't help noticing that conservatives and Libertarians are often the ones making the loudest objections when people start making proposals for economic systems wherein nobody would be economically or legally coerced into working for less wages than they would like or in jobs they would rather not have. There are some who benefit (at least in the short run) from having an ample supply of laborers who are not wealthy enough to tell anyone to offer a better deal or get lost; they are not unreasonable in objecting to any change that would let others have enough economic power to require negotiation.

    As for the minimum wage, remember what that is from the employer's viewpoint. Minimum wages jobs are a specific statement: "We don't value these people any more than we legally have to, and if we could get away with it we'd fuck them over worse."

    646:

    - Universal healthcare: A crime against humanity in my opinion. Poor service at a high societal price. And worse, the main reason for lack of innovation in the health care sector, thus ultimately killing people.

    I had thought it almost impossible to get that many wrong statements into a small paragraph but I was wrong. Kudos sir. Kudos.

    647:

    Libertarians don't need anybody else to buy into their vision, they just want to be left alone.

    Really? What happens when you need something else from somebody else? Buy it? How about they don't want to sell it to you because they don't like you? Maybe you're the wrong color for them to do business with, or you're the wrong sex? Maybe they just steal your money but tell you it was just a bad investment and all your fault?

    Sure you want to be left alone right up until you're starving and homeless and want the charity of the rest of us to deal with your incompetence.

    Never going to happen you say? Sure mate, keep telling yourself that. Sure bad things never ever happen to people who do all the right things and want to be left alone. Never.

    Sheesh. Seriously just grow up.

    648:

    @ 640 Err Politicians should concern themselves about fairness. ROFL Politicians concern themseleves with POWER - manipulating the electorate (or whoever/whatever needs manipulation in a "non-democratic" system) to make sure that they retain that power. / cynicism

    649:

    @ 642 So – all voting is irrelevant, so women having the vote, or not, doesn’t matter? Or are you saying something different?

    Universal healthcare DEAD WRONG – you are believing someone’s lies. How come Britain’s NHS, which is by no means perfect (There are considerably better universal systems.) yet still manages to deliver better health, for the whole of the population at a lower cost than the USA’s broken-backed collection of ramps?

    Employment laws That’s the spherical frictionless argument again I suggest you read Adam Smith on the tendency of employers to band together to screw their workforces … oops.

    Food Safety If NOT the guvmin’t business, then whose? And who is going to fund the private testing agencies? Cartels of big food manufacturers, perhaps?

    Death penalty Half-right (What happened? ) ALL legal systems make mistakes, which is why there are appeal courts – but the death penalty is irrevocable, which is the problem.

    Have you ever, you know, actually LOOKED at the real world & its’ complications?

    650:

    I was going to reply to you, but someone's already addressed pretty much every point you made, and said the same sort of things I would have said.

    So I'll just note that you've rejected the challenge of explaining why deflation is a good thing.

    651:

    Telling a bunch of Brits that the NHS is a dumb idea was bound to get a strong response. Certainly no surprise here :-)

    But my main point is that questions like 'Should we have universal healthcare?", "Should eduction be free?", "Should there be a minimum wage?" in a democracy will never be decided in the Libertarian's favor. These are political debates we Libertarians can't win, as the responses to my comments show.

    Instead Libertarians should focus on building technologies that hamper the state's ability to enforce its mostly crazy laws and thus put a limit on the tyranny of the majority. That's what I love about the Internet, about crypto technologies and virtual currencies like Bitcoin.

    652:

    Missed the challenge on deflation. Here's an attempt:

    If productivity goes up, prices should go down. Technology constantly improves productivity, so things should constantly become cheaper. This natural deflation is a good thing, because it reflects the productivity gains society as a whole is making.

    They only become more expensive, because central banks increase the monetary base. If everyone profited equally from that increase in the monetary base, inflation would just be a nuisance (making it harder to do long-term planning).

    But when central banks inflate (whether via quantitative easing, artificially low interest rates, TARP programs, or whatever), the new money first goes to select few (banks, private equity funds, etc). The price of inflation is most painfully paid by this furthest from the printing press (pensioners, people with fixed income, etc). So inflation is really a redistribution from the poor to the rich.

    When the monetary base has been extended by central banks to the point where credit becomes unsustainable like in 2008, the credit markets will contract and we see an artificial deflation (cash becomes king). This is painful, but necessary. It wouldn't happen if we hadn't had inflation in the first place.

    So in summary, natural deflation is good. Artificial deflation as a reaction to inflation is necessary, but painful. This type of deflation wouldn't happen without central banking, so one more reason to get rid of central banking.

    653:

    SO you're actually anti-democratic and possibly anarchistic? I mean, you've just said "I want to opt out of stuff that I don't agree with". I would love to have been able to opt out of paying for Dubya and B.Liar's wars in the Middle East, for funding an extra arm of the Yousay's WMD program, for bailing out badly managed investment banking... but doing that whilst still paying for actual services like UK defence, NHS, education... is illegal and should remain so.

    654:

    Mr. Stross, if someone had posted here "Socialists are the gift that keeps on giving, if by 'gift' you mean 'mountain of dogshit'", would you have yellow carded them?

    Depends on the nuance. If they'd said "Leninists" or "Trotskyites" or "Maoists" then, well, no. If they'd said "socialists" but went on to make it clear that they meant either (a) the sort of folks who ran the GDR or USSR, or (b) the sort of folks who join the SWP, then again: "no".

    If they were implying that Barack Obama or Tony Blair were socialists, then that would rate a yellow card because reality flaw core dumped.

    I'm planning on doing a longer blog entry on why I'm coming to hate [most] libertarians in the near future. Suffice to say it's not so much the ideology as the people it attracts. If your ideology justifies top-down meddling and centralized control of peoples' lives (as with the hardcore socialists, once we get past social democracy), then it tends to attract asshole control freaks. And if your ideology justifies selfishness and greed you get asshole greed-heads. Either way, it ain't nice: no implementation of a political creed can be better than its followers, and if the followers are nasty ...

    655:

    I actually agree with some of that. Deflation in consumer electronics shows no sign of harming anyone (well until we stop finding ways of extending Moore's law for a few more generations anyway), at least directly. Even there though, it has had the effect of turning devices from tools that get replaced when they stop working into fashion statements that get replaced every year or 2 regardless.

    Similarly, I'll agree about the potential effects of QE and low interest rates, given that the banks used the QE monies to rebuild their balance sheets rather than to lend into the wider economy.

    Where I do not agree is with the claim that the central banks (eg Federal Reserve, Bank of England) were responsible for the property bubble that burst in 2007. See my earlier comments about treating secured debt as an investment vehicle (eg sub-prime mortgages), repeal of Glass-Steagle...

    656:

    I'm going to get out of here soon and I'm sure I won't be missed. Only landed here because Paul Krugman (I'm also not a fan) mentioned this blog. But one last comment in response to Charlie Stross' intended blog post on why he hates Libertarians ("selfishness and greed").

    The Libertarian line of thought is actually more sophisticated than he plans to give us credit for. It goes like this:

    • We want a better world, just like most progressives and socialists do, I'll grant them that (unless they've been corrupted by cushy union posts or government appointments).

    • We believe that respecting peoples lives and property to a fault will make the world a better place. This is a utilitarian argument, just likes the progressive's utilitarian argument that regulation and redistribution are needed to make the world a better place.

    • We also believe in the non-aggression principle: you can't take something that's not yours, regardless of what the purpose. This is a natural rights argument. People have absolute rights to their lives and property, regardless of the laws men make.

    • The tricky part is this: Although Libertarians believe that the world will be better if property rights are respected, we're reluctant to make that argument. Why? Because the utilitarian argument is impossible to prove. I could be right that free markets always make the world better, or progressives could be right that we need some government or a lot of it. Who knows? It's not a hard science. So we tend to focus on the natural rights argument instead: You don't have the right to take my life or my stuff for your purposes, regardless of how lofty your goals are. The downside to that position is that it sounds selfish. But it's not. We also believe it's better for the world, we just don't want to go down a utilitarian rat-hole debating this.

    So Charlie, when you go to rant about how you hate Libertarians, please do us a favor and acknowledge that most of us are not Libertarians because we are selfish. We're Libertarians because we're passionate about making society better. We just happen to believe society will be better if we leave people alone, which for most people seems to be distasteful enough already.

    657:

    Oh, I understand the arguments; I just think they're wrong. Which is a shame. We could really use a simple, consistent, elegant model of how to fine tune human society for the better, couldn't we?

    The trouble only begins when we start trying to agree on a definition of "better". Or "property". (Some study of the history of the Enclosures in England, the Highland Clearances in Scotland, and similar "land reform" exercises elsewhere, is a bit of an eye-opener.) And again: while the idea of non-aggression is great in principle, in practice it takes no accounts of power imbalances that give one party unfair bargaining leverage over another. (The "bottled water vendor in the desert" problem springs to mind here, as does the intrinsic power imbalance between parents/children, or between corporations and atomized labor-unit human resources. And it seems to me that fourth-wave feminists and minority rights campaigners have come up with better cognitive tools for describing it, in the shape of intersectionality and kyriarchy than anything I've seen from strict propertarians/libertarians.)

    As I grow older I'm becoming increasingly suspicious of utopian projects. I'm especially becoming more suspicious of the motives of the proponents and enthusiasts of said projects. And even more so when those projects hinge on an attractive but ultimately reductionistic view of human relationships -- either as being totally dominated by class identity, or as defined by property/market interactions.

    658:

    OK, let's say that we have this society. Someone steals something from me, and I don't have sufficient personal funds to pay someone to recover it (or instead of stealing my whole dinner they steal my soup, Charlie's wine, your meat, Feorag's vegetables... so that it's not worth anyone's while putting more than an hour or two's funds into chasing them), how then do we obtain redress?

    Or someone needs an expensive medical procedure and doesn't have funds for it? Do we just let them die? I find that attitude more than just somewhat repugnant.

    659:

    @ 651 You MISSED where I said that there are better versions of unoversal healthcare than the NHS? Did that go right by you? But, even so, even the imperfect NHS is BETTER (cheaper per capita, lower infant mortality rates & longer overall life expectancy) then the US' non-system. If you want GOOD "nationalised" healthcare system, try Gremany, Denmark, Norway, Sewden, where the figures are even better. I mean, haven't you noticed that ON THE PUBLICLY AVAILABLE FACTS & BY ALL METRICS .. "Nationalised" single-payer systems perform better, all the time? Do you have a counter-argument?

    As for education, well - its' expensive, but ignorance is considerably more expensive, by any metric, including human lives.

    660:

    Charlie @ 657 As I grow older I'm becoming increasingly suspicious of utopian projects. Sometimes called, err "religions". Ahem. I'm also tending to think, along with you, that the Tranhumanists are already well down that extremely dangeorous road, btw.

    { Bad joke: Why do the t-humanists beleive that migrating your cattle will bring the millenium? ....Because the practice of shifting winter/summer pastures is called: Transhumance, oops. }

    661:

    Why do people keep blaming central banks for inflation? If banks didn't lend money recklessly in a fashion guaranteed to produce bubbles in the first place there wouldn't be the increase in money supply to cause all the harmful inflation. Of course central banks set the interest rate, but monetarist attempts at controlling the money supply in that way have been tried and failed. Moreover, I was not aware of any other method of setting interest rates which worked much at all (that is,if you want a 20th-21st century banking sector)

    SRoever and others seem totally unaware where money comes from, despite the likes of me pointing it out repeatedly in this thread, thus it's all about printing presses. However they are correct about the immediate benefactors of quantitative easing, because of the way it was done. The government of the UK could just have given every adult a thousand pounds, which would have injected what, 40 billion or more into the economy, paid off some debts etc, but that wouldn't have helped the bankers so much.

    Amusingly, or not so much, that's where libertarians and socialists and communists and indeed many forms of anarchist, agree, that the state is too easily taken over by the powerful and used for their own ends, which in these times means the bankers and their ilk influencing things for their own benefit. The different responses to this is what causes the argument.

    662:

    I don't know, I think that people have this huge irrational dislike for bitcoins. I found this article quite silly.

    -I mean... the actual technical idea is brilliant and people should appreciate that. It really demonstrates the awesome power of cryptography. I spent a whole summer reading about modern cryptography and I loved it (google "Zero knowledge proofs" and the paper "Proofs that yield nothing but their validity or all languages in NP have zero-knowledge proof systems").

    -"Btc are inherently deflationary": So what? The only potential problem in regards to deflation is that of hoarding bitcoins might depress spending: This cannot really happen since everyone is getting paid in real dollars anyway. It won't hinder borrowing, because people will simply borrow in dollars. This guy doesn't know economics.

    From a purely logical standpoint in regards to macroeconomics/ monetary issues, btc are EQUIVALENT to gold bars, so any problem that btc will magically cause must also be caused by gold.

    -Maybe it has a big carbon footprint, but the current payment system probably has an equally big one.

    -"The gini coefficient of the bitcoin economy is ghastly": Well that actually makes zero sense. GINI measures income inequality and there is no income to speak of. Most addresses will contain a small amount of money because of the existence of tumblers and distributed wallets and things. Why on earth does it matter if a small number of addresses have a large amount of coins sitting in them? Is this creating inequality somehow? No. There are just some wealthy people lurking around.

    -It's never going to damage central banks and the ability to collect income tax because wages are always going to be paid in dollars which are traceable. "linear extrapolations imply that BtC will badly damage stable governance," "damage civil society". Oh come on... don't be ridiculous...

    663:

    I think there are lots of views on what libertarianism is, but some of them are confused (both from proponents and opponents). Here's my take:-

    The question is what's the best political system? Let's take it for granted that we all share roughly the same morality. We don't want to see people abused, starving, etc., etc.

    A political system is generally a kind of machinery to do social stuff, a machinery that boils down to force or threat of force.

    A common response is that this machinery should be the tool of the public weal, the tool of a majority public opinion, of elected representatives, etc., etc.

    Now of course there's a whole passel of interesting problems at that level. And the usual result is the idea of a democractic government run by "us" (the good guys) that corrects whatever imbalances it supposed there might be, in the distribution of goods and services that would have fallen out without such correction.

    But that level of questioning doesn't go deep enough. The real question is not "who rules?" (or its subsidiaries "under what circumstances?", etc.) but "is there any validity in the concept of "rule" at all?" The real question is, do we need such a tool, and if we do, under what limited circumstances?

    Anarchism and libertarianism say, "if at all, only just barely".

    Hence, any and all government policy should be understood to be not a potential solution, but as a least-worst outcome, as a lesser of evils, or something in the nature of training wheels, useful only to the point where individuals do in fact commonly take responsibility for themselves and their own lives, and learn to self-rule (and from there, to communality). (Incidentally, from this view, democracy falls out as another least-worst method of sorting out the "who rules" question.)

    So, if there is a perceived social imbalance, the first question ought not to be "what can government do?" but "what is stopping people from doing?" This might indeed result in some policies that might be practically indistinguishable wrt a libertarian state vs. a socialist state. The difference will be, practical terms, that the policy will be more readily ditched if it doesn't work as advertised, because it isn't based on ideology, on what policy-makers think ought to be, but rather on observed pragmatic effect, in the libertarian case.

    So it's not so much that libertarianism thinks we can do away with government tomorrow. We probably couldn't. But it ought to be our solid, long-term political aim to see how little politics we can get away with, and how much can be done just by individuals interacting according to common rules. It ought to be the political aim to nurture ground-up stuff that's already tending to happen, rather than impose solutions from above. Etc.

    In the longest historical view, what basically happened was that the great democractic revolutions got rid of kings, but not of the king's ruling tools (i.e. government). They didn't get rid of the ruling tools because they thought good could be done with them. By now, we ought to be less naive about it.

    It's ok to have training wheels, but they will have to come off at some point.

    664:

    Most of those countries you describe as having a "single payer" health system aren't actually single payer. They normally require people to actively sign up for healthcare, pay insurance premiums and often also pay money to go visit the doctor, get treatment etc.

    The medical insurance markets in those countries are heavily regulated and often non-profit, the premiums are small and can be offset for needy individuals and the payments (ObUS: copays) are usually small but they're not "single payer" in the same way the NHS is where there are no insurance premiums, no need to sign up or otherwise jump through hoops to get coverage and of course there is no copay system at all for medical treatment.

    665:

    Okay. I'm glad I didn't bother responding to the Libertrarians above. The ignorance and inanity of them just made me want to bang my head against the wall, and I couldn't have done justice to them. Just so you know that not all, or even most, Americans think that way. For someone who claims they "just want to be left alone" they sure can natter on, and remind me more and more of conservative evangelicals.

    As for Charlie's "mountains of dogshit" comment, the only mistake was that he left out the word "Flaming".

    666:

    I just think it's interesting how bitcoins solve the problem of micropayments in one swoop. Remember micropayments? People were kinda interested in those once upon a time.

    If you're the kind of person who cannot abide advertising and ad-supported models maaaybe that's one pro that can balance out the other cons.

    667:

    Who pays for the infrastructure to support the micropayment system in bitcoins? Who deals with dispute resolutions in cases of "he said, she said"? Those have tended to be the problems with any alternative currency system posited for the internet or otherwise.

    668:

    I was with you up until I remembered OGH reporting the value of 1 Bitcoin having crashed for US$1000 to only 500. That's not micropayment values; micropayment is &lt US$1 or thereby.

    669:

    Seriously? I did a word search to find your post after I logged in and you've posted in this discussion over 100 times and you don't even know bitcoin can be split into (a billion) pieces?

    As for dispute resolution: microtransactions don't exactly lead to major disputes because they are... micro. Oh noes he stiffed me of my 2 cents.

    I guess someone could scam millions of people to make tens of thousand $ but it's not likely to be repeatable. And the receiving wallet would be traceable. Perhaps "dirty" bitcoin could be tagged and it's owners boycotted. That would address Charlie's point about horrible markets and turn bitcoin into a reputation currency like in Cory Doctorow's " Down and out in the magic kingdom"

    As for the infrastructure that's what the miners are for. They are the infrastructure.

    670:

    So what you're saying is some deflation is painful but for the greater good? And what's your plan for people who don't have stores of the deflating currency who can't get any because people are holding off spending because they'll get more for their money next week?

    How do you get out of the deflationary cycle of hoarding? The people with lots of money are fine, everybody else though?

    671:

    The problem is the mining! Especially the mining of a fixed quantity of the resource which, as I understand it, cannot be changed.

    Even worse when looking at Bitcoin, the mining gets harder and was easier to start with... So we've a naturally deflationary currency with a hard coded fixed supply that was easy to get at the start for the founders and early adopters...

    Hmm.... There realY ought to be a name for that kind of scheme.

    672:

    So we tend to focus on the natural rights argument instead: You don't have the right to take my life or my stuff for your purposes, regardless of how lofty your goals are. The downside to that position is that it sounds selfish. But it's not. We also believe it's better for the world, we just don't want to go down a utilitarian rat-hole debating this.

    There, in a nutshell, is the problem: it does sound selfish, and that's a semantic composition failure. Libertarians are often seen as selfish assholes because they say things like "You don't have a right to take my...stuff...regardless of how lofty your goals."

    Imagine that same argument rephrased: "We don't have a right to take your stuff, no matter how lofty our goals."

    With that Libertarians stop sounding like selfish assholes (although some may still be selfish and/or assholes); the principle argues for the rights of others, not the privilege of the speaker. If everyone adopts this Libertarian thesis everything works as well as under the previous one, with the added bonus that it may be more obvious when someone's not playing by the rule.

    Okay, there are pitfalls; for example, a Libertarian who argues the thesis "We don't have a right to steal your life or your stuff even if we have good intentions" may have trouble arguing against health care. (Can you let someone die for lack of treatment, stealing his life through inaction, because that would cost you money? That doesn't even sound like a good intention.) That doesn't hurt the Libertarian philosophy, though, just the political ideology that assists assholes in being jerks to other humans.

    673:

    I'm also not sure how a lack of universal healthcare or for that matter education fits into the utilitarian argument.

    We're all for maximizing happiness but only if it doesn't cost us anything does make you sound like a jerk.

    674:

    I did a word search to find your post after I logged in and you've posted in this discussion over 100 times and you don't even know bitcoin can be split into (a billion) pieces Now repeat, and tell me how many of my other arguments are contingent on knowing details of Bitcoin, rather than on economics, politics and the like. Perhaps you'd like to try other searches, and find how many times anyone has mentioned that Bitcoin is a base unit, not a minimum, or how many pieces one Bitcoin can be split into?

    675:

    I apologise if that sounded more accusatory than intended, I was on my mobile and didn't feel like scrolling for 5 minutes to get to the bottom of the page, so I used your name as an anchor.

    The point stands though, this discussion seems to have some glaring holes regarding basic functionality of the thing being discussed.

    how many of my other arguments are contingent on knowing details of Bitcoin

    I am not refuting any of your arguments. I have been participating very lightly in this thread, as I'm not interested in being pigeonholed into some political definition I may or may not agree with (Incidentally, when I hear "libertarian" I think of these http://www.nodo50.org/agl/index.php?showimage=4&ModPagespeed=noscript - the Spanish civil war libertarians who fought against Franco)

    Anyway, a bitcoin can be divided into satoshis, which are 100 millionth of a bitcoin, so at current valuation (round 800$) it's more of a femtotransaction than a microtransaction :)

    676:

    Para 1 - Accepted.

    Para 2 et seq - Thanks. (incidentally, I'm on holiday so have more time than usual for this stuff)

    677:

    Don't worry. I'm pretty sure I'll eventually say something outrageous and you can go back to disagreeing with me!

    678:

    Substitute Dutch with Statalists and you are right.

    679:

    +1 @RobertHanna89.

    I think this article makes sense in response to anyone suggesting BitCoin as the basis for a national economy, but that's a bit of a straw man argument since that's not a suggestion I've seen put forth seriously. I'm sure someone out there has, but in general it's not really part of the discussion. OTOH, if you take half of the arguments and make the point is that BitCoin introduces as many problems as it solves, then point taken—BitCoin enthusiasts should have reason for pause.

    Certainly BitCoin has its darker side, but you could say the same thing about cash and gold. BitCoin mining may have a terrible carbon footprint, but can it really compare the ecological footprint of the kind of gold mining that became economically feasible when gold got past $1k/oz? And the BitCoin cap puts a cap on the major source of the carbon footprint (the mining).

    BitCoin is interesting as an experiment and it raises a lot of questions. The most important question is not whether BitCoin is good or bad, the question is what does BitCoin tell us about the future, and what can be done in the future to maximise the good that comes out of BitCoin and its descendants and minimise the bad.

    680:

    No one force you to drink it, so it can only be toxic to people using and accepting it.

    Why not letting your hated libertarians to use it and get poor, depressed, miserable?

    681:

    One thing I've noticed (especially from reading this blog and its comments) is that "socialist" is one of those words like "old" and "far away". It seems to mean something quite different in the US than in Europe. In Europe, there are any number of mainstream political parties that quite openly call themselves socialist or social democrats or similar terms. In the US, "socialist" is avoided by nearly all political parties, even though some of the basics of what I believe you consider a social democracy are relatively uncontroversial even among American conservatives.

    Any government will tend to accumulate a lot of asshole control freaks (ACFs). Since positions in government tend to be less financially rewarding that equivalent positions in the private sector, they will attract a disproportionate numbers of idealists and ACFs. And as you go higher up the government food chain, the idealists will tend to lose out to the ACFs because the idealists are spending their time trying to help people, while the ACFs are spending their time trying to help themselves. This is a problem in any government or any political system. It's also a serious problem in a whole lot of non-governmental institutions.

    The libertarian solution to the ACF problem is to keep the government small and restrained in power, so as to limit the damage the ACFs can do.

    But what do you do about the asshole greed heads (AGHs)? Fortunately most of them are not looking to government as a career path. (At least not until a government is sufficiently pervasive to the point where political power equals large sums of money.) Libertarians tend to believe the worst (not all) excesses of the AGHs can be controlled by the marketplace. It is only when the AGHs in the private sector and the ACFs in the government join together to create a permanent political class that the AGHs can do large amounts of damage. So to prevent the AGHs finding it worthwhile to subvert the government, keep government small and restrained in power.

    That's my understanding of the basic libertarian position. I'm aware that things are not that simple. I'm also aware that at least a dozen libertarians on this thread will probably disagree with me.

    There is no magic solution to the problems of a hugely complex society. Not single political system is going to have all the right answers. And any political ideology allowed to have its way without opposition will ultimately go the way of the asshole control freak. I imagine that a pure libertarian society would eventually end up with jack-booted thugs from the "Department of Freedom" busting down doors in the middle of the night to haul away "enemies of liberty".

    However by working for a smaller, restrained, and less intrusive government, libertarians help curb the tendencies of the state to move in a corporatist or totalitarian direction.

    682:

    Why not letting your hated libertarians to use it and get poor, depressed, miserable?

    Well there are two issues here.

    Firstly there's the old Libertarian adage that your freedom to swing your fists ends at my nose. To whit: my concern with this is they're not going to be the only ones that might be impacted.

    Secondly: as a fully functional human being with empathy, I'm not keen people being left to be 'poor, depressed and miserable'. Putting on my Greedy Selfish Hat, which I wear at a jaunty angle over my Bleeding Heart Liberal one, I WILL BE BUGGERED IF I HAVE TO PAY TO LOOK AFTER THEM.

    Seriously, whenever I read the types of argument's posted here I hear them in the voice of Harry Enfield's Kevin The Teenager. Seriously, google it. And then go and re-read sroever's posts.

    683:

    Author claims that inflation and deflation are not opposite of one-another. False. By definition inflation is the persistent increase in the general price level of goods and services in an economy over a period of time. Deflation is the opposite in that it has an identical definition, except "increase" is replaced with "decrease" (which by the way, are opposites.) Perhaps the author means the effects of the two aren't opposite one-another, but he doesn’t provide any details or examples of what his point is here so I shouldn’t try to understand and possibly make a mistake. Author, please explain your thoughts here

    I stopped reading right here, because, what are you, eight? His name is Charlie Stross, and you can bloody well use his name, if you want to be taken seriously.

    684:

    It's the comparison between Leninism and Libertarianism that is the ultimate truth here. Marx was, after all, mostly right about the way society works. But he fell for a totally magic concept of "the dictatorship" (of the proletariat, though!) in his later days, I suppose because he was tired of the workers getting kicked in the teeth and revolutionaries getting in trouble with secret police of monarchies and czardoms. "Don't worry," they said, "the dictatorial state will wither away." Like hell. Of course, it took 70 years and

    The Libertarians get into a magic froth about how EVIL the state is, and how the individual was the source of all good. No matter that that's a load of bunkum. No matter that the market has demonstrated over and over and over again that it needs regulation, the latest time being 2007-2008. No difference is seen whether the state in question is a democracy run for the "greatest good of the greatest number" or a dictatorship of the masses or of those with capital. It just, well, IS.

    Money is a social construct. I'm fairly sure that a digital means of exchange will be devised. Cheaper than printing paper. But it will, please God, be regulated by central banks, and thereby democratic governments, for the widest benefit possible. This destructive right-wing Leninism really has to go away, for everybody's good.

    685:

    I'm not up on my right-wing personalities, but I do recall that some of the higher-level neocons in the Bush White House had started life on the far left, then migrated to the far right as they got older, just as some notable pagans became ardent Christians when they got older.

    How many libertarians fall into this camp of migrating lost souls, I wonder? The central theme of their lives may be looking for the One True Cause, and as Charlie (and many others) have noted, this almost inevitably involves treating humans as inhuman abstractions to make the scheme work.

    Does that mean neoliberal, market-driven capitalism is the best and only solution? Nope. That's another One True Church, at least in my eyes. Homo economicus is just as abstract as Homo communensis and Homo liber.

    Since I'm a biologist who thinks that political scientists in general need to dissect more tapeworms and rats, here's my take: any system that's widespread and productive tends to pick up a lot of parasites. It's evolution 101: there's a great resource going untapped, and anything able to tap it (parasites don't kill their prey, after all), is going to be very, very well off. Now, if there's only one political system, it's going to attract the parasites (aka the asshole greed-heads of #681, aka the crooks, cronies, and so forth). It doesn't matter what the system is, if it's doing well, it's going to attract the parasites.

    There are three solutions to such parasitism: --One is to admit that parasitism is inevitable. Something like 75% of Earth's species are parasites (most parasite species have only one host species, but most host species have more than one parasite species). If nature hasn't been able to solve this problem in 4.5 billion years, we won't be able to do it anytime soon. Some biologists tend to believe that healthy ecosystems have a high diversity of parasites, while ones in trouble (for example, systems dominated by recently introduced invasive species that have outrun their parasites) do not. Rather than try to get rid of all freeloaders and crooks, limit the damage they cause so they don't kill the system. --Limiting the damage, part 1: immune systems. In politics, we call these regulators. Yes, too much regulation is akin to an autoimmune disease. However, no regulation is analogous to having no immune system. One of these problems will kill you faster, and this is why I think calls for radical deregulation are a bad thing. Nature's got a lot of neat equivalents for immune systems. --Limiting the Damage, part 2: diversity. In diverse systems, it's hard for one parasite to destroy the system. Possible, but difficult. I'd suggest that diversity in politics is a good thing for exactly the same reason.

    686:

    Charlie,

    Bitcoin is a technology. It's an open-source network protocol, just like HTTP for websites, SMTP for e-mail or bittorrent for p2p file sharing. The fact that it's open-source, means that you don't have to trust anyone - any programmer in the world can read each and every line of code of the bitcoin protocol.

    What you are talking about in this article, is the units of currency, which are used INSIDE the bitcoin protocol. Confusingly, these units are also called "bitcoins", but there is very important distinction between them and the network itself.

    Consider the DNS protocol - the protocol itself is like bitcoin protocol, and domain names are like bitcoin currency units.

    No technology an be inherently "good" or "evil", it all depends on how it's used.

    Bitcoin will never go away, it's a new technology, and it WILL be used, because it allows to do amazing things which were not possible to do before, like to create a "provably fair" casino, or create a decentralized asset ownership ledger, or even to replace the current DNS protocol which I mentioned before... the possibilities are in the thousands.

    It can not be "uninvented". Even if the current form of bitcoin somehow fails, the technology itself still remains.

    687:

    "Some biologists tend to believe that healthy ecosystems have a high diversity of parasites, while ones in trouble (for example, systems dominated by recently introduced invasive species that have outrun their parasites) do not" Thanks for this, didn't know about it (not a biologist); the literature looks fascinating.

    688:

    I'd comment, but it's best not to argue with the proudly uninformed. There are so many problems with your supposed facts (including your deliberate misunderstanding of "inflation" and "Gresham's Law") that it was easier to just cut bait and call "BS!"

    689:

    Come to think of it, I do have a comment--or a rhetorical question: Why do I think you'd be JUST PEACHY with bitcoin's "Gini ratio" if you had purchased a few hundred when they were less than one dollar each? For someone with such a strong opinion, I expected someone who knew a little bit about the topic.

    690:

    "A lot of people who should know better seem to think it's a good thing."

    This is a perfect point, if you apply it to the state and its designated "currency."

    691:

    Hey, Sweetie, who ya talkin' to?

    692:

    JCH @ 681 Your para #2 is a re-statement of Pournelle’s Iron Law of Bureaucracy, actually. ( Isn’t it? ) Libertarians tend to believe the worst (not all) excesses of the AGHs can be controlled by the marketplace. I wonder if they’ve ever come across, oooh, Nicholas Hoegstraaten? Or other people sometimes tagged as corporate bullies { Not mentioning Willie Walsh or Iain Coucher, oh noe! }

    693:

    jmhass @ 684 Marx was, after all, mostly right about the way society works. Correction: .... Marx was, after all, mostly right about the way society worked THEN. And he made predictions, SF-author style about what would (should?) happen if that went on. Like "Halting State" & "Rule 34" the world's operating parameters changed in ways that Karl didn't see. Most employers realised that treating your workforce better, gave you a more productive workforce, etc ... and this became the predominating opinion & outcome. Thus invalidating any societal precription based on classical "Marxism" which thus metamorphosed ( Or should I say metastised?) to a religion, with all the usual consequences.

    Err .. rephrase... Effective Parasites don't kill their "Prey" (food-source) - the trouble is, far too many parasites do actually, kill their hosts, even if slowly. Err ....

    694:

    I THINK he's a drive-by troll, snarking at Charlie?

    695:

    Thing is, I have read Memoirs of Extraordinary Popular Delusions and the Madness of Crowds, and so if I had got in at the beginning of Bitcoin, I would have cashed out long ago. I don't see many ways in which I could use them.

    If you cannot use money, it is worthless. What, if you buy a Bitcoin, can it be used for?

    696:

    Somebody pointed me at a list. It included a few goods not lawful in the UK, and of dubious legality elsewhere. It does change the question slightly, but looking at the overall range of good and services, a rational Bitcoin user, seeking to use it as a currency, would be distinctly odd by my standards.

    And some of the services look a bit dubious. "send SMS messages worldwide (0.5 btc/sms)" That's about $360 to send a text message to somebody's mobile phone.

    I don't see Bitcoin as having any use for me, and I am already a weird pervert.

    697:

    Interesting, it seems that my idea of tagging bitcoins used unethically is feasible and has already been proposed

    http://www.coindesk.com/bitcoin-tracking-proposal-divides-bitcoin-community/

    698:

    Marx will be right once again when the bulk of the population are surplus to Capitalism's requirements. The alternative is a future where the vast bulk of the population are in make-work eg bureaucratic form filling and box ticking while the rest are involved in complex schemes to skim off more than their "fair share" of the production from the tiny minority of "real" workers.

    699:

    ASSUMING "Capitalism" itself retains its present form, as it didn't during Marx's time, & also assuming that there is not, alternatively, a movement Culture-wards.Your prediction will only be valid, in other words, if quite a narrow set of specifications are adhered to ....

    700:

    You mean the narrow set virtually all of the west is following? A political system that has been bought?

    701:

    Dubious at best:

    --If an economy is run by consumer demand, depriving consumers of the way to make money will kill the economy. Ergo, automation will stop when it starts hurting sales. --Lots of unemployed or underemployed young people is the classic recipe for insurrection. Right now it's happening in Egypt, Spain, and Greece. Keeping people gainfully employed is required for governmental stability. --If the economy works such that only the very rich are handling money, the alternative economy will grow up to eclipse them. It's worth looking at the original history of paper money in China, where the silver economy grew up as a distinct and stable alternative that ultimately fed the China trade (using silver from Mexico to feed luxuries to Spain).

    Besides, "make-work" is hardly stupid. We've been strip mining resources out of the true primary economy (the biosphere) for centuries, and it would be smart to sink a bunch of the money (from the secondary manufactured economy) back into improving the biosphere: planting trees, rebuilding soil, recharging aquifers, and so forth. If a government nationalized the hedge funds and put people to work with the money, they'd probably get it all back (and then some) in taxes, economic growth, and improvements in the primary economy which keeps us all alive.

    702:

    RE: Taxation and crime

    Bitcoin is not any different from cash in regards of taxation. In fact Bitcoin is more traceable than cash. It's completely public in fact. You can see every single transaction from every single wallet. You can mine the data to your heart's content. https://blockchain.info

    You can move millions of cash in a plastic bag if you want and it's much harder to track than Bitcoins. And criminals do 10000x more business in cash and 1000x more in hidden bank accounts than in Bitcoin. If you're worried about criminals and tax evasion you should argue against cash before anything else.

    On the senate hearing the representatives from US crime fighting organizations clearly said that they have no problem with Bitcoin and they need no more regulation at this point. I bet they would actually prefer if criminals used Bitcoin, because they have an easier way to track them through it.

    Several countries already issued policies on how to tax Bitcoin and they are treated as any other asset.

    RE: Deflation

    The deflationary nature of Bitcoin is not a flaw, but a feature and a benefit.

    Because of the inflationary nature of the government currencies we have a huge problem of overconsumption in the Western world. People are encouraged to spend instead of saving. They even take loans to spend more.

    Banks are legally allowed to loan out 90% of the money people keep on their accounts. And when those who took the loan put the money on another account 90% of that will be loaned out again. And this goes on indefinitely. Creating thousands of dollars from a single real dollar that has been created with actual work.

    Governments need to raise the debt ceiling over and over indefinitely too.

    This practice is clearly unsustainable on personal, organizational and governmental levels. Eventually parts of it or all of it will collapse and people will pay the price. The housing bubble was an example of a partial collapse. But that's just 5% of what can happen.

    Bitcoin on the other hand is deflationary, which encourages saving instead of spending. Instead of taking up another loan and buying a new computer I will rather use my old one for another 6 month until I can actually afford to buy it. This way I will avoid inflating the debt bubble further.

    Those who save more than spend will help save the rest of country who spends like there is no tomorrow.

    RE: Ethics and carbon footprint

    This supposedly wasted electricity by Bitcoin is not exactly wasted either. Miners power the verification process of all the transactions. If you don't have to open another bank branch because of Bitcoin you would save much more electricity and other resources than what mining uses.

    Also, the practice of building supercomputers and running them for extended periods of time by amateurs is really exciting. The bitcoin infrastructure is several times bigger than the top 500 supercomputers in the world. The skills and technologies we learned will allow us to create supercomputers in the future that will solve the biggest problems we have.

    New coins like Primecoin for example already calculate prime numbers which is key for mathematicians. Ripple, the third biggest and Gridcoin calculates AIDS fighting medicine, cancer markers and climate change data. You can join and make about $400/year with your regular computer Today.

    Finally, the spending reduction that Bitcoin encourages saves much more carbon than the electricity it 'wastes' because you don't have to create those unnecessary products in the first place. If you truly care about carbon emissions Bitcoin and other altcoins are the ethical choice.

    703:

    Bitcoin on the other hand is deflationary, which encourages saving instead of spending.

    Ah, so you want to crash the economy? Excellent.

    So tell me, if you don't want people to spend money, what do you propose the economy does instead?

    704:

    BTW - you do understand that there are countries around today that have been running relatively high levels of government to GDP debt for THREE HUNDRED years with apparently no effect?

    That's not to say that there aren't unsustainable levels of government debt just that the UK, US and Japan are not remotely near them.

    Without fiat money and the ability of the total size of the economy to grow we pretty much break capitalism. What is amazing me about this discussion is how many apparently right wing, capitalist libertarians want to kill capitalism.

    Anybody would think they were being played by some old style communists.

    705:

    This supposedly wasted electricity by Bitcoin is not exactly wasted either. Miners power the verification process of all the transactions. ROFLOLMHS

    706:

    Without fiat money and the ability of the total size of the economy to grow we pretty much break capitalism. What is amazing me about this discussion is how many apparently right wing, capitalist libertarians want to kill capitalism.

    Anybody would think they were being played by some old style communists.

    That or they want to be the commissars. Or feudal lords. Small difference there.

    707:

    You are correct. I had forgotten that Pournelle stated pretty much the same thing more elegantly.

    As for Nicholas van Hoogstraten, Willie Walsh, and Iain Coucher, I was not familiar with them. A quick look at those names in Wikipedia tells me that both Walsh and Coucher seem to have generated the most controversy during their tenure running state-owned or semi-state-owned corporations. The worst of them, van Hoogstraten, eventually found one of the most despotic and corrupt governments in Africa to cozy up with.

    A cursory reading of the careers of the three men, seems to support my contention that the Asshole Greed Heads of the private sector do the most damage when in bed with the Asshole Control Freaks of government.

    708:

    I don't want to get into the business of defending Bitcoin. I think I've been clear that I think it is just another commodity for people to buy and sell, and is likely to have little impact on the world economy.

    However, encouraging savings rather than spending is not necessarily an economic harm. An economy needs a balance of both spending and savings. If the levels of either get too far out of balance, you either get speculative bubbles one one hand, or crushing debt on the other.

    709:

    This may come as a surprise to many people, but while I disagree with Jerry Pournelle on many issues, I agree wholeheartedly with him on some. The iron law of bureaucracy is one of them (although I suspect we differ in our preferred ways of dealing with it).

    As for purely free-market sector greed-heads with no real government income stream, will Bernie Madoff satisfy you?

    710:

    An economy needs a balance of both spending and savings.

    Yes, but it depends how you save. Saving by investing in businesses for growth is good. Saving by shoving your money in a bank, knowing they'll loan it out at interest, also keeps the money-go-round turning, which is good. Saving it in a sock under the bed, however, is bad -- it's deflationary (removes money from circulation), doesn't stimulate growth, and acts as a brake on the business cycle if too many people are doing it. And the latter kind of "saving" seems to be what bitcoin is fine-tuned for.

    711:

    Not entirely co-incidentally, it's also why the UK and USA property markets were bubble markets.

    712:

    Saving by shoving your money in a bank, knowing they'll loan it out at interest, also keeps the money-go-round turning, which is good. Saving it in a sock under the bed, however, is bad

    I wanted to point out that we're currently in a weird situation where people are shoving their money in banks who are doing pretty much the financial equivalent of stashing it in a sock.

    They worked out a while ago that lending money out for interest is a terrible business model really compared to esoteric and poorly understood trading vehicles.

    Which interests me because it pretty much breaks the central conceit of 'trickle down' economics - if the rich people are putting their money in banks who aren't doing a lot with it to actual grow the economic base (investing in business and the like) what is the point of giving all that money back to the very rich?(*)

    (*) - the irony that a lot of the people most worst effected by this are mistakenly believing they are the very rich and seem to be happy with policies which actively make their lives worse is not lost on me, and brings me back to the point above about commissars.

    713:

    Charlie pointed out the main thing about saving, but specifically I've a real problem with people complaining about government debt in a seriously depressed economy that is suffering from high levels of unemployment.

    One of the problems we have is massive transfer of wealth to the very rich (at least in the US and UK) where the only way to stimulate growth that has been acceptable politically is to drive it on the back of consumer debt.

    As my old economics teacher loved to point out back in the 80s.... tightening your belt and saving money is a very sensible and prudent thing for you to do as an individual. The problem comes if everybody does it at the same time and there's nobody around to actual spend money.

    714:

    True. The idea with government debt during a recession is that the government is promising to pay back in future growth what it borrows today to fix problems. That's not a bad scheme, assuming that bad years happen and good years happen after bad years, because the debt evens things out, keeps businesses open, farmers farming, and keeps the necessary infrastructure from disintegrating due to financial problems. In the normal course of things, the Obama administration should have had no problem using this to keep the Great Recession from getting so bad.

    But we also have the massive deficit run up by the Bush administration: it was a classic military move from the Era of Colonial Empires, where people who were conquered and made colonies were saddled with the cost of conquering them (cf: Graeber's Debt), so that the newly conquered paid for the cost of their conquest by doing whatever the conquerors ordered them to do.

    Except that it didn't work in Iraq. Those ungrateful Iraqis (sarcasm) even destroyed their oil production infrastructure so that the US couldn't seize it and use it to pay the cost of invasion. And don't even look at Afghanistan: the only thing the Afghanis could use to pay off the cost of invasion was increased opium poppy cultivation, and the US wasn't willing to follow the British example and forcibly ship opium to, oh, China (cf: Opium Wars)

    The end result was that there's the huge invasion debt floating around, and it can't be paid off the old-fashioned way. That's a bit of a problem.

    The part I don't particularly understand is why the people on the American Right want to keep our huge, expensive military but want to pay off the cost of it by strip-mining assets from every other public sector. I guess the idea is to use said military to keep our international creditors (primarily China) from bugging us too much about when they're going to see their investment paid back. It makes me think that the people who engineered the debt refuse to pay it off and are willing to trash the "Full Faith and Credit of the US" to avoid paying the bill. Since they're all backed by such honorable pillars of industry like Koch brothers, that can't possibly be correct.

    It's so confusing. Really. Heck, people are even claiming that the US is the biggest threat to world peace right now. That can't be right. Can it?

    715:

    --If an economy is run by consumer demand, depriving consumers of the way to make money will kill the economy. Ergo, automation will stop when it starts hurting sales.

    --Lots of unemployed or underemployed young people is the classic recipe for insurrection. Right now it's happening in Egypt, Spain, and Greece. Keeping people gainfully employed is required for governmental stability.

    That first point is awfully optimistic, like saying that cod fishers will automatically self-correct to maintain viable fish stocks. A firm will always see the wage savings of automation before it sees the depressing effect on demand. On top of that it's not even clear that mass employment is something we want to preserve for its own sake.

    Related, that second point: people who are young and unemployed are a recipe for insurrection because they are materially deprived, not because they really want to spend 8 hours a day picking fruit or standing behind a cash register. Give them income, coupled to jobs or not, and I'd bet the insurrection fizzles out. The problem is that most people tend to think of jobs, production, and income as inseparable both practically and morally. In reality jobs and production are increasingly decoupling and I think that income and jobs should decouple too, rather than trying to turn back the tide of automation.

    I agree that projects to remediate environmental damage would be a good idea. Projects to repair and reshape public infrastructure would be good too. These are actually valuable services though, albeit ones undersupplied by market logic. Likewise the New Deal government employment programs generated a lot of useful knowledge and infrastructure that is still around today. When I hear "make-work" I think of things like building more copies of weapons that even the Pentagon says it doesn't need more of, Cash for Clunkers* to stimulate the auto industry, or feeding prisoners $2 worth of food so they can crush rocks with hand tools into $1 worth of gravel.

    *Which initially sounded like a good idea until I realized that real "clunkers" were not eligible -- it was about getting people to scrap recent-ish cars in favor of even newer ones

    716:

    I had assumed that was obvious; socks offer no protection at all. You need at least a U.L. Rated Class 350°F 2-hour fire resistant safe under your bed for money storage (assuming, of course, you haven't already invested in a fireproof underground bunker in your backyard).

    Seriously though, I did assume that most people's savings would not be in the form of "cash in the mattress". People want their savings to appreciate, or at least outpace the rate of inflation. That's one of the problems I see with the US economy now; rates of return for safe savings options are so low that they don't keep up with the rate of inflation, so people look for higher-yield riskier options for even short term investments. Which inevitably leads to bubbles.

    717:

    Oh yes. Madoff is an excellent example of a purely private sector asshole greed head. I'm not denying those exist. There are plenty to go around and they can wreck people's lives.

    718:

    If you are serious about reducing the national debt of the US, the military will to have to be significantly scaled back. Fortunately for the military, there isn't any political party in the US who is serious about reducing the national debt. Every president in my memory (which back to Nixon) campaigned on reducing the budget deficit and the national debt.

    The only time since I've been alive that US was actually showing budget surpluses was under Bill Clinton (and Newt Gingrich running the House). Perhaps the key is to elect more sleazy adulterers.

    719:

    The US isn't a threat to world peace currently because American are sick of wars that never end. Obama did his best to get us into a war in Syria, and ended up being stymied by a "strange bedfellows" coalition of tea party conservatives and progressive liberals in Congress.

    Ironically, the biggest threat the US poses to world peace is getting sick of the entire empire business (which we do a piss poor job of), and cutting its military in about half and pulling back its troops from much of the world.

    720:

    If an economy is run by consumer demand, depriving consumers of the way to make money will kill the economy. Ergo, automation will stop when it starts hurting sales.

    No, automation stops when the company automating can't make money screwing people that way any more. Economic depression hits across the board, meaning there's less money to go around, and every individual company needs to find some way of grabbing a bigger share or paying out less money - and automating human labor is a great way of paying out less money.

    A theoretical exception is when a dominant force - a government - sets people to laboring for the sake of labor, making things happen in a particular way even though they are not done in an economically rational manner. There aren't too many situations in which this strategy is approved of by Libertarians.

    Of course, it's also an obvious economic truth that markets work best when everyone within them has at least some money - yet Libertarians, who claim to love markets, become distressed and even frightened when people propose hypothetical systems in which absolutely everyone has at least some spending money.

    721:

    Dirk You are following a very curious path in this discussion … Promoting a failed prophet (Marx) again … saying “It’ll be different this time!” (As if we hadn’t heard THAT before) …. Claiming that the “west’s” system has been bought – implying it’s all been bought, not merely chunks of it. And, further back, implying that exogamy is a bad thing & a “pure race” ideology (in Japan) isn’t a bad thing. I’ve been handed a yellow card for considerably less, upon a time, when I was rude about one of the Queen’s Enemies, who also regards women as inferior.

    722:

    YES, because (I've seen them say it) they believe, like the communists, in the "withering away of the state" - which os why they want to crash healthcare programmes, food safety, etc - no matter how many people get killed in the meantime, there will be a better new pure world afterwards when the dust clears. Sound familiar?

    723:

    jch @ 707 Perhaps My point was that all three of my examples shat all over "the workers" - where "the workers" included highly-qualified & quite well-paid engineers & technical staff - who happened to get in the way of these bastards' overpowering egos.

    724:

    I have just seen a Tweet from our Prime Minister, announcing that 2014 is the year when the whole country can rise.

    People have noticed the ambiguity in that statement. Aux armes, citoyens!

    725:

    Does telling him "keep yer ba' n ging hame" count as rising in this context?

    726:

    I have just seen a Tweet from our Prime Minister, announcing that 2014 is the year when the whole country can rise.

    I certainly hope he doesn't mean like Warsaw rose...

    727:

    "And, further back, implying that exogamy is a bad thing & a “pure race” ideology (in Japan) isn’t a bad thing."

    Nothing to do with race, except as a secondary consequence. It has to do with the strength of a monoculture and the right of the people making up that monoculture to maintain it as they see fit.

    The monoculture I want to live in is that of a Western secular liberal democracy. Unfortunately that seems to under considerable threat right now from a variety of sources.

    As for Marx being wrong, he was wrong because industry needed as many workers as it could get, and continued that way for more than a century. As soon as there is a massive surplus of labour things will look very different. At present that surplus is being absorbed in make-work. How long such a situation can persist, I have no idea.

    728:

    Actually, my take on Syria was that Obama was doing a very old (and African American) ploy of threatening to kick some major A$$ and counting on his "friends" (in this case Congress and the international community) to hold him back so he wouldn't actually have to get into the fight. I think if you page back in Charlie's blog, you'll see I made a prediction based on that scenario that basically came true. I've also wrote a small blog entry about what's likely to be underlying the Syrian war. I hope I'm wrong, because if I'm right, the likely outcome is a LOT of Syrian expatriates living outside the Middle East.

    Actually, the greatest threat to world peace was misreported, and I went with what I'd heard. I was basing it on a WINGallup international report (link to actual survey results). In the poll, the US is seen as the fourth greatest threat to world peace, behind Iran, Afghanistan, and North Korea. So it's a public perceptions piece, and not a good one for the US.

    729:

    Did you miss the points from other contributors about "make-work" being a good idea, provided it is pointed in the correct direction?

    730:

    By definition "make work" is useless.

    731:

    The Leninism comparison is intriguing, but isn't our current economic method just as flawed? Economists models are built with the assumption that humans will always make rational, intelligent decisions regarding money...

    732:

    I did assume that most people's savings would not be in the form of "cash in the mattress". People want their savings to appreciate, or at least outpace the rate of inflation.

    I used to agree with you. But as I've aged I've discovered that "most people" want security. So they sell their stocks when the prices fall (after buying them when high) and literally do take the money and stuff it into a mattress or the equivalent. A savings account paying .1% or similar.

    733:

    Actually, my take on Syria was that Obama was doing a very old (and African American) ploy of threatening to kick some major A$$ and counting on his "friends" (in this case Congress and the international community) to hold him back so he wouldn't actually have to get into the fight.

    That was pretty much my take too, though I don't know about it being particularly African-American. Basically making a threat of force to save face, while being fairly certain that your friends will hold you back, and those likely affected by the threat will back down. I don't think Obama had any desire to start another Middle East war, but wanted to get allies more involved, and Russia to distance itself from the Assad regime.

    As for Iran I don't see them as much of a threat. I tend to think that if they really want to build nukes to let them try, but with a very clear understanding that if they actually use them (against anyone) their nation will cease to exist within a half hour. I think their leaders have enough sense to take that seriously. Certainly the majority of Iranians have no interest in getting into any kind of war.

    734:

    The only time since I've been alive that US was actually showing budget surpluses was under Bill Clinton (and Newt Gingrich running the House). Perhaps the key is to elect more sleazy adulterers.

    And make sure you maximize the earnings flowing into the US SS system and pretending it isn't being use to paper over the actually deficits. Those amounts peaked at that time and have been falling ever since.

    US Government deficits treat ALL inflows and outflows as income and expenses. SS Accounting treats the surpluses in incomes as assets. Left hand telling different story than right hand.

    Now that SS inflows are declining compared to rate of outflows there's much less (and getting smaller over time) surplus in the SS cash flows to paper over deficits.

    As long as we (US) continue to mix our accounting and talking methods when talking about intertwined money flows in the federal government we'll always be befuddling the "common voters". Which more and more I suspect is the point. And was a big part of the start of the Tea Party movement. (Not that where it is now.)

    735:

    their nation will cease to exist within a half hour. I think their leaders have enough sense to take that seriously. Certainly the majority of Iranians have no interest in getting into any kind of war.

    Unfortunately the majority of Iranians don't have a say in the matter. That would require a total restructuring of the government.

    736:

    If income &gt expenditure then at the end of $period you have a surplus, let's call that cashatbank. My (UKian) accountancy classes say that cashatbank is an asset.

    737:

    Unfortunately the majority of Iranians don't have a say in the matter. That would require a total restructuring of the government.

    Like in 1979?

    738:

    Yeah, well. Of the list (Iran, Afghanistan, North Korea, US), the country most likely to invade another country would be...the US. Unless we're talking about South Korea. The US currently has a horrible record on respecting territorial sovereignty (cf drones and Spec Ops in the global war on terror, plus the NSA), so I don't blame people in other countries for being concerned about US.

    As for who will start the next war, so far as I'm concerned, it's a mug's game. I suspect that everyone would be just as happy if the US unwound a good chunk of its military, and not by selling off surplus arms in a global auction.

    Perhaps the ideal time for this will be if and when a major financial bubble pops in China, and they stop trying to militarize to match the US. Or, alternatively, Moore's Law-style growth in solar PV may destabilize the US oil sector (and yes, there's a reason I think this is possible) to the point where Big Oil's grip on US geopolitics starts to loosen. In the unlikely event this happens, the biggest consumer of oil, the US military, may reorient itself to a rather different threat posture, and they may well substantially downsize in the process.

    739:

    The Iranian nuclear "threat" can't be understood purely in the context of the Israeli nuclear arsenal; you've got to bear in mind that the Iranian strategic posture is regional, and the threat they're oriented against is the Saudi H-bomb.

    Saudi nukes? Well, who do you think bankrolled the Pakistani nuclear weapons program, in return for a technology stake?

    The key here is salafi fundamentalism versus shi'ism; they consider each other to be heretics and, as we've seen in Iraq, Pakistan, Syria, and elsewhere, they don't like each other (understatement). Pakistan is unstable and has nukes: it's not inconceivable a coup could put them in the hands of a radical salafi junta, like the Taliban but in control of a state with real resources. Nor is it inconceivable that Saudi access to nuclear tech could result in a Saudi weapons capability just as Saudi Arabia -- which is a pressure cooker with the lid welded down and the pressure valves sealed -- explodes.

    Either way, we're at least as likely to see a sunni/shi'a nuclear exchange than an Iran/Israel one, driven by the same sort of fanatical intolerance that had Al Qaida in Iraq butchering shi'ites and conducting ethnic cleansing a few years ago.

    740:

    This may not be as coherent as I'd like--it's early. That's my excuse and I'm stickin' to it.

    I also tend to think that Iran has no real interest in nuclear weapons (doesn't mean they aren't trying), but does want power plants so that they can export oil that they are currently burning themselves. I think in an ideal world western nuclear powers would have offered assistance in building the power plants and Iran would have accepted. But the real regime is too paranoid for that.

    I don't think the threat of an Iran/Israel war is a serious one, Netanyahu seems to be the biggest problem in that regard. Lately I've been thinking that when the US finally pull out of Afghanistan (which I am in favor of), the Kharzai government might collapse and Pakistan and Iran go to war over it, perhaps to get at the (iirc) Lithium deposits that have been found there. If that happened with an Iran with nukes...

    741:

    This led me to actually look at an atlas to get it right rather than just say my first thought.

    For an Israel/Iran war (other than ballistic missile exchanges) to occur, one or other has to get rights of passage through (or conquer) Iraq and one or both of Jordan and Syria.

    742:

    paws @ 736 Well, there's a famous quote about that: Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and — and in short you are for ever floored.

    743:

    And why do you think there is such a bitter proxy war going on in Syria, then? With the Al-Queada/salafist/wahabi-Sunni faction desperately trying to kill off, or expel all vaguely-Shia (& any other) factions & groups? They can then move against the Shia Hizbollah in Lebanon & attack Israel directly, whilst making a simultaneous pincer movement against Persia/Iran. Of course, they will also have to stamp on the Kurds in N Iraq in the process.

    I don't think it's going to end well - like Charlie, I would not be suprised to hear of big ( greater than 10kT ) orange balls of fire rising to meet the new dawn. Ugggg .....

    744: 742 - Greg, I think you missed my point there. I was referring to accounting techniques and practices in response to David L and J Carl Henderson's discussion about USian governmental accounting. I was not suggesting that being in a deficit position was desirable.
    745: 743 - At 15:56 GMT, I had only just made the connection on land routes. I still think that having to sail your materiel from Iran to Syria is not going to work well (even if the Suez canal is a viable route).
    746:

    Why is there such a bitter fight in Syria and Iraq?

    Water.

    To quell the social problems in Anatolia (Turkish Kurdistan), the Turks dammed the headwaters of the Tigris and Euphrates in the Southeastern Anatolia Project. Since the dams went in, there have been rising tensions between Turkey, Syria (which is downstream on the Euphrates), and Iraq (which is downstream on both).

    As I noted above and in my blog, there's some good evidence that the civil war in Syria is a water war. Due to mismanagement of the diminished waters coming down from Syria, many farmers in eastern Syria were dispossessed. They moved to the cities, drilled wells, and depleted the local aquifers. As of 2013, Al Qaeda was strongest in the provinces most affected by the loss of water to Turkey, and estimates are that a third of Syrians would have to be eliminated (expelled from Syria) to have enough water for its remaining farmers and other citizens.

    The same problem is happening in Iraq, which is downstream of Syria and Turkey, and it's quite likely that the current crisis is another water war as well.

    Unfortunately, the test for this is that Syria will not come to peace until approximately one-third of their pre-war population has either died or emigrated. Fortunately for us SFF geeks, there is a technological solution at least in the short term: large desalination plants on the Syrian coasts. Building those in a war zone is another problem entirely, but it would be far cheaper and more humane than fighting that damn (dam?) war. Shall we talk about the costs of political mismanagement again?

    Thing is, Al Qaeda and similar radical Islamist ideologies seem to do best in places where people are desperate: Somalia, Afghanistan, and so forth. I'm not going to stretch and say that this is Saudi (desert) religion reaching out. Instead, I think it's simpler: desperate people often turn to anyone who will help them, whether it's religious extremists and organized crime (as now) or communists (as a century ago). I tend to see Al Qaeda and its offshoots as a symptom rather than a cause. They do best in areas of high misery and low government presence. Think of them as a secondary infection, and then think of how much money we spend on this secondary infection that could go to ameliorating the primary disease. This is (yet another) reason I love good governance.

    747:

    Interesting reddit post speculating that bitcoin might be a NSA project from the start

    http://reddit.com/r/Bitcoin/comments/1u89qv/why_the_nsa_revelations_make_me_worried_about_the/

    748:

    heteromeles I read your own blog-piece on "Water War" actually. Like it, but, even over & above that, extremist religious, or even "religious" so-called solutions to percieved problems are almost/always not merely wrong, but a disaster. Going all Godwin, Germany 1933 was in just such a bind.

    The trouble is, that almost all the boxes for "Nazi" get ticked by the Al_Quaeda nutters, as well. Not nice at all.

    749:

    Thanks Greg.

    I'd agree in the present instance. As for past religions, we'll have to agree to disagree. For example, it's difficult to make a case that the prophet Mohammed was less humane than the polytheists he replaced in Mecca and Medina, nor that the Buddha and his first few generations of followers did a bad job with the politics in the Himalayan foothills.

    There's a certain type of religion, now typically termed fundamentalist and/or extremist, that does cause quite a lot of trouble. I don't study religion much, but it appears that the fundamentalist/ extremist sects: --Are offshoots of offshoots of the original religion, --Are, shall we say, highly selective, even idiosyncratic, in their interpretation of the original religion, --Are founded and often run by charismatic men who seek close ties to temporal power, if not temporal power for themselves, --Promote disruptive actions as a way of furthering their aims.
    --Recruit from the disenfranchised and suffering

    There are examples of such groups in Judaism, Islam, Christianity, and Buddhism to my certain knowledge, both modern examples and those going back centuries or millennia, and there are probably examples from Hinduism and Taoism as well.

    Actually, the problem of extremism is not even particularly tied to religion. Perhaps it's simpler to say that major institutions can get hijacked. Or perhaps parasitized. A disproportionate amount of trouble seems to come from the actions of these parasites. Because of this, I'm not very comfortable blaming the idea of religion for the atrocities caused by extremists, any more than I'm willing to blame the concept of government for atrocities committed by clandestine agencies.

    750:

    paws4thot @741 & Greg @743 Hezbollah in Lebanon is in large part funded by Iran, and Israel has shown itself willing to fly over other countries without asking permission. Not sure what Greg's point about the Kurds is; they just want to be left alone by Iraq, Iran, and Turkey, and are likely to be on the side of anyone opposing them. And there was a long history of Jews in Kurdistan, so they may even be willing to side with Israel. (btw, my sister-in-law is a Iraqi Kurd, raised a muslim, now atheist.)

    But this is all way off-topic, and I'm nohwere near an expert on any of this. Just expressing some thoughts.

    751:

    ...And in yet another sign on the onrushing apocalypse (or is it infopocalypse?), Congresscritter Steve Stockman (Republican-ish from Texas) will be accepting donations in bitcoin and other digital currencies, and intends to introduce pro-bitcoin legislation next year (link). He's challenging Texas Republican Senator John Cornyn from the right, or whatever direction the Tea Party is hanging out in relative to everyone else (I'm thinking that they're off in some hyperbolic direction relative to the right-left political spectrum, but I could be wrong).

    Anyway, to continue with the priceless quote: "'I really think digital currency is more about freedom,' Stockman says in the video [which is linked to above], which according to the description will be part of a new documentary on digital currency. 'Freedom to choose what you do with your money, and freedom to keep your money. Without people influencing it through printing money or regulation.'"

    Yes, I think I'll go have a drink now too.

    752:

    Actually, semi-unrelated brain fart, but as I wandered towards the fridge, I started wondering what would happen if some as, erm, ideologically pure as certain Texas politicians are was hit with a dart containing large doses of psilocybin and oxytocin. Could it turn them into a moderate, and if so, for how long? Not that I'm advocating this experiment, of course. Just cogitating.

    753:

    'Freedom to choose what you do with your money, and freedom to keep your money. Without people influencing it through printing money or regulation.' Did he miss the thing about "mining" Bitcoin out of electricity? Oh yes and how a lack of regulation created a "bad debt bubble"?

    754:

    Texas politicians are was hit with a dart containing large doses of psilocybin and oxytocin. Could it turn them into a moderate, and if so, for how long?

    With recreational pot now legal in Colorado we may get to see if there's a 'mellowing' of our politics. I doubt it, but perhaps something to keep an eye on?

    755:

    Hopefully New Mexico will have no objection to people running joints from Colorado to Texas. For medical purposes, of course. I for one, will be vastly amused when the spliff replaces the cigar in political discussions, not that I expect this to happen any time soon.

    756:

    That would require a total restructuring of the government. Like in 1979?

    Yep.

    But the revolutionary guard seems more brutal in their repression of dissent than the Shaw's police.

    757:

    If income > expenditure then at the end of $period you have a surplus, let's call that cashatbank. My (UKian) accountancy classes say that cashatbank is an asset.

    But these folks were talking about businesses, not government entities pretending to keep business books.

    SS has had a surplus for years. Still do. See: http://www.ssa.gov/history/tftable.html

    But based on demographics this surplus will shrink for decades to come.

    So how does this impact the US budget? Well SS can't invest in Boeing, Microsoft, Airbus, whatever. By law all surpluses must be invested in US Federal Government bonds. So instead of this "asset" being based on economic activity growth it is based on future taxpayers. What has happened for decades what the US budget deficit was made to appear smaller via these "investments". But as this surplus shrinks to keep the fed budget deficits at the same levels spending would have to be cut or taxes increased. Sound familiar?

    So when you hear US politicians talk about the SS trust fund is solvent, remember that this is based on an assumption that future Congresses and Presidents will be willing to deal with a shrinking "investment" from SS and worse deal with SS requests to cash in those bonds if needed.

    Wikipedia has an article on this that I've not seen before just now and haven't fully read. Search for: SocialSecurityTrust_Fund

    It seems to reflect my views which I came to 20 years ago when everyone was talking about how wonderful it was that Gingrich and Clinton were doing wonders balancing the budget.

    To me this is just the government version of Enron.

    758:

    It can't be legally taken out of state, you can come from out of state for it, but must consume it before leaving. Personally, I've no interest in the stuff.

    Colorado Springs, one of the most conservative parts of the state, doesn't allow sale for recreational use (there are tons of medical pot shops though), but can't prevent it from being brought from elsewhere in the state and used. So maybe some of our politicians will be affected, but not holding my breath.

    759:

    I think I see the real problem; USian SS, like most private pension funds in the UK were about 10 years ago, is under-capitalised relative to its future liabilities.

    This could potentially be the case whether its funds were invested in Government bonds or in the stock market.

    760:

    Oh you are quite correct. I just couldn't resist when I noticed that each of the three AGHs you mentioned had been deep in bed with various governments. There no shortage of AGHs that operate purely in the private sector. (Bernie Madoff makes a spectacular example, as Mr. Stross has pointed out).

    761:

    The trouble is that the US government has found an excuse to run deficits for as long as I've been alive (save for a few years in the late 90's, for which it has been pointed out might be a case of shady bookkeeping).

    I have little hope of seeing this change. The Tea Party message of fiscal solvency and limited government seems to be rapidly becoming diluted by an influx of social conservatives hitching themselves to that bandwagon. And the social conservative message is a complete turn off to much of the American electorate. I want to smack some politicians upside the face sometimes and tell them "limited government does not include mandated trans-vaginal ultrasounds!"

    The trouble is that the Keynesian prescription of running a deficit during bad times to keep the national economy from cratering, assumes a nation will run a countervailing surplus during good times. Nobody in the US (or in most of the industrialized west) seems to be bothering with the last bit.

    762:

    I don't think Obama's Syria policy was as cleverly planned as you do. It left Obama looking weak domestically at a time he could ill-afford to (just prior to the launch of Obamacare) and made him look weak internationally in comparison to Putin. I don't buy a politician deliberately sacrificing that much credibility in order to achieve a questionable end result.

    763:

    Iran's nuclear ambitions along with the Syrian civil war are really highlighting the depth of dislike between Sunni and Shi'a. It's something that a lot of western policymakers have been ignoring, focusing instead on 20th century "Israel vs Arabs" paradigm for analyzing the Middle East.

    I would not be surprised to see an outright Israeli-Saudi alliance emerge in the next few years if things go well for Iran in Syria, in Iraq, and in their nuclear program. I think all parties in the region realize that it is going to be a hell of a long time before any American president can successfully threaten to put "boots on the ground" in the Middle East, much less do so.

    Israel has been pursuing a "divide and make peace" policy with its Arab neighbors for decades. And from the point of view of the Saudi's and many of the other Gulf states, the Israeli's may be Jews, but at least they are not DIE EVIL HERETIC!* Shi'a (and Persian Shi'a, at that.)

    *DIE EVIL HERETIC! is best read in a Dalek voice.

    764:

    "bitcoin might be a NSA project from the start" There are also more exotic theories. I'm sure OGH has a few stockpiled. (e.g. pedagogical parody of gold.)

    765:

    Additionally:

    While developing its own nuclear arsenal would be politically quite difficult for Saudi Arabia, Israel's sitting over there with 100 to 300 warheads and delivery systems--including very quiet cruise missile launching subs for a second strike capability. In return, the Saudi's can take a lot of pressure off Israel diplomatically vis–à–vis Israel's Palestinian problem, and provide lots of money and Arabian peninsula basing options (which would serve to further encircle Iran).

    766:

    Congressman Stockman be taking Linden Dollars (L$)?

    767:

    We'll agree to disagree. I'm comfortable, because I predicted correctly what would happen and when. That may well be coincidence, but considering the other outcomes, I think it's a good one. While he looked weak, I'll note that Congress looked positively paralyzed in comparison.

    768:

    I started wondering what would happen if some as, erm, ideologically pure as certain Texas politicians are was hit with a dart containing large doses of psilocybin and oxytocin. Could it turn them into a moderate, and if so, for how long?

    Naah, they're not mammals in the first place -- think about it: the climate in Texas is seldom cold enough to inconvenience a poikilothermic entity like, say, a man-eating lizard in a rubber politician suit.

    769:

    I think you're being deeply unfair.

    The problem Texas has got is not that its politicians are reptiles rather than mammals, it's that the heat cooks their brains, thus reverting them to lizards as everything more advanced than their medulla oblongata ablates.

    770:

    Seeing as a good chunk of my family was born in Texas (although most emigrated decades ago), I can't be that nasty about them. Especially the Austin Enclave.

    That said, it's worth reading The Wikipedia account of the Annexation of Texas by the US. The history of Texas when it part of Mexico (as it had been for 300 years) is an interesting mirror of today's state. Colonial Spanish and then Mexican politics in the border state of Texas were radically destabilized by legal and illegal immigrants coming over the border from the US. The gringos wanted to annex the state for the US and import a slave-owning culture, at a time (cough cough) when slavery was illegal in Mexico.

    The Lone Star Republic, which was formed by the white settlers after the Battle of San Jacinto, was never recognized as legitimate by Mexico. In fact, the US got into a war with Mexico after it annexed Texas. But that's getting ahead of the story: The Americans in Texas had their independent Lone Star Republic between 1836 and 1845. They petitioned the US to annex them starting in 1836, and the US refused to negotiate until 1841 or so. It then took another four years and a war for Texas to become a slave-owning state. In other words: we (the US) didn't want them (Texans) for a fairly long time, and that's where their vaunted (and badly run) Lone Star Republic came from.

    So when you look at the stupidity of Texas politics these days, it's good to look at the history that informs it. The whole place was founded by a bunch of slave-owning wetbacks, to put it bluntly. I think that if Texas did as it has threatened and seceded from the US, it would do wonderfully as a relatively small nation sandwiched between the US and Mexico, the more so since they would have pissed off both their neighbors and would only have the Texas National Guard to defend their national interests. Maybe they could use StarCoin (BitCoin 3.14) as their legal tender, and watch their net worth fluctuate 50% each day.

    On the other hand, we could do a great biopolitical experiment with psilocybin-and-oxytocin darts. I wonder what Texas would look like if they had safe and sane politicians in charge?

    771:

    On the other hand, we could do a great biopolitical experiment with psilocybin-and-oxytocin darts. I wonder what Texas would look like if they had safe and sane politicians in charge? Ok, I'm going to say it. Heteromiles could well be closer to right on this one than Charlie is. Lizards might well respond similarly to humans to the cited drugs. The question is over dosage. For instance, cats respond similarly to humans to beta blockers, but a 10lb cat needs about 10x the dosage that you would give a 250lb human.

    772:

    You make a good point; dosage is important, as are proper experimental protocols. We don't need a repeat of the 1962 Tusko fiasco, even if Texas has more politicians than elephants.

    773:

    IIRC, oxytocin can lead to problems with the out-group. Can't lay my hands on the reference I was looking at last year, but a quick google yields:

    "An intergroup conflict game was developed to disentangle whether oxytocin motivates competitive approach to protect (i) immediate self-interest, (ii) vulnerable in-group members, or (iii) both. Males self-administered oxytocin or placebo (double-blind placebo-controlled) and made decisions with financial consequences to themselves, their fellow in-group members, and a competing out-group. Game payoffs were manipulated between-subjects so that non-cooperation by the out-group had high vs. low impact on personal payoff (personal vulnerability), and high vs. low impact on payoff to fellow in-group members (in-group vulnerability). When personal vulnerability was high, non-cooperation was unaffected by treatment and in-group vulnerability. When personal vulnerability was low, however, in-group vulnerability motivated non-cooperation but only when males received oxytocin. Oxytocin fuels a defense-motivated competitive approach to protect vulnerable group members, even when personal fate is not at stake."

    (http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0046751)

    So, do you really want to give politicians (who tend to be wealthy and "socially conservative") a substance that leads then not to cooperate with people not in their group?

    774:

    I was thinking about that actually. Hard to say how oxytocin would mix with the psilocybin, though, and it might simply reinforce some notion that god loves them and wants them to keep being megalomaniacal. Maybe straight psilocybin would be a better idea.

    Still, it beats my first notion, which was a cocktail of LSD and hornet venom, aimed at giving them a bad trip and extended flashbacks...

    775:

    [ SPAM DELETED ]

    776:

    @ 773 Err ... politicians (who tend to be wealthy and "socially conservative") Some politicians, even here, but by no means all of them, or even the majority ... You're in the USA, right?

    @ 775 Advert, but relevant - I suspect some of us may be along to snark, pick holes & quite possibly sneer, later. Ahem.

    777:

    Ref #775 - This is quite flattering to Charlie; at least 2 human spammers have decided that it's worth their while to create accounts here and risk mockery and snarking in order to spam for these people.

    778:

    Spam is pretty much inevitable at this point, so I'll have to close comments here sooner rather than later.

    Which is a bit of a shame, because we're at 778 comments now. My maximum ever was 815 on the "why space colonization is problematic" topic back in 2007 or thereabouts ...

    779:

    The original suggestion was about Texas politicians…

    I'm Canadian, watching our government import US political methods. Tribalism is alive and well up here in the Great White North. So is corporatism: our government is using anti-terrorist legislation to keep tabs on/control environmentalists, unions, church groups, scientists…

    Our politicians aren't as wealthy as those in America, but their strings are bing pulled by wealthy corporations (many of whom are American). The effect is the same.

    780:

    Well, if you want us to go for 816 without spam, why not just say so?

    781:

    Talking of money-spplies & guvmints (as we were) ... On another thread entirely, I remembered what a. n. other regular contributor once said, about guvmint money - both acquiring it & disbursments. HERE is his re-hash, after my request. [ Please note, the specific references are to UK railway & public transport policy in recent years. But the general points are still valid }

    The Treasury ( That is, HMT, the financial main arm of the Brit guvmint ) factions as being: (i) the competition freaks, who argue that competition is the answer to everything. For reasons not unconnected with reading 3rd form ( Age 14-15 in school ) economics textbooks, they particularly believe in the number 3 as an ideal number of competitors – hence 3 ROSCOs, three FOCs originally, 3 tube PPPs, and so on. Ed Burkhardt soon told them the price of fish on that – see next bullet. (ii) the cash hounds – can’t ever have enough cash, to reduce the need for taxation. In this, they are merely following Treasury procedure laid down in the reign of King John (yes, really – the approach is set out in the Dialogus de Scaccario of c1207). This faction struggles with faction I and usually wins – when Burkhardt offered £300m for all three FOCs, his bid was way over anything offered in total for the three individual FOCs, for obvious reasons. After some amusing struggles under the sheets, the cash hounds won. (iii) the control freaks or Stalinists as they tended to be known – the whole point of the British economy in their minds is to serve the Treasury’s policy needs, whatever those happen to be at the time. Thus the luckless construction industry exists solely to act as a bank of labour that can be switched on or off as necessary to regulate the economy. Stalinists shadow every spending department closely, double guessing every important decision – especially in matters, it seemed, where HMT has no expertise. Gordon Brown was the archetype here. Stalinists dislike privatisation unless it’s accompanied by über-regulation but they love cash, too.

    The refernces are to railway works, but the general principle applies, across the whole of HMT.

    782:

    There's a bit of snark, and a whole lot of truth, in there. Particularly in the reference to Greedy Gordon, who seemed to lack useful expertise in anything except wearing the correct colour rosette to ge a safe seat in Scotland.

    783:

    So only another 35 comments to go then...

    Greg, what that suggests re. the treasury is that it isn't there to do what the politicians want, which is problematic in a democratic society. One could forgive it a little if their aim was to maintain a good solid economy, but it appears that the people in the treasury don't know as much economics as they should and are partisan in various ways.

    As for terrorism and politics, Heteromelets #746 is correct, people turn to whoever offers them hope and options, whether stalinist, socialist, capitalist, feudal, etc. Hence why many extremist movements have grown so much and so quickly, then once they have attained power or the problem been sorted died down again.

    784:

    I wasn't specifically going to bring this up, it having nothing to do with Bitcoin, but your 'cash hound' comment is on the mark. For example, this article in the LA Times, which quotes Australia's wealthiest person complaining that, well, she has to pay people to work for her. Australia has a higher standard of living than third-world hellholes, yet ungrateful Australian workers want more money than the desperate impoverished masses of those hellholes.

    As a footnote, the article is inaccurate about her wealth; Gina Rinehart is the wealthiest Australian of either gender, but only about the fourth richest woman in the world. There's considerable churn in these things, but it's safe to say she is obscenely wealthy.

    785:

    May I refer the honourable gentleman to those volumes of Hansard published as "Yes (Prime) Minister".

    786:

    Denizens of the deep comments churn away! 31 more to go!

    Greg, I do like that trio.

    Here's another three-ply model: the triad of paranoia model used in the Clinton Whitehouse (or at least, by some of his bureaucracies): the triad was the business community, the regulators, and the activists, each of whom was convinced the other two were out to get them, each of whom was convinced that they were damned by the other two no matter what they did, each of whom was convinced that they were so outmatched by the other two acting in conspiracy that all they could do was to react to whatever the other two threw at them.

    The Clintonites tried to break that triangle to get the sides to work together on issues where they had common ground, but I fear that government-industrial collaboration got a little too messy under subsequent administrations (and here I'm thinking of Snowden, Blackwater and its subsequent incarnations, and so forth).

    787:

    @709:

    while I disagree with Jerry Pournelle on many issues, I agree wholeheartedly with him on some. The iron law of bureaucracy is one of them

    Try "Parkinson's Law" by C. Northcote Parkinson for a more developed exposition.

    The bad thing about books like that is that they're like Dilbert strips; amusing, until you realize you've been down in the trenches as the butt of the joke...

    788:

    Which Parkinson's Law? Are we talking about "The demand upon a resource tends to expand to match the supply of the resource," or are we talking about "the time spent on any item of the agenda will be in inverse proportion to the sum [of money] involved"?

    789:

    There is also the Peter Principle: in a bureaucracy, people are promoted to the point of incompetence. The problem is that it is hard to get rid of incompetent bureaucrats, and if you are competent you will eventually get promoted. But the upper reaches are filled with people who turned out to be incompetent.

    Add the problem of the competence of the people who decide who gets promoted.

    There's a lot of make-work in a bureaucracy provided for the senior managers, mostly trying to keep them from making decisions.

    790:

    I wonder how many senior civil servants have ever heard of "chaos" and "catastrophe" in their mathematical senses.

    The politicians seem to come up with a lot of figures that just don't make sense.

    There's a lot of value in the Humanities, but do schools and university pay enough attention to useful mathematics. I was taught calculus for A-level and never used it. Probability and Stats I picked up from various sources.

    I soon stopped playing Poker.

    Some of the rhetoric around Bitcoin gives me the same impression of arithmetic fizzy thinking.

    791:

    I know it's late, but still... Just a heads-up from an actual Norwegian: Our oil money isn't spent on making Norway rich. It's instead used to fund the future government pension fund ( http://en.wikipedia.org/wiki/The_Government_Pension_Fund_of_Norway ), est. 1990. Yes, parts of it is used in the national budget, but never more than 4% of the fund, as seen at http://en.wikipedia.org/wiki/The_budgetary_rule . The fact that the fund passed 5 trillion Kroner (~=800 billion USD, ~=500 billion GBP) just before Yule 2013 just goes to show that runaway inflation can be avoided, IF your government thinks that free-for-all markets are inherently unstable... and that unlimited government spending isn't necessarily a good thing. Oil money had no impact on our unemployment rate after the '08 economic crunch, which according to numbers from SSB, [the Norwegian] Statistical Central Bureau had a sharp decline in '06 that lasted through '08, never rose above the feb '06 level of 3,9% unemployment. Besides, our main revenue (as measured by actual, government-accessible revenue) isn't oil; it's fish. If we'd joined the EEC in the '72 referendum, our oceans would have been dead by the time of our next referendum in '94 (the one, overriding, objection to joining the EEC - or later, the EU - was the requirement of relinquishing absolute control over regional waters). We're second only to China ( http://en.wikipedia.org/wiki/Norway#Resources , last paragraph) when it comes to exporting fish, and we're committed to being Green (we had the World's first Minister of the Environment in 1972). So, to conclude: Sorry mate, but yes; we're wealthy because we're not in the EU. And, because we're just that good. [/smug]

    792:

    Some of the rhetoric around Bitcoin gives me the same impression of arithmetic fizzy thinking.

    Not to mention algorithmic fizzy thinking.

    It's amazing how much of the entire sales pitch of Bitcoin is based on either an outright lie or on things that turned out differently in practice.

    As I wrote up-thread, there is nothing inherent about the upper limit on the number of Bitcoins to be mined; that's a design choice, and not an obvious one. Bitcoin is not anonymous, it's pseudonymous, and probably easy to deanonymise altogether if anyone cares. Control is in practice concentrated in a handful of parties, not distributed.

    It's rather surprising how much these get repeated, even by people who really ought to know better...

    793:

    It seems to me (from my position across the Atlantic, here in the Dallas area of Texas), that the complaints people from the UK have about the current Tory-LD government are pretty close to the same complaints they had about the last New Labour government. Have politics of the UK really become that stagnate? Or is it just a matter of people having higher expectations for their particular party? Or is this a case of Mr. Stross' "Party in Power" monolith in action?

    794:

    SS @ 784 Well, some of us have Antipodean female relations who can’t stand the “vile cow” (her words) Gina Rinehart, either. With that level of greed & selfishness, a poster-child for classical Marxism, she is … though I understand that her family is having errr … fun in the Aussie courts at present, over – surprise – money!

    795:

    ATT @ 789 / 790 Problem with Peter Principle … competent people often get … sidelined into (often quite well-paid) niches, whilst the “administrators sail on upwards – until someone “new” then sacks the actually competent person, or they resign in disgust. I’ve seen the latter at least twice.

    Mathematics, yes, well … there’s a Heinlein quote about “facts” … there’s a dreadful fuss at present in London over “cyclist deaths increase” – down in the Poisson “lumpy” area – meanwhile, what’s the highest death statistic? Pedestrians – anyone noticed? Naaah. [ Because pedestrians are unimportant but cyclists are virtuous ] Or the statistics over “Free” schools – one fails, & all the vested interests come down on them – to be rebutted by a free-school headmaster, who began with … “Well, my training in mathematics tells me that you shouldn’t read anything into one result…” Needless to say, after that, it turned into a rhetorical shouting match, with no information-transfer. This of course is the rebuttal, too, to Libertarians decrying “socialist” single-payer medical systems. Get them to compare THREE readily available numbers: Infant mortality, Life expectancy, Overall cost per capita. And your results comparing are? They don’t like it up’em!

    796:

    JCH @ 793 ( Oh AND ZZ @ 791 ) YES Often called LibLabCon. Hence the drift to UKIP or the SnotsNats or the “Greens” (Watermelons) or to religion (shudder). IMHO: UKIP are the least repulsive of these, but they do have their problems [ Far too many of them profess Christianity, for instance, & some of their public figures do look as if they might be racist ] … but there are a lot of “Old Labour” voters who like them, having discovered that Wedgwood Benn was correct, & the EU was/is a cosy corporate-employers’ ramp, crapping on the ordinary workers & employers’ alike. Both by regulatory capture & by unrestricted unskilled immigration keeping wages conveniently low ( See also my comment on Gina Rinehart @ 794 ). That last, of course has been Brit Treasury ( @ 781 factions i & ii ) guvmint policy since the SS Empire Windrush docked … get lots of surplus workers in, to keep wages down & don’t bother with real education … SnotsNats are dreamers with a dangerous & wrong vision. Their grasp of economics is pathetic. We need each other, but they refuse to see it. As for the “Greens”, who want to close down all nuclear power-stations & concrete-over Epping Forest, words fail me. I like real “green” ideas, we need them, but the G-party are truly watermelons, green outside, marxist inside. As for the last, I don’t think I need to elaborate, do I?

    797:
    Have politics of the UK really become that stagnate?

    From my perspective - yes.

    Of the three major parties:

    • Labour: Has not so slowly lurched to the right after failing to get elected throughout the 80's - and repeated this again post Blair.
    • Conservative: Stayed pretty much stayed true to their policies from the 80's and 90's with a few new spins. They've been a tad more vocal on immigration issues since the rise of UKIP.
    • Lib Dems: Previous to the last election and the current coalition government were probably had the most different/interesting policies by a small margin. Since coalition government have become indistinguishable from Labour/Conservative.

    So currently there is very little clear water on policy between Labour and Conservative. It's just being sold with different words to different market segments.

    And nobody on the left trusts the Lib Dems any more after the way they've behaved with the coalition government. I'd be interested to see how badly that's going to screw them in the next national elections.

    Bias warning: I'm way to the left of UK mainstream politics - which from the USAian perspective probably makes me certifiable ;-)

    798:
    Spam is pretty much inevitable at this point, so I'll have to close comments here sooner rather than later.

    Ahhh. That's a shame. They've been so entertaining!

    Just by referencing this post on twitter I've had folk stalking me and harassing via email - which is a first. They seemed very confused when I didn't find "socialist scum" an insult ;-)

    799:

    the complaints people from the UK have about the current Tory-LD government are pretty close to the same complaints they had about the last New Labour government. Have politics of the UK really become that stagnate?

    First, Labour in the early 90s triangulated on Thatcher's conservativism and made a huge leap to the right.

    Second, the Conservatives in the late 00's -- having lost three consecutive elections, an unprecedented shock to them -- triangulated on Blair's theft of their platform and jumped further to the right. They also underwent a generational shift: the current cabinet are mostly younger than I am (early to late forties in their case) and worshipped Thatcher from their dorm rooms as late-teens. (In particular, they bought the biggest lie of all: that she was an Iron Lady, not for turning, and never reversed herself. Compared to this mob, she was relatively pragmatic -- she just never admitted to a reversal. The event which cost her the job, in fact, was her failure to reverse out of a disastrously unpopular policy -- the Poll Tax.)

    Final ingredient for the current mess: the Liberal Democrats would have remained where they were, i.e. to the left of where Labour had migrated to by 2008, except circa 2008 there was a leadership contest and the Libertarian faction won out over the Social Democrats. Cue potential for alliance with Tories.

    Upshot: British politics has lurched so far to the right since 1997, and especially since 2010, that Margaret Thatcher would be on the left fringe in Westminster these days. And the three main parties are largely indistinguishable except for the persistence of tribal identifiation shibboleths.

    (On the outside: UKIP are warmed-over homophobic christianist little-Englanders -- angry older white males. Think Tea Party, only off the fringe of the Conservative Party rather than operating under the umbrella of the Republican party. What makes UKIP dangerous is the fact that they siphon off the hardcore Conservative base, thus provoking the Conservatives to lurch to the right -- anti-immigrant, anti-EU -- territory that UKIP have staked out in order to shore up the crumbling base. The Conservatives are therefore coming out with anti-immigrant rhetoric which used to be the province of fringe fascist groups like the BNP and NF until relatively recently. The unspeakable is now not only speakable but spoken with calm certainty by cabinet ministers.

    The SNP, contra Greg's comments, are the party of government in Scotland, and aside from the nationalist thing are roughly where Labour was in the pre-Tony Blair era -- i.e. a party of the left, but to some extent hamstrung by Westminster's retention of taxation and revenue powers.)

    800:

    By the sound of things, we learnt "Mathemetics" (certainly Calculus, and some of our Probability and Statistics) in a similar manner. Calculus took up roughly 1/3 of my total school-level time studying mathematics; the other two got about 1/15 each.

    I work in a field where analysis of likelihood of events, and of dynamic behaviour of objects is important. I've never used Calc beyond knowing that the area under a Velocity vs Time chart is Distance travelled type stuff, but use Probability and Statistics (and the analysis of them) most working days.

    I think that says it all about mis-stressing which fields of mathematics are important to those who do not actually work in pure or applied maths (including theoretical physics).

    801:

    We're second only to China ( http://en.wikipedia.org/wiki/Norway#Resources , last paragraph) when it comes to exporting fish That Wikipedia quote is more than just a little wooly (as in ignores it completely) on the point I was trying to establish; how much of your fish exporting is commercial sea fishing and how much is fish farming (eg farmed salmon).

    802:

    Further personal testimony on this - Pretty much as other replies to your question, particularly Charlie's #799, with a sidebar that Greg seems to have some peculiar personal antipathy towards the SNP.

    803:

    They seemed very confused when I didn't find "socialist scum" an insult ;-)

    Did you respond by saying "Thank you. &lt/end&gt"? That really confuses them as a rule!

    804:

    The other bad thing about the 'free' schools is that, as per the usual government method, they are being imposed onto communities that don't want them. If there's a whiff of a problem, the council is leant on to turn it into a free school and the vultures gather round.
    And once it is in place it is responsible to the education department, not the local council, thus removing control further from the locals. Oh, and it can also teach any old crap it likes with bad teachers, which is not the Finnish model.

    Basically all three main parties are united in centralising power, rather than 'empowering' local people - their rhetoric doesn't match their actions.

    805:

    IF UKIP are what Charlie says, then why are so many "Old Labour" voters sympathetic, in spite of UKIP's other problems - which I did note, btw? Incidentally, these days "anti-immigration" does not mean "racist" - it's a realisation that, err, "we're a bit crowded in here" (And, our jobs are being cheapened & employment laws undermind - the Wedgwood Benn argument.) No, I don't like the SNP - & particularly Salmond. They are the nasty face of nationalism, based on a hate of the percieved "English" rather than the facts. I have another informant in Edinburgh, a post-graduate history student, who is Welsh, & his opinion of the SNP makes me look mild-mannered. Incidentally, I agree with Charlie about a lot of the modern tories, who seem to be spiteful to me. At the next General Election, I'm going to vote for my Labour MP, Stella Creasey (Note*), BUT at Euro, this year - I'm going to vote UKIP, just to scare the bastards.

    guthrie ( @ 804 ) You've got it. The centralising, "Stalinist" tendencies of all parties. Thank you!

    Note* - Look her up, she's good news, we need more like her.

    806:

    Because, Greg, a lot of old labour supporters are warmed over homophobic little englanders with no knowledge of economics.

    Simple, huh?

    As for the SNP, I know members and others who would vote for independence, and naturally my experience of them and their views is nothing like what Greg thinks of the SNP. It especially does't involved hatred of the english. The SNP itself has nothing much to do with the anti-english side of things, and it isn't currently running the country on an anti-english basis. And lets face it, it isn't doing any worse a job than new labour and the tories.

    Basically Greg reminds me of a marxist friend of mine who has a simplistic view of things, where nationalist = fascist.

    807:

    Also centralisation is not Stalinist, unless you mean that corporations are also stalinist, meaning that the word is being used as shorthand for centralised control and repression; which is a rather broad comparison. Nevertheless, it is worth pointing out that the centralisation thing is important to business, meaning they have fewer places to bribe, more control over what they want, and the bigger firms are the stronger they are and more able to squeeze out competitors or just buy them.

    Expecting Bitcoin to do anything about this without a parallel movement of people and small companies would be silly, but judging by some of the responses on this thread at least some people see that and are doing things about it.

    808:

    It's a bit like the US when the Democrats from the north-eastern states and the West gave up on the bigoted white power types in the South and pushed through Civil Rights and desegregation in the 60s and the Republicans, famously the anti-slavery party of the Union a century before said "well if you don't want their votes we'll take them thanks very much".

    The UKIP and its predecessor the BNP is sucking up the support and the votes of all those working-class white bigots who used to vote Labour while blaming the immigrants and foreigners generally (EU, SNP etc.) for their lack of jobs, crime etc. Alf Garnett is alive and well and running for election in the 21st century.

    809:

    As Guthrie says, old Labour voters who support the UKIP are essentially little-englanders with no economic understanding. But they've also bought into the general view of the party that Greg has, which ignores just a few of their stated and proposed positions. Little details like:

    sharing leadership of the EU's far-right grouping with a man who thinks Anders Breivik had "excellent ideas" and acted "in defense of western civilisation" believing that employing "women of child-bearing age" should be illegal proposing that people with mental health problems should be put into concentration camps (sorry, "special communities") expressing lots of lovely opinions about the disabled (from "disabled babies should all be forcibly aborted" onwards) proposing that people on benefits shouldn't be allowed to vote asserting that there's a link between homosexuality and paedophilia

    To avoid tripping the filters, I've not included source links; most of them are provided at this New Statesman article. Which also comments on UKIP's casual racism and a few other pointers.

    810:

    Ok, I didn't want this to get personal butI don't see any way out of it. No, I don't like the SNP - & particularly Salmond. They are the nasty face of nationalism, based on a hate of the perceived "English" rather than the facts. Former SNP activist speaking. Have you ever met Alex? I have, and he's very personable: The sort of guy you, well I anyway, would happily go for a pint and some craic with. As for the accusations of Anglophobia; Do they stand up against the above? I want independence because I genuinely believe that Westminster rule means "rule based on what is best for London and the Home Counties" and that is not necessarily what is best for England outside that area, never mind for any of Northern Ireland, Scotland or Wales.

    I have another informant in Edinburgh, a post-graduate history student, who is Welsh, & his opinion of the SNP makes me look mild-mannered. Er, a Welshman saying that makes me think "Mr Kettle for you on line 2: He wants to discuss visual spectrum reflectance". I don't know your informant, but casual Anglophobia is probably the single most popular pastime in Wales. I have actually experienced Welshmen having a conversation in Welsh, swapping to English in mid-sentence when I said "Good morning" with a Scots accent, and back to Welsh just as naturally on hearing an English accent. I've never known Doric or Gaelic speakers do the same (although to be fair they wouldn't have switched in English for me either).

    811:

    I was just copying CHarlies words; they fit what I have read and some of what I have seen in Scotland, although the dynamics are a little different. Moreover they don't cover every person, but enough of them to be useful.

    As for the labour party in power, I recall one book called "Labour, a party fit for imperialism" which argued that in the post WW2 period the labour party, contrary to the hysterical right wing press, were quite establishment and pro-imperialism with all that entailed. Political party's change though, as we have seen with the labour party in the last 30 years, but it's hard to see how to make it more electable and less managerialist power crazy than it is just now.

    812:

    PLenty of serial killers have been described as porsonable. Eric "Headbutt" Joyce didn't get his seat in parliament just because he sucked up to the right people, he is reported to be very personable and so on. So just because Salmond is okay in person, doesn't mean he doesn't sacrifice an english person every weekend in his highland hideaway.

    813:

    I have a simple guiding principle for the next elections in the UK.

    The party in power must learn that they can lose.

    In 1979, Maggie got elected, and after the events of the 1970s that was almost inevitable. She was ousted by Conservative Party internal politics, and John Major managed to win the next General Election, keeping the Conservatives in power until 1997.

    Then we got Tony Blair's version of Labour until 2010, with assorted Conservative leaders losing elections and being replaced.

    2010 was the first General Election where I voted in a Constituency which changed hands. We lost a decent bloke to get a Conservative. While the guy has some admirable traits, he's also a bigoted, innumerate, anti-European, slug.

    I think we have to frighten the politicians.

    The Coalition passed a law that fixed the dates of elections, and we are stuck with the current sorry shower until 2015. If the Conservatives win, they will be running the country until 2020. (There is an early election option, but it looks effectively impossible to use.)

    I don't want any party to think they have any guarantee in a General Election. I want MPs to be looking nervously over their shoulders. I want then all to know that they need to deliver a better world.

    The European Election in May 2014 is done with a PR system, large constituencies with between 3 and 10 MEPs each. It feels horribly divorced from the voters in the years between elections. I don't recall who was elected here last time, except for the embarrassment of one of them being from the BNP. It is going to be a hard choice because of the way the system works.

    And GBP 5000 deposit to be a candidate... Not unless my Lottery Ticket comes up.

    But, whoever I vote for, the Conservative Party will not be my choice.

    814:

    The humorous part of the Republicans scooping up the White Power crowd (I believe under Nixon) is that, in 2014, the same people who urged the Republicans to run on a pro-hate, pro-bigot stance (e.g. Karl Rove and company) are busy tooling up for a 2014 war to take back the Republican party for the rich, and to make sure more demagogues from the Tea Party don't make it into power.

    Wonder what the White Power crowd will do if the Republicans don't want them. Will we see a Tea Party in truth?

    The sad part about all of this (as can seen by comparing maps) is that there's a lot of misery behind the Tea Party. Counties suffering the worst from things like drought, Big Ag and Walmart (and meth cookers) taking over their local economies, and so forth, are the Reddest of the Red. They are the ones who are seeking out anyone who can offer prospects for a change, be they radical Christians or the Tea Party. It's a situation that's ripe for abuse.

    Unfortunately, this is the same pattern seen in Syrian (and for all I know, Iraq), where Al Qaeda's on the march in areas that have run out of water.

    It pisses me off that the demagogues are the ones taking advantage, and it also pisses me off that my people, the environmentalists, are busy saying that everyone should cluster in the (left-leaning) cities, because it's more efficient that way.

    Unfortunately, if the Republicans become the Party of the Rich and the Democrats become the Party of the Cities, most of the US will be unrepresented, farmed out to whichever machine can get enough votes. That's a situation that's ripe for insurrection. Hopefully politicians won't be quite that clueless, but we're getting there, especially with our current Congress.

    815:

    I have heard it claimed that every US election is fought by a de facto coalition formed during the candidate selection process, whether a caucus or a primary election, and that's where the different factions fight their battles.

    And then the National Party bribes or blackmails the selected candidates.

    Bitcoin isn't that good a tool for bribery, but the NSA must collect plenty of blackmail material.

    816:

    Actually, thinking back to Graeber's Debt, the only proper, anonymous currency is...the US$20 bill.

    BitCoin can be traced, after all, and it carries a full history of transactions with it. How is this different from credit, which, as Graeber demonstrated, arose centuries, if not millennia, before money was invented? Anonymous coins are great when you're paying your conquering army with them and requiring the recently conquered population to accept these anonymous tokens by requiring people to pay taxes with them. They're not so great when you're trying to track down fraudulent transactions and to maintain relationships, business or otherwise.

    Ultimately, having money that carries its full history with it really is a massive step back to traditional financial systems, which are run on credit, between people who know of, or can know, each other, often using documents (such as repeatedly endorsed checks) that carry their transaction history with them. If so, BitCoin and its kin are merely the latest iteration of the oldest pattern of human financial relationships, not something genuinely new or different.

    In fact, I wonder if a financial system based on anonymous cash is symptomatic of expanding empires, and if credit replaces them when the conquest stops and people settle down and develop more complex relationships with each other. Hmmmmm.

    817:

    There are three different ways to hold early elections firstly a two thirds vote in the Commons, secondly after amending or repealing the act by a simple majority, thirdly if the government loses a motion of confidence and a government with the confidence of the Commons has not been formed after 14 days. What was abolished was the PM can no longer simply ask for a dissolution and the monarch no longer has the power to dissolve parliament early without the consent of the Commons.

    818:

    Looks like we're back over a $1000 per Bitcoin today. Reports of BC were greatly exaggerated.

    819:

    Should read: "Reports of Bitcoins's death were greatly exaggerated".

    820:

    Well, somewhat exaggerated anyway. We could still get lucky and that turn out to be a "dead cat bounce".

    821:

    Just doing my bit to plump up the comment count, but sorta related to previous comments about Iran: Tehran foodies flock to American-style burger joints

    822:

    Interesting; apart from the Arabic script signage, and the large (but not 100%) proportion of women wearing headscarves, that could be pretty much anywhere.

    Which kind of supports my theory that ordinary people (as distinct from politicians and racists) are pretty much the same anywhere.

    823:

    Which kind of supports my theory that ordinary people (as distinct from politicians and racists) are pretty much the same anywhere.

    Yep. I've always felt that too many judge other countries by their governments (or what they hear about them) rather than their people.

    I have to make a comment on the irony of an Iranian burger joint having a picture of Paul Newman, half Jewish star of "Exodus".

    824:

    BEFORE I read any comments in between my last & this one .... Oh BUGGER! it seems I was wrong. NOW what I do for voting is even more of a problem .... I may comment again, after I've read intervening remarks, OK?

    825:

    OK Corrections taken - see also my post above. Now pleae refer to the Norwegian gentleman @ 791.

    Contra everything else, & in the same constituency as the aforementioned & admirable Ms Creasey, we have ... Labour Cllr Clyd Loakes, old labour to the core, IGNORANCE IS STRENGTH & the rest, including doubleplusquacknewspeak ... Tried his best to get the two local museums (Vestry House & the Water House - look them up) closed down - he appears to hate "culture" or anything to do with it, including individuality see: this vile report as to why the main parties are derided. What is one to do? What is to be done?

    826:

    Iran has one of the larger Jewish communities in the Arab world; the rhetoric against the state of Israel is very carefully separated from the faith of Judaism in Iranian politics. Saying that it appears the Jews in Iran tend towards keeping the dietary laws so they're not likely to be seen around burger joints.

    827:

    Interesting. Of course in the US, it is nearly impossible for politician to be elected to any national or statewide office without professing Christianity. The Constitution may forbid any religious tests for holding office, but the votes are not so bound.

    828:

    Thank you (and Greg Tingey and Adrian Howard) for the detailed explanation. It helps makes sense of what I've heard about UK politics over the last few years.

    As for your Tea Party comparison, from my perspective over here, the Tea Party started out as conservative limited government/control-the-debt movement, but has over the past few years been infiltrated by quite a few social conservatives. Which in turn attract a disproportionate share of the media attention because they make the entire movement look bad--and highly unpalatable to the average voter.

    And to explain the baroque structure of US politics a bit further, "social conservative" should be read at "people who want the government to enforce their particular view of biblical morality" rather than people who live their own lives in a moral and conservative fashion. I've taken to calling them "moral socialists" (which makes sense in the context of US politics as "socialist" is a Very Bad Word here) as they believe that the government can make men good.

    829:

    That's really a gross (an in many ways misleading) oversimplification of what happened in US national politics in regards to the movement of the South toward the Republican Party. The South today is both far less racist than in the early 1960s and far more Republican.

    And in neither case does correlation equal causation.

    830:

    I think I see the real problem; USian SS, like most private pension funds in the UK were about 10 years ago, is under-capitalised relative to its future liabilities.

    You're missing the point. But accepting what the politicians tell the populace. That SS is a system where you pay into an account that will be there for you when needed. But it is really just a government benefit (welfare if you wish) tax and transfer system. Like 99.999% other government benefit systems.

    Back in the 80s or 90s during some fake handwringing about whether or not the "trust fund" would remain solvent a member of Roosevelt's inner circle gave an interview about how the program was set up. He said he asked the president why all this complicated record keeping when at the end of the day it really didn't matter. The reply by Roosevelt was that if people THINK they have assent in a "bank" somewhere then Congress will never be able to reduce benefits as people will think they are taking away money that belongs individually to them.

    There are not real capital accounts, just lots of paperwork to make people think there are.

    831:

    Okay, attempted humor on the internet fail. Considering the restaurant's theme, they could just as well have the picture of Newman as a race car driver, as well as James Dean's.

    832:

    You're welcome to believe that, if you want to risk living in Zimbabwe am Hudson.

    833:

    If Norway didn't have the oil (or the fish, or the landscape practically designed for hydro power stations...) you wouldn't be rich. I'm happy to take your word for it that joining the EEC in 1972 would probably have had bad consequences for fishing, but while you might have been less rich, you'd still have been rich.

    I don't think the point about the government pension fund disproves my argument. According to the Norwegian Petroleum Directorate, petroleum exports were NOK 500B in 2010, and the government fund got 271B in 2011.[1] IOW over £20B went into the rest of the economy through wages, buying equipment, etc. NPD say that the industry employs 206,000 people in Norway directly and indirectly[2], which must be close to 10% of the entire workforce. I completely agree that it's great that your government is investing its share the oil money for the long term, but the reason they can do that is because Norway is already very prosperous.

    In terms of my point to Greg, we wouldn't magically find ourselves in your situation if we left the EU now, and we aren't not in your situation now because we joined in the 1970's.

    834:

    The South is far more Republican because in the 1960s the Democrats decided black people are American citizens, entitled to vote and all the other things that go with being American. White bigots like the odious Strom Thurmond moved to the Republican party because it was willing to fight integration and legislation like the Civil Rights Act -- as LBJ said after signing it into law "We've (meaning the Democrats) have lost the South for a generation". Once they were in they took control as it became obvious that without the Southern white bigots the Republican party was never going to win anything ever again.

    "Welfare queens driving Cadillacs" and "Strapping bucks eating T-bone steaks" was a big vote-winner in 1980 and it still goes on today, with speeches about food-stamp recipients eating lobster and the like with the white bigot audience invited to imagine the skin colour of the welfare cheat in front of them at the supermarket till. They can't say "nigger, nigger, nigger" nowadays but they don't have to.

    835:

    This leads to the phenomenon of "dog whistle politics" where politicians use phrases that sound innocuous to outsiders (like the silent dog whistle), but which their supporters respond to (which means, I guess, that the pols see their supporters as trained dogs, but whatever). I'd originally thought the term originated in American southern politics, but according to Wikipedia, the term originated in Australia. Who'd have thought?

    Looks like everyone is doing it now, though.

    By the way Charlie, you're welcome.

    836:

    JCH @ 827 We have the utterly revolting spectacle of good little RC christian, and war criminal, Blair going around & smarming. Now his succesor, Camoron is also appearing to crawl to "religious communities" ... it's enough to make one vomit .....

    Incidentally, we still have the problem of the EU - see "Norway" ... and also, in passing: Guthrie / Chris & Paws .... Err, my Welsh young friend in Edinburgh is from Gwent, ( Usk / Brynbuga actually )& his dislike of SNP is based on his (& his parents) experience of Plaid in Wales .... The Old Labour people I meet (on the plots) are decidedly neither homophobic nor racist, given the other plotholders - some of whom are various shades of brown & a lovely (ex-USA) gay couple who do very well .... As an ex-member of the Lemocrat party, I really don't know what to do. At every election, now (& for several years past) I have been reduced to voting "for" the least worst candidate, or one desperate occasion to keep the then present incumbent out, at any price. This trend appears to be getting worse. I'm not sure if it's been noted on this long thread, but actual party memberships are getting very very low, so that none of the political parties actually, you know, REPRESENT anyone, except their own self-serving cliques

    837:

    Speaking of Reagan's Cadillac-driving welfare queen, it turns out there was a real person behind his speech, and she was a lot weirder than that -- a sociopath who committed social security fraud on a massive scale, guilty of multiple kidnappings of babies and small children, probably guilty of multiple murders as well.

    (Portraying her as a typical welfare claimant is a bit like describing Albert Fish as a typical baby-sitter. And using her as a reason to gut the welfare system is just plain crazy. Or mendacious. Or racist. Or all of the above.)

    838:

    Ref Welsh & Plaid Cymru - I'm not sure why you think that they're an identical mapping with the SNP, other than one disputed testimony. I've been to Wales, had dialogue with PC activists, and with "the man on the Carnarvon omnibus", and found the Welsh far more casually Anglophobic than the Scots. (#810 refers) I live in a Gaelic speaking area and have yet to notice the Gaeltacht doing that. Ok, they don't switch to English when I'm about and back when you arrive which is functionally the same "shutting you out" thing as far as you'd be concerned but if you expect everyone to switch to your language because you're there, then that's part of the problem.

    I agree about low party memberships - Also an ex-activist (and which party is documented and not the point) who once had a conversation with a 20something that went roughly:- 20odd "I don't vote because as far as I can see politics is just a slanging match". Me &ltstunned silence&gt

    839:

    What kind of ideological goals and agenda do you have in mind? You keep repeating it but I don't know what you mean exactly. Also - by whom?

    840:

    one of the reasons - if not the main one - behind bitcoin creation is banking issue. It's highly probable that if we didn't have 'banking issue' we wouldn't have bitcoin if it's simple enough. "I do agree with mr Stross though. No matter who controls the currency, they all seem like money grabbing bastards" - Can you please tell me who are those bastards controlling bitcoin?

    841:

    "I do agree with mr Stross though. No matter who controls the currency, they all seem like money grabbing bastards" - Can you please tell me who are those bastards controlling bitcoin?

    Now that's an interesting question. As an example, if the speaker is an American who takes issue with the Federal Reserve System - there are those who do, many of them sane - they can look up the guy in charge. (That would be Ben Bernanke; he works at the Eccles Building at 20th & Constitution Ave NW in Washington DC.) So if I want to talk about Bitcoin, where do I find Satoshi Nakamoto? Where is his office? Is he really just one guy or an anonymous group?

    And as for the money grabbing part...maybe. Satoshi, whoever he or they may be, is believed to have about a million bitcoins, a billion dollars in ones and zeros. (Ben Bernanke, google tells me, is well off but not insanely rich, with investments worth about two million dollars.)

    842:

    Oh, and now I see that io9.com has posted an article titled Is Bitcoin evil or just dumb?, with a link to this thread. Prepare for more visitors!

    843:

    You're welcome to believe that, if you want to risk living in Zimbabwe am Hudson.

    I and at lot of politicians and economists and others do. But it's not the official line. Have fun. Spend a few days looking at how it's all set up. It's not hidden. Just takes few days of very boring reading and playing with the numbers.

    Why have "money" in your account when the payout has nothing to do with the balance?

    But if you think I'm nuts, well fine by me.

    844:

    In the US we call this waking up on 3rd base and thinking you hit a triple.

    845:

    So if I want to talk about Bitcoin, where do I find Satoshi Nakamoto? Where is his office? Is he really just one guy or an anonymous group?

    Read up on the March 2013 "Bitcoin fork".

    In short: A software infelicity threatened the integrity of the system. In response, a small number of individuals and other entities discussed the options, chose a course of action and implemented it.

    This group effectively governs Bitcoin.

    It consists of (a) the developers of the standard software, and (b) the operators of the largest mining pools. Each of these ultimately derives power from the miners, so what we have is a bicameral liquid democracy.

    846:
    I think in an ideal world western nuclear powers would have offered assistance in building the power plants and Iran would have accepted. But the real regime is too paranoid for that.

    Russia's offered a "fuel and waste collection" deal twice (providing the fuel and being able to audit the waste would have made diversions to weapons programs impossible). The first time it was blocked by Bush (the Iranians wanted a pilot enrichment program, Bush refused to accept any uranium enrichment in Iran), the second time was after the sanctions; the Iranian government (which has its own uranium mines) was understandably wary about being dependent on an outside source of fuel.

    847:

    Well, guess you could also file it under: "HSS sucking at statistics, examples of". Also see "fast system 1, slow system 2":

    http://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow

    Now the real question is, was Reagan actively manipulating congnitive biases, just playing along on his own likely already deteriorating cognitive systems, or a mixture of both...

    On another note, it might be interesting to look for similar errors according to political party. Personal experience would expect to spikes with right and left populists and some environmental groups...

    848:
    People want their savings to appreciate, or at least outpace the rate of inflation.

    Which is why the idea of saving in Bitcoin is irretrievably dumb. It's impossible to conduct reserve banking in Bitcoin due to it solving the double-spend problem - a bank can't both hold a coin and lend it, which means the Bitcoin economy is zero-sum and rates of interest on Bitcoin loans need to be over 100% to guarantee a return (see this paper).

    You can't save Bitcoin, you can only hoard them and hope the value goes up. Holding Bitcoin is exactly analogous to burying a lump of gold at the bottom of the garden.

    849:

    The problem being that in order to convince the people holding the large lumps of money to do something with it you have to promise them a return on investment.

    But we've already invented a way around that: Crowdfunding.

    Sure, nowadays it's mostly used to fund art projects and tech gizmos but there's nothing stopping it from being applied to all sorts of things (There's already a science project crowdfunding site, for instance)

    If we move onto a 21st century economy that isn't hamstrung by having to seduce Scrooge McDuck every time we need to get anything done then maybe deflation isn't such a terrible problem?

    850:

    I think you may have me confused with a Bitcoin evangelist. I don't think Bitcoin is actively evil or anything, I just consider it another commodity that people buy and sell. Whether it turns out to be closer to tulip bulbs or to Google stock is up in the air. I'm not running out to invest in it, personally.

    851:

    And on an utterly unrelated note:

    I'm currently working on next weekend's adventure for my pen-and-paper Dungeons & Dragons group which will feature Githyanki Pirates of the Astral Seas!

    Thank you Mr. Stross.

    852:

    It's impossible to conduct reserve banking in Bitcoin due to it solving the double-spend problem - a bank can't both hold a coin and lend it

    Uh, the entire point of fractional-reserve banking is that the bank holds only a fraction of the coins and loans out the rest. This is possible to do in Bitcoin, just as it was possible to do with gold-standard currencies (or, indeed, physical gold).

    It's no easier or harder than with any other currency.

    853:

    More specifically, with Bitcoin banks can't create money; a deposited Bitcoin can only be lent once. To express it differently, in a Bitcoin economy there's no such thing as "commercial bank money."

    854:

    Neither can normal banks, with traditional currency.

    Actual Bitcoins correspond to M0 and MB, in the same way that notes and coins in circulation and in bank vaults correspond to M0 and MB. The banks don't create new coins or notes.

    The money created by banks is M2, savings account balances. There's no reason a bank couldn't create M2 money denominated in Bitcoin.

    855:

    http://www.newscientist.com/article/dn24822-japans-ageing-population-could-actually-be-good-news.html

    "Japan's economy has been growing slowly for two decades now. But that too is deceptive, says William Cline of the Peterson Institute for International Economics in Washington DC. Thanks to the falling population, individual income has been rising strongly – outperforming most US citizens'.

    With 127 million people, Japan is hardly empty. But fewer people in future will mean it has more living space, more arable land per head, and a higher quality of life, says Eberstadt. Its demands on the planet for food and other resources will also lessen."

    856:

    [ Anti-semitic loon deleted - moderator ]

    857:

    I'm not quite sure if they were anti-semitic themselves or doing a really bad job of communicating that some people are motivated by such ideas. That there are enough such people to drive bitcoin and global unrest seems unlikely.

    858:

    Well, if that were true, China and India would have massively more impact on the planet than the US.

    The fallacy is that population has little or nothing to do with consumption footprint. The US is the classic example of this. We've got the biggest carbon footprint of all (although we may have finally been overtaken by China, which is seven times our size), but at 300 million, we're tiny in a world of over seven billion. We have half the world's military might too. Population numbers rarely tell the whole story.

    The fundamental problem is that the global economy is built on wants, rather than needs. Needs are relatively limited: once people have enough to eat, drink, a home, a family, friends, and something like meaningful work or a role in society, most people are pretty happy. Quadrupling their resource use (or more) won't make them noticeably happier: they may be pulling down 100K, but they're stuck in traffic, working late and not seeing the children, paying down the high-priced car, and so forth.

    A lot of our economy is driven by wants, which are effectively limitless, and these wants are driven by the advertising industry that programs people to consume. Our consumer culture is backed by an ideology of limitless growth, and accounting mechanisms (notably the GDP) that don't take environmental costs into account at all.

    So far as problems with the GDP go, a classic example is that if someone makes money polluting an aquifer that supplies 100,000 people, that's positive GDP. If someone makes money cleaning up the aquifer, that's positive GDP. The cost of making the aquifer unusable is not accounted for, so the damage looks like nothing but growth. It's a pernicious statistic that way, and I was just reading that the man who created it knew of its flaws and cautioned against using it the way it is used today.

    So the bottom line is that Japan still has a problem with an aging population, coupled with a social system that makes it harder for women to be mothers. Italy is in the same boat, and for similar reasons.

    859:

    Please read the "2.2 With bitcoin, reserve banking is impossible" section of the paper I linked to - you, I, or the author has misunderstood something, and I'm not sure which of us it is.

    860:

    Resource extraction is a major inflater of GDP -- places like the bronze-age civilisation of Qatar lead the world rankings for per-capita GDP for that reason. Another inflater of GDP is moving money around which puts Monaco and even the Channel Islands in the top rank.

    Japan has no resources to extract, it imports all of its primary energy and raw materials and its staid financial markets are not a patch on boom-bust-boom Frankfurt or Canary Wharf. Its high GDP is almost entirely due to the productivity of its workforce even with the supposed flaws in its social system hampering its economic growth and development.

    As for "making it harder to be mothers" the Japanese like most Western nations have assorted incentives for mothers and families to raise children such as childcare, paid time off etc.. They also have free education, access to contraceptives, comprehensive medical care etc. all of which tend to depress fertility in individuals.

    861:

    GDP is fairly useful provided that you remember that it is a measurable proxy for economic activity. It isn't directly what you want to increase but you can actually measure it. The problem is there is a danger that you adopt policies that only boost GDP without boosting the underlying level of economic activity, in practice this doesn't seem to be an issue. Luckily you can manage nominal GDP without allowing speculative attack, which is what happened in the early 1980s when the Thatcher government attempted to target the growth in the money supply.

    862:

    The language switching is just a thing, bilingual Welsh speakers randomly switch language during conversation for no particular reason, they aren't being intentionally rude. Hinterland, which is set in Aberystwyth, shows it. When two Welsh speakers are having a conversation one reason for switching is English has a much larger swearing vocabulary than Welsh.

    863:

    Please read the "2.2 With bitcoin, reserve banking is impossible" section of the paper I linked to - you, I, or the author has misunderstood something, and I'm not sure which of us it is.

    I think it's the author of the paper...

    For one thing, he even suggests how fractional reserve banking could work with bitcoin, but says that it is "anathema to the bitcoin community". That's a long way from "impossible".

    For another thing, his idea of fractional reserve banking is over-complicated. In reality, Figure 4 is perfectly workable. Bank 1 now has only $5 in coins on hand, but that's OK as long as it doesn't lose more than 5% of its customers before the loan is repaid.

    One question is why people would use a bank, and he suggests two possible reasons (security and interest), but dismisses them as "hard to understand", which is again a long way from "impossible".

    864:

    Fair enough. :-) Thanks!

    865:

    So far as I know, one problem with GDP is that it assigns no value to things like aquifers, untilled land, the oxygen that forests produce, and so forth, what Schumacher calls the primary economy and the rest of us call ecosystem services. Hence, if they are destroyed, that is counted as income, and if money is spent on restoring them, that is also counted as income. They have no inherent value in conventional GDP.

    According to preliminary valuations made years ago (IIRC), ecosystem services are something like $21 trillion, or three times the size of the human economy. If we actually accounted for the damage caused to ecosystem services, a lot of activities that look profitable (such as converting forests to marginal farmland or depleting aquifers) would not be profitable.

    Note that the UN switched to something called the System of Environmental-Economic Accounting (SEEA) in 2012 to overcome these problems (http://unstats.un.org/unsd/envaccounting/seea.asp). I don't know much about it yet, but it's nice to see an accounting system that's set to track progress towards sustainability.

    866:

    Why carry awkward bitcoins when the bank can just hold them for you and issue an IOU, which is transferable between people.

    "I promise to pay the bearer on demand One Bitcoin".

    867:

    Well, if that were true, China and India would have massively more impact on the planet than the US.

    The fallacy is that population has little or nothing to do with consumption footprint. The US is the classic example of this. We've got the biggest carbon footprint of all (although we may have finally been overtaken by China, which is seven times our size), but at 300 million, we're tiny in a world of over seven billion. We have half the world's military might too. Population numbers rarely tell the whole story.

    China has been ahead of the US on CO2 emissions since the mid-2000s. As of 2012 China was emitting more than the US and EU combined. Chinese per-capita emissions are actually above the EU average, even though energy use per capita isn't, because coal so dominates their energy supply. By this year's end I would guess China's emissions surpass those of the US, EU, Australia, and Canada combined.

    Rising CO2 concentrations are (ideally) counterbalanced by carbon accumulation in plants and soils, and, in the long term, silicate weathering. As a zeroth order approximation, both biological accumulation and silicate weathering are proportional to geographic area. The figure of merit is excess anthropogenic CO2 emissions per hectare, not per capita. Thus while most of the world's nations are emitting CO2 at an unsustainable rate, India and China are even deeper into the red than the US. Canada is doing better than the US, EU, China, or India, because its population density is so low.

    Or to put it another way: anthropogenic climate change would be slower if every nation had the GHG emissions per capita of Canada and the population density of Canada, and it would be faster if every nation had the emissions per capita of India and the population density of India.

    868:

    A couple of factual corrections:

    826: "Iran has one of the larger Jewish communities in the Arab world". While Iran has a number of Arabs in its southwest area called Khuzistan, most of Iran has a Shiite Indo-Aryan culture, quite distinct from the (largely) Sunni Semitic Arabs. A crude analogy might be between Protestant Germans and Catholic Hungarians.

    867: "We've got the biggest carbon footprint of all (although we may have finally been overtaken by China, which is seven times our size), but at 300 million, we're tiny in a world of over seven billion." China's population is ~ 1.3G, a bit over four times that of the USA's ~ 310M.

    ....................................................

    I saw the term "fractional currency" and thought of the term "fractal currency" I have no idea what it would be, or if it even makes any type of sense whatsoever, but it does have a bit of retro-Cyberpunk coolness to it.

    869:

    Actually, there is this joke calling a Farsi speaker an Arab is a clear case of suicide, though most Iranians I met are quite relaxed about it.

    As for the rest, err, actually most people in Iran, e.g. Farsi speakers and like, speak an Iranian language, member of the bigger group of Indo-Iranian languages. Indo-Aryan languages are the second subgroup of the Indo-Iranian group, and they are mainly spoken on the subcontinent, e.g. India, Pakistan, Bangladesh, Sri Lanka and some of the smaller entities like Nepal. There is at least a third group, the Nuristani languages in Afghanistan, though they are something of a minority.

    For actual Indo-Aryan languages in Iran, I guess there are some, but they are likely to be minorities like the Dom people, somewhat related to the Romani migration:

    http://en.wikipedia.org/wiki/Dom_people

    There is also this funny thing with the Mitanni, where the Indo-Iranian superstrate seems to show more similarities to Indo-Aryan than to Iranian languages, but as we know from Age of Empires, the Mitanni are long gone:

    http://en.wikipedia.org/wiki/Indo-Aryan_superstrate_in_Mitanni

    So make that Iranian or Indo-Iranian, not Indo-Iranian. Though there are also Turks, Armenians(different branch of Indo European languages) etc. in Iran. As for the application of the term "culture", well...

    Err, could we just say the relation between languages, religions, cultures and ethnic groups is quite complicated; e.g. going for religion and language, neither do Shia Muslims always speak an Iranian language, the Shia Muslims in Iraq seem to mainly speak Arabic, nor are all Iranian speakers Shia Muslims, the Pashtun in Afghanistan are predominantly Sunni Muslims. If you look at these examples, you might also see why language and culture is a tricky issue, and I'd be somewhat cautious when talking about an Indo-Iranian or, err, Iranian(linguistics) culture. To use another example, the Anglic languages (English, Scots and like) and some Northern German dialects are quite closely related liguistically,

    http://en.wikipedia.org/wiki/Ingvaeonic_languages

    but I guess most of us would use the term "Ingvaeonic Germanic culture" somewhat reserved. It might make sense in some circumstances, it is something of a misnomer in others, and in quite some it would be more of an indication of, err, fringe political ideas of the user.

    And even with religion and culture, neighbours with different religions being culturally more similar to each other than to their coreligionists far away are not that unheard of.

    BTW, for Arabic and Semitic languages, there are still quite some non-Arabic Semitic languages around, if we talk about Iraq and Iran, the Neo-Aramean languages come to mind, though those are somewhat confined to religious minorities. As for a Semitic culture, again, that might make sense in some scenarios, but usually "Nestorian Christian" Neo-Arameans, the whole Arab world and "Miaphysite Christian" Amharic speakers from Ethiopia make a group of debatable usefullness. Of, and then there is the issue of bilingualism...

    TL;DR, the main reason I'd say Iran is not in the Arab world is most Iranians speaking an Iranian language, not Arabic. Religious affiliations are not that important, I guess. I'd argue similar for Turkish speakers, BTW.

    870:

    Slightly ironically, in relation to this, I saw a piece (BBC1 "10 o'clock (PM) News) about how China has ~25% of the World population of wind turbines, and are building more.

    871:

    Yes. Unfortunately (and I think I saw this in Al Gore's The Future), the Chinese are not doing as good a job at building the power grid to connect those wind turbines to consumers. We've got similar problems in the US, so I'm not surprised. You can't just incentivize power generation and expect it to go somewhere, any more than you can pay for too many carbon sequestering tree seedlings and expect them all to be planted, let alone reach maturity (a problem in both the US and China as well).

    Getting back to carbon emissions, according to Wikipedia, China's 2012 emissions are 9.86 gigatonnes of carbon per year (how gravitational), while the US is blowing 5.190 gt/yr and India is emitting 1.97 gt/yr. Also of note, international shipping emits 1.06 gt/yr, which shows that the costs of globalization probably aren't accounted as carefully as the purported benefits to corporations are.

    The per-capita emission rates are also informative, with the top four being Australia (18.8 tonnes/yr), the US (16.4 t/yr) Saudi Arabia (16.2 t/yr), and Canada (16.0 t/yr). The world mean is 4.9 t/yr, which is bracketed between Iran (5.3 t/yr) and Mexico (4.0 t/yr).

    Thanks for the math corrections as well.

    872:

    Yes. Unfortunately (and I think I saw this in Al Gore's The Future), the Chinese are not doing as good a job at building the power grid to connect those wind turbines to consumers.

    Yep. And grid lines are quick to generate NIMBY as they are big, visible, and will last for decades.

    Back in the early 70s the various power companies in the region paid the plant where my dad was a production manager $10s of millions(US$) to: 1. Change their process so they power companies could pay them to cut production way back on 4 hours notice. We're talking 100s of megawatts. 2. Allow the 3 grid lines into the plant to use the plants switch yards to transfer power between the grids even if the plant wasn't using it.

    873:

    Electric power lines also attract NIMBY because some people believe (on fairly weak science, as I understand it) they raise the risk of getting cancer.

    874:

    Actually, I wouldn't be that surprised if there was a real correlation. Many power lines = high concentration of industry producing/consuming energy

    Though we could argue about quite some suspected chemical carcinogens, coal-tar is a Group 1 carcinogen:

    http://en.wikipedia.org/wiki/List_of_IARC_Group_1_carcinogens

    875:

    And now you might be a bitcoin miner.

    Apparently Yahoo was serving up malware ads in Europe for a few days surrounding the New Year. And one of the payloads was to install covert bitcoin mining software if your system was up to the computing requirements. At 27,000 infections per hour for a few days there are a lot of folks with impacted computers.

    It DID require that you have some out of date / unpatched software running for the infection to happen.

    Anyway, here's more info on the attack and how to tell if you've been infected. http://www.zdnet.com/yahoo-ad-malware-spawned-european-bitcoin-mining-network-7000024978/

    Macs were ignored with this one.

    876:

    because some people believe (on fairly weak science, as I understand it) they raise the risk of getting cancer.

    i think most of the hysteria over this came from a study in Sweden (I think) that stated that childhood leukemia was tied to living under power lines. And it was. But they didn't release the raw data till a year (years?) later. The correlation was incredibly weak. Something like 5.1 cases per 100K or so if you lived near a power line. 5.0 if you lived near a street. 4.95 if you lived in a wooded lot or whatever. I'm making up the details but I'm fairly certain I'm in the neighborhood. Lots of risks between 4 and 5 per 100K.

    The point was that the initial reports were all about the power lines being the biggest risk. What wasn't known (to the public) until way later was that it wasn't really a "risk" compared to just being alive and living in an urban/suburban area.

    I'm open to correction by people with better memories.

    But we still live with "Power Lines Cause Cancer".

    And they might but as far as I know the evidence so far is weak to non-existant.

    877:

    Electric power lines also attract NIMBY because some people believe (on fairly weak science,

    Yes. Most people don't understand the inverse exponential power equations that govern EMF radiated power levels from alternating current sources.

    At times I wonder about other correlations. Like the number of people afraid of power line radiation and those who regularly visit tanning salons.

    878:

    Oh, neat! Something I know about!

    I'm in Houston, where I just spent the day talking to land agents for a company called Clean Line Energy Partners. They're building big HVDC lines to run wind power from the Plains to various eastern load centers.

    And here's the totally flabbergastingly unexpected thing: NIMBY is not their biggest problem. In fact, it's relatively small. RTO reliability studies, that's a problem. Last-mile interconnects, that's a problem. Financing for the wind farms when renewable power buyers don't want to sign contracts beyond three years, that's a problem.

    NIMBY should be a problem. Even a small rerouting of a line screws you up. Consider a straight line, two transmission towers. Now re-route the cables around somebody. Two towers become four, and worse yet, because the cables are angled increasing the structural stress, you've just tripled the cost of the towers.

    But ... it's not!

    Now maybe it's a Plains thing, or a recession thing, but the company isn't running into the problems you'd think with local opposition. It ain't non-existent, but it ain't a killer neither.

    879:

    Ah, fake health scares ... Like the "Mobile phone mast ovelooks school - CANCER risk" crap we've had more than once. Total power output of phone-mast, emitter 10 metres up - less than 100W. So, it's as dangerous as a domestic light-bulb. Now try to convince these nutters that there is no risk that is measureable .....

    880:

    Actually, there is a story, can't find reference, so urban legend suspect, about complaints against a mobile phone mast listing a number of symptoms local residents experienced. Things like tachycardia, loss of sleep, headaches, stomach problems, hearing loss, tunnel vision and chest pain. Which prompted an apology from the owners, pointing out they had not switched the thing on yet.

    BTW, it says something about the life of some people if they mistake typical stress symptoms

    http://en.wikipedia.org/wiki/Fight-or-flight_response

    for strange effects of radiation. Though I have no idea what.

    881:

    There is a related (and definitely real) story about cancer clusters around nuclear power plants - that were planned, but not built.

    That story is more about stats and clustering rather than a reverse placebo effect. Unless there's some "leakage" from nearby world-lines where the plants were built, where the mobile phone mast was in operation?

    (Don't worry, I'm not seriously claiming that.)

    Rather "Blue Peter" level article about clusters here: http://www.bbc.co.uk/news/magazine-13374325

    882:

    Well, I guess we need money to rule that idea about world-lines out, who's to say we've not come close to a proof of the multiple-worlds interpretation? ;)

    On another hand, as also pointed at in the article, there might be a real correlation, but it is not radiation. For example, some studies about EMF and cancer are marred by a couple of things, including income effects:

    http://www.quackwatch.com/01QuackeryRelatedTopics/emf.html

    So assuming poorer parts of the country are more likely to have a nuclear power plant planned in them to create jobs and thanks to a lack of powerful NIMBYs, this makes quite sense. Of course, it could also just be chance effects.

    883:

    Now maybe it's a Plains thing, or a recession thing, but the company isn't running into the problems you'd think with local opposition. It ain't non-existent, but it ain't a killer neither.

    I suspect geography plays some part. Not sure how much. I grew up in western KY. I lived in Pittsburgh and New England and now in North Carolina. I visit the Dallas area multiple times per year.

    Dallas and the areas 50 to 100 miles around it are a transmission line siting dream compared to everywhere I've lived. No rivers of any size, mountains, forests, property lines and roads that follow the old creek bed of 200 years ago, etc...

    N. Dallas has all these major roads that had to be laid out 40 or more years ago with central boulevards and 4 WIDE lanes on each side plus setbacks. At times they just run the lines down the center. Try and find that east of the Mississippi.

    884:

    Where I live, power lines causing cancer isn't a major issue. Powerlines arcing in a high wind and causing a billion dollar fire...that's the problem, because it happened in 2007. It's an entirely predictable (and fixable) design and location problem, and the owner of the system has been anything but proactive in making sure it doesn't happen again. Instead, they seemed to have focused more effort on lawyering up to either not pay for the damage caused, or to pass the costs on to consumers rather than investors (in other words, consumers get a rate hike, but the investors get their dividend, rather than accepting the risk).

    Infrastructural issues aren't simple.

    885:

    I can't do the 8 traffic lanes, but transmission towers down a central reservation east of the Mississippi - Saltcoats, Ayrshire, Scotland.

    886:

    Hmm, where? A quick check with Google Maps indicates very little dual carriageway in the vicinity of Saltcoats — the A78 northern bypass appearing to be it — and I don't see a line of pylons along that.

    (I may not have looked far enough afield.)

    887:

    There was a theory a few years ago now that the health effects of living downwind from powerlines was that they were ionising pollution and thus making it more likely to be inhaled and stick in you. (This is a simplification of course) But I can't remember it getting beyond the early stage of evidence for the power lines changing the pollution, into a full blown epidemiological study also involving study of wind direction.

    Heteromeles #884 - I fear your example of why infrastructure issues aren't simple suggests otherwise - it's only a complex case because your government or suchlike can't just say "Stop messing about and fix these issues immediately or else".

    888:

    I guess the idea is that anything that can be fixed by a simple engineering fix is simple. Hmmm. I guess global warming is simple, then. The political issues tend to have the most intractable set of problems these days.

    Speaking of which, Hawaii's got a little problem with too much solar for its outdated infrastructural system (outdated in terms of governance and management, not tech): http://america.aljazeera.com/articles/2014/1/9/hawaii-s-solar-boomistoomuchofagoodthing.html

    I can't resist posting this, if we're talking about infrastructural problems. Last night I tripped over Stewart Brand's 1999(!) suggestion that the internet could "easily become the Legacy System from Hell that holds civilization hostage. The system doesn't really work, it can't be fixed, no one understands it, no one is in charge of it, it can't be lived without, and it gets worse every year."

    Now there's a crisis for someone to write about.

    889:

    It's just a language thing, you say infrastructure, me and lots of others think of stuff, good solid stuff buried in the ground. That there's a whole political side to it is often hidden and unclear. As for global warming, we could solve it right now with the technology we have now, but the politics is the difficult bit. It is a good example though of how politics is about money, despite what lots of people try to pretend.

    890:

    Well, that's true. For my unforgivable sin of participating in democracy by commenting and sitting on volunteer committees, I've learned the great, dirty secret, which is that infrastructure is all political. Not that I enjoy politics, but the physical form of just about any piece of infrastructure embodies a lot of political interests, priorities, and compromises, and it really is simpler to think of it that way. Sometimes stupid designs aren't so stupid when you see them in the political context, and sometimes clever designs are amazingly clueless when the politics are understood.

    One example is the San Onofre Nuclear Power Plant, which was recently closed. One of their reactor complexes was supposed to get a 10% power upgrade through a new generator system that crammed more steam tubes into the generator. Unfortunately, the new steam tubes vibrated under pressure, springing leaks and wearing out much too soon, and the plant owner decided it was too expensive to fix it.

    Sounds like a technical problem, right? People don't build many nukes, so it's understandable if something unexpected goes haywire when they're pushing the limits. Um, yeah. I found out that the same vibration problem was first seen in an experimental nuclear reactor in Santa Susana back in the 1950s, and the problem had been discussed by nuclear engineers for decades as an example of what not to do. Knowing this bit of context the whole San Onofre redesign look like something straight out of the Simpsons.

    891:

    That reminds me of when Torness was down for a few months. Radiation embrittlement of some cooling fans meant one broke and then they had to replace the rest. Of course they hadn't expected it, but I spoke to a retired nuclearn engineer and he seemed to have expected it and, IIRC, suggested they had used the wrong alloy or something.
    I suppose it comes down to the problems with getting technical stuff across to the people who make the decisions. After all why would you try a new design of steam tube when it had been known for decades to have problems, unless there was a complete failure of information or of comprehension.

    WHich is one thing that worries me in this crazy expertise and professionalism destroying system we have just now, how much time and effort is wasted not to mention resources and people, because all the knowledge and experience people build up is chucked out, whether by companies downsizing or by not setting up paths whereby people can gather such expertise and knowledge.

    892:

    @ 869: Thank you for the further correction- I meant Iranian branch of Indo-Iranian Famiy. As you say, while most Arabs, many as in Iraq, Kuwait, Bahrain, etc. are Shiites, and while Persians (Farsi-speaking Iranians) are largely Shiite, the closely-related Dari in Afghanistan, the Tajiks, the Pashtuns, Baluchs, and (I think) a majority of the Kurds are Sunni. For future discussions along these lines I recommend going here: http://gulf2000.columbia.edu/maps.shtml As far as: "Religious affiliations are not that important, I guess. I'd argue similar for Turkish speakers, BTW." I'd have to disagree with you. IMSM ~20% of Turks are "kinda" Shiite (Alevi), and ~25% of Saudis are Shiite, and they don't exactly have/had the best time of it. Likewise, the Shiites in Pakistan. (http://gulf2000.columbia.edu/images/maps/Mid_East_Religion_lg.png)

    893:

    Err, I agree that religious affiliations can be and quite often are deadly serious in the Muslim world, it's just that I don't think them that important for marking cultural boundaries in this case.

    Actually, the Alevis have it especially hard since they are also outside of the confines of Shia Islam, but from personal experience, e.g. some neighbours, doner inns and fellow students, the Alevi contingent of Turkish Germans is still somewhat similar to the Sunni ones with music and like, though Alevis seem to be more, err, "liberal" in other areas.

    As for Iran, it seems that up to the 16th century, most of it was predominantly Sunni, this only changing with the Safavids:

    http://en.wikipedia.org/wiki/Safavid_conversion_of_Iran_to_Shia_Islam

    So, well, there is some debate if Omar Khayyam was Sunni or Shia or something else, Rumi was quite certainly Sunni, but they wrote in Farsi or related languages. OTOH, the Fatimids were Shia, but I guess they used Arabic. The former are part of Persian culture, of an importance prompting some current Iranians to make them Shia, the latter are part of Arabic culture. That's what I meant when I wrote "Religious affiliations are not that important, I guess."

    Sorry if I didn't make myself clear.

    894:

    WHich is one thing that worries me in this crazy expertise and professionalism destroying system we have just now, how much time and effort is wasted not to mention resources and people, because all the knowledge and experience people build up is chucked out, whether by companies downsizing or by not setting up paths whereby people can gather such expertise and knowledge.

    This is a problem in our technical world even when people are not downsized or whatever.

    In computer tech the good folks who want to advance will not sit in the same job for a couple of decades. And typically the folks willing to sit in a job for decades don't care about "institutional knowledge". Especially in areas like computer tech where 50% of what you know today is worthless in 1 to 3 years if you want to advance.

    Back to the nuclear tech issues. My father spent 30 years at a gaseous diffusion nuclear fuel plant. After 20 years he was one of the managers in charge of the production line. (There were 4 or 5 as they needed 24/7/365 coverage.) And he knew he and his peers would never make plant manager. Corp management was smart enough to know that they had to bring in new blood and push them up through the ranks so that all the knowledge of "how things really worked" didn't all walk out the door over a few years as all the WWII vets like my dad retired.

    The problem with large corp IT systems is they loose this knowledge and have to expensively rediscover it for systems that last 10 or 20 years. In the early 80s some people from Travelers Insurance that we worked with on a project were talking about year 6 or 7 of their 3 year project to remove all of the code left over from the days of paper tape teletype processing. Said code was running on IBM 370s VMs running a 360 OS running an autocoder (I think) emulation that processed files that carried the punch tape formats from the 50s/60s. They were working hard on it before everyone who really understood the old system retired or died.

    895:

    Err, as the old ethnographer saying goes, never trust your informants...

    It seem like the Shia leaders in Iran (Chomenei, if you ask) think Alevis are Muslims, so it seems the Alevis are not that "outside of Shia". OTOH, they don't keep all of the Five Pillars, e.g. fasting in Ramadan, or at least not all Alevis fast, so there is some room for discussion.

    Add to this quite some Alevis say they are no Muslim religion, though then, other Alevis stress they are.

    Yes, it's all somewhat complicated, though I could see similar problems with e.g. Universalist Unitarians.

    896:

    I can't see them now, so they may have been removed but they used to be along this http://www.bing.com/maps/?FORM=MMREDR#Y3A9NTEuMjg5MDAxfi0wLjc3NDAwMCZsdmw9NiZzdHk9ciZlbz0wJnE9c2FsdGNvYXRz on the line of Kilbrannan Avenue, Ross Road and Sannox Drive, and we're talking 250kv or 330kv lines, not medium tension 25kv or thereby. So clear along a residential street!

    897:

    A carbon footprint from Hell? This can be solved (like much of the world's problems) by Alternative Energy sources. Solar, Wind etc. At least Bitcoin doesn't use poisonous and toxic dyes and it doesn't cut down acres and acres of trees to exist. If the Carbon footprint is your strongest argument against Bitcoin, it may as well be for it because nothing impacts more on the environment than fiat money making both literally and figuratively. Bringing up Carbon footprint is a very lame attempt at coming up with a downside. Bitcoin does have its downsides and a lot of them too but I fail to see where it is worse than the Fiat. The biggest issue I have with it is its exclusivity and no matter how super-utopian its concept may seem it does not address the fact that there are people out there with actual paper money in their actual wallets who never and will never ever have access to a cellphone much less a computer, bitcoin is an intangible abstract concept that will take years for people to wrap their minds around. Man has known of some form of tangible currency for generations, ever sance man A saw man B with something he did not have and felt he wanted/needed 'money' in some way shape or form came about, generation after generation have been exposed to this concept and have come to accept it. The issue of universal accessibility is not addressed by the these virtual currencies and that is the biggest drawback, even bigger than Carbon Footprint.

    898:

    The problem with alternative energy sources might be you are still USING energy, which could be used for different products, e.g.making aluminium. Which means you have to substitute, maybe with coal or like...

    899:

    Actually, you've just described the biggest problem with Bitcoin, and it's not energy usage. It's the fact that enthusiasts think that their currency is abstract and conventional currency isn't! I first came across the concept of paper money (off $rare-thing standard) being an abstraction in Heinlein (I think probably "Time Enough for Love", but it must be at least 20 years since I last read any of his books other than "Starship Troopers").

    900:
    there are people out there with actual paper money in their actual wallets who never and will never ever have access to a cellphone much less a computer,

    Africans in places where there is little infrastructure have been using cell phone minutes as currency for years now, actually.

    http://gigaom.com/2007/05/27/in-africa-money-not-necessary-for-mobile-banking/

    Note the date of the article.

    901:

    You are totally correct to identify Bitcoin's weaknesses. I noted a few myself: http://alfidicapitalblog.blogspot.com/2013/12/the-serious-disadvantages-of-bitcoin.html

    It's too bad the Libertarian die-hards won't listen to rational arguments. Experimentation is always welcome in finance but crypto-currencies are going to fail when huge blockchains start crashing their transaction processing systems.

    Oh BTW, Bitcoin and HYIP frauds are now preying on each other: http://alfidicapitalblog.blogspot.com/2014/01/the-intersection-of-hyip-and-bitcoin.html That is the ultimate in hilarity.

    902:

    If readers would really like to know about bit coin, law and economics scholar Jerry Brito of George Mason University has written on it.

    Bit coin volatility is due to the small number of venues using it, and its uncertain legal status. As more vendors accept it and its legality becomes clearer, it becomes less volatile.

    The idea that bit coin is deflationary in any significant sense is based in the author's assumption that it is the only currency in use in an economy, like a government monopoly currency. But it is only one of many crypto currencies and it is not administered by a state monopoly bank or banking cartel.

    Specials

    Merchandise

    About this Entry

    This page contains a single entry by Charlie Stross published on December 18, 2013 1:53 PM.

    Trust Me (I'm a kettle) was the previous entry in this blog.

    Over-Extended Metaphor for the day is the next entry in this blog.

    Find recent content on the main index or look in the archives to find all content.

    Search this blog

    Propaganda