Paul Lockett

The Farcical SOCA Take Down of Rnbxclusive - Part 1

2012-02-16T00:16:00.000+00:00

When I first saw the holding page that SOCA put on the seized rnbxclusive website, I was convinced it had to be a hoax. Notices used in extra-judicial take downs in the US had a similar tone of bravado, but this one was so badly written and amateurish, it seemed inconceivable that it was genuine. Almost every line was ridiculous:

SOCA has taken control of this domain name.

It was quickly established that this was untrue. The DNS record had not been changed. A page had merely been posted at the pre-existing host.

The individuals behind this website have been arrested for fraud.

This just doesn't sound like something that would be written by a competent law enforcement agency. "Arrest on suspicion of fraud," yes, but not "arrested for fraud."

The majority of music files that were available from this site were stolen from the artists.

At first, I thought this was the standard "copyright infringement is theft" propaganda. However, the subsequent accusation made was that the files were pre-release items which were taken from the producer, so it might not be quite so inaccurate a use of the word. What is less understandable is that it presents an accusation as fact in a way that potentially could be in contempt of court.

Then we have the claim that:

If you have downloaded music using this website you may have committed a criminal offence which carries a maximum penalty of up to 10 years imprisonment and an unlimited fine under UK law.

I'm not aware of any law which would allow for that kind of penalty for downloading music, but I can't be sure. However, if it were a genuine claim, I'd expect to see some legislation reference.

Then we have we IP address box with some imprecise browser and OS sniffing, followed by:

The above information can be used to identify you and your location.

Which of course, it can't. At best, the IP address could be used by the ISP to work out which account holder it was assigned to, but it wouldn't be sufficient to identify the individual browser. Then it starts getting really ridiculous:

SOCA has the capability to monitor and investigate you, and can inform your internet service provider of these infringements.

Given that the site has been replaced by the SOCA page, it's nonsensical to threaten action in response to infringements spotted through monitoring, when the alleged means of infringement has been removed. Then, having threatened 10 years imprisonment and an unlimited fine, it is laughable to have as the final killer blow a threat to inform the viewer's ISP. It's on a par with saying "we'll tell your mum." It's also a bit odd that, for a crime which supposedly carries a heavy custodial and financial penalty, investigators would inform ISPs, instead of carrying out arrests.

You may be liable for prosecution and the fact that you have received this message does not preclude you from prosecution.

I can't even fathom that. I'm not sure who would think that the act of telling somebody they are liable for something would result in them not being liable.

As a result of illegal downloads young, emerging artists may have had their careers damaged.

Probably least ridiculous sentence. It is true that they may have had their careers damaged, but they may have also had their careers boosted due to the increased exposure. Without supporting evidence, there's no way of knowing, so it's just baseless speculation.

If you have illegally downloaded music you will have damaged the future of the music industry.

This is an unsupported assertion presented as fact. It is also odd strategically. I could understand "...damaged the future of artists" as an emotional appeal, but "...damaged the future of the music industry," implying the currently reviled middlemen, would be more likely to act as encouragement in many quarters.

Visit pro-music.org for a list of legal music site on the web.

Having a law enforcement agency promoting a private industry lobbying group is, unfortunately, not something which I would find surprising. What would surprise me is the site not even being hyperlinked on a page supposedly drafted an agency investigating cybercrime.

I just didn't think it was conceivable that it was anything other than a poor attempt at a hoax. Unfortunately, I was wrong...

Economics Fail

2012-02-07T22:18:00.000+00:00

From the BBC:

The British Retail Consortium (BRC) described vacancy rates as "worryingly high" in many parts of the country and called on the government to reduce business rates, which are set to rise by 5.6% in April.

Reducing business rates is more likely to increase vacancy than reduce it, as it makes it less costly for somebody to hold on to an empty building.

Quote of the Day

2011-05-25T21:29:00.000+01:00

John Perry Barlow:

I don't regard my expression as a form of property. Property is something that can be taken from me.

Quote of the Day

2011-02-14T13:12:00.003+00:00

Nick Clegg showing that, at the very least, he can talk the talk:

I need to say this - you shouldn't trust any government, actually including this one. You should not trust government - full stop. The natural inclination of government is to hoard power and information; to accrue power to itself in the name of the public good.

Alain de Botton On Liberty

2011-02-06T15:52:00.089+00:00

Over at the BBC, Alain de Botton has a point of view piece entitled "In defence of the nanny state"

Alarm bells started ringing at the start of the article when he offered the strange opinion that:

Modern politics, on both left and right, is dominated by what we can call a libertarian ideology.

At the outset, he gives the impression that he's working with an unconventional definition of what a libertarian ideology is. Throughout the article, there are other indications that it is the case. Take, for instance, this section:

All this concern with freedom can be traced back to thinkers like John Stuart Mill, who in his famous book, On Liberty of 1859, explained: "The only purpose for which power can be rightfully exercised over any ridiculous member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not sufficient warrant."

In this scheme, the state should harbour no aspirations to tinker with the inner well-being or outward manners of its members. The foibles of citizens should be placed beyond comment or criticism...

The conclusion is flawed because the argument conflates the use of power to effect change and the use of comment and criticism to effect change. Liberty requires that the use of the former be constrained, but not the latter.

As a simple example, if I say that the argument Alain de Botton put forward in those two paragraphs is logically flawed, I am not infringing his liberty by offering that comment or criticism. On the other hand, if I say that, because I believe the argument is flawed, somebody should exercise power to forcibly prevent Alain de Botton from expressing it, I am suggesting something which would infringe his liberty.

There are also some sections which attribute, to libertarianism, opinions which are held far more widely, such as this section, contrasting religious codes with what is claimed to be a libertarian approach:

In secular society, by the libertarian's reckoning, a firm line should divide conduct that is subject to law from conduct that is subject to personal morality. Thus, the stealing of an ox is a matter to be investigated by a police officer, whereas not having enough sex with your wife if you're a camel driver is not.

I would agree that a libertarian generally wouldn't generally believe that you should be able to get the police involved because your other half isn't putting out. However, I don't think that's a belief which is particularly restricted to libertarians. I think you'd struggle to find many people who think that is a purpose the police should serve.

It is, however, the false equivocation of the use of persuasion and the use of force which seems to cause most of the confusion:

A libertarian state truly worthy of the name would accept that our freedom is best guaranteed by an entirely neutral public space. It would judge that it was no assault on liberty to deprive us of all advertisements in fields, city streets, taxis, websites, phone booths, tube stations, dentists waiting rooms, airport concourses or Hollywood films.

By most broadly accepted definitions, freedom of expression is compatible with liberty, while the use of force to restrict freedom of expression isn't, yet this assumes the complete opposite to be true.

There is one section where the generally accepted meaning of liberty is acknowledged:

In a society that took seriously our laziness about being nice, an occasional paternalistic reminder would not necessarily constitute an infringement of our "liberty" as that term should be properly understood.

Yes, that's the way it should be understood and generally, it is. It's certainly compatible with the position taken by John Stuart Mill, which was quoted at the start.

The article wraps-up with a piece of "heads I win, tails you lose" reasoning.

It is perhaps in the end a sign of immaturity to object too strenuously to sometimes being treated like a child

So, if you believe that you need to be treated like a child by a paternalist state, then you should be. On the other hand, if you object to being treated like a child, then you are obviously immature and need to be told what to do by a paternalist state. Either way, the conclusion is the same.

As well as a general disdain for the idea that one group of people should have the right to force people to behave in a certain way, because they believe that they are somehow superior and know better, I dislike the the way the approach is compared to parenting. It is an approach which has nothing in common with real parenting, where the only reasonable objective is to take somebody from being a completely dependent new-born to being a competent, capable, independent adult.

If a libertarian were to be put in the position of being the parent to society, I imagine they'd do what a real parent worthy of the name would do - encourage people to stand on their own two feet and take responsibility for their own actions, not foster an ongoing sense of dependence.

The People's Supermarket - 160 Years Late

2011-02-05T23:26:00.001+00:00

To recap, in 1844, the Rochdale Pioneers established a set of principles for co-operative organisations. The principles provided such a successful framework that 160 years later, the food retailer with the most outlets in the UK is a co-operative.

Strangely, the makers of Channel 4's The People's Supermarket seem oblivious to this, as they promote their show in which they set you out to "start a high street revolution and change the way Britain shops for food" by creating a supermarket which gives the shoppers "a chance to vote on how the supermarket is run."

Maybe after this show, they could make a program about their attempts to start a transport revolution by inventing the wheel.

Strangely Directed Argument of the Day

2010-12-09T22:33:00.000+00:00

From a BBC story about the DDoS attacks on organisations withdrawing services from Wikileaks:

Carole Thierault, a security researcher at Sophos, warned against getting involved with the Anonymous campaign.

...

Ms Thierault said downloading and installing the LOIC attack tool was very risky.

"No-one should download unknown code on to their system," she said. "You're giving access to your computer to a complete stranger."

In general, it's a good point. At the most basic level of computing, if your machine is running a Microsoft or Apple operating system, you've no way of knowing exactly what the code you've got installed is doing. It's an argument that can be applied to most software that you might go out and buy. The one type of software it can't be applied to is free and open source software, which is precisely what LOIC is.

Not Necessarily...

2010-11-17T20:19:00.000+00:00

From the BBC:

Culture minister Ed Vaizey has backed a "two-speed" internet, letting service providers charge content makers and customers for "fast lane" access.

It paves the way for an end to "net neutrality" - with heavy bandwidth users like Google and the BBC likely to face a bill for the pipes they use.

Why do so many journalists automatically assume that the internet will operate the opposite way to every other information transmission mechanism, where the broadcaster generally pays the content producer, not the other way around?

Musicians don't usually pay radio stations for playing their songs; the cash generally flows the other way. Likewise with TV broadcasts.

In order to attract customers in the suggested landscape, ISPs would have to offer quality access to sites that people want to use. I just don't see it being feasible for ISPs to threaten to hobble or block YouTube unless Google hand over cash, when Google know full well that people who want to use YouTube would just switch to other ISPs.

Pope Pirate the First

2010-10-27T21:43:00.000+01:00

He's possibly not the first person you'd expect to be speaking out against the current scope and trends in intellectual monopolies, but the pope has done just that:

on the part of rich countries there is excessive zeal for protecting knowledge through an unduly rigid assertion of the right to intellectual property

Really, Mr Jobs?

2010-10-20T16:30:00.000+01:00

Steve Jobs, as reported by the BBC:
The customers, he said, just wanted something that worked and he was confident that this approach would triumph over the "mess" that was Android's multiple variants and different app stores.

The idea that somebody would buy an Apple product because it's a good option for somebody who just wants something that works, is, in my experience, laughable. Let me give you a little comparison, Steve. Here was my experience with my Android phone:

I received the phone in the post.
I took it out of the box.
I charged it.
I switched it on.
It "just worked". It "just worked" incredibly well. I moved my contacts over by bluetooth. I connected it to my laptop as a standard drive and dragged and dropped my music and other files to it.

By comparison, here is the experience that somebody in the same position as me had with an iPhone:

Receive the phone in the post.
Take it out of the box.
Charge it.
Switch it on.
Find out that it refuses to work until it is connected to iTunes.
Borrow a friend's PC, because there is no way to get the phone operational with your Ubuntu Linux laptop.
Get phone working.
Phone crashes.
Go round to friend's house again.
Get phone working again.

Now, the iPhone set-up may have changed in the latest version. It might now be possible to get it working without the use of a separate piece of equipment. I don't know because I had no desire to risk it when I got my latest phone. I wanted a phone that "just worked" and in my experience, an Android phone fits the bill far better than an iPhone.

Free markets according to Monbiot

2010-10-18T21:35:00.001+01:00

George Monbiot has an annoying habit of highlighting interesting facts, then completely misinterpreting them. The latest example is his piece on the bonfire of the quangos. In commenting on the failure to abolish, amongst others, the Commonwealth Development Corporation, Export Credit Guarantee Department and Sea Fish Industry Authority, he, quite reasonably in my opinion, says:

Can you see the pattern yet? Public bodies whose purpose is to hold corporations to account are being swept away. Public bodies whose purpose is to help boost corporate profits, regardless of the consequences for people and the environment, have sailed through unharmed

It is, of course, an example of what states, of all shades, will almost always do - provide privileges for their cronies and sponsors. Unfortunately, Monbiot doesn't quite see it that way:

The government’s programme of cuts looks like a classic example of disaster capitalism: using a crisis to re-shape the economy in the interests of business.

In her book The Shock Doctrine, Naomi Klein shows how disaster capitalism was conceived by the extreme neoliberals at the University of Chicago. These people believed that the public sphere should be eliminated, that business should be free to do as it wants, and almost all tax and social spending should be stopped. They believed that total personal freedom in a completely free market produces a perfect economy and perfect relationships

Put the two comments together and you can see that they are contradictory cack. If this government were really an example of people working to eliminate the public sphere, they wouldn't have left the pile of qangos that Monbiot highlighted, they would have got rid of those too; otherwise, it isn't an example of eliminating the power of the state, but redirecting it to serve a different set of rent-seekers. Similarly, siphoning off large wedges of taxpayers' cash to favoured groups isn't an obvious example of a desire to eliminate almost all tax.

The most ridiculous element is the use of the term "free market" in the context of a situation which is anything but. A free market would be characterised by wealth transfers occurring purely by consent of all parties, yet in Monbiot world, the state taking substantial tax revenues from the general public and then dishing them out to a handful of corporates is somehow interpreted as being an example of the free market in full flow.

It's pure doublethink and it's embarrassing.

The Evil Pointlessness of RIPA

2010-10-06T22:31:00.001+01:00

As reported in the BBC, a 19 year old man has been sentenced to 16 weeks in prison for refusing to decrypt files on his computer.

From any legitimate perspective, it is a pointless approach. If somebody refuses to decrypt files because the material is perfectly legitimate but highly personal, such a sentence is an immoral attack on somebody attempting to defend their privacy. If somebody refuses to decrypt files because the material is evidence of serious criminal activity, the sentence serves no real purpose, as it's still preferable to disclosing the material and receiving a much higher sentence.

The obvious, but deeply unpalatable solution to the second possibility, which has already been proposed, is to increase the sentence to at least the level of the offence that may be associated with the encrypted material, but that would make the injustice of the first possibility even worse.

The only real purpose I can see for this law is to enable the state to outlaw privacy as and when it sees fit.

Guest Post on Against Monopoly

2010-09-23T17:17:00.002+01:00

Following an e-mail exchange, David Levine has been kind enough to publish one of my comments as a post on Against Monopoly.

BBC breaks the depositor protection news I posted last week

2010-09-22T21:42:00.000+01:00

Last week, during a piece I posted about Carswell and Baker's banking reform bill, I mentioned in passing that, due to changes in EU legislation, from January 2011, all deposits with banks across Europe will be guaranteed up to at least 100,000 Euros. Eight days later, the BBC has published the same facts as if they are breaking news.

As a example of the seeming inability of politicians to think in any kind of connected fashion, it's highly instructive. On one hand, we have EU politicians pushing out increased banking regulation and capital requirements in an attempt to increase prudence in the banking sector and reduce the likelihood of future losses being socialised, on the other hand, we have EU politicians pushing out increased depositor guarantees, which will reduce prudence in investment decisions and increase the likelihood of future losses being socialised.

The end result is two directives which grab headlines, increase bureaucracy, pull in opposite directions and ultimately, may well end up just cancelling each other out.

Carswell and Baker's Bank Bill - Ultimately Pointless

2010-09-14T20:29:00.000+01:00

There's been a fair amount of online discussion about Douglas Carswell and Steve Baker's bank reform bill. In simple terms, their proposal is to make banks specify whether an account is a straight deposit account, where the bank effectively holds the deposit in a vault, or an interest paying account, where the bank lends on the money to borrowers in order to generate that interest. I agree with the general principle, as I've said previously, but I think this particular bill, in the unlikely event that it were to become law, would be pointless.

The person putting money into a bank account would be faced with two options:

Put the money into an account where the bank would act like a safety deposit box and would almost certainly charge you for the privilege.
Put the money into an account where the bank lends the money on, with the risk that the money isn't repaid or the bank doesn't have the money available at the time you want to withdraw it, but with the benefit of receiving interest.

It would be a reasonable choice to present the depositor with, but for one thing; the government currently guarantees deposits up to £50,000. If the depositor knows that any money put in the second type of account will be guaranteed up to that amount, then there is little point in taking on the extra cost of the first type of account, if the deposit is less than £50,000. On that basis, the law would only serve any useful purpose if it also removed those guarantees and the UK doesn't have the power to unilaterally do that. EU directives require that credit institutions in member states be members of deposit guarantee schemes, with the cover being a minimum of 50,000 Euros, rising to 100,000 by the end of 2010.

So in short, while the principles behind Carswell and Baker's proposal may be good, their execution of it is pointless.

A Reversal of a Common LVT Example

2010-09-13T23:40:00.000+01:00

One of the most common examples presented in support of LVT is the way that investment in public transport infrastructure can increase land values.

In a bit of a twist, The Wall Street Journal has an example of the effect working in reverse. In New York, the Metropolitan Transportation Authority has cut some bus and subway routes, with the predictable result being a drop in property prices along affected routes.

Hat-tip to Stephen Smith at the Market Urbanism blog.

Location Aware OpenStreetMap

2010-08-31T21:34:00.001+01:00

As I mentioned in a previous post, I've been tinkering with OpenStreetMap and OpenLayers, mostly so that I can host walking and cycling routes and geographical photos easily.

As a bit of an experiment, I decided to have a bash at using the W3C geolocation API to mark up the viewer's current location on the map. With a bit of tinkering, I think I've made something fairly usable. Clicking the "show location" check box should centre the map at your current location and show a blue circle there, if you are using a browser which supports geolocation (which is pretty much any up to date browser, other than Internet Explorer). The circle will move and the map re-centre if you move to a new location.

It probably doesn't do anything which isn't available elsewhere, but it's got several features I quite like:

As you move, the map shows a breadcrumb trail of black dots marking your last ten location readings. It shows your direction of travel in a way that I prefer to the arrow which is used by most other maps, as the occasional inaccurate reading doesn't result in a completely inaccurate indication.
The title of the page changes to indicate how accurate the calculation of your location is, in metres.
There are a number of map base layers to choose from, including maps aimed at cycling, hiking and skiing.
The layout is set to vary if the map is viewed on a mobile device, so that it fits the screen neatly.
In terms of privacy, although your browser will ask if you want to share your location with my website, as the code is written in client-side Javascript, your location is never sent to my server.

As with most Javascripts I produce, it's a continual work in progress, so feel free to leave any questions, suggestions or feedback.

The Forgotten Single Taxer Gets His Plaque

2010-08-10T18:30:00.001+01:00

Last year I produced a post highlighting the work of Thomas Spence, the Englishman who'd outlined plans for a Single Tax society almost a century before Henry George and had been been imprisoned because of it.

At the time I was aware that there were plans to install a heritage plaque in Newcastle to commemorate him. In June this year, it was finally unveiled:

So now, he's a little bit less forgotten.

Image courtesy of Newcastle City Council

Reasons for Silence

2010-07-29T18:56:00.000+01:00

Apologies for the recent lack of posting. I've been distracted.

I got myself an HTC Wildfire (A phone I'd thoroughly recommend if you're looking for a compact, relatively low cost Android phone, or even if you're not.), which resulted me going into a techy spell. I starting off configuring the phone and looking for apps to handle, amongst, other things, offline mapping, GPS track recording, PGP, FTP and file management. That then lead me to working with a few things I'd been meaning to get involved with for a while, such as OpenStreetMap, GPX file authoring and Microformats, which have taken up much of my free time.

I intend to get back to more frequent posting as of next week.

Closer, but not quite...

2010-06-30T20:47:00.000+01:00

From a BBC story about various actions being taken against people accused of unauthorised file-sharing:

ACS: Law has said its actions are legitimate, given how big a problem illegal file-sharing is for the music and film industries.

"It is the equivalent of someone stood outside HMV with a pile of the latest albums, handing them out to people who were intending to go in the shop and buy it," ACS: Law partner Andrew Crossley told the BBC.

On the positive side, it's good to hear a far more sensible analogy than the usual "it's no different to going into HMV and stealing a CD." This one at least acknowledges the difference between taking an item of material property, which prevents the owner using it and unauthorised copying, which doesn't.

On the negative side, the analogy still falsely implies that every file shared is a sale lost, but given ACS's business strategy, it's not too surprising that they'd want to maintain that implication.

Ritchie Bottles it Again

2010-06-28T20:02:00.004+01:00

This time, he didn't even bother to go down the route of putting up the "this comment has been deleted" sign, he just deleted two comments as if they'd never been there, including one which he'd already replied to and then posted this, in which he seems to have inadvertently barred himself from his own site:

The link goes to one of his previous replies to one of my posts, so I suspect I'm his actual intended target. As I've said previously, Ritchie seems to get most annoyed when you say something he should agree with, if he was being consistent, but doesn't want to.

In this case, the subject was football clubs and the high wages of footballers in the Premier League. As another poster commented that he viewed it as "A classic example of what happens when capital trumps regulation," to which I replied:

If anything, I would say it is a triumph of labour over capital.

English football is a relatively high-revenue, low-profit business. The scope for the capitalist, in this case, the owner of the club, to make a profit is severely constrained by the fact that the people labouring in the business to create the majority of the value to the consumer, in this case the players, are getting such a high proportion of the revenue.

I find it odd that people who would generally describe themselves as on the left (not directed at you, BenM, as I don’t know how you would describe yourself) are so quick to criticise a situation where the vast majority of the return goes to labour and very little goes to capital.

Ritchie chipped in:

If you really think £100,000 a week is a return to labour you have a lot to learn Paul

98% of that is capital

These people are businesses

This threw me a bit, as I was a bit confused about what capital he was implying was being provided by someone who, it appeared to me, was supplying nothing but their body. In the hope of getting some clarification, I posted this response, which was initially allowed through the moderation process, but subsequently deleted:

"If you really think £100,000 a week is a return to labour you have a lot to learn Paul"

It is a simple statement of fact. The player is paid for providing labour to the business.

"98% of that is capital"

What exactly is the capital that you believe they are providing? Other people own the shares in the club, the stadium, etc. The only asset they provide is their physical person and as far as I am aware, the human body stopped being viewed as capital when slavery was abolished.

"These people are businesses"

To the extent that anybody working in order to earn money is a business, then yes they are. It doesn't alter the fact that they are providing labour and not capital.

Ritchie replied (and bizarre left the reply even after deleting my comment):

Nonsense

Labour is not subject to transfer fees running to millions of pounds from which they do not by any means entirely benefit

The business is about the brand, not the labour

Brands are capital

My final reply, before he pulled down the shutters, was:

"Nonsense

Labour is not subject to transfer fees running to millions of pounds from which they do not by any means entirely benefit"

I think that's a bit off topic. Players enter into long term contracts to provide labour to clubs, which then have a value to the club, as they can insist on payment to allow the player to break the contract.

"The business is about the brand, not the labour

Brands are capital"

The business, if we are talking about the player, is the service provided by the individual. It is the training, playing and other labour provided by the person. If that labour provides an opportunity for the player to generate revenue from his reputation, it doesn't alter the fact that all he provides is labour, as all he is using is his physical person.

The only way he could be reasonably viewed as a capitalist is if you believe that a human being can be viewed as capital. I would hope that no civilised person would hold that viewpoint.

I really don't see anything controversial there. I was under the impression that Marxists and those with similar opinions on the the authoritarian left, generally wanted labour to get the full return from a business and in the Premier League, that seems to come close to happening. What many who call for greater state regulation of the sport tend to miss is that it would probably allow the owner to profit at the expense of the player.

Take the example of sports in the US, such as American Football. While the set-up is created by a closed-market franchise system, rather than state regulation, the end result is similar to what those calling for the latter in football want - capped wages, greater financial stability, very little business failure, etc. The overall consequence is that American Football tends to be more profitable, in spite of generating less revenue, so taking a similar approach would probably make more money for the owners of football clubs, while leaving the players with less.

This is what I think makes the situation so difficult for the authoritarian left to handle. They are presented with two options,

A relatively free market, which will tend to favour the people providing the labour.
A more heavily regulated market, which will tend to favour the people providing the capital.

and while in principle, they should probably favour the former, instinctively, they seem to prefer the heavy regulation that goes along with the latter.

The Priceless Ritchie

2010-06-19T00:28:00.003+01:00

I feel almost cruel fisking him, given what a soft target he is, but he invites it by his conduct. Even when he makes a post with some reasonable elements to it, he can't help but have a hissy fit if somebody points out, in reasonable terms, something which might hint that he isn't infallible.

Take the piece he posted today, the substance of which is essentially that a government isn't like a company because it can print money endless if it wants to. There's some merit to the point, but there are some issues with it. Another reader touched on one of them, to which Ritchie posted a reply which included this:

Take one simple example: there is no chance whatsoever of any company ever paying itself in currency it creates

But the government can demand it be paid in currency only it can create

In response to which, I posted this:

It generally operates that way, but it isn't inherently the case.

Any company can demand it be paid in whatever form it chooses and in terms of self-created currency, company issued scrip has existed in numerous forms.

I think the more significant difference is that, unlike most companies, a government can extract revenue by force and in doing so can maintain effective demand for its currency.

In short the difference is not so much that "the government can demand it be paid in currency only it can create" but that "the government can demand it be paid."

I don't think that's a particularly unreasonable point to make, but unsurprisingly, as I am a heretic who has previously denied the absolute truth of the word of Ritchie, it was blocked.

Of course, a government printing more money to cover its debts is perfectly possible. The flip side is that as a course of action, it doesn't exist in a bubble; it creates side effects. Most obviously, it is inflationary. Another significant element, which doesn't get mentioned as frequently, is that it is effectively a tax; it's just less obvious, because instead of the government taking cash directly, it funds its activities by making the cash which is in circulation less valuable.

Now, as Ritchie has previously criticised me for suggesting that it would be a good idea to increase the proportion of tax taken from land based taxes, on the basis that he feels that Council Tax is regressive, then I would expect him to examine whether or not this is a regressive tax before supporting it. I'm going to guess he hasn't, because it would appear to be a tax which is, at the very least, moderately regressive.

The burden of the tax falls on those who hold Pounds Sterling (or assets denominated in Pounds Sterling), with the burden being in proportion to the amount held. At first glance, that may appear to be a fairly progressive wealth tax, as the very poorest will have no savings and will face almost none of the burden. However, as you go up the wealth scale, a different picture emerges. Those with a small to moderate amount of savings will tend to have most of it in cash and accounts denominated in pounds. As you move further up the wealth scale, you would expect that proportion to fall, for two main reasons; firstly because those with more wealth will tend to feel a need to diversify and secondly, because there are transaction costs involved in converting cash to other investments which tend to produce economies of scale. For example, the dealing costs involved in buying a few shares would probably outweigh any potential gain in a way that wouldn't be the case if buying a larger number.

So, it would appear that the burden would fall, in proportion to total wealth, most heavily on those with low to moderate levels of savings. That's not the most obvious thing for somebody who supposedly dislikes regressive taxation to support.

Quote of the Day

2010-06-17T22:25:00.001+01:00

From Mervyn King's Mansion House Speech:

Still, we should not put all our faith in regulation. It has limits. If the structure of banking creates incentives to take excessive risk then regulators will be overwhelmed by the avarice so vividly captured by Michael Lewis in his book The Big Short. Incentives must be right. One misalignment of incentives today is the implicit guarantee to banks that are "too important to fail", so that creditors have little incentive to monitor the behaviour of banks because they believe they will be bailed out. This problem is too important to ignore.

It's not the first time he's made a point of letting people know that he understands how incentives matter and that moral hazard is a serious problem which has to be allowed for.

WTF? of the Day

2010-06-16T16:27:00.001+01:00

From the BBC:

Fifa is considering legal action against a Dutch brewery it accuses of using women fans to advertise its beer at the World Cup.

Stewards ejected 36 Dutch supporters from Monday's match between the Netherlands and Denmark midway through the second half in Johannesburg.

All were dressed identically in tightly hugging short orange dresses, sold as part of a gift pack by a Dutch brewery.

...

However, they were reportedly taken to a Fifa office where police quizzed them about the dresses and asked if they worked for the brewery, Bavaria.

FIFA establishing a dress code which bans the use of clothing for advertising in a World Cup venue sounds reasonable enough. If the rules are made clear up front, then requiring people to leave the ground for breaking the rules also sounds perfectly fair.

What I find outrageous is the existence of a system of law and policing which appears to be so corrupted by corporate interests that a choice of clothing which, at most, constitutes a breach of contract, should be considered worthy of police investigation.

Who is Materialistic?

2010-06-16T15:43:00.000+01:00

I ask the question as a result of reading this sentence from a piece by George Monbiot addressing the Tea Party movement:

In the United States one of the biggest exercises in false consciousness the world has ever seen - people gathering in their millions to lobby unwittingly for a smaller share of the nation’s wealth

I have mixed feelings about the Tea Party movement, so I've no desire to be seen to defend it or align myself with it, but Monbiot's criticism of it contains an ironic focus on materialism which often appears when instinctive authoritarians criticise those who are more liberty minded.

Those of us who value liberty highly are often criticised by authoritarians for wanting to created a selfish "me, me, me" world. That certainly isn't true in my case and while it may be true for others, it seems to me that, more often than not, it is the authoritarians making the criticism who are the more materialistic.

Take another look at the quote. Monbiot is criticising people for choosing to follow a course of action which does not appear to serve their financial self-interest. It's a thought process which appears to put the material above all else (or at least, above liberty) and assumes that those who do not focus on the material must be driven by misunderstanding, rather than a focus on other values.

It seems that those who value liberty face being both criticised by authoritarians for being selfishly materialistic and ridiculed by authoritarians for failing to be sufficiently selfish materialistic.