Crypto-Anarchy and Libertarian Entrepreneurship – Chapter 1: The Strategy
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Liberty is an ideology for everyone. It benefits all people and groups whose goals do not inherently require oppression. All objections to liberty have simply stimulated more thought into what is possible with voluntary organizations and shown more clearly how much better they are at providing services originally thought to be possible by government. Movements once believed to be wholly incompatible with libertarianism, such as feminism and environmentalism1, now have their own branches of libertarian thought. Liberty is a universal acid.
And yet people do not listen. The ideal of liberty is too abstract for them: most people need to experience liberty before they will desire it.For example, when Napster was invented, suddenly people around the world could ignore the oppression of copyright. They tasted freedom and the taste was sweet. Once they had experienced it, they would not give it up.
The goal of the libertarian entrepreneur is to give others that taste, not by influencing politics but by making politics irrelevant. It is to build capital goods for agorism, so that agorism can be brought to the masses. This requires a principled approach which is narrower than the nonaggression axiom without contradicting it. There is more to be concerned about than whether an organization is voluntary: two forms of organization may be equally voluntary but unequal in their vulnerability to government attack.2
For example, suppose the people in a community came to adore a company whose services require that they give up control of their land or their weapons to it. Such a system could, in theory, remain completely voluntary, but only a fool would think it likely. Such a company would be easily corrupted, either by transforming itself into a government or by collusion with an existing government. There is no basis to criticize such a company strictly on libertarian grounds, but by the time it begins to behave coercively, it may be too late. Whereas the libertarian entrepreneur should oppose it form the start and urgently develop an alternative business model to compete with it.
The libertarian entrepreneur should identify those industries with the greatest level of risk and attempt to transform them into something less risky. There are three ways an industry can be at risk. First, if the government would particularly benefit from controlling it. There are some industries that the government likes more than others: police, education, and transportation are particularly risky. Second, if the industry is particularly centralized. The government has only to collude with its largest players in order to take it over. Third, if the industry works in a way to promote customers’ dependence. If it is too inconvenient to switch from one company to another, then people will be inclined to stay dependent upon it even after it becomes corrupted.
If an entrepreneurial idea is to be adopted, it must be attractive to people who are not concerned with government risk. It is unacceptable to propose that people just stop putting money in banks and trade only in gold coins, as did both Rothbard and Mises. Libertarian entrepreneurship must simultaneously increase the division of labor and reduce risk. As successful as the homeschooling movement has been, it can never directly challenge the control of the public schools over children. An idea that promotes atomism makes everyone poorer. Not an easy sell, and self-defeating in the end too. Loners stand no chance against the state.
The strategy, therefore, is to promote decentralization by enabling people to coordinate with one another by a shared system of rules or traditions rather than through a mediator. Promote independence from particular organizations by promoting greater dependence on networks and on society as a whole.
The crypto-anarchy movement3, which from the beginning drew upon anarcho-capitalist theory4, may be summed up by the observation that cryptography gives us an enormous opportunity to spread the taste of liberty. Crypto-anarchy is not a branch of libertarian theory. It is a libertarian strategy. It is a framework for action. The cryptographic tools we have today are cheap, powerful, and profoundly individualistic. No one can hold a gun to an equation. Cryptographic software will function according to the rules of mathematics, regardless of government directives. As long as it is possible to distribute software, then cryptographic software can show people liberty.
Cryptography should be thought of primarily as a community—builder, not as a tool of secrecy. There is always something which is secret, but it does not have to be a message. Instead, it can work rather like a car key: its form is arbitrary and meaningless, but its shape is associated with a lock to a machine that cannot run without it. A machine locked by the key cannot be jump-started.
Cryptography promotes independence by reducing the need to rely on physical strength for defense. It is easy to construct a key that could not be broken by a computer as big as the Earth if it ran for millions of years. This locks the government out of the actions that require the key. Cryptography promotes decentralization by reducing the need to coordinate through third parties. A well-written protocol is enough to enable people to cooperate and to hold them to their obligations.
In a democracy, no individual vision can change the world. This is why politics is unsuited to libertarians. On the other hand, in the free market, one entrepreneur can change the world. This is where libertarians are in their element. With cryptography, one libertarian inventor can create an entire libertarian society.
Chapter 2: Public-Key Cryptography
Chapter 3: The Killer App of Liberty
Chapter 4: The Risk From the Software Industry
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- See Long, R., Johnson, C., “Libertarian Feminism: Can This Marriage Be Saved?”, 1 May 2005 for a libertarian take on feminism. See Block, W., “Environmentalism and Economic Freedom: The Case for Private Property Rights”, vol. 17, Journal of Business Ethics, 1998, pp. 1887-1899 for an argument for libertarian environmentalism. ↩
- When I speak of “government attack,” this is not to imply that the government is the instigator. The leaders of the industry may be the ones to make the first move. No matter who takes the initiative, it is still a government attack because the government is used as a weapon to change the interests served by an industry from the consumers to someone else’s. ↩
- See Ludlow, Crypto Anarchy, Cyberstates, and Pirate Utopias, Massachusetts Institute of Technology, 2001 for an anthology of works related to crypto-anarchy, both pro and con. I do not actually like this book. It explains nothing about cryptography and contains little that would not already be understood by an anarcho-capitalist. However, it is the only published book on crypto-anarchy, so at least there’s that. ↩
- See May, T., “The Cyphernomicon”, 1994, by one of the earliest crypto-anarchist writers. See his “The Crypto-Anarchist Manifesto”, 1988, for a brief but stirring statement of crypto-anarchy. ↩
Liberty is a universal acid.
A rather unfortunate choice of words, wouldn’t you say?
For example, when Napster was invented, suddenly people around the world could ignore the oppression of copyright.
Right! How OPPRESSIVE it is to have to pay the creator of something you desire for his/her work! In the perfect world of the author’s fantasy, everyone will just steal what they want. Wonderful.
Rearranging the bits on a digital storage device can hardly be considered theft. Theft deprives a person of their possessions, in the case of internet piracy, the original owner still has their copy.
So … if Steven Spielberg spends $100 million on a blockbuster movie, and someone pirates it and sells copies for a penny apiece, and pockets the proceeds, that’s just fine and dandy in your version of the ideal world? Spielberg has nothing valid to complain about? After all, he still has his original copy. Sorry, but I consider that line of reasoning to be complete nonsense.
As for the argument “rearranging bits … can hardly be considered theft,” we are talking about a sequence of bits that will ONLY be realized because of the work of the creator of that sequence of bits. I say that the creator deserves to be paid his asking price for that sequence if you want to use it.
“So … if Steven Spielberg spends $100 million on a blockbuster movie, and someone pirates it and sells copies for a penny apiece, and pockets the proceeds, that’s just fine and dandy in your version of the ideal world?”
“Spielberg has nothing valid to complain about?”
I would recommend looking into the works of Stephan Kinsella, specifically Against Intellectual Property (http://mises.org/document/3582) for a thorough explanation as to why ideas cannot be owned.
Some system truncated the URL. I got the expanded the version to work:
Thanks for the reference.
That did even worse. If you go Mises.org and click on “Literature”, then the “Literature Search” box works.
Anyone know how to get an URL through Disqus?
Fixed. Disqus did not like me putting parentheses around the link.
I believe a powerful argument in this arena to be the fact that hollywood was built on copyright infringement, on piracy, or theft of ideas http://torrentfreak.com/mpaa-boss-forgets-hollywoods-pirate-history-120428/
Picasso has a wonderful quote that “Good artist borrow. Great artists steal” – because they must meet the current level as fast as possible, before they can BREAK THROUGH. This is the same for code-writers, etc.
The inertia created by wasted resources on enforcement of copyright, and the fact that copyright laws pile up in favour of tyranous corporates, leads me to believe that copyright laws are questionable.
The entertainment has done very little to adapt. Perhaps we should not protect an entity that wants to stick to the old ways, while the world moves on. Perhaps it is it rigid 60-70 year olds running these companies, and instead of putting effort into changing they instead cash in credits of favour they have with lobbyists, legislators, and politicians.
This is where I would draw the line, and I recognize that current law is more restrictive:
I would not criminalize the re-use of the same user interface to a program, as long as the back-end code supporting it was written independently (I’m assuming that the second program does not pretend to BE the original program, which I would consider illegitimate, a form of fraud).
I would not criminalize the use of character names in another work (James Bond, or characters in Gone With the Wind, for example), in a new work written by someone else.
On the other side of the line: A particular work comes to the world only through the efforts of its creator. It’s value to the world can be calculated as the sum of what each person in the world would be willing to pay, if access could be had only through the original creator. Anyone who wishes to partake of that creation should, in my humble opinion, be willing to pay the author what he/she is asking. I don’t support intrusive measures such as the U.S. government is taking to track down copyright offenders, but I’d be very glad to hear from those who oppose copyright that there is a moral point behind all of this.
…for a thorough explanation as to why ideas cannot be owned.
Copyright does not protect ideas. It protects specific implementations of ideas.
(If there are exceptions to this that can be cited, I would agree that they should be removed.)
Thus, for example, I can write a spreadsheet program, and you can write another that does everything mine does, and that’s not copyright infringement. Only if you take my actual particular implementation and sell it for your own profit, is that infringement.
I would recommend looking into the works of Stephan Kinsella,
Oh, I’ve read plenty of Kinsella. He’s the genius who thinks he’s proved that nobody needs copyright protection by citing example A, and – oh, here’s another! – example B, of people who have thrived without copyright. Are there examples C, D, and E, of others who have been bankrupt because their work has been stolen? Kinsella does not know and clearly does not care.
As for Spielberg, what is your expectation of what kinds of movies will be made when/if your vision of an ideal world is realized?
“It protects specific implementations of ideas.”
Right. It disallows specific uses of people’s private property, which infringes their exclusive ownership of the property. This is unacceptable and not libertarian at all.
“Only if you take my actual particular implementation and sell it for your own profit, is that infringement.”
You say infringement like I would have done something wrong. What exactly is wrong with that?
Your analysis of Kinsella’s argument is dreadfully awful. You make him sound like a cherry-picking utilitarian, yet his arguments are strictly not utilitarian in nature, although all the utilitarian arguments support his arguments as well.
See Boldrin & Levine’s Against Intellectual Monopoly: http://levine.sscnet.ucla.edu/general/intellectual/againstfinal.htm
“As for Spielberg, what is your expectation of what kinds of movies will be made when/if your vision of an ideal world is realized?”
Hopefully the kind I like, but it’s up to the market. Maybe in a different set of circumstances people would not like to watch movies at all. Arguing for government monopolies is bad enough. Let’s not stoop even lower by arguing for them in order to maintain the status quo.
Arguing for government monopolies is bad enough. Let’s not stoop even lower by arguing for them in order to maintain the status quo.
I think that copyright transcends government, and is not dependent upon government. It’s not difficult to discern if something has been copied, rather than re-derived. Government should not, and does not need to, come into play.
My point about Spielberg is that, if it’s perfectly legal to copy his work and sell it for nearly nothing, then very clearly nobody is going to spend $100 million on a work. Your response seems to be, maybe the world will be better off without works of art (or, if you wish to disdain it, “art”) that cost $100 million. My own expectation is that the world would be impoverished under such (non-)laws. Perhaps we’ll find out over time who is right.
As for Kinsella, I would ask you to cite one column of his, out of hundreds or thousands, which does not deliberately muddle copyright and patents. Patents DO deal in ideas, and I agree that they’re illegitimate. They are completely different from copyright protection, and I would ask you to explain why Kinsella and others almost always try to lump them together.
“I think that copyright transcends government, and is not dependent upon government.”
There is no way to enforce copyrights without aggression. Enforcing a copyright must involve the forcible restriction of the use of someone’s own private property. For instance, enforcing a copyright of a book would mean forcibly keeping me from using my computer, paper, ink, and printer to make my own copy of a book. This is not libertarian.
“then very clearly nobody is going to spend $100 million on a work.”
Not very clearly at all. It’s a rather muddled assertion. What you are describing is a problem with a business model, not a problem of the ethics of property. An artist could find other ways to fund his work than ticket sales. For instance, he could work off a dominant assurance contract model where he gets paid up front for his work. Kickstarter is a great example of this model being used widely today. Artists are creative people. They can find entrepreneurial and innovative ways to fund their works without relying on monopolistic practices.
“My own expectation is that the world would be impoverished under such (non-)laws. Perhaps we’ll find out over time who is right.”
Please stop exerting your subjective values onto other people. Not everyone shares your crippled taste in cinema.
Besides, why do you assume artists only gain from their creations through a monetary profit? Did Chaplin put $1.5 million of his own money on the line for the production of the Great Dictator only in hopes that he’d be making a profit? Or did he have other psychologically profits to be made, such as through sharing an artistic vision and political ideas with the world, despite how it might affect his reputation?
“As for Kinsella, I would ask you to cite one column of his, out of hundreds or thousands, which does not deliberately muddle copyright and patents.”
Rather, you should cite one column of his where he muddles the two. Kinsella clearly delineates the differences between different forms of IP in his works, most notably in Against Intellectual Property.
The market determines if his film is worth the 100 million he spend on it. A freed market is not one that dictates what a person can or can’t do with their own property, even if they are merely copying their neighbor’s work. My garden is my own design, I cannot penalize my neighbor for copying my design for the desire for higher productivity.
So if I take the bits that make up your private bitcoin key and steal all your currency, it’s not theft because they are just bits and not actual property. Moron.
to turn acid into a pejorative isn’t really worth doing, is it?
Just because legislation opposes acid doesn’t make it wrong. In fact many great minds use acid every day (its called micro-dosing and its all very hush hush due to illegality, but silicon vallye is rife with it). The DNA double helix was discovered while on acid by Francis Crick. The WHOLE POINT of a p2p system is that what you do is up to you, and what others do is up to them. This blog deals with very mature ideas, like the ones I just put forward, you put forward very little.
Ah, now I see the true meaning of the word “acid” in the column! ;-j
I do have a question: how does one find LSD today? Even in 1969, when I tried it for the one and only time (so far), many substances were being sold as LSD which were, in fact, something else. Since then, the government has been cracking down even on distant precursors. Is there any actual LSD out there today?
Very fortunate to my mind..
Wrong! Now you can donate anytime
to any creative person who really worth it.
Napster was such a poor choice, intellectual property theft is not liberty. A better example would be the Free Open Source Software movement, as detailed in The Cathedral and the Bazaar by ESR.
Well, many libertarians think of intellectual property as government incuded monopoly and should be abandoned.
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