Cyberpunks Talk Libertarian Class Theory

After finishing up my most recent post, “Regulating the Panopticon,” I became aware of this fascinating 3 hour interview discussion featuring Julian Assange, Jacob Appelbaum, Andy Müller-Maguhn and Jeremie Zimmermann on Russia Today. This special 3 hour episode of Assange’s “The World Tomorrow” was dubbed “The Cypherpunks.”

Now if you haven’t already guessed, I am quite sympathetic to the hacker movement. Indeed, I would say I much greater sympathy for that movement than for the general libertarian movement which I find to be largely incoherent, inextricably conservative and obsessed with fighting old turf wars(e.g., Keynes vs Hayek, a topic which has long outlived its general relevance)1. In particular, I am often flummoxed by the contentions of the leading luminaries of this movement that deny the US is a police state. To boot, we are additionally informed that we are living in a time of unprecedented freedom, justified usually by appeals to technological advances.

Now I would suggest that one’s failure of discernment regarding the status of the United States is a good indication of one posing no challenge to the status quo. If one were actually challenging it, one would probably have a different perspective on the matter. The gathered cyberpunks are actually challenging it. So you will find they have a bit of different opinion regarding the police state practices of the United States government. To wit, from my understanding, Jeremie Zimmermann was interrogated by the FBI when he entered the United States after sitting for this interview in London.

Judging by my stats, my previous 2 posts were traffic failures. Well, perhaps I’m just a bad writer, but the underlying message is important. So to save you from having to digest the verbosity, the summary would be: the internet provides the regime change mechanism for a political competition in technology: a rent-seeking game in data analytics. Data analytics is the last remaining frontier where competition is not outlawed. A political economy in data analytics results in the Panopticon.2 I would encourage you to watch the above linked Assange episode. It greatly expands on this theme. So my writing may be boring. But you will not find that episode boring. Trust me.

Some Show Observations
Julian Assange is a doctrinaire liberal/libertarian but the others are not. Nonetheless, all four participants agreed that political reform was impossible and pointless. The consensus among the four was that the only means to combat the problem of the surveillance State is alternative institutions in economics, currency, etc. I find this interesting because it sort of illuminates an ongoing debate regarding the need/value of libertarian education. I would contend that libertarianism doesn’t have an educational problem. Rather, it has an empirical problem of revolution. American libertarianism will likely educate you into incoherence. But those who are actively involved in challenging the status quo, those who have no particularly affinity for the “capitalism” of american libertarianism, can see the problem quite clearly.

Toward the end, a bit of disagreement broke out regarding the ultimate foundation of freedom. Assange took the position that it ultimately rests with Free Trade. The others were not quite in agreement. But I would take Assange’s position. I ascribe to a method of libertarian class theory. Often, I think this method is misrepresented as the productive vs the unproductive or the taxpayers vs the tax eaters. That is the wrong way to think of it. It is simply Free Trade vs Political Economy. The economic life of Laissez Faire vs the economic life under the compliant auspices of the Polis. So I have to go with “free trade.” Free Speech is not the ultimate foundation of freedom in the observable sense of what the State can and cannot tolerate. It can tolerate “free speech.” It cannot tolerate “free trade.”

One particular observation from the cyberpunks might shed a little bit of light on this recent David Gordon criticism of left libertarianism. Gordon states that there is no midpoint between capitalism and socialism. By this he means economics is merely a duel world between capitalism and socialism. Monopoly status or legal monopoly pricing advantage is socialism. Everything else is capitalism. States Gordon:

As Mises again and again insisted, there is no third system intermediate between capitalism and socialism. The fact that a business has gotten to its position through government aid does not by itself change the way it sets prices. Neither is it the case that large firms operate by setting monopolistic or oligopolistic prices rather than competitive ones. (Of course, if government regulations set prices, or give a business the legal power to set prices, that is another matter altogether.) It is also not the case that wage determination rests on bargaining power: as Mises and Rothbard see matters, zones of indeterminacy are mythical.

To me, Gordon’s statement is why I would defect from capitalism as so defined. More specifically, it illuminates the difference Laissez Faire and Capitalism. I would contend that Mises/Gordon position is the wrong duel world. The political economy of prices, whether they are set by the Walrasian auctioneer or by competing firms, is not the illuminating question. The better question is who is the agency that sets the markets, not the prices. That is the Laissez Faire duel world. Gordon’s method really can’t explain why you would even have political competition. Since (1) political competition rarely results in monopoly price setting and (2) political competition without the advantage of monopoly has no bearing on competitive price setting (3) you really can’t explain political competition by the simple socialist-capitalist dualism model regarding a price-setter.

To return to the cyberpunks, it was pointed out that Russia had tried to bargain, but failed, to get Mastercard/Visa to process Russian credit card transactions in Russia. Why? Because all credit card transactions, including all global transactions, processed by Mastercard/Visa are immediately surveilled by the NSA. Within X number of minutes, every credit transaction by Putin and other members of the Russian political class is known and tracked by the US intelligence agencies(thus perhaps explaining why RT is the most libertarian oriented network broadcasting in the United States).

Now is this an example of capitalism or socialism? Mastercard and Visa do not have the monopoly power as price-setters to set transaction fees, but they do have the bargaining power that every single global banking credit card transaction will be interfaced with US Intelligence. This is oligopoly, but it is not the oligopoly of a price-setter. It is the oligopoly of the market setter. But this has to be considered capitalism according to Gordon.I would suggest that the (radical) Public Choice model of the economic governance of the total firm would be a far more predictive model here. But Gordon is still stuck in the Misean historical context of the Socialist calculation debates(which Mises lost,btw. One of Oskar Lange’s criticism of Mises’ tight compartmentalization between capitalism and socialism roughly followed the same line of argument I’m pointing out now).

1 obviously, any coder knows that the technical community has its own cherished pastime of platform turf wars. But at least this debate can played out in some semblance of an empirical arena: the marketplace.

2 A secondary theme perhaps relates a bit to the current "Spontaneous Orders" series being published by Roderick Long. We define a "Spontaneous Order" in a technical sense of complexity theory as emergent regulatory properties of complex systems. A Spontaneous Order then is a resilient order. The Internet could be defined as an efficient Hayekian Hybrid Constructivist Order derived from a principle of “planned competition.” The degree of efficiency of the Hybrid Haykekian Order introduces a scale-free, small network that follows a power law distribution(at least in the asymptotic limit) that is self-regulating. The tension between constructivism and emergent order is that while the network can regulate itself it nonetheless cannot defend itself particularly well against (external)constructivist intervention. The degree of efficiency of our evolved small network can be expropriated by a power consuming constructivist agency. I believe this argument is sort of similar to the published critique of Part III in that series.

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Declaration of the Separation of Internet and State

Recently, there have been no less than three “Internet Freedom Manifestos” issued by libertarian and civil libertarian groups/coalitions.

Declaration of Internet Freedom Civil Libertarian
Noted Signatories: Free Press, Electronic Frontier Foundation, Mozilla, ACLU, Netroots Nation

Declaration of Internet Freedom Libertarian/Conservative
Noted Signatories: CEI, Americans for Tax Reform, Randy Barnett, Virginia Postrel

The Technology Revolution
Campaign for Liberty

The latter two statements were, in some sense, motivated by the first statement. But all three declarations of purported “Internet Freedom” are flawed.

The problem with the first declaration is the incoherence of duel objectives. Is the objective (1) increased access or (2) refraining from censorship and the protection of open standards? Anything that increases the responsibility of State Actors–promoting greater access–likewise increases its authority. Is increased State authority the best means to achieve an ends of no censorship and the protection of open standards? In addition, it is is greatly muddied by the participation of overtly partisan political groups whose sole objective is the increase of party authority and power. Groups like the ACLU, Mozilla, and EFF should resist being lumped in with partisan politicos like DailyKos and Netroots Nation.

The second statement, penned more or less as a response to the first, promotes a vision of the internet concerned solely with “the process of technological evolution, not the end result.” Of course, what if the end result is an efficient totalitarian surveillance order? You can have plenty of technological evolution and innovation toward that end. The promoted regulation regime is the typical conservative clap trap of the “rule of law” spliced with conservative economic rhetoric a la “open systems and networks aren’t always better for consumers.” Even worse, this group casts the conflict over internet freedom in terms of Thomas Sowell’s “liberal unconstrained” vs “conservative constrained” model. This thusly places the future of “internet freedom” in the palms of conservative cultural politics(and the conservative casting of “free markets”).

The third statement, authored by the Campaign for Liberty, reads like a crass piece of political opportunism penned by a Rand Paul flunkie. The degree of technological illiteracy and historical ignorance in that brief statement of principles is laughable. The implication that internet is a product of Microsoft(and others like them) innovation and the primary role of the State vis-a-vis the internet is to enforce Microsoft’s property rights.

In a previous post, “The Enforceable Obligations of IP and Copyright in Political Economy,” I discussed the actual role government played in our current internet implementation. The role was significant but, nonetheless, a largely informal one centered around a coordination problem of standards. The end consequence, however, was neither particularly intended nor centrally planned. The typical progressive clap trap that the Government invented “the internet” only applies to our current implementation. It certainly cannot be extended to a proposition that there would be no “packet-switch networking” if not for the State. And whatever progressive pride there is to take in the (informal) role the State played in the evolution of our current implementation is immediately cancelled by the fact that the State immediately began to formally enact measures to artificially exclude access to the one honest to god public good it accidentally managed to help create-human intellectual property. The progressive triumph leads to its own empirical refutation.

But I find C4L’s claptrap that our current implementation would somehow be the product of “decentralized” Microsoft innovation to be equally vulgar.

The degree of standardization required to create any degree of wide scale computer networking interoperability is substantial. For our current implementation, there were essentially two competing models in play: (1) tcp/ip, which originated out of DARPA, (2) OSI model originating from the European ISO(International Standard Organization). I would argue that tcp/ip became the dominant global standard as a consequence of the US Department of Defense declaring tcp/ip as the standard for military computing in the early 80s. The Arpanet thusly would soon switch to tcp/ip. This began to create a vendor lock-in as a consequence. Sun Microsystems began to build tcp/ip into the core of UNIX. The last piece of the puzzle involves the NSFNet evolving into the core of the first true “internet backbone.” The National Science Foundation’s project to link together academic research over it’s funded super-computer research centers–with the mandate that any university that received NSF funding to connect to network run tcp/ip over its own network–probably put tcp/ip over the top. This led to the European academic and scientific research centers to throw in the towel regarding tcp/ip adoption, even though the Europeans were heavily vested in their own OSI implementation. But fittingly, the killer app that would turn the internet into a large-scale commercial space for ordinary users and not just a domain for academics and hackers(and enthusiasts)–originated from CERN.

If we return to Microsoft, it should be noted that its a bit of a running joke of how badly Bill Gates mid 1990s book, “The Road Ahead” misjudged the coming dominance of the internet. Gates primarily referred to “the Information Super Highway” in his book and only saw “the internet” as a subset of sorts. What gates envisioned is what the “Microsoft Network” originally was, a commercial model extending a model pioneered by the likes of CompuServe, Prodigy, AOL, etc… in offering a proprietary “gated” portal community. Originally, these network providers operated over X.25 networks and were expanding by offering gateway(“gated”) access to the internet. Gates vision was how the Windows Desktop would become the commercial platform(“the window”, so to speak) to the information superhighway.

But the killer app turned out to be the “browser,” and the killer application protocol turned out to be HTTP delivering content semantically marked up in HTML. I would classify the primary pioneers responsible for the “quantum jump” of the internet to be:

(i) Tim Berners-Lee: Developed the HTTP Protocol specification(a tcp/ip specification) and a relatively simplified document markup language(HTML, a much more simplified language derived from the general ISO standard SGML)

(ii) Linus Torvalds: the first to make a “unix-like” kernel available for intel PC boxes. The kernel core for what we call “Linux”

(iii) Marc Andreessen, founder of Netscape, the company that developed the first “browser” with in-line multi-media display capability.

So Berners-Lee provided the app protocol specification. Torvalds’ contribution was on the server-side: unix-like boxes running on cheap PCs that allowed for inexpensive server scalability for hosting/delivering tcp/ip applications. And Andreessen’s contribution was on the client-side: turning the browser more or less into a consumer appliance. Of course, it should be mentioned that the original codebase for the Netscape Navigator browser, in part, stems from Andreessen’s work at the National Center for Computing Applications(operating from a grant by the US Government as a consequence of federal legislation passed in the early 1990s. Al Gore’s prominent role in the passage of the legislation is really the historical basis of his “I invented the internet” lore).

The end result was the quick death of Bill Gates’ original vision: the gated portal version of “the information superhighway.” Gated Portal means the integration of “ISP/Access and Platform.” The likes of CompuServe, Prodigy would fade. The corporate merger between AOL and Time Warner ranks as one of the worst business decisions of all time. Instead we saw, after the “privatization of the internet backbone,” explosive growth in bandwidth capabilities, with the Telcos becoming the ISPs(the access providers). The “browser” became the platform. The web application became the portal. Yahoo was an early example of what would become the “web portal.”

To give Bill Gates some credit, it should be noted he would soon realize his original “Road Ahead” was a dead-end. Microsoft would revamp around the “internet.” The “Microsoft Network” became the web portal, “MSN.” Microsoft would quickly launch its own browser, “Internet Explorer.” Of course, I’m not sure how many people are aware that Microsoft didn’t build IE from scratch. It was based on a codebase licensed from the National Center for Computing Applications. IE wasn’t free of that code until version 7.0. I’m pretty sure the flunkies at Campaign for Liberty don’t know this. Otherwise, it’s pretty embarrassing to have to spend time deflecting charges that Al Gore invented “Internet Explorer.”

Quick Summary
This is already a long post but the length doesn’t even come close to doing justice to the topic at hand. Open, coordinated Standards are at the foundation of the internet as a small network. To the extent that they are artificial, then the internet is “artificial.”

Contra Declaration II: open, coordinated standards are not in evolutionary, market competition with closed systems. Not over the internet as small network.

Contra Declaration III: Open, coordinated Standards are not the artificial consequence of collectivist, government enforcement.

The underlying text of Statement I is one of network neutrality. The argument is that integration of Access and Platform is a threat to the “open internet.” Statements II,III, which are being presented as the “libertarian response,” are not serious statements. Indeed, they are just more evidence that libertarianism’s continued alignment with conservatism will result in the movement writing its own death warrant.

But what should be a coherent libertarian response to Statement I? I would contend that “State Neutrality” is the more relevant and pressing condition for the continuation of an “open internet.” And the increasingly necessary condition for State Neutrality is the separation of Internet & State. This will be the topic addressed in part II.