Beyond the Nation-State (Boston Review)
The Failure of a Socialist Dreamer (Law & Liberty)
A New Guild System (The Hedgehog Review)
Or, some Monday links on central banks, manners over matters and hard-boiled decisions
That bond salesman from the Jazz Age was right. Reserving judgement, at least sometimes, allows for a fairer outcome. Take for example the Brick film (2005), a neo-noir detective story set in a modern Southern California high school. Here in Greece it made some ripples, then it was forsaken for good. Not sure about its status in the US or elsewhere, but “overlooked”/ “underrated” seem to go with it in web searches. I agree now, but when I first watched it, its brilliance was lost to me ( and no, it was not allegedly “ahead of its time”, as some lame progressive metal bands of late 90s hilariously asserted when they zeroed in sales…).
The film’s peculiarity was obvious from the titles. A couple of gals left the theater like 10’ in. My company and I were baffled for most part, by the gritty atmosphere. And I have not even begun with the dialogue. The language was something from off the map. As late Roger Ebert noted:
These are contemporary characters who say things like, “I got all five senses and I slept last night. That puts me six up on the lot of you.” Or, “Act smarter than you look, and drop it.”
You see, the whole thing was intended to serve tropes, archetypes and mannerisms from the hard-boiled fiction of 1920s-30s. A manly man vs crime and (corrupted) government, and so on and so forth. We went there, un-f-believably how, clueless about all these. We did, however, make a recurring joke from the following lines:
Brendan: You and Em were tight for a bit. Who’s she eating with now?
Kara: Eating with?
Brendan: Eating with. Lunch. Who.
Seen in this light, everything made sense to my gusto. Anyway, seems that reserving judgements not only does better assessments, but also protects the
Now, I have previously indicated that I have a soft spot for the “technology of collective decisions” that are central banks. I usually reserve my judgements on them, too. This comment summarises recent developments, including a few interesting links:
In which the Rich Get Richer (Economic Principals)
A new paper by Carola Binder examines central bank independence vis-à-vis a technocratic – populist merge in the age of digital media:
Technopopulism and Central Banks (Alt – M)
The author argues that central banks, supposedly the bastions of technocratic approach, tend to “respond” (i.e. be nudged by and directly appeal) to a perceived “will of the people”, as it is expressed on-line or via events like the “FED Listens” series. This bend acts as a claim to legitimacy and accountability, in exchange of trust and extended discretion, leading to a self-reinforcing circle almost beyond the democratic election process. In other words, not quite the “Bastilles” contra “modern Jacobinism” (to remember how Wilhelm Röpke deemed independent central banks in 1960). A way out could be made, concludes the author, by introducing of a rule-based monetary policy.
Central banks, as institutional arrangements developed mostly during the 20th century, share a common mojo and tempo with the FED. They gradually assumed more independence, and since the emergence of modern financial markets, (even more) power. This rise has been accompanied by increasing obligations in transparency and accountability, fulfilled through an ever-expanding volume of communication in terms of hearings, testimonies, minutes, speeches etc. This communication also plays a role in shaping economic actors’ expectations, a major insight that transformed our understanding of macroeconomic outcomes. Andy Haldane talks all these, along with other delicious bits, in an excellent speech from 2017 (his speeches have generally been quite something):
A Little More Conversation A Little Less Action (Bank of England)
Plot twist: The endeavor of more communication has a so-so record in clarity, as documented by the rising number of “education years” needed to follow and understand central banks’ messages. The same trend goes for the pylons of rule of law, the supreme courts, at least in Europe. We certainly have come a long way since that time at the 70s, when a former Greek central bank Governor likened monetary decisions to a Talmudic text, ok, but we are not there yet.
As a parting shot, let us return just over a year back, when the German Federal Constitutional Court delivered a not exactly reserved decision (5 May 2020) about the European Central Bank’s main QE program. The FCC managed to:
The judicial b-slapping provoked much outcry and theorising, but little more, at least saliently. The matter was settled by some good-willed, face-saving gestures from all institutions involved, while it probably gave a push to the Franco-German axis, to finally proceed in complementing monetary policy measures with the EU equivalent of a generous fiscal package. The rift between the EU and the German (in this case, but others could follow) respective legal orders may never be undone, though. If anyone feels like delving deeper into the EU constellation, here is a fresh long slog:
Constitutional pluralism and loyal opposition (ICON Journal)
I don’t. But then again, maybe I will act smarter than I look.
We find ourselves in an overlap of classical free-speech abstractions, editorialized-media discourse, and algorithmic-social media diatribe. Each of these is a product that cannot reproduce the stability of the system that produced them. And yet, these platforms—print, electronic and social media—represent disruptions that fill in a vacuum felt in the other system.
Besides, we tend to think that the IT revolution’s transformations with our iPhones, Facebook, and Twitter, are without a parallel, but think of what urbanization brought to the rural life, what the railway brought in the nineteenth century or the telephone in the early twentieth. Disruptive innovations that increased transportation speed in the past couple of hundred years have not lowered commuting time but instead increased commuting distances. The size of an average individual’s ‘extended family’ cluster is an approximate invariant—it doesn’t change with city size. In a village, we are limited to a community by proximity, whereas in a city, we are free to choose our own “village” by our likes and dislikes.
Similarly, social media tools have not brought us closer the way we intended it would. Instead, they have allowed us to construct our “internet villages.” These internet villages are scaled-up, combustible derivatives that cannot reproduce the stability of offline, real-world social interactions that produced them. Instead of free-speech, they cater to our preconceived notions by exposing us to algorithmic-speech that makes each of us a volatile, motivated political actor outside the legal institutions born out of civil society. Their extreme negative externalities include conspiracies, real-world riots, and unrest. Nonetheless, in a primal way, internet populism coming out of these internet villages is gesturing at the real-world rifts created by liberal legalism’s parchment antidotes on the one end and lack of upward mobility on the other end.
As Tyler Cowen points out in his book, The Complacent Class, in our digital realm, the word “disruption” is no longer violent but the peaceful label for an ingenious upheaval of an established business order. Taking a cue from this digital paradox, it is not unreasonable to assume that a radical improvement in our physical realm may occur when we volunteer to act with moderation on social media platforms. If we don’t act with moderation, someone else will moderate it for us. Responsible self-regulation can preclude complicated centralized government regulation.
Note: This was written by my brother Keith, and he did not originally post it online but sent it to our family members. For being a younger brother, he brings a hell of a lot of wisdom to the table, and I think this thought-provoking epistle deserves to be shared more widely. I am publishing it here, with permission:
I learn a great deal from my family. The facts, figures, and articles that commonly result from discussing and arguing with each other are a reward in and of themselves. As might be expected, many of these experiences and facts are soon forgotten, making way for new debates. Once in a while, however, when discussing a topic, we–or I–stumble upon an insight which radically changes, clarifies, or re-enforces my understanding.
In recent months, I had two routine, incidental, and unrelated conversations, one with my brother, and the other with my sister. The conversation with my sister did not start during some contentious economic debate, but when we were eating dinner together. Offhand, my sister said to me: “Keith, I have really come to appreciate the ideas from your econ classes you told me about, like opportunity cost, especially the opportunity cost of time spent on one task being a loss of all other possible actions. When I applied those ideas to my everyday life, I saw a marked improvement, because I had become more efficient, simply from valuing my time appropriately.” We often complain that few people these days recognize how econ is not a theory of how society works but of how math can represent human reality at any level. This is one case where there are real, personal benefits from understanding the math of limited lifespan.
My second recent conversation of note did not concern this day and age, in fact, it concerned the ideas of a wealthy 2000-year-old Roman by the name of Seneca. My brother had recently been translating his Epistulae morales ad Lucilium (literally “Moral letters to Lucilius” in Latin, courtesy of Wikipedia), and had stumbled upon Roman intellectual gold. Any attempt of mine to summarize the ideas in the letter would be less than adequate, so I shall copy it here. I know that it is long, and rather Latin-ish, but I would encourage anyone to take the time to read it, if only because reading it will pay your time back, with interest:
Greetings from Seneca to his friend Lucilius.
Continue to act in the way you described, my dear Lucilius: set yourself free for your own sake; gather and save your time, which till lately has been forced from you, or stolen away, or has merely slipped from your hands. Make yourself believe the truth of my words, that certain moments are torn from us, that some are gently removed, and that others glide beyond our reach. The most disgraceful kind of loss, however, is that due to carelessness. Furthermore, if you will pay close heed to the problem of lost time, you will find that the largest portion of our life passes while we are doing ill, a goodly share while we are doing nothing, and the whole while we are doing that which is not to the purpose. What man can you show me who places any value on his time, who reckons the worth of each day, who understands that he is dying daily? For we are mistaken when we look forward to death; the major portion of death has already passed, Whatever years be behind us are in death’s hands.
Therefore, Lucilius, do as you write me that you are doing: hold every hour in your grasp. Lay hold of today’s task, and you will not need to depend so much upon to-morrow’s. While we are postponing, life speeds by. Nothing, Lucilius, is ours, except time. We were entrusted by nature with the ownership of this single thing, so fleeting and slippery that anyone who will can oust us from possession. What fools these mortals be! They allow the cheapest and most useless things, which can easily be replaced, to be charged in the reckoning, after they have acquired them; but they never regard themselves as in debt when they have received some of that precious commodity: time! And yet time is the one loan that even a grateful recipient cannot repay.
You may desire to know how I, who preach to you so freely, am practising. I confess frankly: my time account balances, as you would expect from one who is free-handed but careful. I cannot boast that I waste nothing, but I can at least tell you what I am wasting, and the cause and manner of the loss; I can give you the reasons why I am a poor man. My situation, however, is the same as that of many who are reduced to slender means through no fault of their own: everyone forgives them, but no one comes to their rescue.
What is the state of things, then? It is this: I do not regard a man as poor, if the little which remains is enough for him. I advise you, however, to keep what is really yours; and you cannot begin too early. For, as our ancestors believed, it is too late to spare when you reach the dregs of the cask. Of that which remains at the bottom, the amount is slight, and the quality is vile.
After listening to my brother dictate the whole of this letter, I felt genuine chills. The truth it contains is so blatant, a simple calculation could yield the same result: life is made up of a limited number of hours, therefore life is time. Whenever you work, you are giving up your time for money (hence the old adage that time is money). This means that whenever you waste time, or money, you are wasting your life, and wasted life is death. This single fact horrifies me every day, because like most every other human, I waste an obscene amount of time. Time watching a movie I have already seen, trolling through Facebook without really reading any of the posts, or having the same argument all over again: rarely, when I am doing these things do I think about what else I could be doing.
Therein lies the link, which most will have already seen, between my two conversations. Our time is not free. Every moment we spend sleeping, eating, studying, etc., has a cost–an opportunity cost–and once it has been spent, if it was not truly the best way to spend it, then some small part of your life has been lost without reward.
I see this nearly everywhere: students doze off in class or idly check their email or texts, they, when “studying” in the library, will spend a majority of the time effectively idle. Writing this, I am in a college library, and with sample size n=11, I may, without prying too much, say that ~7/11ths of my fellow computer users are not doing what they came intending to do. They are wasting time they will not get back.
And so I say to you, whoever you may be reading this (perhaps idly), much the same as what Seneca might say to you, only I will say it less eloquently, and more directly: value your time. Do not waste it. Work on being efficient not for the sake of productivity, but for the sake of leisure, for we all have our jobs to do, and if we get them done faster then there is more time for enjoyment. If you spent less time complaining, you might spend that time actively addressing your problems, solving them rationally and thus eliminating your cause for complaint.
This is a cross-post from the blog of the Centre for the Study of Governance & Society at King’s College London.
Over the last two decades online services have transformed from a product of a multitude of enterprises to being dominated by a handful of corporate-owned platforms such as Apple, Microsoft, Facebook, Google and Amazon. They specialize in connecting media producers to users. These are often mutual interactions with users both producing and consuming content. These platforms play an increasing role governing commercial exchange, as well as civil discussion, with plausibly pernicious implications for liberal democracy. As I propose in a recent paper ‘Markets for Rules’, blockchains offer a promising solution to this danger by helping to displace corporate ownership in favor of common platforms sustained by users themselves.
Corporate concentration has produced enormous efficiencies and innovations, improving user experiences and boosting investment in hardware and infrastructure. But it has also had several bad consequences. These enterprises face extremely low marginal costs and network effects whereby additional users add value to an existing user-base. Some of these effects are explained by these platforms’ business models of collecting personal data to target advertising more effectively at customers. The more interactions on a single platform users have with each other, the more useful the data for advertisers. The result is overwhelming returns to scale and a winner-takes-all competition for profits.
This has troubling implications for economic inequality, especially if we end up with a handful of corporations taking a bite out of every conceivable transaction. Of greater concern is the way owners exert control over who can join and what people are allowed to do on their platforms. Content producers can be demonetized or banned, effectively denying them access to a user-base or revenue. Online sellers can find themselves frozen out of a platform payment system without legal remedies. Controversial or unpopular producers survive at the whim of executives or, at best, a patchily enforced official policy.
This reliance on private governance is a problem for consumers, producers and ultimately citizens. But it is also a challenge for executives who find themselves mediating acrimonious personal disputes and political debate. With all the data in the world, they struggle to judge consistently what belongs on their platforms. The fact that these corporations have ended up functioning as unofficial censors and wielders of sanctions has led some commentators to propose regulating these platforms as public utilities or, more radically, nationalizing them so that access to them is decided democratically. These solutions have their own perils because any centralized system of monopoly control, whatever the underlying democratic credentials, can produce authoritarian outcomes. Liberal democracies up until now have been sustained by an independent civil society constituted by overlapping and competing spheres of governance, not the monopoly of either democratic or corporate government.
The prosecution of the CEO and founders of Backpage, who failed to exclude sex workers from their platform, illustrates the reliance of these private enterprises on government support on controversial policy issues even in relatively free societies. The combination of privately-developed data-collecting networks with over-arching state control is arguably reaching a nadir in China which is rolling out an unaccountable surveillance system of ‘social credit’ that can identify political dissidents and automatically exclude them from significant spheres of civil society.
Is there a way that blockchains can help navigate around the centralising and authoritarian impetus of technology-facilitated governance? Blockchains emerged from two pre-existing technologies – public ledgers and asymmetric cryptography – to produce a way of sharing data across a network that is resistant to manipulation by unauthorized actors. Initially conceived as offering alternatives to state-backed currencies, blockchains are now used to build decentralized autonomous organizations (DAOs) and dapps (decentralized apps). They can supply similar functions as corporate platforms but without an overall owner.
These systems are sustained by rewarding network participants with tokens (through completing intensive computing processes called mining). Tokens are convertible into ordinary currency, albeit currently at volatile rates. The entrepreneurs that build these platforms typically reward themselves and investors a large stake in those tokens but once the network is launched, they do not have control over how it is utilized. The rules of each network are self-enforcing. These rules can be changed, either through the original (or new) developers launching a rule-set that others may choose to switch over to (a fork). Alternatively, the rule-sets might contain provision for amendment. Such amendment schemes are, of course, open to manipulation as is the case for all political processes. Nevertheless, what these schemes offer is a way of interacting and exchanging at large distances without an overarching ruler. Instead, conduct is permitted on the basis of fixed rules enforced mechanically by people’s decisions to participate in the system. One way of looking at these schemes is that they have decentralized properties of communal norms, combined with the possibility of more deliberate design and experimentation of more formal rules and institutions. I call this common government.
The implications of this new technology and kind of governance might turn out to be very far-reaching, approaching that of the development of the Internet itself or even the printing press. But what could it mean for familiar Internet platforms in the medium-term? First, participating in mutual platforms might better align the incentives of users and platform designers. Right now, platform owners rely on squeezing as much data out of users as possible in order to sell it on to advertisers and to sell additional services. Mutual platforms, without responsibilities to shareholders, can experiment with different funding models. Individual users might elect to sell access to their profile to advertisers but the data itself can be made more secure as it will be a property of an encrypted network rather than a profile stored in a central private database. Privacy can be better assured than private management with public regulation.
Second, the networks can be more robust both to natural and political perturbations. Under decentralized protocols, ordinary users help store and serve content to each other. With the addition of blockchains, these users can be compensated for making their idle computer resources available for network use. This means that data doesn’t have to travel so far as is currently the case from host to user and the network as a whole can better cope with outages from particular nodes without data loss. Without a central controller, there is no particular agent that a government can coerce or punish for allowing specific interactions over a platform. Governments would then face the more difficult choice of permitting or prohibiting Internet communications altogether. It is thus more robust against arbitrary government censorship and manipulation of trade.
The relationship between users on a platform is mutual. The relationship between users and platform owners, however, is presently hierarchical – a private dynamic that government agencies can exploit. What blockchains may eventually permit is the provision of relatively efficient networks reliant neither on a single public agency nor private owner.
Learn more about Nick’s work here.
We shared the stage with other graphene projects as BitSpark, DasCoin, PayGer, BitCrab, RuDEX and many others. I look forward to work together with anyone that seeks to decentralize our future, that has a vision in which every human being is free, and where blockchain technology provides the tools to secure our rights to life, liberty, and property.
Stan Larimer was there as well, and he had something interesting to say about how BitShares will import EOS technology through a middle-layer. This will greatly benefit the whole BitShares/Graphene community, including Serey.
Regarding my own presentation, I have made the case that Blockchain is not only a technological revolution, but essentially a social, political and economic revolution. I believe it’s a tool that will move us into a more decentralized world that was envisioned by the earliest internet adopters. As more internet applications were built, it became clear that it would not become as decentralized as these adopters hoped. These applications suffered from a centralized system in which data was stored and controlled on a single or a small number of servers. Those who controlled these servers, the men-in-the-middle, dictated the rules of the platform. They could look into your data, modify your data, prevent you from accessing your data etc.
Blockchain eliminates these so-called “men-in-the-middle”. Its censorship-resistant property provides many great opportunities for developing countries where the rule of law are often weak or underdeveloped. One opportunity that I have been trying to seize in Cambodia is the creation of a social media platform that could not be controlled or censored by a single party. As Cambodians are becoming more tech savvy, and more connected to the outside world through internet access, it’s a great time to roll out a Blockchain-based social media platform where people can express themselves freely. The advantage of a social media is that it’s easier to build the network effect that can reach critical mass in a relatively short period of time. Once we gain enough momentum, I would like to tokenize the national currency, the Riel, develop a Serey Wallet, and provide anyone who has access to the internet the opportunity to open a wallet (bank account) for free and use our tokenized Riel for e-commerce, remittances, savings, loans etc. Although Cambodia has experienced tremendous economic growth in the past two decades and the World Bank has moved Cambodia’s status from a lower-income bracket to a lower-middle-income bracket, 83% of Cambodians still remain unbanked.
Doing so, I hope we will promote freedom of expression and an intellectual society in Cambodia, as well as help banking the unbanked.
Below, you can find my slides for the presentation.
The core assumption of economics is that people tend to do the thing that makes sense from their own perspective. Whatever utility function people are maximizing, it’s reasonable to assume (absent compelling arguments to the contrary) that a) they’re trying to get what they want, and b) they’re trying their best given what they know.
Which is to say: what people do is a function of their preferences and priors.
Politicians (and other marketers) know this; the political battle for hearts and minds is older than history. Where it gets timely is the role algorithms play in the Facebookification of politics.
The engineering decisions made by Facebook, Google, et al. shape the digital bubbles we form for ourselves. We’ve got access to infinite content online and it has to be sorted somehow. What we’ve been learning is that these decisions aren’t neutral because they implicitly decide how our priors will be updated.
This is a problem, but it’s not the root problem. Even worse, there’s no solution.
Consider one option: put you and me in charge of regulating social media algorithms. What will be the result? First we’ll have to find a way to avoid being corrupted by this power. Then we’ll have to figure out just what it is we’re doing. Then we’ll have to stay on top of all the people trying to game the system.
If we could perfectly regulate these algorithms we might do some genuine good. But we still won’t have eliminated the fundamental issue: free will.
Let’s think of this through an evolutionary lens. The algorithms that survive are those that are most consistent with users’ preferences (out of acceptable alternatives). Clickbait will (by definition) always have an edge. Confirmation bias isn’t going away any time soon. Thinking is hard and people don’t like it.
People will continue to chose news options they find compelling and trustworthy. Their preferences and priors are not the same as ours and they never will be. Highly educated people have been trying to make everyone else highly educated for generations and they haven’t succeeded yet.
A better approach is to quit this “Rock the Vote” nonsense and encourage more people to opt for benign neglect. Our problem isn’t that the algorithms make people into political hooligans, it’s that we keep trying to get them involved under the faulty assumption that people are unnaturally Vulcan-like. Yes, regular people ought to be sensible and civically engaged, but ought does not imply can.
As some might already suspect from some of my previous posts, I am a cryptocurrency enthusiast. As of now, there is another crypto-project founded by two libertarian anarchists that I find extremely interesting and that I would like to share with you.
In this post, I’d like to introduce this project called Steemit, a new social media platform where content creators (bloggers) can earn money with every ‘upvote’ (comparable to ‘likes’ on Facebook) they receive from the community. I am not encouraging my fellow note writers to quit posting articles on Notes on Liberty, but I would recommend them to share their articles both here and on the Steemit platform.
So what is Steemit?
“Collectively, user-generated content has created billions of dollars worth of value for the shareholders of social media companies, such as Reddit, Facebook, and Twitter. Steem supports social media and online communities by returning much of its value to the people who provide contributions by rewarding them with virtual currency.”
Steemit is most similar to Reddit, but with the important difference that you can monetize your blog. You can take a look at my first two ‘hits’ on Steemit for proof that you can monetize your blogging skills:
Steemit was founded half a year ago by entrepreneurs Ned Scott and Daniel Larimer. Daniel Larimer has been a familiar face in the cryptocurrency scene as the founder of Bitshares, which currently ranks as the 19th largest cryptocurrency in market cap on www.marketcap.com. Steem itself, the currency that drives steemit, has risen in prominence among other cryptocurrencies. According to www.marketcap.com, Steem is now the 4th largest behind Bitcoin, Ethereum and Ripple.
The concept behind Steemit is very simple, and you don’t need in-depth knowledge of the workings of cryptocurrencies to start writing (and curating posts) and earning some money. If you have a facebook account or a reddit account, you can sign up at www.steemit.com. At first sign up, you will receive $10 worth of Steem Power – I will later get to Steem Power to explain what it is. Once you sign up you can immediately start submitting posts or comments on other people’s submissions. You can earn money through both ways.
The website is still in beta, and you may argue that it is not as user friendly as Reddit or other social media networks, but the pace in which applications have been rolled out on the platform in the one month that I have been using it is impressive!
A chat functionality with private messaging, a functionality to follow other writers, and weekly insights in your earnings have for example all been added in the past four weeks.
This, however, is just the beginning. The founders of Steemit have far larger plans than just creating a blockchain based social network. The social network is the means to attract enough users of its currency (Steem and Steem Dollars) that a full-fledged market place based on these currencies can emerge. The first step is to increase the user base, but next steps are to create a market place in which people can trade goods with Steem and Steem Dollars and where Steem will grow in such prominence that it will compete with already existing fiat currencies like the USD, Euro, GBP, Yen, and RMB. We are still far off from this actually happening, but it’s great to see these kinds of experiments with the free market.
Is Steemit a scam?
I have read about people who have called it a scam, but the funny thing is that you don’t need to put any monetary investments in the platform to submit an article and earn some money. Normally in scams, you are encouraged to give away your money for little or nothing in return. With Steemit, all you need is to create content that the community values and in return you will receive some money.
Steem, Steem Power and Steem Dollars
Lastly, I’d like to say some words about the three tokens you can hold when using Steemit: liquid Steem, Steem Power and Steem Dollars (SBD).
Liquid Steem, or simply Steem by name, is immediately convertible to bitcoin and fiat currencies as USD. People who would like to speculate on the price of Steem can hold it to sell at a higher price.
You can also convert your Steem into Steem Power. Steem Power gives you, if I am not mistaken, interest of approximately 0.7% in Steem Power per day. Holding Steem Power is like holding a stake in the long-term development of Steemit as you can only convert 1% per week of your Steem Power in Steem and exchange it for bitcoins and fiat currencies.
Steem Dollars are tokens pegged to the USD at an exchange rate of around 1 : 1. People who don’t like the volatility of cryptocurrencies can hold Steem Dollars.
For more information about Steemit, you can read the Steem White Paper or watch this excellent interview of its founders:
I hope that I have triggered your curiosity about Steemit, and I hope that you will take this invitation to post your content not only on Notes on Liberty, but also on www.steemit.com. Please don’t forget to follow me once you are on Steemit. You can find me at www.steemit.com/@chhaylin.