Hello all,


I notice that there are a lot of misconceptions about fractional reserve banking flying around here. There is a great confusion between the current government central banking fiat currency system (which HAS and DOES print money out of thin air) and sound fractional reserve banking. They are not the same and FRB need not be inflationary. In fact, when done properly there is very little difference between a fractional reserve bank and a 100% reserve bank. A 100% reserve bank can earn just as much money and get just as much interest as a fractional reserve bank. Yes, possibly even more. I describe how this can be done in the following article:

http://onarki.no/blogg/2011/04/fractional-reserve-banking-vs-pure-gold-standard/


However, due to the hyperdeflation in bitcoins at the moment banking is currently impossible. A proper bitcoin bank must wait until the value stabilizes.

What I meant was not that the number of Gigahashes seems to have gone down (this is obviously the case). There seems to be something that happened two days after the crash. Before the crash I got about 19 Bitcoins per day. On the day of the crash I got 0. Then on day 1 after I got 17, and the day after I got only 8. So I was wondering if something happened on day two also.

As far as I can tell the speed is not back to where it was before the crash. Is there another problem arising?

I think I capture it to a significant degree in our website, i.e. a greener and less crowded version of Singapore and Hong Kong.

And to me it sounds like you are really wanting the Free State to resemble and industrial park populated with warehouses and lawyers so that you can justify your views on IP.

I didn't understand the contract, and I guess that was your point. Generally speaking it is a huge problem with massive EULAs that no-one reads, yet everyone accepts and trusts are not draconian. It is so much more practical to have implicit contracts that are approved by the law makers on behalf of a significant majority of the population. Implicit contracts are practical since most people find them reasonable (otherwise they would not have been voted to be law by a significant majority). Those who want to deviate from the implicit contract must either write an entire EULA or write the *deviations* from the implicit contract.

This aligns the self-interest of all parties. If a software company wants to sell software to MANY people it is very smart to use the implicit contract voted for by the MANY. If a software company wants to sell to a minority then that minority will not mind the EULA since they belong to the minority who may not like the implicit contract. If however a software company wants to sell to the MANY but also don't want to abide by their wishes and follow the implicit contract, they will be at a severe disadvantage because they will have to harass people with a cumbersome EULA.

However, there is a very high treshold for something to become an implicit contract by law, and private contract firms could easily get a "nice to have" implicit contract law overturned by showing that there exists a private, peaceful alternative. This could be similar to a "people who liked X also liked Y"-service. I.e. "people who found contract X reasonable also found contract Y reasonable." With such technology available you could easily migrate from implicit contract laws to explicit contracts mediated by a private firm of your choice.

Implicit contracts of the "nice to have"-kind should in general be avoided, and only reserved for implicit contracts where there is serious risk of violations involved. E.g. implicit contract laws against killing without consent will never be lifted. It will always be assumed that people don't want to die unless explicitly stated in very certain terms.

Generally speaking libraries and digitalization of works that are in the public domain are completely unproblematic, and I applaud such private efforts (e.g. the Gutenberg Project), although government has no business doing running libraries. In general, with copyrighted material libraries become problematic, unless the IP owner explicitly chooses to allow libraries to use his work, and with digital books this becomes even more problematic. There are several solutions to this and one model is that philanthropists who want to share books with the world can make a deal with the author to e.g. buy the rights to place them in the public domain, or to buy a certain amount of licenses at bulk prices.

Libraries made a whole lot of sense back in the days when the act of copying books was the expensive part, but nowadays libraries are really out of date.

The cost of production of Prison Break is just taken from Wikipedia. It is not infallible, but that's the numbers I've seen. Prison Break was especially covered in the news for being the most popular TV Series that "no-one" saw on TV.


I have nothing against the indie movement. I was just quoting real costs of a real production, and even with a 3 million dollar budget per episode the series could EASILY have prospered on less than 50 cents per episode with a proper payment system.


I don't care, so long as a) I get a good product, b) I pay what I consider a fair price for it. I have no problems paying up to 1 dollar per episode for a series I like. Hell, if it's a really good series that only a few people watch but I just happen to love, I wouldn't mind paying 10 dollars per episode. The point is that with micropayment all movies and series are going to cost typically 1 dollar per view or less.



With a proper payment system it would be zero problem to actually segment a market based on location. In the Philippines it makes sense that a legal copy of a series costs somewhere around 5 cents. With such prices there could easily be 15 million viewers for a series. Given that a series today makes ZERO from such a series in Philippines, 15 million * 5 cents = 750,000 dollars per episode extra is not shabby.


Obviously it was the seller, not the buyer that should have been targeted here.


I think you're wrong. In Norway kids buy mobile ring tones upwards of 3 dollars or more per jingle. I don't understand it but they pay it without hesitation due to convenience. The moment it is MORE convenient to pay legally than to become a criminal the piracy rate drops to pretty much zero.

Once it becomes organized it is no longer in line with fair use, so this would not be ok or at the very least borderline. Though, the creators factor in fair use into the price, so that the one who actually pays for the DVD ends up paying for the average number of freeloaders fair use involves. Needless to say if such a scheme cought on and become very common the publishers would simply compensate by increasing the price.

On the other hand the exact opposite would happen with pay-per-view and micropayment. If there were no freeloaders and every single one who ever saw the movie or listened to the song actually paid then the price per listen or pay per view would become VERY small. Let me give one of my favorite examples. Consider the success series Prison Break. It was cancelled after its fourth season (I think). Why when it was so popular? Piracy. Too many people just downloaded the series instead of watching the horrific ad-version on TV. How could this EASILY have been fixed with micropayment? The average number of official viewers in the LAST season was about 6 million. On average each episode in the third season cost 3 million to produce. So with micropayment installed in every TV, if every single official viewer paid 1 dollar per episode (45 minutes) then that would have given the series producers a profit margin of a stunning 50%. That's really, really good. Now, if you factor in all the millions of people who watched the series abroad and all the people who downloaded it then I'm quite certain we are talking about at the very minimum 20 million people. If we now say that a reasonable profit margin for such a series is 40% (to cover the high risk etc.) then each episode would have to bring in 5 million dollars. 5/20 = 0,25 dollars or 25 cents per episode per viewer. In other words, with proper micropayment Prison Break could be extremely profitable at 25-50 cents per episode. I would not hesitate one second to pay that amount, and neither would 99% of viewers.

Now, Prison Break was cancelled. But not only Prison Break. Remember Battlestar Galactica? This fantastic series was cancelled in after its fourth season due to too few PAYING viewers. Remember the prequel Caprica? Cancelled after its FIRST season for the same reason. Think back to all your favorite TV shows that have been cancelled way too early due to too few viewers. Every single one of them could have continued for a much longer time had it not been for piracy and the lack of proper payment systems. These are the casualties of piracy and bad banking laws. So all you anti-IP guys out there that love a series that has been cancelled: You got *exactly* what you asked for.

Think about the horrendous state of Hollywood today, how few truly good, creative and novel movies come out these days. That drought of creativity is entirely due to piracy and bad payment systems. In a sense all these movies and series that are NOT made is Atlas Shrugging, the men of the mind are on strike due to the widespread looting of the able.

Well, I was using a typical order of magnitude numbers. 5 is ok, 50,000 is NOT fair use. 500 is not fair use either, and neither is probably 50.



If you would like to put it like that, yes. But the point is that with transferred ownership (and hence serial viewing) it will take 11 years for 50,000 owners to watch a 2 hour movie, if they watch in a continuous marathon. If we assume that there are 4 people in the family of each owner on average and it is actually only watched during the afternoon hours (i.e. when people are home from school and work and not sleeping) Then you can if you're lucky get two ownership transfers per day and it will then take 17 years for 50,000 people to watch the movie. By that time the movie is outdated and everyone who wanted to see it has seen it anyways. I.e. this serial transfer of ownership, even when done very efficiently (i.e. twice a day), does not significantly undermine the IP (i.e. the ability of the owner to profit from his creation).


That is true. A large black market shows that something is wrong, but not necessarily WHAT is wrong. It may be overpricing, it may be hampering of the product (DRM or annoying FBI-warnings), inavailability due to bad payment systems due to bad banking laws etc. But you cannot from a black market alone tell WHAT is wrong.




If there is a black market then obviously the system is not working.

I applaud and welcome any such improvements as described here. As I have stated numerous times during this debate. IP is so seriously flawed today due to bad laws, mainly due to extremely cumbersome money and banking laws which makes it virtually impossible to start a bank or payment service. As a consequence of this only NOW we are starting to something like Flattr, iTunes, Spotify and other similar solutions that imitate micropayment. With free banking I am positive that we would have seen micropayment systems as soon as before 2000. It is not impossible that when the WWW was built payment systems had been built right into the protocol without the prevalent banking laws. Today micropayment would have been just as mundane and common as email, and as a consequence ALL software, music and movies would have been on a digital payment platform at super-low prices. There would have been virtually zero piracy and no DRM.

To my knowledge no libertarians have ever pointed out the relationship between the bad state of IP and the bad money laws, because most people don't understand the relationship.



Theft is not progressive by any standard.


It's hard to say exactly what would happen in a Free State, but generally speaking organized piracy would be struck down.


There would be equality before the law.

Well, the pen is different in that it wasn't a product that your friend explicitly sold for profit. If he was a pen dealer and you used a pen that he sells at 150,000 dollars, then you may not have to pay the whole price, but at least the price of the market value reduction from becoming a used item.



That's in my view perfectly ok, so long as you don't spread the copy. I do that myself. Remember IP rights do not give a blank check to limit information usage in any way the creator wants. It must serve the purpose of economic exploitation (or privacy issues when that applies.) A DRM has no function for a legitimate user who does not pirate. The creator's intention is not to hamper the user experience, but to prevent piracy.


Agreed, and it's just fair use. There's something screwy about the laws of society (particularly the banking/money laws which prevents micropayment systems), and to compensate for that screwiness in the way you described is not a violation of IP rights.


No, here you HAVE violated the conditions of the DVD. Fair use means watching it with your family (up to 5 people). 50,000 people is obviously distribution and is a violation of IP rights.


Agreed.


Agreed.


Nothing wrong with that.


Well, you own the instantiation of the content on the DVD, but you don't own the distribution rights.



That's true, so long as he has actually not made a copy of it and that you now are watching a duplicate.

These are certainly the best arguments presented so far, and any state has to mount very serious arguments against anarchy. I really don't want to go into that debate now, although I will sketch the argument:

Back in what I call The Original Tribe (i.e. the natural environment humans have lived in and adapted to most of their evolutionary history) there was no state. There were only a few dozen tribe members and the organization of that tribe could just as easily be called anarchism as socialism, laissez-faire, tribalism or nationalism. With such a small group all these organizational systems become virtually identical. Indeed, that is why all these are so popular. The reason you don't need a state in The Original Tribe is because you have something that completely balances power and prevents violation: love and friendship. If you KNOW someone personally it is extremely unlikely that you will enslave them. And if you are part of a family you tend to share with each other in an egalitarian socialist like manner.

The problem with love and friendship is that they don't scale up. You can love and be friends with so and so many people, but beyond that you have no relation with them. They are alien to you, strangers. Now, THIS event (which probably took place around 12,000 years ago with the advent of agriculture after the dramatic rise of CO2 after the ice age) of scaling up the tribe to such a size that the STRANGER was introduced in society was also the birth of slavery and structural violation. With a sufficiently large tribe there will always be groups who have no moral restrictions on what they could do to other groups in the tribe, and hence you get the rise of mafia and despotism. Thus, what is needed is a system that allows for the STRANGER to live safely. That's what a classically liberal society is all about: privacy, i.e. the right to be a stranger. Socialists don't want you to be a stranger. They insist on you being part of the family, treating you as part child and part brother whom they can demand egalitarian sharing from.

But in this world filled with strangers it is inescapable that there will arise mafias who will take over the whole of society and impose despotic rule -- fascism -- on everyone. This happens rarely, but when it happens the condition is extremely hard to get rid of and lasts for centuries. Therefore, what is needed is a minimal state with a single purpose: to prevent the births and takeover of mafias, which is inevitable in a world of anarchy.

However, notice that the minarchy can be very, very small, allowing for something very close to private security firms and even private courts, and if you read our section on Rule of Law, I briefly outline MY strategy for preventing a minarchy from devolving into fascism, as it has in the United States and Europe.

http://freestateinitiative.org/free-state/rule-of-law

It depends on what kind of relationship you have with your friend. Is it very likely that your friend would say yes to lending you his pen or pencil? If so, then borrowing is not a crime. However, suppose you borrow 1 million dollars from him (his entire life saving) to go gambling in Las Vegas. Then you WOULD be a criminal, because this is something that he would very likely object to very loudly.


Yes. At most I have to pay a few cents for borrowing the pen.


No sharing.



Still no.


Still no. He could go to a civil law suit against me and I would have to fully compensate him for using the pen, but the novel I write will in no way affect the compensation. It will ONLY be for using his pen, whether I use to write doodles or a novel.


Yeah I do. All these examples has nothing do with IP.

Direct commercial utilization of the IP. Someone who buys the book doesn't have the right to distribute and sell copies of the book. This should be fairly easy to understand since current IP law examplifies this very well.



That's right.


ALL property was originally created through labor. (Property can be sold or given away, but that doesn't change the fact that the origins of the property was labor)


That's right. You own your own thoughts of course, but owning an idea would infringe people's right to think freely with their own minds and that would be a gross violation of the freedom of thought. In your head you can do whatever you want.


Well walking backwards is not UNIQUE is it? It's not a novelty, and hence it doesn't matter that I've spent 10 years reinventing something mundane. I cannot exploit that concept economically with IP rights because it is not novel.



Because the right to not be killed IS an implicit contract. You CAN agree to have someone kill you (euthanasia) so it's not completely unrealistic that someone wants to be killed. However, by DEFAULT you assume that people DON'T want to be killed, and you therefore have to make an EXPLICIT contract with someone in order for it to be legal for someone to kill you.


I'm only using a large number to create an extreme example. Most people's moral compasses often require more than fine nuances. They need to see the most significant bit before they can sea the lesser bits. So its only purpose is to make a very clear point. No, I don't believe in the labor theory of value, but I DO believe in the labor theory of PROPERTY, which is not the same thing. That something has a MARKET VALUE is not the same as it being your PROPERTY. These are completely separate topics. Property means "that which is under your sovereignty, i.e. full control." Market value means what people are willing to pay for someone's property.


I don't mind debate, that's why I am participating. I just wonder how materialism (upon which Marxism is based) could acquire such a prominent position in libertarianism. It's flabbergasting and disturbing because the position of anti-IP libertarians and Marxists on intellectual property is identical and for identical reasons.

The same goes with "FRB is fraud." I can understand that people are skeptical towards FRB (just like I understand that they think IP law is broken) but from here to conclude that FRB is fraud is a complete mystery. I have btw, written an essay on Fractional Reserve Banking for those interested:

http://onarki.no/blogg/2011/04/fractional-reserve-banking-vs-pure-gold-standard/

No, benefiting is not sufficient. I benefit every single day from technology and capital I don't own and from products I have never bought. I've never used an oil tanker directly and neither have I paid for it directly. Yet, I benefit from oil tankers every single day, and it's perfectly ok. What would NOT be ok is if I benefit DIRECTLY from a product without paying for it.


But as you can see, I have never claimed you should be paid for positive externalities. Copying someone's unique mental work and using it to the detriment of their ability to profit from their own work is not a positive externality, it is piracy. Most people have no problem understanding the difference between externalities and piracy.


As I just pointed out, indirect benefits do not count. That's not what we're talking about.



We're not talking about mere unfairness (it's unfair that some are lucky to be born with good genes etc.), but about injustice. 


I agree that it's not utilitarian, and as an approximation it is an ok definition of property to say that it settles disputes over who controls a finite resource (that's a utilitarian argument), but the more fundamental argument is that YOU OWN YOUR OWN LIFE. Your life is a WORK PROCESS. Every single moment of your life you have to work (through your metabolism at the cellular level, through physical labor and through mental labor). You are a work machine, and you are defined by that work. You are YOU because you create yourself and when you structure your surroundings and reality that becomes part of you. Since we humans are a social species (i.e. peacefully coexist) then it means that living as a human means to respect each other and live peacefully together. Peace is defined as to be able to have full sovereignty over your SELF (and hence also your WORK PRODUCTS). That's the fundamentals, not some arbitrary principles about settling disputes.

We're not advocating those decrees, but it's definitely a possibility that we won't be able to prevent it.

 

Sure, and in the constitution it will explicitly state that certain decrees by the host state are not in accordance with the principles of peace and the Free State, but are put their because there is no alternative, and the very second the host country should choose to lift any of these decrees, then they will be removed as fast as you can say "swoosh" from the Free State.


How true.


Again, true.


That's completely true.


That's also true. Of all the liberties, economic freedom is by far the most basic because without it no other liberty can exist. Also to a non-gay, non-druggie Bangladeshi farmer the Free State DOES provide a humongous increase in liberty and no violations FOR HIM. If that Bangladeshi had the choice between 1) no social liberties + no economic liberties OR 2) no social liberties + full economic freedom, then to HIM that would be a giant step up, don't you think, even if was a gay drug addict. Later the host country may become more liberal and may lift its social decrees, OR later, when people have earned a lot of money in the Free State, they can afford to go to a country in the West that has all these social liberties. The Free State has been a stepping stone and without it they would have NO liberty.


Today no Free State exists. No emigration opportunity exists for billions of people. With the Free State the opportunity and choices has INCREASED, and anyone who goes there goes there voluntarily. And you are saying that I somehow are "making that decision for them"?!?!? The choice people have is: 1) no Free State, 2) Free state with great economic freedom, but with some hampered social freedoms. I don't understand why this isn't a no-brainer.


This is true, and therefore freedom of religion will be an obvious premise.


As I said, the constitution will explicitly state that the decrees are in violation of the principles upon which the Free State is built and that they are nevertheless respected because the very existence of the Free State rests upon that respect.

He ONLY deserves to get paid for his labor if someone actually USES the fruits of his labor. If the one who wants to use the fruits of his labor doesn't like the price, then he can simply refrain from consuming the labor of the mind worker. It's very simple. Basic capitalism, actually.

You're right that something happened to me: I became an adult. I learned to think. I developed basic human competencies such as reason, empathy, decency and integrity.

It's important that we keep our examples general and not dependent on actions by the FDA, because in the Free State the FDA wouldn't exist, and the entire example you gave would be non-existent with proper laws. Remember, most of the cost of medicine today is NOT research or production cost, but FDA approval. Life Extension Foundation has calculated that if the FDA was dissolved the cost of drugs would on average fall by 90-95%. That's how much of the cost is only due to government regulation.

However, that is beside the point in this discussion. The question is whether it should be possible for someone to protect their research WORK without allowing people to parasite on that work. You have to pretty void of any fragment of humanity if you with a straight face claim that someone who has done research for 10 years and sees his profit taken away by others because they DIDN'T do the research is not being done gross injustice. To me that's just so unspeakably evil on such a massive scale that I lack words. Such a person does not deserve to be called human.