Tuesday, December 21, 2010

The State Is Dead, Roll On the Global Free Republic

After my last article 'a time to die' people kept asking me 'so what's next'. So here is my go at an answer.

To me the financial system of our world seems to be bankrupt. The governments that prop it up seem to be bankrupt too. I don't believe we need either of them and the sooner they finish collapsing the sooner we can get on with living a better life on this planet.

I think the present conception of the State is dead* as a viable future entity, in fact the body has become bloated and is beginning to rot from the inside out. It will take years for the general public to realize it, but the smell is growing by the months and its coming out of multiple orifices.

*(the part of the State that will go first is the financial system of bank debt issued money by government FIAT)

The closest thing to states in the future are social networks, examples are 'World of Warcraft', 'eBay' and 'Facebook'. They don't need government  but they do need a form of exchange or money.

The rotting bodies of the States we live in are going to continue to produce gas for a while. We will see this gas continue in the form of more money being printed. I think its a good idea to slowly get out of fiat currencies, or at least start to seriously consider the alternatives.

The great thing is we don't actually need states and governments as they are constructed today, we only think we do. We are conditioned to depend on it as a strange sort of parent figure, its a weird relationship. We think ‘they’ will look after us when its really the last thing on any politician's mind.

What we need is the ability to trade and travel, and we certainly don't need a massively inefficient financial system that leaches off everyone's trade. The collapse of both our present financial system and the governments that are hooked up to it is a great thing. It is going to allow some far more efficient and exciting alternatives to take their place.

As the system collapses, trade will continue but its going to move to using what works. There will be a big financial move back into precious metals, the historical fall back position of real value. You only need to look at gold prices over the fifteen years to see that most people in the know jumped this way long ago. But gold is hard to trade with except as coin, even then, you cant send it long distance without a chariot.

The second exciting option opening up is the move to digital currencies. You may think you have this already in the form of digital bank transfers, but that is only a digital version of current fiat currency.

Anyone can start a digital currency if they a) know how to build the secure compute infrastructure b) know how to build trust in the service. e-gold is a good example of one that started taking off but was blown out by the US courts, i believe it was becoming too big a threat to the status quo at the time.

Three things you need to understand about digital currencies (dc's) these are all about 'responsibility' when you understand that a true dc is really just like coin. You need to be responsible for your coins and what you do with them. The coins or the coin manufacturer are not responsible and should not be held accountable for your screw-up as is the case with real money (but its not the case with our present 'financial system').

1. you can't blame the dc (or coins) if people do fraud with it. There is tonnes of fraud daily on the net, especially with credit card and internet banking, you just don't hear about it because its so common its not very news worthy. The dc is simply the form of exchange. Just because bank robbers like stealing gold from a bank you don't blame the gold for being a compact and easy to move store of wealth. Dc's are much easier to move about than gold, they will likely be blamed for it.

2. you have to be responsible for your dc (coins), nobody is going to look after it for you if you send it to the wrong place. A dc must be non refundable as it has to behave like real coins. It would be no good if you went to a shop to buy something and then at a later date you could just cancel and pull back your coins. If a shop has a refund policy, that is a completely different issue, its between you and the vendor.

3. Security is up to you. Modern online banking is a joke security wise, the security questions commonly used are an example of this joke. Your account is much less secure the moment you have any security questions. The reason for the questions is to reduce support problems, when you lose your password. In the real world of true security, if you loose your password its the same as forgetting where you left your wallet. Or another example is if you make simple two letter password, the analogy would be then of keeping your wallet on the table outside the house. Its up to you.

I don't expect dc's to become widely used while our present financial system still has a semblance of 'working' and dc’s pose too big a threat to the status quo. But as the system collapses we will have a rapid move toward them. (Its going to be very hard to establish a global 'regulated' alternative. But I'am sure we will see centrally controlled global fiat options presented as the 'solution' to the crisis. Actually I think its here already in the from of the IMFs SDR)

I reckon its a good idea to be prepared and figure out the lay of the land with dc's.

I think that we will see is a future of many competing digital currencies each with their own specific cool features. There will be many digital exchanges where you can convert between these dc's and fiat currencies or other local currencies. Each currency system will embody a set of values that are encoded into the algorithms it uses. These values will be transparent rather than covert, as it is the values that will keep the users using that currency as opposed to another.

Where we are going next ?

One exciting development or what i believe will be the 'killer app' for dc's is when social networks such as World of Warcraft (WoW) or Facebook use either an existing dc or create their own for trading within their network. For example WoW could completely replace their monthly fees with a basic tax on the dc's traded in the world. Facebook has been experimenting with its own credits, but so far has backed away from running a real independent dc from the state Fiat system. When will social networks 'come out' and challenge the present State system ? when they do, this is when the the State as we know it is truly dead, Why ?

Current states are tax farms. Ie they farm the people within the borders for taxes. The reason states work so badly is that they do this against the will of the people. This is a redundant non-evolutionary (ie closes down opportunity for evolution within the state) way to operate.

This redundant approach requires government, the two party dialectic operates as a system of ‘disinformation management’ for citizens so the tax farm can continue to operate.

You see there are many things the citizens would not do if they were not ‘coerced into it’ through disinformation management, the best example is paying taxes. (Government often does disinformation management by pitting social groups against each other, the two party 'democratic' system is the primary example of this, simply the classic 'divide and rule' paradigm. If government was not about ‘disinformation’, sites like wiki leaks would be a non issue)

Imagine what a state could do if it simply worked 'with' the citizens not against them, and provided them the information they wanted and needed. All the redundant lobbying and disinformation management infrastructure would just be blown away leaving an efficient machine that could serve a clear and simple goal, 'like a company with a vision statement'. Everyone in a society could start to point in a unified direction. Its very radical.

You may say 'this will never happen' but consider a world where people exchange skills and info over the internet in exchange for a crypto untraceable dc. This is a non taxable situation and its very doable today, there are many open source projects building forms of what I am talking about.

Tax will have to become voluntary in our future. And to be voluntary the organisation that is running the dc will have to do exactly what its users desire.

I think the future is very simple.

The borders of the future state will simply be the membership of a social network. The difference to our states today simply being of user consent. Citizens become voluntary ‘users’

I think a real global republic is based on the freedom to choose whatever social networks you want to be a user of, along with the allowance of competitive dc exchange without interference or 'regulation'.

(competitive dc exchange will be strongly discouraged by the status quo, noone wants to loose their money monopoly, but there is nothing that can be done about it other than shutting down the internet, so I doubt it will happen)

The freedom to travel and freedom to exchange.

You won't need to vote for government, but you will decide what networks you are a user of and you will decide which dc's you like. All of this will in turn have a large effect on the world you are living in.

This future holds a complete 100% turnaround. Right now states as we know them try to keep people or 'users' out because the states are so incredibly inefficient, they cant handle more users. That's dumb, and it makes no sense, because if a state is a tax farm, surely it wants more people to tax.

A well operated Social Network is just the opposite, more users mean more revenue for the network, period.

Ok, if this is too big leap for you, here is one example. Facebook makes money by the fact it has users. The actual code to build a site like Facebook is trivial, a company like Microsoft could have a functional competitor up in under six months. The trick is how to get the 'network-effect' to build a critical mass of users. Facebook got there first, picked the 'social kudos' high ground of the academic institutions and built a massive user base from there. You would think it is unassailable. But imagine if a competitor social network started offering a large portion of revenue, back to the users via its dc. This for example could serve as a 'Minimum Basic Income' for being a user. Getting paid just to be a member, now that's an incentive to move to a new network.

And what if that network owned some real farms, or managed forest, The possibilities for the world are just massive.

(a. yes, i am saying that that unless face book starts to pay people a minimum basic income in some dc they are at risk of loosing out to the first decent alternative that does. I use the term 'minimum basic income' mbi. The general point is a default pay to all members. It avoids all the issues you get with both minimum wages and citizens getting stuck on social benefits scared to get a job again.

b. workers unions can have so much more power, they simply need to understood the value of their workforce and reflect this into a social network. Ie social networks can start to represent groups of skilled workers that could then grow value in a dc because of their recognition and articulation of what they are. Then the union (as represented by the social network) can agree any pay agreement through say exchange of their dc value for man hours at a given team quality level.)

Remember, its all a game, it always was and it always will be. The games we play create our world. Good 'network game design' is the future evolution. A healthy competitive market network model is the way to evolve the best most useful games for us as a global society to create our world with. Keep the dc's free and keep allowing truly open internet access.

I believe the inevitable result of those two freedoms (or even just the one of true open access) is the continuing decline of the state and the emergence of a truly free global republic based on an opt in next generation social network model.

Luckily I think the states are managing to kill themselves as their own financial model and redundant system chokes them to death. Be ready to jump to a nice dc and you can be business as usual. (social networks will jump to this function as soon as the threat of government  is diminished)

I am looking forward to joining a cool social network that encourages the growth and learning of its users and gives everyone a minimum basic income if they join.


Where it can all go: Next Gen DC's

For the more technically Minded

- Bitcoin looks great as a P2P crypto currency.
- Metacurrency Defining currency as simply a set of game rules


The Defunct State Model

Doug Says it very well in this short interview

Summary of the redundant State Model from Stefan Molyneux of Freedomain Radio:


The Defunct Fiat Money Model Explained

This is a good summary about how existing fiat money works. (The new model I am describing is completely the opposite of this. Because dc's 'can be' based on a non debt based 'Real Money' model. Enable free non regulated dc competition and the dc users will naturally move to the most 'efficient' dc for exchange)


Components of a New Model: Eve Online

Eve online is a space fantasy on line world with about 300,000 users. Users navigate space and can both trade and take part in space battles. To succeed you have to be a) organised b) become part of an organisation of other players that is highly organised. Its about the best example of a social network that shows the way to what is possible. Ie An enabling infrastructure for organisation of very complex tasks by diverse social groups. Eve has highly organised corporations and even stock markets within the world. Real companies hire CEO's from eve because they know anyone who can organise and focus a corporation in eve can do the same in the real world. Its not hard to imagine how everything in this game could be transplanted to driving real corporations and teams in the real world and connecting it all with a digital currency to pay everyone with.

This video is about the online portal that lets corporation members (within eve) get at all the info they need. Its an example of the social net provider supporting information access for the tools the 'users' need and education about it. Why don't traditional workers unions do this ? And supply workforces via their 'nets' to corps. It would support de-construction a traditional corporation into an entirely new model decentralised model that is far more competitive and streamlined.

This next video is an example of just one interaction in eve. Planetary resource gathering. It almost looks too complex and tedious, dare i say, 'like work'. But that's exactly the point, and thousands of kids are learning more about management and trading in 'games' than at school.


Mark Herpel said...

""Anyone can start a digital currency if they a) know how to build the secure compute infrastructure b) know how to build trust in the service.""

GREAT ARTICLE. Digital currency is now moving to Open Source. Here is a recent paper on the subject: http://www.scribd.com/doc/44766617/2011-Observations-on-the-Digital-Currency-Industry

If you look at systems such as http://loom.cc and http://www.voucher-safe.com you will find that the 'new' money is cash-like digital currency and anonymous to use...it's excellent stuff. As more Open Source systems open up, this next year, we may all have our own 'brand' of currency or at least that is the trend.

Nice article.

Mark Herpel

servan said...

Thanks Mark. I'm reading your article now :)

Hudster said...

Great article; a deceptively simple article in fact, because you've actually nailed what most believe is a subject so complex it's beyond their comprehension: how do we move away from a state-based system? How do we move away from the current finacial system? You've just proved that it isn't difficult, it's available to anyone who wants to, to grasp.
Well done! But you could embed your links dude.. would give you more traffic as well... :)
Keep up the good work.

servan said...

@Hudster.. Am saying more than how we move away from it.. My position is that its already a fait-a-complit. Ie tis already done.. now its simply about waiting (if you care to) for it to fall down.

Anonymous said...

Thanks Servan for an intriguing, very thoughtfully worked out article.

"Current states are tax farms, i.e. they farm the people within the borders for taxes."
"Imagine what a state could do if it simply worked 'with' the citizens not against them, and provided them the information they wanted and needed."
Also the "very radical" part.

Wish you were on Facebook (Oh, you are!) for some ripple-effect dynamics ...

"Remember, it's all a game, it always was and it always will be."
True. But like you "certainly don't want your assets with any institution that has security questions", I don't want my dc chipped under the skin like zoo animals are invisibly marked by identity microchips.
So I recommend caution to any way, shape or form of global "democratic republic".
Aaron Russo on the ultimate goal

Anonymous said...

Are you censoring me?

Anonymous said...
This comment has been removed by a blog administrator.
Servan said...

Tosco.. I have no idea ?

Tosco said...

I have never tried a Facebook link before on blogspot.com, maybe that could be the reason why the comment instantly disappeared three times in a row. Let's see how it works without ...
No didn't work again. Now without any formatting tags ...
No, nothing. Mission impossible.
And now even my whole blogspot backbone is gone.
Without a trace. Thank you very much.

Tosco said...

Well, then: Happy censoring!

Servan said...

Tosco. No Censoring.. I just figured it out.. Glad you liked the article. seems blogger setting as spam.. i unspammed the first post i saw in the folder.

I agree regarding caution to global anything really. I did not even like calling the article about a global democracy but i thought those were the best words people would sortof 'get'

Tosco said...

I see.
Yes, I do like your whole "thinking out loud" very much. And don't worry about the headline.
Remembering McKenna: "It's true enough".