31 January 2009

New Labour's ID Card Gift

As someone who is opposed to ID cards and the national identity register, I'm actually quite pleased that New Labour has tried to introduce them. I'm fairly sure that if they hadn't, a future government would have; it suits authoritarian governments to have maximum knowledge and control of the electorate and the British electorate seems to have such an unhealthy respect for authority that I expect that the majority would have meekly accepted it.

Given that it was always likely to happen, I'm glad that the government which is attempting to introduce ID cards is so utterly incompetent that even people who would have previously been firmly in the "if you've got nothing to hide, you've got nothing to fear" camp have changed their viewpoint after witnessing government departments haemorrhaging large amounts of our personal information. Hopefully, the opposition that's been created will be enough to discourage anybody from pushing a similar scheme for a generation.

29 January 2009

The Digital Britain Interim Report

I've quickly waded through the government's Digital Britain Interim Report and it doesn't really offer any solid conclusions, except that there will be more reports. There are, however, some interest comments in there and I've picked out a few I think are worth examining:

There is a clear and unambiguous distinction between the legal and illegal sharing of content which we must urgently address. But, we need to do so in a way that recognises that when there is very widespread behaviour and social acceptability of such behaviour that is at odds with the rules, then the rules, the business models that the rules have underpinned and the behaviour itself may all need to change.

This is the first time I can remember a government report even raise the possibility that, if there is a conflict between new technology and copyright laws, it might be best for the copyright laws to be scaled back, especially given that, in general, it doesn't appear that people believe there is anything seriously wrong with unauthorised sharing. Of course, there's no guarantee that the government won't end up making the rules more draconian, rather than less and I don't think it's realistic to expect any serious reduction in the scope of copyright in the final report, but I'm glad that the report has at least least acknowledged that introducing more stringent laws isn't the only way to resolve the conflict of interests.

The copying of content without permission by consumers is not new - it's been an unwanted companion of creative goods for as long as there have been means of copying material without paying.

Who decided that such copying is unwanted? It's clearly wanted by the person doing the copying, even if it isn't wanted by the copyright holder. Given that copyright was created for the benefit of the consumer rather than the copyright holder (or at least, that's how it was sold), it appears copying is a wanted companion of creative goods. Even if you are of the opinion that copyright encourages more creativity and therefore benefits consumers by giving them access to more creative works, it isn't clear cut. Shakespeare based much of his work on the work of others. On a more fundamental level, if copying had never been part of the human make up, we would have never been able to develop the languages which are fundamental to much of the work which we now put under copyright.

Entirely legitimate technologies such as file-sharing can be abused such that millions of people can access material, unlawfully but for free.

I'm pleased that the report acknowledges that file-sharing technologies are perfectly legitimate, when at lot of the propaganda has portrayed file-sharing as a bad thing, even if the copyright holder has given permission to share the file. The fact the first iteration of the BBC's iPlayer used P2P technology probably forced the government's hand on that one.

In the short and long term, the rights holders must find the innovations that once again enable them and their customers to respect each other's point of view.

I think that a very welcome reminder that the music and film industries have lost credibility by complaining about the impact of technology on their revenues, while at the same time completely refusing to adapt their business models to changing markets, instead relying on legislation and issuing threats to their potential customers. This anti-technology stance is nothing new; attempts by the film studios to have video recorders banned when they first appeared now seem ridiculous when you think of the whole new market that was opened up for them. The arguments the arguments they are using now are much the same as they used them.

The music industry could do worse than take a leaf out of the porn industry's book. As porn doesn't have the same lobbying power as the mainstream film and music industries, it has to adapt faster, as it has less scope to rely on legislation to protect its market. That's why porn was making taking advantage of home video players while the mainstream studios were still fighting them.

Porn has managed to survive the advent of the internet and I can't see why music can't do the same. I acknowledge that porn previously had limited distribution channels compared to the music industry and so it probably had more to gain from the advent of the internet, but on the flip side, musicians have a greater scope to earn money from live performances than porn stars do!

In the section addressing the issue of child protection and the ability to access inappropriate content (however you define that), the report says:

There should be a clearer role for trusted brands that provide a guarantee of the nature of the content that may be accessed through their product (e.g. the approach Apple has taken to making available applications that run on iPhone). This framework, combined with media literacy initiatives, will support the greater parental and personal responsibility essential to realise safely and effectively the full potential of the on-line world.

How on earth is personal responsibility aided by using technology which deliberate limits what you can do with it? As you may have worked out from some of my other postings, my view is exactly the opposite; I prefer technology where the owner decides what software is run on it, not the manufacturer. It also easy to see that the iPhone won't do the things that the report implies. Apple have restricted the range of applications that can run on the iPhone for their own reasons, but as it has a web-browser, that will have almost zero impact on the ability of the user to access on-line content. If anything, the locked-down approach makes users less likely to take personal responsibility, as it can give them a false impression that the hardware is capable of doing all their thinking for them.

Overall, the report doesn't make me optimistic about the eventual conclusions that the final reports will reach. It hints at DRM as a way to resolve unauthorised sharing, in spite of the fact that it's failed in practice and it's being increasingly abandoned for music. DRM is one of the technologies which drove a wedge between the industry and the consumer in the first place; it created as situation where the mp3 files that people were illegally downloading weren't just cheaper, they were better. Any attempt to push people to use hardware or software which is locked down would be a retrograde step. In common with many government reports, it focuses on the large corporate players in the market (media companies, ISP's, etc.) but pays lip-service to the individuals who use the internet and listen to music. Any approach which views the consumer as being of minor importance in a market is doomed to fail and rightly so.

I'll probably post a bit more on this subject when I've read through the document again.

28 January 2009

Minister Talks Sense on Copyright

Just to prove that I'm not deliberately negative about everything the government does, I like to offer a bit of praise when it is (all too rarely) due. This is one of those occassions.

In an interview with the Times, David Lammy said that the government had ruled out legislating to force ISPs to disconnect people who illegally share copyrighted material over the internet.

The whole "three strikes" approach was always a stupid idea. It would have violated the basic principles of justice, in that the accused would have been deemed guilty based purely on the existence of an accusation, with no obvious right of appeal to the courts. The punishment would also have been completely out of proportion to the offence. I expect that the Carter report will end up proposing a stupid resolution to the situation, such as the predicted introduction of a levy on ISPs to be paid to the music industry, but for now, I'm going to enjoy the fact that someone in the government is at least making the right noises.

The one thing that has disappointed me about the reporting of this story is the mis-use of terminology by the media. The use of the term "piracy" has been common. Piracy is robbery committed at sea. The use of the word to refer to illegal copying is a piece of propaganda to make it appear like a serious offence, when it clearly isn't. The BBC
report started with the sentence: "The UK's Intellectual Property minister David Lammy has said the government will not force internet service providers to pursue file sharers." This implies that file sharing and its associated technology is in itself illegal. In reality, it is used perfectly legitimately in a lot of circumstances, such as distributing free and open source software. I get the feeling that the positive uses of P2P are being suppressed as they are a barrier to the prohibition of P2P technology, which is clearly what a number of groups want, for censorship as well as profit making purposes. On the positive side, the false description of copyright enfringement as theft seems less popular than it was.

23 January 2009

The House of Jurors

To clarify on a comment I made in my post on referenda, I'll spell out my thoughts on the Upper House.

I have mixed feelings about the House of Lords. In principle, I don't like the idea of a legislative body which has its members either appointed by politicians or given their position due to accident of birth. In practice, however, it generally seems to work well. The House of Lords tends to produce decisions which are more rational and considered than those arrived at by the simplisitic populism that seems to dominate the House of Commons.

It's a difficult connundrum to resolve. One one hand, representative democracy has a tendancy to degrade into low brow vote seeking, when the whole point of the system is to ensure that the people making the decisions take a more in depth approach than would be possible with direct democracy. On the other hand any form of democracy requires that no citizen starts off with a greater right to become involved in decision making than any other.

One suggestion for reform of the House of Lords is to make the house an elected one, but with its members elected for a long term, with members being prevented from standing for re-election. Such a system would reduce the tendency for vote seeking and it's one I'd be fairly happy to see being used, but it would have a tendency to mirror the House of Commons, so I wouldn't view it as a perfect check on the lower house.

A more radical solution would be to make use of the institution which has traditionally served as a check on the abuse of power - the jury. I have in mind a situation where 200 people are randomly chosen from the electoral register to serve for four years, with an option to refuse. The appointments could be made a quarter of the house at a time, so that each year, 50 people would leave and be replaced. That would insure that at any time, three quarters of the house would have a least one year's experience, removing the prospect of the lower house taking advantage of a completely inexperienced house.

The house could make use of the courtroom format. Once legislation was approved by the lower house, it would be presented to the upper house by two advocates, one supporting it and one opposing it. Only with the support of both houses would legislation be enacted.

I think it has the main advantages of both election and hereditary appointment. It has the fundamental equality necessary in a democracy, but provides the freedom to make considered decisions free of electoral pressures. It also has one major advantage over both of those system; it creates a house which is truly represntative of the population. One of the issues that politicians have been wrestling with for years is the lack of diversity in the House of Commons, which creates the sense that, while the house is elected, it isn't representative and creates the sense of a political class which isn't really part of us. The only solution which has been attempted so far is positive action, such as women-only shortlists, but forcing candidates on constituencies in that way can make the sense of alienation from the political process even greater. A house of Jurors would not suffer from that issue, as statistically, representation would be in proportion to the gender, race, age range, political views, religion or whatever characteristic you want to pick, of the general population. The only thing which would skew that would be if certain groups were less keen on taking up a seat, but if under-representation is through choice, I don't see that being a problem.

There's no guarantee that the system would work flawlessly and there's no guarantee that the house would show the same calm consideration that the House of Lords tends to, but it would certainly have more democratic legitimacy. If we still believe that the need to be found guilty by a jury of your peers before beng convicted of a crime is the best protection against tyranny, then why not require that a jury of your peers judges a law to be fair before it applies to you?

22 January 2009

The Cult of the "Hardworking Family"

Of all the emotive devices and sound bites used by politicians, the abstract “hardworking family” is the one that makes me the most nauseous. It isn’t limited to the UK either, as shown by Obama’s chosen labour secretary, who promised to "improve the opportunities for hardworking families."

We elect politicians to represent all of us, so why do they think it’s acceptable to focus all their attention on “hardworking families.” If it were just the “hardworking” or “families” it would be bad enough, but it seems that you’ve got to tick both boxes before you are worthy of appearing on your representative’s radar. Why do spinsters deserve to be treated as second class citizens? Why do families that want to work less and spend more time at home deserve to be ignored? I don’t remember Lincoln talking about government of the people, by the people for the hardworking families.

The idea the hard work makes you a worthwhile person stretches across the orthodox political spectrum in an almost religious worship of the idea that spending time in a way that doesn't increase GDP is almost treason.

The whole idea offends my libertarian sensibilities; I don’t think the state has any right to tell me how hard to work. My life is my own and so long as I’m not harming anybody else in the process, my lifestyle choices should be mine alone. If the government wants to improve opportunities, it should do so for all, without prejudice.


Devil's Kitchen made a fair point in response to my previous piece, which is that "hardworking families" as a term to describe people who are "married with children" and also have a "proper job," is sometimes contradictory, as many government policies are aimed at giving those people the opportunity to work less. It is almost as if the government has put the concepts of "hardwork" and "family" on such high pedestals that if you satisfy both requirements by forming a traditional family unit and holding down at least one job, it believes you must be such a worthy person that you deserve to be given special treatment and let-off the "hardworking" element a bit.

The wording in my first set of comments was a bit sloppy. I said "Why do families that want to work less and spend more time at home deserve to be ignored," which could be interpreted as supporting the kind of "family friendly" policies that the government has been promoting, which isn't what I intended. What I had in mind was the way the tax credit system is only available to those with children who work over 16 hours per week. It's an arbitrary threshold above which the state judges you to be "hardworking" enough to deserve to have your tax burden eased, but below which it views you as undeserving. Of course, if you don't tick the "family" box either, you have to work even more before you become worthy of a rebate.

It's slightly off topic, but this is one of the reasons I like the citizens' dividend approach. By giving everybody the same cash payment, irrespective of circumstances, it can provide a safety net without enforcing the kind of social pre-conditions which are at the core of the current welfare state.

21 January 2009

Is This Really a Bank Bailout?

The mainstream media has been referring to the government's latest package of assistance as a second bailout for the banks (such as in The Times) but is this really another bank bailout? Unlike the first bailout, there hasn't been any suggestion that the banks will fail in the short term without this help. The reason the government is taking this action is to increase the amount of credit the banks are prepared to offer. This isn't something that the banks need to happen, it is something the government needs to happen. The banks could probably plod along offering more expensive lines of credit to safer borrowers, but that would result in the debt fuelled bubble the government is sat on bursting sooner rather than later.

The first bailout might have been an attempt to bailout the banks, but this is an attempt to bailout the government.


Having written this post, I read a speech by the Governer of the Bank of England, given the day after the measures were announced, in which he said:

"The package of measures announced yesterday by the Chancellor are not designed to protect the banks as such. They are designed to protect the economy from the banks."

So the view from the inside seems to be that it isn't a bank bailout.

The Stupidity of Price Controls

First Bus have announced a fare increase in Greater Manchester and the predictable knee-jerk response from a number of simplistic/opportunistic local politicians has been to call for the local passenger transport executive to introduce price controls.

It's a prime example of the common politician's fallacy of supporting a course of action based on the positive effects, while completely ignoring the negative effects.

In this case, one of the most likely side effects is that some of the less profitable routes will cease to be viable if the operator is forced to charge lower fares, resulting in services being withdrawn. I imagine that this is not what the politicians in question want. It will probably result in protests from passengers, at which point the same politicians are likely to push for a subsidised service to replace the one which has been lost. The end result will be a service which is no cheaper, but where a proportion of the cost has been moved off the customer and made up with tax revenue.

That's a poor way of running a service, because it becomes less responsive to the demands of the customer and more responsive to the demands of politicians. Buses become less likely to go where customer demand is and more likely to go where it is politically expedient for them to go.

The basic premise of any service should be that its success or failure is determined by the custom it gets and that can only happen if politicians stop interfering

20 January 2009

Free Banking Needs a New Tax System

Over at the Guardian, George Monbiot has published an article suggesting that alternative currencies could be a way to keep businesses running without giving increasing levels of assistance to the banks. It's a suggestion which touches on LETS and free banking, which I'm generally supportive of, although I'm not sure how successful the approach would be in tackling the current situation in a short time frame, given the scale of the problem and the increasing importance of on-line trade.

Playing Devil's Advocate, the only problem I can envisage with employer issued scrip (aside from the employer going bust) is the situation which arose in the cotton mills. Many of the mill owners paid their staff with tokens which were redeemable at the owner's shop, which generally sold shoddy and over-priced goods. In effect, it allowed the mill owner to suppress wages after they had been paid by increasing shop prices or reducing quality. In general, I wouldn't expect that to be a concern now, except in areas where there are few employers working to attract staff. The most likely would be the local authority, which is another reason why getting as many activities as possible out of government control and into a competitive marketplace is a good idea.

The real problem for governments when alternative currencies are used is that they break the tax system; how can somebody be expected to calculate their tax free allowance when they're being paid in all manner of different tokens for goods and services, not Sterling? Even with a flat tax taking a fixed percentage of whatever people earn irrespective of the currency, it would make financial planning extremely difficult. The best way I can see to resolve the problem would be to move to a tax system based on resource use charges (land value taxes, oil drilling licences, broadcasting licences, etc.) and user fees for government services, all levied in sterling. That way, tax would only be levied when the individual is transacting directly with the state, so if somebody didn't directly obtain any government services or natural resources, they would have no need to pay taxes directly and therefore would have no obligation to use Sterling. With no taxes on sales or income, alternative currencies would be free to flourish while the government would be able to levy all taxes in Sterling. People would be free to opt out of having to deal with the state financially and I think that has to be a good thing.

16 January 2009

Why I Don't Like Referenda

In my comments on the Manchester Referendum, I said I wasn't a fan of the use of referenda, so I thought I should explain why. The idea of each citizen having a direct and equal say on each public policy decisions is perfectly reasonable, but the practicalities lead me to believe that's an inferior option to representative democracy. The one possible exception to that would be major constitutional matters, as the danger of allowing politicians to control the extent of their power could outweigh the problems associated with referenda.

The main objections I have to referenda are:

- They lead to ill-considered decisions. One of the reasons for having representative democracy is to ensure that the people making the decisions have the time and resources to study the issues and make informed decisions. Of course, it doesn't guarantee they will, but the chances are much better than if the whole population has to make the decision, as many won't have the time or desire to study the issues and the large number of voters makes rational ignorance much more of an problem.

- They can produce contradictory results. For example you could ask the electorate "Do you want to pay less tax?" and "Do you want to see significantly more money spent on public services?" in simultaneous referenda. I think there is a reasonable chance that both could result in the majority saying "yes," which would create a near impossible situation for the government. If the referenda were binding, the only obvious options would be to increase borrowing or inflate the money supply in order to meet both obligations.

- They reduce democratic accountability. At present, if the government follows a course of action and it fails, the responsibility lies with the government. If some of the decisions were to be made by referendum, the government could always claim that decisions made in referenda caused the problems, rather than their own decisions.

If there is a genuine need to take certain decisions out of the hands of politicians and put them back into the hands of the electorate, using some kind of jury system seems like a superior approach to me, as it would resolve the first issue. It is that kind of jury system which I'd like to see used as a replacement for the House of Lords, but I'll talk about that in a separate posting.

15 January 2009

The Equitable Life Farce

The government has indicated that it will pay some limited compensation to those affected by the collapse of Equitable Life after the Parliamentary Ombudsman ruled that the public were misled by a "decade of regulatory failure."

To me, this is another indication that the real problem is not the specific regulations or the people enforcing them, but the whole principle underlying financial regulation. The idea that the government can, through regulation, eradicate risk from investments is fatally flawed. All that happens is that customers stop thinking for themselves and put excessive amounts of faith in the regulator, treating the absence of condemnation from the regulator as a sign that a particular institution is failure-proof, which is never the case. At the same time, the institution will focus on satisfying the regulator rather than reassuring the customer directly that the company is sound. The inherently formalistic approach of a regulator will always leave more loopholes to exploit than scrutiny by the many participants in the market, who will seek a fairly fluid and unpredictable set of reassurances.

The stupidity of the situation is compounded by the fact that Equitable Life is a mutual, so in effect, the government will be compensating policyholders because it didn’t effectively protect them from the actions of their own company.

If the Ombudsman has concluded that the regulator has the potential to mislead the public to such an extent that they will accept risks that they wouldn’t have accepted in the absence of the regulator, there is a solid argument for reducing the role of the regulator and introducing a greater level of uncertainty and caution into the market.

13 January 2009

Copyright is a Two-Way Deal

Just when I thought DRM might be dying a slow and satisfying death, it raises its odious head again, in the form of DECE, a consortium of hardware manufacturers, software providers and large film and music companies. DECE's aim is to set up a system of digital restrictions management which will allow sellers to control exactly how music, films, etc. are used.

The mainstream media seem to want to portray DECE as an attempt to fight back against Apple, but in reality, it is an attempt to fight back against the consumer. Market froces have created a situation where DRM-free MP3s are an increasing part of on-line music sales and Apple have announced that they will be removing DRM restrictions on the music they sell. It seems that consumers generally don't want to rent their content, they want to buy it. This is at odds with the media companies' desire to keep control over what the consumer does with content in order to protect their revenue stream.

It is often forgotten that copyright is a two way deal between the produced and the consumer. The theory is that the consumer temporarily gives up some of their freedom to use material, in the expectation that more material will be produced. The consumer retains certain freedoms, such as "fair dealing" rights, which would be too big a price to pay for extra production. Producers (or the companies that control producers) tend to misrepresent copyright as something purely for their benefit which entitles them to restrict the end user's freedom as they see fit, by using mechanisms such as DRM.

DRM violates the social contract that underlies copyright and should void it. In short, if producers use DRM, they should expect to lose copyright protection. If they aren't keeping to their side of the bargain, they haven't got any right to expect the consumer to stick to their side.

Unfortunately, governments tend to be too weak and corrupted to operate copyright as anything other than a one sided deal where the media lobbyists are given greater control and the consumer is given nothing in return. In that kind of environment, while copyright infringement may be legally wrong, it can't reasonably be viewed as morally wrong.

09 January 2009

Opting Out of the Communications Database

I was considering posting about the government's plans for a centralised database of all internet and e-mail traffic, but then I realised there was probably no point. I'm confident anybody looking at this will already know about the plans and I don't think it needs me to spell out how horrific an abuse of power and invasion of privacy it is. With the government we have, I don't think any amount of public outcry or reasoned argument will stop them pressing ahead with it either.

So rather than spelling out my objections to the plan, I thought I'd tell you what I'm doing to "opt out." I'm not massively technologically knowledgeable, but I've taken a few fairly simple steps to ensure that my entry on the database will be as small and uninformative as possible.

As I've said previously, I use free and open source (FOSS/FLOSS) software. I use Ubuntu as my operating system, Firefox as my web browser, Truecrypt for file encryption and GNUPG for e-mail encryption. I think that approach is a no-brainer if you want to protect your privacy; if what's going on under the bonnet of your software is hidden from you, you've no way of knowing what it's doing with you data.

The centralised database won't create any new security issues, but it will make one problem worse - Your ISP will be a massively increased security risk. You have to assume that any information they obtain about your internet use will automatically be provided to the government, with no guarantee about how it will be used. On that basis I think it makes sense to limit the amount of information they have.

The first step I've taken is to install
Tor and Tor Button. In combination, they allow you to move your Firefox internet traffic through the Tor network, which, in simple terms, passes your traffic through a number of third parties, so at no point does anybody in the middle know who both the recipient and the sender are. There is a trade-off, in that it slows down the connection speed, but it is easy to turn off if needed and for websites without too much multimedia content, I've found the speed tolerable.

E-mail presents a separate problem. I already encrypt my e-mail using
GNUPG when possible, which keeps the contents of the e-mail hidden, but it does nothing to conceal who you are sending the e-mail to. There are ways of making a desktop e-mail client more secure, but it's difficult not to leak some data, such as who your e-mail provider is. The solution I've gone for is to use webmail filtered through Tor. For encryption, the FireGPG add on for Firefox performs GNUPG encryption in the browser. An important security consideration now is using an e-mail provider you trust not to leak your information, ideally located in a more privacy friendly jurisdiction than the UK. There's possibly also some value in using an e-mail address that doesn't contain any identifying information, like your name, so it's less easily tracked back to you, because once the e-mail has left your provider, the privacy of the data depends on the steps taken by the person you're sending it to.

No system of privacy protection is ever going to be perfect, but I'm fairly confident that the steps I've taken should make it much less likely that my data will fall into the wrong hands.

05 January 2009

Patent Value Taxation

As I've said previously, I dislike the patent system. Patents are a government granted monopoly, which is something I instinctively dislike. The principle of giving a temporary monopoly to inventors to encourage innovation and the publication of their inventions, thus allowing everybody to benefit from innovation in the process, has some merit in theory, but in practice, innovation seems to occur irrespective of whether or not the innovation is patentable. The current system acts more as a protectionist racket, allowing corporations to patent trivial developments in order to block competition. It also stiffles innovation in many circumstances, as it makes it difficult to create new inventions which rely on other patented inventions, particularly if there are a number of them held by different people. On that basis, I'd like to see the whole system abolished.

Realistically, I don't envisage that happening any time soon, given the lobbying power of beneficiaries of the system, so I would suggest another approach in the shorter term; if a similar system to self-assessed land value tax were used, it would enable inventors to retain an income stream, but it would capture for the public purse a proportion of the value created by the government granted monopoly, it would discourage frivolous patenting and it would bring inventions out of patent if they became commercially non-viable.

Here's how I would envisage the system working: At the point of filing the patent, the registrant would be required to specify how much they value the patent at. Throughout the (currently 20 year) period of the patent, the holder would be required to pay, say, 5% of that amount per annum, possibly with a small grace period at the start to allow the inventor to market his invention. The patent valuation would be publicly available and anybody prepared to meet that valuation could buy the patent from the holder. The holder could revalue the patent upward (but never downward) at any time, with the holder then paying 5% of the new valuation. If, at any point, the holder felt that the value of the patent had fallen such that it was not worth paying the 5%, they would be free to cancel the patent, with the invention falling into the public domain.

I would expect such a system to result in a major reduction in the number of patents filed and in many cases, a shortening of the length of patents, which would enable the public to benefit from freely available innovations more quickly and would free inventors to build on a larger base of usable knowledge.