Does the fallout of Panama blow to ... Helvetia? Radical Economic Transparency

Does the fallout from Panama blow toward ... Helvetia?

It's like a nuke, going off in the world of secret wealth. And downwind effects will stretch to the Alps and far beyond.

Right now I am dealing with press over the Panama Leaks, which eerily resembles a scenario from my novel EARTH (1990).  The question of whether this could lead to an unraveling of secret wealth is interesting. Already being called “the Wikileaks of the mega-rich,” the Panama Papers show how many powerful people around the world have used offshore and secret accounts to dodge taxes and sanctions, or to launder money.  

Does this sound increasingly like the prelude to the “Helvetian War,” from EARTH? Oh, rest assured, I’ll have more to say about this, soon.

 
Meanwhile...

== Transparency as a tool ==

How Technology will expose corporate secrets: A fascinating article on the Fast Company site reveals how much information from legally open sources now flows through new data-handling groups who empower savvy investors to judge whether companies are worthwhile. This goes far beyond what a corporation must reveal in its financial and stockholder statements. For example “startups like Planet Labs and BlackSky Global have launched hundreds of shoebox-sized, orbital satellites that regularly photograph store parking lots, mining sites, plant smokestacks, storage depots, and distribution warehouses. This raw data captures a big chunk of companies' external operations footprints. …" 

Spaceknow analyzes traffic of all of the world’s trucks and ships among mines, depots, and warehouses to deliver what they term "radical economic transparency." Hedge fund traders can subscribe to companies like RS Metrics, which uses imaging to monitor retail traffic and predict sales at chain stores in advance of earnings reports.”

Again, if your reflex is to only see all this in Big Brother terms, then you have the wrong reflexes. These info-flows only become Orwellian when they are clutched unequally by cheating elites.  But when they empower an eco-NGO to catch and record every illegally harvested hardwood tree or illegally dumped toxin, exactly what will be your complaint then?

Soon, algorithms will sift and track this data.  If we have open access and honest regulations and regulators, then the outcome should be better capitalism and better activism, with less waste and more efficiency. 

Another area where transparency can help: Many federal and state lands agencies are critically underfunded, often unintentionally so... sometimes unable to report things like changes in flowering time due to climate change, or to inventory plant species. There is an increasing movement to get big groups of amateurs to descend on areas of public land and document everything they can over a day or a weekend - they call these activities bioblitze. 

It's part of the movement toward Citizen Science that goes back a century, that I forecast burgeoning in EARTH, and talked about here. And here. iNaturalist.org in particular has burgeoned - as of right now there are 1,791,935 observations with locations marked on the map. Check it -- and possibly have fun while doing good for your planet. 

To foil poachers...Can we teach wild elephants to use webcams?   

More efficient than hours of stakeouts, police put GPS trackers on cars, bikes, packages to catch thieves.

Wearables pioneer and transparency/sousveillance scholar and public artist Prof Steve Mann says: "My recent Instructable teaches you all how to see radio waves! A truly transparent society where technology is made transparent."

== Saved by surveillance? ==

One of the reasons we are alive today is that Dwight Eisenhower eventually got his way.  Ike knew that the top cause of war between great powers has always been fearful miscalculation of the other side’s abilities and intentions.  In the 1950s CIA and others always way-over-estimated Soviet  military strength – numbers of bombs and missiles – resulting in U.S. expenditures that, in turn, frightened the USSR leaders into maintaining a hair-trigger.  

Ike tried to persuade Moscow to accept “open skies” so that we each would be able to see each others’ capabilities and calm down. This wan’t going to happen, given Russian paranoid tendencies exacerbated by the recent second world war, plus Cold War tensions.  Indeed, the Politburo doubled down on secrecy and went into a tizzy when Eisenhower tried sending U2 Spy planes, to find out what they were doing. (The Soviets never had that problem with us.  They had only to subscribe to Aviation Week.)

We were saved, the whole world was saved, ultimately, by spy satellites – they are why you are alive right now, boyz-n-girlz – which stabilized the world.  Diametrically opposite to the lesson preached by Howard Hughes’s favorite flick, “Ice Station Zebra.”

When the Cold War thawed a bit, a series of treaties were signed to reduce nukes and back away from the brink… and finally Ike’s Open Skies treaty was signed, giving NATO and Russian planes the right – under careful conditions – to overfly each others’ territory with cameras.   Now Russia seems intent on acting on that right.  "One of the advantages of the Open Skies Treaty is that information — imagery — that is taken is shared openly among all the treaty parties," a spokesman said at a joint hearing of the House Foreign Affairs and Armed Services committees in December. "So one of the advantages with the Open Skies Treaty is that we know exactly what the Russians are imaging, because they must share the imagery with us." Still, military and intelligence officials have expressed serious concern. And Russian restrictions have limited our own views.

== Surveillance - Sousveillance ==

Could the Third Amendment be used to fight the surveillance state? Yes, the one you've scarcely heard of, because it has not been invoked in a century.  I am skeptical.  But then, my favorite is the Sixth. The one that truly prevents tyranny.

An interesting site suggests that Jeremy Bentham’’s Panopticon concept for top-down surveillance can fairly smoothly be transformed into laterally accountable sousveillance.  Since these words are both French, it is interesting to see a French thinker’s approach to all this.  Although the English translation is a bit awkward and rough, M. Ganascia makes several interesting points with his examples…

… while failing to address the key question of why these are the two only choices that we have – either (1) submitting to one-way watching by elites – and thus Big Brother forever… or else (2) taking on the citizen duty for all of us to watch – and thus ensuring Big Brother Never. Instead, M. Ganascia offers a series of interesting, brief anecdotes and examples of how we seem to be heading for #2, whether we like it or not.

One example: “Since he has been elected, President Obama has promoted the 'Government 2.0' (Gov 2.0) or the Open Government by making all the public data transparent and easily accessible to everybody. Through the Gov 2.0, President Obama has wanted to reconnect “we, the people of the United State” and the government. For instance, since February 2009, all the informations about the way public founds are used, about the frauds and the abuses and about public policy are given in the recovery.gov web site that is intended to “Track the Money” and to show, on maps, “where the Money is Going”. In a similar spirit the website data.gov provide access to all the data bases that are used by public services. For instance, data about toxics release inventory or clinical trials of drugs are now accessible to all citizens who can exploit them by themselves or with machines. The promoted Gov 2.0 is a typical case or sousveillance, that has been generalized to the administration of the overall state of the biggest and more influential nation in the world.”

== More on Transparency ==

A researcher in Russia has made more than 48 million scientific articles from journals - a good fraction of the peer-reviewed paper ever published - freely available online on SciHub, and refuses to shut it down, despite a court injunction.

One idea to beat the surveillance state: radical transparency: Hasan Elahi bares his life for all to see... a uniquely modern and with-it approach, if you have the guts. (He cites The Transparent Society .)

Much discussed lately is “tyranny of algorithms.” The tendency of even a well-meaning political and civil service system to rely upon coded procedures and weighting systems to decide budgetary allocations, or social security payments, or when a prisoner comes up for parole.  Do we need better systems to vet these algorithms and make sure they aren’t in grievous error?

Samsung has confirmed that its "smart TV" sets, with voice activation are listening to customers' every word, and the company warns customers not to speak about personal information near the TV sets, as the sets can share information, including sensitive data, with Samsung as well as third-party services.

== Announcements ==

Bard College’s Hannah Arendt Center proclaims: “We're excited to announce that edited footage from our eighth annual fall conference "Why Privacy Matters: What Do We Lose When We Lose Our Privacy?" is now available on our Vimeo account. You can watch all of the panels, including Edward Snowden's keynote on "Why Privacy Matters" and David Brin's talk on The Transparent Society, by accessing the Bard conference's video collection here.

The PBS broadcast The Human Face of Big Data nationwide in February (now available on Amazon), focusing on both the promises and perils of the Big Data revolution.

Interview on Hearsay Culture: here I speak on transparency and cyber-utopianism with David S. Levine.

And yes, I'll soon be going to Panama!  Well, thematically.  Yipe.  How right does a guy have to be, before CNN calls?

Solving World Debt Through Radical Economic Transparency

A Way Out of the World Debt Spiral?

My own debt exit strategy to Save Capitalism with Radical Transparency is likely to be the simplest, easiest and most effective you'll find... and thus it is the very least likely to be tried, since it would sharply reduce the power of the most-mighty. 

No, it isn't particularly radical.  In fact, the concept might be called "conservative" in its fundamental ethos and judged by the writings of Adam Smith. The notion does not entail any particular campaign of confiscation, higher taxes, socialism or new regulation.  In fact, it would allow a whole lot of regulations to simply fade away as no longer needed. It would certainly force very little change in the actual structure of capitalism.

The proposal is radical economic transparency. Imagine a simple requirement, negotiated into a treaty that encompassed the world, that is so simple it can be encapsulated in a few sentences.

Anyone who owns anything larger than a small farm or shop must simply  declare and avow, openly, that they own it. People should state what it is that they own, and how they came to own it.  

Oh, there is one necessary corollary to spell out.

 Further -- no property may be possessed by any set of holding companies more than two layers deep, before getting to actual human people, who admit, assert and avow that ownership.

That's it; all there is. There ain't no more.  Isn't it enough?

                             Not so radical an idea.

Note that there is nothing whatsoever socialistic, confiscatory or “leveling” about this proposal. All I am asking for is the situation that already, in theory, prevails!  Look into it. Exactly this level of traceable ownership is the basis for most of our market systems, not so much for the benefit of the state, but so that all market players, from corporations to small consumers, can have the Hayekian knowledge they need, in order to make informed market and legal decisions. 

See also my article: Transparent Ownership Treaty.

In other words... if it ain’t true, right now already, then it oughta be.

No property owned by the rich or mighty or by corporations... or by anybody at all... should be any more or less protected by the law, just because nobody knows who (or what) owns it.  The law is the law and tax policy, and every other property-related concern, would be better thrashed out in the open, by adult citizens via the open political processes that are supposed to control such things.

In other words, those who use political means to fight for lower taxes on the rich may continue to do so; indeed, the propaganda machine agitating for continued low rates of taxation on the aristocracy is in full swing and very effective.  But that is an entirely different matter from concealing the ownership path itself.  There are no bases for justifying that, political, moral or philosophical.

Indeed, the open and honest rich ought to really want this, in order to prevent their more unscrupulous peers from gaining advantage over them!

One immediate benefit? An ability to attribute accountability, when it is badly needed.  Take the case of the oil tanker that ran aground in Brittany, a few years ago, befouling half of Northern France. When it came to assigning blame, no one could even find out who owned the damned ship! Nested holding companies and flags of convenience simply should not be allowed to perpetrate such travesties.

So, what would happen to the secret wealth that’s revealed, if this plan were implemented?  Well, much of it was, in fact, completely innocent, sheltered from general nosiness, but otherwise entirely legal. So? Should the rich really get to be the ones who determine this, on completely their say-so? Privacy is one thing but  paranoia is another. We have a right to have a look, sniff a moment, and verify the aroma is good.  Enjoy the wealth, but openly, please.

Much of the rest was derived from tax avoidance -- and for that huge reservoir, a generous partial amnesty should ease the transition and cleanse a lot of consciences. And the problem with making these people live by the same rules that apply to us is...?

As for the rest of the newly revealed wealth? I have seen estimates that a substantial fraction of the world's hidden ownership would be simply abandoned, rather than allow public connections to real people. Ill-gotten gains from criminal enterprise, drug-lord stashes, the holdings of local debt-lords who have no legitimate provenance for the estates they make peasants slave-upon. At-best, this might result in the return of maybe half of the wealth that was ripped out of developing nations by their own corrupt elites. (Africa, alone, would probably see a doubling of public assets, from the restoration of loot stolen by the likes of Mobutu Sese Seko.

It is all very good for the right to blame the plight of deficit-ridden nations on excessive government and entitlements. And indeed, these are problems that need the corrective force of conservative criticism.  But that has nothing at all to do with the issue at hand, which is to fix the balance books as much as possible through the most-cleansing force of all.  Light.

And here's the crux: erasing much of the world’s official debt can take place without any confiscation or increased taxation of legally-gained assets. 

Ponder that last sentence again.  What at first seems a state power grab and tax rape is not anything of the sort.  Not inherently, at least. Not if put into effect honorably, by people who (with open eyes) genuinely want vibrant entrepreneurial markets to continue to work, ever-better.  That desire, if sincere and pervasive, should limit the “victims” of transparency to those who flee from some assets, abandoning them because they never did (or never should have) own them.

In fact, taxes on legal assets could probably go down, steeply, after such a move.  Think about that.  Especially if some of the abandoned property is then vested in the tenant farmers who actually till the soil, following the pro-market, pro-entrepreneurial methods of Hernando de Soto... methods that have vested property in the poor farmers of Peru, giving them a giant leg up toward middle-class, land-owning independence. This is a story that proves my point.  Lawful, open ownership is a goal that should inspire libertarians and honorable conservatives, easily as much as any liberal.


(It would also broaden the tax base, turning more of the voting population into tax-skeptical owners... think about it. In any event, the general transparency treaty might be accomplished as part of a no-new-taxes deal.  Would that sweeten the pot, for conservatives?)

 Ask economists.  They will tell you that open information flows are the life-blood of markets, both in theory and in practice.  According to F. Hayek, the patron saint of sane libertarians, capitalism falls apart when shrouded fogs - either of secrecy or pragmatic obscurity, or else oligarchic collusion - thwart the ability of six billion market participants to make intelligent choices, based upon all pertinent data.  Note, also, that obscurity in order to mask cheating is precisely the kind of crony-aristocratic meddling that Adam Smith thoroughly denounced, in The Wealth of Nations, when he first shed light on the fundamental principles of market capitalism.

Of course you would expect such a proposal from the author of The Transparent Society: Will Technology Force Us to Choose Between Privacy and Freedom? But in fact, I am no goggle-eyed purist! I would allow considerable exceptions to Radical Transparency -- including professional confidentiality, basic intellectual property, tactical state security secrets, and temporary caching of business strategies and product development. This is not about purist radicalism, but pragmatically seeking equilibria that can help to keep our civilization healthy. 

And free.

Entirely at right angles to the hoary and stupid and discredited so-called "left-vs-right political axis,"  this is the reform most likely to rescue and re-invigorate capitalism.  It is also the one way that the debts can be paid off -- by criminals, tax cheats, and scoundrels.

And then there is science.

 Of course, even the prodigious debt-payoff that results from transparency-of-ownership won't prime the pump forever.  Sure, economic activity will also work better and more efficiently, with ownership information available to all.  Nevertheless,these are one-time jolts. Once we've incorporated the new efficiencies and the reservoirs of illicit wealth, what will drive the engine?

Look, over the long run, there is really only one way out of our current economic troubles.  Growth.  And what propels growth?  In developing nations it can be surges in previously under-utilized labor, as we've seen in China and India.  Marx said that capital formation can come from administrative theft, but we'll assume we're moving past that kind of thing.  So what is left?

It has been proved, time and again, that technology and science were responsible for 50% + of all growth in developed nations, since World War II. The figure in Western nations during the Internet boom of the 1990s was more than two-thirds, According to Mark Anderson of the Strategic News Service. Over sixty percent of growth, directly attributable to technological advancement.

Isn't the solution obvious?  Especially after the infamous War on Science reversed America's tech-driven growth spurt, during the first decade of this century?

More tech entrepreneurship.  More and better science education. Pull out the stops to encourage innovation.  And more science...

===   ====   ===

...and now... some Misc Political Items...

Said an alert fan: “FYI. Drudge just linked to a scare piece on an Alex Jones site about the coming dissolution of America in 2017, and they used a still from The Postman movie to illustrate the story. It was a hard LOL for me, and thought you'd all like to know.” 

Indeed, while Drudge & Jones are major apologists for oligarchy, Roberts is actually less predictable, sometimes interesting, and aims a zinger on-target, toward the end.: "America’s collapse occurred when government ceased to represent the people and became the instrument of a private oligarchy. Decisions were made in behalf of short-term profits for the few at the expense of unmanageable liabilities for the many."

Of course, the destruction of the American middle class should be the biggest political issue of our time. Hence, read this article!  Right now, the blame could very plausibly be heaped upon the Neoconservative Movement, whose misrule so horrifically harmed not only the United States, but the older mantle of responsible conservatism, which it hijacked.  President Obama could “get all populist on their asses” over this devastating example of retro-social-engineering.  But instead he has spent 18 months trying to reason with the unreasonable and to reach out to the rabid. 

He now has very little time left before he winds up owning the decline.  It is time to listen to Rahm Emmanuel. Or, at least, appoint a special prosecutor over the corruption at the Minerals Management Service... and let the SP’s trail take him where it will.

In the category of “who else do you know who has been saying all this, as long as I have been?”   “A U.S. audit has found that the Pentagon cannot account for over 95 percent of $9.1 billion in Iraq reconstruction money, spotlighting  that there is little to show for the massive funds pumped into their cash-strapped, war-ravaged nation.”

Continues the report: “The $8.7 billion in question was Iraqi money managed by the Pentagon, not part of the $53 billion that Congress has allocated for rebuilding. It's cash that Iraq, which relies on volatile oil revenues to fuel its spending, can ill afford to lose.... Complaints surfaced from the start of the war in 2003, when soldiers failed to secure banks, armories and other facilities against looters. Since then the allegations have only multiplied, including investigations of fraud, awarding of contracts without the required government bidding process and allowing contractors to charge exorbitant fees with little oversight, or oversight that came too late.”  Oh, BTW... 100% of the funds in question went missing during the Bushite Administration. And yes, I have said all this since 2004. 

Of course, you all could join the Coffee Party Movement. Yes, it is based on opposition to the rancorously partisan "Tea Party" movement.  But not so much over left-right issues as red-blue temperaments and basic approaches to life.  (There are conservatives and fiscal responsibility types etc in the Coffee Party movement; as I said, it is about personality.)  No, the thing being opposed is the rancor itself.  The culture war that is being foisted on America as a way to weaken us. "Our Vision: Reason, truth & civility in public affairs; A gov't of public servants accountable to the People; A People committed to civic virtue, compassion & the common good."

http://nakedcapitalism.com/  See an interesting extrapolation about hidden wealth in offshore tax havens... and the long-term implications for us all.

As someone who has experienced the most frigid extremes of the cold war between the US and Soviet Union, Admiral Bill Owens  has made it his life's mission to try to prevent a similar chill freezing the emerging relationship between Beijing and Washington.  (I have met Owens - a singularly impressive member of the officer corps.  And all I can say, again, is thank God for the Navy.)

According to the Wall Street Journal, consumer tracking “has grown both far more pervasive and far more intrusive than is realized by all but a handful of people in the vanguard of the industry.” Tracking technology “beacons” are placed on a computer when you visit a website, gathering information on your online activity, your profile and preferences…this info is bought and sold on stock market-like exchanges…