Ponzi Scheme? Try protection racket.

In reply to http://whatmatters.mckinseydigital.com/climate_change/time-to-end-the-multigenerational-ponzi-scheme

There's a simple reason why there has been no market solution to pollution. At the dawn of industrialism, wherein real libertarian capitalism was transformed into corporatism, the industrialists influenced governments to place a moratorium on liability for pollution. That means people, as individuals or as a class, cannot seek legal damages due to the actions of polluters in a meaningful fashion. If an industrialist built a factory down the street from my house, covering me in soot, filling the air with stench and ultimately giving my whole family lung cancer I could not sue him for damages to the value of my property or my health.

Thus polluters were given free reign to destroy public health and local environmental quality, and unknown to the people of the time to eventually set us on the path to global catastrophe. If this hadn't happened he cost of operating a gross polluting industry after legal liability would be ruinous, and thus they would not get built and would not exist and we would not be having this conversation. From the onset they would have been forced to innovate in ways that reduced pollution and used energy more efficiently, or to give up on their industrial pursuits. That was seen as a problem to be avoided at the time of course. Clean technology existed at the time; renewable energy and the chemistry necessary to burn fuel cleanly or else capture the pollution predates the industrial revolution. It's only taken the past 200 years to make that technology efficient enough to profitable when the alternative, gross environmental destruction, is protected from liability.

Note what happened here was that the state got in bed with industrialists to *bar* the natural, decentralized, market-driven solution, in this case legal liability, in order to support the desires of the few over the needs of the many. This is *not* capitalism. This is not what free-market capitalism would have engendered, because in free-market capitalism the state may not insulate a private company from liability for damages they caused.

Subsequent efforts at government intervention, such as the creation of the EPA, failed and continue to fail because we place the power in a handful of authority figures to sort out the mess and make the right decisions. Even with the best intentions the regulators act on flawed information force-fed to them by lobbyists who are working, secretly or openly, on the behalf of the industry that is ostensibly to be regulated. The outcome is that regulations favor the interests of the most successful lobbying group, always to the detriment of the competition, the public, and the environment.

So my solution is not the government; the government keeps screwing it up. First they created the problem through regulation on liability, then they deepened it by attempting to address it with more regulation and doing so poorly. I say get the government out of the way and start dividing up the liability. Let's add up the number of cars, factories, cigarettes, and other air polluters in, say, the city of Los Angeles and hold their creators proportionately liable against the costs inflicted on the public in terms of medicine, property devaluation, and the constant cleaning necessary to remove the soot and grime and repair the physical damage. The government doesn't need to help here, it just needs to leave the court system open to handle all the class-action lawsuits. It can spend all that EPA money on hiring new judges to handle the cases instead. Forget carbon taxes and cap-and-trade; forget clean energy incentives. Legal liability is far more terrifying and far more effective at keeping industry in line.

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OnLive - Gaming on the Cloud

So I saw this one coming about 12 years ago. Really, anyone who understands Moore's Law and economies of scale should have. At the time everyone I tried to explain this to thought I was crazy - remember, this was the age of the 28.8, nobody could conceive of full speed high-res streaming video and virtually no latency. OnLive, if you haven't heard, is a gaming service wherein all the demanding parts of the game are managed on the cloud; A.I, graphics, everything is done by remote servers which stream the audio and video to you over the internet. This means virtually any PC or television in a home with a high-bandwidth internet connection can play any game any time, no special hardware required.

I don't know if the timing is right, but I believe that within 10 years this will be the gold standard for all rich media services. Think about it: if you're a gamer you probably spend on average 300-500 dollars per year on hardware between console upgrades and gaming hardware for your PC. Given the rapid depreciation rate of that hardware and the fact that you only use it 10-20% of the time it spends in your house, this just doesn't make any sense. That's not to mention the hassle of upgrades, patches, driver updates, operating system issues, viruses, and the competing needs of other members of the household. If you were just renting time on the same hardware pro-rated by the hour you'd cut your hardware costs to 30-100 dollars per year and probably save a good 100 or more hours in headaches. That is exactly the value proposition that is going to make OnLive, or a service like it, wildly successful in the next decade.

There are a few implications to this that should be considered. One is the fact that the standard 250gb/month bandwidth cap that the major ISPs have been claiming is more than sufficient for the foreseeable future is right out the door. Without revealing the math, this service alone is going to require around 200gb/month for your average gamer. Innovations like this are also going to drive consumer demand for network neutrality, as nobody wants to be stuck with the internet provider who isn't getting payed off by their rich media service of choice for preferred bandwidth. Imagine for instance moving from one town to another and finding out that your ISP doesn't consider OnLive a 'preferred' service and thus doesn't allow it to run on their full advertised bandwidth. This is a situation where the power is going to end up in the hands of the consumer, who will demand maximum choice with minimum hassle.

We'll see how it plays out. I wish OnLive and everyone like them the best of luck; I'll definitely be a customer.

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Spending Our Future

I came across this at Reason Magazine. It shows by comparison how the spending programs of the past year add up to the largest spending in United States history, greater even than the Iraq War, the New Deal, or World War II. Pretty crazy stuff.

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Everybody Should own a Copy of the Anarchist Cookbook

I think you, and everybody you know, should make a point to find and read a recent edition of the Anarchist Cookbook, cover to cover. No, wait, hear me out. I don't say this because I think we should all be prepared at any moment to become violent revolutionaries. I say it because I think it's important to know how easy it is to make a weapon, and then to contemplate a much deeper point that is implied by this fact. Why, exactly, don't people do it?

If you don't know what the Anarchist Cookbook is, it's a collection of recipes for making everything from hacking tools to working guns to bombs out of household items. The original Anarchist Cookbook was a physical book written in 1971 as a protest against the Vietnam War (you can read more about it in the Anarchist Cookbook Wikipedia entry). Sometime in the more recent past it found its way onto bulletin board systems, then to IRC, FTP archives, p2p, and intermittently the world wide web. From there it evolved into a sort of wiki project before there was such a thing as a wiki; contributors added their own recipes and the best made it into highly circulated releases that are still easy to find today. Some, if not most, of the recipes are unreliable or more dangerous to you than they are to your hypothetical victim.

I think it's important for everyone to read this book for a very simple reason. The Anarchist Cookbook illustrates how easy it is to create deadly weapons out of common materials. Your average radio-detonated IED, for instance, carries around a 15 dollar material cost. For less than the price of a ticket and a bag of popcorn anyone could easily kill or harm every attendee in the theater. It doesn't take a genius to make weapons, either. It might require a good high school education to design some of these devices but any literate 5 year old could easily follow the directions. Furthermore it's impossible to prevent or even provide reasonable restrictions on creating them. You'd have to take away people's rights to clean their homes, bleach their laundry, open their garage doors from afar, scrub their dishes, change the oil and break fluid in their cars, fertilize their gardens, etc. without licensing from authorities for the appropriate materials. Obviously that's not a world any of us wants to live in.

Now step back for a moment and consider the view of the world as presented to us by the government and the media. One in which we are surrounded on every side by dangerous criminals and terrorists. People from whom we need protection by paramilitary police forces, no-warrant wiretapping, and restrictions on the purchase of any conventional weapon, not to mention a third of the entire global budget for military spending here in the U.S. The question posed to us then is: why don't massive terrorist attacks happen every day? Why are there not mad bombers slaughtering innocent people in every small town across the world? Why do we not don full body armor and CBRN protection gear every morning before checking the mail? Plainly it is not because it is difficult to cause death and destruction, a skill mankind perfected in the bronze age and hasn't really improved on since.

Could it be, perhaps, that human beings are not as stupid, violent and dangerous as we are lead to believe? Could it be that despite the availability of the raw materials and pertinent information to cause mass murder there are just not that many motivated murderers? Could it be that we are safe not because of massive government intervention, who are powerless to protect us from our own household items and the looming danger of the terrorist weapon warehouse known as "Home Depot", but because there are just very few people who have the desire to hurt others? Maybe we don't need all this "protection", all this anxiety, after all. Maybe safety is impossible but danger is highly improbable and that's the simple equation that describes risk in our daily lives.

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Google Latest Victim of News Media FUD Hydra

I came across an article on BBC regarding the recent attacks against Google by the news media. The basics, if you're not into link chasing, is that following the NAA's annual industry meeting, they've been pushing the blatant lie that Google and other search/media aggregates "steal" their content for profit. In reality what they do is post headlines and small previews of news stories cosslinked to the originating website, which generates traffic and ad revenue for both companies, much like bloggers link sources but rarely copy-paste more than a short snippet. For the past few weeks Big News has been spreading this drek in everything from their nightly news and commentary to interviews on the Colbert Report. Personally, I'm not surprised at all - this is just another head of old media's FUD hydra.

This beast's heads include everything from undermining the credibility of bloggers to attacking the accuracy of community information aggregates like wikis and painting new communication and entertainment media like online games, forums, chat, and social networks as havens for perverts, criminals and terrorists. It's similar to the continuing FUD attacks Microsoft uses against open-source software, only more insidious because they exploit their position as direct media outlets to attack their competition. They also drive further wedges into the generational gap, pitting parents and grandparents against the current generation and turning the youth of families into suspects. This destructive and narrowminded campaign is destroying their relationship with their own prospective future audience and ultimately sealing their fate.

Murdoch and his News Corp. have always been at the forefront of these attacks, evidenced by Fox Noise's frequent attacks against everything internet-related in ridiculous fear-mongering "news" pieces, but most of the other big media companies share at least some of the blame here. They're going down in flames because of it, too (News Corp's stocks have plummeted from around $25 to $6/share in the past 18 months or so). Oh well, it's their funeral. I don't think Google does itself a service by dignifying it with a response, but it's nice of them to pretend at making an honest effort to save these assholes from themselves.

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