Finance War No More

Source: DailyAnarchist.com

Since World War One the United States has engaged in wars of aggression and military occupation in Central America, the Caribbean, Europe, Africa, Asia, and the Middle East. To this day the US military occupies 56 bases in Germany, 113 facilities in Italy, and 84 in Japan. They have an armed force in the “demilitarized zone” on the Korean peninsula, and hundreds of bases in at least 70 different countries.

“These facilities include a total of 845,441 different buildings and equipments. The underlying land surface area is in the order of 30 million acres. According to Gelman, who examined 2005 official Pentagon data, the US is thought to own a total of 737 bases in foreign lands. Adding to the bases inside US territory, the total land area occupied by US military bases domestically within the US and internationally is in the order of 2,202,735 hectares, which makes the Pentagon one of the largest landowners worldwide (Gelman, J., 2007).”

The US government spends hundreds of billions of dollars every year on military activities, to buy equipment and supplies, to deploy forces around the globe, to conduct surveillance from drones, aircraft, and satellites, and to “command and control” all these various people and things all over the world. Some recent estimates suggest that a trillion dollars or more has been lost or mis-allocated by the US military.

How is it possible to finance all these wars, all these military bases, all this activity? Quite simple, really.

In December 1913, then-president Woodrow Wilson signed the Federal Reserve Act into law, enabling the government to borrow as much as it wants. Lately, it has borrowed trillions of dollars.

As an anarchist I am against war, and I want nothing to do with it. It takes at least one government, and typically more than one, to have a war. Anarchists have never dropped nuclear bombs on cities, have not decimated populations with artillery strikes, have never committed genocide, and don’t need euphemisms about collateral casualties, because anarchism doesn’t kill civilians in war. But as a humanitarian I want more than to know that my political philosophy isn’t militaristic. I also want to have no part in financing wars. It turns out that it’s rather difficult to avoid military finance. There are so many taxes on so many things that it’s difficult not to participate in some way, at some level, in the system that collects money and makes war possible.

Several hundred years ago, author Etienne de la Boetie wrote about ending tyranny by withdrawing support from the tyrant. You don’t need to place your hands upon him and push him over, according to de la Boetie, you simply stop supporting him. The tyrant doesn’t have enough eyes to spy upon everyone, he needs you and your neighbors to rat each other out. The tyrant doesn’t have enough fists to beat everyone up and keep them in line, he needs police and an army or perhaps some brown shirt thugs to do that sort of work. Most of all, the tyrant needs money to pay for these things.

In the mid-90s, a number of technologies were developed by people like David Chaum, Doug Jackson, Bernard von NotHaus, and others to create alternative monetary systems. Some of these were very much in line with the ideas of FA Hayek’s essay, “The Denationalisation of Money.” For example, certain ideas of Chaum were used by Digibank to create a system of digital bearer instruments that prevent double-spends. Jackson created E-gold.com which made gold, silver, platinum, and palladium available in digital form for buying and selling. Von NotHaus created Liberty Dollar, which was a paper, silver, and digital currency.

As someone very interested in alternatives to government-issued paper currencies, I found these experiments fascinating. The success of one or more of these currency systems would have presented an enormous opportunity to avoid the bloody consequences inherent in the mainstream banking system. For a time it looked as though E-gold would be very successful. It began growing on an exponential curve in the period from 2001 to 2006. Unfortunately, that growth generated a great deal of interest by law enforcement organisations. The system reacted to protect itself. Jackson was accused of money laundering, and over a period of years became convinced to plead guilty to at least one felony charge. Naturally, doing so prevented the company from obtaining money transmitter licences. After April 2007, E-gold was a bust.

The situation with Liberty Dollar was similar in many respects. Von NotHaus did not plead guilty, however a jury in North Carolina found him guilty of a charge that amounts to felony counterfeiting. For various reasons he still has not been sentenced, and it is difficult to appeal a conviction prior to sentencing. Since September 2007, the Liberty Dollar has been kaput.

Other very interesting experiments took place. For example, a former mainstream banker, James Turk, created a digital gold storage system called GoldMoney.com. The GoldMoney system was based on the Channel Island of Jersey, had gold storage in London, and provided for high levels of “know your customer” compliance, with copies of passports and such for new user accounts. For a time, GoldMoney also provided for transfers between user accounts, so it could be used as a medium of exchange. However, presumably due to fears of government intervention, GoldMoney closed this feature of its system. It remains a remarkably successful gold storage facility, but it is no longer a medium of exchange.

Into this context of experiments with alternative monetary systems, their destruction by law enforcement, and a continuing desire in the market for better money, came Satoshi Nakomoto. In 2008, Satoshi distributed a famous white paper about Bitcoin. In 2009, he released the open source software Bitcoin Core which is the basis of the Bitcoin technology. By 2010 he had mostly faded into the background, assigning the important domain names to others and withdrawing from public life. Rumors abound about who Satoshi is, whether a person or a team, what age, what gender. Many people believe that Satoshi took about a million Bitcoin with him when he went away. At current market prices, those Bitcoin would be worth about $500 million.

Bitcoin is open source and decentralized. Rather than using a central server to process payments, as with the E-gold system, Bitcoin uses a distributed array of Bitcoin “miners” who process payments, typically for very small amounts of Bitcoin. Miners add processed data about transactions to what is called “the blockchain,” a public ledger of every Bitcoin transaction.

Bitcoin has inspired dozens of similar currencies, such as Litecoin, Dogecoin, and applications of the blockchain methodology to other concepts such as domain name ownership (Namecoin) and other ownership records. Widespread market acceptance of Bitcoin has made it possible for billion-dollar annual sales corporations such as Overstock.com and Dell to accept Bitcoin. Today, the total amount of Bitcoin in circulation figures in the billions of dollars worth. Its decentralized nature makes it hard to target in the way that E-gold and Liberty Dollar were. There is no single point of failure, no central servers, and no particular individuals to focus upon.

However, Bitcoin has a number of deficits. It does provide a digital bearer instrument. However, its interfaces with the mainstream financial system create enormous risk for a given user. Once an individual’s wallet is tied to a user’s banking information, credit card, social media accounts, or other footprint, it is no longer anonymous. Some recent ventures, such as Coinbase, attempt to perform detailed “know your customer” due diligence on every user in order to attempt to comply with anti-money-laundering laws. Others, such as Trucoin, use social media logins for Facebook and MAC address information from wireless routers to establish the geographical and other particulars of their customers. Apparently, Google created a huge database of wireless routers when they did all that “war driving” for “Street View.” Such databases are available, for a fee, to merchants. Which ought to make you go right to your web browser and change its “about configuration” to turn off geo-location.

Users continue to seek tools that can safeguard their privacy. The more you get involved in technologies that examine or discuss your personal activities, the more cognizant you may wish to be about how those technologies give out your information. Some people seem to be reasonably happy being oblivious about their privacy, but that isn’t necessarily a good idea.

You are probably aware that your cell phone talks to cell towers, without your involvement. You may not be aware that some people have been put in prison because they were convicted based on conversations they had near their cell phones, when those phones were turned off.

If you really want to keep your private conversations private, take the battery out of your phone, and watch the person you are with do the same. Consider the merits of a Faraday cage in the event you worry about unknown transmitters signalling your private conversations.

You are probably aware that e-mails travel circuitous routes, at times. You may not be aware that Edward Snowden’s documents reveal that the NSA captures every e-mail that crosses through routers in the US, which is the vast majority of all e-mails. If you want to keep your e-mail discussions private in any meaningful sense, you should learn public key cryptography, at least to the extent of adding something like the Enigmail plugin to your e-mail client. Pretty Good Privacy (PGP) isn’t perfectly private, but it is far better than sending every e-mail in clear text.

One could go on in this same vein at some length. Now that you are aware of the limitations of the blockchain, you may want to find ways to turn off the public disclosure aspects of your Bitcoin use. Happily, that is now possible.

At the same time that Bitcoin was under development, another group of programmers began working on a very different system. Voucher-Safe allows any digital bearer instrument to be transferred from one user to another, directly. There is no intermediary, there is no public blockchain. With Bitcoin, your payment first goes to at least one Bitcoin miner, who confirms the transaction by publishing it to the blockchain. Bitcoin Core, and most other wallet software provides a tiny payment to the Bitcoin miner for confirming the transaction. With Voucher-Safe wallet payments are made from one wallet to another, directly.

The Voucher-Safe technology divides the global population up into Voucher Publishers, Voucher Issuers, Voucher Users, and Wallet Publishers. SilentVault is an example of a Wallet Publisher. They make available two sorts of wallets, one which is basically a web app, operating under its own java virtual machine environment, the other a plugin for the Spark Jabber/XMPP open source chat client.

Silent Bitcoin Trust and Silent Silver Trust are examples of Voucher Issuers. Issuers hold Bitcoin, silver, or some other asset, and issue vouchers that represent the asset. Each issuing trust has its own rules for audits and compliance with the approaching-infinity number of regulations regarding financial instruments worldwide.

Voucher Users include anyone with a Voucher-Safe wallet. Since the Voucher-Safe wallet standard is open source, anyone can build and publish a wallet. The wallet software is also open source and complies with open source licence standards. However, the contents of the wallet are accessed using public key cryptography, with the wallet’s private key always stored on your computer, never on a remote server.

That fact means that what you do with your wallet and its contents is your business. Nobody involved in the Voucher-Safe system will ever ask you, “What’s in your wallet?” What you have in your wallet shouldn’t be anyone else’s business.

Indeed, some years ago an Austrian banking specialist, Peter Zipper used to make presentations for a bank called the Anglo Irish Bank. He would note that many Americans talk openly about their mortgages, their salaries, how much money they spent on their current automobile. He would comment about how unknown that behavior was in Austria. “Austrians talk about pastry,” he would say. Which is probably a better approach for people who want to have some economic freedom and privacy in a world where paid informants turn over databases of Swiss bank accounts to tax authorities.

So, what’s in it for the anarchist? Economic privacy is its own reward, of course. The more you have privacy in your economic affairs, the less you have to concern yourself with regulators and tax authorities who want to interfere with what you are doing. But, it goes much further than your own particular freedoms.

With economic privacy, you can effectively avoid contributing to the wars going on all around the world. If you think those wars are a good thing, that NATO is fighting against Russian aggression, or that the US is fighting against Islamic terrorist networks, then you might be very content in the mainstream banking system. But if you think those wars are unjust, that they represent chaos unleashed, that the people profiting from the wars are going to insist on more wars, that the “Legacy of Ashes” that Eisenhower lamented, and the unwarranted influence of the military industrial complex that he warned against are issues you should be concerned about, you might want to do things a little differently.

You might choose to enter the SilentVault and finance war no more.