After watching Sasha Baren Cohen's new film Bruno, I was reminded of all the wonderful things associated with the country of Austria. I mean aside from flamboyant fashionistas, Austria has given us the likes of Beethoven, Mozart, Wagner, Strauss, Schwarzenegger, and even a local favorite Frank Stronach - yes, even the popular Canadian industrialist was actually born in Austria. There have also been some less historically beloved individuals, such as Hitler, but they need no mention.
However, the subject of my post today is not about famous Austrian celebrities per se. It is about a distinct philosophy and social science that is beginning to grow as a creed. The so called Austrian School of economics, named aptly for the predominant origins of its founders, believes that the spontaneous, collective actions of human beings are the best force for the efficient allocation of resources in society. In other words, Austrian economists posit that the price mechanism and laissez-faire thought - proposed by classical economists like Smith and Ricardo - trump any notions of centrally planned economies. By adhering to these principles societies can promote greater freedom, market efficiency, and wealth. More importantly though, from this belief, comes a powerful identity called Libertarianism which holds that the sanctity of individualism and man's freedom from any and all kinds of coercive forces, must be the most highly regarded virtue in any society that is to be truly free.
Thus, Austrian economists (and Libertarians by extension), seek a society free from any state, or at the very least, a most minimal government. Taxes, subsidies, bailouts, lack of government transparency, central banking, national police forces, and foreign policies are just some of the ways that each nation-state interferes, distorts, and coerces the movements and decisions of individuals. Consequently, and according to Austrian economics, these various state actions disrupt the free and fair allocation of wealth in the world.
In a Libertarian society, where Austrian economics form the basis for "public policy", the role of government is restricted to law-making, and resource allocation and planning is realized on individual and community levels. For instance, zoning will be voluntary, so-called public goods (eg. roads, street lights, clean water) will be cared for by cooperative business models, unions will not hold important services hostage, and governments will not decide which substances are morally acceptable and which are not. The genius of this philosophy will free us from the burdens of everything from foreign wars to traffic laws.
To learn more about Libertarianism and famous libertarians such as Bohm-Bawerk, Hayek Mises, Rand, Rothbard, Reisman, and more, check out sites like mises.org, georgereisman.com/blog/, and cato.org/. Libertarianism and Austrian economics, are at the very least, very interesting political and economic topics to explore and read about, and I recommend checking out some literature on these subjects.
Monday, July 27, 2009
Wednesday, June 24, 2009
The Intrusive Powers for the 21st Century Act - Part 1
Last week the Tories proposed two new bills that will seek to increase the ability for law enforcement to effectively control and monitor the private information of all Canadians. The Investigative Powers for the 21st Century Act and the Technical Assistance for Law Enforcement in the 21st Century Act, will allow police to activate TRACKING devices in people's cars and cellphones, obtain information WITHOUT a warrant, and FORCE Internet service providers (ISPs) to install expensive monitoring equipment on their servers at their own expense! (Please see http://www.theglobeandmail.com/news/technology/tories-seek-to-widen-police-access-online/article1187507/ for a more in depth look on the coverage from Ottawa.) What follows is a 2 part article on the subject from a Canadian perspective.
There is nothing new about the issue of cyber-policing, even though it tends to resurface from time to time with interesting (and frightening) new proposals for the official spying on citizens. The bottom line, as it has been since the 1990s, is that the Federal government wants to see a legal increase in the use of surveillance mechanisms deployed over the privacy and information of free citizens. Any efforts to do so have been largely restricted by the unpopularity and controversy of the plan in parliament, thus far. However, now it seems that scapegoats such as child pornography and identity theft are giving governments more leverage in their fight to rule the Internet domain. In part 2 we will discuss the implications on our liberties and the development of our societies from all this surveillance, through a lens of reason and logic.
Before we delve further into the Libertarian response though (part 2), lets briefly examine the current global status of government cyber-policing efforts (part 1).
To begin with, Canada already has a number of legislations that allow law enforcement some wiggle room in obtaining information about citizens from the Internet, and tracking conversations and data over communication programs (i.e. short messaging and emails). The new bills will require ISPs to hand over subscriber data to law enforcement agencies at the government's discretion, use tracking beacons installed in new cars and cellphones to locate and target individuals, and make it easier for police to intercept online communications. Of course what they do not tell you is how inclusive the subscriber data will be, where these tracking devices on your new car or cell phone are located, the methods by which they can single out emails, VOIP calls, and SMS texts, who and how many people have access to YOUR information, and how they intend to collect, store, and interpret the information they gather on you. Furthermore, what standards do they use to determine suspicious persons? Do you have to be overtly trafficking child porn under your real name, or will their surveillance systems be as sensitive as mere keywords used out of context? For instance, if I include the words "child" and "camera" (without any correlation) in an email to my friend about a recent family birthday party, will some law enforcer suddenly justify checking out all my private information? How about the words "bomb" and "fertilizer"? These are the kinds of critical questions that need to be asked in order to ensure accountability!
Fortunately, Canada is actually behind many others in the cyber-policing game. Countries like China, Iran, North Korea, and Singapore notwithstanding, how do other Western countries fare in Internet surveillance? Lets take a look at three other countries to see where new legislation may end up taking us.
Australia: Much of the onus for "electronic warfare" as it is known down under, falls on the 3 branches of the armed forces - navy, air force, and army. However, Australia also has the Defense Signals Directorate (DSD), which is largely responsible for monitoring information and telecommunications signals in and out of the country. This organization is increasingly employing domestic surveillance methods to watch its own citizens for things like child porn, terrorism, and privacy theft. The problem with the DSD is that much of their operations are kept under guarded-state-secrecy, which means Australians are not even sure how far their liberties can be breached! Australians also need to be weary of something called the Cybercrime Act (2001), which allows the judicial branch of government to force suspects (not convicts) to reveal their encryption codes for data transmission.
United Kingdom: Britain's brush with terrorism has made that topic the go to issue for law enforcement officials who are looking to put a stranglehold on the Internet. Though distinct from cyber policing, Britain also employs one of the largest physical surveillance policies in the West. One that rivals countries like Singapore and China. Whether you are going shopping, at and airport or train station, on your way to school, or taking the subway to a parade, you can bet that at least some state security official (i.e. police, intelligence, military) has seen you at least once. As far as the Internet goes, the UK is not quite so advanced in their techniques, but Britons have the Terrorism Act (2001) to contend with, which requires ISPs to log user traffic for a year and hand it over to police at the government's discretion. Furthermore, under this act, the Interior Ministry monitors the financial transactions and private emails of citizens (while not disclosing how or to what extent). It should also be noted that police do not require warrants to get access to this information from either ISPs or government agencies.
United States: America is the land of the free! A shining example to the world of how people from all walks of life can achieve their dreams! With so much "freedom" to enjoy in America, I suppose that its only fitting to have so much government freedom over the people as well right? The United States is where the Internet began and also where cyber policing began! The FBI and NSA control the majority of Internet surveillance here. The scary part about the US is that the reach of these agencies extends far outside US borders. So what happens to their laws can have implications for Afghani, Iranian, French, and even Canadian citizens. The FBI has also made most ISPs install a tool that is aptly named the Carnivore surveillance system! The Carnivore can record and store all messages that an ISPs customers send or receive. It can do this by using 'loose' word filters which make no contextual distinction for word usage. In other words, if you've ever typed the word Allah in an email (even as a joke), it is likely someone at the FBI has reviewed the information that you would have given to your ISP. And of course, all this is done without the need for warrants.
Australia: Much of the onus for "electronic warfare" as it is known down under, falls on the 3 branches of the armed forces - navy, air force, and army. However, Australia also has the Defense Signals Directorate (DSD), which is largely responsible for monitoring information and telecommunications signals in and out of the country. This organization is increasingly employing domestic surveillance methods to watch its own citizens for things like child porn, terrorism, and privacy theft. The problem with the DSD is that much of their operations are kept under guarded-state-secrecy, which means Australians are not even sure how far their liberties can be breached! Australians also need to be weary of something called the Cybercrime Act (2001), which allows the judicial branch of government to force suspects (not convicts) to reveal their encryption codes for data transmission.
United Kingdom: Britain's brush with terrorism has made that topic the go to issue for law enforcement officials who are looking to put a stranglehold on the Internet. Though distinct from cyber policing, Britain also employs one of the largest physical surveillance policies in the West. One that rivals countries like Singapore and China. Whether you are going shopping, at and airport or train station, on your way to school, or taking the subway to a parade, you can bet that at least some state security official (i.e. police, intelligence, military) has seen you at least once. As far as the Internet goes, the UK is not quite so advanced in their techniques, but Britons have the Terrorism Act (2001) to contend with, which requires ISPs to log user traffic for a year and hand it over to police at the government's discretion. Furthermore, under this act, the Interior Ministry monitors the financial transactions and private emails of citizens (while not disclosing how or to what extent). It should also be noted that police do not require warrants to get access to this information from either ISPs or government agencies.
United States: America is the land of the free! A shining example to the world of how people from all walks of life can achieve their dreams! With so much "freedom" to enjoy in America, I suppose that its only fitting to have so much government freedom over the people as well right? The United States is where the Internet began and also where cyber policing began! The FBI and NSA control the majority of Internet surveillance here. The scary part about the US is that the reach of these agencies extends far outside US borders. So what happens to their laws can have implications for Afghani, Iranian, French, and even Canadian citizens. The FBI has also made most ISPs install a tool that is aptly named the Carnivore surveillance system! The Carnivore can record and store all messages that an ISPs customers send or receive. It can do this by using 'loose' word filters which make no contextual distinction for word usage. In other words, if you've ever typed the word Allah in an email (even as a joke), it is likely someone at the FBI has reviewed the information that you would have given to your ISP. And of course, all this is done without the need for warrants.
There is nothing new about the issue of cyber-policing, even though it tends to resurface from time to time with interesting (and frightening) new proposals for the official spying on citizens. The bottom line, as it has been since the 1990s, is that the Federal government wants to see a legal increase in the use of surveillance mechanisms deployed over the privacy and information of free citizens. Any efforts to do so have been largely restricted by the unpopularity and controversy of the plan in parliament, thus far. However, now it seems that scapegoats such as child pornography and identity theft are giving governments more leverage in their fight to rule the Internet domain. In part 2 we will discuss the implications on our liberties and the development of our societies from all this surveillance, through a lens of reason and logic.
Thursday, June 18, 2009
Banking: Islam Awaits ... But Like the Rest of Us, Won't get Very Far
Okay so I have read this article in Canadian Business (http://www.canadianbusiness.com/managing/strategy/article.jsp?content=20090616_10007_10007) twice now entitled "Banking:Islam Awaits". The author speaks to an issue in finance that is growing in importance in the West, but has unknowingly touched so many issues in regards to Canadian banking laws, that I am not even sure where to begin. So I guess I will have to get down to the basics first.
What is Islamic banking (or in other words, Sharia compliant banking)? While I am no theological expert, from what I understand, interest payments on borrowed money are considered Haram (sin) because it is believed that profiting by lending to someone is evil. Of course, this idea comes from the times of Abraham and I guess it caught on for Muhammed and all his followers, but regardless, its in the Quran and Muslims are influencing its modern growth. What's more, an elaborate banking system has evolved around the issue, to make lending "holy". Essentially, Islamic compliant banks adopt a cooperative model whereby the borrower and lender are in some kind of equity agreement. For example, if you are buying a house and need to borrow money, the bank outright buys the house, and you pay them back in rents until sufficient profit is made on the bank's end, and the title to the house will transfer to you.
I have certainly muddled that explanation, but that is the gist of it!
What is Islamic banking (or in other words, Sharia compliant banking)? While I am no theological expert, from what I understand, interest payments on borrowed money are considered Haram (sin) because it is believed that profiting by lending to someone is evil. Of course, this idea comes from the times of Abraham and I guess it caught on for Muhammed and all his followers, but regardless, its in the Quran and Muslims are influencing its modern growth. What's more, an elaborate banking system has evolved around the issue, to make lending "holy". Essentially, Islamic compliant banks adopt a cooperative model whereby the borrower and lender are in some kind of equity agreement. For example, if you are buying a house and need to borrow money, the bank outright buys the house, and you pay them back in rents until sufficient profit is made on the bank's end, and the title to the house will transfer to you.
I have certainly muddled that explanation, but that is the gist of it!
The article takes a stand against the delays that our beauracracy (surprise!) has created for those trying to setup up Sharia financial products. For instance, where do Middle Eastern banks fit on our "ingenious" tiered banking system. The author goes on to argue that the Canadian financial industry is lagging against internationl competitors (i.e. Britain, US) in enabling such banking products, and it will hurt the profits of our banks down the road. In the comments section of the article, some spectators also noted that we are missing out on a 100+ billion$ industry.
Several questions arise from all this chatter about Islamic banking in Canada. Should this be allowed in the Canadian banking system? (From the article's subject line), is our society hurt by delays in legislation and policy for this type of banking? Does any of this matter or make sense?
First, its the right of free citizens (who happen to believe in Islam, or any other kind of religion) to voluntarily enter into banking agreements of their choosing. Though I personally feel this idea is simply equity-sharing under a more maniacal name, well hey, whatever floats your boat right?! The state has no place telling people (households and firms alike) that they cannot buy certain financial products. And frankly, I think the real story underlying this article is the red tape that encircles the Canadian banking industry, for all financial products and firms!
Several questions arise from all this chatter about Islamic banking in Canada. Should this be allowed in the Canadian banking system? (From the article's subject line), is our society hurt by delays in legislation and policy for this type of banking? Does any of this matter or make sense?
First, its the right of free citizens (who happen to believe in Islam, or any other kind of religion) to voluntarily enter into banking agreements of their choosing. Though I personally feel this idea is simply equity-sharing under a more maniacal name, well hey, whatever floats your boat right?! The state has no place telling people (households and firms alike) that they cannot buy certain financial products. And frankly, I think the real story underlying this article is the red tape that encircles the Canadian banking industry, for all financial products and firms!
This brings us to the second question. Of course, opportunities lost on any kind of hot business prospect come at a cost for those firms that would have pursued them. And I think we need to break this national shield we have around our banking industry, so that all banks with an interest in our market can setup shop without adhereing to all kinds of governement restrictions. (Note: At this time I would like to mention however, that sovereign wealth funds should NOT be welcome anywhere near us. That is, these large pools of stolen government money from the Middle East and beyond, should not be allowed to offer products in Canada. But more on that another time).
In response to that one guy's comment in the CB article about the HUGE market ... globally its is likely that this market will reach into the hunderds of billions, but from a Canadian perspective, which is the line this article takes, the math doesn't nearly add up. There are roughly 1 million Muslims in Canada, and even if they all switched their savings accounts and mortgages to an Islamic bank (which I doubt), there is hardly 100 billion dollars between them all.
To answer the third and final question, Canadians should not fear this type of product due to its religious undertones - though I would agree with anyone who says its stupid - because naturally all citizens should be free to enter into voluntary contracts of their choosing. However, I might point out that all this noise that is being generated about Islamic banks, stems from a simple misunderstaning about the nature of interest rates (and payments) on the part of Muslims (no surprise there).
What is interest? Is it evil? Is it one man profiteering from the sorrow and misery of another? NO!!! Interest is simply another way of saying the price of money! Bananas have a price, coal has a price, shoes have a price, shouldn't money have a price? To break it down, we all have consumption demands. If I want to buy something that is beyond my cash reserves in the present, then my demand for present consumption is very high and I "buy" more money so that I can meet my needs. By doing this of course, I must naturally forgoe some future consumption since my demand then will be relatively lower (this is what paying back interest and a principal on a loan equates to). There is nothing evil, sinful, or cruel about this transaction. I simply want to buy present consumption, in expense for future consumption. When I save (the opposite of borrowing), I am giving the bank money (for their present consumption), and in return I will have great future consumption (interest payments to my savings account).
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