We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

The depth of the disaster for the Islamists starts to become clear

Events in Afghanistan bring to mind a large container truck suddenly tipping over and spilling its load across a busy highway in front of traffic moving in both directions. As we see the situation shift not by the day but by the hour, it is important that people look not just at Mazar-i-Sharif, Kunduz, Kabul and Khandahar, but also at nuclear Pakistan: what happens in Islamabad, Karachi, Rawalpindi and Quetta will certainly end up being far more important in the long run.

For weeks since the US bombing started, the Islamic political parties in Pakistan have been whipping up sentiment with a world view that pits Islam against the godless foreigner. Large numbers of young Pakistanis heard the call for jihad against the United States and were urged to stand shoulder to shoulder with the Taliban and Al Qaeda in the defence of Islam. Thousands streamed across the Khyber Pass into Afghanistan seething with religious zeal to take up arms against the hated infidel.

The secular General Musharraf looked on uneasy as the streets swelled with crowds incited by his political enemies and has also been forced to keep looking over his shoulder at his own intelligence service, the ISI, who have always been the Taliban’s primary patron.

And then, the container truck unexpectedly tips over, scattering its cargo of… jack-in-the-boxes.

Weakened by the USAF/USN airstrikes far more than the ignorant and willfully pessimistic western pundits would have had us believe, the Taliban suddenly starts to collapse. Like dominos, town after town falls to the various anti-Taliban forces.

In Mazar-i-Sharif, we have learned that the Afghan Taliban forces took all the available motor vehicles and retreated as Abdul Rashid Dostam’s forces enveloped the city, leaving about 600 newly arrived pro-Taliban Pakistanis to face Dostam’s soldiers alone. The school in which they made their last stand is now a twisted ruin and at least 400 Pakistanis were wiped out in the bitter fighting.

In Kunduz, accounts suggest most of the Afghan Taliban forces have either defected or bailed out of the town prior to it being completely surrounded. What is left are largely Chechens, Chinese Muslims and Pakistani fighters. They are clearly doomed.

And so, it is interesting to note that the streets of Pakistan are surprisingly subdued. Far from ‘Islam’ rising up against the United States and its anti-Taliban friends in Afghanistan, city after city is filled with cheering throngs and America is saluted by the very people who lived through the bombing for contributing to the Taliban’s misfortunes. Hundreds and possibly thousands of young Pakistanis are already dead, killed not as Islamic holy warriors but as hated foreigners by Afghans who have had it up to ‘here’ with the interference of its neighbours.

So as the Islamic politicians of Pakistan survey how in the matter of eight days the entire situation in Afghanistan has turned upside down, the families and friends of the dead Pakistani boys who listened and then marched to their deaths across the Khyber pass are going to start asking ‘why?’ When people start to figure out the answer, I don’t think the forces of Islamo-fascism are going to like what happens next. It must be slowly dawning on the more secular forces in Pakistan that their Islamist political enemies are starting to look very exposed indeed.

For the west, nuclear armed Pakistan is far more important in the long run than that ‘Mad Max’ nation called Afghanistan.

Yes, the leitmotif for Afghanistan and Pakistan really is a jack-in-the-box. You heard it here first.

Three cheers for Capital One

On the sometimes inspired, sometimes misguided but always interesting anti-state.com site, there is an very interesting article about a major credit card company electing to use private binding arbitration rather than the coercive and clumsy state legal system to resolve disputes.

An interest development and, I suspect, an sign of things to come.

Postmodern outlook objectively smashed

Herbert London, another voice of critical rationality, points out the self-destructive absurdity of post-modern ‘thought’ in his short but on-target article.

“This argument is mere subterfuge for the central postmodernist view that we don’t know what we mean when universal terms are used. In the September 11 attacks, I maintain Americans were not the least bit confused about terminology. We saw the face of evil; it did not require an interpreter.”

Yes, it really is that simple.

Thou shalt not criticize an establishment pundit

For media establishment pundits ranging from lowly tabloid hacks all the way up to the Brahmins of academic political correctness, the world seems to be a much more intellectually hostile place since September 11 2001. Previously unchallenged opinions about the way the world works are now being judged under the harsh light of reality cast by two burning skyscrapers in New York.

One of the good things to come out of the horrors of that day is that the western world, or at least the dynamic Anglosphere part of it, is undergoing a most astonishing intellectual ‘shake out’. The system is in a state of flux and it is unclear what the zeitgeist is going to feel like when it all starts to settle down again. One thing is for sure, it will be different.

Former prince of the statist ‘left’ Christopher Hitchens is a striking example of this process. Whilst always articulate and insightful, it seems he is also possessed of a critically rational mind capable of simply jettisoning the demonstrably false when the evidence deems that the correct thing to do. One only has to read his devastating carve-up of former fellow travellers like Noam Chomsky to see just how far he has come. In his article in the Guardian called “Ha ha ha to the pacifists” he pours scorn on those who would side with the vilest regimes in the world and claim moral superiority.

Of course people do not like being proved wrong, and they like others pointing out their cock-ups even less. Last night I was listening to pundit-lite Michael Brunson on the TV reviewing the early editions of the British newspapers. At one point he became almost apoplectic with a double page spread in the print version of The Sun (a low-brow tabloid) titled ‘Shame of the Traitors’. This article quotes the Guardian, New Statesman, the Independent, the Mirror, members of Parliament, members of the European ‘Parliament’ and sundry others. All made dire predictions about the war, questioned the morality of it and scorned its progress.

So was Michael Brunson angry that the pundits had got it so wrong? Hell no! He was outraged that a lowly tabloid like The Sun had questioned the motivation of people making clearly ridiculous unsupported claims to the point they could be described as giving ‘aid and comfort to the enemy’. He said “I fail to see the point of this whole article” and “Why should they criticize people for saying that they believe?”.

To give you some idea of what the people whose ‘honour’ Michael Brunson was defending were actually writing:

“Opposition leaders about to quit battle against Taliban. US blunders leave key fighters disillusioned. Key Afghan opposition commanders are on the verge of abandoning the fight against the Taliban because their confidence in US military strategy has collapsed. Insurgents are no longer willing to infiltrate eastern Taliban-controlled Afghanistan because they believe American blunders are destroying the opportunity to spread revolt against the Islamist regime.”

Rory Carroll, the Guardian, November 9: the day Mazar-i-Sharif fell to the Northern Alliance! This ‘news’ is either Taliban propaganda, astonishingly bad reporting or simply made up to suit Rory Carroll’s anti-Americanism. Take your pick.

“If the Northern Alliance does take Kabul on, the battle is likely to be very bloody. The recent successes of the Northern Alliance are unsurprising but it will take more than carpet bombing to win southern Afghanistan.”

Richard Norton-Taylor, the Guardian, November 13: The recent successes are… unsurprising? I guess Norton-Taylor was not reading the Guardian on November 9 beacuse if he had, he should have been utterly astonished that the Northern Alliance was winning! Moreover in reality Kabul fell with a whimper, not a roar.

“The message we want to get out is simple – stop the bombing…Recognize that bombing pleases one person above all others – Osama bin Laden.”

Tam Dalyell, Labour Member of Parliament, November 1: so if the Taliban and Al Qaeda were asked “would you like the bombing to continue or stop?”… presumably Tam Dayell would have us believe that they would say “Continue, we would like some more of that invigorating bombing please”.

Judging from Michael Brunson’s remarks, it seems that being correct is not a very important part of a pundit’s job. However what is really important is not to point out the stupidity of other pundits or, even worse, that a great chunk of what they said was proved by events to be completely incorrect. That simply is not cricket!

And higher up the established media food chain, no wonder they really hate people like Christopher Hitchens, as he cannot be dismissed as a mere hack for some boorish English tabloid… not only is he making the doves of the ‘left’ and ostriches of the ‘right’ look extremely bad, he is an apostate who has been attacking Sauron Chomsky himself. Hitchens is actually calling himself a libertarian these days. As Bob Dylan sang: Oh the times, they are a’ changin’

Why arbitrage is not a zero sum game

or Fred Bastiat gets all warm, loving and huggy with Natalie…

Arbitrage itself is not a zero sum game as the buying/selling of both sides of the arbitrage adds liquidity to the market, which adds value to the market itself by making trades easier for all participants and reducing volatility.

As for ‘arbitraging’ sovereign services, anything which reduces the distortions of the state by reducing the power of the state to do, well, much of anything, is hardly a ‘zero-sum-game’. Allowing the market to actually work better adds value that would otherwise be lost to the state. Government by its nature destroys wealth by using force to allocate resources, thus removing the ability of those resources to flow where they otherwise would have been employed with profit.

Frederic Bastiat wrote in 1850 about ‘that which is seen, and that which is not seen’, in which he explains how we can see how the state allocates resources which it has appropriated and we can see how it results in supposed productive activity. But what we do not see is what those resources would have done if allocated by the market if the state had not appropriated them. If the resources could have be used to create what the government wants at a profit, then why have the government do it at all? If the resources could not have been employed to create it at a profit, then clearly the actions of the government result in wealth destruction.

So I would contend anything people can do to keep the means of production out of the hands of the state, far from producing a zero sum game, actually adds to the total sum of wealth by allowing those means to engage in genuine wealth creation.

Capitalism, when warm, loving and huggy… or cold, bad tempered and grumpy, is a splendid thing because it creates wealth whilst not actually giving a damn. It is rather like the way the wind can move a sail ship forward if the ship is sailed correctly or sink it if the ship is sailed poorly. On the other tentacle, government, even when warm, loving and huggy, makes us all poorer, rather like a dreaded in-law who comes to visit and just will not go away again.

As for my glee at the idea of driving the tax men of several nations into a confused state of mental collapse, now that is a metacontext thing. It’s just the way I see the world.

Arbitrage is a wonderful thing…

… it can also lead to an interesting world view.

Arbitrage is an artful way to make money. When two (or more) items have a historical range of price relationship between them, temporary changes in these relationships provide an opportunity for profit. Often the relationships between the two different products is obscure, very indirect and sometimes quite counterintuitive. Yet many an arbitrageur (or just ‘arb’ as they are often known) has grown slowly and unflamboyantly wealthy, not in the high drama the great bull or bear markets, but just by watching relative price movements in products as diverse and seemingly unrelated as soybean oil and pork belly futures.

The same approach can be taken in other areas of endeavour too.

Globalization has brought many interesting and exciting things in its wake, not to mention hitherto unprecedented prosperity to more people on the planet than ever before. Capital is now almost totally fungible at the push of a button and this has had the effect of creating an interesting market. The sovereign law market.

I wrote about the most glaring example of this yesterday. States like to pass laws that say what their subject populations can and cannot say, write or publish. Yet now, people who wish to publish views that their local laws say are illegal have merely to host them on a server in some other country and viola! The ‘illegal’ views are on display for anyone who wishes to read them and there is not a damn thing the state can do about it. Information too is now fungible: if you can’t publish a dead tree pamphlet, a website will do just fine.

Which brings us again to laws. It use to matter very little in a nation what the laws were in some other country. But in this era of downloadable virtualized products, excellent communications, cosmopolitan entrepreneurship, ubiquitous spoken English and mobile capital, there is increasingly little reason why a business should be set up in a place which chooses to slather on tax and regulatory burdens. We are entering an era of the arbitrage of laws. Are the employment laws better in the Philippines or India? India eh? Ok, lets relocate our call centre from Los Angeles to India. What about corporate taxes? Ok, move the company’s brass plate to the British Virgin Islands. Where are the best programmers? Prague? Ok, lets outsource to a Czech codehaus…they even have the best beer there. Where will our data be safe? USA? Ok, I know a nice server farm in Fresno…yes, they have their own power generators…etc.

Rather than ‘investing’ a business in a single ‘national’ economy, the sovereign law arbitrageur modularizes and virtualizes and invests wherever their particular needs are best met by the state for that aspect of their business. No longer does he have to take a one-size fits all/one nation fits all approach. Analogous to arbitrage, this approach does not yield the big bucks won or lost by hitching one’s fortunes to a single state…yet by simply opting out of unreasonable laws by moving modularized companies to where they are best looked after (i.e. left the hell alone), capital is allowed to work more effectively.

The future is dispersed, virtual, anational and the bits send each other e-mail in English…even when one bit is in Calcutta and the other in Prague and they are talking about a client in New York. Of course an added bonus is driving the theft enforcement arm of several states utterly crazy trying to figure out not just how to tax you but just who the hell ‘you’ actually are!

The future is closer than you might think.

A message from all technological asylum seekers to the enemies of free speech in France and everywhere else…

An article in Wired reports a victory against the ‘forces of darkness’ with a US court refusing to allow the French state to impose Internet restrictions across the world. Does this mean I think wacko groups like the KKK or Nazi historical fantasists are ok? No I don’t. However I do not want my judgement and prejudices to have force of law, unlike the lawyer for the forces of statist authoritarianism, Stephane Lilti.

“If this ruling, which we will appeal against in the United States, is upheld, it will give total impunity to all those who seek technological asylum in the United States,” Stephane Lilti told Reuters. “This would make America a haven for all types of people on the extreme right and racists … for us French it will be extremely difficult to ensure our justice system’s decisions are respected because we will be dealing with someone who can take refuge in a U.S. computer.”

Excellent. Every time we can make a repressive law in France or anywhere else unworkable, the light of liberty shines a little brighter across the entire world. Why should anyone respect the French justice system’s decisions to repress free speech? Notice Lilti does not seem to worry about ‘the extreme left’. I guess this means a post to the Internet in support of the Khmer Rouge and Pol Pot is just fine by him.

What force advocating statist lawyers like Lilti do not choose to realise is that the best way to destroy irrational buffons like the KKK is not by forcing them underground but by actually shining the light of day on them. Let them out into the open where everyone can see what preposterous little people they are by reading their own words… sort of like the way Stephane Lilti is exposed by his words as a noxious enemy of liberty who rails in fury against the rest of the world’s refusal to be a party to the repression of French internet users.

As Sinead O’Connor put it in a song:

Though their own words.
they will be exposed,
they’ve got a severe case
of the ‘Emperor’s new clothes’

So I would like to raise my glass to all you technological asylum seekers, yearning to speak free…the brave ones, the oppressed ones, the articulate ones and yes, even you stupid hateful ignorant ones.

And to those who would gag us, censor us and unplug us… fuck you

You know you are a superpower when…

An interesting article by Saritha Prabhu, who give an nice perspective on what the war against terrorism actually means to ‘the man in the street’ in The Tennessean.

Living in an affluent western society it is easy to forget that for most of the rest of the world, when a war suddenly comes snarling across your border it is not something you only get ‘feel’ by watching the BBC or CNN.

Harry Potter and the libertarian subtext

For a libertarian angle on the Harry Potter phenomenon, check out Natalie’s blog and look for the article “Harry Potter and the Libertarian Subtext”. Most entertaining.

Is real life starting to imitate computer games?

There is an interesting Boston Herald article about the draconian plans to, in effect, declare martial law in the USA in the event of a bioweaponized attack of smallpox.

Probably the best computer game yet made is Deus Ex, in which you, the player, take on the role of J. C. Denton, an ‘enhanced’ agent of uncertain background and shifting loyalties.

Initially you start out as a good little statist secret policeman working in the USA and supporting FEMA, the Federal Emergency Management Agency (which actually does exist in real life) as it tries to distribute vaccine to key people as a terrible disease ravages New York city in the near future… and fighting against the ‘terrorist’ bad guys who for some reason are trying to thwart FEMA. Eventually you end up working for these self same ‘terrorists’ and fighting against your previous employer when it turns out that the plague is really just an excuse for FEMA to mastermind a coup d’etat, suspend all civil rights and take over the US government.

Read the Boston Herald article and then ask yourself…is reality starting to take it’s lead from computer games? Scary thought.

Deus Ex is a superb game. Unlike most ‘first person shooters’ in which you interact with people mostly by shooting them, in Deus Ex you have to actually talk to them (and of course some you do indeed end up shooting). This is a game which actually has characters expressing political and moral views, from mystical totalitarianism to cynical statism to well armed libertarianism! Also, how many other computer games do you know of in which during a visit to Paris, you can find yourself being subjected to a believably idiotic existentialist argument? Likewise, whilst stealing some weapons from an arms dealer’s house, if you click on a book next to his bed you will find yourself reading a chapter of Common Sense by Tom Paine. Elsewhere, you may or may not encounter two utterly incidental characters who are clearly very closely based on The Story of O. This is a superb and intelligent game that does not treat the player like an ignoramus.

However let’s hope it is not also an accurate vision of the future!

Hawala bashing: The arrogance, stupidity and futility of ‘power’

An article in the Washington Post reports moves against a couple of the larger ‘Hawala’ networks. Also: “Under the new anti-terrorism legislation passed by Congress last month, hawalas will be required by year-end to register with the Treasury Department and, like banks, to report suspicious activities, such as unusually large cash transfers.”

The idiots seem to completely miss the point about why people use hawala (or Chinese ‘Fei Qian’) to move money internationally. It is so that the state cannot see what they are doing. To demand hawalas register with the state and report ‘suspicious activities’ is rather like passing a law requiring bank robbers to register and file a report prior to conducting a robbery. Do terrorists use hawala? Probably. So do millions of other people. Will they manage to shut the system down (which has been around since the 11th Century in India, China and other parts of Asia)? My guess is they will be even less successful than that other triumph of the state’s excursion into international paramilitary policing, namely the ‘Drug War’. These hawalas occur within ethnically homogenous tight knit communities. It is going to be impossible to shut down more than a few of these dispersed, multiply redundant networks as they are semi-underground as it is and extremely easy to set up again by others if any given hawala is disrupted.

What is a hawala?

A hawala (or fei qian) is a simple network set up to transfur funds internationally, usually using a member of an extended family or personal friend on both sides of the network (though a few larger hawalas are almost like banks). Vijay (or Abdul or Deng) goes to a hawala (typically a small back street office) in London (or Los Angeles or Paris or Toronto) and gives them a quantity of cash plus a small brokerage fee. He tells the hawala who he wants to collect the money in Calcutta (or Karachi or Cairo or Shanghai) and then leaves. The business is conducted with a handshake and trust. The hawala in London calls his contact in Calcutta (often a cousin or other family member) and tells him how much to disburse and to whom. This is often done on the phone but increasingly it is done by PGP encrypted e-mail. Next day, a relative of Vijay (or Abdul or Deng) goes to the hawala in Calcutta, identifies himself to the associated hawala there and collects his cash. The hawala run accounts with each other and periodically settle up the old fashioned way: a guy with a suitcase packed full of used 50 pound notes (or 100 dollar bills) gets on a plane in London, flies to Calcutta and settles the tab in cash. It is that simple!

In fact they are an excellent example of highly successful, completely unregulated, handshake based international capitalism. Hence is it hardly surprising so many people in government do not like these networks as it gives lie to all the smug claims about the supposed superiority of the West’s regulated international financial systems.

The Panopticon State is at it again… all of them!

As usual, the state wants to see all and know all… of course it will still understand nothing. Wired magazine has a good article about the current state of play.

Remember boys and girls, when crypto is outlawed, only outlaws will have crypto. I have the greatest confidence we will always find new and innovative ways of keeping the state blind, deaf and dumb about things that are none of it’s damn business… namely our business.