●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive.
Can there be an economy in which no one owns anything? Is there a difference between “own” and “possess”?
Recently, I read an article in NewScientist Magazine, titled “Lost in the cloud: How safe are your online possessions? (02 April 2013 by Douglas Heaven) Here are some excerpts:
In the digital age, your files and memories are not truly yours any more. They belong to the cloud.
To keep his valuable footage safe, Kyle Goodwin had placed it in a popular storage facility. On 19 January last year, all those assets disappeared without warning. As did everything put there by more than 150 million others. When he asked for his livelihood back, he was refused.
The US government, who confiscated his material, is essentially claiming that he forfeited his rights to his property the minute he uploaded it.
Clusters of servers thousands of miles away now hold our favourite music, photo memories and vital correspondence. We are headed for a world in which we will live our entire digital lives in the cloud, but these developments are poised to change our basic assumptions about ownership in surprising ways.
The article continues on that theme – the idea that in the digital age, ownership will not be clear cut. For instance, do I own this blog?
Everything you’ve read in the past 1000 posts is stored on servers managed by something called “Wordpress.” I don’t know who actually owns those servers. Perhaps there are multiple owners. So, if the owners, whoever they are, decide to charge you — or even, me — for access to my own posts, do I have recourse?
Shared computer resources now sit in vast data centres owned by the likes of Amazon, Google or Microsoft. Amazon alone is thought to own 450,000 servers around the world, providing storage and other services to thousands of websites and. According to one 2012 study, every day a third of US internet users visit a site that relies on an Amazon server.
It is widely thought inevitable that by 2020 the cloud will run all digital life. Though you technically retain copyright if you have created the photos, videos or text you upload, the reality is that agreeing to the service terms generally means you forego many of the rights you might reasonably expect. For example, the popular photo-sharing app, Instagram, recently changed its terms after it was acquired by Facebook, giving itself a license to use people’s uploaded photos for advertising.
And it gets even more complicated:
If your file has already been uploaded by someone else – a digital copy of a Radiohead album, for instance – then Dropbox will just link you to the existing files rather than waste bandwidth and space by uploading a duplicate. Are those files uploaded by that other person now yours? Surely not. Untangling relationships with your possessions in the cloud quickly gets confusing.
Buy the NewScientist or go online (the cloud) to read the rest of this intriguing article, which continues to expand on the central point: Ownership of anything online is questionable, and may be resolved in favor of whomever owns the servers. Amazon might own the world.
And this belatedly, brings us to the point of this post: Money, having no physical existence, is nothing more than numbers on accounting spreadsheets. (See:A dollar bill is not a dollar and other economic craziness)
You never have seen, held, touch, tasted or smelled a dollar. That green piece of paper in your wallet simply represents a dollar. Just as a car title is not a car, and a house title is not a house, a dollar bill is not a dollar. It is a title.
You do not possess any of the money noted on your bank’s servers. You may own shares of General Electric or AT&T, but you do not possess these companies. Your ownership is stored on servers somewhere – servers that might have multiple owners – and your ownership depends on vagaries of the law – which also might be stored in the cloud.
Consider what happened in Cyprus:
Cyprus and international lenders decided that depositors who had more than 100,000 euros in the two banks will lose some of their money to contribute to the recapitalization of the institutions, along with shareholders and bond holders.
With the press of a computer key, 8.3 billion euros will disappear from depositors’ accounts. The banks made the unilateral decision that these euros did not belong to depositors, but rather are owned by the banks or by the banks’ creditors.
And lest you believe this was an anomoly, Fed governor Jeremy Stein said:
If a (big bank) does fail I have little doubt that private investors will in fact bear the losses. Dodd-Frank is very clear in saying that the Federal Reserve and other regulators cannot use their emergency authorities to bail out an individual failing institution.
There is an old expression, “Possession is nine tenths of the law.” While not literally true, it shows that historically, ownership was related to possession.
Now, fast forward to a couple decades from now, when all documentation might be online, and a case could be made that no one will own anything in the cloud. After all, the U.S. government made that very case about Kyle Goodwin’s materials.
If ownership of a house is determined by its title, and the title will exist only in the cloud, ownership of the title will be questionable. Then presumably anyone having access to a server can change the title, in which case, no one would own the house.
Can there be an economy in which no one owns anything? If so, what would such an economy be like? Would it be some sort of communism on steroids?
Without ownership, can there be motivation? Without motivation can there be progress or even survival? Can there be economics without ownership?
Perhaps it all seems far-fetched, today. But Cyprus questions ownership of euros deposited for safe storage in their banks. And the U.S. government questions ownership of files safely stored on line.
When all your records are spread over hundreds of thousands of servers around the world, and these records continuously swirl in microscopic, electronic packets, among all those servers, who owns the electrons that make up your files? Anyone?
For all I know, someone has downloaded a dictionary containing every word in the English language. Or more simply, has downloaded all 26 letters used in every English word. And rather than storing my words, the addresses of those letters are stored.
So, the words in this sentence may consist of nothing but addresses and may exist on many servers. They might be just as a series of references to that original list of letters, and ten seconds from now, may have moved to many different servers. How would I claim which words are mine if I can’t claim ownership of that original list of letters?
Now may be the time to visualize what economics can be, without clear ownership.
Is such an economics even possible?
Rodger Malcolm Mitchell
Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports