Does Using GPL Software Violate Sarbanes-Oxley?

Anonymous Coward writes "eWeek is reporting that The Software Freedom Law Center has published a white paper that dismisses recent publications from embedded systems seller Wasabi Systems. Wasabi recently released statements focusing on alleged GNU General Public License violations in relation to the Sarbanes-Oxley Act of 2002. The white paper, titled "Sarbanes-Oxley and the GPL: No Special Risk," essentially counsels users of the free software license that they have no need to worry."

Comments

Worded poorly.

[Short Circuit]

The SFLC wrote the paper titled "No Special Risk" ... Wasabi Systems alleged SO violations.

And no surprise...they advertise BSD-based products on their front page. (Not dissing Any of the BSDs, they're cool, IMO.)

Re:Worded poorly.

[ShieldW0lf]

Situation One: Your company owns the copyright to the software outright, released it under the GPL, and doesn't accept contributions. No problems. Situation Two: Your company distributes GPL software that it didn't write, with or without modifications. Your company recogizes that this is not its intellectual property, and never should have been, being that it wasn't written by them, and doesn't claim it as an asset. No problems. Situation Three: Your company distributes GPL software that it didn't write, with modifications. Your company fails to recognize that part of this software was never theirs in the first place and that the rest of it is not an economic asset because they do not have the ability to control access to it in exchange for money, but you try to pull some bullshit with the numbers to make it seem like an asset. By doing this, you're misleading your investors and committing fraud. You have a problem. But the problem isn't with the law. The law is working exactly as it should. If you're an OEM using open source software that you sourced externally for free and modified, it's not your property, and you shouldn't be listing it at all. If you've built your business around this lie, you're SUPPOSED to be fucked. That's what the law is for.

Re:Worded poorly.

[Anonymous Coward]

Situation four: Your company has taken GPL code, and modified it for internal use. This modified code is not distributed externally in object or source form.

The GPL is not violated since there in no distribution. However, if it is declared as a company asset, then you need to make it clear that only your modifications count as assets. As I understand it there is a possible violation of Sarbanes-Oxley here. But there's no special risk here - if the company declared public-domain code or BSD-licensed code as an asset they would be in violation too.

Slightly off topic but ....

[un1xl0ser]

Who can recommend a good book on IT 404?

Re:Slightly off topic but ....

[Anonymous Coward]

Not a book, but a great link.

Re:Slightly off topic but ....

[J0nne]

Who can recommend a good book on IT 404?

I searched Amazon, but all I got was 'File not found'...

Re:Slightly off topic but ....

[CarrotLord]

Why is this moderated funny?

http://www.amazon.com/exec/obidos/tg/detail/-/0471 653667?v=glance

Re:Slightly off topic but ....

[un1xl0ser]

Because nobody knows what section 404 is? I thought it was kind of strange myself.

CSPAN called

[Anonymous Coward]

they want their boring back.

Re:CSPAN called

[caudron]

The 90's called. They want their joke back. ;-)

And just to head the smart replies off at the pass...

The Jerk factory called. It wants me back. I'm outtie.

Tom Caudron
http://tom.digitalelite.com

Re:CSPAN called

[Firehed]

Error 404: Funny not found.

Re:CSPAN called

[Frank T. Lofaro Jr.]

From your sig:

Stopping Content Restriction Annulment and Protection means not calling it DRM.

A better backronym would be Content Restriction And Policing.

Re:CSPAN called

[Kymermosst]

The Jerk factory called. It wants me back. I'm outtie.

No, it was the village that called...

Re:CSPAN called

[Anonymous Coward]

How about

Content Restriction And Prohibition

or even

Content Restriction And Persecution

It's not as if they really want free content on their precious devices.

More info on SOX

[kebes]

In case you have no clue what "Sarbanes-Oxley" is, you can check out official info and the Wikipedia article. Basically it is a set of laws that place limits on what companies (and those working for them, especially upper management) can do. This has mostly to do with declaring assets and transfers of money. It tries to prevent companies from defrauding investors and so on. These laws were enacted after the Enron scandal.

Wasabi's complaint is that under these laws, you have to declare all assets, including intellectual property. Their rationale is that using open-source software, you may be in violation of the law if you do not review and declare that usage.

As was pointed out last time this was discussed on slashdot, a company would only be in trouble if they were already doing something illegal: violating the GPL. If you violate the GPL, then you're misrepresenting your ownership of IP (claiming to have a license you don't), and thus are also violating Sarbanes-Oxley.

So what's the problem? If a company follows the GPL, then everything is fine. They have nothing to worry about. If they violate the GPL, then they're breaking multiple laws. So, as always, companies should make sure that what they are doing is legal. This in no way diminishes the extent to which GPL software can be used in commercial environments. Wasabi acts as if there is some tremendous additional legal burden to using GPL software. However it seems that Sarbanes-Oxley would equally apply if you mis-represented your ownership of non-GPL software. So there's no difference. (You can read the Software Freedom Law Center white paper for a more complete explanation.)

Re:More info on SOX

[Jeffrey Baker]

More importanly, you can substitute any other license for "GPL" in the parent post. If you misappropriate software under any license, you could have some liability. Duh.

Re:More info on SOX

[robfoo]

In case you have no clue what "Sarbanes-Oxley" is..

Thank you! Would it have killed someone (submitter/editor) to add a paragraph, much like your first paragraph, to the end of the summary? It's not like the summary is overly long as it is.

Or even the first sentence from Wikipedia: "The Sarbanes-Oxley Act of 2002 [..] is a United States federal law also known as the Public Company Accounting Reform and Investor Protection Act of 2002"

I'm not new here, so I'm not going to ask that the editors, I don't know, EDIT stuff.. But seriously. Non-US, non-lawyer users shouldn't have to go to Wikipedia just to find out what the hell the SUMMARY is about.

Re:More info on SOX

[jamcmh]

Agree on all counts. Further, anyone (person, company, etc.) can be found guilty of breaking license violations. This isn't really a SOX thing.

So in reality, here's the problem, as I see it:

Companies spent over $6billion on consultants and auditors last year to get their companies up to SOX standards and pass audits.

Now, this guy comes along with a big bullhorn, and now, some manager/director/vp type is going to read this article on /. and hit the panic button. "Gee Thanks." That's all we need. Just throw those guys some more money. Which will undoubtedly come from some other budget, which will in turn result in someone's job being cut or someone's raise not being what it should be.

C'mon people. Think before you write this stuff!

Re:More info on SOX

[Anonymous Coward]

Wasabi acts as if there is some tremendous additional legal burden to using GPL software. However it seems that Sarbanes-Oxley would equally apply if you mis-represented your ownership of non-GPL software.

I think the big difference is that for many it's much easier to accidentally/ignorantly run afoul of the law when dealing with OSS in general. If some company decides to use some source code and they aren't familiar with the differences between say a BSD license and the GPL, then they could be in trouble. However, with commercial software, you are typically dealing with a vendor, and that fact alone makes the issue of licensing more explicit.

Re:More info on SOX

[booch]

In almost EVERY argument against the GPL, you can substitute any other license for "GPL", and the argument would still hold true.

One of the biggest arguments against the GPL is that if you use it in your own code, you have to agree to its terms. In the case of the GPL, those terms mean that your code must be GPLed. Other licenses set other terms; many licenses don't even ALLOW you to use their code in your code. In any case, if you don't follow the terms, you can be sued for copyright violation. So you always have a choice, no matter what the license -- either follow the license, or get sued.

Re:More info on SOX

[Anonymous Coward]

Everything violates the SOX.
Breathing violates the SOX.
Turning on/off your PC violates the SOX.
The only question is whether or not your fully paid-up auditor will give agree that you're complient.
Full complience is not technically possible, so it becomes a commercial arrangement instead.

Re:More info on SOX

[Fulcrum of Evil]

One of the biggest arguments against the GPL is that if you use it in your own code, you have to agree to its terms.

How is that an argument against the GPL? In most other cases, even getting the code will violate several laws, and you have no right to use it in your product. Seems the GPL gives you more than most. If you just want a library, the choice is simple - make your stuff GPL or don't use the library (with some exceptions).

Re:More info on SOX

[Anonymous Coward]

I'd also like to add, that if a company chose to use *ALL* GPL'd software their legal burden would be less because they would not have to track and verify compliance for multiple EULAs from multiple companies. The Wasabi statements seem a bit dubious to me.

Re:More info on SOX

[zero1101]

One of the biggest arguments against the GPL is that if you use it in your own code, you have to agree to its terms. In the case of the GPL, those terms mean that your code must be GPLed.

This is an extremely misleading statement, if not outright false. Your code must only be GPLed *if you redistribute it*. There are, unfortunately, plenty of cases where PHB's decide not to use GPL software because they don't understand this. And apparently neither do many Slashdot readers.

Re:More info on SOX

[HoosierPeschke]

So you're saying this was funded by Microsoft?

*ducks*

Re:More info on SOX

[Tony Hoyle]

In practice though GPL stuff isn't enforced...

Witness the number of embedded devices (particularly routers) where you can't get the source code to the GPL parts, and where you can, they're hard linked to closed source binaries with 'no unauthorised distribution' clauses (Yes I mean you Broadcom!).

So it's perfectly legal to modify the GPL bits, but illegal to distribute the resultant code... thus the GPL is defeated by apathy because nobody cares.

Re:More info on SOX

[zippthorne]

It's not ok to do that. However many have argued that some terms of license are not legally enforceable as they unfairly prevent interoperability. I'm sure there's a tremendous amount of arguing those exact points wrt. samba.

Re:More info on SOX

[booch]

Sorry, you are correct. I mis-spoke. I know better, but I didn't think that was pertinent to this thread.

Re:More info on SOX

[Hognoxious]

You appear to be new here. The correct phraseology is "Bill? Is that you?".

Re:More info on SOX

[Anonymous Coward]

One of the biggest arguments against the GPL is that if you use it in your own code, you have to agree to its terms. In the case of the GPL, those terms mean that your code must be GPLed. Other licenses set other terms; many licenses don't even ALLOW you to use their code in your code. In any case, if you don't follow the terms, you can be sued for copyright violation. So you always have a choice, no matter what the license -- either follow the license, or get sued.

One reason the GPL gets flak for this is, of course, that people are idiots. Another, however, is that unlike most other licenses the GPL is touted as espousing freedom--a freedom that is not reflected in the terms of the license. Other licenses are not chastised for this because they do not claim to promote freedom.

Re:More info on SOX

[TubeSteak]

Give him a break

booch (4157) is new here

Re:More info on SOX

[Anonymous Coward]

thanks for clearing that up. laws are not enforcable if i think they are unfair. cool.

Re:More info on SOX

[kesuki]

but illegal to distribute the resultant code

I think you meant 'binaries' of course, obviously you can redistribute the source code, it just won't Compile or if it compiles it won't 'run' without the proprietary bits that you had to seperate out.

anyways, it's just a sign of how sad and pathetic things are nowadays. back in the old days if you invented something, but hated patents, you could just tell people how to do it, and no one else could patent it, because you'd proven how to do it first... but with software, you can't even GIVE it away without being at risk of being sued, hense the various 'open source' licences.

Re:More info on SOX

[Frank T. Lofaro Jr.]

Is it actually illegal to redistribute, or does the GPL "infect" their code, because they are the ones who comingled it with their own code?

Could they support an action against someone, if in doing so they violated the license?

Can one commit a crime or tort and as a result of that, have someone else prosecuted or sued? Or is that a "fruit of a tainted tree" or "dirty hands" and thus such actions would be barred?

Re:More info on SOX

[jschrod]

Check out http://www.gpl-violations.org.

Witness the cases where GPL gets enforced legally, when embedded devices violate the copyright of the netfilter project.

Re:More info on SOX

[Short Circuit]

Even if the PHB understands it, he'll have to defend his decision from every other PHB who hears the argument and doesn't understand it.

Re:More info on SOX

[ScrewMaster]

If he does understand it, he probably isn't a PHB. But that doesn't mean he won't have to defend himself from actual PHB's. You're right about that.

Re:More info on SOX

[Anonymous Coward]

This is an extremely misleading statement, if not outright false. Your code must only be GPLed *if you redistribute it*. There are, unfortunately, plenty of cases where PHB's decide not to use GPL software because they don't understand this. And apparently neither do many Slashdot readers.

Well, see, here's where copyright law hasn't exactly been clearly defined. In *most* licenses, you are assumed to have no rights to the software at all until you agree with the license. The GPL explicitly states that the software may be used "in-house" without agreeing to the license, but only because the authors of the GPL take the legal approach that fair use allows for the use of software without agreeing to a license. Unfortunately, there haven't been any cases that I'm aware of that have established this as a legal principle, because if that were the case EULAs would instantly be unenforcable.

It is understandable why many people believe they have to agree to the GPL, whose terms are that derivative works must also be GPL. The distinction between agreeing to the license to use the software versus agreeing to the license to distribute the software is legally uncertain because of the prevailence of EULAs and other crazy licensing schemes. Blame the courts and lawyers for that one...

Re:More info on SOX

[ShieldW0lf]

Is it actually illegal to redistribute, or does the GPL "infect" their code, because they are the ones who comingled it with their own code?

Well, technically, since you're modifying the code you externally sourced, it's not a matter of the GPL infecting your code. The GPL'd code that you downloaded was a perfectly healthy entity before you came along and started adding bits to it.

It's more like you inject something into the healthy code, and if what you injected turned out to be proprietary and whatnot, the GPL acts like antibodies to kill the infection. Which is your proprietary code.

Re:More info on SOX

[zippthorne]

*sigh*

There are rights you cannot sign away. For instance, there is no form, statement, or contract you can sign, notorize, witness, swear before a judge, that grants another human being the right to take your life.

In the US, the vast majority of "liability waivers" that you sign before doing something that could be remotely dangerous (i.e. scuba lessons, skydiving lessons, bungee jumping, wall climbing, surfing, marathon running, go cart driving, you know, stuff you can't do sitting in front of a computer screen) are not valid contracts (however, rights that are appropriable may still be validly signed away, so the contract may not be wholly struck out. consult a lawyer).

Many in the GPL movement claim that similar law applies to reverse engineering for interoperability purposes. IIRC, the samba team in particular has had to do some kind of reverse engineering (i'm not sure if it was actual disasembly however), so their experience, and any cases they may have had to bring, would be informative.

Belief that a license is unfair is irrelevant, except where that unfairness runs into conflict with other laws, say.. anti-trust laws for instance. The outcome of a clash of multiple laws is not necessarily clear, and this is where the lawyers make their money.

Oh, and thanks for misconstruing my categorizing of some beliefs as an exposition of my own belief, then blowing it out of proportion for the purpose of discreditation via sarcasm.

Re:More info on SOX

[Anonymous Coward]

People like you are the reason I stopped drinking coffee while reading through comments here. My keyboard may be filthy but it's still dry.

Re:More info on SOX

[Anonymous Coward]

(Disclaimer: I am not a lawyer)

> In the US, the vast majority of "liability waivers" that you sign before doing
> something that could be remotely dangerous (i.e. scuba lessons, skydiving lessons,
> bungee jumping, wall climbing, surfing, marathon running, go cart driving, you
> know, stuff you can't do sitting in front of a computer screen) are not valid
> contracts (however, rights that are appropriable may still be validly signed away,
> so the contract may not be wholly struck out. consult a lawyer).

I thought they *are* valid contracts, otherwise why would anybody bother to make them?

I mean, those contracts presumably say "I agree to bear the risks of injury/death etc", which translates to "I agree not to sue you if I get fscked up". And I *think* that is valid as long as the other party takes all reasonable measures to make sure the facilities are "safe".

Re:More info on SOX

[Malor]

Further, you only have to give the code to the people you distribute the binaries to, NOT the public at large. You don't owe the public a _damn thing_ under the GPL, just the people to whom you give binaries.

The GPL doesn't require source distribution for 'internal usage', but in large companies, what's internal and what's external can get fuzzy. The safe thing to do is to always distribute the source with the binary.

I'm a little unclear on what would happen if a rogue employee distributed your internal source code without permission... I believe that the GPL requires a chain of distribution permission. If you authorize Subsidiaries A, B, and C to have your GPL code, they definitely have the right to give that code to anyone they want, and you cannot legally restrict them from doing so. (you could punish them in other ways, I imagine, but you couldn't sue them for copyright infringement.) But if a rogue employee of one of those subsidiaries released the code, that transfer would be unauthorized, and I don't think anyone further down the transfer chain would be entitled to use it.

Practically, you might not be able to stop copying, but as far as I know, you'd have the same rights to punish copyright infringement that Microsoft would. (this actually happened to Microsoft, and they've sued at least one person distributing their code.)

Basically, by using the GPL, any 'customer' can become a competitor. If you choose your customers carefully, that doesn't *have* to happen. You don't owe the public at large anything at all.

Re:More info on SOX

[bgat]

Hint: Wasabi makes their money developing and redistributing BSD-licensed software. Thus, anything they say against the GPL must be carefully considered. This isn't the first time they've been downright misleading, you should see them at the trade shows!

Re:More info on SOX

[zippthorne]

some are, many aren't. It depends on the wording, claims, industry, state, and if a quick google search is any indication, what the court had for breakfast may enter into it as well. In many indutries they simply haven't been tested, so they're a kind of craps shoot. But if you ran such a business, some chance at protection is better than none, and at the very least, the form will make skittish individuals think twice about engaging in your activity.

Re:More info on SOX

[petermgreen]

Further, you only have to give the code to the people you distribute the binaries to, NOT the public at large. You don't owe the public a _damn thing_ under the GPL, just the people to whom you give binaries

just to be clear that applies IF AND ONLY IF you supply the source with the binaries. if just the binary is distributed with an offer to distribute the source on request that offer must be valid for anyone.

Re:More info on SOX

[Anonymous Coward]

The GPL doesn't require source distribution for 'internal usage', but in large companies,

Your use of quotations around 'internal usage' falsly creates an impression that you are quoting the GPL. In reality, the word "internal" is not contained in the GPL, nor is does the infamous "internal use exemption" really exist. Please don't propagate this myth.

Technically, copying an altered GPL program from your desktop to a laptop in the same room is "distribution". Whether or not that small amount of movement is enough to run afoul of the GPL is a matter for your nation's copyright laws, not the GPL.

Intended Consequences of laws

[dada21]

Some think that these situations are unintended consequences of laws that have "good" effects. Sarbanes-Oxley was intended, from the start, to be the ultimate way for governmentto control any corporation at will.

The law was initially meant to "fix" problems such as the Enron fiasco, but if you rewind just a few years, you see that most of these fiascos came directly out of trying to take advantage of loopholes in previous laws. The SEC colludes with the rest of the all powerful federal government to constantly keep non-preferred companies on their toes, while giving excessive power to the cronies. Sarbanes-Oxley will have the same effect.

The one light in Congress, Dr. Ron Paul, made an excellent note regarding Sarbanes-Oxley and the cost it will pass on to consumers. The Mises Institute also has a ton of great articles and blog posts regarding the horrors of this law.

It is time to realize that government is NOT good at regulating business, except from the point of view of the cronies. Bills like this will rarely be used for their original intent, and the un?-intended consequence in the long run is to see criminals made of innocents that had nothing to do with the law's purpose.

Instead of voting, I think we need to start pitching money in a hat to buy rope for those who violate their oath to uphold the Constitution.

Re:Intended Consequences of laws

[un1xl0ser]

So if you really want to go after a company who is violating the GPL ... just put a call explaining how they are voilating Sarbanes-Oxley regulations. This could be a very complicated and expensive (for taxpayers and laywers) way of dealing with GPL violations in the US of A.

Re:Intended Consequences of laws

[Anonymous Coward]

The real problem is that Accounting in the United States is nothing more than a game of rules lawyer... err accountants.  Cross your ts and dot your is, and your auditing firm can issue an unqualified statement.  Doesn't matter how obvious your corruption was - if your auditing firm follows the rules, and you know GAAP well enough, you can get away with anything.

In the United States, there should be stronger rules requiring accountants to follow up on exceptions and 'suspicious' activities.  At the current time, there is no incentive for accountants to do so - following up on these activities is a good way to piss off their clients with increased audit fees and time spent.  Better to cross those ts and dot those is, follow the rules of Sarbox but ignore the spirit.

Re:Intended Consequences of laws

[Monokeros]

Wouldn't it be more effective for everyone to pitch money into a hat to purchase a congressperson or three?

Sure, It'll cost more than a rope, but the benefits will be more lucrative.

Re:Intended Consequences of laws

[killjoe]

Yes we should just let the corporations go wild. They would never do anything to harm anybody anyway.

Re:Intended Consequences of laws

[dada21]

I have absolutely zero dollars in publicly traded companies. I have no faith in the business of others -- in my own businesses I have so much "insider information" that I can't believe everyone else is a big enough sucker to trust these massive companies to tell the truth about everything.

That being said, I hate accountants. The average CPA is part of the problem in this country (CPAs as a group lobby Congress to make the tax code worse every year). Instead of requiring companies to do anything, how about telling people that they really shouldn't put their money anywhere but where they trust? I make between 20% and 50% on my various businesses, annually. Most stocks pay no dividend, so they actually make their owners no profit (except on sale, which is ridiculous as companies should pay profits).

The whole system is a mess, and its a mess because we keep requiring business to perform counter-productive to how a free market performs.

Re:Intended Consequences of laws

[Procyon101]

Better a corporation than a government. Corportations don't have prisons, armies, police and ultimately answer to the higher power of law. The law running amok is MUCH more dangerous.

Re:Intended Consequences of laws

[dada21]

Yes, let them go wild. It will teach the average "investor" that there is no such thing as a free lunch. You should NEVER put your money into a business that you don't have faith in or trust. If you make it government's job to make people "tell the truth" you'll get lies covered by legal loopholes.

The problem starts with the Fed (Greenspan, Bernanke and their inflationary cycle) that makes money worthless over time so we seek to invest it to at least break even. The problem is made worse by the same inflationary cycle that makes our salaries go up slower than the inflationary cost of living increases (which go up because of the money printing). It goes downhill from there -- the SEC makes investors believe they're protected, which in a free market is a fallacy. You are only protected through contracts, not through law forcing people to act a certain way. Beyond contracts you protect yourself by doing business with people with a history (see eBay's feedback system).

This is all a mess, made worse by people who have faith in others. I have no faith in others except those who have proven their trustworthiness to me. This is why I only invest in businesses I have direct contact with.

Re:Intended Consequences of laws

[NeutronCowboy]

Instead of voting, I think we need to start pitching money in a hat to buy rope for those who violate their oath to uphold the Constitution.

Nonono - you got that all wrong. It's "we need to start pitching money in a hat to buy our own senators". Don't vote with a voting box - vote with your dollar! Isn't that the american way anyway?

Re:Intended Consequences of laws

[Billly Gates]

Do you believe that?

Business can not happen without the government. Its in any economics101 course and certain services can not be done by business. Mainly things in public consumption since its not profitable to help everyone.

The free market works best when the market is stable. The government tries to setup the market as free as possible and to stabilize it so it can grow.

Without SOX you would have problems of more problems of bad accounting reporting which would hurt the general market more.

The government is not always the bad guy here and many market purist forget withotu the government regulating currency, providing roads, educating yoru workforce, and making trade negotiations with foreign nations we wouldn't have a market for you to sell products to.

It seems all these mu8lti billion dollar right wing think tanks sponsored by big businesses have quite a few followers today. I just dont understand the American obsession agaisnt government but not at all agaisnt big business?

Re:Intended Consequences of laws

[jdavidb]

Instead of requiring companies to do anything, how about telling people that they really shouldn't put their money anywhere but where they trust?

Our culture has accepted a lie about trust. We believe that it is the obligation of people to extend trust, and that it is a moral failing when they do not. In reality, the exact opposite is true. Nobody should be trusted until they have proved themselves trustworthy. If person A fails to trust person B, that is solely and completely person B's responsibility. It is not person A's fault. A has to earn B's trust.

This was clear to me during my dating days in an online singles community when I'd hear women who had just been jilted say, "How can I ever trust anyone again?" Well, the problem is that they were extending trust to people who had not yet earned it, and those people performed as could be expected. Then these women were viewing it as somehow their own moral obligation to trust people after that. In reality they were receiving an education that was pointing them to the obvious conclusion that it was not their responsibility to trust people who have not earned it.

Extending that to business is left as an exercise for the reader; I've had more success in dating than I have in business. ;)

Re:Intended Consequences of laws

[NMerriam]

You have been raised in a late 20th century world in which you simply take for granted that corporations have certain limitations, but the merest browsing of a history book will show that every one of the things you claim corporations don't have are, in fact, things that corporations did have prior to public outcry and government crackdowns.

Start with a google search for "company town" and then feel free to read backwards through European history and the international corporations that weilded far more military and police power than any nation-state of the time.

Re:Intended Consequences of laws

[Billly Gates]

Well we are letting them go wild in deregulation and we are experiencing things like all the telecoms merging back together again. They never learn.

The people who oppose big government and any regulation are accountants with clipboards and calculators who make no business decisions. They only tell their corporations if they met expectations or didn't in the current quarter and penalize anyone who doesn't financially.

Its like swallowing yoru own tail as government intervention is taught as a good thing in any micro or macro economics 101 course in college. Supply side economics doesn't work in every situation and we are having problems now due to it. The debt is one and the other is R&D.

For example why dont we have a cure for AIDS or cancer? These big few drug companies who own a monopololy and patents for all the drugs dont have an incentive for research because of their monopoly status on this precious little pills. Funny how they use that same argument for not splitting them up. Its just more popular to sell impotence drugs and expensive common cold prescriptions than saving people.

This is where more government intervention is needed and if AT&T was not split up the internet would not be here today for the public. Think about that one?

Re:Intended Consequences of laws

[dada21]

Well we are letting them go wild in deregulation and we are experiencing things like all the telecoms merging back together again. They never learn.

The telecom industry has never been deregulated in any way -- it has only been re-regulated -- some regulations were ended, many more began. Don't believe for a minute that the industry is running in a free market, it is heavily regulated and subsidized.

Supply side economics doesn't work in every situation and we are having problems now due to it. The debt is one and the other is R&D.

BS. Debt has nothing to do with supply side economics -- public debt is a socialist trap created mostly out of fiat currency. Private debt gets worse once the inflationary cycle begins, creating easy money and low savings rates.

This is where more government intervention is needed and if AT&T was not split up the internet would not be here today for the public. Think about that one?

I ran a successful BBS for years. Before I even knew the Internet had existed, we BBS operators were already implemented a large scale network of BBSes using X.25 packet switching networks and other private communications systems. Splitting up the bells had nothing to do with the Internet, and the Internet has exploded specifically because of the lack of regulations covering it. The more it is regulated, the slower it will grow and adapt.

You're a big government supporter, I can accept that, and I even think you have a right to be one. I just want access to opt-out of all the programs. I'll be happy to not rely on medicare, social security, or any of the options government gives me. Send me a bill for my share of the roads and defense (not offense) and I'll happily pay them until I can find a way to replace them with private providers.

Re:Intended Consequences of laws

[edwdig]

It is time to realize that government is NOT good at regulating business, except from the point of view of the cronies. Bills like this will rarely be used for their original intent, and the un?-intended consequence in the long run is to see criminals made of innocents that had nothing to do with the law's purpose.

Yes, of course, by removing the threat of punishment for screwing over other people, corrupt businessmen everywhere will suddenly see the error in their ways and change. Why didn't anyone think of this before?

The law was initially meant to "fix" problems such as the Enron fiasco, but if you rewind just a few years, you see that most of these fiascos came directly out of trying to take advantage of loopholes in previous laws.

The Enron fiasco was caused by people in power who thought they could get away with stealing. They did for a while, but eventually went too far and everything collapsed.

Society is complex. No matter what legal and economic systems you come up with, there will always be ways for people to take advantage of them.

Your approach is equivalent to Microsoft saying "Well, its impossible to make a modern computer system 100% secure and bug free, therefore, we are going to remove all security features from Windows. Users will be on their own to figure out how to keep their computer running."

Re:Intended Consequences of laws

[dada21]

Wow, we are so far apart from each other in beliefs that it would be hard to further the debate.

I've read all the books you use to support your side, would you mind reading just one free tiny e-book that covers mine? http://www.mises.org/money.asp This is Rothbard's basic book regarding money and what government has done to destroy the economy.

I am against big business as well because I believe big business grows out of abusing government's laws. I also believe these laws were written with this abuse in mind.

Government destroyed our currency by getting off of a 100% reserve system in 1913. It has destroyed any reason to save (the best way to create a strong economy is through savings, not public credit), and it has destroyed the ability for us to compete in the world market with our regulations and business controls.

Re:Intended Consequences of laws

[AuMatar]

You are only protected through contracts, not through law forcing people to act a certain way

Contracts are only worth the paper they're printed on because the law enforces consequences if they're broken. In the end, it still falls back on the law to enforce good behavior. The problem isn't that the laws to force the truth don't work- its that they aren't actively investigated or enforced until after a major collapse such as Enron. And that even after that, most of the people get away with it. What we need is better enforcement.

Re:Intended Consequences of laws

[killjoe]

"Better a corporation than a government. Corportations don't have prisons, armies, police and ultimately answer to the higher power of law."

First of all that's an out and out lie. There are numerous mercenary corporations providing soldiers all over the world. There are also numerous corporations providing armed security in the states. So yes corporations do have armies, police and prisons.

Secondly if we let the govt abdicate their responsiblity then there would be no law to which corporations would be subject to.

Finally corporations that don't arm themselves do so because it's easier to buy the services of the govt to provide security for them. RIAA does not need police because they have bought the laws they need and the state is procividing jails and police free of charge for them.

Re:Intended Consequences of laws

[killjoe]

You might want to read some history. In history there have been many cases where business has been run without any govt interference. Maybe read up on the copper barrons in montana or read about the post civil war south.

That's just in America. There are lots of examples all over the world of what happens to a country when the corporations are allowed to run wild.

Re:Intended Consequences of laws

[dada21]

Contracts can be enforced in a private market without the force of law. If you sign a contract, you take out contract insurance through a private company. This company issues a "bond" against your signature, guaranteeing the other party that you'll follow through, and also offering you insurance against the other party running off. This happens all the time in the construction industry (I should know, I own a business that gets bonded on each project).

Beyond just getting contract insurance, we can also create new businesses that only work to issue feedback on an individual or a corporation, similar to eBay's feedback system. When you make a transaction with another party, you give them positive or negative feedback. Sure, someone can take their terrible negative feedback and start anew with another company, but would you trust a 30 year old with zero feedback? Neither would I.

The reality to me is that government does a poor job of protecting economies, markets and trade. In every situation I've seen and have experience with, government has done more damage to trade than any situation where they have helped.

People need to know that stock markets are not safe investments. They need to know that they're getting less information than the insiders. They need to understand that their investments are likely making more money for others, and that they should find better places to put their money.

In a free market, interest rates are free to go up and down. Banks that need money can offer better rates than those who have money. Also, in a free market with a fixed money supply (100% reserves) we'd see soft deflation, which is good for the economy -- it gives people reason to save, increasing the money supply to banks for loans to GOOD businesses, not junk ones.

Re:Intended Consequences of laws

[jdavidb]

Send me a bill for my share of the roads and defense (not offense) and I'll happily pay them until I can find a way to replace them with private providers.

You should make that your sig.

Re:Intended Consequences of laws

[jbolden]

Maybe I'm missing something. But all SO says is that when a company
1) makes statements
2) in an official release
3) targeted to investors
4) signed off by high ranking officers

That those officers have good reason to believe those facts are in fact true. That's it that is all that SO requires. A company that finds determining facts too onerous of a burden can simply publicly admit that fact and they have no obligations under the law at all.

I just don't buy that's an unreasonable obligation. Fraud costs this country hundreds of billions a year. Mises says $100m for enforcement, heck if it costs 100 times that it would be a bargain. America used to not have a culture of corruption. We have one now and we have to fight it. We did so at the turn of the century we can do it again. And yes it means added costs for companies. But frankly SO requires nothing that any good business shouldn't be doing already.

Re:Intended Consequences of laws

[dada21]

I've read about both. The post civil war South was destroyed by Lincoln's cronies. The Civil War (or what I call the War Between States) was created specifically by Lincoln to give his cronies government corporate welfare. It had nothing to do with slavery, and everything to do with the Republican platform of imperialism and corporate welfare.

The copper barons of Montana were not a corporation, they fully controlled the state, too. Henry H. Rogers was a philanthropist who gave money out of his fortunes to nearly 100 schools, and paid for the education of blacks and the poor. He was raised in a poor family, and initially earned his wealth through fair trade and competition. He did more good things than bad, and everything bad that he was alledged to have done was done through the force of government, not the cooperation of the free market.

Don't try to teach me your history, based on lies written by the winners. Try reading the real history of the times, and you'll see your facts are based on those very lies.

Re:Intended Consequences of laws

[jdavidb]

It has destroyed any reason to save (the best way to create a strong economy is through savings, not public credit)

All right, let me play devil's advocate here for a minute:

If government has destroyed any reason to save (and I tend to agree with this, mind you), then why do you save so much?

Re:Intended Consequences of laws

[killjoe]

If everything was dependent on contracts the civil courts would be so bogged down nothing would get done. If a corporation thug came to your house and killed your grandfather because he was costing too much to maintain then you would have to sue them in civil court. They in turn would drag the case out till you were broke and you would be shit out of luck.

Corporations would love nothing better to be completely free to poison the waters, kill people who are claiming insurance benefits etc, buy and sell slaves, put people into indentured servitude etc.

You may think I am being a bit dramatic but all this has happened in the past when corporations were allowed to run free. What makes you think it won't happen again?

Re:Intended Consequences of laws

[jbolden]

30 years ago we had a fed we had investors and we had corporate leadership that wasn't corrupt. People who told lies who had VP for C something before their name did time for lying.

Re:Intended Consequences of laws

[dada21]

You offer some very valid advice -- if we were still living in 1910 or 1950 or maybe even 1970.

I think you MIGHT be able to win a debate that government was needed in some way back then, when communication was limited and people were not aware of the world around them. The Internet has replaced much of the need for government oversight, replaced instead with the ability for billions of consumers to oversee each other instantly and in an aggregated fashion.

I'm familiar with some company towns today, such as Bagdad, AZ which has a significantly higher standard of living than the rest of the state, and almost no poverty. That same corporation also owns Morenci, AZ at the other side of the state, with even higher income levels and incredibly low poverty rates. The education of the residents is excellent, I have visited both towns and I am amazed by the residents that live there.

Don't forget Irvine, CA, either, which is a company town to this day. Irvine is considered one of the safest towns in the country, with one of the best public schools as well. This is still a company town!

In my experience, I have visited about 15 company towns around the country, and all of them are amazing examples of corporate governance.

Add in the amazing instant communication abilities of the web, and I think we see fewer and fewer reasons to have federal governments -- I'd rather see us shut down the fed to a BARE minimum (merely to keep the States in line) and let the local communities decide how much taxation and regulation they need or desire, in line with their residents.

Re:Intended Consequences of laws

[rossifer]

would you mind reading just one free tiny e-book that covers mine? http://www.mises.org/money.asp This is Rothbard's basic book regarding money and what government has done to destroy the economy.

I went ahead and read it, and the author makes the same mistake that all advocates of the gold standard make: they fail to understand that currency and value are separate. Further, the author completely misunderstands the role of the central bank (The U.S. Federal Reserve Bank) in a paper money economy: which is to stabilize the relationship between currency and value. This deliberate stabilization is impossible in a gold standard economy (more precisely, there are too many players who can influence the quantity of currency in circulation in a gold standard economy to know who they are, let alone understand their motivations).

I admit, most people don't understand why certain pieces of paper are more valuable than others, but that lack of understanding does not mean that we should revert to the gold standard (which has an equally misunderstood relationship between currency and value). All the gold standard buys you is less control.

Government destroyed our currency by getting off of a 100% reserve system in 1913. It has destroyed any reason to save (the best way to create a strong economy is through savings, not public credit),

This statement presupposes that inflation alone is a disincentive to savings. Which is false.

The incentive to save is based on relative returns. If the available interest rate of savings accounts is above the inflation rate, there is an incentive to save. At the moment, this is not true. After taxes, bank interest rates on savings accounts, most CD's and most money markets are below the inflation rate. But this inversion of returns, and the problematic incentives that provides is a recent (over the last 20 years) event, not stretching back to 1913.

You'll have to come up with another theory. I agree that bank regulation is to blame, but to describe a new set of regulations that provide for banks to make a profit on savings and to offer a competitive interest rate is beyond my limited knowledge of economics and monetary theory.

Regards,
Ross

Re:Intended Consequences of laws

[dada21]

What makes you think it won't happen again?

Primarily the web, honestly. In the past, I could accept some government oversight as the people had very little interaction with one another outside of their community. But now that we can share information about bad businesses instantly, I think there is less need for the use of force to govern businesses and individuals. Hell, the entire stock market can be taken apart and let shareholding be deregulated -- people can trade and exchange stocks and bonds through the web as well, in an organized chaos that lets everyone decide how they want their money best used.

In the long run, I think anyone who has faith in the current system is just being duped. As the country grows weaker day by day, and the dollar loses value in the global market, a great many people will wish they had listened. The stock market has barely grown 500% in the past 100 years once government's inflation has been taken into account. The banking industry is a wing of the fed, happily accepting new counterfeit dollars and using them to pad the pocketbooks of the bank owners. If you're happy to ignore this collusion and theft, that's fine with me, but I want a way to exit this system.

Re:Intended Consequences of laws

[Billly Gates]

Well I respect other opinions.

The market was very unstable before 1913 with huge inflation when it grew and bad recessions when it didn't grow.

The government needs to run the currency to help slow inflation and also regulate interest rates to both slow and expand growth.

There are several theories in economics. One is supply side with minimal government intervention in which the economy will explode and take care of itself (the side your on), demand side economics which state the opposite that the government can create jobs and manipulate demand through regulations that effect the whole market (my side and FDR's), as well as the monitarist (Clinton) which tries to create a stable banking system with low interest rates so businesses can make easy loans to grow and people's savings are well secured.

The idea of the SOX law is to help investment in all businesses which benefit everyone in the long run.

Its interesting that you talk about savings. Most demand side economists hate savings as every dollar in your wallet is not being spent and that means it does not help inflate the economy to grow. However the average american savings is the worst since the great depression and it scares me that we are crediting everything now and paying back later. I think its going to bite us all in the ass. especially with the new bankruptacy laws going into effect.

Re:Intended Consequences of laws

[dada21]

If government has destroyed any reason to save (and I tend to agree with this, mind you), then why do you save so much?

Ahh, good catch there! I'll amend my statement to read "government has destroyed any reason to save federally issued dollars." I save in gold, silver and land -- mostly appreciating assets versus the federally issued currency. :)

Re:Intended Consequences of laws

[jdavidb]

Ah, okay; just checking. :)

BTW, adding some information about purchasing land to the information you're already providing about gold would be great. :)

Re:Intended Consequences of laws

[dada21]

which is to stabilize the relationship between currency and value. This deliberate stabilization is impossible in a gold standard economy (more precisely, there are too many players who can influence the quantity of currency in circulation in a gold standard economy to know who they are, let alone understand their motivations).

Rothbard doesn't really ask for a gold standard, per se, but a deregulated currency system -- which I support. In a gold standard, some players COULD horde all the gold, but this would cause prices to drop to cover this hording. This is a good thing, creating a supply and demand for money that can't be destroyed by government fiat or force. If someone wants to horde gold, they first have to acquire it. As they acquire and hold it, they're losing out in the short run generally as that gold is working for them.

All the gold standard buys you is less control.

Less control in what way? An ounce of gold today buys about the same thing that an ounce of gold did in 1800 and an ounce of gold in 0 AD. Gold tends to be stable, as currency should be, relative to consumer goods. Fiat paper currency always gets destroyed -- in every situation in history, fiat currency has bankrupted. The US dollar has only existed as fiat currency since 1913 (partial reserve banking creation), and was completely taken off of a reserve system in 1971 by Nixon. Our currency in 1800 compared to 1912 was nearly 1:1, from 1913 to now it is 20:1 -- $20 in 1913 is worth $1 today. In the past year the government has devalued our currency almost an additional 10% through excessive printing, how is this stable?

If the available interest rate of savings accounts is above the inflation rate, there is an incentive to save.

Yet the available interest rate is set by the same organization that prints the new paper currency! If interest rates were free market provided for, things might be different. Yet the same government that devalues our currency every week also sets the interest rate too long to instill a good savings rate.

I agree that bank regulation is to blame, but to describe a new set of regulations that provide for banks to make a profit on savings and to offer a competitive interest rate is beyond my limited knowledge of economics and monetary theory.

This is why I am a fan of private 100% reserve banking. Banks are meant to do two things: protect your real money (gold, silver, oxen, whatever), and offer you the chance to invest it safely in businesses they have researched and trust -- usually backed by assets. Today banks offer neither: your money devalues while they hold it, and they don't do a good job of investments (see the housing bubble and the stock market).

I have faith in Rothbard's words, and I live on a personal gold standard myself ( http://dadasays.blogspot.com/ ). My money is stable, and I don't fear stock market fluctuations, war, imperialism or a global loss of faith in the dollar. Is your future safe?

Re:Intended Consequences of laws

[dada21]

The market was very unstable before 1913 with huge inflation when it grew and bad recessions when it didn't grow.

That's untrue. $1 in 1800 was $1 in 1912. The only time money was inflated was when the Tyrant Lincoln decided to abandon the gold standard and issue paper currency. His money because worthless during the war, so he was forced to return to gold reserves, which brought the dollar back to its previous value and power. Of course some banks decided to cheat and loan out more money than they had gold to back up, causing the runs that bank-rupted those that we recall in history. Since 1913, $1 then is worth $0.04 today. Inflation comes only from one reason: more currency introduced into the system than previously held -- government is great at this. The gold rush DID introduce gold inflation, but it was quickly recovered and the new money was very useful for the industrial revolution.

Most demand side economists hate savings as every dollar in your wallet is not being spent and that means it does not help inflate the economy to grow. However the average american savings is the worst since the great depression and it scares me that we are crediting everything now and paying back later. I think its going to bite us all in the ass. especially with the new bankruptacy laws going into effect.

I disagree with this, though. If I save $1 in my bank, they have the power to loan this money out to businesses with good business plans and assets to back up the loan. Instead of putting it into a sucker's stock market, I'd rather save it and let the bank find the best investments. My favorite place to put my money is into my own businesses, which are generally profitable if you watch your cash flow and manage your time properly.

I agree on debt, though. What I really hate is that our parents are pushing off their lives' mistakes onto us (social security mostly), and we'll be pushing it off to our kids. Our country has over $70 trillion in liabilities to pay, and I guarantee that the piper will want to be paid, some day.

I imagine a near future where the Chinese and Indians who are loaning up money today will be living in our mortgaged mansions, driving our leased cars and watching our financed big screen TVs, while we clean their bathrooms and wash their feet.

Lucky for me I exited the banking and credit system entirely, and have no fear for the future in any way (short of a comet made entirely of gold and silver hitting the earth).

Re:Intended Consequences of laws

[bobdinkel]

Right off the bat, I'd like to say that I don't share the beliefs you have expressed in this thread. I'm aquainted with a number of people that share your beliefs, but do so for knee-jerk, tinfoil hat, militia sort of reasons. However, your points seem well thought out.

So I was hoping you could explain some things that others haven't. Do you believe in public property? What about government regulation for companies/corporations with regard to polution?

Re:Intended Consequences of laws

[AuMatar]

Contracts can be enforced in a private market without the force of law. If you sign a contract, you take out contract insurance through a private company. This company issues a "bond" against your signature, guaranteeing the other party that you'll follow through, and also offering you insurance against the other party running off. This happens all the time in the construction industry (I should know, I own a business that gets bonded on each project).

No, it can't. First off- I sure as hell shouldn't HAVE to take out insurance for every one of my contracts. Yeah, thats a great idea- lets build up yet another level of middle men into society. Second off- its rife for corruption. For example, say I have a contract with a big company- say WalMart (no reason for picking them except their size). The bond company does hundreds of contracts with WalMart a year. They do 3 or 4 with me. We have a disagreement. WalMart tells them to side with WalMart, or they'll never give them buisness again. Who do you think they're going to side with?

The free market doesn't work on situations like this. They're called externalities, and covered in econ 101. A course I become more increasingly sure no libertarian has ever taken.

Sure, someone can take their terrible negative feedback and start anew with another company, but would you trust a 30 year old with zero feedback? Neither would I.

So in a world already hampered by big corporations, you want to add another artificial stumbling block raising the barriers to entry and allowing the big corps to fuck you over even more. Another great idea.

Don't forget to factor in that over half of all buisnesses fail in under 5 years. So yes, there would at any one time be a majority of buisnesses with little to no feedback. You'd also have a whole new class of crooks- feedback scams. They happen on ebay all the time- someone creates an account, sells a few dozen items to friends to build up feedback, then scams some unlucky guy (or frequently several unlucky guys) out of thousands of dollars in a big sale.

In a free market, interest rates are free to go up and down. Banks that need money can offer better rates than those who have money. Also, in a free market with a fixed money supply (100% reserves) we'd see soft deflation, which is good for the economy -- it gives people reason to save, increasing the money supply to banks for loans to GOOD businesses, not junk ones.

Deflation is no better than inflation. Both are good for different sectors of the economy and different economic classes. Inflation is good for people in debt (they need to pay less when the debt is due), deflation is good for debt owners (the debt is worth more when it is due). There's good reasons for prefering inflation to deflation- inflation makes credit very expensive. It makes buisnesses hard to start and homes hard to buy. Historicly inflation in this country was pushed for by farmers, who were land rich and cash poor, so they could more easily utalize their land to generate debt in bad years and repay in good.

As for a fixed money supply- thats not a good thing. One of the biggest problems in the middle ages was that the fixed money supply frequently left too little cash money in an area, limiting economic growth. The basic macroeconomics equation is change in money supply+ change in velocity of money=change in GDP plus inflation. If the money supply is fixed, you either have no change in GDP or you end up having money cycle very quickly. Quickly cycling money lowers savings rates (you have to spend it more often). Its much preferred to have a slowly increasing money supply. The ideal is to increase the money supply just enough so that inflation is 0, but this is nearly impossible to do. In practice its better to overincrease it and have mild inflation than the reverse.

Re:Intended Consequences of laws

[dada21]

Great questions. I don't believe in public property, but I do believe that there is enough desire amongst members of a community to endow a trust to own land that is available to the public. I've been to private land shelters (Vermont, Idaho and Montana) and they are healthier, cleaner and safer than the public parks I've been to. I've been thinking about filming both public and private parks to show the difference, actually.

Pollution is a very difficult situation for me. I'm not sure what the answer is, and it is one of about 3 points that I am still trying to resolve mentally (and financially). I do believe pollution is mostly bad, but I think some pollution activists are a little over the edge. I think that pollution can be better regulated by local communities, but of course you have some pollution that affects people thousands of miles away or decades later.

Not to create a straw man, but I have done the research, and the worst polluter in all of history has been the U.S. government. I'm not sure the worst polluter in history is really the best organization to regulate the pollution of private citizens. I do believe that there ARE free market ways to control pollution. I support www.perc.org because I think they're doing some good things, and they're helping to handle the burden of finding voluntary ways to control pollution.

In the end, pollution can ONLY be controlled through voluntary desire. If people really want to end pollution, they need to be informed by others in who is the worst polluters, and we need to boycott those companies. If no one boycotts, I can only believe that no one cares, in which case the problem needs to get bad enough for the next generation to realize the error of their parents.

Re:Intended Consequences of laws

[Anonymous Coward]

(How fitting...the capcha for this submission is "embezzle"...)

"we can also create new businesses that only work to issue feedback on an individual or a corporation, similar to eBay's feedback system."

The problem is, now you've tied reputation to whether or not someone already has experience. To some extent this kind of works, but it discourages new players (particularly honest ones). Keeping new people out isn't useful and won't make the market more efficient, especially if they have bright ideas. And people who've been in business don't somehow become more honest with time. Enron had great feedback - until it all fell apart.

And how do you deal with companies that are too large or distant to see on your own? If you had a great deal of money to invest, you may travel to visit the company, talk to management, tour the plant, and double-check the accounting. This is what large fund managers do, I'm sure. But even if you did this...how do you know if they're telling you the truth? If they say "we sold 5000 widgets this year, and have orders for 7000 next year", how do you know that? Suppose they show you a stack of receipts, is that good enough? Maybe they just printed them themselves. The only way to tell is to require reporting, and impose significant penalties for lying. Again, Enron's a good example - even if you analyze the numbers they tell you, you wouldn't have noticed the problems because they made them all up.

"People need to know that stock markets are not safe investments."

Well, it's not risk-free. Statistically, there are ways to reduce risk through analysis and diversification. Also - where else are you going to invest? The stock market is extremely liquid, and works whether you've got $100 or $100 million. Real estate is hard to cash out of, and requires a lot of capital. The bond market has all the same flaws as the stock market - same thing for commodities. Bank accounts won't even keep up with inflation. Starting your own business takes a great deal of dedication, time, and capital - and certainly isn't risk-free either. So where are you suggesting people invest?

"They need to know that they're getting less information than the insiders."

All the more reason for regulation. It's well known (or at least claimed) that efficient markets require that all knowledge be public. Things like Sarbanes-Oxley, insider trading laws, etc. make penalties for acting on privileged information and not disclosing relevant information.

"They need to understand that their investments are likely making more money for others, and that they should find better places to put their money."

That's the way it works - if you ask for a loan to start a business, you do so because you expect to make more money than the interest you have to pay. If your investor demanded all the profits from the loan, you'd have no reason to bother since you couldn't make anything off of it. The point is that the investor decides he's making a good enough rate of return by investing in your business.

So where do you think people should be investing? Because I'd love to find somewhere other than the stock market with low barrier to entry, good liquidity, reasonable returns, and (relatively) transparent operation. It'd be a great way to get rid of a lot of the risk associated with the market.

Re:Intended Consequences of laws

[killjoe]

"Primarily the web, honestly. "

During the age of the copper barrons people had telegraphs, telephones, newspapers, and mail. They were able to communicate with the outside world just fine. It was not the internet but it was communication nevertheless. Despite the this entire towns were living as indentured slaves. In some places the air was literally toxic and there was a blanket of smog so thick it was like lving in a fog of soot 24/7 and the visilibility was never more then a dozen yards or so.

The barrons themselves lived ourside of town in palacial grounds (which you can still visit today by the way).

"In the long run, I think anyone who has faith in the current system is just being duped. "

I think anybody who thinks that letting corporations run wild will lead to a better society is being duped myself. Not just duped but wilfully ignorant of history. It's fine to have theories but in this case there is no need for theory. We have many examples of what happens to countries when corporations run the place. Not only in history but right now too, all over the world.

Take a loot at any backwater third world country and you will see corporations running everything. Take a look at first world and you will see corporation power checked with govt regulation.

"If you're happy to ignore this collusion and theft, that's fine with me, but I want a way to exit this system."

If you think this bad, take a look at what happens when the corporations run the country.

I too want out BTW. Can i get my portion of the military spending back? I am tired of killing brown people by now.

Re:Intended Consequences of laws

[jgc7]

I make between 20% and 50% on my various businesses, annually.

Now I know why there are so many CPA's. What you said makes no sense whatsoever. 20% Return on Sales? Equity? Btw, are you taking into account your own salary?

Most stocks pay no dividend,

Again, not true. Companies that don't pay dividends are the exception not the rule. If the only companies you look at are tech stocks, maybe I can understand why you are confused

so they actually make their owners no profit (except on sale, which is ridiculous as companies should pay profits).

There are a couple of ways to pay profit other than a dividend, including share buyback programs.

Re:Intended Consequences of laws

[dada21]

Funny. I just returned from a 3 week trip to Europe and Asia, to see some of the worst 3rd world countries. What did I see? Millions of people trying to make money outside of government -- so called black money. Capitalism is voluntary cooperation between two parties for the mutual profit of both. This is what I want.

Here in America it is almost impossible to open a business today (I know, I've succeeded and I've failed), mostly due to government at every level. There is so much red tape and so many regulations that there is a constantly declining desire by entrepreneurs to even take the risk. This is why we have Wal*Mart so powerful -- they have enough money to lobby government to bend their rules and relax the regulations.

The American economy has been in decline for almost 15 years, once you factor in personal and corporate debt, real wages, tax burdens and the trade balance. It can not survive much longer like this, and the reason we can't compete on a global scale is because our government doesn't let us.

When corporations "ran the country" decades ago, they did so because they were the government. I'm not saying end all government tomorrow, let's just start with downsizing the federal government about 90% and giving power back to the States, the Cities and the People. Over time, some states will become more capitalist, others will become more socialist. They'll attract the people that want to live in those systems. In today's federal system, we don't have much opportunities to vote with our feet in supposedly the freest country in the world.

My visit to India in my Eurasian tour was mind blowing. I have never seen a more open and aggressive marketplace than I had seen there. We are in deep trouble if we stay on the road we're on.

Re:Intended Consequences of laws

[NMerriam]

You offer a wonderful vision of the future that has no basis in human behavior or reality. Yes, with the federal and state governments exercising strong oversight, it is completely reasonable to have municipalities in the US essentially run by companies (of course they are not even a shadow of true comapny towns, where your pay was in scrip that was only redeemable by comapny stores, etc -- they are just private municipalities, no different than any other private municipality, of which there are tens of thousands throughout the USA).

Take a trip outside the USA sometime and see how well company towns treat their citizens when there is no strong government oversight. Even american companies -- those most vulnerable to bad press -- still treat unskilled employees as virtual slave labor once they leave the regulatory boundaries of the US Government.

The idea that the internet and communication have changed the desire to generate profit or have a captive customer base is ridiculous. As long as every company does it, there's no alternative provider, and thus bad PR will accomplish nothing. In Libertarian fantasy-land, of course anyone can start a new megacoporation to compete if they like, but here in the real world there are very few of us who have millions of dollars and decades of our lives to dedicate to eradicating a single injustice. It's a lot easier to simply consolidate our efforts, pool our money and hire some people to require standards we all find acceptable (we could even call it a "congress" of sorts!). Trusting the hand of Adam Smith to reach in and correct a problem decades after the victims have already been buried is not a solution.

The free market is wonderful in the long run, but in the short run it has a bad habit of chewing up the bones of human beings in a rather vicious fashion. Anyone who believes otherwise has never seen what unregulated industry is capable of (or alternately, a refugee having a reactionary response to TOTAL government control, which is why Ayn Rand can be forgiven her paranoia).

Re:Intended Consequences of laws

[Qzukk]

The problem is that nobody out there has the time to engender the trust they'd want from every single individual they come in contact with, and corporations certainly won't go out of their way to help. Can I really trust the "Organic" produce sellers to not take the ugliest fruit from the truck and slap the organic label on it so they can mark it up? Can I really trust my water utility to purify the water I'm drinking and not feed me any strange chemicals for research purposes? Can I really trust the power plant next door to the house I live in to follow all applicable safety regulations? Can I really trust the medicine I bought to not be placebo pills?

How would these entities go about convincing me to trust them? What do I do if nobody decides that my trust is all that important? What is my recourse for cases where entities build up trust over time specifically to pull off a couple of big scams (see: ebay)?

Re:Intended Consequences of laws

[dada21]

(How fitting...the capcha for this submission is "embezzle"...)

Hah!

And people who've been in business don't somehow become more honest with time. Enron had great feedback - until it all fell apart.

Which is why I don't trust stock brokers (not even my friends who broker stocks). Enron had great feedback from the fraudsters selling it. Enron was also backed by many government bodies. I would never put money into a massive corporation like Enron -- in a regulated or a free market. I'd rather invest in local businesses I have some control over (which, by the way, net me MUCH more profit yearly than the stock market ever could).

And how do you deal with companies that are too large or distant to see on your own?

Good question -- I wouldn't. I prefer to see my money stay close to me, and it also helps me by making my community financially stronger. All the businesses I keep my money in are small, but they all offer great profits and very slow capital growth, which offers cash flow stability and very little risk.

So where are you suggesting people invest?

Locally though your bank. Speak to your banker to find good businesses with a positive cash flow, positive equity, and a good market segment. From my experience, the ONLY way you can truly make money is to work -- if you invest in the stock market, you have to work just as hard to earn $10 as you would in your regular job. There is no such thing as a free lunch, no matter what your broker tells you. I watch my investments daily.

It's well known (or at least claimed) that efficient markets require that all knowledge be public.

That's a Keynesian myth. In any market trade, both parties need to hide something. When I buy a Widget, I don't tell the widget seller how much money I have available or how badly I need said widget. The widget salesman doesn't tell me what profit he's making, how many widgets he'll have in the future, or how useful the widget really is to me. We both come to the table with secrets, and we both leave the trade profiting from the transaction -- I'm a widget richer, and he's a few dollars richer. Transparency was never required, and if the widget fails to meet my needs, it was because I didn't research the widget's usefulness enough.

The point is that the investor decides he's making a good enough rate of return by investing in your busine

Except which stocks today pay any return at all? Do you have any stocks that issue a proper dividend? Probably not, the SEC and IRS hurt companies that issue real profits. I only own stocks in local companies that pay an annual dividend of at least 20% on my money. I hate capital expansion if it hurts my profitability. I like to earn back 100% of my investment in 3-5 years, and I usually do. Publicly traded stocks don't make profits, except when they're sold -- one sucker selling a stock to another sucker.

Where should be people be investing? They shouldn't. They should get debt free -- no mortgage, no lease, no loans, no debt. Then they should build from there -- buy more land, buy some gold, invest in local businesses with the guidance of a banker or a real investment advisor. I avoid the stock market like the plague. The best income is one that you earn by doing actual work -- investments are no different.

Re:Intended Consequences of laws

[ceoyoyo]

Um, if you abolish law you're going to do what in what? Courts enforce the law. No law, no courts.

If there's no law you have to hire some of your own thugs to go beat up the corporate thugs and... yeah.

Re:Intended Consequences of laws

[dada21]

I'm neither a libertarian nor a Rand-droid, fwiw :)

I do travel the world, in fact I just got back from a 3 week trip to Eurasia. My visits to Poland and India were eye opening, indeed. This summer I am traveling to 2 other continents, and following up with a late winter visit to Dubai, one of the my favorite cities in the world, and also the freest market to boot. I see growth everywhere I go, except in the US. Of all my businesses, my 2 biggest failures were due to regulation by the government. My 2 biggest successes were in the free markets that were unburdened by regulations.

I believe we've put too much faith in government, which is the reason things are as bad as they are. Most people don't notice it, though, but traveling to other countries has proven to me that we have no idea what we're talking about. The Chinese "slaves" working in the corporate towns are happier than those who don't have jobs. The Indian "slaves" working for the megacorps have a much higher standard of living than their neighbors. I'm not sure where the bad things are, but I keep looking for them and I find nothing.

When Ethiopia was "starving and the people were dying," I went there. I saw prosperous cities, people with brighter futures, and an economy that would explode if it wasn't for excessive regulations and taxes. I see the same thing today in Tunisia and other parts of Northern Africa.

My words don't come out of some utopian fantasy, they come from honest experience working with many people in many countries. Humans want to make themselves better, and they find ways to do it regardless of what government promises to do. Usually those promises are the main reason we can't better ourselves.

FWIW, I believe megacorporations come directly out of government support and subsidy. I don't know if we'd see the same megacorporation control in a free market, as most megacorps get there through utilizing regulations in their favor.

Re:Intended Consequences of laws

[ceoyoyo]

Your argument is basically that the US government is hurting small businesses because it's being lobbied (effectively controlled) by large corporations.

So if you don't have the government at all... the large corporations just exert more direct control.

The problem is not that government is bad, it's that governments are becoming increasingly controlled by corporations, NOT the people. Government is supposed to be the representative of the people and enforce their will. One of the ways they do that is by intervening in the economy. If corporations control the government....

So go vote. For someone other than the usual suspects.

Re:Intended Consequences of laws

[killjoe]

In india you can buy and sell children. In fact many children are sold to quarries where they carry stones on top of their heads until they are about 15 or 16 because by that time they are crippled by either a leg injury of a spine injury. By the time they are that old they are also deeply in debt to the company they are working for because the company has been charging them for rent and food (which by coincidence is more then they earn). Their only way out is to have children and then sell the children to the company to satisfy their debt. After being freed from their debt both boys and girls usually go into prostitution because their bodies are too broken to do any other kind of work.

That's just one industry. In india there are a huge number of people who are in similar situations.

No thanks.

Re:Intended Consequences of laws

[Arandir]

Yes we should just let the regulators go wild. They would never do anything to harm anybody anyway.

Re:Intended Consequences of laws

[dada21]

You're right, I witness such a "business." I also witnesses families who were able to leave the situation and better themselves just a few miles over in a tourist-friendly town.

In American, we carry the burden of our parents on our heads so much that by the time we'll retire, we'll have to pass our our expenses to the next generation. I'm not sure this is that much different. Instead of being able to provide for ourselves from the get-go, we're stuck in an endless loop of work, pay taxes, and work more. I exited the system as best as I could and have found more happiness and wealth than ever before.

I see opportunities for growth in India, I see almost none hear. More and more doors are closed to entrepreneurs in this country, yet in India I found at least 10 markets that are ready to be entered, if not for government restrictions to foreign investment. I met with dozens of "poor" people there ready and willing to work to better themselves, yet in the US all I do is interview college graduates who feel they are worth much more than they really are.

This country, the US, will learn a very harsh lesson, very soon. If it wasn't for the imperialist wars waged against others, I think we'd have collapsed by now. Yet the day grows closer that we'll have to pay for our debts and pay for our imperialism, and from what I learned on my recent trip, those loaning up the money and goods to live our excessive lifestyles are getting close to stopping the flow back.

Re:Intended Consequences of laws

[Arandir]

But all SO says is...

If it were that simple then S-O wouldn't be as lengthy and complex as it is. In fact, we ALREADY have laws against fraud. That's why the Enron guys are in jail. They broke the law!

Re:Intended Consequences of laws

[ceoyoyo]

So if there were no government, do you think Bell South (or whoever your ISP is) would appreciate you saying bad things about them on the Internet? I think you might be in for a bit of censoring. Perhaps even some censoring by hand (or bat).

Also, I'm sure your ISP would be happy to offer that service to other large corporations you were badmouthing.

Re:Intended Consequences of laws

[dada21]

That's 20% net profit after expenses (including salaries). I put in $100,000 into a business, I expect to make 20% net profits in dividend form at year's end. Even in retail I was able to hit 30% net profits after 2 years. In wholesale the margins are even higher but require more risk I feel. In mostly service-oriented businesses, the margin returns are a little different, but they still return significant profits on year's end if cash flow and customer happiness is managed friendly.

Re:Intended Consequences of laws

[ceoyoyo]

Or you could vote them out of office and replace them with a candidate of your choice (perhaps even you).

I know it seems a little unorthodox, but as someone who lives in a democratic country I can tell you it works fairly well.

Re:Intended Consequences of laws

[Procyon101]

I'm not saying that government should abdicate their responsibility, but rather, that using "but corporations can be evil so we need stronger governmental control" is not a useful response. You are simply replacing one abuse of power with another, and the newer power is even more uncontrolled than the original.

As for the "lie", corporations in the US do not have police powers, rather private citizens in those corporations have police powers, just like private citizens outside those corporations. A representative of a corporation could detain you and lock you in a corporate cell under the same authority that I can act as an officer of the law and lock you in my bedroom. The difference is that there is definite personal liability in such a police action, and if I or the corporation am detaining you without just cause there is hell to pay for the person who locked you in their bedroom :) Outside of the US, well, depending on the country, corporations may or may not have power rivaling that of the governments and in history sometimes they have also, and indeed could even be indistinguishable from governments, but I am speaking to the US' definition of corporation, which has none of those powers.

You're final statement, "RIAA does not need police because they have bought the laws" argues my point directly. Governments can be just as corrupt as the companies, and will often work in tandem with them towards corrupt ends. By giving the government MORE power over companies, you don't just allow the government to curb corruption, but you also allow it more power to crush legitimate competion from non-corrupt corporations in favor of their corrupt alliances. The OP's points were arguing that this was such a case, and while I myself do not feel qualified to offer an opinion on this particular case, I do feel qualified to point out that countering his argument by stating that all corporations should have increased government control is invalid.

Re:Intended Consequences of laws

[Joey Vegetables]

Libertarian theory is pretty straightforward. LewRockwell.com covers this kind of issue on occasion so I'm sure you've seen all of this before. Simply put, if you don't own it, you can't pollute it, at least not without the consent of whoever does. If you do pollute it then you are responsible for cleaning it up, and appropriately compensating those harmed by it. If the harm is irreparable then it becomes a criminal matter. Knowingly causing deaths by pollutoin is no different than any other kind of murder.

Allowing some people to pollute resources owned by others, or resources not nominally owned by anyone (such as air or groundwater), is a subsidy to the polluter and an obvious violation of the rights of those being harmed by the pollution.

Industry would look very different in a libertarian society. It would exist, but with no subsidies (including no right to pollute other people's air, water, land, etc.) and no regulations save those designed to protect against imminent and irreparable harm to life, liberty or property, and even these regulations would likely be enforced by insurance entities, not a government. It is possible that some inherently polluting industries, such as coal-fired power plants or steel mills, could not exist in a libertarian society, in their present forms, although it is much more likely that they would exist on large tracts of land owned by the owners of these plants, and mostly automated so as to avoid the need to pay workers for their willingness to knowingly and voluntarily endanger their health. Furthermore, in an even semi-free society, knowledge always increases, and along with it better processes for making materials and goods, and better substitutes for those goods with large costs (external or otherwise).

Re:Intended Consequences of laws

[Anonymous Coward]

You may be able to opt out with this:

http://www.irs.gov/pub/irs-pdf/f4029.pdf

Re:Intended Consequences of laws

[bbc]

The real problem of course started when the government started recognizing businesses as persons. All these other laws and regulations since then are small change.

Re:Intended Consequences of laws

[Hognoxious]

RE: your sig. I'd say the same for anything yada23 posts, but it's probably a low estimate.

Re:Intended Consequences of laws

[rossifer]

An ounce of gold today buys about the same thing that an ounce of gold did in 1800 and an ounce of gold in 0 AD.

This statement is only true for a very carefully selected group of products (and almost no services). While an ounce of gold will still buy a nice men's suit of about the same relative quality as you might buy in 1800, for pretty much everything else, an ounce of gold will not buy you the same things you could get in 1800. This is due to relative changes in value of purchasables, especially the value of human services as compared to physical goods. The comparison to 0AD prices is that much more crazy (just because you can find one product that could be traded for about the same gold does not mean that there's equal value behind an ounce of gold over time).

Even more importantly, your assertion about the consistency of value behind an ounce of gold glosses over huge currency to value changes (hyper inflation and deflation) that have disrupted local economies and created great misery until things restabilized.

If the available interest rate of savings accounts is above the inflation rate, there is an incentive to save.
Yet the available interest rate is set by the same organization that prints the new paper currency!

Actually, a particular consumer bank's savings account interest rate is not set by the federal reserve and only bears the slightest relationship to any of the interest rates they do set. The biggest problem is that banks earn a lot more money from debt than from savings and are disincented from providing savings services, except as necessary to maintain their fractional reserves. How to correct this imbalance of incentives? It's more complex than you think.

My money is stable, and I don't fear stock market fluctuations, war, imperialism or a global loss of faith in the dollar.

Gold ended up being devalued hugely in the late '70's and early '80's (from about $800/oz to $300/oz in 1976 USD) and many people who thought like you do lost substantial fractions of their savings because they had fearfully put all of their money in gold as a hedge against disaster. Which turned out to be disastrous for them once the oil crisis passed.

Is your future safe?

Actually, pretty risky. Almost all of my money is in my home and will soon be in my own entrepreneurial venture. But I'm convinced that that's the best place for it, despite the risk that the company could fail. The independence and potential upside are too compelling to ignore.

Regards,
Ross

Re:Intended Consequences of laws

[dada21]

This statement is only true for a very carefully selected group of products (and almost no services).

This is very true, and one of the things I am doing to show gold's power is to plot gold versus consumer goods and consumer services. I've only been tracking this since January 06, but I plan on opening up my graph and my data to a larger group of recorders so we can better track gold's holding power. The fact that gold still has any value versus any fiat currency proves to me that there is a lasting power.

that have disrupted local economies and created great misery until things restabilized.

Again, very true, but a little ignorant of the fact that distribution and communications in the past were severely limited. Today's structure of distribution and communication has allowed us to have protection mechanisms in the market (derivatives are a great example, although they are over-used due to the inflationary cycle).

How to correct this imbalance of incentives? It's more complex than you think.

I agree that it is complex, but the bank's ability to make money from credit comes directly out of its ability to generate new currency where none existed before (through the Federal Reserve's creation of new currency). When the Fed makes new money available, it does so through the credit system of the member banks. Hence the easy money/easy credit cycle.

Which turned out to be disastrous for them once the oil crisis passed.

I believe this is a problem that can be tied to gold's "newness" to investors. Gold had been illegal to own for decades, and was also tied to a pre-set dollar value. I personally don't care of gold is US$100 per ounce or US$1000 per ounce as it is merely a store of wealth for me -- my wealth can greatly fluctuate but its value to me is what will it be worth in the future. As I currently have numerous stable income streams, as long as my gold and silver holdings continue to rise in weight, the current and future value is unimportant as long as the value is something greater than zero. I don't see gold dropping below US$300 ever again, but I also don't see gold dropping below 7 barrels of oil per ounce. The most important factor to me is how much of X can I buy with an ounce of gold (or an ounce of silver).


Actually, pretty risky. Almost all of my money is in my home and will soon be in my own entrepreneurial venture.

I was in a similar situation not that long ago. I downsized greatly (from a gorgeous 4 bedroom home to a much smaller trailer home), but I also upsized my wealth and time availability greatly. I went from owning one small business to a variety of businesses in different markets. My income is lower than before, but my debt and monthly burden is near zero. Do I like living in a cheaper home? Actually, yes. My home is much more energy efficient, I utilize the space much better, and the lack of a mortgage (nearly a US$1500 a month savings) allows me to travel, work less, and spend more time studying the world and human action. Most of my friends own less than 5% of their McMansion's, so I'm not concerned with keeping up with the Joneses.

It's funny, not that long ago I was driving a huge Land Rover, living in a big home (with a big vacation condo as well), and working 50 hours a week, never seeing my family or spending any quality time traveling. Now I drive a used Toyota, live in a house made of foam on wheels, but I have the world at my fingers. It is amazing what a difference life can be once you realize your previous premises were wrong!

Re:Intended Consequences of laws

[Anonymous Coward]

You've missed the point. The problem isn't big business or big corporations, it is the fact that government exists that is the problem. Big corporations are able to take advantage of the government and thereby make the rules harder for other businesses to compete. This is not voluntary exchange, this is coercion.

For example, lets say WalMart wanted to damage its competitors... assuming that it is currently paying its employees $7/hr it could do serious damage to its competitors by simply pushing the government to raise the minimum wage to $6. This would hurt all the competitors that are currently paying $5.75 an hour for their wages and do no damage at all to WalMart because it is already paying above that (it has already factored in the costs). This is what what dada21 is talking about. Big corporations aren't necessarily evil in and of themselves, it is when we allow big corporations to manipulate the government in the name of ``fair competition'' and other socialistic phrases that things get skewed.

Re:Intended Consequences of laws

[TykeClone]

those loaning up the money and goods to live our excessive lifestyles are getting close to stopping the flow back.

Does that mean that they will stop purchasing debt, or stop purchasing all American goods and services? And if so, what will they do with the dollars that we're sending them (or are they planning on stopping all trade with the states?)?

Re:Intended Consequences of laws

[jbolden]

Yes we have fraud laws against saying things you know to be false. SO just made saying certain things that might be true but might not be illegal.

Re:Intended Consequences of laws

[iminplaya]

So if you don't have the government at all... the large corporations just exert more direct control.

On the contrary. Those large corporations won't have the gov't protection they presently enjoy to become the behemoths that they are now. The gov't regulations we see now are more of an attempt to raise barriers to the competetion than anything else.

Government is supposed to be the representative of the people and enforce their will.

It is and it does. Otherwise the turnover would be much higher. You wouldn't see the 90-95% re-election rate that we have today.

Re:Intended Consequences of laws

[WilliamSChips]

I'd choose the regulators over the corporations. At least if the regulators are corrupt, we have a chance of voting them out. And if you say 'vote with your wallets' you should know that that doesn't work, especially when the corporations don't deal directly with consumers.

Re:Intended Consequences of laws

[dada21]

Many countries are starting to experience inflation of their own (based on our inflationary cycle) and are also starting to gain western desires as well. It would not surprise me to see the new consumer countries being the previous supply companies.

I doubt the dollar will collapse (but I have hedged against it with gold and silver). I do think its purchasing power will severely drop as other countries step up to the plate. A real dollar crash would likely hurt the international markets enough that things would just correct themselves and move forward. It is a very difficult projection to make in any case, but there is nothing wrong with protecting against all outcomes.

Re:Intended Consequences of laws

[matt4077]

Your comment is somewhat true. However, trust is very important for an economy. I. e. you wouldn't buy anything without some trust, currencies are based only on trust (no more gold standard) etc.

I seem to recall that much of the economic success the jewish communities had in the early 20th century and before was based on trust, i. e. you could give someone locally some money and some business partner of them would pay the same sum (minus some fees maybe) to the final recipient. Very useful in the times before international banking systems were firmly established.

Why were they trustworthy? Because their reputation depended on it, and reputation is rather important in small communities.

Today, the communities are much larger, so you wouldn't know someone personally or be able to learn anything about his personal reputation. That's why there are companies like Western Union, Paypal and banks. These entities are under the rule of law, in which you trust. The law has therefore become a proxy for trust.

Re:Intended Consequences of laws

[budgenator]

Without SOX you would have problems of more problems of bad accounting reporting which would hurt the general market more.
  But basicaly SOX make a company's executives personally liable for crimes that are committed by the coporations, that they would have been responsible for if the companies weren't corporations. I'm sure if a corporation had to purchase "accounting fraud" insurance privately, the terms of the policy would be a lot stricter than anything the SEC could dream up.

You would be surprised at how many Americans not only hate/distrust big government, but big business, big religion, anything that's too-big/powerful.

Re:Intended Consequences of laws

[Anonymous Coward]

I'm sure you've read this, so this URL is for the benefit of those who may not be have seen it:

http://www.mises.org/story/1970

Re:Intended Consequences of laws

[Stephen Samuel]

You offer some very valid advice -- if we were still living in 1910 or 1950 or maybe even 1970.

The difference between then and now is that we now have laws in place that disallow the worst of those past abuses. Remove the laws and the abuses will almost certainly come back.

I'm working on a mathematical proof of the need for anti-monopoly laws. Without activity limiting laws, it is easy for corporations to go completely overboard.

'Company towns' are just fine for the priviledged few who the corporation considers critical to their survival.... for as long as that's true. However, once those people are deemed disposable, the services that the corporation provided can disappear as quick as it takes to write a memo.

I talked to a forester on the central coast of British Columbia who told me of what happened to a 'company town' late '80s early '90s. (I didn't get an exact date, but I was told the story in 1995 and it was given as recent history).

It was a company town in the general region of Bella Coola that was based on the logging industry. It had wonderful conveniences, and the company built, for example, a brand new gymnasium/theatre for the community to use. The next year, they decided to shut down logging in the area, and they ordered everybody out. The brand-new gymnasium was ordered abandoned. People were not allowed to remain there -- even if they wanted to -- because the town was private property of the corporation.

Re:Intended Consequences of laws

[chris_eineke]

Here in America it is almost impossible to open a business today (I know, I've succeeded and I've failed), mostly due to government at every level. There is so much red tape and so many regulations that there is a constantly declining desire by entrepreneurs to even take the risk.

Adam, you absolutely need to visit Germany. You wouldn't believe your eyes and ears about how much red tape there is. America's red tape is nothing compared to that.

Re:Intended Consequences of laws

[Anonymous Coward]

The economics of slavery are very bad; it's very dificult to make any money with them. Far better to hire employees that can be laid-off durring slow periods; even better would be independant contractor's and or H1B holders.

Re:Intended Consequences of laws

[ceoyoyo]

Business (corporations, capitalists, etc.) are not evil, or good, they are amoral, the ultimate sociopaths. So yes, having them run the government is a BAD idea. But government itself isn't the problem, it's who the government answers to.

Places that have no legitimate government are not conducive to business. They are poor and violent. Companies like stable places to do business.

The role of a democratic government is to exercise the power of the people, NOT the power of the corporations. The people need to periodically remind the government of their wishes. Good luck with abolishing government though. If you ever succeed I think you'll find you've created some serious third world nastiness.

Re:Intended Consequences of laws

[ceoyoyo]

Most places don't HAVE the 90-95% reelection rate you seem to in the US. Senators sitting for decades? That's insane! Maybe what you have is a combination of apathy and corrupt campaign laws. Not to mention long standing social conditioning to a two-party system. Or perhaps the majority really do like the system you have, in which case the majority has spoken.

We had an election one time and one of the parties ran on the platform that if we all bounced up and down in unison, across the country, we'd solve all of our problems. Seriously. I wouldn't be surprised if they got more votes than most of your minor presidential candidates. A government that's secure in their power is a bad government.

As for corporations, do you really think that if there was no government control Wal-Mart wouldn't make itself a little private army and arrange "accidents" for it's Mom-and-Pop competitors? When you get rid of the rules might makes right. I'd hate to see what the RIAA would do if they were given a free reign.

Re:Intended Consequences of laws

[killjoe]

"You're right, I witness such a "business." I also witnesses families who were able to leave the situation and better themselves just a few miles over in a tourist-friendly town."

In any country there will be the poor and the rich. The measure of a countries civility and humanity is how the poor live. The fact that there are people "getting ahead" in India is of little consequence when they are getting ahead on the backs of child labor, prison labor, and slavery.

A programmer in India is able to charge two dollars an hour because his house was built by the destiture using bricks made by five year old girls, using furniture made by slave children.

Like I said. No thanks.

"In American, we carry the burden of our parents on our heads so much that by the time we'll retire, we'll have to pass our our expenses to the next generation."

Unlike most of the world your parents will get Social security, medicare or medicaid. Imagine your burden if those weren't there?

"I see opportunities for growth in India, I see almost none hear."

In that case you are blind. If you don't see opportunity in America you are not looking.

"This country, the US, will learn a very harsh lesson, very soon. If it wasn't for the imperialist wars waged against others, I think we'd have collapsed by now."

And we will continue to wage wars to prop ourselves up. One of the reasons we invaded iraq was to prevent them from asking euros for their oil. Make no bones about it. We will kill anybody who gets in our way. This is why America is dominant. We have no morals when it comes to money. This is also why there is more opportunity here then anyplace else.

Re:Intended Consequences of laws

[Anonymous Coward]

I just want access to opt-out of all the programs.

Somalia is that-a-way.

Re:Intended Consequences of laws

[killjoe]

"My 2 biggest successes were in the free markets that were unburdened by regulations."

I think that's everybodies point. Business loves to run free and do whatever it wants. It's great for you, sucks for everybody else.

As I said there are lots of places in the world where there are weak govenments and businesses run the country. I don't want to live in any of them. You want to live in Dubai? Under a king? No democracy? Go ahead. My guess is that you won't live there, you will set up a business and fuck the guest workers like all other dubai businesses do. Get them into the country and then take away their permission to leave so you can work them for cheap.

Dubai is great if you are a) connected b) rich c) royal d) visiting.

Re:Intended Consequences of laws

[mckennage]

"That being said, I hate accountants. The average CPA is part of the problem in this country"

Woah there, dada. Sounds like a lot of hate. Accounting is a very necessary profession. If you can think of an alternative to having accountants, please share.

I work with CPAs every day, and from my own personal experience I can say that I highly doubt that the "average CPA" is part of the problem. I think the CPAs that lobby congress are a minority. And there are also some CPAs that are AGAINST Sarbanes Oxley.

"Instead of requiring companies to do anything, how about telling people that they really shouldn't put their money anywhere but where they trust?"

I couldn't agree more. Sarbanes Oxley is ridiculous. The government shouldn't be in the business of trying to help us better trust these large companies, even if it did work (it doesn't).

"Most stocks pay no dividend, so they actually make their owners no profit (except on sale, which is ridiculous as companies should pay profits)."

It's up to the investors to take the profit as they like, and they are therefore free to choose a dividend paying stock or not. Many prefer to have the stock appreciate instead of receiving a dividend. I know I do. The appreciation on a stock is tax free and it is low maintenance when you don't have to reinvest dividends. Then you can sell off stock in small pieces during retirement to minimize tax burden. Or donate to charity and avoid capital gains taxes altogether.

IANACPA.

Re:Intended Consequences of laws

[Politburo]

the worst polluter in all of history has been the U.S. government

True.

I'm not sure the worst polluter in history is really the best organization to regulate the pollution of private citizens.

Possibly, but it's an irrelevant argument. The government regulates on behalf of the people.

I do believe that there ARE free market ways to control pollution.

Really. What ways are those? How much pollution have they cut?

In the end, pollution can ONLY be controlled through voluntary desire.

False. While voluntary desire can be a strong motivator for pollution control, it is not the only solution. Regulations have proven results.

If people really want to end pollution, they need to be informed by others in who is the worst polluters, and we need to boycott those companies. If no one boycotts, I can only believe that no one cares, in which case the problem needs to get bad enough for the next generation to realize the error of their parents.

Except people do care, which is why environmental regulations have been enacted.

Re:Intended Consequences of laws

[Billly Gates]

I was thinking of investing in precious metals a few years ago. I tried to convince my old man to do so as the stock market became very violatile. He told me its risky and after the discussion the value of gold and silver went down considerable. Also he had a friend buy some gold only to have it devalue as soon as the stock market went up in the mid 1980's.

Right now is a good time to buy as the price went back down again and it maybe more stable. However I am a little skeptical on using for currancy purposes. It is a lower risk investment but it may not return as much as other opportunities.

Re:Intended Consequences of laws

[Pig Hogger]

Pollution is a very difficult situation for me. I'm not sure what the answer is, and it is one of about 3 points that I am still trying to resolve mentally (and financially).

That's because your libertarian head is totally unable to cope with the concept of "public good" being more important than "private good".

In your head, "what is good for General Motors is good for the whole world".

In the end, pollution can ONLY be controlled through voluntary desire. If people really want to end pollution, they need to be informed by others in who is the worst polluters, and we need to boycott those companies. If no one boycotts, I can only believe that no one cares, in which case the problem needs to get bad enough for the next generation to realize the error of their parents.

Only government can control pollution, because it alone has the power to punish polluters.

The public at large does not give a flying fuck about the environment, given how ready they are to jump in their trucks to drive in the urban sprawl.

The only time they give a shit is when there's an oil spill in their backyards; they then become NIMBYies, but they will tolerate any abuse as long as they're able to drive their cars to their 'burbs.

Re:Intended Consequences of laws

[greenguy]

in fact I just got back from a 3 week trip to Eurasia

Ah, that explains why I haven't seen you post as often as the next three most frequent posters combined, like I'm used to.

And aren't we at war with Eurasia? Oh wait, that was Eastasia.

Re:Intended Consequences of laws

[Pig Hogger]

Libertarian theory is pretty straightforward. LewRockwell.com covers this kind of issue on occasion so I'm sure you've seen all of this before. Simply put, if you don't own it, you can't pollute it, at least not without the consent of whoever does. If you do pollute it then you are responsible for cleaning it up, and appropriately compensating those harmed by it. If the harm is irreparable then it becomes a criminal matter.

And, pray tell, which inexistent government under libertarian rule will have the power to prevent and force pollution cleanup? And, more importantly, with which nonexistent taxes it will pay for that enforcement???

Industry would look very different in a libertarian society. It would exist, but with no subsidies (including no right to pollute other people's air, water, land, etc.) and no regulations save those designed to protect against imminent and irreparable harm to life, liberty or property, and even these regulations would likely be enforced by insurance entities, not a government.

Do you live in Disneyland? Which insurance company will willingly forfeit a significant portion of it's sacro-sanct bottom-line in order to enforce it's own insurance policies???

And with the zillions insurance companies out there, figuring out who is responsible for bailing-out the cleanup costs is gonna be a nightmare just like figuring out a medical procedure!!!

Re:Intended Consequences of laws

[Pig Hogger]

The free market doesn't work on situations like this. They're called externalities, and covered in econ 101. A course I become more increasingly sure no libertarian has ever taken.

Externalities age overlooked by libertarians because their essential "free lunch killer" qualities...

Re:Intended Consequences of laws

[Pig Hogger]

When corporations "ran the country" decades ago, they did so because they were the government. I'm not saying end all government tomorrow, let's just start with downsizing the federal government about 90% and giving power back to the States, the Cities and the People.

You swallowed the big croporate line, hook and sinker. They made you believe that government is bad because only government can prevent them from sucking your blood and pissing in your drinking water.

Their idea is to totally discredit politics and politicians, and eventually democracy itself, so, one day, when some guy will come around saying "hey, all that democracy bullshit is not working, vote for me, and I'll get rid of it all", people will actually vote for him.

Just like the germans voted for Hitler in 1933.

Re:Intended Consequences of laws

[Pig Hogger]

In American, we carry the burden of our parents on our heads so much that by the time we'll retire, we'll have to pass our our expenses to the next generation. I'm not sure this is that much different. Instead of being able to provide for ourselves from the get-go, we're stuck in an endless loop of work, pay taxes, and work more. I exited the system as best as I could and have found more happiness and wealth than ever before.

Could it be that they have to have a bigger house, lawnmower, swimming pool, car than the Joneses?

I see opportunities for growth in India, I see almost none hear.

Well, why don't you go there and grow yourself, unhindered by that big bad government here that won't let you buy children (and their firstborns) as slaves???

Re:Intended Consequences of laws

[Pig Hogger]

I doubt the dollar will collapse

Oh, it will. As soon as Saudi Arabia, Iran and Venezuela switch to Euros to get paid for their oil, the Dollar will take such a plunge that the US economy will never recover before at least a generation, given how much the US has squandered it's own domestic manufacturing capability.

Without that, the US will **NOT** be able to generate any wealth at all to repay it's huge international debt.

Saddam was just about to switch to Euros for Irak's oil, because he found out he made more money in Euros than in dollas. This is the real reason why the US invaded: it wanted to send a clear message to other "rogue" states like Venezuela or Iran that it will not tolerate anything that could undermine it's currency that is essentially based upon what people think of it. And when more and more people dump the dollar, people will realize thatit's more and more based on bullshit.

Re:Intended Consequences of laws

[Pig Hogger]

If there's no law you have to hire some of your own thugs to go beat up the corporate thugs and... yeah.

Just like the "frog wars" of yesteryear...

Re:Intended Consequences of laws

[Pig Hogger]

I just dont understand the American obsession agaisnt government but not at all agaisnt big business?

This goes back to 1215, when the magna carta was extorted from a weak king by ruthless barons.

The barons managed to wrench some powers that the King had previously held. This significantly weakened the english crown, to the point that eventually, at the time of the Industrial Revolution, the bourgeois were expecting that they could not be ordered about by the State.

This is the origin of the anglo-saxon mindset where everything coming from the State is bad, corrupt and should be viewed with disdain. This attitude led to laissez-faire capitalism with it's horrid social consequences throughout the World.

Big businesses being a relatively recent development, they haven't had time to foster as much discontent and distrust as 3/4 of millenium of magna-carta has been able to do in the collective anglo-saxon psyche...

Re:Intended Consequences of laws

[Anonymous Coward]

In American, we carry ... ... I see almost none hear.

Proof that America's failure is in its public education system.

I exited the system as best as I could and have found more happiness and wealth than ever before.

Your next step is to learn spelling and grammar.

Re:Intended Consequences of laws

[mvdwege]

And yet the financial world keeps complaining that there is not enough consolidation in the German market, that there are too many entities. In other words, despite the red tape, Germany has a thriving SME sector, one that is so healthy that large corps complain about it, because it 'fragments the market' (and here I thought that more competition was a good thing).

Something is wrong with this picture.

Mart

Re:Intended Consequences of laws

[jdavidb]

How much would that gold be bought if you had bought it and held it until now?

I actually regard gold as not changing substantially in value; I see long-term increases in gold's "value" in terms of dollars as simply indicating the devaluation of the dollar due to the government expanding the money supply. So from my point of view, you don't buy gold to make money as the price rises: you buy gold to escape from the inflationary problem of fiat money. Whether or not that's better than investing your money elsewhere if you actually want the value to RISE rather than staying the same, I don't know.

(This is a simplification, and if dada21 sees this, he'll probably correct my by mentioning that in a free market if everyone is on hard money instead of fiat money you actually see a slow deflation (increase in money value) in the long term because new technologies and discovered business practices result in greater efficiency and cheaper prices. This is a good thing and means that gold does more than hold its value long term. But I'm simplifying to just get at the fact that I don't intend to purchase gold in order to make stock market returns; I simply intend to purchase it because I view its value as stable relative to dollars which I could be saving instead.)

Re:Intended Consequences of laws

[jdavidb]

Primarily the web, honestly.

I got to thinking about this last night and thought I'd come back and challenge you and say, "All right, how's the web going to work without IANA?" But then I remembered your background, and I realized that you probably already know the answer to that. :)

Re:Intended Consequences of laws

[jdavidb]

My confusion is all your fault, you know. You made me read that Rothbard book, and now when I read "money," I think gold, and when you say "save," I think "save money," which means "save gold."

Re:Intended Consequences of laws

[jdavidb]

However, trust is very important for an economy. I. e. you wouldn't buy anything without some trust,

Right. You buy stuff when you have that kind of trust. So, for example, you check out the product for flaws before you buy it. And you buy from people that you know well enough to know they are selling something that isn't flawed, or with flaws disclosed.

Re:Intended Consequences of laws

[jdavidb]

That's why there are companies like Western Union, Paypal and banks. These entities are under the rule of law, in which you trust.

I most certainly do not.

Re:Intended Consequences of laws

[bobdinkel]

Thanks for the thoughtful response.

I don't believe in public property, but I do believe that there is enough desire amongst members of a community to endow a trust to own land that is available to the public.

The idea of a community trust owning land for public use is interesting. But how does that really differ from the government owning the land? At some level, that's what government is right? Individuals pooling resources to do things like provide for the common defense, maintain public lands, etc. To me it seems like a community trust and a government are points on the same continuum. Could you explain the difference?

Not to create a straw man, but I have done the research, and the worst polluter in all of history has been the U.S. government. I'm not sure the worst polluter in history is really the best organization to regulate the pollution of private citizens.

It certainly isn't analogous to having a known child molester watching your kids, but I understand your point. I took a look at the PERC site and it's definitely something I'll be looking into.

In the end, pollution can ONLY be controlled through voluntary desire.

I certainly don't agree with that statement, but maybe I'm misinterpreting it.

If people really want to end pollution, they need to be informed by others in who is the worst polluters, and we need to boycott those companies.

Where do we get information about who are the worst polluters? Do companies report their own pollution or are they monitored by some other party? How would this work?

Re:Intended Consequences of laws

[CommieOverlord]

Fed (Greenspan, Bernanke and their inflationary cycle)

You make a) sound like it's their idea and b) inflation is purposefully designed to screw people over. It is neither.

A fiat money system is not the great evil you've made it out to be, nor is the a gold standard a perfect solution either. In the modern and global economy, the gold standard has proved ineffective. It has been tried and abandonned several times. While inflation is a problem of fiat money systems, it is _still_ a problem of gold based systems. Gold based systems also bring in the yet worse deflation.

Re:Intended Consequences of laws

[Arandir]

Vote? Vote? When was the last time you voted for a bureaucrat? Hell, it was a major year long undertaking just to remove a corrupt governor in California!

Re:Intended Consequences of laws

[WilliamSChips]

No, bureaucrats have to take tests. Although I don't like a huge bureaucracy either, it's a necessary evil, and there are minimum requirements for most positions(the ones that don't are ironically the top positions, something I admit is a mistake because it leads to things like the current administration's cronyism), something which corporations don't have, except through regulations, and even then, not well enough. And the ones making the laws, we vote for those, even if a proportional-representation system would probably be better. And frankly, I place the blame for the energy crisis in California more on the corrupt corporation Enron's shady money-making dealings than on anything Gray Davis did. And now you have another Republican actor as governor.

Re:Intended Consequences of laws

[Arandir]

1) What does a test taken by a bureaucrat have to do with anything? A bureaucrat's education and intelligent is unrelated to the bureaucrat's morality and ethics. Bad regulations can come from educated and intelligent bureaucrats. Really!

2) It doesn't matter if a corporation has dumb executive, because a corporation has no authority over me. They don't generally impose "regulations" on me, and those few times that they do it is because government has given them that authority. Thus government is still the root cause.

3) Bureaucrats might not make laws, but they do make regulations.

4) While Enron was certainly run by corrupt criminals, it was fostered under an environment led by Gray Davis. Enron was a convenient scapegoat, and while they screwed over their employees and investors, they didn't cause the energy crisis.

5) The last Republican actor governor was pretty damned good for California. You may not have liked him as president, but a governor he was kickass. While the current Republican actor is somewhat muddleheaded, I happened to go to school with the nimwit who was his leading opposition, and I'm very glad he didn't get get elected.

The original article says ...

[gregor_b_dramkin]

violators of GPL are violators of Sarbanes-Oxley.

solution: don't violate the GPL.

Re:The original article says ...

[booch]

Parent post - (Score: 5, Succinct)

Coming soon to slashdot:

[endrue]

Does the GPL Violate Sarbanes-Oxley?
[E]ssentially counsels users of the free software license that they have no need to worry.

Coming soon:

Does peanut butter taste like fish?
No

Is water wet?
Yes

Short and informative - this is great stuff!

Re:Coming soon to slashdot:

[XMilkProject]

Is water wet?

In the vast majority of possible temperatures it is gas or solid. So I'd say, on average, no; water is not wet.

Re:Coming soon to slashdot:

[SpinJaunt]

Short and informative - this is great stuff!

Short and informative - this is great fluff!

I'm pretty sure that's what you ment? LOL ;)

Re:Coming soon to slashdot:

[outZider]

and then it is no longer water.

Re:Coming soon to slashdot:

[MP3Chuck]

Really? Does it change from H2O when it changes phase? ;)

Re:Coming soon to slashdot:

[Anonymous Coward]

In common English, we refer to solid molecular water as "ice" and gaseous molecular water as "water vapor."

Now you know, and knowing is half the battle!

Re:Coming soon to slashdot:

[General Alcazar]

In English, water implies liquid state:

Solid H2O: Ice
Liquid H2O: Water
Gaseous H2O: Steam
Plasma H2O: Profit!

Re:Coming soon to slashdot:

[Kjella]

Really? Does it change from H2O when it changes phase? ;)

<Hermes Conrad>Would you say "solid water" or "liquid ice"? Show me a good example of 'water' being used in phase-neutral context. For example, to describe the weather we have percipitation. Heavy snow or rain? No, that's downfall. I suppose you could use water vapor, but that might also mean "vapor coming from water", and I'd just as easily call that steam. In any case, 'water' without qualifiers is specificly liquid H2O, and thus always wet</Hermes Conrad>

Re:Coming soon to slashdot:

[Door-opening Fascist]

Bzzt. The IUPAC name for H2O is water, regardless of state.

Re:Coming soon to slashdot:

[bbc]

"In the vast majority of possible temperatures it is gas or solid. So I'd say, on average, no; water is not wet."

In the vast majorities of possible temperatures it is impossible to test your claim.

Re:Coming soon to slashdot:

[Fulcrum of Evil]

and then it is no longer water.

No, it's either water ice or water vapor. By the time it hits plasma, it's hydrogen plasma and oxygen plasma.

Re:Coming soon to slashdot:

[darkmeridian]

water is not ice.
water is not steam.

ice is solid water.
steam is gaseous water.

Re:Coming soon to slashdot:

[pthisis]

Bzzt. The IUPAC name for H2O is water, regardless of state.

And in Spanish, "arena" means sand.

But I believe the quote "Is water wet?" was speaking English, not IUPAC or any other scientific jargon. In English, water is liquid. See, e.g., Webster "Water[..] 1 a : the liquid that descends from the clouds as rain, forms streams, lakes, and seas, and is a major constituent of all living matter".

Re:Coming soon to slashdot:

[venicebeach]

I think more to the point is whether a liquid can be "wet". Usually we use the term "wet" to refer to a solid that is covered with or has absorbed a liquid.

Re:Coming soon to slashdot:

[masterzora]

Using water to refer to all of the phases is valid in English, even if it isn't common.

Re:Coming soon to slashdot:

[Anonymous Coward]

In the vast majority of possible temperatures it is gas or solid. So I'd say, on average, no; water is not wet.

---

i'll meditate o nthis idea during my next cruise...

Re:Coming soon to slashdot:

[mckennage]

"In the vast majority of possible temperatures it is gas or solid. So I'd say, on average, no; water is not wet."

You can't tie those two statements together to make valid conclusion. The first sentence is true, but your conclusion in the second statemetn is false. Most water on Earth is wet, so I'm not sure what kind of average you are using to say that on average water is not wet. Certainly not the mean, median, or mode if you are living on planet earth.

Are you referring to a hypothetical place where temperatures are random or where H20 temperatures are equally divided between all possible temperatures?

Re:Coming soon to slashdot:

[Anonymous Coward]

Can you please give an english example where water is used to refer to the non-liquid state?

The other day, I went skating on the water rink!

Diesel trains are so ugly...I prefer water engines.

Sorry...of the 5 english dictionaries I checked, water is consistently descibed as a "liquid"

Re:Coming soon to slashdot:

[masterzora]

I don't know about you, but I hear the term "frozen water" on a regular basis. "Water vapor", too. As far as I'm concerned, that's using water to refer to the solid and gaseous states.

Re:Coming soon to slashdot:

[Anonymous Coward]

So why do you think, in your example, that it needs to be qualified by "frozen"?

Re:Coming soon to slashdot:

[XMilkProject]

Usually we use the term "wet" to refer to a solid that is covered with or has absorbed a liquid.

Wow, I guess it depends where your from. Around here wet typically means several other things:

1. You get 'wet' when you smoke a joint with PCP/Angeldust in it.
2. A girl is 'wet' when she's horny. Regardless of leaking vaginal fluid.
3. 'wet' often refers to any task involving murder or assasination.
4. And then I guess more similar to your definition, when you piss the bed.

Re:Coming soon to slashdot:

[masterzora]

Same reason liquid nitrogen needs to be qualified as liquid.

Re:Coming soon to slashdot:

[XMilkProject]

Are you referring to a hypothetical place where temperatures are random or where H20 temperatures are equally divided between all possible temperatures?

Well... Yeah. Like maybe a good MMORPG or something.

Tastes Great! Less Filling!

[winkydink]

If you rely on public websites for your corporate legal advice, you deserve exactly what you pay for it.

Ultimately, there is only one kind of person who can tell you if it is legal or not. That person is called a Judge or, in rare instances for corporations, a Jury.

SOX is change management over financial systems

[futuresheep]

SOX requires strict change management controls over financial systems. When we went through our audit, the auditing company was mostly concerned with how changes were made to these systems, what management controls were in place to monitor these changes, and the processes that were in place to ensure their integrity. None of the OSS software used in these processes was given a second glance beyond the aforementioned items. As an example, our use of Nessus as one the our tools for network audits and our archive of Nessus scans was applauded.

Just my Experience.

Re:SOX is change management over financial systems

[jamcmh]

I like what you said, but let's be clear... SOX says nothing about change management.

SOX can be boiled down to two things: #1) The opinion from the auditor of how effective your controls are (this includes everything from IT to Payroll, and everything in between), and #2) The opinion from the auditor expressing their evaluation of if or if not you are following the controls.

Now. Consider what you said:

"SOX requires strict change management..." -- While true, it is somewhat misleading. Your company has established a Change Management methodology as a control to cover the accountability of changes to the systems. You follow these Change Management guidelines as if it were a religion. That results in #1 - their opinion of your C/M after evaluting it, and #2 - their opinion of if you're following it religiously.

Re:SOX is change management over financial systems

[CodeArtisan]

I like what you said, but let's be clear... SOX says nothing about change management.

Not directly. PCAOB Audit Standard #2, however, does. The PCAOB Audit Standard is the SEC approved audit standard to which US Public Companies filing under Sarbanes-Oxley are held.

Paragraph 50 of the standard requiter that Change Management over financial systems should be tested by the auditor.

Re:SOX is change management over financial systems

[jamcmh]

Fair enough. :-)

Re:SOX is change management over financial systems

[mckennage]

I am an IT auditor. The entire Sarbanes Oxley audit covers a lot more than just the systems managed by IT. But yes, change management on those systems is absolutely critical, though only a part of the controls needed to be in place to mitigate IT-related risks to the financial statements. I've never even heard discussion about whether software is OSS or not. It doesn't really come into play in the typical audit. A lot of people seem to be looking into more detail than the typical audit covers. IT auditors usually just want to know that you have change management controls, strong password settings, backups, anti-virus software, firewalls, physical security, and proper rights setup in the applications and systems.

Re:SOX is change management over financial systems

[seann]

Just a random question.

If you know of a company that violates SOX, is there a method to report this?

Since when is the GPL a EULA

[Tweekster]

What would use of software have to do with the GPL... The user does not have to accept the terms of the GPL to USE the software...

Maybe I'm a bit thick but...

[Masa]

I don't understand neither the original article title nor the Slashdot article title. How can GPL (or using GPL'ed software) violate the SOX, if GPL'ed software is used as the license permits? Reading the article didn't give me any insight about this issue.

Re:Maybe I'm a bit thick but...

[ZachPruckowski]

How can GPL (or using GPL'ed software) violate the SOX, if GPL'ed software is used as the license permits? Reading the article didn't give me any insight about this issue.

You can not get in trouble for using software you have a license to use. Period. If you follow the GPL, you have a license to use OSS. Break the GPL, and well, you don't have that license anymore. Ditto with normal software. If you violate an EULA, or steal software, you don't have a license anymore. Using software you don't have a license to is a SOx violation, regardless of whether the software is free or not.

Re:Maybe I'm a bit thick but...

[Billly Gates]

According to SOX you need to give an account on who owns all your IP.

The counterlink given in this article is just as biased.

Here is the problem. You run linux and your software is an asset used to help run your company. Who owns it? Does Linus own the kernel? What about the distro owner? How about the 250 people who contributed to the kernel?

Wasabi is saying that you need to keep track of all the thousands of kernel and FOSS developers since they own the copyright on the code in your accounting reports. Since that is impossible you therefore break the SOX law and your business can be held liable.

The GPL is not an EULA but just a license for the code. The issue of proper credit and who owns what is what the fud is all about.

This will scare some of the suits from using linux but they would typically find a reason not to use it anyway.

Re:Maybe I'm a bit thick but...

[booch]

According to SOX you need to give an account on who owns all your IP.

OK.

Here is the problem. You run linux and your software is an asset used to help run your company. Who owns it?

I still don't see the problem. It's not my IP, so I don't have to account for it. Really, you'd have the same problem with code from Microsoft and other proprietary software vendors. Much of the code they sell is sub-licensed code owned by other companies. Heck, some of it is even BSD-licensed code.

Re:Maybe I'm a bit thick but...

[RobertLTux]

the way it works it hinges on that IF THEN statement if you can prove you have copyright/permission then you don't have this issue but if not then after the penguins get done with you you may have some "men in black" having a "disscusion" with you on the finer points of the Law TSCOG may have fun with LanHam and SOX and RICO and ...

Re:Maybe I'm a bit thick but...

[soft_guy]

And further, I think the GPP poster is trying to imply that no one "owns" linux which is not the case at all. I believe in order for the GPL to be in effect, the software must be copyrighted since that is the basis of the GPL. Therefore, there is a copyright holder who "owns" the software. I believe that it is probably the Free Software Foundation.

Re:Maybe I'm a bit thick but...

[Anonymous Coward]

And you'd be [mostly] wrong. Although some of the linux contributors may have assigned the copyrights to their contributions to the FSF, Linus has not, and he retains copy rights on much of the kernel.

Re:Maybe I'm a bit thick but...

[soft_guy]

Still, someone "owns" linux - Linus.

Re:Maybe I'm a bit thick but...

[10101001 10101001]

If you follow the GPL, you have a license to use OSS. Break the GPL, and well, you don't have that license anymore.

Oh the number of errrors... Well, let's begin. The GPL is FSS, not OSS. Use of FSS/OSS/etc isn't bound by you having a license to the GPL/BSD/whatever; use is an innate property of legally possessing a copyrighted work. It's bound to the person who gave you a copy having proper redistribution rights (and you're liable, at least in the US, if they don't). This means your violation of the license would occur upon redistribution outside of the terms of the license and its nullification would open you up for punishment for all copies you redistributed; it would do nothing to halt your use of the legal copy you obtained.

This is fundamentally different from an EULA, which tries to force upon you use requirements that harken back to book publishers including EULAs inside the cover of books in an attempt to do the same sort of legal entrapment EULAs do today. The two major defenses to combating an EULA are to return the product (one of the stated bases why EULAs have yet to be wholly declared null) or to, if possible, circumvent agreement to the EULA (clearly this is paramount to seeing a contract lying inside your new home already signed by the person you just bought it from with further restrictiosn, and you cleverly ripping it up). None of these hoops are present in the GPL because most people never have a reason to agree to it.

Re:Maybe I'm a bit thick but...

[booch]

There is actually a big issue there -- too many people own the IP in Linux. If you take *just* the kernel (and a GNU/Linux distro contains a ton more software than that) there are probably several thousand people who own code in there. And not all of it is well-documented who owns it. If you had to find all those people, it couldn't be done. Which is why the license can't practically be changed (without throwing out a lot of code where it's unclear who owns all of it) to the GPL 3 or any proprietary license.

But like I said, this isn't something SOX requires. And you'd have a hard time writing a list of all the owners of Windows code too.

Re:Maybe I'm a bit thick but...

[gnasher719]

'' Here is the problem. You run linux and your software is an asset used to help run your company. Who owns it? Does Linus own the kernel? What about the distro owner? How about the 250 people who contributed to the kernel? ''

That is really very simple. Your company can just make a statement like: "In our company, we are using 500 copies of Linux and 500 copies of OpenOffice. Both Linux and OpenOffice are owned by their respective copyright holders; we are using this software under the GPL license. We are also using 500 copies of Windows XP and Microsoft Office which are both owned by Microsoft; we are allowed to do this because we paid Microsoft lots of money for the licenses. "

If in reality you only paid for 100 licenses of Windows XP and Microsoft Office and someone finds out, then you are not only in trouble with Microsoft, but also with SOX. And should you be violating the terms of the GPL license in such a way that you are not allowed to use Linux and OpenOffice (and I am not quite sure at the moment how you would do that), then you are also in trouble with SOX.

Re:Maybe I'm a bit thick but...

[bbc]

"If you follow the GPL, you have a license to use OSS."

Nonsense.

Following the GPL does not generate a license for OSS.

You do not have to follow the GPL in order to use GPLed software.

Some OSS uses the GPL, but following the GPL does not switch off copyright law for you; you still have to follow all the other OSS licenses.

Furthermore, a license is not a contract.

Re:Maybe I'm a bit thick but...

[MickLinux]

You will be happy to be informed that Microsoft code does not have problems with this difficulty of the Sarb.-Oxley law. ALL of Microsoft Code which was not developed by and in Microsoft, was cleaned of previous ownership through *adverse posession* laws. Therefore, if it is a Microsoft Product, you can list it as being purely owned by Microsoft. The same applies to your computer, which you can list as being purely 0wN3D by Microsoft.

*** Note to Modders: Please, please, please do not make the same kind of mistake as you have so often made before, and mod this +5 informative ***

Re:Maybe I'm a bit thick but...

[Anonymous Coward]

Wrong. Linus doesn't require that kernel developers transfer copyrights on contributed code to him. The individual developers retain copyrights on any code they wrote. All he requires is that they license their code under the GPLv2.

This is in contrast to the FSF which requires that all code from the GNU project has copyrights assigned to the FSF. This allows the FSF to relicense code in the future and to have standing to sue anyone for violating the GPL with regards to GNU software.

There is no single person who holds the copyright to the Linux kernel in whole or even a majority share.

GPL - Gets Perused Lightly

[digitaldc]

What this means practically for the vast majority of companies complying with SOX is that the threat to their businesses posed by potential GPL license violations, both inadvertent and intentional, is so low as to be immaterial.

Does the GPL Violate Sarbanes-Oxley? - No

Groklaw quotes Moglen: FUD, plain and simple.

[toby]

Article here.

Quoting a response by the Software Freedom Law Center:

the latest Software Freedom Law Center white paper maintains ... these issues were reviewed and it was found that there is in fact no special risk for developing GPL'd code under SOX. "Under most circumstances, the risk posed to a company by SOX is not affected by whether they use GPL'd or any other type of software. Arguments to the contrary are pure anti-GPL FUD [fear, uncertainty and doubt]," the paper says.

Wasabi = BSD zealots

[drwho]

I contacted Wasabi hoping to buy some tools from them for BSD development on embedded platforms. When I asked about a platform they didn't support, the proceeded to criticize that CPU and Linux saying they were underpowered and immature, basically, they want you to buy their favorite CPU. Sadly, this company is made from NetBSD developers, who I had previously thought were among the less rabid BSD zealots.

I stayed with Linux for embedded systems, and probably will forever, unless embedded BSD is freed from the grips of these people.

Re:Wasabi = BSD zealots

[Billly Gates]

Management runs the company not its BSD founders. Also they sell their own embedded systems and highly discourage using your own as it would cost htem money.

Management wants to kill linux as much as possible so you can run netbsd instead.

It seems they are desperate at this point and bashing linux was not a good way to make a customer. It seems they have incompentant salesmen and upper management probably had a role in training them.

Re:Wasabi = BSD zealots

[Anonymous Coward]

The way it was told to me is that Wasabi borrowed money heavily and incurred mountains of debt. Unable to meet cash flow expectations, they were forced into another round of borrowing. They are carrying huge financial obligations to their creditors. One can only surmise that they are probably pretty desperate at this point, thus the grasping at straws.

Re:Wasabi = BSD zealots

[telemonster]

I am slightly familiar with their storage products. Perhaps the CPU you were asking about is new and really isn't mature?

You can use NetBSD on some embedded platforms if you wished.

Re:Wasabi = BSD zealots

[Anonymous Coward]

You've heard the old saying about "When the only tool you have is a hammer, every problem looks like a nail." NetBSD essentially only supports one simple model of an embedded microprocessor: a 32 bit processor with paged memory and an MMU. Wasabi's main problem is NetBSD. Wasabi is unable to support the type of processor which is used in most embedded applications. If you bring a problem to them which they are unable to solve, they will "dis" you and your processor.

Linux on the other hand scales across the board. IBM demoed Linux on a wrist watch. SGI runs Linux on 256 processor NUMA machines. Of course the fastest and largest computational clusters in the world run Linux. Set top boxes, TiVo, cell phones, PBXs, crosspoint switchers, you name it, all run Linux, run it well. NetBSD is not even in the running.

Re:Wasabi = BSD zealots

[drwho]

What's surprising about this is the old slogan "Of course it runs NetBSD" - when in fact a lot of the listed NetBSD listed platforms are in fact not really operational. It's as though there's kudos for getting netbsd to boot on your coffee maker, and then after the kudos and high-fives are exchanged, it's back to working in x86 land. I was hoping that I could spend a bit of money with tools from Wasabi and change this, but instead I found out that Wasabi doesn't even support most of the listed BSD platforms. It's kind of pathetic.

Sarbanes-Oxley is a joke

[rfolstad]

I speak from experience and people can and will use SOX as an excuse for anything and everything. The problem is auditors are now trying to understand technology and they just don't get it.

The basics of SOX is that your CEO must sign that the proper controls are in place to ensure that all changes made to production systems that affect the reporting of financial information are approved changes.

Companies can take this to mean that changes to your firewalls, mail servers and webserver need to be logged and monitored with scrutiny. And they will even send "auditors" in to take screenshots of /etc/shadow hahahahahahhaa.. It's hilarious.

Realistically it is impossible to be 100% SOX compliant and profitable. This bill will be gone within 5 years and other countries without silly laws like this will prosper in the meantime.

So yes. If there is a not an audit trail in place where someone approves of applying that patch to the linux kernel on all production machines then you are not SOX compliant. Just like if someone doesn't approve installing that critical service pack from microsoft. Without approval and test cases you will fail your SOX audit unless you pay the extortion^H^H^H^H^H^H^H^H^H fee that anderson^H^H^H^H^H^H^H accenture is charging these days.

Re:Sarbanes-Oxley is a joke

[Anonymous Struct]

I couldn't agree more. There's nothing about SOX that has any meaningful impact on security. We could easily be secure and not be SOX-compliant, and we could just as easily be insecure and be totally SOX-compliant. Trying to legislate information assurance from Capitol Hill is a complete joke, and the auditors are eating it up. I just hope this garbage gets repealed before it wraps the entire industry in thick, red government-issue tape.

Re:Sarbanes-Oxley is a joke

[srNeu]

SOX has become revenue stream for auditing firms. They took a very simple law (about 2 pages) that is as you stated "The basics of SOX is that your CEO must sign that the proper controls are in place to ensure that all changes made to production systems that affect the reporting of financial information are approved changes." and turned it into a complex cash cow.

My company's parent company has several internal corporate auditors on staff that are extremely computer illiterate. They basically take what the external auditors say to do make us produce documentation for it. However, the auditing firms have made the requirements overly complex and the corporate guys don't understand the technology to know what really makes sense or not.

Case in point, our corporate guy decided that only 2 of the 4 admins at our company need admin access in the mrp system. So he directed one of the dedicated mrp people to remove my access. Now I can no longer unlock user accounts, etc., so my ability to help the company has been reduced. No where in the SOX law does it say that you can only have 2 people with admin rights. So where does the corporate guy get that impression --- from the auditing firm. I have since got my rights back due to confronting him if he could point out exactly where in the SOX law it says that only 2 people can have admin rights. He couldn't, and only said that [unnamed auditing company] said that was the right way.

As long as the external auditing companies make up the rules on what is covered and what is not, we will continue feeding the auditing company's cash cow called SOX.

Re:Sarbanes-Oxley is a joke

[Jacobine]

The paper trail is truly boggling. We're using the 'we need the paperwork for the auditors' excuse on a very regular basis now. It's a lot of user training there. We're not auditing every single thing, but having to use the programs that monitor our every move while still keeping authorities locked down is a pain. (I hate that actions that took me 30 seconds before now take me three times as long and five times the keystrokes.) Of course, my new job is sox compliance and security. Not only do I manage the sox paper trails, but I do all security changes myself. Can I say how glad I am that the next audit is months away and my new boss is the one who was in charge last time?

Re:Sarbanes-Oxley is a joke

[moggie_xev]

What they might be trying to get at is the segragation of responsiblities

eg. Two people with root access, two different people with "dba" access and another two people people with application level root access. With logs stored an a different machine that only management sysadmins have access too.

Most auditors I have seen don't really understand that root can do everything.

I am half hoping they choose the change control where I grab the FC's encrypted password change the FC's password to something I know, do some work and then put her encrypted password back.

It would be entertaining, our consultant auditor was suprised with what su did.....

Re:Sarbanes-Oxley is a joke

[jbolden]

Its easy to be SOX compliant.

1) Accurately state what you know is true
2) Explain where the holes are in what you suspect is true
3) Accurately explain what you don't know

The only thing SOX prohibits is pretending you know things are true when you don't. Telling the truth is not impossible. Give conservative estimated, list risks, the list unknowns... Its really pretty easy.

Coming soon to Reggie Perrin's "Grot" shop...

[Anonymous Coward]

Does peanut butter taste like fish?

Coming soon to Grot: Fish-flavored peanut butter.

Scuttlemonkey does it again!

[Fujisawa Sensei]

Does Using GPL Software Violate Sarbanes-Oxley?

Does this actually have anything to do with the article? No

The Article says that violating the GPL may be a SOX violation, but no more so than any other EULA.

I've seen a lot of complaints about Zonk; SM is worse.

Re:Scuttlemonkey does it again!

[bbc]

"no more so than any other EULA"

Any other EULA compared to what other EULA?

Re:Scuttlemonkey does it again!

[PetoskeyGuy]

Check out http://digg.com/. It's much better content and avoids this crap.

you know

[Ender Ryan]

I really hate to think that the law is so fucking insane that your "regular," above average intelligence bloke can't figure it out for himself. If that truly is the case, which it most certainly seems to be, we seriously need to start all over again. Start with the Constitution, and go from there, and try a little fucking harder to prevent it all from being corrupted like it is now.

The Founders of this insane country have got to be spinning in their graves.

Re:you know

[TubeSteak]

I assume that by "Start with the Constitution, and go from there" you really mean "Start with the Constitution and British Common Law, then go from there"

If a lawyer with lots of free time can find a precedent out of British Common Law that hasn't been superseded by more recent laws and/or court decisions... He just won his case.

Being King involved a lot of adjudicating back in the day.

Who Effing Cares! WTF HAPPENED TO /.?!

[Compu486]

Who Effing Cares! WTF HAPPENED TO /.?! This is real lame news to be the norm now! STOP IT!!!!!!!

Wasabi Burns

[Doc Ruby]

I knew the founders of Wasabi Systems, here in NYC. The original "brains" behind the startup, which planned a "Red Hat for NetBSD", got screwed by his lawyer partner in the late 1990s, and left. No surprise to hear their business model is lying about GPL (Linux) in press releases.

Re:Wasabi Burns

[Anonymous Coward]

Ouch. Goes to show you that you can't trust lawyers. Whats the other guy doing now?

Re:Wasabi Burns

[Doc Ruby]

He's a high-end IT consultant in NYC, his usual career for 15 years. Married, apparently wiser.

He had approached me and my company to do for NetBSD what Red Hat did for Linux, though the Linux model at the time was Slackware. My own partner, though no lawyer, refused, blew the opportunity for everyone. I wish we had done it, and I'm no lawyer, either.

Re:Wasabi Burns

[Anonymous Coward]

You talking about Perry? He got married? Good for him! Haven't talked to him for years.

Re: I have to agree....

[inventgeek]

I have to agree.... this is really lame filler type news on this site. It seems that ole Slashdot has really gone down hill... even looking at the number and quality of comments on the different news lines is on the decline.... looks like digg is really kicking ass.

Re:Swatting a fly with a sledge hammer

[symbolic]

My understanding is that one of the reasons that Enron got as far as it did was because of the absence of laws that declared a conflict of interest if the same firm used for accounting/auditing, was also used for consulting. Doing the right thing would have meant giving up either of those roles, and all the money that went with it. Money talks, integrity walks.

If my understanding is accurate, I wonder why it wasn't fixed by simply closing this loophole. Seems like every time something goes wrong (and it went terribly wrong here), there's an additional excuse to increase "oversight" - and all the red tape, hassle, and extra cost that goes with it. I also seem to recall that someone sounded the alarm quite aways before Enron broke, but was ignored by Congress.

What the FUD?

[redelm]

AFAIK, SOx is all about increasing "transparency", mostly records retention and statement quality. OSS can only help these, not hurt, unless the corp is incurring liability by violating licences.

Sic em Red Hat

[Anonymous Coward]

They're obviously trying to denegrate the competition by telling lies about it. That's why Red Hat sued SCO. They should be forced to prove their allegations or shut up.

So what if it does violate SO

[Anonymous Coward]

People who think for themselves will one day realize that in the end, it's all about FREEDOM. Corporations do not have your best interests at heart and never will. The GPL is where the future of free software is, and only the GPL. People who bitch and moan about things will one day thank the GPL for being what it is. Corporations are becoming stronger. GPL software can never be stopped by anyone, ever, anytime.

Re:So what if it does violate SO

[iamacat]

Corporations do not have your best interests at heart and never will.

While not arguing about common reality, what's to stop a particular corporation from having your best interests at heart and why do you think they can not/shouldn't? In fact, I consider it a part of civilized society. If I set up a repair shop and incorporated it for tax/(reasonable) liability protection purposes, I would try to help my customers with their problems rather than screw them over. You?

Re:So what if it does violate SO

[sumdumass]

The difference is that we are all indepentent thinkers. You have a repair shop, i have my breaks fixed as cheap as possible, you notice that rotors are groved and will degree there performance of the brakes after a while. Now I think in my best interest is to get the brakes fixed as cheap as possible, you think replacing the rotors will get more life and make them more reliable so that my best interest. Granted you make money by selling the rotors so it apears your wanting to sell the upgrade to benefit yourself more then me.

In other words a corperation cannot know whats in anyones best interest so what you do is set up a system were you offer a value for a reasonable cost. You need to do it in a way that makes you money. While not trying to screw someone over, it will eventualy be seen as that because you try to make money. If you changed my rotors out while I wasn't wanting to spend the money on them, I would think you were trying to screw me when you weren't. After you get so big, you stop worrying about your reputation and more about keeping things running. After your a publicaly traded company, you have to do whats in the share holders interest to make money and if you don't, you won't be running things much longer.

Re:SOX !?

[Anonymous Coward]

dammit, SOX = sound exchange.

Re:Swatting a fly with a sledge hammer

[Anonymous Coward]

You're forgetting the most important part of the act: holding executives personally accountable for their company's malfeasance.

No Violation

[stonetony]

The Government in notorious for telling you that you need to comply with regulations without telling you how to comply. This sounds great at first, but this also leaves you open for penalties later if they determine that the methods you chose were insufficient. There is nothing in Sarbanes-Oxley that restricts the use of any specific sort of software to comply.... as long as if/when they investigate you they determine that you are/were in compliance.

In-house developed Intellectual Property

[Infernal Device]

What happens if a company develops intellectual property and releases it as GPL? Are they still required to report it?

I gather from a quick reading that simply using GPL software doesn't imply any risk, since the company in question does not own the IP outright. But if they are the original developers ... what happens then?

Thats no better than what you complain about

[Wizardry Dragon]

Is this an 'innocent until proven guilty' world or a 'guilty until proven innocent' world?

I tend to take a decidedly buddhist view when it comes to that, nothing to do with the religion (before I get a religious flamewar going here), but I believe in moderation. Completely distrusting everyone is no worse than complete trusting everyone. You have to strike a balance - the way our world works depends upon it. Buisness depend upon trusting that the average consumer is not a theif (someone should tell the RIAA that, before they strangle the music industry), relationships depend upon trusting that the person you are with will be true to you, in whatever way that means to you.

~ Wizardry Dragon

Re:Thats no better than what you complain about

[mrchaotica]

"Innocent until proven guilty" is an obligation for the Government because it is created to serve the people. Individuals, however, have no such obligation because they are only responsible for serving themselves.

Re:Thats no better than what you complain about

[jdavidb]

Is this an 'innocent until proven guilty' world or a 'guilty until proven innocent' world?

I don't see that as related, because that is a standard for law, not a standard for personal and business relationships.

A girl dating a guy she does not know should absolutely not treat him as "innocent until proven guilty." And a person buying a portion of a business should absolutely not assume that the people running it are trustworthy unless they know them.

Completely distrusting everyone is no worse than complete trusting everyone.

Since I didn't advocate distrusting everyone, I think you misunderstand what I was saying.

I say you don't trust someone until they have proved themselves trustworthy. That means I do trust some people.

relationships depend upon trusting that the person you are with will be true to you, in whatever way that means to you.

Yep. Which is why you shouldn't enter a relationship with someone until you know they can be trusted in that way. You don't just "take a leap of faith" and hope they won't betray you. You find someone you've spent enough time with and know well enough to know that they will not.

Re:Thats no better than what you complain about

[Wizardry Dragon]

It is a standard for law only because 'the people' decided that it was what is to be expected of the 'reasonable person.' Of course, religious zaelots who practice the 'guilty until proven innocent' inquisiton-sih regime are not seen as reasonable people.

What makes you trustworthy, even, to yourself? If wait for everyone you come across to prove 'worthiness' then you're going to be waiting for a -really- long time, because most people are -not- going to go out of themselves to prove themself to you. You either accept them on the readily observable merits they have, or you do not; it's simply unrealistic to expect to have the time, or even the inclination 90% of the time to wait for people to prove themselve trustworthy.

~ Wizardry Dragon

MOD PARENT UP: Headline Bad

[Anonymous Coward]

Sheesh. RTFA guys - the accusation isn't that the GPL itself violates SOX, but that if you violate the GPL, you're violating SOX, because you're making misrepresentations about what IP you own.

It's a dubious theory to begin with, and misreporting it doesn't help.

Wasabi & NetBSD

[Anonymous Coward]

Wasabi Systems has been spreading some FUD about the GPL prior to this. My understanding of the situation is that they're a company that delivers NetBSD solutions and employs the key NetBSD developers. NetBSD has been particularly eager to get rid of GPLed code in their distribution but gcc is hard to replace unless you are willing to pay. They still like to advertise how they are essentially GPL free.

I suppose they're bitter because of Linux's success while very little attention has been directed at the BSDs and most of that has been towards FreeBSD. NetBSD is a great OS but I find it disturbing that free software projects turn against each other like this.

Re:Act of 2002?

[Gogogoch]

You're right. Sarbanes-Oxley doesn't matter today. What was I thinking?

Just so you know...

[Anonymous Coward]

Wasabi employs many of the people behind NetBSD and is leading the push to commercialise it. They offer many proprietary extensions to NetBSD, and it seems they are now into sleazy FUD marketing too...

SOX Violations

[Ratbert42]

From my growing experience with SOX, I probably violate it every time I take a piss without capturing it.

Re:Sarbanes-Oxley is a joke - SO TRUE

[gullevek]

Yes, we are forced to make screenshots from fileserver accounts creation, change, whatever, same for the mailserver and so on. We create TONS of papers. Papers for everything. Nobody will ever read them, nor understand them.

SUXBOX! This is just new trick for those "companies" to make gazillions of money in "auditing". Auditing? Muhahaha, they skim threw the papers, asks hillarious stupid questions, where the IT people just litteraly laugh at them.

How should this EVER help preventing anykind of accountant fraud? In no way, never every. EVER. If you record a new users rights or not, it will not stop him or her to trick the balance sheet or do some other stuff.

But whatever. Luckily someone gets rich of it.

Re: I have to agree....

[idonthack]

Digg is slowly getting better, but it's not quite there yet. Their new comment and moderation system has really helped them, but it's at a level so far below Slashdot's that it almost of made them more pathetic. Until they have a good moderation and comment threading system and the article submitters start typing full sentences, they won't be my primary news source.

Already Refuted

[Anonymous Coward]

As you can see from Groklaw's article on this, the answer is no. The costs do not change merely because one uses the GPL. SOX is a royal pain in the ass to comply with, true, but GPL software isn't any more problematic than software released under other licenses.

Beware Your EULA

[Stephen Samuel]

Man, if you're worried about the GPL, imagine what happens if you use Microsoft Software?

Under the MS EULA, once you upgrade your software, you have no rights to use the older version(s). This means that if the 'upgrade' breaks your mission-critical software you are so toast.
If you don't revert your software, then your mission-critical software wll remain broken until Microsoft deigns to fix the issue.
If you do revert your software then you're in violation of the EULA and subject to having Microsoft demand that you delete the entire package at any time.

With the GPL, you're only likely to run into problems if you want to distribute the software without distributing the full source. You can sometimes get away with not publishing the source to isolated parts of software written by you, but at that point you're running on the border and should talk to lawyers to make sure that you're not crossing over the line.

Re:Beware Your EULA

[julesh]

Under the MS EULA, once you upgrade your software, you have no rights to use the older version(s). This means that if the 'upgrade' breaks your mission-critical software you are so toast.

I believe you are mistaken. Not only would it violate the principle that once you have paid for a license it is yours to dispose of as you wish (doctrine of first sale), Microsoft specifically grants downgrade rights in many of their licenses anyway -- e.g., if you want a second license for Office 97 you can buy a recent version of Office and install from your old Office 97 disk if you want.

Re:Beware Your EULA

[ratboy666]

Interesting... I've been through the older MS EULA, and that grant isn't there. I *would* like to deploy older Office and Windows (older "junk" computers). I don't have the "latest and greatest" EULA (with Windows XP and Office 200x).

Can you post the grant?

Thanks in advance

Ratboy.

Re:Beware Your EULA

[Stephen Samuel]

Not only would it violate the principle that once you have paid for a license it is yours to dispose of as you wish (doctrine of first sale),

If you're saying that, I'd have to conclude that you've never actually read (and understood) your MS windows EULA.

Once you buy an article you can do what you want with it. Licenses are arbitrary... That's why the EULA has the claim "you agree that you have licensed this software, not purchased it (or something to that effect).

Under general copyright there is no need to obtain a license to run a piece of software. The doctrine of fair use would allow you to install and use it to your heart's content on any one machine.
In theory a license is supposed to grant you something that you would not normally have.. MS licenses seem to do nothing other than take away rights that you would normally have. I think that that's part of the reason why EULA 'agreement' pages are designed to discourage you from actually reading them.

From the current XP-Pro SP2 eula. (find it here)

3. RESERVATION OF RIGHTS AND OWNERSHIP. Microsoft reserves all rights not expressly granted to you in this EULA. ..... The Software is licensed, not sold. (emphasis MS's)

8.Upgrades. To use the software identified as an upgrade, you must first be licensed for the software identified by microsoft as eligible for the upgrade. After upgrading, you may no longer used the software that formed the basis for your upgrade eligibility. (emphasis mine)

14 ..... The initial user of the Software may make a one-time permanent transfer of this EULA and Software to another end user, provided the initial user retains no copies of the Software. ..... The transfer may not be an indirect transfer, such as a consignment. ....

It just kinda goes downhill from there..

Re:Act of 2002?

[budgenator]

It's not the GPL clashing with SOX, it's when a company knowingly uses GPL code in their proprietary product, lies to the stockholders by saying they own the code i.e. list it as an asset on the balance sheet, and then refuses to release the source code as required by distributing software containing GPL'd code.

Would be like a bank robber worrying about an unpaid traffic ticket he got enroute to the bank robbery.

Very Stupid

[glrotate]

The Wasabi Whitepaper itself says it doesn't:

"None of this applies to companies who merely use GPL software, such as those who run Linux on their servers, as long as their software was created in a compliant way. In addition, none of this applies to companies using non-GPL open source software, such as BSD; in the case of BSD, there is no requirement to make modifications open source. Rather, the requirements discussed here apply to companies who modify GPL software, such as embedded OEMs
using Linux."

This is only about companies releasing products with GPL software.

Actually it would be good for Open Source if it was a violation. It would be leverage to use against these infringing embeded companies.

I've worked with Sarbanes Oxley

[Banner]

And it's a complete joke and waste of money. More of Congress making stupid laws and costing people more money, and now we have accountants telling us how to make software? And what counts as 'quality'? Please...

I dunno...

[rindeee]

what has changed since the last time this was a topic on /. a few short weeks ago (January 19th @ 13:18 to be exact)?

Cui bono -- who benefits -- is often important.

[jbn-o]

The reason why they're making their case against the GPL is important. Proprietors are saying that the GPL makes them nervous, they don't like the commons the GPL creates and maintains. Proprietors want to discourage everyone from using and developing GPL-covered code so that they have less competition and won't have to spend their time lobbying governments around the world to help make Free Software implementations of various programs impossible. Thus this is just another legal risk FUD case against the most widely used Free Software license, the GNU GPL which fails to mention what the Software Freedom Law Center points out:

"Historically, GPL violations have not triggered massive lawsuits for damages the way that violations of proprietary license agreements have. The primary enforcer of the GPL is the Free Software Foundation (FSF), who has never used a GPL violation as the basis to go to court to seek a large damage award or enjoin software distribution. The FSF's stated policy is to ensure compliance, not to prevent software distribution or to seek damages.

What this means practically for the vast majority of companies complying with SOX is that the threat to their businesses posed by potential GPL license violations, both inadvertent and intentional, is so low as to be immaterial. In any case, the financial impact of GPL violations is likely to almost always be lower than the impact of proprietary license violations, for which parties routinely bring suit for damages."

And when it comes to GPL-covered software being so complicated to deal with, the SFLC has this to say:

"In most instances, compliance with proprietary licenses is much more complex than GPL compliance because the GPL is a general license with obligations that are fairly simple and understandable. No money changes hands, seats are not counted, and licenses are not time-limited. GPL compliance is a fairly simply matter, and if a company has concerns about how to comply, the FSF is staffed with experts who can and do help companies create efficient compliance procedures. Proprietary licenses, on the other hand, often contain both a greater number of provisions and a greater complexity than the GPL. Thus, a company trying to understand its rights and comply with its obligations under such a complex and detailed license will have a much harder time than one who must merely comply with the GPL. Accordingly, the risk of inadvertent license violation is often greater with non-GPL licenses."

There is this thing called.....

[3seas]

.... consumer choice.

Ever heard if it?

From the programmers creating F/OSS to the users who chose to use it...

Now what would we have if that weren't so?

SOX is FUD

[smack.addict]

Sarbanes-Oxley is god's gift to consultants.

It really says nothing about technology. Yet consultants get companies to do whatever they want by claiming it will put them in violation of SOX.

FUD FUD FUD FUD!!!

What if you write GPL code to help SOX compliance?

[RedPhoenix]

GPL could Violate SOX eh?

I guess all the organisations that are using the GPL'd Snare for Windows, Snare for Solaris, Snare for (Linux|AIX|Tru64|etc..). to help them meet their Sarbanes-Oxley audit-related objectives (or GLBA / DCID / DIAM / ACSI 33 / NISPOM / HIPAA / etc..) will be laughing their collective asses off then ;)

Red. (Disclaimer: Snare developer)

Don't blame Scuttlemonkey this time ...

[Zero__Kelvin]

Does the GPL Violate Sarbanes-Oxley?
By Peter Galli
March 7, 2006

Well, I guess it depends upon whether you consider the article's title to be part of the article. There are sentences in the article that are ambiguous enough to make one wonder which interpretation is intended, as well:

"The fact remains that no criminal charges on the basis of violating SOX have ever been brought against a GPL user," he said.

Note that it says GPL user, not violator. Of course, Peter Galli almost certainly didn't pick the title, as that is typically done by the editor. There are lots of times when the Slashdot article title gets it wrong, but this wasn't one of them.

Re:What if you write GPL code to help SOX complian

[fishbowl]

*Violating* the GPL, which is a specialization of violating copyright law, could expose you to civil litigation. Failure to anticipate such a risk might get you into Sox territory. But if that's what it takes to get your company to abide by basic laws such as copyright, you probably have much bigger problems than Sox compliance.

Duly noted, but

[einhverfr]

I think that there ought to be an appropriate regulatory infrastructure to require transparency in corporations. Transparency is the goal, not regulating what companies must do or don't do.

What I can't understand about many of these scandals is why the CEO was so heavily involved in cooking the books or pressuring the CFO's to do so. The CFO isn't supposed to work for the CEO. All the more reason to suggest that C-level officers should not also be on the Board of Directors.

I also think that with two smaller laws, we could do wonders for transparency in corporations: 1) Neither the CEO nor CFO ought to serve on the board of directors of a publically traded company and 2) The CFO ought to be paid a salary and not offered any securities from the company as compensation. This is to avoid an incentive to cook the books.

You didn't look very hard on your trip

[einhverfr]

I always found it interesting. In Jakarta, Indonesia, the only road to the airport is a private toll road. One company *controls* access to the airport serving the largest city in the country. Talk about corporations running everything.

The smog is horrendous, the polution is terrible. The rivers are awash in garbage. The government has not the money to provide the basic services necessary to clean things up. The tap water usually comes from wells and smells of sewage because there is no water treatment. Yes, there is a lot of black money, but this does not work the way we would like-- most of these people don't even have the legal right to squat where they do.

Part of the problem is that the problems of land reform, economic reform,and the development of sustainable cities are heavily intertwined problems. When poor people have no documentation of ownership of land where they have built houses, they cannot finance their businesses, nor can the government collect taxes. Hence garbage piles up in the rivers, and so forth. This is why countries such as Peru have found that land reform is crucial to helping those small black-money businesses you describe. Yet, who owns the land? You got it. The large corporations.

I lived in Jakarta for a total of about eight months. I can tell you that our current system, imperfect as it may be, is far better than what exists in Indonesia.

I do not wish to go back to a world like that. I think that we do need to continue to focus on transparency, such as allowing every shareholder full access to a firm's accounting data.

Um, no

[Rix]

Releasing code under the GPL does not take away any rights to relicense it in another manner. Trolltech, for example, offers QT either under the GPL or a commercial license.

Re:Swatting a fly with a sledge hammer

[nairobiny]

My understanding is that one of the reasons that Enron got as far as it did was because of the absence of laws that declared a conflict of interest if the same firm used for accounting/auditing, was also used for consulting. Doing the right thing would have meant giving up either of those roles, and all the money that went with it. Money talks, integrity walks.

If my understanding is accurate, I wonder why it wasn't fixed by simply closing this loophole. Seems like every time something goes wrong (and it went terribly wrong here), there's an additional excuse to increase "oversight" - and all the red tape, hassle, and extra cost that goes with it. I also seem to recall that someone sounded the alarm quite aways before Enron broke, but was ignored by Congress

Except that your understanding isn't correct. Firstly auditors already are banned from undertaking consulting engagements, and were even before SOX came in.

Secondly, auditors can never be totally independent of a company - after all, they are paid out of company funds to perform audits. A much more sensible approach is to recognise that there are always threats to independence, but that auditors can establish certain safeguards against these threats. For example, by prohibiting members of the audit team from buying stock in the companies they audit. Or by mandating a 'cooling off' period during which an audit partner cannot go join an audit client in a financial role. This approach - unsurprisingly known as the "threats and safeguards" approach originated in the Institute of Chartered Accountants in England & Wales in the late 90s and is now part of the code of ethics of the International Federation of Accountants.

Also there are often good reasons why you should hire your auditors to undertake non-audit (non-consulting) work. They already have a wealth of knowledge about your company which another firm simply wouldn't have. Another firm would have to spend lots of time - and that means shareholders' money, folks! - learning about your company. So instead of mandating a blanket ban, SOX required (Section 201) that the company's audit committee pre-approve non-audit services. So it recognises that sometimes they will be the best firm for the job, whilst adding another hurdle for them to cross before they can provide non-audit services.

No what?

[booch]

We were talking about using existing GPLed code in your own code. You can NOT relicense THAT code in any other manner than the owner allows.