The US deficit is not a problem. Seriously. The size of the US debt means nothing when looked at in isolation. Is it a large number? Sure. But compare it to the amount of private wealth, and things start looking very different suddenly.
The only problem is to optimize spending and taxation in such a way that the real outcome is good in some sense - and there needs to be a genuine discussion about what "good" should mean. I would say "good" means jobs that allow obtaining a high real living standard for everybody who wants that (if you don't want to work, that's fine too, just don't expect such a high living standard).
Then the deficit will be as small or large as is necessary to achieve that goal. The deficit is an endogenous outcome anyway; this means that the size of the deficit is not a decision by politicians, and in fact politicians can do very little to influence it (as the continued austerity measures in Britain, Greece, and other countries demonstrate). Instead, the budget deficit is simply the outcome of private spending and savings decisions. It is a matter of accounting that by itself means very little.
So effectively, biodiversity is a worthy goal in and of itself - you actually say so yourself - because biodiversity is equivalent to redundancy. And we all know that redundancy is a worthy goal in critical systems.
I find your views on how diversity could result from market forces to be a bit naive. Biodiversity is incompatible with economics of scale, and the market naturally tends towards monopolies. These tendencies have to be actively resisted.
That said, reduction of diversity is a problem that is bigger than GM foods. There is a history of short-sighted farmers setting up monocultures that ultimately prove destructive even when no direct genetic manipulation was involved at all.
You think your US government backed cash has any actual value to it? It has as much (or as little) value as the people who hold it believe it does.
This is incorrect because of taxation. By taxation, the government forces a debt nominated in US$ on you. This implies that you have to get US$ from somebody else. Thus demand for US$ is created, giving them value.
Almost everybody believes that the US government taxes people so that they get money to spend. This is completely false, however. Think about it: the US government is the one who *creates* the US$. Saying that they need income from taxes to be able to pay out US$ is as silly as saying that Blizzard needs income from somewhere in order to be able to pay out WoW gold.
The primary purpose of taxes is to remove purchasing power from the private sector, to create a gap in aggregate demand that can then be used for inflation-free government spending. You may be interested in some of Prof. Mitchell's writing on Modern Monetary Theory, starting e.g. here.
Actually, the curriculum is part of the problem, and at least the first semester really is all about programming at many universities. So CS is really hurting itself by turning a lot of people off in the first year or so, while those who do survive the programming bootcamp will later be totally shocked when they learn about all those other things.
Don't be fooled by the "Women in Computer Science" title. A lot of the talk is about this issue, but at least the curriculum redesign part of what the speaker talks about was originally not motivated by women issues. It just turns out that it helps make CS attractive to people - whether male or female - who have not spent their childhood and teens teaching themselves how to program. When you watch the talk, you will also see that by "attractive" they don't mean "dumb it down to make it accessible". Rather, it means "remove stupid obstacles and rituals, and care about the things that truly matter instead".
Their situation is special because their students only choose their major after having taken introductory CS courses, but similar lessons could certainly be applied at other universities anyway, as well as at highschools.
Your story for gold still doesn't really add up from where I'm standing. Are you really saying that a material that satisfies a) through e), but has no purpose in production or art or jewellery, would become a store of value? Can you explain how people would suddenly get the idea of hoarding something that is worthless?
I don't think so. For some strange reason, pretty much every non-toxic material we've found (and most toxic materials as well) actually has been put to use, so our theories are a bit difficult to put to the test. However, imagine something like gold, with the difference that it looks ugly (so that nobody wants to use it for jewellery), and perhaps has even come to be associated with bad luck for some bizarre reason (since it is ugly, it might be associated with the devil, or witchcraft, or evil in general, or whatever). The material satisfies all your conditions (a) through (e), but I find it hard to buy the theory that such an "anti-gold" material would become a store of value.
My counter-theory is that you need your points (a) through (d), combined with
(f) It has some intrinsic value for production (or art, etc.) to begin with.
for a material to become a store of value. That is really all that I'm saying. The point (f) is how people get the desire of using gold as a medium of exchange or store of value. Your points of (a) through (d) are simply what makes it exceptionally feasible. I don't think we actually disagree here, I just want to emphasize that you really do need both factors.
(I believe your point (e) is not really relevant by itself - after all, people thousands of years ago wouldn't have been able to tell the difference anyway; but probably more complex molecular compositions would either corrode or otherwise decay naturally, and so would not satisfy (a) and (b), which makes (e) redundant)
It's a self-reinforcing cycle. Gold started out being valuable for industry and jewellery (don't forget that part, it is pretty significant), and for that reason (combined with other nice property), people started using it for exchange and as a store of value. Using it as a store of value increased its scarcity, which drove up value even more. The same thing happened to silver, though not quite to the same extent.
So the value of gold is originally due to its industrial value, but has long since then gotten out of hand. It's basically a bubble that is thousands of years old.
Since you mentioned copper: I sincerely hope that the same thing will not happen with copper. Unfortunately, it seems like some banks are actually setting up funds where they physically hoard copper for an indefinite amount of time, which could cause a similar self-reinforcing cycle. That would be a shame.
By crash I meant an economic crash. BitCoin is valuable only by common consent, which could collapse over night, independently of the stability of the network as a peer to peer system. Note that this is different from the US$, which has value mostly by common consent, but in addition to that, it is backed by the fact that US citizens have to pay their taxes in US$ - so it will retain value even if common consent were to disappear (of course, via democracy, you could call that taxation is by common consent as well, but I digress).
Similar things apply to gold. You are right: the value of gold is seriously inflated compared to the purposes of gold in industry and jewellery. However, how do you think people came up with the idea of using gold as a medium of exchange and store of value in the first place? That was precisely because gold started out being valuable (for industry and jewellery, and scarcity reasons). Then it became a self-reinforcing bubble because people started hoarding gold for its value, thereby increasing its scarcity and driving up its value.
Transactions are verified by means of public/private key pairs, which are not directly tied to an identity, especially if you create a new key pair for every transaction. So it's not like there is a list of who owns what in the BitCoin system. It might be possible to analyse the graph of transactions starting at some known public/private key pairs to deduce this, but it's certainly not trivial.
You are right though, claiming that being untraceable is an advantage of BitCoin is misleading.
You do need the public key, but the public key is not tied to your identity. Apparently, it is common practice to create a new public/private key pair for every incoming transaction. In other words, everybody knows all the transactions, but the transactions are only tied to one-off public/private key pairs that are not tied to any identity. I suspect that if you are given some known key identities, you might be able to analyse the graph of transaction to draw conclusions from it, but I don't think this has ever been demonstrated.
As for the size of the coins, this is not by itself an issue. There is no "coin" object in BitCoin, only transactions, whose size is dominated by the cryptographic data involved, but this is essentially constant. However, every node in the BitCoin network needs the entire history of transactions. This could become problematic if the network were ever used for a significant number of transactions. (In principle, the history can be pruned, removing old transactions whose knowledge is no longer important. I'm not sure how well that would work.)
(Note that I am not a user of BitCoin, and I think it's a bad idea from an economics point of view. Still, it's a very interesting cryptosystem.)
More importantly, the first time there is ever a serious BitCoin crash, the game will probably be over forever. Unlike gold or government run fiat money, BitCoins really are valuable only by common consent, and if that consent ever wavers, that's it.
Gold has real value because it does have actual uses (although the price of gold is seriously inflated by hoarding, compared to what it should be based on natural scarcity alone), and government run fiat money has value because the government requires you to pay your taxes in it. BitCoin has no inherent value at all.
I think part of your characterization of religious people is slightly unfair. After all, atheism was originally developed by people who started out being religious, simply because everybody was religious as a default if you go far enough back. There are intelligent people that are moderately religious, and who are able to change their opinions on a matter - as long as this matter does not conflict with their religion.
As a side note, I would like to point out that the real villain here is not religion, but belief in a god. It is totally feasible to be part of certain religions while being rational and without having any supernatural beliefs, while people who are not part of a religion but believe in the supernatural do tend to exhibit the flaws that you describe. After all, there is no way supernatural beliefs can hold up in the face of rational thinking, so at some point, people either have to make a choice between the two or compartmentalize their world views. In fact, I believe that one of the great challenges for humankind is to move everybody over to religions that provide for humans' spiritual needs while embracing rationality - if we can manage to do that, then we're on a good path for the future.
I also think that it is a valid observation that "left wingers" are more open to changing their minds, and then to fight amongst themselves over slight differences of opinion, while "right wingers" have a much stronger tendency to stick together no matter what. Evidence of this is that in multi-party democracies, one sees multiple parties on the left much more often than on the right.
The thing most people seem to forget is that the spirit of democracy is not only about one person, one vote. It's about one person, one vote, preceded by reasoned, rational debate in which the people form their opinion on what to vote on. Unfortunately, this last aspect tends to be a bit difficult to implement because the concept of one person, one vote is not manifested in the public debate; there, your vote is basically proportional to the amount of money you have (to spend on advertising and to influence the media).
Your JS interpreter doesn't run at kernel level with full access to your low level hardware.
Neither does your graphics driver, at least on Linux (I suspect that Windows is similar, but I have no knowledge of it). Everything related to OpenGL is implemented in user space, and then the user space component simply sends a command stream to the GPU via the kernel. The kernel module (drm) verifies the command stream to ensure that it does not violate any of the security constraints, and/or sets up the GPU access control registers appropriately (yes, modern GPUs have such features).
Of course, these security checks are geared towards the requirements of a multi-user system. Basically, one user's OpenGL program is not allowed to mess with a different user's data. So it's entirely plausible that exposing WebGL will cause problems to be noticed that simply haven't been visible before. But then those get fixed, people get used to the new security constraints, and we all move on.
He's right. Using WebGL, you do not directly upload executable code to the GPU. You send textual shader programs, which are Just-in-Time compiled by the OpenGL driver into hardware instructions. This is pretty much exactly what modern JavaScript engines are doing already.
Now it is true that things can go wrong in this translation stage. A JavaScript engine can have a bug that allows arbitrary code execution, and so can an OpenGL driver. So adding WebGL increases the amount of code that can have security-relevant bugs, but so what? This happens every time you add a new feature. Flash or Silverlight are no different in this respect, and neither is JavaScript itself for this matter. If you're really that paranoid, you should already be browsing without JavaScript enabled.
Within a group, a non-altruist will always out-compete the altruists and reproduce at a higher relative rate.
Until the altruists develop the mental capability to recognize the non-altruists, and exclude them from their group. Then the non-altruists lose - or rather, it becomes a fight of increasingly subtle non-altruistic behaviours to get an edge over pure altruists.
And that's why I stopped voting and consider mind-hacking lobby and media people a far more effective strategy.
Ignoring for the moment the fact that you do not have to chose between one and the other (voting still makes sense given how low-cost it is compared to the alternative), this is something that more people need to realize. We the people need protections against lobby and media people. Hacking them - in the general sense - is an important tool and needs to be done more often.
I'd be interested to hear why the Mozilla developers don't use an existing compiler framework like LLVM, which already implements many advanced optimization techniques. I am aware that JavaScript-specific problems need to be dealt with anyway, but it seems like they could save themselves a lot of hassle in things like register allocation etc. Those are not so interesting problems that are handled by existing tools like LLVM quite well, so why not use that?
In reality, actual founders (as opposed to those mythical creatures in the economists' dream world) do not choose the place where they set up a new company based on tax rates.
As an American part owner of a corporation set up in Ecuador, I can assure you that this is utter nonsense.
Is it really nonsense? You are still American, aren't you? It seems you really didn't understand my point at all, so let me reiterate one last time.
If, instead of part-owning a company in Ecuador, you were to move to Ecuador to work there, you would of course pay Ecuadorian income tax. However, as long as that tax is lower than whatever the US income tax rate is, you would then have to pay the difference to the US government. In effect, the tax rate you are paying is the maximum of whatever the local income tax rate is and the US income tax rate. In that sense, as long as you keep your US citizenship, you cannot evade those taxes by moving abroad.
All I'm saying is that it would be both possible and fair - and remove a lot of the tax evasion incentives - to apply similar rules to the taxes that a US-owned company has to pay. Basically, let the tax rate that applies to a company be the maximum of the rate of the country where it operates and the rate of the country of citizenship of its owners. Yes, there are details that need to be worked out - and they can be. It's the big picture that counts.
I agree with you that e.g. sales taxes should simply be based on whatever country the sale happens in. But when you're talking about corporate taxes that are essentially the corporate equivalent of a person's income tax, then there is really no reason not to apply a similar system.
I don't know why you're doing business in Ecuador. If it is indeed purely for tax reasons as you seemed to imply, then you might disagree with me because you have vested interests. That's okay - but please at least be man enough to admit that, instead of making up some fake "reasons".
Of course, you are missing the point that under the current system, the point of corporations is to make profits for their owners. If a corporation and its owners currently exist in the UK and are paying UK taxes, then it is totally feasible to set up a system of taxation and tariffs that prevent this ownership from moving around, or eliminates the benefits of moving it around.
Which make UK corporations less competitive with respect to those in other jurisdictions and encourages anyone setting up a new corporation to chose those jurisdictions instead of the UK.
In reality, actual founders (as opposed to those mythical creatures in the economists' dream world) do not choose the place where they set up a new company based on tax rates. Most of the time, they simply set up where ever they happen to live. Please show me all those mythical Brits who give up their citizenship and become let's say Taiwanese, because the tax rates there are better for them, otherwise your argument has no basis in reality. You have to understand that this threat of moving to another country is largely a bluff. Shipping the jobs of somebody else overseas is one thing, but actually changing your own citizenship for a small tax benefit? Very few people are prepared to do that. Don't fall for their bluff.
As for your point on international tax treaties - such treaties are changed all the time when parties feel that the terms are no longer beneficial. If both the US and the UK required income from assets to be taxed at their respective rates, then things naturally balance out again, and your argument on investment becomes moot.
This would not prevent founders from changing citizenship and then creating new corporations abroad, but that is not a very credible threat anyway - people don't change their citizenship on a whim
No, but corporations do move entire offices around if they think they are getting a raw deal.
So what? Then the corporation would perhaps be able to make a higher profit and if - as I originally suggested - existing tax loopholes were closed, this would result in them actually paying more taxes domestically. The composition of the work force would change, but these things can be dealt with.
The devil's in the fact that you can't force everyone to cooperate with your scheme, and so either the corporation moves or their foreign competition has a favorable cost-basis.
The more rules you make, the less competitive you become relative to everyone else. No one that buys a video game cares if it's made in the UK or Canada, and if the latter has lower costs and can therefore deliver better games, consumers will chose them. Maybe UK game developers are intrinsically so much better than Canadian ones that they will still compete but I doubt it.
What's this obsession with competitiveness? The entire point of why we come together as a society to form states, to form a government, what legitimises the whole system, is that it should work towards the benefit of the public. Competitiveness may be a useful tool to achieve that end, but it can never be an end in itself. If, in the pursuit of competitiveness, we are actually hurting the well-being of the general population, then I say screw competitiveness.
Taking a step back, I think the thing that baffles me is that you seem to want the wealthy and corporations to have privileges that are not accessible to the vast majority of the population in terms of taxation. Is that what you want? If so, why?
Or, alternatively, if you do want a more fair system of taxation, in which corporations do not have unfair advantages compared to what the general population has available, then what is the point of your argument? Do you have something better to propose? I would appreciate constructive input.
So let's say that I, as an American, buy a rental property in the UK. You state that I should pay both UK taxes on the income (income made in the country is taxed by that company), and then US taxes on the income? And you liken this to an income tax? Yea... that is such a crazy-bad deal that I would switch citizenship.
Except that the empirical evidence contradicts your claim. I will reiterate: Americans who work abroad have to pay US income taxes (of course they can deduct whatever amount they paid in taxes in the country where they worked, and obviously it would work the same way for corporate income), yet the number of Americans who give up their US citizenship because of that burden is insignificant. Perhaps you personally would switch, but clearly the vast majority of people value their original citizenship more than a small monetary benefit. This is not an opinion, it's an empirical observation.
It is possible that the super-rich might not care enough about their citizenship and prefer to become citizens of some small island in the Pacific or something. Personally, I would consider this a benefit: at that point their influence on domestic politics would essentially disappear, because even conservatives would start labelling them as pariahs.
I understand your knee-jerk reaction, because it just seems so unreal to imagine a world where corporations and the super-rich have to abide by the same rule as normal people. But this is exactly the problem. So try to think outside the box, and start imagining. The only reasons we do not live in such a world are political, there are no other fundamental obstacles.
I'm not denying them the right to move or pay taxes in my preferred locality but in effect the argument is shifted onto the government to be held hostage by corporations when it should be on the corporations to deal with their locality and accept that taxation is part of the system.
I don't see any argument being shifted by anyone. A company is free to set up wherever they please. England cannot force an American company to set up shop in London, never could, never will. You are arguing about what has always been the case -- that companies will chose to do business in friendly jurisdictions and that the citizens of those jurisdictions have the right to set those policies in accordance with their preferences.
The contrary position -- that one national government can coerce a corporation headquartered elsewhere -- is internally unworkable in the case of >2 governments anyway.
Of course, you are missing the point that under the current system, the point of corporations is to make profits for their owners. If a corporation and its owners currently exist in the UK and are paying UK taxes, then it is totally feasible to set up a system of taxation and tariffs that prevent this ownership from moving around, or eliminates the benefits of moving it around. Just like the US government requires its citizens to pay income taxes for income from their employment, a government could easily require its citizens to pay income taxes/capital gains taxes on assets they are holding around the world.
This would not prevent founders from changing citizenship and then creating new corporations abroad, but that is not a very credible threat anyway - people don't change their citizenship on a whim. However, it would effectively stop domestically owned corporations from evading taxes by moving abroad. They could still move their jobs abroad, but hey: if they do that, and by doing so increase the taxes they pay domestically, then this could even become a win-win situation for society as a whole, because other, less easily offshored jobs could be created.
Conceptually, it is really not that difficult to set up a tax system in which there is no real threat of corporations moving abroad due to taxation (the devil's in the details of course). The problem is a political one. Nobody in power really wants to set up such a system because of vested interests.
Good point and a nice story. The fundamental problem in the Great Depression and today is the same: people are saving money, which causes a gap in demand, which causes unemployment.
The Wörgl solution to the problem was a negative-interest currency, which strongly discourages saving. The problem can also be solved by a monetary sovereign government filling the gap in demand.
It's a pity that this experiment did not run longer. There are certainly issues with having a system in which people cannot effectively save in currency. For example, a privatized pension system would likely be even more unworkable than it is with current institutional arrangements. However, one cannot say for certain whether the Wörgl system would have been viable in the long run or not, since the experiment did not run long enough to collect sufficient data. The consequences of a lack of saving possibilities would likely manifest only after several years.
If the parents had used bitcoins they could simply offer to babysit 1 hour for less than the previous going rate. It seems that at some market rate people would start to exchange bitcoins for babysitting.
That used to be (and still is, for many people) the theory. In practice, deflation is a bad way to fix recessions. It might have worked in that baby-sitting economy where prices could have been changed by decree (though I wouldn't be sure of it), but in the real world, it runs against a number of barriers. One of them is that people and businesses are much more prepared to raise nominal prices than to reduce them, so the adaptation of the price level is slower, which forces the recovery to take longer. This is partly psychological and partly because of nominal obligations such as paying rent or mortgages and utilities. Since such nominal obligations are fixed, it is for the majority of people preferable to take a cut in real income via inflation rather than via a cut in nominal income.
The calculation is simple (numbers are pulled out of thin air to illustrate the point): suppose you used to earn 1000# per week and had 500# per week in nominal obligation, so you had 500# disposable income for other things like food, education, entertainment. Now suppose you need to take a 5% cut in real income. If you take that cut in nominal terms, you will only earn 950# per week, of which 500# will still have to go to your nominal obligations, so your disposable income drops to 450#, which is in fact a cut of 10% in real disposable income. However, if you take the cut in real terms via 5% inflation, then you still earn 1000# a week, of which after nominal obligations, 500# will be left as disposable income. Those are worth 5% less, so your purchasing power drops to 475# in real terms. The point is that your real disposal income only drops by 5% instead of 10%. This is why inflation is preferable over nominal cuts in income for anybody who isn't living off interest.
So nominal cuts are resisted very strongly, which brings me back to the point that getting out of a recession via deflation is a very slow process, and in the meantime a lot of opportunity for wealth creation has been lost because the recession is "fixed" by a continued economic contraction. The problem of Bitcoin is that it would basically force the economy to take this painful path to recovery whenever a demand shock causes it to go into recession. That's not a world I want to live in.
Actually, the biggest problem of Bitcoin is that there is no way it will gain traction. The thing is, fiat money like the US$ is viable because there is an entity that forces US$-denominated debt onto people - the government plays this role via taxation. This creates demand for the fiat money and therefore gives it value. Once this basic value is established, the circular reasoning of "you accept US$ in exchange for money because you can use US$ to pay at Walmart because US$ needs US$ to pay its suppliers because they need US$ to pay their employees, i.e. you" largely takes over, but it is only stable because there is a formidable entity behind it that creates demand for the money.
Since there is nobody around who can force Bitcoin-denominated debts onto people, Bitcoins will not gain traction outside of a few fringe nerds and extreme libertarians etc.
Another problem of Bitcoin is that, even if it were successfully adopted, it would introduce massive problems for the economy. Remember the formula MV = PQ of the Quantity Theory of Money that orthodox economists love so much? (The QTM is severely flawed, but of course you can still write down that formula.) M is eventually constant for Bitcoin, and while V jumps all over the place (this being the main reason that QTM is flawed), it does seem to have an upper bound as well. So this either forces the economy to contract (a reduction of real output, i.e. a reduction of Q, and thus a reduction of living standards) or it forces a deflation in the price level P. In any case, neither is a very happy scenario in a world where improvement of living standards has historically only been achieved via debt-powered growth combined with modest inflation.
I don't see a problem with bitcoin in theory... but throughout history no currency has been stable without an army to enforce its existence. Disband the USA police/Army and the dollar would collapse.
You almost hit Bitcoin's problem spot on. The reason that fiat money like the US$ is viable is that there is an entity - the US government - that can force a US$-denominated debt on you via taxation. This taxation creates demand for the money, which is what ultimately underpins the money's value, once you go beyond all the circular reasoning of "You work for US$ because Walmart accepts US$ in payment for goods because Walmart needs US$ to pay its suppliers because the suppliers need US$ to pay their employees, i.e. you".
Historically, no monetary system could remain stable and useful for significant amount of time unless it was backed by an appropriate power of taxation to jumpstart the value of the currency. No power exists that is able to force Bitcoin-denominated debt onto people, and so Bitcoin will never be widely used outside of the fringe of curious geeks and gold-nutters.
And this is just the problem of how Bitcoin could gain traction. If Bitcoin ever gained traction, then G** help us. Recessions like this one would be inevitable and prolonged, because nobody has the power to jump-start the economy out of a recession by unilateral stimulus spending. (Of course, given how the political debate is going these days, we might as well use Bitcoins, since governments refuse to use the tools at their disposal with which they could get us out of it.)
By the way, if you really want to learn more about how monetary system works, I recommend billy blog as a good source by a modern monetary theory economist. The entry A simple business card economy is probably a good starting point.
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The US deficit is not a problem. Seriously. The size of the US debt means nothing when looked at in isolation. Is it a large number? Sure. But compare it to the amount of private wealth, and things start looking very different suddenly.
The only problem is to optimize spending and taxation in such a way that the real outcome is good in some sense - and there needs to be a genuine discussion about what "good" should mean. I would say "good" means jobs that allow obtaining a high real living standard for everybody who wants that (if you don't want to work, that's fine too, just don't expect such a high living standard).
Then the deficit will be as small or large as is necessary to achieve that goal. The deficit is an endogenous outcome anyway; this means that the size of the deficit is not a decision by politicians, and in fact politicians can do very little to influence it (as the continued austerity measures in Britain, Greece, and other countries demonstrate). Instead, the budget deficit is simply the outcome of private spending and savings decisions. It is a matter of accounting that by itself means very little.
This is the essence of Functional Finance and the more recent Modern Monetary Theory.
So effectively, biodiversity is a worthy goal in and of itself - you actually say so yourself - because biodiversity is equivalent to redundancy. And we all know that redundancy is a worthy goal in critical systems.
I find your views on how diversity could result from market forces to be a bit naive. Biodiversity is incompatible with economics of scale, and the market naturally tends towards monopolies. These tendencies have to be actively resisted.
That said, reduction of diversity is a problem that is bigger than GM foods. There is a history of short-sighted farmers setting up monocultures that ultimately prove destructive even when no direct genetic manipulation was involved at all.
You think your US government backed cash has any actual value to it? It has as much (or as little) value as the people who hold it believe it does.
This is incorrect because of taxation. By taxation, the government forces a debt nominated in US$ on you. This implies that you have to get US$ from somebody else. Thus demand for US$ is created, giving them value.
Almost everybody believes that the US government taxes people so that they get money to spend. This is completely false, however. Think about it: the US government is the one who *creates* the US$. Saying that they need income from taxes to be able to pay out US$ is as silly as saying that Blizzard needs income from somewhere in order to be able to pay out WoW gold.
The primary purpose of taxes is to remove purchasing power from the private sector, to create a gap in aggregate demand that can then be used for inflation-free government spending. You may be interested in some of Prof. Mitchell's writing on Modern Monetary Theory, starting e.g. here.
Actually, the curriculum is part of the problem, and at least the first semester really is all about programming at many universities. So CS is really hurting itself by turning a lot of people off in the first year or so, while those who do survive the programming bootcamp will later be totally shocked when they learn about all those other things.
I found this Education@Google talk about the redesign of the introductory CS course at Harvey Mudd College interesting: http://www.youtube.com/watch?v=HF_Gkxqf158
Don't be fooled by the "Women in Computer Science" title. A lot of the talk is about this issue, but at least the curriculum redesign part of what the speaker talks about was originally not motivated by women issues. It just turns out that it helps make CS attractive to people - whether male or female - who have not spent their childhood and teens teaching themselves how to program. When you watch the talk, you will also see that by "attractive" they don't mean "dumb it down to make it accessible". Rather, it means "remove stupid obstacles and rituals, and care about the things that truly matter instead".
Their situation is special because their students only choose their major after having taken introductory CS courses, but similar lessons could certainly be applied at other universities anyway, as well as at highschools.
Your story for gold still doesn't really add up from where I'm standing. Are you really saying that a material that satisfies a) through e), but has no purpose in production or art or jewellery, would become a store of value? Can you explain how people would suddenly get the idea of hoarding something that is worthless?
I don't think so. For some strange reason, pretty much every non-toxic material we've found (and most toxic materials as well) actually has been put to use, so our theories are a bit difficult to put to the test. However, imagine something like gold, with the difference that it looks ugly (so that nobody wants to use it for jewellery), and perhaps has even come to be associated with bad luck for some bizarre reason (since it is ugly, it might be associated with the devil, or witchcraft, or evil in general, or whatever). The material satisfies all your conditions (a) through (e), but I find it hard to buy the theory that such an "anti-gold" material would become a store of value.
My counter-theory is that you need your points (a) through (d), combined with
(f) It has some intrinsic value for production (or art, etc.) to begin with.
for a material to become a store of value. That is really all that I'm saying. The point (f) is how people get the desire of using gold as a medium of exchange or store of value. Your points of (a) through (d) are simply what makes it exceptionally feasible. I don't think we actually disagree here, I just want to emphasize that you really do need both factors.
(I believe your point (e) is not really relevant by itself - after all, people thousands of years ago wouldn't have been able to tell the difference anyway; but probably more complex molecular compositions would either corrode or otherwise decay naturally, and so would not satisfy (a) and (b), which makes (e) redundant)
It's a self-reinforcing cycle. Gold started out being valuable for industry and jewellery (don't forget that part, it is pretty significant), and for that reason (combined with other nice property), people started using it for exchange and as a store of value. Using it as a store of value increased its scarcity, which drove up value even more. The same thing happened to silver, though not quite to the same extent.
So the value of gold is originally due to its industrial value, but has long since then gotten out of hand. It's basically a bubble that is thousands of years old.
Since you mentioned copper: I sincerely hope that the same thing will not happen with copper. Unfortunately, it seems like some banks are actually setting up funds where they physically hoard copper for an indefinite amount of time, which could cause a similar self-reinforcing cycle. That would be a shame.
By crash I meant an economic crash. BitCoin is valuable only by common consent, which could collapse over night, independently of the stability of the network as a peer to peer system. Note that this is different from the US$, which has value mostly by common consent, but in addition to that, it is backed by the fact that US citizens have to pay their taxes in US$ - so it will retain value even if common consent were to disappear (of course, via democracy, you could call that taxation is by common consent as well, but I digress).
Similar things apply to gold. You are right: the value of gold is seriously inflated compared to the purposes of gold in industry and jewellery. However, how do you think people came up with the idea of using gold as a medium of exchange and store of value in the first place? That was precisely because gold started out being valuable (for industry and jewellery, and scarcity reasons). Then it became a self-reinforcing bubble because people started hoarding gold for its value, thereby increasing its scarcity and driving up its value.
BitCoin has none of these properties.
Transactions are verified by means of public/private key pairs, which are not directly tied to an identity, especially if you create a new key pair for every transaction. So it's not like there is a list of who owns what in the BitCoin system. It might be possible to analyse the graph of transactions starting at some known public/private key pairs to deduce this, but it's certainly not trivial.
You are right though, claiming that being untraceable is an advantage of BitCoin is misleading.
You do need the public key, but the public key is not tied to your identity. Apparently, it is common practice to create a new public/private key pair for every incoming transaction. In other words, everybody knows all the transactions, but the transactions are only tied to one-off public/private key pairs that are not tied to any identity. I suspect that if you are given some known key identities, you might be able to analyse the graph of transaction to draw conclusions from it, but I don't think this has ever been demonstrated.
As for the size of the coins, this is not by itself an issue. There is no "coin" object in BitCoin, only transactions, whose size is dominated by the cryptographic data involved, but this is essentially constant. However, every node in the BitCoin network needs the entire history of transactions. This could become problematic if the network were ever used for a significant number of transactions. (In principle, the history can be pruned, removing old transactions whose knowledge is no longer important. I'm not sure how well that would work.)
(Note that I am not a user of BitCoin, and I think it's a bad idea from an economics point of view. Still, it's a very interesting cryptosystem.)
More importantly, the first time there is ever a serious BitCoin crash, the game will probably be over forever. Unlike gold or government run fiat money, BitCoins really are valuable only by common consent, and if that consent ever wavers, that's it.
Gold has real value because it does have actual uses (although the price of gold is seriously inflated by hoarding, compared to what it should be based on natural scarcity alone), and government run fiat money has value because the government requires you to pay your taxes in it. BitCoin has no inherent value at all.
I think part of your characterization of religious people is slightly unfair. After all, atheism was originally developed by people who started out being religious, simply because everybody was religious as a default if you go far enough back. There are intelligent people that are moderately religious, and who are able to change their opinions on a matter - as long as this matter does not conflict with their religion.
As a side note, I would like to point out that the real villain here is not religion, but belief in a god. It is totally feasible to be part of certain religions while being rational and without having any supernatural beliefs, while people who are not part of a religion but believe in the supernatural do tend to exhibit the flaws that you describe. After all, there is no way supernatural beliefs can hold up in the face of rational thinking, so at some point, people either have to make a choice between the two or compartmentalize their world views. In fact, I believe that one of the great challenges for humankind is to move everybody over to religions that provide for humans' spiritual needs while embracing rationality - if we can manage to do that, then we're on a good path for the future.
I also think that it is a valid observation that "left wingers" are more open to changing their minds, and then to fight amongst themselves over slight differences of opinion, while "right wingers" have a much stronger tendency to stick together no matter what. Evidence of this is that in multi-party democracies, one sees multiple parties on the left much more often than on the right.
The thing most people seem to forget is that the spirit of democracy is not only about one person, one vote. It's about one person, one vote, preceded by reasoned, rational debate in which the people form their opinion on what to vote on. Unfortunately, this last aspect tends to be a bit difficult to implement because the concept of one person, one vote is not manifested in the public debate; there, your vote is basically proportional to the amount of money you have (to spend on advertising and to influence the media).
Your JS interpreter doesn't run at kernel level with full access to your low level hardware.
Neither does your graphics driver, at least on Linux (I suspect that Windows is similar, but I have no knowledge of it). Everything related to OpenGL is implemented in user space, and then the user space component simply sends a command stream to the GPU via the kernel. The kernel module (drm) verifies the command stream to ensure that it does not violate any of the security constraints, and/or sets up the GPU access control registers appropriately (yes, modern GPUs have such features).
Of course, these security checks are geared towards the requirements of a multi-user system. Basically, one user's OpenGL program is not allowed to mess with a different user's data. So it's entirely plausible that exposing WebGL will cause problems to be noticed that simply haven't been visible before. But then those get fixed, people get used to the new security constraints, and we all move on.
He's right. Using WebGL, you do not directly upload executable code to the GPU. You send textual shader programs, which are Just-in-Time compiled by the OpenGL driver into hardware instructions. This is pretty much exactly what modern JavaScript engines are doing already.
Now it is true that things can go wrong in this translation stage. A JavaScript engine can have a bug that allows arbitrary code execution, and so can an OpenGL driver. So adding WebGL increases the amount of code that can have security-relevant bugs, but so what? This happens every time you add a new feature. Flash or Silverlight are no different in this respect, and neither is JavaScript itself for this matter. If you're really that paranoid, you should already be browsing without JavaScript enabled.
Within a group, a non-altruist will always out-compete the altruists and reproduce at a higher relative rate.
Until the altruists develop the mental capability to recognize the non-altruists, and exclude them from their group. Then the non-altruists lose - or rather, it becomes a fight of increasingly subtle non-altruistic behaviours to get an edge over pure altruists.
And that's why I stopped voting and consider mind-hacking lobby and media people a far more effective strategy.
Ignoring for the moment the fact that you do not have to chose between one and the other (voting still makes sense given how low-cost it is compared to the alternative), this is something that more people need to realize. We the people need protections against lobby and media people. Hacking them - in the general sense - is an important tool and needs to be done more often.
I'd be interested to hear why the Mozilla developers don't use an existing compiler framework like LLVM, which already implements many advanced optimization techniques. I am aware that JavaScript-specific problems need to be dealt with anyway, but it seems like they could save themselves a lot of hassle in things like register allocation etc. Those are not so interesting problems that are handled by existing tools like LLVM quite well, so why not use that?
In reality, actual founders (as opposed to those mythical creatures in the economists' dream world) do not choose the place where they set up a new company based on tax rates.
As an American part owner of a corporation set up in Ecuador, I can assure you that this is utter nonsense.
Is it really nonsense? You are still American, aren't you? It seems you really didn't understand my point at all, so let me reiterate one last time.
If, instead of part-owning a company in Ecuador, you were to move to Ecuador to work there, you would of course pay Ecuadorian income tax. However, as long as that tax is lower than whatever the US income tax rate is, you would then have to pay the difference to the US government. In effect, the tax rate you are paying is the maximum of whatever the local income tax rate is and the US income tax rate. In that sense, as long as you keep your US citizenship, you cannot evade those taxes by moving abroad.
All I'm saying is that it would be both possible and fair - and remove a lot of the tax evasion incentives - to apply similar rules to the taxes that a US-owned company has to pay. Basically, let the tax rate that applies to a company be the maximum of the rate of the country where it operates and the rate of the country of citizenship of its owners. Yes, there are details that need to be worked out - and they can be. It's the big picture that counts.
I agree with you that e.g. sales taxes should simply be based on whatever country the sale happens in. But when you're talking about corporate taxes that are essentially the corporate equivalent of a person's income tax, then there is really no reason not to apply a similar system.
I don't know why you're doing business in Ecuador. If it is indeed purely for tax reasons as you seemed to imply, then you might disagree with me because you have vested interests. That's okay - but please at least be man enough to admit that, instead of making up some fake "reasons".
Of course, you are missing the point that under the current system, the point of corporations is to make profits for their owners. If a corporation and its owners currently exist in the UK and are paying UK taxes, then it is totally feasible to set up a system of taxation and tariffs that prevent this ownership from moving around, or eliminates the benefits of moving it around.
Which make UK corporations less competitive with respect to those in other jurisdictions and encourages anyone setting up a new corporation to chose those jurisdictions instead of the UK.
In reality, actual founders (as opposed to those mythical creatures in the economists' dream world) do not choose the place where they set up a new company based on tax rates. Most of the time, they simply set up where ever they happen to live. Please show me all those mythical Brits who give up their citizenship and become let's say Taiwanese, because the tax rates there are better for them, otherwise your argument has no basis in reality. You have to understand that this threat of moving to another country is largely a bluff. Shipping the jobs of somebody else overseas is one thing, but actually changing your own citizenship for a small tax benefit? Very few people are prepared to do that. Don't fall for their bluff.
As for your point on international tax treaties - such treaties are changed all the time when parties feel that the terms are no longer beneficial. If both the US and the UK required income from assets to be taxed at their respective rates, then things naturally balance out again, and your argument on investment becomes moot.
This would not prevent founders from changing citizenship and then creating new corporations abroad, but that is not a very credible threat anyway - people don't change their citizenship on a whim
No, but corporations do move entire offices around if they think they are getting a raw deal.
So what? Then the corporation would perhaps be able to make a higher profit and if - as I originally suggested - existing tax loopholes were closed, this would result in them actually paying more taxes domestically. The composition of the work force would change, but these things can be dealt with.
The devil's in the fact that you can't force everyone to cooperate with your scheme, and so either the corporation moves or their foreign competition has a
favorable cost-basis.
The more rules you make, the less competitive you become relative to everyone else. No one that buys a video game cares if it's made in the UK or Canada, and if the latter has lower costs and can therefore deliver better games, consumers will chose them. Maybe UK game developers are intrinsically so much better than Canadian ones that they will still compete but I doubt it.
What's this obsession with competitiveness? The entire point of why we come together as a society to form states, to form a government, what legitimises the whole system, is that it should work towards the benefit of the public. Competitiveness may be a useful tool to achieve that end, but it can never be an end in itself. If, in the pursuit of competitiveness, we are actually hurting the well-being of the general population, then I say screw competitiveness.
Taking a step back, I think the thing that baffles me is that you seem to want the wealthy and corporations to have privileges that are not accessible to the vast majority of the population in terms of taxation. Is that what you want? If so, why?
Or, alternatively, if you do want a more fair system of taxation, in which corporations do not have unfair advantages compared to what the general population has available, then what is the point of your argument? Do you have something better to propose? I would appreciate constructive input.
So let's say that I, as an American, buy a rental property in the UK. You state that I should pay both UK taxes on the income (income made in the country is taxed by that company), and then US taxes on the income? And you liken this to an income tax? Yea... that is such a crazy-bad deal that I would switch citizenship.
Except that the empirical evidence contradicts your claim. I will reiterate: Americans who work abroad have to pay US income taxes (of course they can deduct whatever amount they paid in taxes in the country where they worked, and obviously it would work the same way for corporate income), yet the number of Americans who give up their US citizenship because of that burden is insignificant. Perhaps you personally would switch, but clearly the vast majority of people value their original citizenship more than a small monetary benefit. This is not an opinion, it's an empirical observation.
It is possible that the super-rich might not care enough about their citizenship and prefer to become citizens of some small island in the Pacific or something. Personally, I would consider this a benefit: at that point their influence on domestic politics would essentially disappear, because even conservatives would start labelling them as pariahs.
I understand your knee-jerk reaction, because it just seems so unreal to imagine a world where corporations and the super-rich have to abide by the same rule as normal people. But this is exactly the problem. So try to think outside the box, and start imagining. The only reasons we do not live in such a world are political, there are no other fundamental obstacles.
I'm not denying them the right to move or pay taxes in my preferred locality but in effect the argument is shifted onto the government to be held hostage by corporations when it should be on the corporations to deal with their locality and accept that taxation is part of the system.
I don't see any argument being shifted by anyone. A company is free to set up wherever they please. England cannot force an American company to set up shop in London, never could, never will. You are arguing about what has always been the case -- that companies will chose to do business in friendly jurisdictions and that the citizens of those jurisdictions have the right to set those policies in accordance with their preferences.
The contrary position -- that one national government can coerce a corporation headquartered elsewhere -- is internally unworkable in the case of >2 governments anyway.
Of course, you are missing the point that under the current system, the point of corporations is to make profits for their owners. If a corporation and its owners currently exist in the UK and are paying UK taxes, then it is totally feasible to set up a system of taxation and tariffs that prevent this ownership from moving around, or eliminates the benefits of moving it around. Just like the US government requires its citizens to pay income taxes for income from their employment, a government could easily require its citizens to pay income taxes/capital gains taxes on assets they are holding around the world.
This would not prevent founders from changing citizenship and then creating new corporations abroad, but that is not a very credible threat anyway - people don't change their citizenship on a whim. However, it would effectively stop domestically owned corporations from evading taxes by moving abroad. They could still move their jobs abroad, but hey: if they do that, and by doing so increase the taxes they pay domestically, then this could even become a win-win situation for society as a whole, because other, less easily offshored jobs could be created.
Conceptually, it is really not that difficult to set up a tax system in which there is no real threat of corporations moving abroad due to taxation (the devil's in the details of course). The problem is a political one. Nobody in power really wants to set up such a system because of vested interests.
Good point and a nice story. The fundamental problem in the Great Depression and today is the same: people are saving money, which causes a gap in demand, which causes unemployment.
The Wörgl solution to the problem was a negative-interest currency, which strongly discourages saving. The problem can also be solved by a monetary sovereign government filling the gap in demand.
It's a pity that this experiment did not run longer. There are certainly issues with having a system in which people cannot effectively save in currency. For example, a privatized pension system would likely be even more unworkable than it is with current institutional arrangements. However, one cannot say for certain whether the Wörgl system would have been viable in the long run or not, since the experiment did not run long enough to collect sufficient data. The consequences of a lack of saving possibilities would likely manifest only after several years.
If the parents had used bitcoins they could simply offer to babysit 1 hour for less than the previous going rate. It seems that at some market rate people would start to exchange bitcoins for babysitting.
That used to be (and still is, for many people) the theory. In practice, deflation is a bad way to fix recessions. It might have worked in that baby-sitting economy where prices could have been changed by decree (though I wouldn't be sure of it), but in the real world, it runs against a number of barriers. One of them is that people and businesses are much more prepared to raise nominal prices than to reduce them, so the adaptation of the price level is slower, which forces the recovery to take longer. This is partly psychological and partly because of nominal obligations such as paying rent or mortgages and utilities. Since such nominal obligations are fixed, it is for the majority of people preferable to take a cut in real income via inflation rather than via a cut in nominal income.
The calculation is simple (numbers are pulled out of thin air to illustrate the point): suppose you used to earn 1000# per week and had 500# per week in nominal obligation, so you had 500# disposable income for other things like food, education, entertainment. Now suppose you need to take a 5% cut in real income. If you take that cut in nominal terms, you will only earn 950# per week, of which 500# will still have to go to your nominal obligations, so your disposable income drops to 450#, which is in fact a cut of 10% in real disposable income. However, if you take the cut in real terms via 5% inflation, then you still earn 1000# a week, of which after nominal obligations, 500# will be left as disposable income. Those are worth 5% less, so your purchasing power drops to 475# in real terms. The point is that your real disposal income only drops by 5% instead of 10%. This is why inflation is preferable over nominal cuts in income for anybody who isn't living off interest.
So nominal cuts are resisted very strongly, which brings me back to the point that getting out of a recession via deflation is a very slow process, and in the meantime a lot of opportunity for wealth creation has been lost because the recession is "fixed" by a continued economic contraction. The problem of Bitcoin is that it would basically force the economy to take this painful path to recovery whenever a demand shock causes it to go into recession. That's not a world I want to live in.
Actually, the biggest problem of Bitcoin is that there is no way it will gain traction. The thing is, fiat money like the US$ is viable because there is an entity that forces US$-denominated debt onto people - the government plays this role via taxation. This creates demand for the fiat money and therefore gives it value. Once this basic value is established, the circular reasoning of "you accept US$ in exchange for money because you can use US$ to pay at Walmart because US$ needs US$ to pay its suppliers because they need US$ to pay their employees, i.e. you" largely takes over, but it is only stable because there is a formidable entity behind it that creates demand for the money.
Since there is nobody around who can force Bitcoin-denominated debts onto people, Bitcoins will not gain traction outside of a few fringe nerds and extreme libertarians etc.
Another problem of Bitcoin is that, even if it were successfully adopted, it would introduce massive problems for the economy. Remember the formula MV = PQ of the Quantity Theory of Money that orthodox economists love so much? (The QTM is severely flawed, but of course you can still write down that formula.) M is eventually constant for Bitcoin, and while V jumps all over the place (this being the main reason that QTM is flawed), it does seem to have an upper bound as well. So this either forces the economy to contract (a reduction of real output, i.e. a reduction of Q, and thus a reduction of living standards) or it forces a deflation in the price level P. In any case, neither is a very happy scenario in a world where improvement of living standards has historically only been achieved via debt-powered growth combined with modest inflation.
I don't see a problem with bitcoin in theory... but throughout history no currency has been stable without an army to enforce its existence. Disband the USA police/Army and the dollar would collapse.
You almost hit Bitcoin's problem spot on. The reason that fiat money like the US$ is viable is that there is an entity - the US government - that can force a US$-denominated debt on you via taxation. This taxation creates demand for the money, which is what ultimately underpins the money's value, once you go beyond all the circular reasoning of "You work for US$ because Walmart accepts US$ in payment for goods because Walmart needs US$ to pay its suppliers because the suppliers need US$ to pay their employees, i.e. you".
Historically, no monetary system could remain stable and useful for significant amount of time unless it was backed by an appropriate power of taxation to jumpstart the value of the currency. No power exists that is able to force Bitcoin-denominated debt onto people, and so Bitcoin will never be widely used outside of the fringe of curious geeks and gold-nutters.
And this is just the problem of how Bitcoin could gain traction. If Bitcoin ever gained traction, then G** help us. Recessions like this one would be inevitable and prolonged, because nobody has the power to jump-start the economy out of a recession by unilateral stimulus spending. (Of course, given how the political debate is going these days, we might as well use Bitcoins, since governments refuse to use the tools at their disposal with which they could get us out of it.)
By the way, if you really want to learn more about how monetary system works, I recommend billy blog as a good source by a modern monetary theory economist. The entry A simple business card economy is probably a good starting point.