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This program was recorded in one, 60-minute segment.
Introduction: Some folks just don’t play well with others. Sadly, terrifyingly and tragically, that applies to many key players in the world of Big Tech.
Supplementing discussion presented in FTR #859, we reiterate the introduction to that broadcast.
Albert Einstein said of the invention of the atomic bomb: “Everything has changed but our way of thinking.” We feel that other, more recent developments in the world of Big Tech warrant the same type of warning.
This program further explores the Brave New World being midwived by technocrats. These stunning developments should be viewed against the background of what we call “technocratic fascism,” referencing a vitally important article by David Golumbia. ” . . . . Such technocratic beliefs are widespread in our world today, especially in the enclaves of digital enthusiasts, whether or not they are part of the giant corporate-digital leviathan. Hackers (“civic,” “ethical,” “white” and “black” hat alike), hacktivists, WikiLeaks fans [and Julian Assange et al–D. E.], Anonymous “members,” even Edward Snowden himself walk hand-in-hand with Facebook and Google in telling us that coders don’t just have good things to contribute to the political world, but that the political world is theirs to do with what they want, and the rest of us should stay out of it: the political world is broken, they appear to think (rightly, at least in part), and the solution to that, they think (wrongly, at least for the most part), is for programmers to take political matters into their own hands. . . First, [Tor co-creator] Dingledine claimed that Tor must be supported because it follows directly from a fundamental “right to privacy.” Yet when pressed—and not that hard—he admits that what he means by “right to privacy” is not what any human rights body or “particular legal regime” has meant by it. Instead of talking about how human rights are protected, he asserts that human rights are natural rights and that these natural rights create natural law that is properly enforced by entities above and outside of democratic polities. Where the UN’s Universal Declaration on Human Rights of 1948 is very clear that states and bodies like the UN to which states belong are the exclusive guarantors of human rights, whatever the origin of those rights, Dingledine asserts that a small group of software developers can assign to themselves that role, and that members of democratic polities have no choice but to accept them having that role. . . Further, it is hard not to notice that the appeal to natural rights is today most often associated with the political right, for a variety of reasons (ur-neocon Leo Strauss was one of the most prominent 20th century proponents of these views). We aren’t supposed to endorse Tor because we endorse the right: it’s supposed to be above the left/right distinction. But it isn’t. . . .”
Underscoring the “anarcho-fascist” nature of technocratic fascism, the broadcast notes how crypto-currencies offer the possibility of, what for lack of a better term, might be called “cyber-offshoring.” Going the Cayman Islands and other offshore tax havens one better, crypto-currency offers the possibility of sociopathic economic elites collapsing the nation state by subverting revenue collection. This is the fiscal wet dream of the economic elites that dominate right-wing ideology. “No Taxes!”
” . . . Governments initially attempting to control cryptocurrency taxation through the businesses and bottlenecks which it can be monitored through will meet with as much success as they have limiting file sharing, illegal downloads, and Tor operations. Cryptocurrencies have an inherent regulation, that of the law from number. Truly, bitcoin is code as law. . . .”
Continuing to explore the technological aspect of corporatist ideology, we note that Target stores responded to a vote by their pharmacists to unionize by introducing a new commitment to robot workers. (This is reminiscent of a threat to replace fast-food workers with “apps,” if they try to obtain a higher minimum wage.)
Next, we recap an important article highlighted in FTR #851. A Bitcoin-inspired technology developed by Ethereum appears set to engender a number of appalling possibilities, including: the anonymous, online funding of the assassination of public officials; the anonymous sabotaging and vandalizing of websites and last, but certainly not least, the replacement of third-party human administrators, such as lawyers with code. It won’t just be fast-food workers and low-wage employees at places like Target who lose their jobs to high-tech automation!
The sociopathic ethic fundamental to technocratic fascism was articulated by Ethereum Chief Technology Officer Gavin Wood:
” . . . . However, Wood acknowledges it is likely that Ethereum will be used in ways that break the law—and even says that is part of what makes the technology interesting. Just as file sharing found widespread unauthorized use and forced changes in the entertainment and tech industries, illicit activity enabled by Ethereum could change the world, he says.
“The potential for Ethereum to alter aspects of society is of significant magnitude,” says Wood. “This is something that would provide a technical basis for all sorts of social changes and I find that exciting.” . . . .
. . . . “You can implement any Web service without there being a legal entity behind it,” he says. “The idea of making certain things impossible to legislate against is really interesting.”
In that same context, major financial institutions implicated in the shenanigans that brought about the financial collapse of 2008, as well as the Libor rigging scandal have launched the Symphony messaging system, which may prove opaque to regulators.
State-of-the-art facial recognition software deployed by the wildly popular Facebook threatens privacy in unprecedented ways. People should be far more worried about Facebook–with 1.5 billion users–than of the NSA. QUICK: How much influence do YOU have in what Facebook does?!
The program concludes with a look at Indian Premier Narendra Modi’s courting of Silicon Valley companies, including Zuckerberg’s Facebook.
His political CV is inextricably linked with the operations, development and history of the RSS, political parent to his BJP Party. The RSS is a Hindu nationalist and fascist party, one of whose alumni assassinated Mahatma Gandhi.
Recent developments have clarified the degree of control and influence that the RSS exerts on Modi. That control is profound and direct.
Program Highlights Include:
- Review of Lucy Komisar’s work on “offshoring.”
- Review of EBay chief Pierre Omidyar’s backing of Narendra Modi’s election.
- Review of Omidyar’s role in financing the Maidan coup.
- Review of Omidyar’s financial backing of Glenn Greenwald’s recent journalistic efforts.
- Review of Modi’s effort to roll back India’s child labor laws.
- Review of the probable Underground Reich development of Bitcoin. (We discussed Bitcoin, in FTR #‘s 760, 764, 770, 785.)
1a. We by re-examining one of the most important analytical articles in a long time, David Golumbia’s article in Uncomputing.org about technocrats and their fundamentally undemocratic outlook.
This concept is key to understanding much of what we will discuss.
“Tor, Technocracy, Democracy” by David Golumbia; Uncomputing.org; 4/23/2015.
” . . . . Such technocratic beliefs are widespread in our world today, especially in the enclaves of digital enthusiasts, whether or not they are part of the giant corporate-digital leviathan. Hackers (“civic,” “ethical,” “white” and “black” hat alike), hacktivists, WikiLeaks fans [and Julian Assange et al–D. E.], Anonymous “members,” even Edward Snowden himself walk hand-in-hand with Facebook and Google in telling us that coders don’t just have good things to contribute to the political world, but that the political world is theirs to do with what they want, and the rest of us should stay out of it: the political world is broken, they appear to think (rightly, at least in part), and the solution to that, they think (wrongly, at least for the most part), is for programmers to take political matters into their own hands. . . First, [Tor co-creator] Dingledine claimed that Tor must be supported because it follows directly from a fundamental “right to privacy.” Yet when pressed—and not that hard—he admits that what he means by “right to privacy” is not what any human rights body or “particular legal regime” has meant by it. Instead of talking about how human rights are protected, he asserts that human rights are natural rights and that these natural rights create natural law that is properly enforced by entities above and outside of democratic polities. Where the UN’s Universal Declaration on Human Rights of 1948 is very clear that states and bodies like the UN to which states belong are the exclusive guarantors of human rights, whatever the origin of those rights, Dingledine asserts that a small group of software developers can assign to themselves that role, and that members of democratic polities have no choice but to accept them having that role. . . Further, it is hard not to notice that the appeal to natural rights is today most often associated with the political right, for a variety of reasons (ur-neocon Leo Strauss was one of the most prominent 20th century proponents of these views). We aren’t supposed to endorse Tor because we endorse the right: it’s supposed to be above the left/right distinction. But it isn’t. . . .”
1b. Potentially realizing the economic wet dream of fascist/libertarian elements, cryptocurrency may subvert the ability of nation states to tax–a function central to the very concept of civic existence! (We discussed Bitcoin, in FTR #‘s 760, 764, 770, 785.)
As the age of cryptocurrency comes into full force, it will facilitate a subversively viable taxation avoidance strategy for many of the technically savvy users of peer-to-peer cryptographic payment systems. In doing so, cryptocurrency use will act to erode the tax revenue base of national jurisdictions, and ultimately, reposition taxation as a voluntary, pay-for-performance function. In this post, I’d like to cover some of the benefits such a strategy will have for cryptocurrency investors, why our notion of taxation is ripe for disruption, and why cryptocurrency taxation is enabled by default.
Although investors have been lured by the siren song of tax havens for as long as governments have existed, none have existed with the legal and structural characteristics such as those found in cryptocurrency. By operating behind a veil of cybersecrecy, it is reasonable to forecast the impracticality of systemic taxation on these types of financial assets from national jurisdictions. Individual enforcement of taxation is likewise impractical due to ideological backlash governments would receive for targeting individuals who avoid national taxation via information technologies. Even so, many jurisdictions have already declared digital currency transactions (something which occurs between consenting parties on a network which no one owns) to be taxable under current legal frameworks.
How can the state lay claim to the right to tax that which they do not issue and cannot control?
Running The Numbers on Cryptocurrency Taxation
It has been said that compounding interest is one of the most powerful forces in the universe. When we apply the black magic of compounding returns to the profit-maximizing actions of consumers, we see quite clearly why every user aware of the benefits of using cryptocurrency, even if only for the tax-savings, will opt to do so over traditional fiat money. The allure of avoiding the clutches of national taxation is strong enough that any rational consumer will make cryptocurrency a portion of their financial portfolio given they have the sufficient technical understanding.
James Dale Davidson, co-editor of Strategic Investment
“Each $5,000 of annual tax payments made over a 40-year period reduces your net worth by $2.2 million assuming a 10% annual return on your investments,” reports James Dale Davidson in The Sovereign Individual: Mastering the Transition to the Information Age, “For high income earners in predatory tax regimes (such as the United States), you can expect to lose more of your money through cumulative taxation than you will ever earn.”
As we explained in the report Bitcoin May Become A Global Reserve Instrument, never before has there existed a tool that can preserve economic and informational assets with such a high degree of security combined with a near-zero marginal cost to the user. This revolutionary capability of the bitcoin network does, and will continue to provide, a subversively lucrative tax super haven in direct correlation with its acceptance on a worldwide basis.
Government Response to Cryptocurrency Taxation
Many government agencies have already cued in to the tax avoidance potential of bitcoin and cryptocurrencies. However, it would seem that they misjudge this emerging threat looming over their precious tax coffers. The Financial Crimes Enforcement Network in the United States (FINCEN) for example, has already issued guidance on cryptocurrency taxation, yet makes a false distinction between real currency and virtual currency. FINCEN states that “In contrast to real currency, “virtual” currency is a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency,” and later “virtual currency does not have legal tender status in any jurisdiction.” What these agencies fail to realize, is that cryptocurrency is not virtual in any sense of the word. Indeed it is as real, and perhaps even more real, than traditional fleeting fiat currencies.
Bitcoin and cryptocurrency offer a near perfect alternative to traditional tax havens which are being tightly controlled by the new laws associated with the Foreign Account Tax Compliance Act (FATCA). In his report Are Cryptocurrencies Super Tax Havens?, Omri Marian makes clear the pressure for financial institutions who interact with the US banking system to hand over account holders, and for a crackdown on offshore tax havens with the enactment of FATCA in 2010.
Tax policymakers seem to be operating under the faulty assumption that cryptocurrency-based economies are limited by the size of virtual economies. The only virtual aspect of cryptocurrencies, however, is their form. Their operation happens within real economies, and as such their growth potential is, at least theoretically, infinite. Such potential, together with recent developments in cryptocurrencies markets, should alert policy-makers to the urgency of the emerging problem.
– Omri Marian, Are Cryptocurrencies Super Tax Havens?
Current payment processors such as BitPay have recently revealed that government agencies are watching cryptocurrency transactions through the bottlenecks and exchanges where it can be tracked and traced with a high degree of transparency. It should not come to anyones surprise that governments are watching cryptocurrency nor that companies are complying with their laws, but understanding why national governments require users of the bitcoin digital economy to cut them a slice of the pie while they contribute nothing to the operation, and in many cases, hinder the adoption of this technology, remains a callus mystery.
Governments initially attempting to control cryptocurrency taxation through the businesses and bottlenecks which it can be monitored through will meet with as much success as they have limiting file sharing, illegal downloads, and Tor operations. Cryptocurrencies have an inherent regulation, that of the law from number. Truly, bitcoin is code as law.
Old laws seldom resist the trends of technology. The attempt of government agencies to levy taxation on cryptocurrency transactions directly is as futile as sweeping back waves of the ocean. No matter the size of broom, state actors will be overrun by continuously expanding waves of cryptocurrency adoption.
In the 1980s, it was illegal in the United States to send a fax message. The US Post Office considered faxes to be first-class mail, over which the US Post Office claimed an ancient monopoly … billions of fax messages later, it is unclear whether anyone ever complied with that law.
– James Dale Davidson, William Rees-Mogg, The Sovereign Individual
Cryptocurrency Taxation By Default
What would you say if you were told cryptocurrency taxation occurs on every transaction by default? In the realm of digital currency, the transaction fee which the user decides to (or decides not to) attach to each payment represents the taxation. This user can decide to attach a large fee or no fee at all. In doing so, the miners of the network will choose preference for the transactions with a larger fee attached, and will work to confirm these payments sooner than those with smaller fees. This transactions queue represents a voluntary, pay-for-performance taxation structure where the performance derived from the system is dependent upon how much taxation they pay.
Algorithmic Regulation
Cryptocurrencies have regulation built into the very nature of their existence, just not through our conventional ideas of human intervention. Because of the technological nature of cryptocurrency taxation, judicial regulations bestowed upon these types of systems will always be, to a large degree, futile. Cryptocurrencies have established their own set of rules and guidelines through the source code they are built upon, forcing legal frameworks on this type of 21st century innovation will only cause friction during its adoption phase.
The only choice of regulation we have in terms of cryptocurrency taxation is not to try and fit it inside some existing doctrine, but to abide by their laws of finance and information freedom. We must be the one’s to conform to the regulation, not have it conform to our conventional beliefs. Bitcoin is a system which will only be governed effectively through digital law, an approach which functions solely through a medium of technology itself. It will not bend to the whim of those who still hold conventional forms of law-making as relevant today.
For a successful technology, reality must take precedence over public relations, for nature cannot be fooled.
– Richard Feynman
Conclusion
When we come to understand the systemic resilience to judicial intervention, it becomes quite clear that cryptocurrency taxation will remain a voluntary, pay-for-performance function of the network itself. No longer will taxation be enforced through coercion, but become a voluntary act towards increased system performance.
Make no mistake, in a crypto-anarchist jurisdiction where there is no means to confiscate or control property on behalf of another individual, the need for the state will cease to exist. Mass taxation on digital currency is not feasible through judicial enforcement while individual enforcement is bound to prove ineffective. You, or anyone motivated to retain their net worth, will find a subversively lucrative tax haven in the realm of cryptocurrency.
3a. A harbinger of things to come: if you want to unionize, you may be replaced by technology.
Just a day after pharmacy workers from a Brooklyn Target store formed a union, the company announced plans to replace employees with robot workers in the near future.
Last week it was reported that the pharmacists had submitted their initial “microunion” filing with the National Labor Relations Board after an initial ballot vote was passed 7 ‑2. The filing was noteworthy as the workers become the first union at any Target store since the retailer opened in 1902.
Yet, less than a week later, in a seemingly unrelated press release, Casey Carl, the Chief Technology and Strategy Officer at Target announced the company’s plan to develop automation systems and replace workers with robots in their retail locations as part of a new program with Techstars, an industry leader with a reputation for accelerating startups.
“We know that technology will continue to revolutionize retail, and that Target’s future will be built on innovation. That’s why we’re so excited to partner with Techstars and invite the world’s most promising startups to work with Target right in our backyard.”
For the last few years, Target has been increasing their share of the e‑commerce sector since taking back control of their digital fulfillment from Amazon, which also uses robot workers. But now, they are looking to integrate that portion of their business with their brick and mortar locations to create a speedy grocery delivery service, which will require an even greater investment in technology.
That, combined with groups and politicians working towards a $15 per hour minimum wage, has pushed Target to announce that within two years they will have a “concept store” open that will include robots instead of associates.
Large corporations such as McDonald’s and Wal-Mart have been using the threat of “automated workers” for years to keep wages low and suppress union growth within their stores, but have so far been unsuccessful in automating the “customer service” portion of their operations.
3b. The rise of “smart contracts” may not only enable the successful perpetration of numerous kinds of criminal undertakings, including the assassination of public officials, but may replace the use of attorneys to draft contracts. It is not only low-wage workers who face unemployment realized through technological replacement! Actually, Bitcoin’s Dark Side is pretty damn dark, as we saw in FTR #‘s 760, 764, 770, 785.
“Bitcoin’s Dark Side Could Get Darker” by Tom Simonite; MIT Technology Review; 8/13/2015.
Investors see riches in a cryptography-enabled technology called smart contracts–but it could also offer much to criminals.
Some of the earliest adopters of the digital currency Bitcoin were criminals, who have found it invaluable in online marketplaces for contraband and as payment extorted through lucrative “ransomware” that holds personal data hostage. A new Bitcoin-inspired technology that some investors believe will be much more useful and powerful may be set to unlock a new wave of criminal innovation.
That technology is known as smart contracts—small computer programs that can do things like execute financial trades or notarize documents in a legal agreement. Intended to take the place of third-party human administrators such as lawyers, which are required in many deals and agreements, they can verify information and hold or use funds using similar cryptography to that which underpins Bitcoin.
Some companies think smart contracts could make financial markets more efficient, or simplify complex transactions such as property deals (see “The Startup Meant to Reinvent What Bitcoin Can Do”). Ari Juels, a cryptographer and professor at the Jacobs Technion-Cornell Institute at Cornell Tech, believes they will also be useful for illegal activity–and, with two collaborators, he has demonstrated how.
“In some ways this is the perfect vehicle for criminal acts, because it’s meant to create trust in situations where otherwise it’s difficult to achieve,” says Juels.
In a paper to be released today, Juels, fellow Cornell professor Elaine Shi, and University of Maryland researcher Ahmed Kosba present several examples of what they call “criminal contracts.” They wrote them to work on the recently launched smart-contract platform Ethereum.
One example is a contract offering a cryptocurrency reward for hacking a particular website. Ethereum’s programming language makes it possible for the contract to control the promised funds. It will release them only to someone who provides proof of having carried out the job, in the form of a cryptographically verifiable string added to the defaced site.
Contracts with a similar design could be used to commission many kinds of crime, say the researchers. Most provocatively, they outline a version designed to arrange the assassination of a public figure. A person wishing to claim the bounty would have to send information such as the time and place of the killing in advance. The contract would pay out after verifying that those details had appeared in several trusted news sources, such as news wires. A similar approach could be used for lesser physical crimes, such as high-profile vandalism.
“It was a bit of a surprise to me that these types of crimes in the physical world could be enabled by a digital system,” says Juels. He and his coauthors say they are trying to publicize the potential for such activity to get technologists and policy makers thinking about how to make sure the positives of smart contracts outweigh the negatives.
“We are optimistic about their beneficial applications, but crime is something that is going to have to be dealt with in an effective way if those benefits are to bear fruit,” says Shi.
Nicolas Christin, an assistant professor at Carnegie Mellon University who has studied criminal uses of Bitcoin, agrees there is potential for smart contracts to be embraced by the underground. “It will not be surprising,” he says. “Fringe businesses tend to be the first adopters of new technologies, because they don’t have anything to lose.”
...
Gavin Wood, chief technology officer at Ethereum, notes that legitimate businesses are already planning to make use of his technology—for example, to provide a digitally transferable proof of ownership of gold.
However, Wood acknowledges it is likely that Ethereum will be used in ways that break the law—and even says that is part of what makes the technology interesting. Just as file sharing found widespread unauthorized use and forced changes in the entertainment and tech industries, illicit activity enabled by Ethereum could change the world, he says.
“The potential for Ethereum to alter aspects of society is of significant magnitude,” says Wood. “This is something that would provide a technical basis for all sorts of social changes and I find that exciting.”
For example, Wood says that Ethereum’s software could be used to create a decentralized version of a service such as Uber, connecting people wanting to go somewhere with someone willing to take them, and handling the payments without the need for a company in the middle. Regulators like those harrying Uber in many places around the world would be left with nothing to target. “You can implement any Web service without there being a legal entity behind it,” he says. “The idea of making certain things impossible to legislate against is really interesting.”
4. Symphony, Wall Street’s fancy new bank-to-bank messaging system that sports super-encryption even the government can’t break, just went live. And they did so only after coming to an agreement with the New York Department of Financial Services over concerns that Symphony’s clients were going to be hiding incriminating evidence from regulators: Symphony agrees to keep copies of client messages for seven years. Additionally, for four banks — Goldman Sachs, Deutsche Bank, Credit Suisse and Bank of New York Mellon — that are both investors in Symphony and, in most cases, perpetrators of the giant Libor-rigging cartel arranged via a chat system, they also have to give copies of their encryption keys to an independent custodian.
So with those safeguards in place, Wall Street’s controlled information black hole is now a reality:
Symphony, the secure messaging company backed by 15 Wall Street banks, will launch on Tuesday after hammering out a deal with a regulatory agency that once threatened to shut down the first real challenge to the Bloomberg Terminal.
Three years in the making, Symphony was born out of desperation among the world’s most powerful financial firms and investment houses to break free of Bloomberg’sstranglehold on financial software, data and news. Long before people used Facebook, MySpace, Twitter or AOL Instant Messenger, financial professionals depended on the terminal to chat with and keep track of one another. Today, the terminal confers status and privilege to the more than 325,000 financial pros who pay $24,000 a year to use it.
Symphony’s cloud-based messaging service does two things: It uses advanced encryption techniques in order to keep sensitive messages — instant messages mostly — locked up and out of the hands of hackers. But since it’s designed for financial companies, which are required by law to keep copies of their messages for several years in case regulators or law enforcement ever needs them for an investigation, it has also been designed to work in concert with whatever compliance tools those companies have in place.
So when the New York Department of Financial Services raised suspicions over the summer that banks might use Symphony’s encryption technology to avoid the prying eyes of regulators, it seemed plausible that the company could face restrictions on how it does business.
That didn’t happen. Instead, on Monday Symphony announced a deal with the DFS under which it agreed to store for seven years copies of messages that its clients send on the service. Additionally, four banks (Goldman Sachs, Deutsche Bank, Credit Suisse and Bank of New York Mellon) which are both customers of and investors in Symphony agreed to turn over copies of their encryption keys to an independent custodian. When a regulator wants to review encrypted messages, they will be able to decrypt them upon request.
“The agreement is another positive development on the eve of Symphony’s launch,” the company said in a statement emailed to Re/code. “Symphony’s platform safeguards against cyber-threats while strengthening customers’ compliance operations and facilitating their ability to meet their regulatory obligations. Symphony can store data securely for as long as its customers request, and its end-to-end encryption ensures messages are secure. Symphony provides state-of-the-art cyber-security for institutions operating in complex regulatory environments.”
It’s not entirely the end of the regulatory road for Symphony: Over the summer Sen. Elizabeth Warren wrote a letter to federal regulators expressing worries similar to those of DFS, and there are questions pending too from international regulatory bodies. But none of them are especially worrying to CEO David Gurle.
“We’ve engaged in a series of meetings with regulators where we demonstrate that we have capabilities that can be used by regulators to carry out any kind of investigation they may want to do,” he told Re/code in an interview earlier this month. “What we do enhances the ability of our clients to meet their legal and regulatory obligations, but it also gives them the added benefit of secure communications.”
...
It’s not entirely the end of the regulatory road for Symphony: Over the summer Sen. Elizabeth Warren wrote a letter to federal regulators expressing worries similar to those of DFS, and there are questions pending too from international regulatory bodies. But none of them are especially worrying to CEO David Gurle.
...
5. Facebook’s facial recognition software continues to be a source of controversy and litigation. Bear in mind that Facebook is also developing apps that permit people’s smart phones to be turned on remotely, in order to monitor the type of music they (and their friends and associates) enjoy. They are also implementing an app that will permit financial institutions to deny people credit on the basis of the credit-worthiness of their friends and associates!
Who owns your face? Believe it or not, the answer depends on which state you live in, and chances are, you live in one that hasn’t even weighed in yet.
That could soon change. For the fourth time this year, Facebook Inc. was hit with a class-action lawsuit by an Illinois resident who says its face-recognition software violates an unusual state privacy law there. The latest complaint, filed Monday, underscores a quiet but high-stakes legal battle for the social networking giant, one that could reverberate throughout the rest of the U.S. tech industry and much of the private sector.
With almost 1.5 billion active users, Facebook has amassed what probably is the world’s largest private database of “faceprints,” digital scans that contain the unique geometric patterns of its users’ faces. The company says it uses these identifiers to automatically suggest photo tags. When users upload new pictures to the site, an algorithm calculates a numeric value based on a person’s unique facial features. Facebook pitches the feature as just another convenient way to stay connected with friends, but privacy and civil rights advocates say the data generated by face-recognition technology is uniquely sensitive, and requires extra special safeguards as it finds its way into the hands of private companies.
“You can’t turn off your face,” said Alvaro M. Bedoya, founding executive director of Georgetown University’s Center on Privacy & Technology. “Yes, it’s 2015, and yes, we’re tracked in a million different ways, but for most of those forms of tracking, I can still turn it off if I want to.”
Faceprints Are Mostly Unregulated
Currently, there are no comprehensive federal regulations governing the commercial use of biometrics, the category of information technology that includes faceprints. And Bedoya said the government appears to be in no hurry to address the issue.
Earlier this year, the Center on Privacy & Technology was one of a number of privacy-rights groups — along with the Electronic Frontier Foundation and the American Civil Liberties Union, among others — that withdrew from discussions on how to craft guidelines for face-recognition technology. After months of negotiations, Bedoya said the groups grew frustrated by tech industry trade associations that would not agree to even the most minimal of protections, including a rule that would require companies to obtain written consent before collecting and storing faceprints on consumers.
“When not a single trade association would agree to that, we just realized we weren’t dealing with people who were there to negotiate,” Bedoya said. “We were there to deal basically with people who wanted to stop the process, or make it something that was watered down.”
But Illinois is different. It’s one of only two states — the other being Texas — to regulate biometrics in the private sector. Illinois passed its Biometric Information Privacy Actin 2008, back when Facebook was still in its relative infancy and most companies were not thinking about face-recognition technology.
“I think we were ahead of the curve,” said Mary Dixon, legislative director for the ACLU of Illinois, which advanced the initiative. “I think it’d be hard to pass similar initiatives now given the intense lobby against some of the protections we were able to advance.”
Litigation Faceoff
Illinois’ law went pretty much unnoticed until April of this year, when a high-profile privacy lawyer filed a lawsuit in federal court on behalf of a Facebook user who charges that Facebook is collecting and storing faceprints on its users without obtaining informed written consent, a violation of Illinois’ BIPA. The suit is federal because Facebook is based in California and the proposed plaintiff class potentially numbers in the millions. Since then, at least three more federal lawsuitswere filed, each making similar claims. The latest suit comes from Frederick William Gullen, an Illinois resident who doesn’t even have a Facebook account, but who insists that Facebook created a template of his face when another user uploaded a photo of him.
“Facebook is actively collecting, storing, and using — without providing notice, obtaining informed written consent or publishing data retention policies — the biometrics of its users and unwitting non-users ... Specifically, Facebook has created, collected and stored over a billion ‘face templates’ (or ‘face prints’) — highly detailed geometric maps of the face — from over a billion individuals, millions of whom reside in the State of Illinois.”
A Facebook spokeswoman said the lawsuits are without merit and the company will defend itself vigorously against them, but the reality is, the cases could play out in a number of ways given that face recognition is largely untested legal territory.
Dixon and other legal experts familiar with BIPA say Facebook probably will argue that because its faceprints are derived from photographs, they are exempt from BIPA’s consent requirements. Shutterfly Inc., another Internet company being sued in Illinois over facial-recognition technology, is arguing a similar stance. Although BIPA clearly considers scans of “hand or face geometry” to be biometric identifiers, it also says photographs are not. Bedoya said the wording of the law raises a “seeming contradiction” that defendants fighting BIPA lawsuits might be able to exploit.
“The law was written in a way that could have been clearer,” he said.
Facebook points out that users can turn off tag suggestions, but Dixon said BIPA was written to ensure that biometric data collection does not take place without written consent executed by the subject of the biometric identifier. The law also makes it illegal to sell, lease or otherwise profit from a customer’s biometric information, a particular thorn in the side for companies that trade in personal data.
The Facebook and Shutterfly lawsuits will be closely watched as policymakers in other states consider crafting bills governing the use of biometrics. Meanwhile, privacy advocates say we should all be paying attention. As face-recognition technology becomes more pervasive, it will have increasing implications for our lives, both online and off.
“There’s an awful lot at stake here,” Bedoya said. “In the end, do we want to live in a society where everyone is identified all the time the minute they walk out into public? I think most people aren’t ready for that world.”
6. Epitomizing the amoral perspective lurking behind the very successful public relations manifested by Big Tech is their courting of Narendra Modi.
Narendra Modi and Mark Zuckerberg have much in common.
Mr. Modi, the prime minister of India, oversees a nation of 1.25 billion people. Mr. Zuckerberg, the chief executive of Facebook, runs a social network with 1.5 billion active users. Both see themselves as global leaders pushing for broad social change, and both routinely use social media to communicate with their many millions of fans.
On Sunday, the two men engaged in a mutual admiration session at Facebook’s Silicon Valley headquarters, with Mr. Modi fielding preselected questions from a crowd of Facebook employees and guests invited by the Indian Embassy.
Mr. Modi praised social networks like Facebook, Twitter and even China’s Weibo as useful tools for governing and diplomacy. . . .
. . . . Silicon Valley has been eager to assist. . . . .
7. In FTR #795, we detailed the historical evolution of the political ascent of Narendra Modi. His political CV is inextricably linked with the operations, development and history of the RSS, political parent to his BJP Party. The RSS is a Hindu nationalist and fascist party, one of whose alumni assassinated Mahatma Gandhi.
Recent developments have clarified the degree of control and influence that the RSS exerts on Modi. That control is profound and direct.
We also note that Modi’s election was engineered to a considerable extent by Pierre Omidyar, the top dog at EBay. Omidyar also helped bankroll the Maidan coup, that placed the heirs to the OUN/B, Third Reich-allied fascists in power. We should never forget that it is Omidyar who has bankrolled Citizen Greenwald’s journalistic ventures.
Modi says he wants to court Big Tech to raise his country out of poverty. As we noted in FTR #851, he is also trying to do that by relaxing his country’s child labor laws!
“Modi Blows His Cover – and the Loss is India’s” by M.K. Bhadrakumar; Asia Times; 9/10/2015.
India recently witnessed a strange spectacle of Prime Minister Narendra Modi and his cabinet colleagues subjecting themselves to an intense scrutiny by the Rashtriya Swayamsevak Sangh or RSS, the Hindu nationalist organization, regarding their ‘performance’ in office.
Modi himself used to be an activist of the RSS. But an elaborate charade was kept so far that Modi was in command of the government.
The Indian media has since reported that the RSS eventually gave ‘thumbs up’ to the government after Modi and his cabinet colleagues trooped in to meet the RSS bosses and testified at the hearing on their ‘schemes and achievements’ in the government.
No Indian government has ever been made to look so foolish and diffident.
Why the RSS decided to subject Modi and his cabinet to such a dressing down publicly is anybody’s guess. Perhaps, it was to project the RSS itself as god almighty in the Modi era. But then, it is an open secret that the Hindu fundamentalist groups are calling the shots in the government, penetrating all walks of national life systematically and imposing their agenda.
The upshot of the RSS hearing is that Modi has blown his ‘cover’, which helped him so far as prime minister to create an impression that he is a humanist and a devout follower of Buddhism who viewed with distaste the excesses committed by the Hindu zealots on the minority communities in India such as the attacks on Christian churches.
Under the Modi government, incidents of communal tension involving Hindus and Muslims have sharply increased, according to official statistics. However, observers have generously absolved the prime minister himself of any responsibility in this regard, and are willing to suspend disbelief. The ‘cover’ has now been blown.
The fallout of this on the India-Pakistan relationship can be serious. Obviously, Modi can no longer maintain with credibility his stance that he seeks friendly relations between India and Pakistan.
In fact, following the cross-examination of the government ministers, the RSS spokesmen in their media briefings inter alia brought up the explosive doctrine of ‘Akhand Bharat’ as the guiding principle for the Modi government as regards the India-Pakistan relationship.
Broadly, the RSS’s doctrine is that the great Partition of the subcontinent in 1947, which led to the creation of Pakistan, was an aberration that can still be got undone if only India worked toward such an objective.
Pakistan has always had a lurking suspicion that there is really no daylight possible between Modi and the RSS. What used to be a dark suspicion is now likely to become an article of faith. Pakistan’s advisor to the prime minister on national security Sartaj Aziz (who is the de facto foreign minister) has been quoted as saying Wednesday that in Islamabad’s estimation, the Modi government won the 2014 parliamentary poll on the basis of ‘anti-Pakistan platform’ and has been pursuing the same policy from ‘day one’.
Aziz said, “They (Modi government) want better ties, but on their own terms”.
To be sure, the mutual rhetoric makes the prospect of a resumption of India-Pakistan dialogue a remote possibility. And it should be a safe conclusion that the India-Pakistan normalization will remain elusive as long as the Modi government remains in power.
Do the RSS bigwigs and their wards in the government realize what colossal damage they are causing to India’s national interests? The 31 percent vote share Modi managed to garner in the poll last year to create India’s first ever RSS-run government does not give these people the right to superimpose their sectarian agenda on the entire nation.
India’s national interest lies in creating a peaceful external environment in the immediate neighborhood that enables the country to focus on the development challenge through the narrow corridor of time of the next 15–20 years.
Yet, what India is witnessing is a ratcheting up of tensions in the relations with Pakistan. The past week alone began with India’s army chief General Dalbir Singh shedding his fabulous reputation for being a strong silent soldier of discretion and reserve – presumably, on instructions from the political leadership – to underscore the readiness of the armed forces to wage a ‘swift, short’ war with Pakistan.
It was an incredibly tactless statement to have been made in the present tense climate of bilateral ties with Pakistan. Besides, the brilliant general should certainly know that the only way he could ensure that a war with Pakistan remained ‘swift’ and ‘short’ would be by nuking that country in the dead of the night.
You don’t need a Clausewitz to explain that the ‘kinetics’ of war with Pakistan (nuclear power with bigger arsenal than India’s and with second-strike capability) will ultimately depend on a variety of factors that are way beyond the control of anyone in New Delhi, civilian or military.
Now, it is into this combustible mix of rhetoric that the RSS bosses presented their stark reminder to Pakistan that India has never really reconciled with the creation of that country in 1947.
...
As for his Indian counterpart’s dire warning, Gen. Sharif was plainly dismissive: “Armed forces of Pakistan are fully capable to deal all types of internal and external threats, may it be conventional or sub-conventional; whether it is cold start or hot start. We are ready!!”
Are we hearing the beating of drum presaging the beginning of another bloody round of ‘low intensity war’ (read vicious cycle of cross-border terrorism), which cost India heavily in human and material treasure? Or, could it be that India and Pakistan are inching toward another full-fledged war? Time only can tell.
Most certainly, people in responsible position should be careful about what they say in public. What Gen. Dalbir Singh said about ‘short, swift’ war was probably fit for a closed-door meeting with the Director-General of Military Operations at the Army Commanders Conference but not as the stuff of grandstanding.
Equally, while the RSS bosses may not be public officials, they happen to be extra-constitutional authorities wielding more power than many erstwhile emperors in India’s medieval history – and they tend to be taken seriously. Simply put, they should know that the notion of ‘Akhand Bharat’ has no place in the 21st century world order.
India is not presenting a convincing picture as a responsible member of the international community when the so-called movers and shakers in the country behave like hollow men.
The point is, India is keen to secure a seat in the UN Security Council as a permanent member on the plea that it wants to contribute to international security and world peace and development. Funnily, yoga, which Modi has begun propagating under the UN auspices for the good of the soul and body of mankind, is itself all about self-control.
And, yet, in its own region, India chooses to preoccupy itself with sly thoughts about waging a ‘swift short’ war with its unfriendly neighbor and harbors delusionary notions of doing away with a sovereign independent nation that came into being 68 years ago.
The Jekyll-and-Hyde split personality does not do good to India’s image. The country would have been far better off if Modi hadn’t blown his ‘cover’ as a humanist and a modernizer.
...
India’s national interest lies in creating a peaceful external environment in the immediate neighborhood that enables the country to focus on the development challenge through the narrow corridor of time of the next 15–20 years.Yet, what India is witnessing is a ratcheting up of tensions in the relations with Pakistan. The past week alone began with India’s army chief General Dalbir Singh shedding his fabulous reputation for being a strong silent soldier of discretion and reserve – presumably, on instructions from the political leadership – to underscore the readiness of the armed forces to wage a ‘swift, short’ war with Pakistan.
It was an incredibly tactless statement to have been made in the present tense climate of bilateral ties with Pakistan. Besides, the brilliant general should certainly know that the only way he could ensure that a war with Pakistan remained ‘swift’ and ‘short’ would be by nuking that country in the dead of the night.
You don’t need a Clausewitz to explain that the ‘kinetics’ of war with Pakistan (nuclear power with bigger arsenal than India’s and with second-strike capability) will ultimately depend on a variety of factors that are way beyond the control of anyone in New Delhi, civilian or military.
...
The New Yorker has a big new profile on Reid Hoffman, one of the original members of the PayPal Mafia and a long-time friend of Peter Thiel going back to their days at Stanford. But Hoffman, it should be noted, is not an uber-Libertarian like Thiel. Quite the opposite it would seem, given his extensive donations to the Democratic party and self-professed general progressive worldview. So there’s at least one non-uber-libertarian throwing around his PayPal Mafia billions, which is nice in some ways, although it makes Hoffman’s quest to turn the future of employment into the unholy love child of LinkedIn and Uber perhaps even more disturbing than it otherwise would have been:
Ok, that’s a lot to unpack, but based on the following, it sounds like Reid Hoffman wants to turn LinkedIn into a giant global jobs-posting board that we’ll all use to find work as we move out of the era of the “The Organization Man” and into the age of “The Network Man” where everyone becomes an entrepreneur in the business of selling their services in an Uber-like piecemeal manner. And Uber-izing the economy should somehow address the issues that have emerged in the mid-seventies as economic life become much more uncertain for the middle-class and for more favorable to wealthy interests. And LinkedIn is creating an “economic graph” with the goal of creating “opportunity for everyone on the globe” via selling their services via LinkedIn’s networking services:
“Hoffman is convinced that we can fix the problem through Internet-enabled networks. Work is already becoming more temporary, sporadic, and informal, and this change should be embraced. Many more people will become entrepreneurial, if not entrepreneurs. The keeper of your career will be not your employer but your personal network—so you’d better put a lot of effort into making it as extensive and as vital as possible. A twenty-first-century version of William H. Whyte’s memorably titled 1956 book “The Organization Man” would, by Hoffman’s logic, be called “The Network Man,” and this virtual structure would define the age as fully as the big corporation defined the earlier age.”
And in order to achieve this utopian future, Hoffman warns that it’s going to require “trying to get politicians to understand that solving this problem is about facilitation of a network, as opposed to”—sarcastically—“the New Deal.”:
So Hoffman’s solution to a crisis in contemporary capitalism and increasing systemic inequality and unemployment is to turn everyone into a contractor and just let the power of networking work its magic. Magic that will be absolutely vital since “the global economy will need six hundred million new jobs over the next twenty years, and existing business can provide only ten to twenty million of them. The rest, he claims, will have to come from startups, so societies everywhere will have to reorient themselves significantly in order to make entrepreneurship easier.”
Yes, according to Hoffman, societies everywhere need to reorient themselves significantly to make “entrepreneurship” easier, which will apparently involve Uber-izing employment on a mass scale, or else we’re all going to be running half a billion jobs short over the next 20 years by Hoffman’s estimates. And he’s considered to be one of Silicon Valley’s lefty oligarchs. It’s a little odd, but, in fairness, relative to his right(er)-leaning counterparts, he is somewhat to the left. Somewhat:
So there we go: Hoffman supports the Democrats despite the party’s support for thinks like regulations or “big government” and more due to social issues. And he scoffs at the notion that the ultra rich wouldn’t work as hard with higher taxes. So, in that respect, he really is kind of sort of more liberal than, say, Peter Thiel: Hoffman appears to still be a hyper-capitalist technocrat that can’t envision a future that doesn’t involve some sort of hellish global rat race where everyone is as insecure as their social network allows, but at least he seems to have socially liberal view on non-economic matters. Sort he’s sort of a Libertarian-oligarch-lite: his visions for the future is probably going to be a stressed out techno-hellscape that almost no one enjoys, but he could be worse!
If the letter “S” didn’t already have an assignment under Google’s new “Alphabet” corporate shell, that’s shouldn’t be the case anymore: “S” is for “Symphony”:
While it’s possible that Google simply wants in on a growing market for financial industry super-encrypted communication platforms, keep in mind the Symphony’s tune might resonate with a number of other industries that would also like a super-encrypted communication and collaboration platform and expanding into other sectors was always part of the plan:
“While today the product focuses primarily on the needs of financial services, Gurle says over time, the content can adapt to the many different content-centric industries such as life sciences, medicine, shipping, manufacturing, accounting, legal and energy.”
Symphony for everyone! And should Symphony expand to other industries, it’s certainly possible that large players will also be forced to keep copies of their encryption keys with a 3rd party in a similar compromise to what was reached with four of the large Symphony clients/investors to allow for regulatory oversight. But, of course, that compromise deal doesn’t actually apply to any other Symphony clients. Just those four large Symphony users that also happen to be investors. And given the highly regulated nature of financial industry communications compare to many other industries, it doesn’t seem very likely that other industries would be subject to even that “compromise” for greater oversight.
So who knows, we could be seeing super-encrypted “collaboration” messaging systems pop up in all sorts of industries, compliments of Goldman Sachs and now Google. Just imagine how many industries might be interested in this kind of tool. For instance, there’s lots of collaboration involved with auto manufacturing. Could auto manufacturers do what they need to get done in terms of communicating with their various parts suppliers, etc, using Symphony? If so, there’s probably a company Wolfsburg that wishes it had been using Symphony for the last decade or so:
“Prosecutors in Braunschweig, near the company’s headquarters in Wolfsburg, said the aim of the searches was to “secure documents and data storage devices” that could identify those involved in the alleged manipulation and explain how it was carried out.”
There’s an app for that.
Mark Ames has a recent piece on the latest attempt to “Uber-ize” another piece of the “old economy”, this time it’s trucking in the cross-hairs, and it makes a critical point that’s going to be increasingly vital to keep in mind when assessing the potential impact the libertarian hyper-capitalist tech oligarchs are going to have on society going forward: “For all of the Internet’s initial promise (and cant) of smashing traditional hierarchies and creating horizontal structures that democratize power and politics, the reality is that the Internet economy has centralized power and wealth and the political economy on a scale not really seen since the railroads destroyed the old economy and quickly created hugely centralized new industries, which centralized into trusts — and created a class of oligarchs with outsized wealth and power that no democracy could survive.”
“The question of who benefits from this “efficiency” and what it means can be quantified. When the revenues are concentrated through an app or two, and distributed to a small handful of incredibly wealthy investors, there you have the real architecture of this New Economy trucking industry.”
Yep, the New Economy trucking industry probably going to be pretty “efficient”. At least in terms of cost of labor efficiency. How those “efficiencies” get divided between the new tech trucking barons with their “narrow stream” oligopolies and the end consumers of shipped products will be something to watch.
And in other news...
The recent student protests at the University of Missouri just took an unfortunate turn following a series of violent threats against the campus’s black students issued via Yik Yak, an anonymous app decided to let users says whatever about whatever, but totally anonymously. Fortunately, the threatening Yik Yak user has been arrested. Unfortunately, as the below points out, this is far from the first time Yik Yak has been used in this manner, and there’s no indication that’s going to change any time soon:
“At this rate, the app is fielding a new high-profile incident roughly every two weeks.”
If, as the saying goes, there is indeed no such thing as bad advertising, Yik Yak’s propensity to generate high-profile incidents every couple of weeks probably isn’t hurting its popularity, which might explain its $200-$300 million valuation from venture capital giant Sequoia Capital (Sequoia also invested in Whisper, so they seem to like the anonymous broadcasting market).
Still, you have to wonder how the arrest of the individual that was issuing these threats will threaten Yik Yak’s popularity. After all, what fun (to horrible trolls) is an anonymous app that let’s you say anything (like mass death threats) but still might get you caught?! Who (that isn’t a horrible person) is going to want to use something like that?
Of course, as the article below points out, Yik Yak only cooperates with authorities when there’s a subpoena, court order or search warrant, or an emergency request from a law-enforcement official with a compelling claim of imminent harm. Otherwise, it’s up to the local users to down-vote (and therefore remove) the harmful messages:
As we can see, Yik Yak does indeed have identifiable information on its users, it just won’t share it unless there’s a subpoena or compelling claim of imminent harm from law enforcement. So it’s users aren’t actually anonymous. They’re just anonymous to everyone except Yik Yak:
And that all raises an interesting question about Yik Yak’s rather questionable business model: Yik Yak was valued at $200–300 million, and yet it’s free, doesn’t generate any revenue, and the only obvious revenue source is advertising which could be tricky since a lot of companies might not want to advertise on a smear-peddling platform known for online harrassment:
So...since Yik Yak obvious can identify users in an emergency, but simply chooses not to under all other circumstance, you have to wonder if the high valuation for a company that not only isn’t turning a profit but actually has no revenue might have something to do with the fact that large numbers of people are using a service that they assume to be anonymous but is actually able to identify their devices along with user location data. Could that be part of the planned business model? It seems possible.
It’s one of the many questions raised by the wave of new anonymity apps (that aren’t very new, conceptually, nor very anonymous) that’s sweeping the social networking world. One of many.
With Mark Zuckerberg and his wife pledging to donate 99 percent of their net worth to a charitable organization dedicated to a variety of philanthropic goals, a number of commenters have point out that it’s both pathetic that society even needs the largess of billionaires to attempt to solve pressing global issues and rather alarming given the persistent reality that billionaires tend to have rather skewed view of how the world should work.
But it’s also worth pointing out that Zuckerberg’s massive charitable contribution wasn’t actually a charitable contribution:
“Any time a superwealthy plutocrat makes a charitable donation, the public ought to be reminded that this is how our tax system works. The superwealthy buy great public relations and adulation for donations that minimize their taxes.”
Yep. And those donations don’t just minimize billionaires’ taxes. They also maximize their influence. It’s also worth reminding our selves that, when it comes to Libertarian oligarchs, what they consider “help” can be pretty harmful. We’ll see which path Zuckerberg takes on his quest to help the masses. We’ll see...
Wonderful. The power of facial recognition software can now be in the palm of your hand...scanning your phone’s photos for Facebook:
Nice. So now the new facial recognition technology that was previously only available in Australia is getting automatically added to mobile Facebook app users everywhere...except Canada and the EU.
And if the facial recognition functionality of “Photo Magic” sounds familiar for Facebook users, it might be because it’s basically the same way as “Moment”, a new stand-alone Facebook app that also features the facial recognition technology
“If this sounds familiar, it’s because it’s the same basic idea as Moments, a stand-alone app that Facebook launched earlier this year. (The Messenger and Moments teams collaborated on Photo Magic, particularly around the face recognition elements.) Moments works the same way, but there’s a catch: friends needs to have Moments installed in order to view the photos you send them. I like Moments a lot, but very few of my friends have it installed — and so I resist sharing photos using Moments, because I don’t want to feel like I’m spamming them with app download links.”
Yep, now that Facebook’s Photo Magic is getting rolled out to most of the world as part of Facebook Messenger , Facebook’s facial recognition technology that scrolls through your smart phone photos can get adopted at a much higher rate since it presumably won’t suffer from the same “we both need to have it” issue that’s holding adoption of Moment back.
But while Photo Magic will sort of be competing with Moment for Facebook’s facial recognition services don’t assumes that Moment’s moment has already passed:
“The focus on Moments puts Facebook in a better position to compete with Google, whose own Google Photos service just added a way to share and sync private albums”
Yep, Moment is Facebook’s answer to Google Photos service. Will facial recognition give it an edge over Google? That’s hard to say.
At least opting out of services that allow third-party mega corporations hell-bent on commercializing as much personal data on all of us as possible scan our smartphone pics is still an option. For now.