Group items tagged

gospel of individualism, small government, and market fundamentalism

innovation is the new selfishness

mastery of public relations

making it seem as if the language of economics was, in fact, the only reasonable way to talk about the subject

memes are for losers; the real money is in epistemes.

“Open source software” was also the first major rebranding exercise overseen by Team O’Reill

It’s easy to forget this today, but there was no such idea as open source software before 1998; the concept’s seeming contemporary coherence is the result of clever manipulation and marketing.

ideological cleavage between two groups

Richard Stallman

Free Software Foundation, preoccupied with ensuring that users had rights with respect to their computer programs. Those rights weren’t many—users should be able to run the program for any purpose, to study how it works, to redistribute copies of it, and to release their improved version (if there was one) to the public

“free software.”

association with “freedom” rather than “free beer”

copyleft

profound critique of the role that patent law had come to play in stifling innovation and creativity.

Plenty of developers contributed to “free software” projects for reasons that had nothing to do with politics. Some, like Linus Torvalds, the Finnish creator of the much-celebrated Linux operating system, did so for fun; some because they wanted to build more convenient software; some because they wanted to learn new and much-demanded skills.

Stallman’s rights-talk, however, risked alienating the corporate types

he was trying to launch a radical social movement, not a complacent business association

By early 1998 several business-minded members of the free software community were ready to split from Stallman, so they masterminded a coup, formed their own advocacy outlet—the Open Source Initiative—and brought in O’Reilly to help them rebrand.

“open source”

The label “open source” may have been new, but the ideas behind it had been in the air for some time.

In those early days, the messaging around open source occasionally bordered on propaganda

This budding movement prided itself on not wanting to talk about the ends it was pursuing; except for improving efficiency and decreasing costs, those were left very much undefined.

extremely decentralized manner, using Internet platforms, with little central coordination.

In contrast to free software, then, open source had no obvious moral component.

“open source is not particularly a moral or a legal issue. It’s an engineering issue. I advocate open source, because . . . it leads to better engineering results and better economic results

While free software was meant to force developers to lose sleep over ethical dilemmas, open source software was meant to end their insomnia.

Stallman the social reformer could wait for decades until his ethical argument for free software prevailed in the public debate

O’Reilly the savvy businessman had a much shorter timeline: a quick embrace of open source software by the business community guaranteed steady demand for O’Reilly books and events

The coup succeeded. Stallman’s project was marginalized. But O’Reilly and his acolytes didn’t win with better arguments; they won with better PR.

A decade after producing a singular vision of the Internet to justify his ideas about the supremacy of the open source paradigm, O’Reilly is close to pulling a similar trick on how we talk about government reform.

much of Stallman’s efforts centered on software licenses

O’Reilly’s bet wa

the “cloud”

licenses would cease to matter

Since no code changed hands

So what did matter about open source? Not “freedom”

O’Reilly cared for only one type of freedom: the freedom of developers to distribute software on whatever terms they fancied.

the freedom of the producer

who must be left to innovate, undisturbed by laws and ethics.

The most important freedom,

is that which protects “my choice as a creator to give, or not to give, the fruits of my work to you, as a ‘user’ of that work, and for you, as a user, to accept or reject the terms I place on that gift.”

O’Reilly opposed this agenda: “I completely support the right of Richard [Stallman] or any individual author to make his or her work available under the terms of the GPL; I balk when they say that others who do not do so are doing something wrong.”

The right thing to do, according to O’Reilly, was to leave developers alone.

According to this Randian interpretation of open source, the goal of regulation and public advocacy should be to ensure that absolutely nothing—no laws or petty moral considerations—stood in the way of the open source revolution

Any move to subject the fruits of developers’ labor to public regulation

must be opposed, since it would taint the reputation of open source as technologically and economically superior to proprietary software

the advent of the Internet made Stallman’s obsession with licenses obsolete

Many developers did stop thinking about licenses, and, having stopped thinking about licenses, they also stopped thinking about broader moral issues that would have remained central to the debates had “open source” not displaced “free software” as the paradigm du jour.

Profiting from the term’s ambiguity, O’Reilly and his collaborators likened the “openness” of open source software to the “openness” of the academic enterprise, markets, and free speech.

“open to intellectual exchange”

“open to competition”

“For me, ‘open source’ in the broader sense means any system in which open access to code lowers the barriers to entry into the market”).

“Open” allowed O’Reilly to build the largest possible tent for the movement.

The language of economics was less alienating than Stallman’s language of ethics; “openness” was the kind of multipurpose term that allowed one to look political while advancing an agenda that had very little to do with politics

highlight the competitive advantages of openness.

the availability of source code for universal examination soon became the one and only benchmark of openness

What the code did was of little importance—the market knows best!—as long as anyone could check it for bugs.

The new paradigm was presented as something that went beyond ideology and could attract corporate executives without losing its appeal to the hacker crowd.

What Raymond and O’Reilly failed to grasp, or decided to overlook, is that their effort to present open source as non-ideological was underpinned by a powerful ideology of its own—an ideology that worshiped innovation and efficiency at the expense of everything else.

What they had in common was disdain for Stallman’s moralizing—barely enough to justify their revolutionary agenda, especially among the hacker crowds who were traditionally suspicious of anyone eager to suck up to the big corporations that aspired to dominate the open source scene.

linking this new movement to both the history of the Internet and its future

As long as everyone believed that “open source” implied “the Internet” and that “the Internet” implied “open source,” it would be very hard to resist the new paradigm

Telling a coherent story about open source required finding some inner logic to the history of the Internet

“If you believe me that open source is about Internet-enabled collaboration, rather than just about a particular style of software license,”

everything on the Internet was connected to everything else—via open source.

The way O’Reilly saw it, many of the key developments of Internet culture were already driven by what he called “open source behavior,” even if such behavior was not codified in licenses.

No moralizing (let alone legislation) was needed; the Internet already lived and breathed open source

apps might be displacing the browser

the openness once taken for granted is no more

Openness as a happenstance of market conditions is a very different beast from openness as a guaranteed product of laws.

One of the key consequences of linking the Internet to the world of open source was to establish the primacy of the Internet as the new, reinvented desktop

This is where the now-forgotten language of “freedom” made a comeback, since it was important to ensure that O’Reilly’s heroic Randian hacker-entrepreneurs were allowed to roam freely.

Soon this “freedom to innovate” morphed into “Internet freedom,” so that what we are trying to preserve is the innovative potential of the platform, regardless of the effects on individual users.

Lumping everything under the label of “Internet freedom” did have some advantages for those genuinely interested in promoting rights such as freedom of expression

Forced to choose between preserving the freedom of the Internet or that of its users, we were supposed to choose the former—because “the Internet” stood for progress and enlightenment.

infoware

Yahoo

their value proposition lay in the information they delivered, not in the software function they executed.

The “infoware” buzzword didn’t catch on, so O’Reilly turned to the work of Douglas Engelbart

to argue that the Internet could help humanity augment its “collective intelligence” and that, once again, open source software was crucial to this endeavor.

Now it was all about Amazon learning from its customers and Google learning from the sites in its index.

The idea of the Internet as both a repository and incubator of “collective intelligence”

in 2004, O’Reilly and his business partner Dale Dougherty hit on the idea of “Web 2.0.” What did “2.0” mean, exactly?

he primary goal was to show that the 2001 market crash did not mean the end of the web and that it was time to put the crash behind us and start learning from those who survived.

Tactically, “Web 2.0” could also be much bigger than “open source”; it was the kind of sexy umbrella term that could allow O’Reilly to branch out from boring and highly technical subjects to pulse-quickening futurology

O’Reilly couldn’t improve on a concept as sexy as “collective intelligence,” so he kept it as the defining feature of this new phenomenon.

What set Web 2.0 apart from Web 1.0, O’Reilly claimed, was the simple fact that those firms that didn’t embrace it went bust

find a way to harness collective intelligence and make it part of their business model.

By 2007, O’Reilly readily admitted that “Web 2.0 was a pretty crappy name for what’s happening.”

O’Reilly eventually stuck a 2.0 label on anything that suited his business plan, running events with titles like “Gov 2.0” and “Where 2.0.” Today, as everyone buys into the 2.0 paradigm, O’Reilly is quietly dropping it

assumption that, thanks to the coming of Web 2.0, we are living through unique historical circumstances

Take O’Reilly’s musings on “Enterprise 2.0.” What is it, exactly? Well, it’s the same old enterprise—for all we know, it might be making widgets—but now it has learned something from Google and Amazon and found a way to harness “collective intelligence.”

tendency to redescribe reality in terms of Internet culture, regardless of how spurious and tenuous the connection might be, is a fine example of what I call “Internet-centrism.”

“Open source” gave us the “the Internet,” “the Internet” gave us “Web 2.0,” “Web 2.0” gave us “Enterprise 2.0”: in this version of history, Tim O’Reilly is more important than the European Union

For Postman, each human activity—religion, law, marriage, commerce—represents a distinct “semantic environment” with its own tone, purpose, and structure. Stupid talk is relatively harmless; it presents no threat to its semantic environment and doesn’t cross into other ones.

Since it mostly consists of falsehoods and opinions

it can be easily corrected with facts

to say that Tehran is the capital of Iraq is stupid talk

Crazy talk, in contrast, challenges a semantic environment, as it “establishes different purposes and assumptions from those we normally accept.” To argue, as some Nazis did, that the German soldiers ended up far more traumatized than their victims is crazy talk.

For Postman, one of the main tasks of language is to codify and preserve distinctions among different semantic environments.

As he put it, “When language becomes undifferentiated, human situations disintegrate: Science becomes indistinguishable from religion, which becomes indistinguishable from commerce, which becomes indistinguishable from law, and so on.

pollution

Some words—like “law”—are particularly susceptible to crazy talk, as they mean so many different things: from scientific “laws” to moral “laws” to “laws” of the market to administrative “laws,” the same word captures many different social relations. “Open,” “networks,” and “information” function much like “law” in our own Internet discourse today.

For Korzybski, the world has a relational structure that is always in flux; like Heraclitus, who argued that everything flows, Korzybski believed that an object A at time x1 is not the same object as object A at time x2

Our language could never properly account for the highly fluid and relational structure of our reality—or as he put it in his most famous aphorism, “the map is not the territory.”

Korzybski argued that we relate to our environments through the process of “abstracting,” whereby our neurological limitations always produce an incomplete and very selective summary of the world around us.

nothing harmful in this per se—Korzybski simply wanted to make people aware of the highly selective nature of abstracting and give us the tools to detect it in our everyday conversations.

Korzybski developed a number of mental tools meant to reveal all the abstracting around us

He also encouraged his followers to start using “etc.” at the end of their statements as a way of making them aware of their inherent inability to say everything about a given subject and to promote what he called the “consciousness of abstraction.”

There was way too much craziness and bad science in Korzybski’s theories

but his basic question

“What are the characteristics of language which lead people into making false evaluations of the world around them?”

Tim O’Reilly is, perhaps, the most high-profile follower of Korzybski’s theories today.

O’Reilly openly acknowledges his debt to Korzybski, listing Science and Sanity among his favorite books

It would be a mistake to think that O’Reilly’s linguistic interventions—from “open source” to “Web 2.0”—are random or spontaneous.

There is a philosophy to them: a philosophy of knowledge and language inspired by Korzybski. However, O’Reilly deploys Korzybski in much the same way that the advertising industry deploys the latest findings in neuroscience: the goal is not to increase awareness, but to manipulate.

O’Reilly, of course, sees his role differently, claiming that all he wants is to make us aware of what earlier commentators may have overlooked. “A metaphor is just that: a way of framing the issues such that people can see something they might otherwise miss,

But Korzybski’s point, if fully absorbed, is that a metaphor is primarily a way of framing issues such that we don’t see something we might otherwise see.

In public, O’Reilly modestly presents himself as someone who just happens to excel at detecting the “faint signals” of emerging trends. He does so by monitoring a group of überinnovators that he dubs the “alpha geeks.” “The ‘alpha geeks’ show us where technology wants to go. Smart companies follow and support their ingenuity rather than trying to suppress it,

His own function is that of an intermediary—someone who ensures that the alpha geeks are heard by the right executives: “The alpha geeks are often a few years ahead of their time. . . . What we do at O’Reilly is watch these folks, learn from them, and try to spread the word by writing down (

The name of his company’s blog—O’Reilly Radar—is meant to position him as an independent intellectual who is simply ahead of his peers in grasping the obvious.

“the skill of writing is to create a context in which other people can think”

As Web 2.0 becomes central to everything, O’Reilly—the world’s biggest exporter of crazy talk—is on a mission to provide the appropriate “context” to every field.

In a fascinating essay published in 2000, O’Reilly sheds some light on his modus operandi.

The thinker who emerges there is very much at odds with the spirit of objectivity that O’Reilly seeks to cultivate in public

meme-engineering lets us organize and shape ideas so that they can be transmitted more effectively, and have the desired effect once they are transmitted

O’Reilly meme-engineers a nice euphemism—“meme-engineering”—to describe what has previously been known as “propaganda.”

how one can meme-engineer a new meaning for “peer-to-peer” technologies—traditionally associated with piracy—and make them appear friendly and not at all threatening to the entertainment industry.

O’Reilly and his acolytes “changed the canonical list of projects that we wanted to hold up as exemplars of the movement,” while also articulating what broader goals the projects on the new list served. He then proceeds to rehash the already familiar narrative: O’Reilly put the Internet at the center of everything, linking some “free software” projects like Apache or Perl to successful Internet start-ups and services. As a result, the movement’s goal was no longer to produce a completely free, independent, and fully functional operating system but to worship at the altar of the Internet gods.

Could it be that O’Reilly is right in claiming that “open source” has a history that predates 1998?

Seen through the prism of meme-engineering, O’Reilly’s activities look far more sinister.

His “correspondents” at O’Reilly Radar don’t work beats; they work memes and epistemes, constantly reframing important public issues in accordance with the templates prophesied by O’Reilly.

Or take O’Reilly’s meme-engineering efforts around cyberwarfare.

Now, who stands to benefit from “cyberwarfare” being defined more broadly? Could it be those who, like O’Reilly, can’t currently grab a share of the giant pie that is cybersecurity funding?

Frank Luntz lists ten rules of effective communication: simplicity, brevity, credibility, consistency, novelty, sound, aspiration, visualization, questioning, and context.

Thus, O’Reilly’s meme-engineering efforts usually result in “meme maps,” where the meme to be defined—whether it’s “open source” or “Web 2.0”—is put at the center, while other blob-like terms are drawn as connected to it.

The exact nature of these connections is rarely explained in full, but this is all for the better, as the reader might eventually interpret connections with their own agendas in mind. This is why the name of the meme must be as inclusive as possible: you never know who your eventual allies might be. “A big part of meme engineering is giving a name that creates a big tent that a lot of people want to be under, a train that takes a lot of people where they want to go,”

News April 4 mail date March 29, 2013 Baffler party March 6, 2013 Žižek on seduction February 13, 2013 More Recent Press I’ve Seen the Worst Memes of My Generation Destroyed by Madness io9, April 02, 2013 The Baffler’s New Colors Imprint, March 21, 2013

There is considerable continuity across O’Reilly’s memes—over time, they tend to morph into one another.

A broad statement of the key idea of smart contracts, then, is to say that contracts should be embedded in the world.

And where the vending machine, like electronic mail, implements an asynchronous protocol between the vending company and the customer, some smart contracts entail multiple synchronous steps between two or more parties

POS (Point of Sale)

EDI (Electronic Data Interchange

SWIFT

allocation of public network bandwidth via automated auctions

Smart contracts reference that property in a dynamic, proactively enforced form, and provide much better observation and verification where proactive measures must fall short.

The mechanisms of the world should be structured in such a way as to make the contracts (a) robust against naive vandalism, and (b) robust against sophisticated, incentive compatible (rational) breach.

A third category, (c) sophisticated vandalism (where the vandals can and are willing to sacrifice substantial resources), for example a military attack by third parties, is of a special and difficult kind that doesn't often arise in typical contracting, so that we can place it in a separate category and ignore it here.

The threat of physical force is an obvious way to embed a contract in the world -- have a judicial system decide what physical steps are to be taken out by an enforcement agency (including arrest, confiscation of property, etc.) in response to a breach of contract

It is what I call a reactive form of security.

The need to invoke reactive security can be minimized, but not eliminated, by making contractual arrangements verifiable

Observation of a contract in progress, in order to detect the first sign of breach and minimize losses, also is a reactive form of security

A proactive form of security is a physical mechanism that makes breach expensive

From common law, economic theory, and contractual conditions often found in practice, we can distill four basic objectives of contract design

observability

The disciplines of auditing and investigation roughly correspond with verification of contract performance

verifiability

The field of accounting is, roughly speaking, primarily concerned with making contracts an organization is involved in more observable

privity

This is a generalization of the common law principle of contract privity, which states that third parties, other than the designated arbitrators and intermediaries, should have no say in the enforcement of a contract

The field of security (especially, for smart contracts, computer and network security), roughly corresponds to the goal of privity.

enforceability

Reputation, built-in incentives, "self-enforcing" protocols, and verifiability can all play a strong part in meeting the fourth objective

Smart contracts often involve trusted third parties, exemplified by an intermediary, who is involved in the performance, and an arbitrator, who is invoked to resolve disputes arising out of performance (or lack thereof)

In smart contract design we want to get the most out of intermediaries and arbitrators, while minimizing exposure to them

Legal barriers are the most severe cost of doing business across many jurisdictions. Smart contracts can cut through this Gordian knot of jurisdictions

Where smart contracts can increase privity, they can decrease vulnerability to capricious jurisdictions

Secret sharing

The field of Electronic Data Interchange (EDI), in which elements of traditional business transactions (invoices, receipts, etc.) are exchanged electronically, sometimes including encryption and digital signature capabilities, can be viewed as a primitive forerunner to smart contracts

One important task of smart contracts, that has been largely overlooked by traditional EDI, is critical to "the meeting of the minds" that is at the heart of a contract: communicating the semantics of the protocols to the parties involved

There is ample opportunity in smart contracts for "smart fine print": actions taken by the software hidden from a party to the transaction.

Thus, via hidden action of the software, the customer is giving away information they might consider valuable or confidential, but the contract has been drafted, and transaction has been designed, in such a way as to hide those important parts of that transaction from the customer.

To properly communicate transaction semantics, we need good visual metaphors for the elements of the contract. These would hide the details of the protocol without surrendering control over the knowledge and execution of contract terms

Protocols based on mathematics, called cryptographic protocols, tre the basic building blocks that implement the improved tradeoffs between observability, verifiability, privity, and enforceability in smart contracts

secret key cryptography,

Public key cryptography

digital signatures

blind signature

Where smart contracts can increase observability or verifiability, they can decrease dependence on these obscure local legal codes and enforcement traditions

zero-knowledge interactive proof

digital mix

Keys are not necessarily tied to identities, and the task of doing such binding turns out to be more difficult than at first glance.

All public key operation are are done inside an unreadable hardware board on a machine with a very narrow serial-line connection (ie, it carries only a simple single-use protocol with well-verified security) to a dedicated firewall. Such a board is available, for example, from Kryptor, and I believe Viacrypt may also have a PGP-compatable board. This is economical for central sites, but may be less practical for normal users. Besides better security, it has the added advantage that hardware speeds up the public key computations.

If Mallet's capability is to physically sieze the machine, a weaker form of key protection will suffice. The trick is to hold the keys in volatile memory.

The data is still vulnerable to a "rubber hose attack" where the owner is coerced into revealing the hidden keys. Protection against rubber hose attacks might require some form of Shamir secret sharing which splits the keys between diverse phgsical sites.

How does Alice know she has Bob's key? Who, indeed, can be the parties to a smart contract? Can they be defined just by their keys? Do we need biometrics (such as autographs, typed-in passwords, retina scans, etc.)?

The public key cryptography software package "Pretty Good Privacy" (PGP) uses a model called "the web of trust". Alice chooses introducers whom she trusts to properly identify the map between other people and their public keys. PGP takes it from there, automatically validating any other keys that have been signed by Alice's designated introducers.

1) Does the key actually belong to whom it appears to belong? In other words, has it been certified with a trusted signature?

2) Does it belong to an introducers, someone you can trust to certify other keys?

3) Does the key belong to someone you can trust to introduce other introducers? PGP confuses this with criterion (2). It is not clear that any single person has enough judgement to properly undertake task (3), nor has a reasonable institution been proposed that will do so. This is one of the unsolved problems in smart contracts.

PGP also can be given trust ratings and programmed to compute a weighted score of validity-- for example, two marginally trusted signatures might be considered as credible as one fully trusted signature

Notaries Public Two different acts are often called "notarization". The first is simply where one swears to the truth of some affidavit before a notary or some other officer entitled to take oaths. This does not require the notary to know who the affiant is. The second act is when someone "acknowledges" before a notary that he has executed a document as ``his own act and deed.'' This second act requires the notary to know the person making the acknowledgment.

"Identity" is hardly the only thing we might want map to a key. After all, physical keys we use for our house, car, etc. are not necessarily tied to our identity -- we can loan them to trusted friends and relatives, make copies of them, etc. Indeed, in cyberspace we might create "virtual personae" to reflect such multi-person relationships, or in contrast to reflect different parts of our personality that we do not want others to link. Here is a possible classification scheme for virtual personae, pedagogically presented:

A nym is an identifier that links only a small amount of related information about a person, usually that information deemed by the nym holder to be relevant to a particular organization or community

A nym may gain reputation within its community.

With Chaumian credentials, a nym can take advantage of the positive credentials of the holder's other nyms, as provably linked by the is-a-person credential

A true name is an identifier that links many different kinds of information about an person, such as a full birth name or social security number

As in magick, knowing a true name can confer tremendous power to one's enemies

A persona is any perstient pattern of behavior, along with consistently grouped information such as key(s), name(s), network address(es), writing style, and services provided

A reputable name is a nym or true name that has a good reputation, usually because it carries many positive credentials, has a good credit rating, or is otherwise highly regarded

Reputable names can be difficult to transfer between parties, because reputation assumes persistence of behavior, but such transfer can sometimes occur (for example, the sale of brand names between companies).

Blind signatures can be used to construct digital bearer instruments, objects identified by a unique key, and issued, cleared, and redeemed by a clearing agent.

The clearing agent prevents multiple clearing of particular objects, but can be prevented from linking particular objects one or both of the clearing nyms who transferred that object

These instruments come in an "online" variety, cleared during every transfer, and thus both verifiable and observable, and an "offline" variety, which can be transfered without being cleared, but is only verifiable when finally cleared, by revealing any the clearing nym of any intermediate holder who transfered the object multiple times (a breach of contract).

To implement a full transaction of payment for services, we need more than just the digital cash protocol; we need a protocol that guarantees that service will be rendered if payment is made, and vice versa

A credential is a claim made by one party about another. A positive credential is one the second party would prefer to reveal, such as a degree from a prestigious school, while that party would prefer not to reveal a negative credential such as a bad credit rating.

A Chaumian credential is a cryptographic protocol for proving one possesses claims made about onself by other nyms, without revealing linkages between those nyms. It's based around the is-a-person credential the true name credential, used to prove the linkage of otherwise unlinkable nyms, and to prevent the transfer of nyms between parties.

Another form of credential is bearer credential, a digital bearer instrument where the object is a credential. Here the second party in the claim refers to any bearer -- the claim is tied only to the reputable name of issuing organization, not to the nym or true name of the party holding the credential.

Smart Property We can extend the concept of smart contracts to property. Smart property might be created by embedding smart contracts in physical objects. These embedded protocols would automatically give control of the keys for operating the property to the party who rightfully owns that property, based on the terms of the contract. For example, a car might be rendered inoperable unless the proper challenge-response protocol is completed with its rightful owner, preventing theft. If a loan was taken out to buy that car, and the owner failed to make payments, the smart contract could automatically invoke a lien, which returns control of the car keys to the bank. This "smart lien" might be much cheaper and more effective than a repo man. Also needed is a protocol to provably remove the lien when the loan has been paid off, as well as hardship and operational exceptions. For example, it would be rude to revoke operation of the car while it's doing 75 down the freeway.

Smart property is software or physical devices with the desired characteristics of ownership embedded into them; for example devices that can be rendered of far less value to parties who lack possesion of a key, as demonstrated via a zero knowledge interactive proof

One method of implementing smart property is thru operation necessary data (OND): data necessary to the operation of smart property.

A smart lien is the sharing of a smart property between parties, usually two parties called the owner and the lienholder.

Many parties, especially new entrants, may lack this reputation capital, and will thus need to be able to share their property with the bank via secure liens

What about extending the concept of contract to cover agreement to a prearranged set of tort laws? These tort laws would be defined by contracts between private arbitration and enforcement agencies, while customers would have a choice of jurisdictions in this system of free-market "governments".

If these privately practiced law organizations (PPLs for short) bear ultimate responsibility for the criminal activities of their customers, or need to insure lack of defection or future payments on the part of customers, they may in turn ask for liens against their customers, either in with contractual terms allowing arrest of customers under certain conditions

Other important areas of liability include consumer liability and property damage (including pollution). There need to mechanisms so that, for example, pollution damage to others' persons or property can be assessed, and liens should exist so that the polluter can be properly charged and the victims paid. Where pollution is quantifiable, as with SO2 emissions, markets can be set up to trade emission rights. The PPLs would have liens in place to monitor their customer's emissions and assess fees where emission rights have been exceeded.

the bell curve described the wealth and income distribution of American society

As the technology boom of the 1990s increased productivity, many assumed that the rising water level of the economy was raising all those middle class boats. But a different phenomenon has also occurred. The wealthy have gained substantially over the past two decades while the middle class has remained stagnant in real income, and the poor are simply poorer.

America is turning into a power-curve society: one where there are a relative few at the top and a gradually declining curve with a long tail of relatively poorer people.

For the first time since the end of World War II, the middle class is apparently doing worse, not better, than previous generations.

an alarming trend

What is the role of technology in these developments?

a sweeping look at the relationship between innovation and productivity

New Economy of Personal Information

Power-Curve Society

the future of jobs

the report covers the social, policy and leadership implications of the “Power-Curve Society,”

World Wide Web

as businesses struggle to come to terms with this revolution, a new set of structural innovations is washing over businesses, organizations and government, forcing near-constant adaptation and change. It is no exaggeration to say that the explosion of innovative technologies and their dense interconnections is inventing a new kind of economy.

the new technologies are clearly driving economic growth and higher productivity, the distribution of these benefits is skewed in worrisome ways.

the networked economy seems to be producing a “power-curve” distribution, sometimes known as a “winner-take-all” economy

Economic and social insecurity is widespread.

major component of this new economy, Big Data, and the coming personal data revolution fomenting beneath it that seeks to put individuals, and not companies or governments, at the forefront. Companies in the power-curve economy rely heavily on big databases of personal information to improve their marketing, product design, and corporate strategies. The unanswered question is whether the multiplying reservoirs of personal data will be used to benefit individuals as consumers and citizens, or whether large Internet companies will control and monetize Big Data for their private gain.

Why are winner-take-all dynamics so powerful?

appear to be eroding the economic security of the middle class

A special concern is whether information and communications technologies are actually eliminating more jobs than they are creating—and in what countries and occupations.

How is the power-curve economy opening up opportunities or shutting them down?

Is it polarizing income and wealth distributions? How is it changing the nature of work and traditional organizations and altering family and personal life?

many observers fear a wave of social and political disruption if a society’s basic commitments to fairness, individual opportunity and democratic values cannot be honored

what role government should play in balancing these sometimes-conflicting priorities. How might educational policies, research and development, and immigration policies need to be altered?

The Innovation Economy

Conventional economics says that progress comes from new infusions of capital, whether financial, physical or human. But those are not necessarily the things that drive innovation

What drives innovation are new tools and then the use of those new tools in new ways.”

at least 50 percent of the acceleration of productivity over these years has been due to ICT

economists have developed a number of proxy metrics for innovation, such as research and development expenditures.

Atkinson believes that economists both underestimate and overestimate the scale and scope of innovation.

Calculating the magnitude of innovation is also difficult because many innovations now require less capital than they did previously.

Others scholars

see innovation as going in cycles, not steady trajectories.

A conventional approach is to see innovation as a linear, exponential phenomenon

leads to gross errors

Atkinson

believes that technological innovation follows the path of an “S-curve,” with a gradual increase accelerating to a rapid, steep increase, before it levels out at a higher level. One implication of this pattern, he said, is that “you maximize the ability to improve technology as it becomes more diffused.” This helps explain why it can take several decades to unlock the full productive potential of an innovation.

innovation keeps getting harder. It was pretty easy to invent stuff in your garage back in 1895. But the technical and scientific challenges today are huge.”

costs of innovation have plummeted, making it far easier and cheaper for more people to launch their own startup businesses and pursue their unconventional ideas

innovation costs are plummeting

Atkinson conceded such cost-efficiencies, but wonders if “the real question is that problems are getting more complicated more quickly than the solutions that might enable them.

we may need to parse the different stages of innovation: “The cost of innovation generally hasn’t dropped,” he argued. “What has become less expensive is the replication and diffusion of innovation.”

what is meant by “innovation,”

“invention plus implementation.”

A lot of barriers to innovation can be found in the lack of financing, organizational support systems, regulation and public policies.

90 percent of innovation costs involve organizational capital,”

there is a serious mismatch between the pace of innovation unleashed by Moore’s Law and our institutional and social capacity to adapt.

This raises the question of whether old institutions can adapt—or whether innovation will therefore arise through other channels entirely. “Existing institutions are often run by followers of conventional wisdom,”

The best way to identify new sources of innovation, as Arizona State University President Michael Crow has advised, is to “go to the edge and ignore the center.”

Paradoxically, one of the most potent barriers to innovation is the accelerating pace of innovation itself.

Institutions and social practice cannot keep up with the constant waves of new technologies

“We are moving into an era of constant instability,”

“and the half-life of a skill today is about five years.”

Part of the problem, he continued, is that our economy is based on “push-based models” in which we try to build systems for scalable efficiencies, which in turn demands predictability.

The real challenge is how to achieve radical institutional innovations that prepare us to live in periods of constant two- or three-year cycles of change. We have to be able to pick up new ideas all the time.”

pace of innovation is a major story in our economy today.

The App Economy consists of a core company that creates and maintains a platform (such as Blackberry, Facebook or the iPhone), which in turn spawns an ecosystem of big and small companies that produce apps and/or mobile devices for that platform

tied this success back to the open, innovative infrastructure and competition in the U.S. for mobile devices

standard

The App Economy illustrates the rapid, fluid speed of innovation in a networked environment

crowdsourcing model

winning submissions are

globally distributed in an absolute sense

problem-solving is a global, Long Tail phenomenon

As a technical matter, then, many of the legacy barriers to innovation are falling.

small businesses are becoming more comfortable using such systems to improve their marketing and lower their costs; and, vast new pools of personal data are becoming extremely useful in sharpening business strategies and marketing.

Another great boost to innovation in some business sectors is the ability to forge ahead without advance permission or regulation,

“In bio-fabs, for example, it’s not the cost of innovation that is high, it’s the cost of regulation,”

This notion of “permissionless innovation” is crucial,

“In Europe and China, the law holds that unless something is explicitly permitted, it is prohibited. But in the U.S., where common law rather than Continental law prevails, it’s the opposite