The debate is raging: what will we make of the information age? Are we moving towards a technological dystopia, whereby Big Brother monitors and regulates our every action and thought? Or, conversely, does the digital revolution contain the promise of a renewed era of liberty? The former view definitely presents valid arguments; systemic eavesdropping by intelligence agencies, human beings being implanted with RFID chips, or the proliferation of biometry are popular examples to support it.
To settle the debate, one may start by looking at the Internet, and the way it was built. Many people imagine it being formed around some kind of "backbone", i.e. a planned and centralized communication infrastructure through which all traffic must go, easily tampered with by the powers-that-be. That view is however quite distant from reality. On the contrary, the Internet is a dynamic and heuristic amalgamation of "peering agreements", i.e. it is intrinsically decentralized.
To put things plainly, here is how it works. Say Alice and Bob wish to communicate with each other on a very regular basis; they will co-finance a bilateral communication line, and will agree on which technology to use for their purpose. Now imagine that Charlie also has such an arrangement with Alice, and wishes to episodically communicate with Bob; rather than peering directly with him, he will typically pay a transit fee to use the Alice-Bob line (i.e. Charlie's traffic will go through Alice before reaching Bob).
In addition to the physical infrastructure, protocols are very important. They are used, for instance, to determine the shortest path between two points in the tangled web of peering agreements; they are useful to translate easily-remembered hostnames into more obtuse numbered addresses; they are also essential to exchange content in pre-agreed formats. But all these protocols are freely elected by participants, much in the same way as people may form a consensus to use Facebook to keep in touch with friends. There is no coercion, and two participants may at any time decide to rely on a different protocol (or physical communication technology) altogether to communicate with one another.
Therefore, the Internet itself is the unplanned and formidable product of free, unilateral, individual human action. So, while a generation ago, everyone envisioned a 21st century made of flying cars and butler robots, the Internet seemingly popped-up from nowhere.
So how can one best describe the Internet today? Is it merely an "information superhighway"? Is it "like TV but without broadcasting"? These definitions are unsatisfactory. For a better answer, one must notice a divergence that occurred in the early 21st century, namely when editing was disconnected from formatting. What this means is that, with the advent of the first blogs, content-management platforms, or sites such as YouTube and Myspace, there was no longer any need to know how to format content (i.e. how to encode it technically) in order to share it with the world. From that moment on, anyone, given a very low barrier of entry, could freely trade information with anyone else. Given that freely-traded goods increase in quality (cost-efficiency) at exponential speed, that meaningful information is called an idea, and that the raw material for producing new ideas are other ideas. The Internet is therefore best described as a distributed invention that dramatically decreases the cost of producing and trading ideas.
If the Internet works as a free-market of information, thus empowering the emergence of better ideas, then the best "informational goods" should be the ones that leverage the Internet the most. Is this the case? Can one think of purely intangible goods, and verify whether those that are empowered by the Internet are more competitive than those that are not?
Well, one very good example of informational assets are operating systems (OSs). An OS is a complex software that underlies the functioning of any computer platform; it is lengthy to devise, and its performance is critical to that of the hardware itself. In the early 1990s, before the Internet became ubiquitous, Microsoft reigned supreme in the consumer OS industry. Its product, Windows, ran on most end-user platforms. The consensus view was that Microsoft's solution, which cost billions to build and maintain, was designed and thought-through by a uniquely brilliant hierarchy of developers, planned by the best project managers in Information Technology, and led by the best mind atop the pyramid, would hardly suffer any competition in the near/medium term. And especially not from Linux, that amalgamation of contributions from God-knows-who based God-knows-where and moved by God-knows-what. Well, less than 20 years later, Linux, and its close cousin FreeBSD, equip more than 90% or all smartphones and tablets in the world (Android, iOS) and more than 60% of all servers.
Another very good example of purely informational goods are encyclopedias. Here again, Wikipedia, empowered by the individual effort of editors distributed across the Internet, has overtaken, in a mere 15 years, the two-and-a-half century old Britannica (Wikipedia has ten times more articles in English, exists in 280 languages, and was proven to be just as reliable). Funnily enough, a popular saying among its editors is that Wikipedia only works in practice, not in theory. That may mean that there's something wrong with the theory (i.e. the superiority of central planning).
John Maynard Keynes yields less results on Google search than Ludwig von Mises, despite the former being overwhelmingly dominant in canonical literature and the mainstream press (results taken on 03/12/2014 from google.ch in central St-Gallen, Switzerland).
Richard Stallman describes the early hackers by saying that "they wanted to be able to do something in a more exciting way than anyone believed possible, and show look how wonderful this is; I bet you didn't believe this could be done". In other words, hackers are not the crooks who steal credit card information or infest your inbox with spam; rather, if you have ever used a coffee machine to make tea, you are a hacker too.
Whether one considers the "first" hackers of the MIT Artificial Intelligence Lab or the contemporary crypto-anarchists, hackers are characterized by creativity and imagination, an independent mind, resistance to authority and a strong feeling of individuality. They consider information sharing as both an ideal and a practical strategy, are hostile to secrecy, advocate freedom of inquiry, and place a strong emphasis on rationality. Linus Torvalds writes in his book The Hacker Ethic that these principles have evolved from the known protestant ethics and incorporate the spirits of capitalism, as introduced in the early 20th century by Max Weber.
At this point, one may ask how all of this may affect our future. To be sure, hackers helped build the Internet's foundations. Humanity got a free market of ideas. Better ideas emerge, and bad ones are exposed faster. Intangible assets improve in quality. But does all this stop here? How does all this fit together? And what overall impact can be measured on the real world?
Before answering we must realize that "information age" simply means that information has become another word for number. Therefore, regulating the flow of information has become akin to controlling the enunciation of numbers. It cannot be done, short of devolving into a North Korea-style society. If one number is illegal, is that number minus one still illegal? Or its square root? Is there a list of illegal numbers? Is 42 illegal? It obviously makes no sense. Therefore, all crimes pertaining to having and sharing ideas (e.g. defamation, dissent, revisionism) become increasingly difficult to prosecute, and initiatives concerned with the restriction of ideas (e.g. copyright, censorship, propaganda) become utterly anachronistic.
But that's not all. Taxation and exchange barriers are henceforth more easily ignored, as anonymity represents a strong obstacle to enforcement. You want to force taxi drivers to pay prohibitive taxes? That's fine, we'll just build an app that makes anyone with a smartphone able to avoid them. You want to force hotels to comply with inane rules? That's okay, we'll have a website that turns any home into a bed-and-breakfast. You want to ban particular vegetables that people enjoy smoking? We'll trade them on the darknet. You wish to lock-up people who put servers up on the Internet? We'll have ten times more such servers, in as many different places, the following day. You think you can disarm law-abiding citizens? We'll make sure the Liberator (Cody Wilson's famous 3-D printed gun) can be produced at home by anyone.
Fig 4 - Because controlling the free-flow of information is akin to restricting the uttering of numbers, coercion becomes increasingly meaningless when it tries to impose monopolies over ideas.
The Holy Grail
As you may imagine things do not stop here. A famous financier once said "let me control a nation's money and I care not who makes its laws". He was certainly right, and that's why sovereignty over money must be taken away from the oligarchy, and put in people's hands. Then, no one will care anymore who actually makes the laws (people can still go on dressing in little robes, gather to write stuff on little pieces of paper and call these papers "laws", we just won't need to care anymore). In other words, the time has come for the Separation of Money and State (or the denationalization of money, as Hayek puts it). This is indeed the challenge of this generation.
Ultimately, money is an information exchange system (i.e. a distributed meta-accounting book). And fortunately, we just happen to have a brand new medium to freely exchange information, called the Internet. Bitcoin is at present the best-known crypto-currency; at this point however, it is irrelevant to try guessing whether it or one of its off-shoots will free us from the existing monopoly over money. The point is that the Internet shall ultimately destroy the tyrants' backbone - fiat money and legal tender laws.
At this point, one can clearly see how individual technological innovators ("hackers") will help build a libertarian 21st century. As it always happens in the case of unregulated and widely spread initiatives, it is impossible to predict how the evolution will precisely occur, or how long it will take. But the same as the Internet's historical predecessors have lead humanity to greater freedom, today, at the beginning of the information age, many of the 20th century laws are already becoming meaningless. The direction is clear and inescapable. Today, hackers help with free and open software, political activism, connection relays, strong cryptography and data leaks. Tomorrow, nobody can be certain what tools the fight for freedom will lead to. Will someone build a bountyleaks website, transforming the online crowd into one giant sponsor of the resistance? Will someone scale up the Chaos Computer Club's RFID-Zapper to help the proliferation of mini-EMP guns (useful to disable some undesirable electronic circuits)? It is impossible to tell. What is clear is that the Snowden leaks have already helped privacy and security to become competitive factors for software and online services, that strong cryptography is about to become ubiquitous, and that the Internet will someday turn dark for the NSA.
This article appeared in the latest Global Gold Outlook Report. Subscribe for future updates on www.globalgold.ch. To read more about holding physical gold outside the banking system and the available solutions offered by Global Gold, please visit http://welcome.globalgold.ch/physicalgold and request an investor kit for free.