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<nettime> GeoCap: Nietzsche vs. Shakespeare, Tim May vs. Lawrence Lessig
R. A. Hettinga on Mon, 25 Mar 2002 11:30:26 +0100 (CET)

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<nettime> GeoCap: Nietzsche vs. Shakespeare, Tim May vs. Lawrence Lessig, and the definition of actual property in cypherspace (was Re: Henry VI and Lawyer-Killing)

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     "Are you a GOD???"
     "Then you DIE!!!"
          -- Zool talking to Venckman

Geodesic Capital

Nietzsche vs. Shakespeare,
Tim May vs. Lawrence Lessig,
and the Definition of Actual Property in Cypherspace

Robert Hettinga


Boston, Massachusetts

At 1:42 PM -0800 on 3/24/02, Tim May wrote:

> "First, we separate the lawyers into three categories: those who
> can pay  compensation for their crimes and can enter other fields,
> those who  should kill immediately for their crimes, and, last but
> not least, those  who must be tortured for their crimes and then
> killed."
> My guess is that nearly all lawyers fall into the third category.
> The Earl was far too kind to them.

I suppose I would say the the above more about *legislators*, than I
would *litigators*, :-), though it probably won't come to that, no
matter how much wishful thinking some might have about physical
solutions to the paradoxically *logical* problem of the modern
infestation, for lack of a better word, of the internet with
intellectual property lawyers, and the like.

Personally, I agree with David Friedman about lawyers.

He says that private law -- the negotiation and dispute of commercial
agreements struck between private parties --  is a good thing. To me,
personally, I think that force monopoly as practiced by the modern
nation-state, "democratic" or not, is as abhorrent as organized
religion was to Voltaire. Or to Nietzsche, Tim May's favorite
philosopher, or at least the one he quotes the most on the
cypherpunks list network.

Friedman himself points to "dark-age" Iceland as an example of a
perfectly functional anarchy, a successful society operating
functionally in the absence of "public" law.

At the turn of the second millennium in Iceland, and in most of the
Norse world, from Labrador, Iceland, Ireland and "Danelaw" Britain,
all along non-tribal top of Eurasia to the edge of central Asia and
the backdoor of Byzantium itself, murder was a tort. Everyone had a
head-price, and if someone was killed and their head-price wasn't
paid to that person's family (and after the family hired a judge who
said so, of course), an appropriately adjudged murderer could be
killed without penalty. Such a person would, literally, become an
outlaw, outside the tort law, and, more important, the economics,
governing the situation. In Iceland, then, private law preceded the
state, as it probably always has. And, places like Iceland, where
inhabitants had more or less equal recourse to markets for force,
prove it is possible to live without force monopoly and still have
law for quite a long time, at least until resources diminish to such
an extent that a foreign power can invade, or engineer an non-violent
annexation, as a Scandinavian king did to Iceland for most of the
late second millennium.

There have been discussions about whether population density requires
more law, causes the creation of states, and so on, but we should
note that some of the functionally, if not officially, freest places
in the world have had the highest population densities, even
officially, like Hong Kong was, before the Chinese resumed control
and recently started to legislate economics there like they do on the

Even without official sanction, or, more properly in spite of it,
"City Air Breathes Free", as the medieval saying goes. All
neo-Jeffersonian agrarian-utopia fantasies -- and rural
misperceptions of urban life -- aside, the reason so many laws and
regulations are promulgated in cities is because huge amounts of
those official controls are more honored in the breech than in any
observance thereof. Even if that causes H.L. Mencken's "bluenoses and
busybodies", people with more money, time -- and of course greed --
than sense, to promulgate more laws and rules to "solve" a "problem",
in the same way that more sin causes religious believers to pray
more, even when the efficacy of prayer for physical redress is an
empirically questionable exercise, it doesn't change things much,
unless people residing in a given urban area decide to change
themselves anyway.

In the same vein, I think that from the very foundation of his
assertion that *political* intention causes small-c "code", and not
actual physics and economics, Lawrence Lessig has completely the
wrong end of the internet "governance" stick, just like anyone who
thinks that politics is caused by ethics instead of economics is
grabbing a completely different stick entirely. :-).

I think we'll see that, over time, the logical mechanism of software
will, in fact, eventually subsume all but the most theatrical
applications of public law, and eventually of private law as well,
just as all but the most theatrical aspects of chivalry and liturgy
were subsumed by modern military, law and political theory. However,
unlike most, I wouldn't want to move into that particular castle in
the air just yet, at least until technologists actually build it,
though I keep using the market, meaning the available code-base, to
kick the castle's door every once in a while just to see if it's
there yet.

In the case of internet bearer transactions, for instance, we're
pretty close, I think. Most gold-transaction systems are securities
depositories by another name, and most have shopping cart interfaces
which can be used in conjunction with mints like Ben Laurie's
Wagner-blinding lucre library. Even the ATM networks keep sprouting
more and more "roots" into the the financial aquifer that internet
bearer finance could be come. The FSTC, the Financial Services
Technology Consortium has prototypes for ATM-based web access and
payment that their member banks could use right now. Even PayPal,
which pays interest on account balances makes a decent
depository/custodian for an internet bearer instrument reserve
account, or it will once someone does it on some other book-entry
internet value-store/transaction system.

And, as Tim May notes, technologies like blind signatures and
strongly encrypted information on ubiquitous internetworks allow the
creation of an extra-legal kind of "place", an actual *thing*. That
"thing" is, in fact, property, property which can be transferred
exclusive of, orthogonal to, the law.

This idea of actual, tangible boundries, as real as those defined by
law and upheld by a monopolistic force, but existing in what should
be just an imagined space in a mere communication medium, is a
brilliant discovery. And, it is, of course, the very core of Tim
May's ideas about Crypto-Anarchy. No one, in considerably more than a
decade of his promoting the idea on the net and discussing it in
places like cypherpunks and elsewhere, has pointed to a prior claim
on any idea even remotely approaching Cryto-Anarchy in it's
originality. And it is the idea of Crypto-Anarchy, whether anyone
knows about it or not, that makes Tim May probably the most
influential person on the net today.

Certainly most people *don't* know that, in the same way that
Nietzsche or Wagner immediately influenced the philosophical and
political, or the musical and artistic thinking of their time. And
they continue to influence us today. Most modern western ethics,
especially political "science", is derivative of Nietzsche's, for
instance, and most big-budget movie scores, like those of John
Williams, are Wagnerian in design with leitmotifs and so on; the idea
of a darkened house and a lit stage is even Wagner's, for instance.

People like Wagner and Nietzsche hold their influence regardless of
how personally abhorrent and obnoxious some of their other opinions
on various contemporaneous issues were -- not unlike Mr. May's quite
literally theatrical exhortation above, for instance which  is,
obviously, pure Nietzsche, and not, has been noted, Shakespeare. :-).

So, getting back to lawyers and ridding ourselves of same, if
something is encrypted, whether it's streaming or static information,
whether it's operating control of machinery or of a financial asset,
or whether it's access to or control of physical property, it's safe
to argue that if I control the decryption of that "thing", to make it
immediately useful to me, it becomes, in fact, my *property*, to do
with what I want -- completely, and, more important, physically
exclusive of any legal claim the state may make on my behavior, up
to, and including selling a copy of information in my encrypted

That kind of control of property, the ex-nihilo creation of *private*
property, as any microeconomist will tell you, is the fundamental
requirement of any working economy.

Put another way, strong cryptography, and financial cryptography
protocols in particular, allow me to control increasingly valuable
property, like extremely recent information and, better, financial
assets, and to do so using considerably less force than it costs me
to call a cop and send someone to jail if they stole, say, my wallet,
or, better, lied to me about the safety of my money in their bank. At
the very least, strong financial cryptography allows me to use cheap
enough force to control an asset without dispute from others because
they can't know what I have, up to, and paradoxically including, the
assets I use in the free-market purchase of physical force itself --
in, obviously the smallest amount economically necessarily to keep me
unencumbered from the physical encroachment of others.

So, if such a given good is property, then it has value, and it can
be traded for other property of like value. Just like property in
meatspace, this new private digital property be negotiated for,
either by a price-discovery auction, or by software convention and
protocol (the way that TCP/IP avoids packet collision or that a
blinding protocol prevents double spending), or negotiated by
argument of hired verbal adversaries, as we do with lawyers and
judges in private law now. Private law which, again, will happen less
and less as reduced transaction cost increases the ability to strike
economic bargains, subsuming transfer-pricing -- or the *calculation*
of asset value instead of discovering it -- which is at the very
heart of most modern, and legitimate, legal property disputes to
begin with.

So, I suppose that, rather than killing the all the lawyers, :-),
people who do strong cryptography on the internet are doing something
even better, to my mind.

They're actually making the legal professions unprofitable. If we
must thump our chests like ubermenschen, cypherpunks are actually
just threatening to starve lawyers, and their children, into

"Forcing" them, economically, to get real jobs and leave the rest of
us alone... :-).


Version: PGP 7.0


R. A. Hettinga <mailto: rah {AT} ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA

The IBUC Symposium on Geodesic Capital
April 3-4, 2002, The Downtown Harvard Club, Boston
<mailto: rah {AT} ibuc.com> for details...

"The direct use of physical force is so poor a solution to the problem of
limited resources that it is commonly employed only by small children and
great nations." -- David Friedman, _The_Machinery_of_Freedom_

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