The Info-gap |
(how "the thumb on
the scale" rules, in daily life, and |
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In the modern economy, most goods and services will be consumed by one and only one consumer --a win/lose game. People are deadly serious about this question and the outcomes are determined by an endlessly complicated social and political process, ultimately, of persuasion.
In all living beings, there is a gap between perception and reality --mental models cannot fully correspond with what is real, in the phenomenal universe.
Information gaps are not new, and have always existed, and all of us work very hard creating and maintaining them. Nobody individually wants to reduce them, and nobody will accept or use software which reduces their freedom or privacy, or their ability to transmit "partial truths" and outright lies.
Nevertheless, software itself can accelerate the truth. Many examples exist in which technology itself brought broad social changes regardless of the wishes of any particular individual or group in society.
Other humans are of course, real things in the universe, which all of us study very deeply! Other humans do real things like giving you their money, or power, or sex, or services. They do these things as an expression of their free will, which is of course highly associated with their mental models.
Accordingly, real outcomes can be influenced and manipulated by intentional manipulation of information available to the observer, or influencing their approach to decisionmaking or analysis.
OK. Boring, so far. Right?
Even animals practice illusion, persuasion, and deception. We all try to
To survive as adults in this sea of lies and misinformation, we
We create info-gaps customized for the particular audience. What men tell women is different from what they tell the alpha male. What companies tell investors is different from what they tell customers. Employees invariably tell different truths to their bosses than their colleagues or subordinates.
I happen to believe that everybody would be better off by transmitting clear and accurate information, particularly in business. It would result in better decisions based on fundamentals, on facts, with full understanding and consideration by decisionmakers based on their own interests. At present, much business and consumer decisionmaking is far from optimal, effectively tricked into making the wrong decisions by omissions and, well, lies.
| "All multifarious means which human ingenuity can devise, and which are resorted to by one individual to get an advantage over another by false suggestions or suppression of the truth, and includes all surprise, trick, cunning, or dissembling, and any unfair way by which another is
cheated." - Definition of fraud, Black's Law Dictionary |
Clearly, much of today's economy is affected and guided by the blocking of information. All supply chains and distribution channels are based partly on info-inefficiency. Nobody wants their customers to know their wholesale costs, for example, or wholesalers or alternative suppliers. Nobody wants their competitors to know what products are selling well, or which products have good margins, or particularly, which products have low support costs, low returns, etc.
Nobody want their employees to know which customer account or distribution channel or activity is really profitable, or how easy that really is. Nobody wants their competitor to know how to organize production. This barely scratches the surface of these things. There is a very deep academic and industry vernacular on topics like confidentiality, security and the prevention of industrial espionage, in which you can find catalogs and listings of the financial damages suffered by companies from information leaks, both on the supply side and demand side, in various industries.
Furthermore, most sales and marketing and advertising messages contain deliberate info-poisoning, i.e. they are hardly intended to be objective.
The fundamental structure of the modern economy, government as well as corporate sectors, are held in place by information gaps. This is so pervasive that it creates a collective illusion that our fundamental well- being depends on maintenance of this status quo, through privacy and confidentiality.
Actually, well-being depends on secrecy and lies only at the micro level. When customers find alternative suppliers, your sales truly go down. When your suppliers find alternative markets for their goods, your business costs truly go up. When employees find higher-paying jobs, or learn the salaries of their co-workers, your labor costs certainly go up. When customers find that your product does not really grow new hair or improve their sex life, sales truly go down. These are real outcomes.
But at the macro level, this is a classic tragedy of the commons where almost everybody is impoverished, needlessly. Massive resources are wasted in manipulation of information to poison and reduce its usefulness, and more problematically, the production of real goods and services are corrupted into forms that do not accurately reflect the actual desires of consumers.
Reducing the info-gap is an ambitious goal that will take 100 years, and will be wildly disruptive but our institutions and our cultural and spiritual foundations would certainly meet this challenge with aplomb. Organizations will remake themselves. A human is a very great being, capable of great adjustments in the space of decades.
The status quo has at least three components.
1) huge, entrenched, willful BLOCKAGES of information.
2) huge entrenched CHOKE POINTS where information is readable and accessible ONLY by somebody having interests which are adverse to other party(ies) e.g. VISA, the banks, government tax collectors, Microsoft Passport, etc.
3) huge entrenched ORGANIZATIONS operating as naming czars, who manipulate outcomes and prevent developments that would otherwise occur in a free society by either BLOCKING the appearance of certain vocabulary and at the same time FORCING the usage of other vocabularies having the results they require. The motivation and mechanisms for this have been articulated by George Orwell and many other authors. http://www.k-1.com/Orwell/1984.htm The control over the names of things, and the grammars for assembling of those names into messages controls outcomes just as the shape of the table at the Vietnam peace talks controlled outcomes.
The legal industry of course is the primary ministry of truth, standing behind all kinds of rackets FBO various elites, i.e. whatever arbitrary collection or aggregate of economic interests happens to have the most money. It doesn't matter what the industry or activity is. If it is a source of energy, you will find the legal industry. At this point, you can say just about any damned thing you want; we're still at a stage of trying to stop the most atrocious wrongs, http://www.rbs2.com/infotort.htm
The involvement of the legal industry is a feedback loop that reinforces whatever arbitrary info-gap happens to manifest first. Whatever results in economic power, eventually, results in legal force. (I would concede, western legal and government activities are a font of mercy and humanity at times. But when does the legal and government industry concede the opposite?) "The law" and its courts and courtesans now a force beyond anyone's control, from which even its maintainers seem unable to escape. I am referring to the grammar of contract law, GAAP reporting, copyright and trademark, definitions of all things regulated. All of these things have spun into endlessly complex forms, which no single person could possibly master, but which are absolutely binding and final. Superficially they seem simple and fair. Ultimately, they are full of loopholes in which only the best lawyer prevails.
I am not leveling any accusation at the legal-government industry that is any different from other industries: in a mass economy of billions of people, it is subject to the same mechanisms as everybody else, and in Darwinian fashion, it reorganizes itself around its food sources. We are all pretty powerless before these forces as long as we obey them.
The law most directly supports and increases information gaps by its unequal protections of stakeholders in intellectual property, privacy, and security.
A lot of this nonsense of intellectual property and information gaps will crumble away, if everybody adopts ISO 11179 data element registries. This is an international standard for a neutral registry for storing the names and definitions of data, i.e. these are called MDRs (Metadata registries) and they make the definition of language more democratic. The process of defining data is totally open, and each actor within any community of users can adopt elements, or ignore others.
How will actors behave, when freedom of choice in semantics exists? There may be some precedents in the behavior of subcultures or urban gangs. Subcultures create their own language when they feel that gives them a more accurate map to the territory of life, or better prospects than the existing language and society offers them. One may observe in cults and gangs, direct examples of rule by redefining grammar - in other words, governing by lying, by creating a reality warp.
A really good metadata registry would have a very interesting debate over specification and goals. The software would take more than a week to write. Certainly it would never happen in the current goodcop-badcop routine of Microsoft, IBM, Sun, none of whom sincerely wants to change the status quo anymore than their global 500 clients or the governments they run. The software industry itself is totally united around some shared goals--that software industry shall obtain some rent-collecting position in the global economy. This is fundamentally based on information spreads. The IT industry has for 40 years been on an absolute romp, very successful at this.
Nobody who has a clue about the strategic value of information wants to share information, itself, in any way. They always want to construct artificial messages, to send the most positive constructions of the English language as legally permitted, and commercially expedient. Whatever the truth may be, it certainly has no influence on the stream of messages that flow out of today's soviet corporations. The voice of today's corporation is calculated to maximize revenue, i.e. hit the middle of the bell curve. To be sure, messages are reasonably honest, since the public is not totally stupid. Messages are as honest as necessary and not more. Markets and laws make them honest, for example when the public already knows enough facts that they cannot lie outright.
Corporations like people, generally want to block *all* information outward to the public and this is legally permitted, indeed the right to "privacy" is protected by laws. If corporations could block all outbound info. channels without harming their intake of incoming information they would do that, in a heartbeat, giving their marketing and PR departments complete control over the public message. Indeed many companies continue working hard to prevent any employee talking or emailing anybody outside the company.
Software companies are typical of this. They are always trying to gain info-advantages i.e. get clues to software design without anybody getting clues in return. Or to lock information into their software products, for their own enrichment first, for their users second, and explicitly to screw and disadvantage everybody else other than themselves and the users of their software. A software company is a classic externality pump. It externalizes costs and harms, while acquiring and securing gains and advantages for itself. So, under the economic rules today, the software industry is a sick industry.
Let me illustrate this with an example. If there were a software program that did nothing positive whatsoever, but disadvantaged everybody else in a particular industry and resulted in its user getting 10% more sales, and the software did nothing illegal, ask yourself, "would I buy that software?" Of COURSE you would and there are many examples of programs like that. SPAM programs are one example at the business level but most of these "abusers of the commons" are at the software level.
Software companies always want to appear "open". While posturing to customers about data openness, they actually practice every possible mechanism that customers do not understand, which effectively immobilizes customer data or prevents users from abandoning their applications by moving data to competitors.
That is why it takes an act of congress to get software companies to agree on any data standards. Major software companies view standards for sharing data or descriptions of data is very similar to the nationalization of an industry by a military junta or something. It just takes away some of their profit margins. So, they all pretend to work on standards, and put out the same message that they want standards. In fact, the nature of the software market, and the incentives in our twisted system of IP laws, ensures there must never be standards.
Progress only happens when users collaborate on this, and in America this is only possible for large corporate users. Accordingly, large corporations have achieved quite a lot of control over their software providers. The result is that all software today (Windows, Linux, Unix -- all of it) is fundamentally built around an assumption that its network interactions are oriented around servers. Servers will control your permissions and rights on the network, and the software on your PC will be secure and private but not sovereign. Some element can be controlled by servers.
Why are there so many millions of people in the software industry scheming and conniving to get control of other people's software and other people's data? This even includes the linux communty. Why does everybody want to control my data? Why doesn't somebody write an application, for once, that gives the user sovereignty over his own data?
Much of modern life seems to consist of continual battle to prevent other people from manipulating us by controlling our information stream, manipulating our data, preventing us from accessing data about yourself, or finding direct ways to get the things you need to buy, and sell the things you need to sell.
Why don't we build something that gives total control of the data to its owner finally and totally.
Obviously nobody would recognize its usefulness at first and would not know how to use it, any more than the Russians know the value of freedom, free markets or free elections. These things take generations to learn. But learn they will. Because this device will achieve lower transaction costs at the interpersonal level: it will enable P2P commerce with unambiguous description of goods/services, and strong and persistent reputation. The economic savings derived from more people getting more of what they really need, and the absence of giantism and giant info- poisoning and lies.
It will have to be a device, if it's going to be secure. A PDA or tablet PC with something like BSD unix, since Windows can never be secure.
What you want is a hardened vault that cannot be hacked and having all of its execution in silicon, having no programmability whatsoever.
I question the whole security model today. Windows, linux etc. are always designed to give control to a sysadmin. Everything you see in the market about security is **still** oriented this way. There's nothing happening that strengthens the individual or makes the PC sovereign.
Anything that makes the PC sovereign obviously is the enemy of the state, and every software company everywhere, and all corporations. Any sovereign computer reduces the economic profits that are achieved by the manipulation of outcomes, by the manipulation of information.
This has to be different. It has no rights system. Whoever buys the device can setup access to the device, by its PIN for example. It should delete its memory after five consecutive bad guesses, for example. In other words, the machine gives rights to whoever has it in its possession, plus knowing its PIN. Achieving this simple feat, reliably, will be sufficient.
The key functions you need are secure messaging (PGP email for starters), web browser, and something like MeT security element which enables you to digitally sign *whatever you want* not just what the government or the bank clerk puts in front of you. The big bosses of the universe wish you could not agree to dealings with those immediately around you, and have succeeded in creating stupendously large pyramid entities like the US government with its $4,000,000,000,000 debt. I view this with a combination of dread and bemusement, how so many people could be sucked into this scam.
Regardless of the hardness of the computing platform you have to assume it would be outlawed and that the internet itself will not carry its traffic. Who are we kidding? The internet costs hundreds of billions to build and maintain--- it is a very expensive operation and its operators will inevitably tighten their grip on consumers and raise prices and spreads, on all fronts. Or go bankrupt and surrender their equipment to the remaining carnivores. Worse carnivores.
The prospects for alternate networks are accordingly pretty grim. They will be blocked by a broad variety of legal and economic attacks. You have to assume an entirely parallel network. The device will need local ad-hoc radio (802.11b perhaps, in 2001) with a built in router that automatically assembles router tables of all the devices nearby out to at least 3 or 4 hops, and dutifully cooperates with them to collaborate, efficiently, on routing decisions.
Obviously the truth-in-commerce device would need a mechanism for money. Perhaps a mini-mint for issuing its own digital cash. Digital Cash mints are not high technology. The choreography etc. are well known. Digital bearer cash = my promise to pay to the bearer, X amount of money, or commodity.
Nobody can outlaw your issuance of digitally signed promissory notes like this in the course of buying something from somebody. You're not a bank, accepting money in deposit. So, under this scenario, all the people and businesses would increasingly issue promises, rather than governments. Verifibly paper of large, established businesses would be regarded as good money.
One of the mechanisms of digital cash mints is to enable party B to pass part or all of your scrip to Party C, by giving party C the capability to check back with the Mint to prevent doublespending and, perhaps, maintaining title registry of who is the rightful owner of the scrip. The secondary purpose may be, perhaps, to enable everybody to confirm that Party A didn't issue more Digital Cash than he has got money in the bank (Some parties will have incentives to disclose their currency reserves or other collateral to each other.) Digital cash mints are not that complex, particularly when mechanisms for masking identity are left out.
The sovereign device would perhaps, never conduct any communications, send or accept delivery of anything, unencrypted. When everything is universally, strongly encrypted, everybody benefits.
The method of ecommerce would be exchanging standard XML documents for orders, invoices, and payments, within a business process framework such as ebXML. The system of accounting could be local applications, or newer ones such as shared transaction repositories or trading systems in the sky. http://www.gldialtone.com/fbc.htm
Why not? This stuff works beautifully at low bandwidth, with low performing clients and hosts. It allows the individual the capability to do business without trying to taking away intrinsic freedoms we already have. http://www.gldialtone.com/glism/glism.htm
Open commerce, based on ebXML and honest metadata standards, is still workable for giant corporations, governments, and other huge aggregation schemes. It does however, remove their existing built-in advantages for giantism. You want an architecture for ecommerce in which the costs of participating in the business process do not decrease geometrically based on the size of the company. The code rules, as Lessig said. What kind of future do you want to create? Today-you have command hierarchies.
A total P2P commerce solution gives every sovereign party the total privacy within each binary interaction, without injuring any other party's capabilities to operate bigger, more complex information systems when desired. In other words you have automated the bookkeeping saving everybody a hell of a lot of time, without having to pick up the unnecessary burden of changing anybody's behavior, or requiring any centrallization of anything in centralized accounting hosts, registries, etc. that are susceptible to takeover and rent extracting.
I think the man in the street would use this device. Lots of people would use it just because it's wireless and secure and has a browser and messaging. People would use it to conclude ordinary business such as shopping. People are fed up with the 5% fees on credit cards, and with banks and governments reading all their transactions.
Stores could lay one by the cash register and it would carry on simple buy/sell choreography by itself. People selling prohibited contraband would jump on it, just as they are already economic bases for cellphones (buying new phones and new accounts frequently). Gray markets would grow very very fast in every trade, etc. which now operate in cash. The government would have to outlaw the things. It would be very interesting.
Todd
Oct 4 2001
here's more of this stuff, sorry for my tedious writing style.
Whitepaper Roadmap to GL integration with ebXML
Core components definitions for the accounting context
Todd
Nov. 15, 2001