Tony Curzon Price

Sounds like a firm of City lawyers -- Krugman, Blinder & Co. In fact, it is half the panel line-up on this excellent film of the Princeton Economics Department panel on the subprime crisis.(YouTube embedded below - the whole thing is about 1 hr, with the first 1/2 hour most informative, IMO).

Unfortunately, Blinder is mostly cut. Brunnermeier is fascinating on really detailed stuff---economists will never be short of clever fixes to regulation problems; Hong is really  interesting --- I want to post on his point about the psychology and sociology of systems prone to bubbles; Krugman --- well, if you've followed him in the NYT, you won't find any surprises here. 

openDemocracy

My note to Willem Buiter on his praise of the Fortis "nationalisation":

Dear Professor Buiter,
I agree that Fortis shows that the worry - expressed just today by Munchau in the FT - that Eu cannot respond in a crisis is wrong. But the outcome of the capital injection seems favourable compared to what would come out of TARP, no?

51% of old shareholdings preserved --- doesn't this show that a little more transparency to voters in the Benelux might have got them a better deal?

Taxpayers are unwilling risk capitalists here, and that should make our representatives negotiate harder for our upside, not less hard.
Best wishes,
Tony

Tony Curzon Price

My note to the FT's Martin Wolf this morning, on reading his column, which argues (quoting Churchill Winston “The United States
invariably does the right thing, after having exhausted every other
alternative.”) that the time for a bail-out is now.

Dear Martin,

I enjoyed, as ever, your column on avoiding depression. I do wonder how much time we have (our political systems have) to negotiate the deal ... Paulson tried to tell us it needed to be done over 1 week-end; 10 days later it was not passed and the consequences are still mostly confined to the financial sector. What sets the ticking clock here? Presumably, the real economy's borrowing that comes up for renewal is the biggest deadline. And is that not temporarily extendable by central banks? Indeed, the various central bank facilities are presumably doing exactly that.

Given that decisions made in crisis are highly determinant of the shape of the eventual settlement, should we not be thinking about how to extend the window for negotiation rather than implementing a solution to the crisis?

Best wishes,

Tony

openDemocracy

Here is the first draft of the bailout bill. Just 20 pages into it, but it looks as if the right terms have been put into it. Breath-holding over. The American system appears to have delivered.

Tony Curzon Price

There's a huge amount of excellent and important commentary on the financial crisis. I have collected together the RSS feeds I'm using in 4 netvibes tabs that I am skimming through to keep abreast. You'll find feeds from Krugman, Roubini, Setser, DeLong, Thoma and many others who are commenting regularly on the crisis.

If you're not a netvibes user, go to the link here. You will see tabs across the top of the screen with Economics 1 to 4 - click those for the feeds. Click on a feed to have a quick read of what it contains, or do "shift+click" on a title to open the originating article.

The professional economics blogosphere, mainly under the influence of american academics, offers a pretty complete substitute for the analysis pages of the main newspapers. There are just a few exceptions - like the FT's own economics blogs (and especially Buiter's Mavrecon). An excellent European voice comes from VoxEU, a group blog of Euroconomists.

I hope you find these feeds useful, and drop me a line (tony dot curzonprice at opendemocracy dot net) if you've got some RSS feeds or sites that you think should be added to this list for crisis-watching.

Tony Curzon Price

 

The price of mistrust

Gamekeeper Hank Paulson has asked taxpayers to put up $700bn of risk capital to spend on his erstwhile and future colleagues on Wall Street. He has given permission to his previous employer, Goldman Sachs, to become a deposit-taking institution. (I am no financial adviser, but I would caution anyone to think twice before transferring their balances to Goldman Sachs today). Are the Democrats right to be resisting the blank cheque, or are they playing loose with the world economy?

The dilemma is clear: crises require flexibility, rapid action and leadership; but the power of flexibility can be abused. Paulson, who rose to the top in the macho culture of ``take no prisoners'' Wall Street is not the man the taxpayer should trust. Worse, the Bush administration's systematic capture by energy, military and religious interests does not suggest a culture that can be trusted with huge power.

Here, concretely , is the worry. The US taxpayer gives Paulson the risk capital. He spends it on buying up the assets that banks do not value--he buys them at a price that the banks find attractive. Once the bad assets out of the way, the banks no longer have to worry that their colleagues and counter-parties will go suddenly out of business and they can start to lend again. It is back to the good old days, except the taxpayer holds all the junk. Paulson has bailed his buddies; the Bush administration has rewarded its friends; bankers and lawyers learn to subvert the new regulation as they subverted the old. Wall Street--indeed world finance--can return to being a cosy club dedicated to personal enrichment.

This is why the Democrats now resist nodding through Paulson's plan. Paul Krugman summarises the problem on his New York Times Blog. The presidential politics make this particularly hard. It is a crisis and your leader asks for urgent help. As you start to raise objections, you can easily be turned into the cause of problems. Every time Nancy Pelosi says ''no'', markets will fall. There is a basic political Pavlovianism that will make the Democrats seem anti-economy. Obama's response to the plan--''it seems very big, but this is an emergency and I will not get in the way''--clearly recognises the danger. McCain's response--''Fine, but No New Taxes''--is clever: McCain protects the taxpayer, and no one thinks he would fail to support Wall Street.

The solution? The Democracts must put flexibility into the rescue package so that the next administration is not tied down to supporting a bad bail-out. Taxpayers should agree to put new money into banks in exchange not only for the toxic assets, but also for various options. Firstly, the option to turn those toxic assets into shares in the banks at the price before last Friday's announcement of a bail-out. This means that if world finance does recover past profitability, taxpayers will not have been the ultimate suckers, the ones who will always patiently take on the losses while others take on the gains. Second, taxpayers should require the option to monitor and cap all pay deals in the rescued institutions. As the Lehman case shows, profitability can go down while individuals still command astonishing rewards--not the rewards that an effectively nationalised industry should tolerate. Third, taxpayers should insist that the risk be borne by those who profited most from the leverage-bubble. Mark Thoma is very convincing that this should be done through a strong dose of progressive income tax.

The basic rule of finance is ''Who has the gold makes the rules''. When the banks have no capital, and the taxpayers are asked for gold, they need to remember that they make the rules. This is the moment to set the rules, not tomorrow, after a recapitalisation. There is a critical difference of a few months between today's crisis and the 1932 banking crisis that brought in the New Deal. Banks started failing in November '32, after the election. Roosevelt's plan was the important one. Today, unfortunately, three months make all the difference. It will be Paulson's rescue. The Democracts must avoid being cast as the destroyers of the economy, while standing firm as the rule-makers of last resort on behalf of that unlikely risk-capitalist, the taxpayer. Nouriel Roubini, long the Casandra of the this crisis, warns in his FT commentary that the crisis will spread to the real economy and to Europe's as well as the US's.

It is going to be hard, so now is not the moment to waste the hardship on a crony's solution.

 

---

tony curzon price 2008-09-22

Tony Curzon Price

I wrote the other day that we -- the collective, global, democratic "we" -- desparately need to take responsibility for financial regulation. I mainly had in mind our own shareholder, pension-holder, saver activism. But our friends at Avvaz.org have a very sensible, complementary approach that tries to put pressure on our governments to take the issue of regulation seriously. Their new campaign around the issue is here: looks to me like a good one to sign up to.

openDemocracy

The de-leveraging crisis--or the sub-prime crisis or the debtonation crisis--came about through the interaction of wicked plutophiles, genuinely useful financial innovations and lax, cowardly and confused regulators. It is important to untangle these in order to destroy what was genuinely bad in our financial arrangements. The spread of cheap computing, the theoretical understanding of how to price flexibility--option pricing--and the globalisation of supply and demand for capital set the stage for the growth of the financial sector from the 1980s for the next 25 years. In a world of benevolent, professional bankers, these changes would have been welcomed. However, the world of finance became the global magnet for hordes of semi-quantitative plutomaniacs against whom the partially sighted, ideology-bound regulators had no chance of success.

Globalisation, financial innovation and computing have brought benefits that now, when blame is spread generously, should be remembered. The heart of every financial transaction is an exchange of financial risks. When you sell a house, you want an amount of cash in exchange with a known, certain value. When a bank offers a mortgage, it swaps a known value for the likelihood of a stream of payments. The seller of the house has become financially more secure; the seller of the mortgage has taken on the corresponding risk. Moving risk around has real social value. A manufacturing company in Senzhen with good commercial contacts to corporate America can borrow to expand; it wants to take on risk. A fifty year-old office worker in California, at the height of her earning powers and saving for retirement, may find that an investment in a Senzhen factory is attractive. Globalisation of capital markets--whatever abuse it also permitted--expanded the opportunities for these sorts of re-allocations of risk. There is real social value in doing this--as long as you do it right.

Financial intermediaries can often provide more attractive risk re-allocations than would be possible with direct contracting between lenders and borrowers because they can enjoy the statistical effects of pooling risks. This is the basis of insurance: because things tend not to all go wrong at the same time--because ``sod's law'' is not a law--two mortgages are less risky than one mortgage. Information technology expanded the scope for the discovery of offsetting risk of this sort, and so found ways to ``cancel-out'' uncertainty. There is real social value in doing this, as long as you really do it. Only inveterate gamblers prefer material uncertainty to stability, and they can always be served at the casino. The more material uncertainty can be destroyed through social aggregation of risk, the easier we ought to be able to sleep at night ...as long as we are really doing this. Computers trawling great databases of prices could identify opportunities for cancelling risk on an unprecedented scale.

The development of portfolio theory and option pricing theory by financial economists has opened the way for a greatly increased scope for pooling risks. Even once you have identified uncertainty that can be ``cancelled out'', you need to turn that aggregate into a product that those affected by the uncertainty can buy; and as long as you can assess the price of risk, these become products that those with a collective appetite for risk can supply. So, a retiree might want to swap her accumulated pension fund in exchange for a promise to have her medical care covered, her subsistence needs covered, and a small amount left over for her children. Financial theory now allows such products to be priced and supplied.

In the midst of all this potential to do good came the plutomaniacs and bad regulators. The three forces of good change in finance of the last 25 years--increased opportunities to trade, increased data-processing and increased understanding--could all in themselves justify some degree of increase in the level of leverage. For every pound, euro or dollar of certain value that a financial firm could count on, it could now transform those into more uncertain pounds, euros or dollars of value than in the past. The banking multiplier could increase. Its increase from a traditional value of about 6 to the current value of about 25 is the story of ``debtonation'' that Ann Pettifor has told so well. Even if the forces of good change could justify--an extreme suggestion--a doubling of the rate of leverage, the five-fold increase we have lived through in 20 years can only be explained by the monumental failure to properly guide an invisible hand made weak by the mendacity of many in the financial industries.

As globalisation allowed banks to run rings around national regulators, the Bank for International Settlements transformed itself in the 1980s into a world-wide regulator. All banking institutions need to show consolidated accounts and prove that taking all their operations together, they have sufficient capital to cover ordinary and even extraordinary risks. Banks are required to limit their lending to 8 times their capital, where the value of the capital base is cleverly adjusted for its riskiness. In a world of benevolent bankers, all of them following the rules, these constraints should have worked. The banking money multiplier would have stayed at 8X, a number apparently entirely justified by the good forces for change in finance.

But we know the reality ...Banking ``innovation'' became more concerned with hiding the lending that banks were extending in order to continue to lend a long way beyond the 8 times capital limit. The ``special investment vehicles'' like Granite--the Jersey-based company that Northern Rock set up--existed only to be the repositories of lending that would not be counted against capital by the Bank for International Settlements regulation. Bankers, bonuses based on the volumes of the transactions they performed, had found a way around the spirit of regulation to unconstrained personal gain. Asset price bubbles followed, as the money created by banks chased limited investments. Emerging markets, technology stocks, housing, stock markets, gold, commodities, contemporary art ...anything in vaguely fixed supply--or at least supply slightly more fixed than the unconstrained creation of money by the financial sector--rose in price to absorb the money being created in the cracks of international regulation by the plutomaniacs. We can tell that the crisis still has a way to run from the stellar results of Hirst's last auction.

The crisis we are now going through comes from the fact that the money-creation went into a largely virtual economy. This was not about factories in Senzhen or retirement packages ...most of the growth in money was going to casino chips on which rich-world middle classes became hooked; their appreciating housing assets gave them a sense of righteous enrichment, a reward for who knows what hidden moral virtue they could conjure. The retrenchment today will require de-leveraging from today's absurd 25X to a normal 8X. Two thirds of the debt in the system needs to be eased out.

The dilemma now is this: how do we de-leverage in such a way that the virtual economy is hit, not the real? and how do we protect the real forces for good while cutting off the most destructive tendencies of the plutomaniacs? Regulatory pragmatism is aimed at the first problem now. AIG is too close--or thought to be too close--to the real economy to be allowed to default, while Lehman is sufficiently virtual to need to go. HBOS has strong links to reality--its mortgage business in the UK is tightly related to household savings, and so to the UK economy as a whole--to get nod-through approval to join the stronger balance sheet of Lloyds-TSB. As banker to the real economy and bankrupter of the virtual economy, this regulatory pragmatism is the right approach to the immediate mess.

But what of the longer term problem of good regulation? Can we have our good financial cake without it being forced down our throats like geese prepared for their liver? A solution to a problem usually comes from choosing the right constraints: what is fixed? what can be assumed to be in our choice? It is important to assume that the plutomaniacs will always be with us: financial regulation must assume that the great magnet of money will always disproportionately attract the iron-like sharks. What was true of politics when David Hume recommended that we design constitutions on the assumption that every man be a knave should now, in a world where the market has become mightier than the sword, be applied to financial regulation. 75 years after Hume's advice, Benjamin Constant, in his essay on the Freedom of the Moderns as Compared to that of the Ancients, reminded us that we ought to continue, all of us, to stay involved in politics in order to prevent the return of tyranny:

we should [...never...] surrender our right to share in political power too easily. The holders of authority are only too anxious to encourage us to do so. They are so ready to spare us all sort of troubles, except those of obeying and paying!

Today, this advice holds for control over finance. This is where the holders of authority lie in wait for us. Politics today needs to be in the shareholder assembly, as activist investors, as savers and borrowers. We must take control of regulation from the demoralised public servant and help ourselves. Where is your pension invested? Who manages the money? How culpable am I for the use that my savings have been put to? In our pre-occupation for the freedom of the moderns, for our cherished ability to get along with our private concerns, we have left a gaping opportunity for plutomania to operate and create havoc. Regulation is too important to be left to the conflicted civill servants.

We need all to become our own regular regulators.

 

---

tony curzon price 2008-09-19

Tony Curzon Price

Tim Duy has a great analysis of what the week-end teaches us about where we are with Lehman, Merrill, AIG etc. I think he is right that this is a signal from the US authorities that the socialisation of losses is over; that any taking-over of dud assets by the public will now go through Congress, and not through a technocratic nod-and-wink. The danger, as it has been for a year, is contagion to the real economy---when do firms providing real value find that either a) demand has fallen such that they have to cut back operations or b) that their own credit lines for working capital and investment programs are closed, and so have to cut back?

That danger still exists. Certainly, as banks find it harder and harder to satisfy regulators that they have enough capital to guarantee the loans they have made, they will cut back their lending. So far, the Fed has become banker-of-last-resort by allowing bonds and now even shares to be put up as guarantees for cash loans.

In any case, the week-end moves by the Fed mean that the music of time is picking up again. After 1 year of waiting, time-haltingly hoping, that the crisis would resolve itself, the regulator has called time-up. There may yet need to be large-scale public cash injections into the corporate sector to avoid deep depression. But this week-end shows the regulator has, at last, given up on hopes of self-repair. So adopt the pose of the surfer caught between breaking waves: take a deep breath and hope the turbulence of the breaking behemoth does not keep our economies trapped under for too long.

When we re-emerge, expect to see JP Morgan and Goldman Sachs still standing, but not much else in the financial firmament. Expect a divided world of finance---hyper-regulated standard products on one side, and a pool of crazy, gambling sharks on the other. Think twice about risk-reward before surfing in the sharky waters again.

 

Tony Curzon Price

George Hewitt doesn't like the way:

"the torrent of media commentary on the Georgia-Russia war has been characterised by near-obsessive geopolitical calculation, which [...] tends by default to view Georgia's "lost" territories (if they are viewed at all) as nothing more than inconsiderate and irritating pawns on a global chessboard."

Georgia has its own "near abroad", that happen to be within its UN-defined borders; Russia has Georgia in its "near abroad" ... Remember Mandelbrot's ginerbread man: whatever the scale you examined it at, you'd get those repeating patterns. Fractals of nationalism. And what about the non-Ossetian minorities in South Ossetia? Where will they go, as one of our commenters asked.

Surely there is a pattern here that we can see should be avoided: to treat the other, be it ethny, nation, or however you care to define the outsider, as a means to your political end? Shouldn't alarm bells from the Balkans be ringing in NATO's ears?

George Hewitt provides the historical background and the detail that we need to read to understand---to really sympathetically understand--- that when we take the short-cut of geopolitics, we allow ourselves to think of South Ossetia and Abkhazia as mere pawns in a new cold war, then we have already ruled out the possibility of a humane solution.

Tony Curzon Price

There's always a business model question hovering around iSummit, and 08 is no exception. Jamie King talked about what he'd learnt from Steal this film -with some great pidgeon pictures - but also talked about VODO, a platform for users to  donate for cultural production on peer-to-peer networks. Each work has a paypal account linked to it, and the community can identify files as being tokens of a "work''. Donations get aggregated. Now, the nice twist I liked here was Jamie's idea of giving works the option to specify that some percentage of donations will be spread back into the community of previous donors - by donating you are buying a share. This will appeal in some places and in some communities. You will need to fix the shape of pyramid, etc - and you could let donors specify _who_ their share was going to go to --- good, for example, in communities where the scheme seemed too Wall Street -like for comfort. 

More generally, it struck me that getting good ways of chanelling funds for specific types of production is something that all publishers on the commons are trying to do. So here is another opportunity for iCommons to think about shared infrastructure.How about iCommons created buttons -- and systems behind -- that I could embed on a piece of content and which said: 

``I'd like to support this piece of content''

``I'd like to give general support to this organisation"

``I pledge $x to this project as long as total pledges amount to $y"

In all these cases, I think that standardisation across Commons  sites would be useful - the donor would come to learn what a button meant; could have an account at the shared piece of infrastructure , etc.

OK, and iCommons could have a pyramid-shaped button for VODO :)

 

Tony Curzon Price

Notaland.com is at the iSummit08 offering t-shirt remixes.

They print it on the spot, within a few hours. You get a template - this one had the iSummit08 logo on it, you tell it what Flickr stream you want (I asked for openDemocracy's) and you make your t-shirt.

Here is the one I did yesterday

Let me have your orders, Yen1,000 per shirt.Tony

 

Tony Curzon Price

I spent yesterday in the Local Commons Global Context track of the iSummit event which was focusing on publishing on the commons. oD was there as one of 2 other publications for whom the ethos of the global commons is important. GlobalVoicesOnline, which we know and love, and Overmundo - less familiar because it of its Brazilian language and culture focus.

GVOnline is a digest of blogs that is orchestrated by a remarkable volunteer network. One of its most impressive achievements has been the development of translation communities around GV, Lingua, which is now, in part at least, available in 15 languages. I spent a lot of time talking to translators---how they organise the volunteer networks; why they are motivated to do it ("many of our volunteers are away from their home countries and cultures; translating is a homage to home" was one answer). 

Overmundo has developed a community of citizen commentators, of editorial democracy that seems very remarkable -- energetic, popular and self-asserting. A sort Slashdot of Brazilian culture. 

 Rebecca Kahn,  convenor and connector of dots on the Local Commons Global Context track, wanted to know what all three publications could share --- apart from basic ethos. At first, it seemed hard to think of this --- all three publications are living experiments whose way of working is an integral part of the qualities the publications exhibit. So mixing and matching seems hard. (oD sometimes carries GV material, so some mixing and matching is very straightforward). But beyond using content, which we can do anyway under the CC licenses, what more could be done to combine our strengths? As Chris Salzberg, the Japan Lingua editor, said: `` even within GV we have trouble keeping with everything. The bottleneck is time and attention!"

 Well, on reflection, I think there are a number of things we should be doing to combine our strengths:

 

1. sort out the search engine stuff that I keep going on about (here and here)- we are all affected by it, so let's have a joint approach to it 
2. move towards a common open-ID login infrastructure - give people who want to login a common identity across the global commons publishers and provide a sense of a ``family of publications" that you are a part of
3. participate in cross-advertising. The overlap of our potential readerships is likely to be quite large - so let's make sure that we regularly point readers to the other publications. For oD, one of our most effective means of promotion is the 50k strong email distribution, where, on a monthly basis, we could include a link to the family of commons publishers. Even better, of course, if someone took on the task at iCommons of writing a summary blog post of what is going on in the publishing commons, and linking to that...
4. some degree of editorial forward planning. so, for example, we might have a quarterly skype call for publications in the ``commons family" simply to talk about what each of us has coming up, to make sure we're not missing any tricks in possible collaborations, joint fundraising or marketing activities ...

 

 

 

Tony Curzon Price

 

What is the global commons and what does it need?

Contents

• iCommons should be the confederation that serves the projects that constitute the global commons
• What does this mean in practice?
• How should iCommons work as an organisation?
• Heather's Revisioning Message
• Bibliography

Heather Ford, executive director of iCommons, has opened an important discussion for everyone involved in creating new media for the public realm. iCommons grew out of the Creative Commons licenses, and was always intended to be the ``movement" that would underpin the licenses, encapsulating and giving expression to the ethos of openness, free culture, of sharing and of the transformative potential of technology that the Creative Commons licenses were but a tool of.

iCommons' institutional progress has been remarkable--it has captured the spirit of hope in technology and has been able to raise funding for five years. A real achievement--I know how hard this is--congratulations Heather and Ronaldo.

Congratulations also for putting out there the existential questions: what is iCommons for? and being true to the open ethos of the organisation in asking the question in such a public way.

 

iCommons should be the confederation that serves the projects that constitute the global commons

My view is that iCommons should be a confederation of projects; the projects are all trying to be micro-movements, to develop a sense of identity, purpose, community ...iCommons needs to be the umbrella, to provide the federative infrastructure; to lobby for its confederal members; to give project leaders and managers a resource that they can use. As a confederation, iCommons ought to live above the movements that it encourages. It ought to be a movement of movements.

Let me explain my thinking. The best place to start is Zittrain (2008)'s schema of the organisations that work on the Internet. I gave an account of this schema in this article(Curzon Price, 2008).

 

 

 

 

iCommons' Federative domain

 

My guess is that all of the projects that feel themselves to be part of the iCommons live in Zittrain's communitarian corner. More than that, I believe that most of the content providers in the communitarian corner ought to be federated by iCommons. In the domain of code, or of protocols, or of hardware, the communitarian corner has other ``movement" organisations looking after projects' interests. Not in the realm of content.

The communitarian corner is made up of many micro-institutions. This is the world of hierarchy--there are clear rules, goals, framing systems. We are not in the polyarchy of the market or of anarcho-hacking. The micro-institutions are typically under-funded, relying on good will, idealism and a small number of dedicated key individuals. These are groups whom iCommons should consider as its clients. They need support, and they are the natural vectors of the ethos of the global commons.

 

What does this mean in practice?

What would the federation deliver, and to whom? A federation makes sense to supply common, collective goods. Those goods that are of shared usefulness between members. A federation is a sort of club. Here are a few examples of what iCommons could be supplying (maybe it is already and I do not know ...):

 

1. represent iCommon interests to important corporate/industry actors. For example, does Google's search take the CC origination issues seriously? I believe not, as I have written about before, in the context of Google sending out News alerts for our material only once it has been reproduced by others, and as originated by others.
2. provide a directory of projects aimed at funders--a bit like what TechCrunch does for SV start-ups, or VentureWire does for venture-financed deals.
3. provide central s/w infrastructure, for example an open-id server and authentication service ...this is a piece of functionality which most of us need and which can be shared; iCommons could provide -- either in-house or out-sourced-- a central facility. Not having these sorts of facilities is the sort of practical problem that will push us into the ``corporate / federalist'' corner of Zittrain's schema -- if there is no Commons solution to identity infrastructure, I might as well use Google's or Yahoo's...
4. develop iCommons as a brand. Most of us use CC licenses because of a shared ethos more than because of the details of the legalities of the licenses. iCommons should come to be seen to represent that ethos, and content-associated with the mark should satisfy certain user expectations beyond the legal detail.

 

How should iCommons work as an organisation?

Projects that consider themselves to be under the iCommons should register with iCommons. iCommons should think of these projects as its customers--it ought to exist to serve them, as the centre in a confederation ought to be at the service of members. iCommons ought to poll projects regularly--not only to keep status up-to-date, but also to prioritise what it should be doing.

 

Heather's Revisioning Message

In 2005, iCommons was established as an outgrowth of Creative Commons with an objective to ?advance the wider dissemination of non- commercial sharing of scientific, creative and other intellectual works by the general public?. Creative Commons was the sole member, guarantor and sponsor of the charity, providing organisational and financial support.

Today, iCommons has a small, agile core team with its own policies, procedures and culture; we?ve expanded our membership (Creative Commons is now one of five members of iCommons rather than the sole member), raised core funding for the next five years and initiated a series of new collaborative projects, and as of 31 March, 2008, have become an independent organisation separate from Creative Commons.

Following our independence, and because we realise that we could be doing so much more, we thought it important to examine ourselves and develop a vision to guide us through an open revisioning process.

This vision is of a world where there is widespread participation in global innovation, digital culture and knowledge-building initiatives, based on equitable access to technology, education, science and culture ? a world where people are using the organizing power of technologies and the spirit of the commons to work together to solve crucial global challenges.

iCommons could play an important role in catalyzing connections between people from the global South and North, with diverse backgrounds in order to develop a mutual understanding of the role of the digital commons in enabling innovation, participation and cultural expression in diverse regions of the world.

Achieving this will be no easy task. The ``global'' commons is far from global right now, and we're all trying to solve very different problems with very little insight on how we can develop solutions that are inclusive of people throughout the globe.

This is where we need your help to decide what an independent iCommons can be doing to support the global commons in the future. There are obviously limits to what we will be able to do, but we believe that this community can have a major impact on developing truly global solutions to challenges that are defining our generation.

? How can we build an identity for ourselves that is distinct from our former parent (Creative Commons) whilst retaining a partnership that is mutually beneficial?

? What should iCommons do to best achieve our vision?

? What kinds of governance changes need to occur in order to operationalise this new vision?

? How can we achieve all of this while adhering to our core values and principles?

? How can we extend our impact beyond the iSummit and our other projects?

? How can we build this movement into something that is truly global?

Today starts an open discussion that will continue through the iSummit and shortly beyond. I will be giving a keynote address (webcast live from the iSummit website) to introduce the revisioning process and there will be physical spaces at the iSummit for participants to answer these questions. We encourage people who are unable to attend to answer these questions in the comments facility below.

The board will then review your suggestions directly after the iSummit and they will publish the minutes from their discussion.

We appreciate your input and look forward to a new future that truly brings together the community to grow the global commons.

Please respond on the article http://icommons.org/blogs/revisioning- icommons

 

 

Bibliography

Curzon Price, T.: 2008, From zittrain to aristotle in 600 words, openDemocracy .
http://www.opendemocracy.net/blog/tony_curzon_price/from_zittrain_to_ar istotle_in_600_words.

 

Zittrain, J.: 2008, The Future of the Internet (and how to stop it),Princeton University Press.
http://yupnet.org/zittrain/.

 

 

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tony curzon price2008-07-28

Teo Kermeliotis

If the rather hasty, western view that wants those who refer to themselves in the third person to be in the threshold of schizophrenia is valid, then psychiatrists all over the world should soon start preparing themselves for a huge workload.

Millions of Facebook users have been incorporating such practises for a long time now in their daily online activities, feeling the urge to express their feelings and inform the world of their thoughts and plans.

As if the world did not already know.

Sadly enough for those of us who almost always struggle to come up with upbeat and boasting updates for our virtual statuses, the amount of information that exists out there about us is so extensive, that often it does not leave much space for our buoyant, kind-of-hip version.

A constantly increasing network of applications is designed and installed to stoke a vast system of surveillance, destined to deliver results in the name of promiscuous purposes, from deterrence and control to convenience and marketing.

The 9/11 attacks and the consequent rise of security in the policy agenda undoubtedly accelerated the implementation of such measures. Both the biometrics and the video surveillance industry are growing at a fast rate, with rocketing sales in the last few years. At the same time, surveillance technology is rapidly becoming an important part of the arms trade.

“Every breath you take, every move you make”

Ubiquitous security cameras monitor our moves, look down on us while driving and walking, as well as scan the areas we go for shopping and entertainment. They are growing in numbers and getting smaller, to the point of invisibility, while more sophisticated technology is enhancing their capacity.  

Features such as “Talking CCTV” – in which operators can intimidate via loudspeakers anyone thinking of behaving in an inappropriate manner – and “The Bug” – an “intelligent” system that uses movement tracking software to predict a crime by detecting, zooming in and following those who might be acting in a suspicious way – are not figments of an Orwellian mindset but just a few aspects of the many established trends that govern the “under-the-lens”  society.

Under the European Directive on Data Retention, all the fixed-line and mobile operators are required to keep records of their customers’ communications no matter if they are investigated or not. Although the content is not recorded, a range of data that most people value as private such as the destination, date and duration of phone calls and text messages are stored and could be made available to law enforcement authorities, for up to two years.

The European Commission is also considering a new policy on biometrics, including the creation of a central database of fingerprints, while under new proposals all non-Europeans would be asked to submit facial scans and fingerprints before being allowed to enter the continent.

At the same time, governments are ordering the airline carriers to hand over travel records while border agents can seize laptops without cause to search them for criminal evidence; mobile phones with embedded GPS constantly keep an automatic trail of the phones holders’ location; shopping centres track the motion of their clients by triangulating their cell phones; credit or debit cards record spending patterns.

The list is enormous and is growing in accordance with technological achievements. How far is the future where individual identification will be based on odour or saliva? 

“Digital ghost”

And of course, the surveillance net can creep and perforate virtual walls too. A number of companies, from Internet Service Providers to web-based businesses, are our official online shadows, monitoring all our web searches and visits. They gather data on which sites we visit, at what time and for how long, what do we consume and what we are interested in buying. As Privacy International says, “in the off-line world this would be comparable to, for example, having someone follow you through a shopping mall, scanning each page of every magazine you browse though, every pair of shoes that you looked at and every menu entry you read at the restaurant.”

Data mining and behaviour advertising are inextricably associated in the digitised world. Consumerism targeting the individuals by putting them at the centre of all choices seems to has found, in the face of the Internet, an ideal platform to act, as the virtual world is both isolated and public.

Webmail providers, such as Gmail, scan every e-mail read or sent and then display relevant ads keyed to certain words. Charter Communications, the third largest cable operator in the US, has recently spoken of plans to introduce a new system that will capture their customers’ online surfing, and then provide the information to advertising networks through a third party.

Just a few weeks ago, a US court ordered Google to give every log of every video watched by Youtube users, including their ID and IP addresses, to Viacom, the media conglomerate. Would that ruling ever be possible if Google did not keep that amount of user data in the first place?

Also, as expected, the aforementioned European Directive on Data Retention applies, of course, to the online world as well, with similar provisions about the monitoring of all internet activity (e-mails, URLs, etc) by the ISPs.

At the same time, the expansion of social networking sites has seen millions of people willingly reveal a vast amount of detailed information about their lives, blurring even further the lines between private and public. This has not gone without cost to many, as their experience of such exposure ranges from minor consequences like personal embarrassment to more grave ones such as job losses, lost opportunities and negative profiling.

Looking from some distance, it is not difficult to realise that it is rather easy to be deceived by the isolative nature of the online process. Yet, it is essential to truly internalise, beyond the point of simple knowledge, that whatever we do online is leaving an electronic trail behind us that is here to stay.

The understanding of such a reality can undoubtedly create a bleak conception to many over the shape of modern life, as it is not difficult to comprehend how this has the ability to monumentally affect every day choices. Yet, as Bill Thompson puts it, “it is possible to take an optimistic view and treat our current concerns as a reflection of a period of transition and generational difference: we may just be taking our time coming to terms with the new levels of exposure.”

“Brave new world”

As different perceptions and prejudices collide in this rapidly changing environment, we still need to find our way around the new system. Today we are wary that online photos showing us drunk at parties could deter recruiters from hiring us, but in twenty years time it is quite likely that most employers will be much more lenient, as they will have their own online past and will be more familiar with such images.

Perhaps in the end we should dare to go one step further. The idea of identity is at the core of the most important debates of our time. Industrialisation and the enlightenment have given us an idea of “self” and of the boundaries between private and public that seem natural but are not. With the industrial age now in a transient stage, we should acknowledge that the concept of identity is itself a social construct and therefore subject to modification. The boundaries are now re-chartered, with technology playing a key role in the process. Bill Thompson explains: “The growth of online services, social tools and surveillance are challenging the assumptions that underpin the enlightenment idea of identity and we will see new ideas emerge to help us cope in an increasingly digitised world where little is truly private.”

At the top of this massive wave of public exposure, from the external, omnipresent monitoring to the voluntary revelation of personal and possibly harmful information, lie some fundamental questions whose answers can determine the route of our existence in the interconnected world. Are we willing to sacrifice freedom of expression in the name of avoiding unwanted public exposure? Should we choose between safety and privacy?

These questions can often be misleading and result to extorted choices. Just as liberty requires both security and privacy, respect for the individual and freedom of expression are equally important in the digitised environment.  Similar to the annoying prospect of being treated as citizens under constant investigation or as life-long objects in a market research project, there is the danger of encouraging the breeding of “clinical” behaviours by imposing self censorship to avoid potential personal harm.

Such fears can deeply affect our attitude towards a wide set of every day choices. Are we going to care, for example, about the CCTV cameras that monitor our moves if we want to go to a demonstration that condemns the involvement of our country in a war? Are we going to post pictures of that protest on Facebook?

Perhaps our response can draw some inspiration from our previous reactions while other monumental changes were taking place. In the same way that 18th century people dealt with the culture shock of moving from the fields into factories by developing urban culture and its plethora of attitudes and characteristics, we should now adjust our mindset in the modern conditions and assess what from everything being done is “acceptable and even normal,” as Bill Thompson points out.

Although without the benefit of hindsight, it is not incongruous to underline the historic significance of our generation. The fading memories of the world before the heavy interconnection might be rapidly abandoning us but they have not yet completely evaporated. Without acting as if the standards that dominated the world half a century ago can still be applied today – or have some inherent eternal wisdom – we should boldly enter this brave new world, trying to keep values such as tolerance, respect and openness at the core of the new environment. The burden is heavy and the conditions are not easy. Yet, it is vital to succeed.

Tony Curzon Price

Are oil prices rising because of semantics?A calm has returned to the economics blogosphere .... if not to the oil markets. Krugman saves his position by arguing that "speculation" only occurs when stocks go up, and refusing to consider the possibility of oil-in-the-ground being a stock. SWhen Krugman wondered about the political biases in calling "Speculation" he was not admitting, at some level, his own bias. Krugman wants to believe that oil prices are "about right" now. I wonder where he stands on carbon taxes and post-Kyoto? Does he believe that peak oil will do the job of cleaning up the environment without intervention?

Martin Feldstein in the WSJ is very convincing to my mind. He takes up the difference between storable and non-storable commodity prices that I emphasised here.

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openDemocracy

Here is an instructive comparison between economists and political realists:

First, the increasingly abstracted stock-flow models from Paul Krugman and Mark Thoma.

Second, a suggested account of the recent oil price rise (from the oildrum):

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openDemocracy

A good summary of the positions by Mark Thoma (a bit of theory)

Arnold Kling is not sure where to place his bets, but has a good counterfactual question to Krugman: does he believe oil prices were at the right fundamental level last year when they were at $60/bll. And if not, why weren't stocks disappearing then?

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openDemocracy

Mark Thoma has a good summary of yesterday's econ-blogosphere debate on the speculation question.

 He ends up on the question of what single cause can account for the run-up in both agricultural products and oil prices.

I am not sure he should be such an ardent Occamist here - compare these 2 graphs, of oil and wheat prices this year, and ask what sort of common explanation you might want:

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openDemocracy

The economics blogosphere is abuzz ... is the oil price being driven up by market fundamentals or by some sort of manipulative activity?

Paul Krugman has a short theoretical piece here challenging the speculator-spotters to come up with a story that fits the facts.

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