Re: Thoughtcrime (Re: My War) (fwd)

Forwarded message:

> Date: Mon, 9 Jun 1997 20:22:44 -0700
> From: Tim May <tcmay@got.net>
> Subject: Re: Thoughtcrime   (Re: My War)

> Your economics education must have some gaps. Look into "price elasticity."
> Look also at the markets for illegal drugs: despite severe "taxation" (in
> the form of price increases of some drugs, increased prison terms, etc.),
> some markets have increased even as prices have increased.

Clearly this whole discussion can be broken down into a cusp shaped gap.
Too much regulation will cause the market worth to soar hence driving a
large increase in at least attempted revenue spent on the commodity. Whereas
a complete lack of regulation will saturate the market hence driving
suppliers and distributors out of the market, leaving a few megaliths.
Somewhere in the middle is a point where there is actualy a minimum of
the events you are trying to eliminate.

> With drugs, knocking out distributors has in many cases increased the
> selling price of the drug, making it actually more lucrative for street
> dealers to enter the market.

Actualy what it does is increase the perception of danger and difficulty in
the mind of the user and low-level dealer. The actual cycle is much more
complicated than Tim is alluding to here. First there is the total supply of
raw material, processing, and distribution. This sets a hard baseline limit
on the total available drug. Then we have a certain fluctuating percentage
of the population who use it. If we study the typical 'addict cycle' for
different drugs and users we see a multiplicity of cycles and patterns of
behaviour (eg most users who don't od kick the habit after a period of
time). Then we have the perception of those users on the availability of the
drug. There is also the percentage of tax that a society can support at a
given standard of living to support police activity specificaly for drug
control. The image that John and Jane Doe have on the impact of drugs on
their lives. And on and on... 

> This is not at all clear. If the crackdown on child porn, or porn in
> general, causes the street price to rise to $10 a picture, say, then many
> folks not producing child porn now might be tempted to get into the market.

Any many who had thought about it would decline because of the increased
chance of getting caught.

Specificaly how are you justifying the assumption that the net effect would
be to increase the total available distributors? It seems to me that such
an arguments natural extension would be that it would increase the net
number of movie makers not distributors. Consider, the number of distributors
is reduced by a very public campaign. Obviously two things come from this.
First is the actual reduction of available material and the perception that
distribution is a very dangerous game. So what does our enterprising
pedophile do? He buys himself a camera and proceeds to make his own for him
and his buddies. Hell, if he gets too worried he can start killing the kids
so they can't squeel.


   _______________________________________________________________________
  |                                                                       |
  |            Speak the truth, but leave immediately after.              |
  |                                                                       |
  |                                     Slovenian Proverb                 |
  |                                                                       |
  |     Jim Choate                                 ravage@ssz.com         |
  |     The Armadillo Group                        www.ssz.com            |
  |     Austin, Texas, USA                         512-451-7087           |
  |_______________________________________________________________________|

At 8:16 PM -0700 6/9/97, Jim Choate wrote:

>  ...    The actual cycle is much more
>complicated than Tim is alluding to here.

I agree. I was mainly reacting to Igor's simplistic model from Economics
that a tax on something will decrease consumption of it.

There are many, many other issues.

I didn't even mention one of the most basic ones: no one expects to get caught.

Thus, the increased penalties do indeed increase the averaged costs of
producing child porn. But a rule of thumb is that markets will thrive when:


          selling price > production cost

Or,

          selling  price - production cost = profits

Sellers of illegal mateials will factor in their chances of getting caught,
the punishment if caught, etc., as another part of the production cost. So,

   selling price - (production costs of item plus chance of being caught
times chance of being convicted times punishment if convicted) = profits

And so on. The higher selling price of a more restricted item may in fact
cause more sellers to enter the market. This was Lucky's point.

It's all very complicated. And strong crypto, of course, is on the verge of
making the risk of getting caught near zero. You know the rest.

--Tim May



There's something wrong when I'm a felon under an increasing number of laws.
Only one response to the key grabbers is warranted: "Death to Tyrants!"
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
tcmay@got.net  408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Higher Power: 2^1398269     | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."

Tim May wrote:
> It's all very complicated. And strong crypto, of course, is on the verge of
> making the risk of getting caught near zero. You know the rest.

I do not think that it is "on the verge", rather, it is there already.

I have a business plan. It presumes that I can RECEIVE cash
anonymously and operate in a certain city. As far as I understand,
a modification of existing protocols allows to implement anonymity 
of payees.

I open a trug trading center at, for example,
drugz@anonymous.mailserver.com. Alternatively, I can publish my public
key in alt.anonymous.messages.

Drug addicts would send me digital cash and specify which drugs they
wish to receive, and send me their public keys. I would place their
drugs in some random place in that city, and then send them (anonymously) 
the location of the place so that they can pick it up.

I do not see how I can be detected, modulo the security of anonymous
remailers. Since my reputation will be based on PGP authentication, I
will have an incentive not to cheat.

	- Igor.

P.S. I do not believe that anon remailers provide an adequate security.

On Mon, 9 Jun 1997, Igor Chudov @ home wrote:

> I do not see how I can be detected, modulo the security of anonymous
> remailers. Since my reputation will be based on PGP authentication, I
> will have an incentive not to cheat.

Three weaknesses in your scheme come to mind:

The bank could turn you in if you cash in the digicash (i.e. sting
operation would be to track a certain piece of digicash). So you'd have to
pass it on to others and not spend it.  

Failing that, the LEA's would then try to blast your reputation by saying
they are Joe Dimebag and that they sent you money, but you ripped them
off.  They do this enogh times, your rep goes down the tubes and everyone
will fear sending you e$.  If not the LEA's then your competitors, etc.

Third hack into your scheme: someone with loads of digicash and loads of
time (LEA, who else?) could buy lots and lots from you.  Eventually a
physical pattern would show itself in your drop boxes.  If you ever reuse
a drop location, you could easily be nabbed.


As long as the goods you deliver are physical, the above are huge factors
and make it not worth your while to do.

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At 11:22 PM 6/9/97 -0500, Igor Chudov @ home wrote:
>I have a business plan. It presumes that I can RECEIVE cash
>anonymously and operate in a certain city. As far as I understand,
>a modification of existing protocols allows to implement anonymity 
>of payees.

Receiving the cash is the hard part. This has been discussed extensively.
You can post to alt.drugs and advertise your wares. You can mail the wares
by simply putting them in random mailboxes. You can even receive the
purchase orders, though this is at present more difficult. What you can't
do is get the money securely. You need two way anonymous ecash for that
purpose. And that doesn't exist yet for all practical purposes. Though I
hear this major obstacle to free enterprise is about to be overcome.


--Lucky Green <shamrock@netcom.com> PGP encrypted mail preferred.

  Put a stake through the heart of DES! Join the quest at
  http://www.frii.com/~rcv/deschall.htm

At 09:08 PM 6/9/97 -0700, Tim May wrote:
>At 8:16 PM -0700 6/9/97, Jim Choate wrote:
>
>>  ...    The actual cycle is much more
>>complicated than Tim is alluding to here.
>
>I agree. I was mainly reacting to Igor's simplistic model from Economics
>that a tax on something will decrease consumption of it.
>
>There are many, many other issues.
>
>I didn't even mention one of the most basic ones: no one expects to get
caught.

This is certainly true. I lived in cities most of my life and encountered a
good number of sellers of various illegal merchandise. [On 6th Street in
San Francisco, everything from crack to counterfeit subway passes is on
sale. On SSI payday, the dealers line up at 8 am right across from the
check cashing place. This is taking place two blocks away from the main
police station, the municipal court, and the county jail. The dealers
conduct their business openly in plain sight of anyone walking to the
nearby subway station. Same for the consumers smoking glass pipes in the
alley half a block away. All of this is funded by your tax dollars.]

Neither party seems to think they will be caught.

>Thus, the increased penalties do indeed increase the averaged costs of
>producing child porn. But a rule of thumb is that markets will thrive when:
>
>
>          selling price > production cost

Medical cocaine wholesales in the US for $0.50 per gramm. I am told that
"street" cocaine with <50% active ingredient sells for about $50 a gramm.
That's two orders of magnitude difference between production cost and
selling price. No wonder that some of the smarter youths, the one's that
can keep track of money and understand business, choose careers as drug
dealers. What other good gives you similar profit margins? [I believe they
are missguided, but this must be hard to understand if you are 16 and can
make $1000 per day selling drugs.]

Well, child pornography might have similar profit margins. Or at least it
will, once Se7en and the feds succeed in raising the price.

Everything is the other way around,


--Lucky Green <shamrock@netcom.com> PGP encrypted mail preferred.

  Put a stake through the heart of DES! Join the quest at
  http://www.frii.com/~rcv/deschall.htm