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Lame excuse |
| June 28th, 2009 under Digital Rights, Music, Politics, rengolin, World. [ Comments: none ]
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While EA seems to have understood how to play the game, the Swedish court (and the European legal system) not only fails to get it, but also came with a lame excuse to reject the pirate bay retrial.
On one side, one of the judges was a member of several copyright protection groups and forgot to mention that before the case. This fact itself should be enough for a reconsideration of the decision, as his interests were too tied up with the case to have a fair opinion. But what bugs me most is the reason (or rather, the excuse) of why they are still determined to make them pay for their “crimes”.
The court found them guilty because, it said, they continued to operate the service even when they knew users were being pointed to pirated material.
So, they’re not keeping any copyrighted material themselves, and they have a clause that takes away their responsibility of whatever material is shared across their networks, but that’s not enough, they should have done something.
Let’s say they did have to do something, now we should apply the same rule to others as well right? What about the weapons industry? They know it’ll be used to kill other people, but they still make it and sell it (much worse than only provide the means). What about the tobacco industry? They know it’s not healthy, they know people will get lung cancer, but they still do it (and quite a lot of it).
What about the recording industry? Yes, the same one that is accusing pirate bay of “harming the artists”, forces artists to sign diabolical contracts where they get all the money and the artists get all the work. Who’s harming the artists in the end?
I completely agree with the court decision, as long as they apply the same rule to everyone. No more firearms (for civilians, at least), no more cigarettes, 50/50 for contracts. Fair is fair.
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Spam is good for you |
| April 27th, 2009 under Digital Rights, InfoSec, Life, Media, Politics, rengolin, Web. [ Comments: none ]
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Spam is good for you, at least better than you may think. Spam accounts for three quarters of all emails sent worldwide and some even attached carbon footprint to it (and here one of the reasons why it’s nonsense). But it’s good for you in ways that does not meet the eye very easily and very few people would even consider it as good in the first place.
Not only emails, think on how much regular mail you receive is really worthy and how much is spam, it’ll probably account for three quarters as well. How much of that is really mean, how that really hurts you so bad that you’d put the sender in jail for it?
Sure spam is a nuisance, sure it gets in the way of the real work, but at what cost are we, the society, willing to pay to eradicate such problem? Well, lets take a look on how spam really started…
Local business
You’re a window cleaner and recently moved to Shlobershire in a very quite little village. How would you let people know about your business? You can go on, talking to each one of the local residents but that’s a nuisance, so you print some pamphlets and post through the door of everyone.
Some will read and call you, some will be pissed off but most will just ignore you. You’ll figure out pretty quickly about those that got pissed off (if you live in a small village you know that already), but then you buy them a pint and everything is settled.
What’s the final cost? A few pamphlets, a couple pints and you got two great things: one or two windows to clean and the whole village knowing who you are. This is, by far, the cheapest marketing ever. The rest of us that can’t afford a real marketing campaign have to find ways to promote our business.
With all the fuss about global warming, organic farming and fair competition in business (if there is such thing), we want to promote and use more of local business than big brands. We’re loosing creativity, diversity and quality if we don’t.
ROI
Just like the local business, some people can’t afford big marketing campaigns. Either because they’re poor or because their business is not so legal in every country.
So, why people still send those stupid ill edited loosely formatted emails, even when it’s obvious what they want? Who wants pills, fake degrees or enlarge their penises? Well, apparently some do and the do reply and may well get what they want!
The return of investment is much, much better than most marketing campaigns. Take Microsoft’s campaign with Jerry Seinfield or the “I’m a PC” thing? It was the most expensive piece of crap ever done. Seriously, I prefer spam than that!
The return rate is very low, one reply in millions of email, but if they send billions of emails, go figure.
But that’s clearly bad, isn’t it?
Well, illegal activities are bad, of course. Either on-line of off-line, drug dealing is bad, banking scams are bad, but not all spam is a scam or a drug selling point.
First, people receive so much spam from normal companies (even those that they have explicitly opted-out) including broadband providers, software, telephone and TV etc and etc.
The smaller companies are still sending physical spam and it’s probably working much better than the electronic spam, but that’s the deal: it works and it’s cheap.
Second, what’s really illegal? Downloading a music you haven’t paid for is illegal? What if you will pay later? What if the author allowed you to? Ripping your CDs to MP3 to listen in your car is illegal? You have paid for it already!
Google has become target of many accusations of illegal behaviour because they host a number of websites, videos, personal profiles on social networks. If people started to massively upload child pornography to YouTube, would the Google guys be in jail? I bet my little finger they wouldn’t.
RIAA kills a kitten every time you download (or rip) a CD while governments detain people for years on maximum security prisons without a single charge, what’s really legal?
Pirate Bay scam
I still don’t believe it happened, even though it was on all major journals for a week, but the Pirate Bay guy actually got a jail sentence for owning a website that allowed people to share files. They’re not criminals, they’re not killing people or (more importantly) getting in the way of the course of business (after all, money is more important than peoples lives nowadays). They just set up a list of things.
File sharing is one of the biggest revolutions of the recent internet and more and more people are asking the industry to finally adopt the technique rather than fight it. Whether they like it or not, it will prevail.
What is worse, a few old ladies downloading very old music (unavailable from any shop in the world) or the fear that the recording industry poses on most governments today that allowed such a scam to ever being turn into reality?
One mistake does not justify the other, but many (sane) people are already saying: Stop fighting reality, come back to it, be part of it.
You can’t fight them, help them!
I can’t imagine a world where we wait people to deliver a pamphlet to hand-cuff them, or where someone is jailed for listening music in his player’s speakers. Unfortunately, we’re not that far from it.
Why spam works? Because there isn’t any other way for those people. Yellow pages? Who reads them? Journal advertisement? Banners? People got used to them and can ad-block automatically. Our brains are trained to ignore them, it’s just not effective any more.
Some companies say they can provide a much better ad experience for the users by spying their lives closer than their lovers. I would object that approach…
There are many (free) systems for local business, but none of them seem to cut it. Maybe because people are always trying to get money in return (weird world, isn’t it?) and end up putting paid ads bigger, colourful and in the front page, and let the real local business somewhere between marriages and obituary.
I have no idea how a system would get rid of spam once and for all and it’s not my cup of tea to think about it, but I’m sure there are many people that could tackle this problem, they just need a bit of money (from the government) and time. It’s not a matter of filtering emails, it’s a matter of removing the need to send them in the first place!
If governments are really worried about spam, let them be creative and help freedom, privacy and good relationships rather than the totalitarianism we’re seeing around the world.
A new world is rising, new machines are taking life much faster than most governments would like and the digital hand-cuffs are showing that none of them understand a bit of what’s going on. All blinds, living in their caves watching the shadows on the wall. Whoever cry wolf is right for no one knows what wolf really is and where is it. Technology is like children, the more oppressed they are, the more you loose control over them.
Einstein didn’t go to the US because he liked the land of freedom, he moved because he hoped (in vain) that they would know how to use wisely the technology he knew how to build. He knew that others would be able to build it and it was just a matter of time before any bomb was actually available. Holding it back was not the answer and he knew it.
I just hope people figure it out sooner rather than later, or 1984 will seem like a pretty boring fairy tale for our children…
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MySQL down the drain? |
| April 20th, 2009 under Devel, OSS, Politics, rengolin. [ Comments: 4 ]
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Almost 10 years ago, MySQL became a great open source database, part of the LAMP platform (Perl, not PHP) and had everything to compete with the big players in the next few years.
It was then that they have done major releases, with a huge set of new features each, almost once a year. The community was happy using, developing and integrating with other products. But it was around 2005 that the things started going bad…
Back in 2005, when I was still in the loop, I have to say that I wasn’t impressed with the progress that the database had. I wasn’t also impressed with the new view the board gave to big companies (such as Yahoo!) on what was a good bet and what wasn’t.
After release 5.0 (still the production release, irrespective of what Sun says) there wasn’t a major development until Sun acquired MySQL and only then they’ve released 5.1 which they better shouldn’t.
In the old days, MySQL became famous by not implementing foreign keys and transactions, something that every other database had, because of speed issues. That decision became the core of the company and allowed other storage engines (such as InnoDB and BerkeleyDB which had those features) to be integrated, making it very easy to plan your database, using only the features you needed where you needed.
Who’s to blame?
I’m not sure it has something to do with Oracle buying InnoDB and Sleepycat (and now buying Sun, which owns MySQL). Even with all the politics of Oracle slowly buying MySQL in pieces, I don’t believe it’s the whole story. I see much more of an internal conflict and a lack of vision (probably for the lack of guts to keep taking weird decisions and succeeding) than anything else.
Now, MySQL is going down the same drain InnoDB and Sleepycat went, but with a twist: the source code is still GPL. Sun screwed up MySQL in a way I thought it wasn’t possible, Oracle will do it much more efficiently, even if they still play as good guys, it is definitely the end.
Don’t take my word only, my good friend and MySQL guru Jeremy Cole is taking himself out of the loop to avoid the useless politics. Steven (Computerworld) also cannot see how any of the involved companies will get anything in return of this deal.
Is there a light at the end?
Could Monty’s fork become a new MySQL without all the fuss? Could he, the odd guy with odd ideas, put MySQL on the map again? I do hope so, but that will cost MySQL the hall of fame. They’ll need to start over again and eventually fail once they’re there again and restart…
It’ll be fun to watch, at least MySQL had a GPL license which always ease forks and future development. Long live the open source revolution!
UPDATE:
Two excellent articles about the same issue from The Register and Ars Technica.
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Who needs Microsoft’s FAT? |
| February 26th, 2009 under Computers, Digital Rights, OSS, Politics, rengolin, Unix/Linux. [ Comments: 2 ]
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Hydrogenated, unsaturated fat and cholesterol are long enemies of the public, but recently a new type of fat has been added: FAT.
Microsoft has filed a patent suit against TomTom about its FAT implementation on their Linux satnavs. This is a bit of a long story and Microsoft is not tired yet. Probably because of the recent losses with patents, they’re trying to get some profit for themselves.
Luckily, there is hope. The guys at End Software Patents can see some light at the end of the tunnel. Looks like the Bilski case can give precedence for rejecting the lawsuit of that (and many other stupid patents they’re claiming) based on the tangibility of mathematical algorithms (software) when they’re not particularly tied to any concrete implementation (hardware).
This was how it was done before in the US until the first case passed through that wasn’t attached to any particular hardware and then with the final revision in 1998 that they could patent even cake recipes.
Why not ditch it for good?
So, FAT is rubbish, 30 years old and close to zero evolution since then, why keep it? It’s true that there are many other filesystems around, much faster, safer, optimized and well designed, but FAT still has its market: on embedded devices. Because it’s simple and stupid, it’s quite easy to support it on very small machines with reduced RAM and CPU power. It’s also light-weight and fits well for small flash cards and USB storage. But the biggest reason to keep it is another: Microsoft supports it since its birth.
Would you buy an SD card that needs to install a driver to make it work? What’d be the point?
Yet again, because of the market domination (and not technical merits), Microsoft forced rubbish down everyone’s throats live for longer that it was expected. And now, they’re trying to get the profits by suing everyone that followed them for decades. What a nice way to say thank you!
Speaking of which, not only they’re happy by suing companies by using Linux (TomTom in this case and many others during the FAT fight), they’re also asking for the open-source community’s help to make Visual Studio 2010 a better product, isn’t that nice? How lovely is the American way of life, I guess the world will never be able to thank them enough.
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Paying tomorrow’s pension |
| February 16th, 2009 under Biology, Life, Politics, rengolin, World. [ Comments: none ]
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Pension plans are always too optimistic, and in this case, being optimistic is not at all a good thing. It’s actually getting the situation worse and, if nothing is done about it, it’ll be impossible to make the work force pay the pension for the huge retired population.
During the 80′s and 90′s we learned in school that European countries’ population pyramid had clear signs of development, because it had low birth rate and high life expectancy. Opposed, of course, to those from Brazil at that time, which was pretty much triangular, especially in the poorest regions.
This is obviously a problem as much more children are being born and dying, due to lack of education of the parents (that have dozens of children rather than a couple) and complete lack of health care. They were adopting the R-selection (as insects and lower organisms), where the more children you have, the higher are the chances of having grandchildren (and so, propagate your genes). It may sound terrible, but if you actually go there and talk to those people, that’s what they say. If you say you only have two children they think it’s an absurd, asking: “what would you do if one or two die?”. It’s not lack of love for all of them, it’s the hard truth they have to live with.
Now, terrible as it is, let’s see the other way around. In a high educated society, with excellent public health care, you normally see couples with none, one or at most two children. Seeing three is ok, but four is an absurd. How can you cope with all of them? Imagine the cost of childcare! (Note that this is no problem for those that have 15 in the situation above). What happens is that, with time, less children become adults and the number of retired people get bigger than those that pay for their pensions.
You may think that you (retired folks) have paid already your public and private pension in the past, but truth is that both the government and the banks already spent your money on something else (probably paying the pension of your parents). They never think soo long term as they ask you to. They force you to think on your own pension when you’re around 30 years old but all that money is being re-invested, lost and getting money from the government to pay the bill. Government money (from your tax and pension payments) were actually to pay other bills they had in the past, and they hope they’ll have money in 30 years to pay yours.
The big problem is that, today, the number of employed and retired people are still similar, but in 50 years it’ll be very unequal. With better health care (as we all expect), with stem cell research, gene therapy, cloning and other wonders of modern medicine we’ll probably be immortals by the end of the century. How can a small group of people between 20 and 65 years can ever pay for the pension of 65 until 200 years old? We don’t have to go so sci-fi, nor so distant in the future, some predictions are telling that the size of the work-force is going to be much smaller. Either the pensions payments go up or it’ll be impossible to pay up.
Have more children?
Until now the answer is “Have more children!”. Lots of couples in “baby-age” nowadays are having more than three children. They do it because, in developed countries, it’s cheap. Health care is free, schools are free, medicines and most services are free too. Who is paying for that? All of us. What happens with having more children is that, not only the work force is paying for the pension of the old, but also for the joy of the young. If it’s already a disaster to rely on such a small work force to pay the pension, how fair is it to demand them to pay for the young too?
But there is another, even bigger, question: Isn’t the population already big enough? Can we ever give decent food to every single living being (including animals, of course) that already exists in the world? Do we really need more? Shall we let people kill babies in China with the one-child policy while we have joy with our 10 children? If we really need those babies, shouldn’t we be adopting the “unwanted” Chinese, Ethiopian, etc?
Well, I particularly don’t believe in cheap charity. As my mother always said (and stuck for life in my mind): “Give the fishing pole and teach them how to fish”. So, I still think we should promote education and health care for countries in need so they can also have a population pyramid like the developed countries, but the policy of children, pension and taxes has to change. Of course, education and health care do take some time to evolve, and the children on those countries today won’t benefit from that, so plain old charity IS also fundamental to help those regions.
Managing the retirement age
People’s health is better today that it was 30 years ago. More and more people today retire older and older (quick Google for “increase retirement age” and you’ll see), and some countries are even increasing the official retirement age. That helps a lot, of course, but it’s only temporary and can work against the people. What happens, for instance, if the average retirement age decreases from one year to another? Would the official age reduce too? Is it fair for everyone, between one year and the other? I don’t think so.
One possible solution is to provide incrementing retirement payments, proportional to age and external remuneration. Say I turn 55 and, because of health problem, I need to reduce my work load by one third. I should be able to get one third of my retirement and keep on working, until I need another break and get, say, half of it by the age of 65. I could have gotten the full amount, but because I’m still working (or getting funds from elsewhere), I only get the amount proportional to what I was earning before and am now.
In numbers: With 55, I’m earning 60K a year. I have to work only 2/3 and therefore get only 40K. My pension is total of 30K, and 1/3 is 10K, so my new salary is 50K. With 60 years I need another break, so my new salary is 1/2 (30K) plus 1/2 of my pension (15K) = 45K. If I stop completely, I’ll only receive the 30K or my pension. Of course, if you want more you can always make a private pension plan and trust your bank won’t go bankrupt in the next 30 years.
Why this is fair?
- If you’re still working full steam you should not get money from the government.
- If you still want to work but can’t full time, you should get a proportional help from the government, but only what the government can afford to pay
- If you can’t work at all, you should receive the full amount, exactly what the government already pays you today
This is just an example of how things can be worked out, not intended to be extensive not exhaustive. There are plenty of room for good ideas, we just need to get people talking about the alternatives rather than only thinking about how to get MORE money.
Why is retirement SO important?
Simply because there is just too much people in the world. Malthus would say: “Kill’em all”. I’d rather say: “Don’t let them be born at such an enormous rate”. If the solution for the future recession is having more babies, we’ll get ourselves into yet another one, much worse, in the next generation, like a snowball.
We have to stop having babies right now, deal with the consequences right now and hopefully in the future, our grandchildren will be better off. According to the CIA, the world population has just passed 6.7 billion people. With birth rate at 20/1000 and death rate around 8/1000 (same source), it’s not going to lower so soon. Raising 2% per year and with mortality rate extremely lower than in nature (which varies a lot, but seldom reach 0.8%), it’s very likely that in a few decades we’ll be the only animal on the planet. In a few centuries maybe the only living being (if you can say so).
Will we discover how to do photosynthesis with melanin? Or will we become cannibals?
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The end is near, at least for software patents |
| January 29th, 2009 under Articles, Digital Rights, Politics, rengolin, World. [ Comments: 1 ]
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Ars Technica has a fantastic article on software patents in US, and how the process is slowly reversing to what it should be (and was) since the beginning.
They describe all the history, important cases, different points of view and how the whole thing was going nuts in this century. The system was due to fail since the big companies started paying billions for patent trolls, but it took a bit too long to actually start reversing…
Would that be Obama’s aura? Or does both events mean that the US people finally started to think on their own? Whatever that is, it’s in the right direction, I think.
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Who’s afraid of the big bad code? |
| January 14th, 2009 under Articles, Devel, InfoSec, Politics, rengolin. [ Comments: none ]
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What would Bruce Schneier say about the magic list that the NSA is putting together with Microsoft and Symantec of the 25 biggest errors in code that normally lead to a security flaw.
Don’t get me wrong, putting out a list of bad practices is a fantastic job, that’s for sure. It makes programmers more aware of the dangers, and as the article says itself, newbies can learn from experience before getting into a new field.
But the way that (lay) people take it makes it so magical that the practical side of such list is greatly reduced.
Order and size of the list
I understand that the order must have some sense, but which? Is it ordered by number of attacks in the last 12 months? Or by the sum of all reported losses caused by them? Or by number of such errors found in common code (on those companies’ code, of course)? Or by any other subjective “importance” factor from a bunch of “Security Experts”?
Also, why 25? Why not 30? Who says that the 25th is so important to show up in the list and not the 26th?
Real-world
We programmers know about most of them, know the problems they pose and normally how to fix them. We often want to fix them, but that normally requires some refactoring and now it’s time to implement those features that our client needs for the demo, right? We can think about that later… can we? Will we?
Than, NSA decides to make this a priority for the country and claim it as a national security problem. Big companies like fancy terms, and would strive to adopt any new standard that shows up in the market.
Then, comes down the VP of engineering and say:
“We need to make sure every programmer knows how to write code that is free of the top 25 errors.”
Done, he can put the GIF image from the NSA saying his company’s software is secure against all odds, according to the NSA and DHS.
Now, coders and technicians, tell me: Would any editor, IDE or compiler ever be able to spot those errors with 100% accuracy?
“Then we need to make sure every programming team has processes in place to find and fix these problems [in existing code] and has the tools needed to verify their code is as free of these errors,”
Of course not, but they will try, and Microsoft will put a beta on Visual C++ and other companies will tell their clients that their software is being tested with the new product and the clients will buy, after all, who are them to say anything about that matter?
Protect against who?
Now, after so much time and effort, 30+ companies and government departments working hard to come up with a (quite good) list of the most common errors that lead to security flaws for what?
“The real dedicated serial attacker will probably find a way in even if all these errors were removed. But a high school hacker with malicious intent – ankle-biters if you will – would be deterred from breaking in.”
WHAT?!?! All that to stop script-kids? For heavens’ sake, I thought they were serious on that… Well, maybe I expected too much from the NSA… again…
(Note: quotes from original article, ipsis litteris)
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Recursive hacking law |
| January 13th, 2009 under Articles, Digital Rights, InfoSec, Politics, rengolin. [ Comments: none ]
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According to BBC, the new European strategy against cybercrime encourages the police to hack the hacker.
I just wonder if the European Union has any idea of what the word ‘hack’ really means or how gray is the area between white hats and black hats and, more importantly, that both types live on both sides of the fence! Ask a hacker to define hacking and you’ll need a comfy sofa and someone else to actually hear the whole story.
The only problem with that is that it’s recursive. Once the police (and the private sector) hacks me, they become a hacker themselves, allowing me to hack them, on the interest of security based on the same law. Right?
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Review on root-kits in UK |
| November 12th, 2008 under Digital Rights, Politics, rengolin. [ Comments: 1 ]
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Please, if you are in UK, sign this petition to investigate the legality and fairness of DRM techniques, especially root-kits such as SecuROM.
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On Knowledge and Power |
| October 14th, 2008 under Politics, rengolin, Science, World. [ Comments: 7 ]
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Knowledge was always hand in hand with power. Still is, but recently there seems to be an unusually high value, higher than most concrete things, like land. The last 10 years of the financial market shows us a bit of this shift.
In the beginning…
… there was land. The old empires, from Sumer to Mongols, had a big fixation on land. The more the better. It was quite obvious, more land always means more food, slaves and tax payers. During that period, though, much was achieved on science. Astronomy, mathematics and philosophy were the biggest advances from that age, and they had a lot to do with power, as all good kings had their own good scientists around.
But there was something missing on that connection… The scientist had the power to give advices but the kings had the power to ignore them. Astronomy was entangled with astrology, chemistry with alchemy, biology with religion… The true scientist didn’t have any power whatsoever, as kings always liked best those that would say everything would be all right.
Land is not enough (aka. knowledge goes dead)
After the first period of land-setting, when all kings and landlords had their share, it was obvious that they needed a new coin to get richer. With the collapse of the trade network during the (so called) dark ages, new forms of power came to surface. Faith was by far the greatest. The catholic church (and lots of sub-divisions of it) became the most powerful entity world has known so far. This power comes from the opposite of knowledge, unfortunately, and many scientists lost their lives fighting against it.
Other things were also highly valuable, like gold and gems, vassals and slaves, soldiers and castles. And they had lots of them. With the discovery of the new world, there was a new boost for land, but the old emperors were smart already and knew that it was only a matter of time to consume all that land.
It was actually easier to work it around, when the Spanish found an unbelievable amount of gold on Central America. Most colonialists started to ripping off their colonies of whatever they could find, and knowledge, science or wisdom is hardly ever associated with power in that period.
People have brains, after all
Renaissance fighting bravely the dark ages (for science, at least), came the age of enlightenment, when science had, once again, its role on power. Descartes, Newton and many others were not only digressing, but defining the intrinsic mechanisms of the universe. Later on, Darwin would set the final course for life, and Adam Smith and Karl Marx would define the next centuries in politics and economy.
Those thinkers had a huge power in their hands, they were shaping how we understand life, the universe and everything, but yet concrete values were still concrete. Money was more valuable than ever, fact, but land was still a stable market. Trade routes, consumers and the food market was still at the top of most governments.
Image is everything…
When we get to the 20th century that things start to get fuzzy. The consumer market turned into the most important thing in the world. More than land, trade routes and food, consumers would buy anything. If they don’t need it, you can advertise as fundamental to their existence and they will buy it. Advertisement surpassed even faith in matters of power. It doesn’t matter your religion, skin colour, place of birth, as long as you keep buying. See the fantastic Story of Stuff to know more about it.
Nevertheless, science didn’t stop being important to power. The atomic bomb and the impressive developments on computing is a clear outcome of that. It was so important that the image of the scientist changed from the weird guy in the dark room to the visionary guy on wheelchairs. The computer nerd image changed from the long-bearded-large-glasses weirdo to the charming multi-billionaire on his private cruiser.
People are now trying to become smarter for some time in order to reach this grail, a clear demonstration of this power.
But with this power also comes corruption. Like in the old days, pure science is a rare myth. Governments will always prefer to invest in science that has a solid return in money.
The last 10 years and the image of knowledge
Even though Wall Street assured the world that the crisis of 1929 would never happen again, banks lending more than they should made a new crisis this year. Other crisis happened in the late 90′s and early 2000. The problem this time is the image of knowledge.
In the late 90′s, the trust on the power of the internet (a technological and scientific concept) was so great that many old investors got greedy enough to spend millions on crap or non-existent projects. The usual risk is invest in 10 to get 1 good return, but in this case the return was close to nothing. The image was everything.
A Harvard PhD’s paper was enough to release half-million investments. Closer to the dot-com bubble‘s climax, even smart kids would get their funding anyway, leading to the collapse of the whole internet and technological market.
Speaking of image, what better case than Enron’s? They sold the image of electricity, gas and even broadband! Today we call this vapour-ware, and they managed to make billions only on that. Fooling the government, all major banks in the world and consumers.
Short selling was again the cause of the new financial crisis. Blamed also for the 1929 crisis, it consist in selling something you will have in the near future, as in, selling before you buy. Two things can happen wrong with that:
- Chain of short-selling: when you sell to someone who will sell to another person (again and again) before you even bought it in the first place. It’s not hard to see that this is a recipe to disaster. This was responsible for the 1929 and the current crisis.
- Not buying at all: As soon as you get the money you don’t actually have to buy the thing anyway. You just pretend to have it and delay the delivery. You can also borrow from someone else and give it to the other, in a circular dependency and never (ever) having to actually buy anything at all. Enron and the internet bubble were cases like this.
What’s the knowledge’s role on that?
Simple: Knowledge is difficult to acquire and accumulate. It’s also quite often difficult to test and assure consistency throughout all the scientific domain. As with every single program written, it’s impossible not to have bugs. There is no such thing as a perfectly safe system.
Nobel prizes were won defining “the rules” of short-selling. When such beautiful differential equations are demonstrated by famous professors and the whole economic community laureates this very idea with a Nobel prize, it’s quite difficult to be sceptical about it.
The pen is mightier than the sword, knowledge is mightier than land. Houses lost their real value and began spiralling to imaginary prices. Banks hoping for increasing prices forgot that it was all a dream and lent more money than they had, and it all ended in this.
Quants, locked in their hedge-funds offices, with pens and computers, dictates the future of the market. They change the way we, non-investors, buy houses to live and raise families.
In turn, computer nerds define the way people buy clothes and books, search for knowledge and talk to their granny and grand-children. All this technology and science is shaping the world of tomorrow. It’s defining how we think, who we are and how our children will be.
Do your part!
If you have this power, do your part. If you’re a quant, do it with responsibility. If you’re a programmer, think about the future. Think about the world tomorrow, not just your pocket today. Freedom is more important than money. Education, health and security is more important than the financial market. Think on the planet, think green!
Above all, please be sensible. There is no win-win situations, someone (or ultimately Earth) will always loose. And the more you gain, the more they (or it) will loose.
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