one step forward, two steps back

The two biggest policy concerns surrounding online activities are most likely privacy and freedom of speech. Citizens around the world are fighting for their right to privacy and free speech on the net but also counterproductively, fighting to monitor and keep criminals out. So obviously, with these two opposing forces it seems like we're doing an endless dance back and forth. In good news, Standford students are designing a "Do-Not-Track" software for internet browsers. As it stands websites collect information about users which allows them to better advertise and market towards them. This software would stop third party websites from collecting this information, protecting internet users' privacy. Combined with legislation (which is in the works) to force companies to respect the "Do-Not-Track" software, this will be a great step forward in the pursuit of internet privacy.

Unfortunately, freedom of speech on the internet has been taking a hit in the last couple of weeks. As we watch individuals gaining more privacy we see the US government's privacy being violated with the latest WikiLeaks release of US diplomatic cables. Of course, I wholly support WikiLeaks in its quest for transparent international relations (provided that innocent names are redacted). The treatment which WikiLeaks and its founder Julian Assange are receiving in the international community is one which is sad for the state of freedom of speech on the internet. A year ago President Barack Obama and Secretary of State Hillary Clinton praised the freedom of information which the internet provides (in criticism of Chinese censorship) however now, faced with WikiLeaks' latest leak, they are condemning the very idea of freedom of information. Meanwhile, companies, like Amazon and Paypal are dropping their support of WikiLeaks supposedly because of violations of Terms of Services, however as the list grows it becomes reasonable to question what the motivation is and who gave the executive order. Whoever is behind the attacks on WikiLeaks, the outcome is the same, one step back.

On a similar story concerning freedom of speech on the internet, outshined by the stories on the leaked cables, the US government recently seized dozens of internet domains responsible for sale of counterfeit products as well as distribution of pirated material. In the list of websites shut down was bitTorrent's search engine as well as a number of websites which were dedicated to promotion of hip hop music. The law which was passed allowing the US government to take down these websites essentially allows the US government to block any website which hosts copyrighted material, ranging from piratebay, to youtube, even to Facebook and other websites which allow for the storage of information. Again, this appears to be another step back.

Hopefully, these latest developments will result in greater awareness for the cause of freedom of speech and privacy on the internet.

The Virtual Economy

Warning: This blog is long and boring but has brief references to World of Warcraft and Muse.

When looking at economics and industry there are three basic divisions.

Primary Industry: Resource Extraction, Mining, Forestry, Agriculture, Fishing
Secondary Industry: Manufacturing, Construction, etc.
and Tertiary Industry: Retail, Services, Banking

Quaternary Industry: I will be focusing on Tertiary Industry which makes up over 60% of the economic output of developed nations. Specifically I will focus on the sector of the tertiary industry that some have dubbed the Quaternary Industry. The tentatively named Quaternary sector is the sector of the economy devoted to development and sharing of information. This includes a wide range of services from the internet, to research and development, to entertainment, to education. This sector is all about buying and selling information, knowledge and ideas (which in itself seems an odd phrase). Its weird to consider the fact that in a society where we consider thought to be free, something as intangible as an idea can be bought or sold. Aside from that, where is the resource to back it up? Should we be concerned that a majority of our economy is based on immaterial information locked up in peoples brains as well as fragile servers that crap out if a stray dust particle lands on them?

Virtual Economies: Its an idea I've toyed with for years, since I saw the first online communities pop up. It is the idea that virtual goods and information could be bought and sold from an online world that could in theory develop its own economy. Of course we aren't talking a world-class currency (yet) but these do exist. Second Life is a virtual world which boasts its own virtual currency and economy. Citizens, who comprise a wide variety of nationalities pay in for the services which the Second Life world supplies and some companies even make money from Second Life services. Essentially Second Life has imports and exports as well as an internal economy despite being a completely virtual non-existent world. Other examples of virtual economies are not so complex, like online MMoRPGs such as World of Warcraft where virtual economies develop out of the illegal trade of in game items for real money. These pay to play games reflect a different side of the virtual economy though.

Entertainment: The entertainment sector of the quaternary industry revolves around a lot of services, including music, video games, and movies. In most cases these economic interactions represent the end of the line with final sale and with an increasing dedication to digital media there is no resale value in these purchases. Essentially in the past 10 years entertainment has become a service, and in some cases just a transfer of information, rather than a tangible product. This is entirely due to the internet which has even gone so far as to remove certain facets of entertainment from the economy almost entirely as pirating the latest Muse CD becomes more and more popular to the frugal consumer.

The Internet: This is the least tangible of all. Imagine this, you pay a subscription to a website that gets paid by advertisers who are selling domain names and server space to a company that sold the web design to the website you're currently viewing. Cyclical and confusing is the nature of the internet economy. It is based solely on the growth of the internet which at the present moment, almost every industry in the world depends on. Almost all business interactions (legitimate or not) rely on the internet in some way. Companies put money into the growth of the internet and in turn the receive services which potentially make them money. Other companies, some of the wealthiest, Google, have made the majority of their money solely on the internet, their goods and services locked up in servers and data. If I had to hazard a guess how much money is locked up in the internet I would have no idea where to start, considering the vicious cycles I outlined above and the fact that all industries seem to now rely on the internet.

The Implications:
-most of our economy is based on fragile things knowledge, data, info., etc.
-we don't have any concrete resource to back up these services
-these are entirely new untested, unquestioned industries except for education

Concerns: Should we be concerned for the economic stability of such a system? If billions of dollars are on the line is the threat of cyber-terrorism significant? What back-ups are in place in the event of cyber-disaster? Can we maintain the internet economy? There is little economic theory on the subject, maybe because its not a problem. I have only a vague understanding of economics but it seems to me that too much money is tied up in services that cannot be backed up with resources. If you want to be guaranteed a job in the event of a cyber-disaster, go into the primary or secondary industry, preferably on a local scale.

These are the unintelligible, unorganized thoughts on current economics by an average blogger, hope you enjoyed.