David Miranda, Keith Vaz and Legitimizing the “Ordinary” State.

When I met David Miranda, he was introduced to me as Glenn’s partner. I nodded and smiled and was pleased to meet him. I chatted with David about his home in Brazil, about his 10 dogs and the banana-throwing monkeys that torment them, and other things. A few minutes later, after hearing again that he was “Glenn’s husband,” I whispered to a friend “Um, who’s Glenn?” “Glenn Greenwald” I was told.

David and I didn’t talk about Greenwald, Snowden, the NSA, or any other such thing. I was quite surprised when yesterday morning, while still in the French mountains for a Telekommunisten retreat with several friends, I heard that David was detained in the UK, and that his computer, cellphone, storage media, etc., was taken away from him.

The same day I met David, another friend’s backpack, also containing cellphones and storage media, was stolen from the bar we we’re in. It seems possible these things are connected, perhaps some clumsy SIGINT looking to intercept Snowden material destined for Greenwald.

Many voices have quite rightfully come forward to protest the detainment of Miranda, especially under the specious pretence of anti-terror legislation, and rightfully so. We must all protest the further degradation of our ability to travel and to keep possession of our personal belongings and data, and to maintain our privacy.

In doing so, we must remember that the rule of law and the power of the State is not guided by wisdom or fairness, but always by the interests of the most powerful. And always against whatever adversaries they face.

The state is not a neutral, disinterested mediator, uninfluenced by regard to personal interest nor free from bias or prejudice. The state does mediate among the classes, but always on behalf of the dominant class, and what’s more, there is nothing sinister or nefarious about this, this is nothing more than a material fact, like the fact that moss grows on the damp side of the rock.

The unequal distribution of moss on the surface of a rock is not a conspiracy against the sunny side of the rock, but simply a matter of irrigation. The moss needs water to grow, there is simply more of it on the shady side.

Just as moss needs water, power needs wealth, and the wealth of the most powerful provides the irrigation for the growth of the State, which would shrivel without it. The interests of the State are always ultimately driven by the interests of wealth. We can not change this. The only thing we can change is how wealth is created and distributed in society by producing and sharing differently and thereby change what the State’s interests are.

So long as the the wealthiest members of society depend on control and exploitation, the State will serve the interests of control and exploitation. If we can instead develop ways to build social wealth based on co-operation and equality, the State, to whatever degree it is needed at all, will serve these interests instead. It is not a matter of clandestine schemes to control the state, it’s a matter of irrigation.

British Labour MP Keith Vaz called the detention of David Miranda “extraordinary.” Yet, there is nothing “extraordinary” about the State attempting to intercept communications by physically taking away media and storage devices. The hollow protestation of Keith Vaz is just part of the spin to deflect attention away from the systemic fact that the State is using its power to protect its interests, and instead frame the story as the behaviour of particular government agents, or perhaps details of law.

By calling the detention of David “extraordinary” Vaz is defending the legitimacy of the State and its power of search and seizure in the “ordinary” case. He makes this clear: “it is right that the police and security services should question people if they have concerns or the basis of any concerns about what they are doing in the United Kingdom.”

And yet, even in the ordinary case, the State will continue to develop its capacities for surveillance and control in concert with its capitalist partners, and this is what will inform the “concerns” of police.

So, while protesting injustices such as the detention of David Miranda is very important, it’s perhaps even more important to remember that it’s not enough to protest the “extraordinary” but the “ordinary” even more so.

It’s far too simple to blame tyrannical law enforcers and clueless politicians while ignoring the laws of motion of capitalism and the profit motive. We must not be under the impression that all can be fixed by simply amending some legislation and reprimanding some border guards. We must always remember that our conflict is with capitalism itself.

I’ll be at Stammtisch as usual today, at 9pm, and I look forward to seeing everybody. Though I hate to say it, please bring only what you need. Let’s watch each others stuff, and do whatever we can to keep our possessions and data safe.


Vote WikiLeaks 2013

Correction: Assange is standing for the Senate, not Parliament, and would therefore become a Senator, not an MP.

Entering the Ecuadorian Embassy last Wednesday felt kind of like visiting a private house, a rather posh house right beside Herrods in the conspicuous consumption district of central London, but just a house nonetheless.

The Embassy is neither fortified, nor particularly guarded, neither compound nor fortress, protected not by rampart nor battlement, but only by diplomatic law granting inviolability to diplomatic premises. Ecuador’s Embassy stands in stark contrast with the barricaded garrisons typical of US Embassies around the world. Ecuador, one supposes, has a much shorter list of official enemies.

It’s been a few years since I met Julian Assange at 26C3, and the interim has no doubt been interesting times, as WikiLeaks and Julian himself rose from hacker exemplar to international cause célèbre, currently confined as an asylee in the Embassy for over a year to avoid extradition.

The relative smallness of the building means that the street is never more than a few metres away, always visible through windows and doors, yet beyond reach for Julian, unable to step outside.

Not withstanding his confinement on Hans Crescent, Assange is standing in the Australian Federal elections with the newly formed WikiLeaks party, with elections coming up on September 7th. He stands a good chance of becoming an Australian Senator.

Obviously, the first question that comes to mind is whether or not becoming a Senator would change his situation with regard to potential extradition or somehow allow him to leave the embassy and return to Australia to attend parliament, but Assange doesn’t think it would. He plans to serve as a Senator in exile, from the Ecuadorian Embassy in London. As he put it, the only way it would change the situation is make his confinement even more absurd.

The idea of the party is taking advantage of the political process as a public platform for the agenda of WikiLeaks, “Transparency. Accountability. Justice.” As their platform says, “Where the truth is suppressed or distorted, corruption and injustice flourish.” Clearly, the suppression of truth is not an Australian issue, per se, but rather a global issue and WikiLeaks has never had a policy focus, let alone Australian policy specifically.

WikiLeaks is a publisher, aiming to primarily make a contribution to journalism; “Our goal is to bring important news and information to the public.”

This makes the framing of a “WikiLeaks Party” a somewhat odd fit. Yet, my interest in it stems from my endorsement of the concept of “Counterpolitics,” the same basis of my support for the Pirate Party, and my proposal for the Debtors’ Party.

The goal of “Politics” is to impose the interests of powerful groups on the rest of society. The Political process provides a pretense of participation and thereby provides legitimization for rule. However, political participation requires the capacity to campaign, to donate, to lobby, etc, so in the end it’s a battle of capacities in which only the wealthy can push relentlessly towards their own interests. The interests of the less wealthy and less powerful groups can never be imposed by way of the political process, as those that are more powerful will inevitably have more wealth with which to resist them.

This is why the goals of less powerful groups must be pursued from the bottom up, by building and expanding alternatives, not by way of top down restructuring of society through the power of the State.

Thus, our political engagement is not politics proper, but rather counterpolitics. Our goal can not be to impose a new society from the top down, since only dominant groups can impose their interests that way, but rather to resist attacks on our ability to build alternatives.

As such, it doesn’t matter whether or not a WikiLeaks Party represents a coherent platform for ruling Australia, the party will never rule Australia, and we can not achieve communism by offering to manage capitalism for the capitalists.

What does matter is whether or not the WikiLeaks Party can, by way of participating in Australian parliament, and by way of using that country’s upcoming elections as a publicity platform, help defend our ability to build the new society in the shell of the old. Just like the Pirate Party and the proposed Debtors’ Party, I believe it can.

Australia, Vote WikiLeaks 2013!

I’ll be at Stammtisch at Cafe Buchhandlung tonight at 9pm or so, look forward to see you all there.

The Quantity Theory of Money is the Flat Earth Theory of Economics.

There’s an old joke that you can prove that the earth is flat with a simple experiment you can do anywhere: Jump!

Since scientists claim that Earth is rotating at a very high rate of speed, by simply jumping up as high as you can, you can prove it’s not true! If the Earth were indeed spinning at such a fast speed, wouldn’t you land hundreds of feet away instead of in the exact same spot you jumped from? Obviously the Earth is flat! QE god-damn D!

Quantity Theory believers also often start with a similarly personal scale from which to understand a macroeconomic question. They have a fixed amount of money. Money, to them, is like a pile of stuff. If you imagine that everything else there is to buy in the world is a similar pile of stuff, then, obviously, if you take the total amount of money in the pile of money and divide it up by total amount of stuff in the pile of stuff: you have the value of money.

If you increase the amount of money, by, for instance (in the flat earth vernacular) “printing” it, each “piece” of money in the pile goes down in value, because the pile of stuff still has the same amount of stuff. “More money chases fewer goods” as they say.

Joan Robinson frequently recounts that the great Michal Kalecki once exclaimed to her “I have found out what economics is; it is the science of confusing stocks with flows!” The trouble with the flat earth economists, is that they confuse the dynamic flows of production and consumption that make up an economy with static piles of stuff. Robinson further reasoned that “it is this confusion that has kept the Quantity Theory of Money alive until today.”

Just to start with, money is not something that is “printed,” the physical number of paper bills or minted coins is simply an artefact of the retail demand for such to conduct cash transactions. Money is either spent into existence by the government, or lent into existence by the banks. The amount of money created by government spending is a matter of government policy, the amount of money created by banks is a matter of the level of qualified demand for borrowing there is in the economy. In neither case is there any pile of paper, coins, or anything else that limits how much they can spend or lend.

A flat earth economist reasons that if more money is created (“printed”) the value of money necessarily goes down. This would only be the case if the total number of things to buy where a fixed stock. Not only that, it also assumes that any new money would be necessarily spent on buying things, and these things are locally produced.

In reality, of course, the number of things to buy is not fixed, in most economies, particularly in down-cycles, unemployment exists, and so does underutilized productive capacity. New money can be created in such a way so as to put more people to work and more capital to work to produce more things, as such, the flow of money and the flow of goods both increase.

And of course, not all new money is spent on locally produced goods, thus newly created money is also sometimes simply saved, or used to repay debt, or is sent abroad and results in greater imports and foreign savings.

When you add it all up, it becomes very clear that the amount of money that is “printed” (aka spent) by the government tells you very little about the level of prices on it’s own, this can only be understood within the context of sectoral balances, taxation levels, unemployment, utilization of productive capacity and local and foreign propensity to save the currency.

To put this in terms of a macroeconomic identity, the quantity theory of money can be expressed as MV = PQ. M is the number of units of money in our pile of money, and V is the number of transactions that occur in a given period, this must, by definition, be equal to the price level (P) multiplied by the real GDP (Q), our pile of stuff.

As Bill Mitchell argues, following Kalecki and Robinson, to render this a theory of inflation one has to assume that V and Q are fixed, in other words that propensity to save, invest and import never change and that the economy is always operating at full capacity. Since that is empirically demonstrable to be not the case, the assertion that an increase in M necessarily results in an increase in P is demonstrably false. This theory is as dead as they come.

So what is the real reason that zombie economic theories like the Quantity Theory continue to stalk the earth when they have been unequivocally refuted ages ago? Remember that all money is created in one of two ways, it is spent into existence by the government or lent into existence by the banks.

The Quantity Theory and the related monster mash of undead theories that go along with it are popular among proponents of social austerity because they falsely imply that “printing” money necessarily leads to inflation. This means that government should be artificially limited to spending only as much as it taxes. When tax revenues fall as a result of economic downturns, government should cut spending, just as the communities it serves need government spending the most.

This is really a win-win for financial elites with lots of money! On one hand, the immiseration of workers by way of austerity allow capitalists to push for lower wages and benefits, as the workers are in a weaker position to resist, on the other hand, without any infusion of money from the government, additional money needs be borrowed instead, thus increasing interest income for all those financiers smart enough to be very rich!

The Quantity Theory of Money is nothing more than a fable invented to convince the whole of society that they should have less, so that the very rich can have even more!

In any case, as is is my tradition, I will bring a small pile of money to spend on a signification volume of beer on Tuesday night, so join me at Toronto Stammtisch at The Embassy in Kensington Market, the rest of the Telekommunisten crew and friends and will be at Cafe Buchhandlung in Berlin. Please come!

Listen, Anarchists!

My fellow Anarchists! We have an insecurity problem. We need to get over it. We need to stop complaining about “Marxists” and build a heterodox communist movement with everybody who believes in working towards a society without classes.

Let me start with a joke.

Two men are sitting at the bar, one is forlorn about his recent divorce, the other proclaims, “If you had listened to my advice about love you would have saved your marriage!” The forlorn man, perplexed, responds, “but you’ve never had a girlfriend, much less a wife, what makes you think you know about love?” “Obviously, the fact that I know about love” the other responds, “is clearly proved by the fact that, unlike you, I’ve never been divorced!”

Anarchists, never having had their ways and means in charge of anything on any globally significant scale, and as result, never having failed on any signification scale, think they know everything there is to know about power. Like the people’s front of Judea, they militate against the Judean peoples’ front, and not the Romans. With apologies to Monty Python, you can picture the scene in an infoshop near you: “We must unite against the common enemy! Yes! The Marxists! NO NO THE CAPITALISTS!”

Some Anarchists spend so much of their time distancing themselves from so-called “Marxists” or “Leninist” or, when they really want to be scary, “Stalinists,” that you’d think that defeating capitalism is a secondary goal compared to settling the score over the transgressions of the past and winning told-you-so points in some imaginary rivalry for leadership of the working class.

Don’t get me wrong. Anarchism is right. Marx is not some infallible prophet who’s received wisdom may not be questioned. The thing is, you need to dig far into the grungy depth of obscure ideological echo chambers like the Socialist Worker’ Party to find anybody who actually thinks that way, so why bother refuting it? And yeah, Marx was not only fallible, but could be a jerk, he didn’t give due credit to the likes of Proudhon and Bakunin, and was not above using an impressively deployed array of misrepresentations and fallacies in his attacks on them. But come on, if you’re really surprised and scandalized by this, you need to read yourself some of Schopenhauer’s art of controversy. In their own time, both Proudhon and Bakunin where better known and more widely influential than Marx was, so get over it!

Ok, so Marx was a jerk sometimes. Proudhon and Bakunin where hardly sweethearts themselves, as their misogyny and antisemitism illustrates, not to mention Bakunin’s involvement with his ruthless, murderous, buddy Nachayev. It’s not like Proudhon and Bakunin never got anything wrong! Just like the contributions of Proudhon and Bakunin are in no way invalidated by their personal failings, neither are Marx’s, and they’re all dead now anyhow, so it’s a little late to rehabilitate them. Can’t we just admit that, despite their failings, they all made huge contributions to the struggle against capitalism and move on? Does the identification with “Marxist” and “Anarchist ” camps really help us? Is it about flying our gang colours, or getting on with, you know, the struggle?

Anarchists need to deal with arguments worth dealing with, and not feel like they have to respond to every single provocation, endlessly proclaiming “Look look! Some random “Marxist” said something wrong about Anarchism! Outrage!” There’s a great XKCD cartoon called “Duty Calls” where a man at a computer is being called into bed by his lover, but refuses to come, proclaiming he can’t because “Somebody is wrong on the Internet!” A similar cartoon could be made with an Anarchist being called into action in the struggle against capital, but says “Can’t come now! Somebody said something wrong about Anarchism in some totally obscure journal!”

We really need anarchist to grow up and help make the communist movement whole. The anarchist position is very important! Not their position on what Marx took from Proudhon without credit, or what mean and unfair things Marx said about Bakunin. Boo Freakin’ Hoo! Also not interesting is the burning questions of who was really at “fault” in the Spanish civil war or the Soviet experience, as if these historical outcomes were based on the personalities or opinions of Lenin, Trotsky or Stalin, and not the material facts of class struggle. These failings need to be analyzed as complex and multifaceted topics, not anarchism vs Marxism brownie points. No current involved in those events is solely responsible, or completely innocent, for what happened, we need to look beyond the sectarian blame-game and try to better understand the complex political, economic, social and geographic forces at work. It really is super pointless to try to pin it on Marx or even “Marxists,” as if that gets us anywhere.

The reason the anarchist position is important is to understand the limitations of state power. Communism can not be imposed from the top down, it must be built from the bottom up. This is very important to understand. The state is the servant of the ruling class, because the ruling class has the wealth to relentlessly push the state towards their own interests. Trying to give control of the State to an underclass is like trying to make a rock fly by throwing it into air and berating it to stay up there. An underclass, by definition, has less wealth than the ruling class, and therefore can never retain state power! Even in the extremely rare case it manages to seize it, no matter how well it manages what wealth it has, it will, inevitably, eventually, fall to the unceasing attack of the global ruling class, and it will inevitably be distorted and degraded beyond recognition by the fight for its life during the time that it does remain in power.

The only way to change the structure of wealth in society, is to change the way we produce and share, by producing and distributing wealth differently, we change the structure of society itself. The preamble of constitution of the IWW states this quite well: “The army of production must be organized, not only for everyday struggle with capitalists, but also to carry on production when capitalism shall have been overthrown. By organizing industrially we are forming the structure of the new society within the shell of the old”

However, the complete rejection of parliamentary action that many anarchists promote is also problematic. The goal of taking the state and imposing a new society is not the only possible motivation for parliamentary action! Our capacity for building the new society in the shell of the old depends on the amount of wealth and freedom that we currently have, and that level is clearly affected by the policies of the state, parliamentary action can help resist policies that degrade the conditions of workers by fighting for the maintenance of rights and benefits. Like workplace and community action, parliamentary action is another theater of struggle, and it is foolish to abdicate this struggle, simply because we understand that such activity alone can never achieve our goals! The struggle for communism must be waged on all fronts where inequality reigns, in the workplace, in the household, and in the parliament as well!

Anarchists! Stop being so childish and defensive, get over crying about “Marxists” for their transgressions against you, get over your sibling rivalry. Communists of all sorts are our brothers and sisters in the struggle! We’ve got plenty to learn from and teach each other, so lets stop bickering about long irrelevant doctrinal fights, and lets build a heterodox communist movement that can challenge the power of capitalism on all fronts!

Meanwhile, back in Berlin, Stammtisch will go on as usual at Cafe Buchhandlung, and I’ll be at Toronto Stammtisch number 5 tonight at the Embassy!

Communist Semantic Drivel, The Good Parts. w/ @schneierblog

My Telekommunisten colleague Baruch Gottlieb wrote an excellent, considered response to Bruce Schneier’s recent essay, “The Internet is a Surveillance State.” While Baruch shares Schneier’s concerns about the increasing prevalence of surveillance on the internet, the focus of Baruch’s response is to investigate the political and economic origin of this. Baruch explains that although Schneier is certainly right about this state of affairs, he misses the mark on the political aspects of it.

Acknowledging the essay, Schneier posts a somewhat unusual reply:

“This Communist commentary seems to be mostly semantic drivel, but parts of it are interesting. The author doesn’t seem to have a problem with State surveillance, but he thinks the incentives that cause businesses to use the same tools should be revisited. This seems just as wrong-headed as the Libertarians who have no problem with corporations using surveillance tools, but don’t want governments to use them.”

Now, if Baruch wishes to comment on this, he will, so I’m not going to engage to much with either Schneier’s essay, or Baruch’s response to it, rather I would like to comment on what is implied in Schneier’s response above.

First of all, it should be obvious that the second part of the comment, claiming that Gottlieb is somehow a champion of State surveillance, is very obviously a straw man argument, which Schneier enthusiastically tears down with an irrelevant dismissal of “Libertarians.” A red herring.

And yet, remarkably, these are not the only logical fallacies in this short paragraph, for Bruce also deploys a tidy out-of-hand dismissal, using the term “semantic drivel,” and while not explicit, even the label “Communist” appears to be imply a guilt by association. So, a straw man, a red herring, an out of hand dismissal and perhaps an ad hominem, all in just a few sentences!

I don’t want to single Schneier out here, Bruce is a brilliant and insightful commentator and analyst. Who among us has not blustered on occasion when we’ve felt indignation?

What’s interesting to me is the source of the indignation.


What is causing Schneier to act-out in this fashion? I suppose the answer lies in the fact that despite the fallacious dismissals, Schneier notes that “parts of it are interesting.” This communist semantic drivel has some good parts! Something stuck a chord.

I’ve never met Bruce, but when smart people are overcome with indignation and bluster, it’s usually because they feel threatened. They feel unsure, and this feeling makes them defensive, makes them lash out.

I don’t believe that Bruce is threatened by Baruch’s response itself.  But rather, there is something in it which challenges, his world view, and his sense of place in the world.

Baruch’s essay recalls Schneier’s closing comments, as a point of departure: “Welcome to an Internet without privacy, and we’ve ended up here with hardly a fight.”

Baruch, citing EFF, The Open Rights Group, and others, notes that we certainly have fought! You can add many others to that list, including Schneier himself. We have fought! We have fought and lost.

In order to understand the reasons we have fought and lost,  you need to address the structure of wealth and power in our capitalist society, which is what Baruch tries to do, and I wont expand on that here, it’s all there in his essay.

Schneier, perhaps, is not quite as ready to admit we’ve lost, that he himself has lost. This might explain the amnesia, refusing to remember the fight at all.

I hope his indignation is a sign his amnesia is passing, and he’ll soon be ready to confront the true cause of his disappointment with what the Internet has become. Once the initial revulsion and indignation passes, he may realize that the antagonist he is searching for is capitalism, not the laziness, stupidity or apathy of “we,” the masses, who supposedly neglected to fight, or the critical “semantics” of communists.

The problems he so expertly describes result from the profit motive itself.

The Many Tentacles of Octo P7C-1 at @transmediale #BWPWAP

Though Telekommunisten has been a participant in transmediale in some capacity for several years now, this year, as a partner of the festival, was by far our largest involvement to date.

The Octo P7C-1 installation, was not only loud, active and physically huge, occupying the entire building with about a kilometer of tubing, 8 end stations and the P7C-1 central operating station, but the project was also the largest collaboration, both with the number of members of the Telekommunisten network involved, and the number of partners involved.

Kristoffer Gansing and Tatiana Bazzichelli came to us in August of 2012, since R15N was the Official Miscommunication Platform of the previous year’s festival, they wanted to work with us early, as a partner, to plan the Miscommunication Platform for the upcoming transmediale, they shared the #BWPWAP theme with us, and asked us if we could do something with a pneumatic tube theme, since we had discussed our mutual admiration for the technology and interest in Berlin’s system on previous occasions.

None of us knew yet what Octo would become.

As the latest installment in the Miscommunication Technologies series, certain components of the artwork where evident from the beginning. Octo is perhaps the most clear demonstration of a centralized topology possible, and so the idea of Octo as a global domination minded start-up seeking to capture physical delivery by offering a business model based on control of user data and interaction. Once again, Telekommunisten designer-in-chief Jonas Frankki, created the graphic identity of the work, brilliantly using a cartoon octopus with a peculiarly neutral expression to express both the topology and global domination ambitions of the start-up.

However, Octo is more than just a social fiction or electronic telecommunication system, its very physical, and actually engineering a large scale pneumatic post system was the largest undertaking Telekommunisten has attempted to date.

Fortunately, electronic artist Jeff Mann, inventor-in-chief, had some experience with this. Jeff’s work draws out tensions between notions of utopian industrialism, personal theatre, and the evocative enigma of electronic equipment.

Jeff invented what was to become the Octo P7C-1 system, suggesting that we could use plain-old vacuum cleaners and drainage pipe to build the system. We demoed Jeff’s concept at a ReSource Transmedial Culture event and it was clear that this was not only going to work as pneumatic system, but also as a wonderful sculptural and audio installation. It was everyone’s first glimpse of Octo. We where all convinced and excited.

Next, we needed to prove the concept to Raumlaborberlin, the transmediale architects, and the Haus der Kulturen der Welt.

Using one of the Shop-Vacs that was later to be installed in the central operating station, we propelled a full 500ml can of beer through 50m of drainage pipe stretched across the Podewill courtyard, up into a 3rd story window, and down the hall.

Amazingly, it worked! Not only did it work, but it looked and sounded great.

Over the next next few months, right up to the last minutes before transmediale 2013 opened it’s doors, we worked with the HKW and Raumlabor, who designed the chaotic alignment of the tubes throughout the building, and created the 8 end stations. Jeff, drawing on his research into the nature of technological life and its cultural representation, designed and built the beautiful P7C-1 central operating station, which was almost certainly photographed more that Mount Fuji during the run of the festival.

And though the physicality of the work is on a scale much larger than any previous Telekommunisten work, the performative aspect of Octo was also more prevalent.

Telekommunisten director-in-chief, Baruch Gottlieb directed the many facets of the project towards a coherent whole, bringing new emphasis to the performative fiction aspect of Telekommunisten’s work though the lens of his concept of the biographical chronicle of labour. All the transmediale volunteers that operated the central station and attended to the end-stations, and all building maintenance staff that was constantly adjusting tubes throughout the building extended the work as labour theatre. Baruch worked closely with long time member of the Telekommunisten network, Diani Barreto, to create the character of Octavia Allende Friedman, CEO of Octo Corporation, a character which Diani played to great affect, both in person at Transmediale, and online, as a social media power house, who amassed well over a thousand friends and followers in just a couple of weeks.

It was also our first time working with Julian Gough, who played the role of Octavia’s personal biographer, a role we all hope we he will reprise as the legend of Octavia goes on.

As usual, Telekommmunisten Chief Communication Officer Mike Pearce, helped make our message simple and concise, while Chief Operations Officer Rico Weise handled our administrative work.

Although you kinda had to be there to really get it, we’ve collected some pictures and videos here:


I can’t thank everybody enough for helping us pull this off!

We’re very interested in showing the work again, so we encourage adventurous curators to contact us.

And yup, I’ll be at Stammtisch tonight at 9pm, so come have a drink with us.


Kind Regards,

Dmytri Kleiner

Today: Octo stakeholder debriefing /// stammtisch

Octavia Allende Friedman has left Berlin, jettsetting on, where to? Hong Kong? Milan? Havana? Perhaps only her personal biographer knows for sure.

Meanwhile, members of the Telekommunisten network will be present as usual, at Cafe Buchhandlung, to greet one and all and raise a drink to a successful launch of Octo P7C-1 at transmediale.

Many deserve a cheer for their amazing contributions to Octo.

Jeff Mann, chief inventor and head of pneumatics, creator of the P7C-1 prototype, contributed decades of research into pneumatics and art
machines to his vision for the tubular system, and his master creation, the P7C-1 central operating station.

Jonas Frankki, Chief Designer, head of graphic identity, created the powerful branding and corporate identity that so perfectly expresses the numerous layers of the project.

Baruch Gottlieb, Chief Director, head of labour dramaturgy, for tirelessly directing the many facets of the project towards a coherent whole.

Diani Barreto, Chief Executive Performer, head of social representation, who brought the project persona to life online and at the festival.

And thanks to our Chief Communication Officer, Mike Pearce, who works towards bringing our often complex, perhaps even convoluted message, to the general public by adding simplicity and concision.

Behind the scenes, Rico Weise, Chief Operations Officer, manages the ever expanding administrative flow.

Not to mention our valiant team of ‘yellow-shirts’ the OCTO central and remote station volunteers, taking the smooth running and efficient delivery of OCTO P7C-1 to heart and ensuring we made a great demo for our current and future investors!

Please come and celebrate with us, share, retweet, all are welcome!

Cafe Buchhandlung is at Tucholskystr. 32

Here is a map: http://bit.ly/buchhandlung

9pm on.

TODAY: Octo Investors Meet & Greet at Cafe Buchhandlung /// Erzatz Stammtisch

This evening we’re having a informal Meet & Greet for Octo Investors and members of the Telekommunisten Network, if you’re an Octo investor or thinking of becoming one, come by and have a drink and chat with us. psychomedia analyst DJ Podinski of XLTerestrials will provide musical entertainment along with a special performance of three Yidish Workers’ Songs by the brother of Octavia Allende Friedman, CEO Of Octo Corp.

The event will take place at

Cafe Buchhandlung
Tucholskystr 32
map: http://bit.ly/buchhandlung

Starting about 10pm.

Octavia Allende Friedman will be in attendance along with members of the Telekommunisten network.

Please join us and pass this information on. Don’t miss out on the investment opportunity of the epoch!


If only the hot air of its supporters where as limited in supply as Bitcoin itself.

Correction: The original article mistakingly claimed that an LA Times quote used in the article was from anarchist-capitalist economist David Friedman, son of Milton Friedman, but it is a different author, David Friedman, a Senior Fellow at the New America Foundation.

I only have a few minutes for a post today, so this will be brief, to start with, I’ll be at Stammtisch late today, probably around 11pm.

Last week I wrote about Bitcoin and the Public Function of Money

What started as a trickle, grew into a gusher of economic quackery, as Bitcoin proponents came out of the woodwork to add their 0,00002 bitcoins to the discussion.

As I mention in the previous article, Bitcoin is a very significant development, I am pro-Bitcoin. But it’s remarkable how much zombie economics lurks in the Bitcoin trenches.

The most significant response, in terms of time spent typing, at least, comes from Erik Voorhees, “a Bitcoin entrepreneur” who concludes: “There were many other fallacies in Dmytri’s article, but this one on the nature of money’s origin and purpose is crucial. Money does not originate from the State, and does not derrive its virtues from compatibility with tribute. Indeed, as Bitcoin will prove, money functions best when the State’s coercive perversions are far removed.”

Never mind that that Erik does not appear to be familiar with the meaning of the term “fallacy” (hint: it does not mean wrong), but his article depends on the idea that the origin of money and money prices is barter, Erik is quite clear: “The origin of money is barter. In fact, money derives directly and unavoidably from barter.”

So, since I’m in a bit of hurry, I’ll just repost what I added to the comments section:

@Erik, I have to admit it’s a little tedious to respond to articles that depend on long discarded nonsense like the barter origin of money. We know from anthropology, most recently written by David Graeber, that money prices do not predate taxes, and that there was no barter before money, or even commodity prices defined in other commodities. The barter origin theory of money is well know to be false. So before you call other people’s understanding of money “misguided” you should perhaps update your own scholarship on the subject.

Anthropologists gradually fanned out into the world and began directly observing how economies where money was not used (or anyway, not used for everyday transactions) actually worked. What they discovered was an at first bewildering variety of arrangements, ranging from competitive gift-giving to communal stockpiling to places where economic relations centered on neighbors trying to guess each other’s dreams. What they never found was any place, anywhere, where economic relations between members of community took the form economists predicted: “I’ll give you twenty chickens for that cow.” Hence in the definitive anthropological work on the subject, Cambridge anthropology professor Caroline Humphrey concludes, “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing”
a. Just in way of emphasis: economists thus predicted that all (100%) non-monetary economies would be barter economies. Empirical observation has revealed that the actual number of observable cases—out of thousands studied—is 0%.
b. Similarly, the number of documented marketplaces where people regularly appear to swap goods directly without any reference to a money of account is also zero. If any sociological prediction has ever been empirically refuted, this is it.
– David Graeber

Just to repeat for emphasis: Cambridge anthropology professor Caroline Humphrey concludes, “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing”

I guess just like religious fanatics that don’t stop making ridiculous claims about history from the Bible just because they are disproved by material fact, the barter origin of money crowd are likewise determined not to know that money did not emerge from barter.

But beyond Erik’s incorrect anthropology of money, he makes the claim that “money functions best when the State’s coercive perversions are far removed.” and here I agree with him compeletely. However, we must understand what function money actually performs in society.

Erik and others would like to believe that functions like financing public goods and counterbalancing financial cycles and sectors are not necessary so that a pure-specie form of money will do, but that is not the case, not even celebrated right-wing “anarcho-capitalist” economist believe it.

For instance, in the Liberation Technologies list I posted a quote from David Friedman.
In a 2002 article for The Los Angeles Times, Friedman wrote “Until U.S. economic growth is more balanced and its emerging public finance challenge more manageable, it’s likely that our economic prospects will fail to fire investors’ and consumers’ enthusiasm. An expanding public sector may be necessary at a time of global terrorism.” Ok, so he invokes Terrorism, but non-the-less, Friedman, the anarcho-capitalist economist, is admitting that fiscal stimulus is needed to counterbalance sectors.

Much like his father Milton Friedman, who did much to make Von Mises and his ilk better known in the mainstream, non-the-less also understood the need for counter-cyclical fiscal policy, as my original article explains.

The fact is, until we develop non-State ways to provide the socially necessary functions provided by State money to freely associating, networked communities, we will not move beyond the State form, because these functions are necessary and having a monopoly on them will keep the State in place. But that’s all in the original post, so even if Erik and co refuse to know this, I don’t need to repeat it here.

Now, the reason that many do refuse to believe that these functions are necessary come from two other incorrect views common among the zombie economics set, in addition to the false belief that money came from barter, they also usually believe in the quantity theory of money and the efficient market hypothesis.

The former, like the barter origin theory, is well known to be false, though there has been literally thousands of papers that prove this, a nice blog from Bill Mitchell comes to mind where he argues: “They trot out phrases like “too much money chasing too few goods” – a vision derived from the old classical Quantity Theory of Money, which via an identity (that is, an accounting statement) – MV = PQ (where M is the money stock, V is turnover or velocity of that stock in transactions per period, P is the price level and Q is real GDP) – links monetary growth to prices.

So it is a matter of accounting that the money stock (M) times the velocity of money – the turnover of the money stock per period (V) is equal to the price level (P) times real output (Q).

To render that a theory of inflation, the mainstream had to directly link M to P and they did that by assuming that V is fixed (despite empirically it moving all over the place) and claiming that Q is always at full employment as a result of free market adjustments.”

The Quantity theory of money depends on the idea that velocity in the economy is fixed, and that there is never unemployment. As both these assumptions are false, the theory is also false.

But underlining all this is a belief in the efficient market hypothesis. That is the real reason the faithful want to believe the barter origin and quantity theories so badly, because they want to deny that we need any public forms because they believe that markets are magical efficiently mechanisms that always allocate productive assets to the most productive use, and always justly reward participants according to their contributions.

This is, of course, also false. Just like bureaucratic processes, markets also have asymmetries of power and information, and the singular focus on profit fails to adequately address other issues like social and environmental justice.

Neither markets nor planning are inherently efficient, both are equally able to misallocate productive assets and result in unjust and unsustainable outcomes. And both will remain components of human society that we need to improve.

Ok, more on that later, but I need to run now, so see some of you in the wee hours at Cafe Buchhandlung.

Bitcoin and The Public Function of Money

I want to write a bit about the public function of money, especially as compared to the market function of money, in light of some of the recent discussion about Bitcoin.

Bitcoin is already a very useful technology due to the fact that it allows transactions to take place without any central authority. This alone is significant. The technology behind it is also perhaps applicable in other areas, such as the Namecoin project to replace the centralized Domain Name system.

Does Bitcoin have the potential to replace Government fiat money? No. It doesn’t. It only has the potential to be one commodity form within the money economy.

Countless books and papers have described money, money is a very complex thing which serves many functions. Keith Hart has written about the “Two Sides of the Coin,” heads on one side, tails on the other. One way to interpret this might be to contrast between the public function and the market function of money.

The origin of money is tribute. The source of money is the public, in whatever form, whether empire or democracy or something else, money is spent on public expenditure and demanded back as tribute. Whatever its commodity value, whether minted on gold, printed on paper or electrified as bits in a database, this sort of money has value because it can be used to fulfill tributary obligations, for example, it can be used to pay taxes. As the entire source of this money is government spending, the amount of this money is determined by the amount we want to provide on behalf of all as a society. This is the “Heads” side.

Not all economic activity is done for money. Much of it takes, and has historically taken, gift and kin-communal forms, where work and wealth is shared without specific prices for specific commodities, but rather on a basis of social trust and reciprocation. Markets emerge as economic activity extends beyond communal and neighbourly forms, markets extends the social to beyond the kin-communal, and along with such social distance come more transient relationships that can not rest on trust and reciprocation, and thus must be encompassed by spot transactions, and as a result specific prices for specific commodities and specific price relationships between commodities. With these transient relationships comes money. But this sort of money is different.

Commodities can also be traded directly, even if their relative worth is counted in “Heads” money, and trade can also be done on-account, by credit. The amount of which is not limited to the physical amount of “Heads” money in circulation. In the wider economy, money is endogenous, the amount of money circulating in the economy is not a function of any monetary base, but rather is a function of the amount of things we want to make and do for each other. More specifically, the amount we want to make and do for each other for money. This is the “Tails” side.

This is vertical money and horizontal money. Vertical money is created and destroyed by the public, horizontal money expands and contracts as a result of the economic activity of private individuals and their incorporated forms.

Money that has a commodity base, i.e. Gold, is not completely rooted in a particular public form, since it’s value can cross international borders.

This is where Bitcoin, a digital specie essentially, emerges as a new and rather unique form of money. It’s built-in cryptographic limits on supply make it essentially a virtual commodity form of money, fixed and “hard”, like Gold, yet digital and transferable electronically across global telecommunications networks. As such, it has attractive features as both means of exchange and store of value. Yet, while it certainly is useful on the “Tails” side of money, as one of the various kinds of assets circulating in the global market economy, it does not serve public function well. There is a reason that modern public forms of money are not commodities, why modern economies use “fiat” money, money that is not based in or guaranteed by conversion to any sort of commodity.

If the public restricts itself to commodity-money for public expenditure, this means that what it spends must be limited to what it taxes plus what it borrows, since commodities have a fixed available supply. And though many ignorant or simply disingenuous commentators, such as promoters of austerity, present this to be the case even now, in a modern monetary economy based upon fiat money issued by the public for public purpose, this is factually not the case.

The thing about public money is that we can have as much of it as we want to have. How much we spend relative to how much we tax is a public policy choice, and the right-wing dogma that the appropriate choice is for the budget to be balanced, for taxes to be equal to spending, is universally understood to be false, even among the most celebrated right-wing economists. In his 1948 article “A Monetary and Fiscal Framework for Economic Stability”, “Chicago Boys” patriarch Milton Friedman proposed a counter-cyclical policy, where government spending would be increased beyond taxation during economic downturns, similar to Abba Lerner’s “Functional Finance” which is often referred to as “Keynesian” economic policy. Whatever their ideological stripes, there is little disagreement among economists that to the degree that public budgets need to be balanced, they must be balanced relative to economic cycles and sectoral balances and not merely between annual public spending and taxation.

The balance between spending and taxes is simply the balance of the public “Heads” side of the coin, always in counter-balance with the private “Tails” side of the coin, as expressed by the activity of private interests in the global market.

It is no secret that the national State form is unsatisfactory. Not only is it burdened by its aristocratic roots, and not only is it corrupted by the fact that its modern form is largely captured by the international corporate elite, but the State is clearly unsatisfactory for modern publics as a result of the fact that static territorial forms are increasingly ineffective and inappropriate structures to serve global, distributed communities.

The public form has to evolve from the state form to the networked form, but for that to happen, new, networked public forms will need to emerge that are able to take over the socially necessary public functions. Including the management of forms of public money.

The critical feature required of public money is that we can socially determine how much of it there is, and how much of we want to apply to public purpose. We need ways to create and destroy public money so that we can can have a counter-balance to private activity, to manage cycles, to counter-balance economic sectors, and to socially pursue public objectives, such as health, education, and justice.

Thus, Bitcoin’s innovation in terms of creating a networked form of commodity money is not useful in creating networked forms of public money, and as a result it does not create a way for networked public forms to replace the current State forms.

I’ll be at Stammtisch this evening at 9pm, please come if you’re in Berlin, if not, R15N continues at Mal au Pixel in Paris, you can join the network by calling +33 181 97 97 11