Indeed, the encryption of computer data may well be the most powerful tool that peaceful individuals have to protect themselves against Big Brother. Predictably, Big Brother is miffed. In a Dec. 12, 2011, Salon column entitled “Hillary Clinton and Internet Freedom,” civil rights guru Glenn Greenwald commented, “Beyond WikiLeaks, the Obama administration…is seeking ‘a new federal law forcing Internet email, instant messaging and other communication providers offering encryption to build in backdoors for law-enforcement surveillance.’”

The rationale, as expressed in “A Report to the President of the United States” on Sept. 16, 1999, remains the same today: “American history has been punctuated by periods in which the national government had to respond to sweeping social, economic and technological developments.” Speaking of cyberspace as a “new tool,” the government claims that technology raises new issues to which it must respond in new ways.

Buncombe. The core issues are exactly the same as they have always been. Government intrusion and civil liberties. Surveillance and privacy. Social control and freedom.

These issues date back to the founding of America. In 1785, a resolution authorized the secretary of the Department of Foreign Affairs to open and inspect any mail that related to the safety and interests of the United States. The ensuing “inspections” caused prominent men, like George Washington, to complain of mail tampering. According to various historians, it led James Madison, Thomas Jefferson and James Monroe to write to each other in code — that is, they encrypted their letters — in order to preserve the privacy of their political discussion.

The need for Founding Fathers to encrypt the information they sent to each other is high irony. The intrusive post office against which they rebelled had been established specifically to provide a free flow of political opinion. In the colonial 1770s, Sam Adams had urged the 13 colonies to create an independent postal system. The existing post office, established by the British, acted as a censor and barrier against the spread of rebellious sentiment. Dorothy Ganfield Fowler, in her book Unmailable: Congress and the Post Office, observed, “He [Adams] claimed the colonial post office was made use of for the purpose of stopping the ‘Channels of publick Intelligence and so in Effect of aiding the measures of Tyranny.’” Thus, “‘the necessity of substituting another office in its Stead must be obvious.’”

Alas, the more government changes, the more tyranny remains the same. Soon, the Continental Congress itself wanted to declare some types of matter “unmailable” because their content was deemed too dangerous. One of the first types of mail to become de facto unmailable was Anti-Federalist letters and periodicals. During the debates over ratifying the Constitution, the Anti-Federalists — who rejected the Constitution unless it had a Bill of Rights — simply could not circulate their material through the Federalist-controlled post office.

Yet like Adams, many of those who founded the Post Office seemed to sincerely want communication to flow freely. The first official restrictions placed on “mailability” were strictly utilitarian, not political. For example, the first law (1797) by which Congress limited what could be mailed banned newspapers with wet print because they damaged accompanying material. But politics won over good intentions. Prior to and during the Civil War, governments of both the North and South banned just about anything they deemed to be “seditious.”

Private communication in America has never recovered. Recent history is rife with purely political postal measures such as the Cunningham Amendment (1962), which restricted the circulation of communist literature that originated in a foreign country.

The American government has always realized the political importance of controlling the flow of information. In the 1770s, communication occurred primarily through postal routes maintained by horseback riders. Today, we communicate through packets of data beamed across phone lines. The type of technology used is a technicality and irrelevant to the principles involved. The key questions are who owns your words and ideas? and who has the right to read them? No wonder government wants to divert attention to the technicality of technology.

The tug of war between privacy and surveillance continues from the colonial days to modern times. For over a decade, the struggle has focused on encryption. On May 6, 1999, the Ninth Circuit Court of Appeals ruled that federal restrictions on encryption violated the First Amendment: Specifically, they constituted prior restraint and limited the freedom of the press (Daniel J. Bernstein v. U.S. Department of Justice). In that decision, Judge Betty Fletcher stated, “The availability and use of secure encryption may…reclaim some portion of the privacy we have lost. Government efforts to control encryption thus may well implicate not only the First Amendment rights…but also the constitutional rights of each of us as potential recipients of encryption’s bounty.” Then, on Sept. 30, the Clinton government managed to convince the Ninth Circuit Court of Appeals that the Bernstein case should be reheard. The earlier decision was withdrawn.

Such maneuvers are nothing new. What would Thomas Jefferson have said of them? I suspect he would have said it in code.

Regards,

Wendy McElroy

Thomas Jefferson: Crypto-Rebel? was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

We are patriots. We have proudly served in our country’s military, have extended a helping hand to its public sector, and have plowed our entrepreneurial enterprise into its once fertile soil. We love America, but these days, America does not love us back. It takes without giving and squelches free enterprise. These days, America is no longer the land of the free, especially when it comes to the market.

Just look at the headlines, seemingly ripped from the pages of Atlas Shrugged: Unconscionably large bank bailouts. Punishing regulations and tax requirements. An arctic business climate. Government money bombs. Riots and protests. Slowing trade. Protectionist rhetoric. Demonized corporate executives. Even pirates hijacking cargo ships. One can guess what will happen next.

We predict the next several years will usher in larger, more obtrusive governments, resulting in a decline of personal liberty and financial privacy. The world will become increasingly polarized between two groups: those who consider government intervention a great idea, and the rest of us who happen to be sane.

As such, you can bet your last falling dollar on some absolute certainties: bank nationalization is a given, at least de facto if not de jure; taxes are going up on those of us with any money left; the Fed’s money blitzkriegs will spark a blaze of inflation; and financial privacy will be a thing of the past in the United States.

The obvious and necessary solution is to position one’s finances outside of the United States, and to do so now, while the narrow and finite window of opportunity is still open.

To be clear, evading (or even avoiding) taxes at this point is not a wise move, given the size and scope of the ever-growing IRS. But there are significant advantages to expatriating your capital now:

For starters, you will actually have control of your own money. Yes, in certain instances you’ll be obliged to tell the IRS exactly where it is and what you’re doing with it, but no government agency will have the authority to reach into your overseas pocket and freeze or expropriate (read: steal) on a whim just so Team Obama can give it away to pay for someone else’s McMansion.  Plus, when exchange controls are implemented and Americans are forbidden from wiring money overseas, your capital will already be secured in another jurisdiction, where you will be free to do what you want with it.

Secondly, you will no longer have to assume the risk of insolvent banks or go through the hassle of petitioning the government to get your FDIC insurance bailout. Many overseas banks are far better capitalized than those in the United States, and some of them are in jurisdictions with constitutionally protected banking privacy.

Lastly, and probably most importantly, moving money overseas gives you a last chance at diversifying out of the dollar, which, in a very short period of time, will barely be worth the paper on which it’s printed.

Bank and Brokerage Accounts

Opening a foreign bank or brokerage account is easier said than done; the United States government severely restricts where and under what terms you can open a bank account, invest in a fund, or engage in other economic activities that facilitate the protection of and access to your assets. As the signatory on an overseas account, you are required by law to inform the federal government on Treasury form TDF 90.22 by the end of June each year. Ostensibly, this has been done in the name of fighting money laundering, but it has the effect of severely restricting your freedom of financial movement.

Many foreign banks simply won’t work with you… don’t worry, it’s nothing personal. Uncle Sam has been beating them down since the Reagan years, and between Qualified Intermediary rules, tax treaties, and the USA PATRIOT Act, Sammy gives himself a lot of regulation to bury the opposition with.

There are some jurisdictions that are still excellent banking centers; Switzerland may have rolled over, but Panama, Uruguay, Singapore, and the United Arab Emirates have thus far ignored the call for “greater transparency” (read: government access to private finance).

Some individual banks, like Credicorp and Global Bank in Panama, or Banco Itau in Uruguay will not work with U.S. citizens anymore, but there is still opportunity with the hundreds of remaining banks in these jurisdictions.

Similarly, opening a foreign brokerage account is a shrewd move, not only to move your money overseas but also to have greater access to financial markets. Remember when world markets tanked on Martin Luther King Day 2008? If you were a U.S.-based investor and wanted to sell, sell, sell, you had to wait a full 24 hours until the markets opened after the holiday on Tuesday morning. If you had been invested with global depository shares through a foreign brokerage, you could have saved yourself several points and gotten out in time.

We would suggest looking at Saxo Bank in Denmark.

If you have gold, it would be highly beneficial to get it out of the U.S. – stat. If you do keep it in the U.S., your only truly reliable and private option is to store it yourself in a safe that you bury in your backyard.  Otherwise, move it out of the U.S. now before Team Obama pulls an FDR and takes your gold from you.

At the moment, gold is not considered a monetary instrument by the U.S. Customs and Border Patrol, so there is no legal requirement to declare your bullion upon leaving the United States. Some countries, like Taiwan and Uruguay, require you to declare gold in excess of a certain value to customs officials upon entry.

We recommend Panama, Austria, Switzerland, and the United Arab Emirates as locations to store bullion; one particular favorite is a location called Das Safe (www.dassafe.com) in Vienna where anonymous safes start at 400 euro/year.

Real Estate

It might sound counterintuitive after the subprime debacle, but real estate is a sound option for moving money outside of the United States; there are zero reporting requirements. It’s your business where you own property, and (so far) no one else’s. You can purchase property in a private way by setting up a corporate structure to hold the assets so that they’re not in your name (Panama is an excellent jurisdiction to set this up), and although there are many places with depressed real estate markets, there are also many with good growth potential: in Latin America, we would recommend Panama, Colombia, Uruguay, and Chile. In Europe: Slovakia, Albania, and Poland. In the rest of the world: Lebanon, Hainan Island (China), the Philippines, Cambodia, and New Zealand.

Time is of the essence – start looking for your safe haven now.

Regards,
Simon Black and Fitzroy McLean

April 3, 2009

Move Your Money Out of America and Soon was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

– Pink Floyd, Welcome to the Machine (Wish You Were Here, 1975)

There’s this friend of mine…

He works in the financial industry, lives in a well-appointed, relatively new home in an idyllic suburb of a booming Maryland city, is married to a lovely, charming woman, and has an adorable year-old son. He’s from a fine, relatively soap-opera-free family in which there are no head cases or drug addicts, and in which everyone’s educated and more or less gainfully employed.

He works out at the gym several times a week, drives a Lexus, and plays golf or goes clay-bird shooting when he gets a chance. Like most people, he’s saving too little and juggling his fair share of debt. Bottom line: I consider this friend of mine reasonable, sane, and well adjusted — and very likely quite representative of the typical middle-class American professional…

And judging by a surprising amount of the reader mail we got in response to Part 1 of this series, my friend is VERY typical in the sense that he doesn’t mind if everything he does and everywhere he goes is recorded and scrutinized by the eyes of law enforcement. He’s not the least bit worried about living his life on camera.

“I’m not a criminal,” he said over lunch recently. “I have nothing to hide, so what do I have to fear from being on camera?”

Again, this friend of mine is a reasonable man, and his thinking is reasonable — given one very UNreasonable (yet seemingly universal) supposition…

That our safety is the only aim of our government’s omni-prying eyes.

I, Robot Revenuer

A little more than a year and a half ago (Whiskey & Gunpowder, June 15, 2005), I wrote about the absurd number of laws that govern every aspect of our lives. There are literally tens of thousands of pages of legislation that we don’t know we’re violating until we’re caught running afoul of it…

Now, stay with me here. The vast majority of laws are typically punishable by fines, not incarceration — which means that lawbreaking is a major source of revenue for all levels of government. This is no great revelation, but it does explain WHY there are tens of thousands of pages of laws we’ll never know about until we’re caught breaking them. It’s part of a vast revenue and control machine, the bottom line of which is this:

Everyone’s guilty of something. We just don’t know it until after the fact. Or more accurately, until we get the bill. There are literally so many laws that one cannot help but break a bunch of them. I’ve even seen cases of laws that contradict each other — so that no matter what you do, you’re a criminal.

But because in the eyes of the court ignorance of the law is no excuse for breaking it (if you ask me, it’s the ONLY valid excuse), all it takes for the revenue machine to grind onward is for an appropriate agent of authority who knows which laws we’re breaking to see/catch/detect us in the act, and we’re slapped with a fine that goes directly into Big Brother’s pocket.

The only thing currently protecting us from being nickel-and-dimed to death with fines for our inadvertent lawlessness is the fact that there aren’t enough cops, IRS auditors, ATF agents, etc. that actually know all the laws who are in a position to catch us every time we accidentally break one of them…

Seriously, very few people in positions of authority really know much about the law. The average cop on the street, for instance, has a very poor grasp of it. The example of this I love to cite is the one about the pocketknife. Here it is, excerpted from my June 15, 2005, Whiskey essay:

“I asked a dozen or more police officers this very simple question: Is it legal to carry a knife? I got the following answers, or variations of them:

1) No.
2) Yes.
3) Yes, as long as it’s concealed.
4) Yes, as long as it’s NOT concealed.
5) Not for the purpose of self-defense, only for utility.
6) Yes, as long as the blade isn’t more than 2 inches long.
7) Yes, as long as the blade isn’t more than 3 inches long.
8) Yes, as long as the blade isn’t more than 4 inches long.
9) Yes, as long as it is a folding knife, and not spring-loaded or of a “butterfly” configuration (whatever that means).
10) Yes, as long as it would not be construed by any police officer as a threat during a routine search (this is entirely subjective, of course).

“See what I mean?”

What’s so ironic is that citizens’ ignorance of the law is NOT an excuse for breaking it, yet enforcers’ ignorance of the law is the very thing that keeps many of us from routinely being caught breaking it! Right now, only two things give us a safety net against an unwitting career in crime — or a bankruptcy at the hands of petty fines:

1. The fact that the mere mortals that enforce laws can’t keep track of the hundreds of thousands of them that govern us.
2. The eyes of authority aren’t on us frequently enough to catch us breaking the million or so laws we don’t know about.

Now here’s the $64 trillion question:

How will this dynamic change once the detection of unlawful behavior is no longer the job of humans — but officially delegated to omnipresent, camera-eyed, software-brained, mega-memoried robots that CAN keep track of thousands of laws simultaneously?

Think we won’t all of a sudden find out just how inadvertently criminal we really are — even those of us who “have nothing to hide”? Think we won’t find out very quickly just how many ways our elected officials have legislatively transformed us from upstanding citizens into petty outlaws?

If you think I’m nuts, just consider the ways in which this is already happening. Cameras on highways and at stoplights are handling the enforcement of moving violations now, instead of flesh-and-blood cops. Think this isn’t aimed purely at revenue creation — or do you really believe it’s about safer roads?

If things go the way they’re shaping up, it won’t be long until robots are calling in the cavalry on us — or simply mailing us fines and citations — for all kinds of stuff we’d never have known or imagined we were doing wrong…

And we’ll be lucky if it doesn’t bankrupt or ruin every one of us.

I, Robot Voyeur

One of the more disturbing aspects of this coming quagmire is something I touched on in Part 1 of this essay: the likelihood that soon, robots (camera-equipped computers) will be making the determination of what constitutes suspicious behavior. Basically, they’ll decide what warrants the scrutiny/investigation of a law enforcement officer under the “probable cause” standard…

This bothers me because it’s possible that robotic surveillance from all sources may NOT fall under the same regulatory control as manned surveillance by humans. Again, I’m no lawyer, but this seems to me to be uncharted legal waters.

For instance: It’s currently illegal for the police, FBI, etc. to set up targeted surveillance on any American without a court order or similar official permission (which isn’t to say this kind of thing doesn’t happen anyway). In other words, there’s a legal process that has to take place before anything other than generalized surveillance can occur…

Increasingly, the line demarcating “generalized” surveillance is creeping toward “omnipresent” surveillance — especially with the approaching implementation of HAA (High Altitude Airship) technology. Soon, the government’s people-watching activities won’t be confined to street corners with a history of drug dealing or potential terrorist targets like train stations or busy shopping centers. It’ll be EVERYWHERE.

What I’m wondering is this: Once the monitoring duties are transferred to robots, are the legal limitations on when and where we can be peeped on still valid? Think about this for a minute. If heartless, soulless, emotionless machines, instead of real people, are watching us — complete with their fantasies and agendas and corrupt urges and senses of humor — does this constitute any unconstitutional breach of privacy rights?

Put another way: Can MACHINES invade a person’s privacy — especially if they’re programmed to block all external access to their images and call in the cavalry only if they detect crimes being planned or committed?

I’m betting that the feds would argue no.

By virtue of their lack of humanity, I’m betting it will one day be determined that robots could watch us in every room of our houses, every moment of the day, and never invade our privacy in the eyes of the law — as long as we don’t do anything illegal (this is easier in some states than others)…

However, if we did do something that met some cyber-definition of “probable cause” for illegality, the cops these robots summon would have every right to invade our privacy based on that determination.

But here’s an interesting question: What if, upon a court’s review, a surveillance machine were found to have misinterpreted innocent actions and wrongfully determined probable cause — yet the cops that busted in the door found evidence of law-breaking anyway?

Example: Let’s say you and your teenage son start roughhousing in the clubroom downstairs. You’re trying to teach him wrestling moves you used to pin people with in college. He’s using his youth and surprising speed to slip away from you. You’re having a grand old male bonding session, the likes of which are all too rare these days…

All of a sudden, the cops bust down the front door. It seems that your innocent horseplay was watched through a small basement window and misread as child abuse by the robot on the telephone pole outside your home. You’re detained until a representative of Social Services arrives and interrogates your child…

However, in the process of sorting out the mistake and establishing your innocence, the cops in your home — called there justifiably by a machine, mind you — spot a dog without a license lounging on the hearth (a stray your daughter brought home a month ago) and an antique firearm over your mantle without a trigger lock on it.

Unbeknownst to you, these are violations of the law. Punishable by FINES.

The question is: Are these crimes “fruits of the poison tree” since the robot made the wrong call on probable cause? Or are they still prosecutable under the “plain sight” standard? How do you think your state’s courts would rule on this, given the fact that a lot of money in fines hangs in the balance?

I’m telling you, what’s coming is yet another legal and financial quagmire for ordinary people and a bonanza of cash for governments.

But that’s not even the worst wrinkle in the coming “eye, robot” reality…

I, Robot Citizen

Lest you think I’m either a closet criminal or just a militia-joining paranoiac, let me share with you what I’m most afraid of, should (when) omnipresent robotic surveillance become a reality…

It’s not getting caught and fined to death for laws I unknowingly break that really worries me. Nor is it being filmed in embarrassing or compromising positions and having these images somehow reach the Internet or some government database.

No, what I’m really worried about is that, if we accept or rationalize the necessity that everything we do is being watched and scrutinized, we’ll inevitability stop doing the right thing simply for its own sake.

We’ll only do it out of fear of being seen doing the wrong thing.

Think about this for a second. It’s easy to do what’s right when someone’s watching. What’s hard — and what leads to character, honor, and all the other things good people (and good leaders) should be made of — is doing the right thing when NOBODY is looking.

And if we’re on camera every minute, we’ll no longer have a need for such inner integrity. Doing what’s right will be simply an exercise in hassle-free living, not an impulse that comes from within. So we won’t teach integrity to our kids or develop it for ourselves anymore. We’ll only teach them how to avoid appearing guilty of anything on camera…

The most laughable and terrifying irony of all is that when this happens, we will have become the robots, and the robots us! We’ll have literally switched places.

The robots will have become pseudo-citizens in the sense that they’ll be making more and more of society’s most crucial decisions (like determining probable cause for arrest). And citizens will have become robot-like, in that they’re no longer directed from within by their hearts, consciences, and sensibilities — but from without by the need to integrate themselves with the dictates and perceptions of a cyber-system.

In this world, we won’t wrestle and tickle and roughhouse with our kids anymore, for fear of drawing child abuse charges…

We won’t make love any way but “by the book,” lest our rambunctious role-playing be construed as domestic violence…

We won’t make more than one pass over that engagement ring in the store window, for fear of being seen as casing the place…

We won’t leave that box of clothes and blankets on the street corner where the homeless guys congregate every night, for fear our “abandoned parcel” would trigger a bomb alert…

In other words, we’ll be programmed (literally) not to do anything spontaneous or nutty or risky or gutsy or sexy or romantic or valiant or compassionate or humorous or creative or HUMAN anymore, for fear that the machines will see it as criminal in their literal ones-and-zeros minds.

I don’t know about you, but that’s a reality I’ll risk any terrorist plot, any drunk driver, any hazardous neighborhood, any crazed mall gunman, any sexual predator, any crime of passion, or any serial killer to avoid living in…

Because if my life isn’t discernibly human, what’s the point of protecting it?

Die, robot,

Jim Amrhein
Contributing editor, Whiskey & Gunpowder

February 27, 2007

Welcome to the Machine, Part II was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.