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In the New Cold War, Technology Is the Enemy of the State

By: Adam Dubove - @dubdam - Jul 13, 2015, 3:04 pm
El dinero electrónico y aplicaciones que facilitan la vida son los nuevos desafíos para los Estados. (Ebankingnews.com)
The app-based economy has become a threat to government-run monopolies (Ebankingnews.com)

EspañolTechnological innovation has put the world in a position to face a “cold war” once again. In the future, there will still be studies that examine the conflict between the United States and the Soviet Union, but as a footnote, compared to what is headed our way.

The key players will no longer be governments alone, obsessed with space, weapons, and scientific races. There’s no time for that: technology, the new enemy, has revealed that governments are becoming increasingly obsolete appendages whose vital functions are in decline. The signs are clear.

In the United States, the level of correspondence sent through the US Postal Service each year continues to decline. Between 2006 and 2012, the volume of stamped mail (bill payments, personal correspondence, cards) plummeted by 47 percent. The US constitution may grant authority for the creation of a postal system, but the nation has begun to lose one of its government emblems.

In April, the US Federal Aviation Administration authorized Amazon to test-fly drones for the delivery of packages through its Prime Air program. Even a pair of Australians have unveiled a design for drone delivery nets, guided by LEDs, that would allow drones to deliver cargo from the sky.

Rebellion is underway in diverse areas. In the case of Uber, the ride-sharing mobile app has faced heavy opposition from unions and some governments. Earlier this year in Buenos Aires, the taxi-owner and driver unions began to protest against the service when news leaked about the San Francisco-based company hiring on LinkedIn.

Since the smartphone-based service arrived in Mexican cities in 2014, protests have become routine. Meanwhile in Colombia, taxi drivers aggressively reacted to a special that encouraged people to choose Uber over the regulated taxis. “An app does not replace a taxi, but in the end it’s a taxi monopoly, and they don’t like the disruption. It’s healthy competition,” said Rodrigo Arévalo, Uber’s director in Mexico.

Other websites, such as Airbnb, allow people to easily rent a bed, a room, or a house in various cities across the globe. By using a reputation-based ranking system that guarantees high satisfaction, consumers can avoid the middlemen.

Government officials are aware that to continue collecting taxes from the hotel sector it must survive, so they have launched measures to regulate temporary rentals offered by individuals. “We don’t have enough properties to house Parisians,” the deputy mayor of Paris, Ian Brossat, complained. The city of (few) lights has joined a number of other European nations taking the same path.

Bitcoin is a revolution by itself. A non-governmental, decentralized, currency will make central banking obsolete, removing an institution responsible for looting on a mass scale. Traditional banks will radically change from their current form, but the most remarkable innovation is the blockchain technology that processes the digital currency transactions. The technology underlying bitcoin could be compared to other technological innovations such as the steam engine “that have transformed the way business works,” as noted in BNP Paribas’s Quintessence finance magazine.

National rulers are still tepidly observing the progress of bitcoin. However, Ecuador took the lead when President Rafael Correa banned bitcoin last year and the country launched its own state-controlled digital currency. Unlike bitcoin, a state-run digital currency would guarantee the government — in the long-term — a monopoly on the means of payment, and no privacy for the public. Totalitarian surveillance on every economic transaction is everything that bitcoin attempts to avoid.


“Bitcoiners are afraid of a more practical money appearing in Argentina. It will happen….”

Meanwhile, earlier this month in Argentina, Lucas Llach, an economist and primary candidate for vice president with in one of the main opposition coalitions, suggested via Twitter he would try to launch “more practical money used with cell phones.” Although he says there is a method to guarantee anonymity, he also affirmed it would facilitate feeding the voracious appetite for tax money  — in other words, “fight tax evasion.” Bitcoiners saw the folly of his ways when Llach said bitcoin was the “most unstable currency on the planet.”

While protectionism has Argentina lagging decades behind when it comes to state-of-the-art technology, in the United States, 3D printers are becoming more affordable. 3D printing is a decentralizing technology that is — and will — disrupt the known production methods and business models. Consider how the rise of 3D-printed guns has already resulted in efforts to regulate them — situation that could rapidly escalate and see the long arm of the law reach less controversial printed items.

The Dark Side of Technology

Governments don’t want to miss the boat, and have developed their own control-oriented technologies. Following a slow start, as happens given the public sector’s low levels of productivity, authorities are aiming to take the lead in the technological race in the wake of the cold war of our times. However, even privately-developed technology has advanced the cause of police-state supporters.

In Argentina, the outgoing President Cristina Kirchner has implemented one of “the most aggressive surveillance systems in all Latin America,” as affirmed by Wikileaks founder, Julian Assange. The Report on Biometrics Policy in Argentina, published on Tuesday July 7 by the Civil Rights Association, warns about the different registries the Argentinean government has set up that threaten the privacy of the citizens.

Technological innovation also allows for improved border-patrol technology, including the construction of more efficient walls and aerial surveillance — all contributing to and perpetuating the injustices of immigration policies enforced around the world. The new technologies also help, for instance, the Venezuelan government use unreliable electronic voting machine, similar to those used in Argentina on the recent elections in Buenos Aires, opening a door for subtler ways of fraud.

Point of No Return

The rise of the new, decentralized economy is the involuntary beginning of the second cold war. The states and their corporatist alliances with unions, and other vested interests groups, will start falling as the number of choices increases and state or state-sponsored monopolies are disrupted. The emerging companies will apply pressure on the monopolies, now facing competition.

From Khan Academy and Coursera to Couchsurfing, they all offer innovative ways of meeting genuine consumer demand. They are thriving in the face of stagnated government-regulated sectors, stuck in time. It’s the free economy as in freedom and as in gratis, or at least less expensive than competitors.

The drums of war can be heard. It seems Argentinean-born writer Jorge Luis Borges’s fictional prediction was accurate: “What happened to the governments? Legend has it, they gradually became obsolete.”

Adam Dubove Adam Dubove

Adam Dubove is a journalist, co-host of The Titanic's Violinists radio show, and the secretary of the Amagi Institute. Follow him on Twitter: @dubdam, and read his blog: Diario de un Drapetómano.