Reflections on Change and Continuity at the IMF

Recently I got hooked on Progressive Economics Forum and while digging through their archives and generally browsing around their site found a gem: “Reflections on Change and Continuity at the IMF“. It’s the first time since I’ve read “Shock Doctrine” by Naomi Klein that I found economist going through the tectics and strategies of IMF/WB and picking them apart from scientific and political standpoints. This is not somebody who just sat on the sidelines watching – John actually was part of those events he describes and describes in great detail. In other words “Reflections on Change and Continuity at the IMF” is a great read with the view into the history bridge into today’s problems and an analysis of current state of IMF/WB. It’s a “must read piece” every thinking being should be aware of it and read through it carefully. It’s shorter than “Shock Doctrine”, less emotional, yet very telling.

Century of failed experiments

Analyzing last ~100 years (only to save some time by not digging deeper) it’s hard not to come to conclusion that we can mark that last century as a century of failed experiments. We have seen large scale experiments undertaken and all of them failed. Communism building in ex-USSR and later occupied countries, Fascism, Free Trade economics (with it’s sister Globalization). Not a single large-scale success? Not even a bit?

Looking at the aftermath left by each experiment it’s hard not to think that we’re a screw-up race and deserve to be wiped of the face of the earth as yet-another failed large-scale experiment. Reading Stanislaw Lem’s The Star Diaries and episode where aliens are charging some miscreants for dumping biological mass on Earth and mixing in some bodily substances in it as well started unsanctioned evolution one may get impression that there might be some truth to that – we’re failing big time. Every time we fail it gets bigger and bigger. Every single time we take lives of people, animals, plants, bacteria etc. One must believe in divine law and the right of human to do so to make any sense of it and not to be committed to psychiatric ward.

Long chain of events sparked my interest in Russian revolution, which lead me to some explorations of Fascism and I’ve been tracking Free Economy for some time already. There are more and more dots on my graph and it’s very tempting to draw the lines:

Until 1925, when the liberal economist Alberto de Stefani ended his tenure as Minister of Economics (1922–25), after having re-started the economy and balanced the national budget, the Italian Fascist Government’s economic policies were aligned with classical liberalism principles; inheritance, luxury, and foreign capital taxes were abolished;[28] life insurance (1923),[29] and the state communications monopolies were privatised, et cetera. Yet such pro-business enterprise policies apparently did not contradict the State’s financing of banks and industry.

On a wider scale the Fascist economic policy pushed the country towards the “corporative state”, an effort which lasted well into the war. The idea was to create a national community where the interests of all parts of the economy were integrated into a class-transcending unity. Some see the move to corporatism in two phases. first the workers were brought to heel over 1925-27. Initially the non-fascist trade unions and later (less forcefully) the fascist trade unions were eliminated…

Reading through the history it’s is hard to argue that Mussolini’s values at the time of ascending to power very very much like values of currently governing political elite in most developed countries:

Deputy Mussolini (with military, business, and liberal right-wing support) launched the PNF March on Rome (27–29 October 1922) coup d’État, to oust Prime Minister Facta, and assume the government of Italy, to restore nationalist pride, re-start the economy, increase productivity with labor controls, remove economic business controls, and impose law and order.[17]

As luck would have it I just recently heard of “tough on crime“, removal of economic business controls, and changes in electoral law. Latest piece of evidence: technocratic governments popping all over the place, which, just like in Italy and Germany scenarios bypasses democratic elections, and by coincidence places at helm people largely responsible for the meltdown: supporters of Free Trade school of thought.

It’s not that the current political powers are immediately fascist by nature, but at this stage they mimic fascism impressively well. Even the nationalism – fairly difficult subject at the time of globalization had to be re-invented but serves the same idea – unite country from the inside in a simplistic “us vs them” rhetoric. And that would be the same political force that advocates Globalization. Here’s a visual point of disconnect however under the surface it turns out connection is fairly strong. Current implementation of Globalization works on principle of exploitation of “other” markets. North American market exists due to cheap labour in other places of the world, Free Trade benefits largely North American-based multinationals that immediately dominate opened markets.

Another oddity is that Friedman’s roots are in:

the American economy’s “ultimate purpose is to produce more consumer goods.”

yet following some (admittedly not all) of Friedman’s recipes America produces less and less every year. This has been nicely summarized by Jennifer Egan in her novel “Look at me” (spotted in “Adbusters”):

…The narrative of industrial America began with rationalization of objects through standardization, abstraction and mass production, and has concluded with the rationalization of human beings through marketing, public relations, image consulting and spin…

As per Friedman’s advise, America (and the rest of the world) focused all of it’s attention on Monetary research/operations rather than social and technological.

Speaking of which: Technological vs Monetary is something that I really care about. In proprietary branch of IT industry huge amount of effort is spent on preventing others from using software, or limiting it’s uses – amount of effort that could’ve moved us forward significantly if applied in other areas but we keep slowing ourselves down with artificial blocks. Just like Friedman’s Free Economy software deserves to be free and uninhibited to be able to evolve into something new. However there is a clear distinction between Free Economy and Free Software – Free Economy dictates political regime, while Free Software transcends political regimes.Free Software does not impose political nor economic rules. You can still charge for your software, you can still be ruled by a dictator and you can still send people to prison for not agreeing with you.

Where does it leave us? As a race we have managed to avoid implementing democracies true to definition, we hate our neighbors  for unknown [to us] reasons and we keep on supporting models in which only selected few get to rip benefits while the rest is trying to create some space for themselves and at the time of crisis majority still clings to “ye olde ways”



With the overabundance of information on #OCW movement one can’t help but think of it on a daily basis. People are fighting economic inequalities produced by current political/economic system.

While still composing black list of current government’s deeds this idea crystallized:

Society s not a function of economy, but rather economy is a function of society

With that idea things start fall into place. No matter how Chicago school economists are trying to present that economy comes first and everything should depend on it (thus it needs to be “pure” and “free”) and society has to arrange itself around that “free economy”. However society came first economic relationships came second. We first organized ourselves into the packs only after came economy with exchange of the goods etc. Economics was invented by us while society has made us who we are. It is natural thing then that economy should follow our social desires, and not the other way around.

So why does society in general and communities in particular have to bow to the power of “Free Economy” and set aside social responsibilities, ethics and the sense of community? Well they don’t. #OCW is all about that. Finally people who see through spoke up.

Fight cloud with cloud (#OccupyCloud ?)

With the advance of clouds and aggressive invasion of “social services” like Facebook, MySpace, Google* etc. it looks like there is no space left for person’s private data (Naomi Klein’s “No Space” comes to mind). As soon as information is fed to Facebook, Google or other entity it stops being the property of that person and becomes property of the company. Another thing that is happening is annihilation of local services, local communities and removal of local knowledge (it sounds that in Egypt’s reversing the trend helped the revolution). At present to know your community which is right at your doorstep you have to go to Facebook, Twitter, MySpace, etc. and explore it there. It’s not hard to imagine disappearance of Facebook* services one day (either entirely – the South-Park way or partially – the Facebook way ). That could have some very measurable negative impact on community hooked on such services. The scenario can be reapplied multiple times for different “cloud providers” and for different “communities”. In other words people are in a great danger of losing not only their personal data but also their collective/community data. Imagine losing all books of Dickens overnight (or books of Orwell) or any other cultural heritage that doesn’t belong to a single individual but entire nations or even entire planet.

There’s a solution. The most antagonized creation of IT industry – BitTorrent. Content publishers of all kinds (MPAA, RIAA, BlahAA etc.) are all after BitTorrent users, ISP’s are after BitTorrent throttling it down to a trickle, Software manufacturers for the most part are scared out of their minds and media is demonizing BitTorrent users. Above are all the entities that want to own person‘s data but don’t want to give back much: Blu-Ray wants to know all about person’s movies and lock him out if it doesn’t like something, ISP’s want to know what person is doing online and sell him/her out to the highest bidder, software producers want to know consumer’s every move and turn it into a commodity or force-feed him advertisements – the common line is to strip consumer of his privacy, his rights and commoditize him/her. As per Google:

As Google says in their own words, to their investors:

Who are our customers? Our customers are over one million advertisers, from small businesses targeting local customers to many of the world’s largest global enterprises, who use Google AdWords to reach millions of users around the world.

And as Mathew Ingram sums up in his article:

As the saying goes: If you’re not paying for it, then you’re the product being sold.

Linking all of the above and brilliant presentation by Mark Pesce some things come to mind:

Peer2Peer distribution + Localization + IPv6 = Freedom

Above needs some explanation and requires some technical skill to grok. Equation is actually much more complicated than above and here’s what it translates to (or born from?).

Following Mark Pesce‘s logic the more popular is resource the more available it is. Note also that resource does not exist in any single location, instead it exists on dozens of computers all at the same time. What such distribution creates is a bonus for any sort of freedom movement (WikiLeaks anyone?) as it removes single point of entry (ISP, Domain Registrar, government, etc.) that can be sued, or scared into droping hosting of such content. Just like what Mark is arguing about (and like everybody knew for a while now) once content is published online – it starts the life of it’s own and can’t be contained. Only in Peer2Peer scenario survival rate is even higher.

Private Peer-to-Peer networking seems to be developing too: N2N, RetroShare, etc. Which brings us one step closer to implementation.

Back to our equation: localization is needed to retain community information within community (because of it’s high appreciation and value in this context) while making it available to everybody outside at the speeds proportionate to demands. In other words if your town has a pile of resources it wants to share primarily locally and if anybody is interested outside of community as well – the law of latencies helps here. Currently ISP’s are the gate-keepers so if there’s no ISP in town – no data sharing for you. In other words tech-savvy communities are hostages of ISP’s. Alternative is a local mesh network that doesn’t need ISP. All the “spare parts” are readily available – WiFi-equipped devices are on every corner so turning them all into access points could create a local “roaming zone”. With Peer2Peer – based content distribution (think HTTP-over-BitTorrent) community can host it’s own sites/forums/mailing lists/you name it without ever needing provider. It’s even possible to use different carriers – HTTP-over-SMS, old school dial-ups, even pulling ethernet cable across the driveway to your neighbour’s house, Bluetooth, Infra-red, etc.

Localization is good but inter-community communications are still needed. Now is time to invoke FidoNet – asynchronous distributed network of semi-autonomous nodes. Brilliant idea that was both right for it’s time and too advanced for it’s time. Taking a close look at node organization it is exactly like described above except it required phone lines. That is where IPv6 comes into play. FidoNet had node list and network addresses assigned from central authority, but essentially addresses were unlimited, just like IPv6. If we take IPv6 as a transport layer – we’ve almost resolved problem of compatible addresses across the globe – every single machine can have unique address and routing can be done based on that. Now idea doesn’t seem so crazy and distant, does it?

Couple more details to make it more attractive and add more meat to it: since we’ve got mesh networking and IPv6 protocol, and BitTorrent-like distribution of content we have freed ourselves from the hard dependency on specific physical media for transport. Whether it’s a phone line from my house to neighbour’s or shared WiFi or P2P Radio Antennas, or Ham Radio or pidgin mail – when locally somebody makes a request for pageX that is not part of local community’s infrastructure, it’s download it scheduled throughout community network of nodes and with the first possibility of download being downloaded to computer of whoever requested it. Now pageX is local. Next person asking for pageX will get it locally! More popular page – more people locally will store it so as per Mark Pesce – download speed goes up. A-ha! With the clever mechanisms of caching and expiry it’s not so hard to devise a fairly efficient method of keeping things that are of interest to population readily available (and not controlled by anybody).

Now next aspect of this theme is permanent local storage. While in above scenario people keep on downloading and storing locally other people’s stuff it’s important for that “other people’s stuff” to exist. All that needs to be done is having “local storage” defined on all the nodes, where content of local storage, just like with BitTorrent and other Peer2Peer networks is shared freely upon request with the rest of the world but permanently resides on local computer (unlike cached content that person requested today or yesterday which can expire tomorrow). In which case user’s machine becomes the “host” for the content, but if content becomes popular – burden of serving it is shifted to the… wait for it… wait for it… cloud!

Above resolves the problem of content ownership and content’s persistance. If I like what I downloaded – I move it to my local storage making it something that I host permanently, now there are 2 hosts hosting the same content (with the same signature) on Peer2Peer network. It looks like having 3 different types of storage should resolve majority of usecases: private store, public store and cache store. Private holds data you do *not* intend to share with anybody (personal documents, pictures, etc.), public store holds [personal] information intended for sharing – movies, sites, files, music, documents, etc., and cache would store only transient data – data that person downloaded for whatever reason and is keeping for the time being to speed up subsequent access (and this part is the only one controlled by automatic measures of expiry etc.).

Above may sound far-fetched, but something is already happening in this domain – FreedomBox Foundation have just started it’s operations but if you look at the goals – they are already thinking in that direction:

We’re building software for smart devices whose engineered purpose is to work together to facilitate free communication among people, safely and securely, beyond the ambition of the strongest power to penetrate, they can make freedom of thought and information a permanent, ineradicable feature of the net that holds our souls.

Currently it looks like they are at the point where they target only communication itself, not data preservation, but why wouldn’t it be a next step?

To get around ISP getting overly sneaky and curious – layer of Tor could be implemented between inter-community nodes or even throughout the community.

Imagine applications for sharing information. Assume person A lives in community X. Now, A goes on a trip to community Y, of course he brings his laptop (?) with him. While at the bus station everybody in close proximity get to “know” what A knows and share content with him (if they choose to) – anonymously and at great speeds (and without paying fees to the carrier).

Last piece that is missing in all of the above is out-of-the-box hardware/software platform that would support that. FreedomBox doesn’t seem to have goals that reach this far, and we won’t witness any great movements from Google, Microsoft, Apple or any other existing commercial entity that is not deeply rooted in OpenSource world. All of the proprietary vendors are gearing their operations towards other corporate/commercial entities rather than average person (as it was mentioned and proven earlier). It is not in their interest – without our data they have nothing to sell.


Descending into medieval times?

So it looks like we’re descending into medieval times:

Group worship in this era?

Looking through book of arts looks like female breasts were a must on majority of the pictures even when they didn’t belong there. Today we’ve got exact same – book won’t sell without them and movie won’t fare well without them (kids/family movies are exception… for now).


Do no evil, see no evil, hear no evil

There was a lot of co incidents lately: me reading Slavoj Žižek, BBC quoting Marx, Adbusters quoting Marx statistics on crazy people percentile in a capitalist society going up over time and confirmed by WHO.

following Slashdot’s article ( and reading through FreeSoftwareMagazine ( ) which really comes as no surprise after “Google joins California Do-Not-Track opposition lobby” ( ) and that is all summed up in Adbusters (more precisely in Jennifer Egan’s novel “Look at me”):

…The narrative of industrial America began with rationalization of objects through standardization, abstraction and mass production, and has concluded with the rationalization of human beings through marketing, public relations, image consulting and spin…

sor while Corporations like google argue for transparency what we have in our back-yard is “New Wikileaks Docs Show Ex-Minister Bernier Offered To Leak Copyright Bill to U.S.” ( ) and “Libyan papers ‘show CIA and MI6 links'” (

Facebook cleans up compromised accounts = people losing data/money

Explore facebook as means of avoiding reality and global issues making “self”/ego the focus of everything.

coincidence? South parks episode about loss of internet.

narcissistic tendency

How to spot a narcisist

Narcissists thrive in big, anonymous cities, entertainment-related fields (think reality TV), and leadership situations where they can dazzle and dominate others without having to cooperate or suffer the consequences of a bad reputation.

Does growth of Narcisism  reflect tendency to outsource? Narcisism is linked to leadership skills – need to dazzle and depend on others for positive feedback, when entire society is geared towards outsourcing, everybody is a “manager of X” – since all day long you try to concentrate attention of others on yourself, wouldn’t you develop Narcisistic traits?

It appears that narcissists seek out people who maintain their high positive self-image, at the same time intentionally avoiding and putting down people who may give them a harsh dose of realism.

and another one:

“In the long run it becomes difficult because others won’t applaud them, so they always have to search for new acquaintances from whom they get the next fix.” This could explain why narcissists so frequently change their social contexts and maintain only weak ties to others.

and another one:

The whiplash combination of parental coldness and excessive parental admiration is more strongly related to maladaptive narcissism than is either attitude alone.

wtf is twittergate???

Meteorological attack. Second front – Workforce

After dealing with Cloud vs Users case it’s time to take a look behind the scenes and uncover what else is impacted by Clouds and what the impacts are. We have already established that for users move to the cloud means parting with their data, it surely means the same thing to business entities, after all they are too users. Let’s get beyond that. If you’ve ever read “No Logo” by Naomi Klein you are familiar with the chapter “No Jobs” that follows immediately after “No Choice”. It looks like the order of chapters is not coincidental. The process of dissociation of corporation with manufacturing process and workforce is like the mushroom cloud – both stunning and horrifying.

It’s not required to read No Logo to understand simple principles at work. Principles and mechanics employed by corporations in their search of “brand identity” and “brand experience”. As usual it comes with some collateral damage:

No Choice

…Dazzled by the array of consumer choices we may at first fail to notice the tremendous consolidation taking place in the boardrooms of the entertainment, media and retail industries. Advertising floods us with the kaleidoscopic soothing images of United Streets of Diversity and Microsoft’s  wide-open “Where do you want to go today?” enticements. But in the pages of the business section the world goes monochromatic and doors slam shut from all sides: every other story – whether the announcement of a new buyout, an untimely bankruptcy, a collossal merger – points directly to a loss of meaningful choices…

So how does it translate to IT? It’s an attempt to wipe out diversity by “streamlining business practises” and “bringing them closer to the base”. Say, institution has been priding itself in it’s uniqueness in catering to a very specific customer base and generating quite a loyal following. Institution that stood out and can’t be matched by others only because… of it’s unique business practises.  However in the boardrooms this must’ve looked annoying or out of place because the decision has been made to “consolidate”, “streamline” and “merge”. In other words – all the products that are used by competition “as-is” and “out-of-the-box” are to be applied to this institution as well essentially wiping it’s uniqueness. The only logical conclusion would be that institution is being moved in the “branding” direction where product is essentially the same and service about the same as the rest but what is sold is “brand” and “experience”, not the product itself (not surprisingly since it’s the same product):

The difference between products and brands is fundamental. A product is something that is made in a factory; a brand is something that is bought by a customer

No Jobs

…corporations should not expend their finite resources on factories that will demand physical upkeep, on machines that will corrode or on employees who will certainly age and die. Instead, they should concentrate those resources in the virtual brick and mortar used to build their brands; that is, on sponsorship, packaging, expansion and advertising…

So after “No choice” invariably comes “No Jobs”. Discussed institution in this case is not exception. There is a clear sense of direction in cleansing institution of any traces of IT department outsourcing most critical applications and systems. Institution doesn’t want to burden itself with infrastructure or workforce, it needs to concentrate on what’s important – building image. Resulting in exploded marketing departments (or just expanded budgets outsourcing that activity someplace else) and reduced funding for manufacturing and R&D.

Above principles no longer apply strictly to corporations and other businesses. Now they are applied to governments and government institutions as well as education.

Some naive people assume that government is there to serve people or that education should be accessible by people and serve people’s needs. Only in case of ongoing “branding” government serves businesses believing in “trickle down effect” that has never been proved to work and education is serving business needs of companies and government. Application of business rules in government and education sectors has devastating effects: hollow and emasculated they can’t serve people anymore and have to abide by business rules serving only what business demands. Which for education means that you can’t produce any more “free thinkers” or offer “non-marketable” programs because there’s no business need for them. So instead of government shaping the economy and busineses we have businesses serving themselves with hollow government watching the carnage from afar unable to do anything.

Current hysteria about financial crisis provides fertile ground for those seeking excuses to enact “touch measures”, “trim the fat” and “streamline operations” at expense of workers, taxpayers and customers. It’s a “disaster capitalism” at work: create or wait for a crisis and then while people are dazed and confused implement everything you’ve dreamed about bypassing all the normal processes excusing yourself by extraordinary situation at hand and repeating “ad nauseum”: “In a critical time like this we have to act fast.”

What is that magic bullet that can kill that undying beast of IT department? It’s all on the frontpages of magazines – “Cloud”. Single word that spells emasculation of IT departments everywhere and narrowing of choices for consumers as well. For a government that seeks to hollow itself out it’s a prime destination.

What was previously known as “outsourcing” and became lame and unpopular over time is now called “cloud computing” and is shoved down everybody’s throat using every possible excuse.

Favourite argument of cloud-defenders is that “computing” is “new electricity” and “cloud provider” is new equivalent of “power company” with companies paying for computational power like they do for electricity. However it’s not enough for company to move infrastructure. Once it has made that step – why not make the second step and go to SAAS instead? Running VM’s on the cloud is not sexy, plus it creates tons of problems with security VPNs and it doesn’t resolve the “problem” of having IT staff. Once everything is hosted by SAAS provider you have no worries. The only insulation required is the contract. Cloud computing started as an idea of running VMs on the remote infrastructure yet still managed by a company staff, but with time term got overloaded with much more meaning making it impossible to differentiate one proposition from another and  creating new common ground for understanding. Now cloud computing equals outsourcing.

“Cloud” is what powers the transition from “unique organization” and “self-sufficient organization” to “No Choice” and “No Jobs”. Incantation that has a viral effect essentially wiping off any living cell in it’s path. “Cloud” takes all that annoyance of managing IT and removes it from institution. What’s interesting – it removes it in “unknown” direction. From that point on Institution is free of workforce and infrastructure, while whoever runs the “Cloud” is bound by limited contractual agreements and operating most likely in un-unionized environment and is free to expand and contract at will having only “temp” staff in it’s employment catering to demands of clients. So for a heavily unionized institution it’s a blessing – you move your IT services outside and your “IT Crowd” is no longer a unionized headache but rather “workforce on-demand”. That workforce doesn’t have to reside in the same country either, opening up brand new frontiers of exploration (or exploitation?).

Here’s the thing – one has to answer simple questions to realize the depth of it. “What drives organization?” – “Maximizing profit”. “What drives employees of organization?” – “Making sure organization profit margins are high, so that their jobs are secure”. Now, in the relationship “Could provider” – “Cloud client” both are driven by above principles. However their goals are orthogonal. So what is the difference between organization’s own employee and “cloud” employees? – The motivation that drives them. In case of “own employee” – his interest is for his organization to prosper or at least not to go under. In case of “cloud employee” at best his interest is to serve his employer which is orthogonal to goals of “cloud client” – he needs to maximize profit of “cloud provider” by minimizing impact “cloud client” has on provider’s resources which in turn means – spending less cycles serving the client. This entire equation is then translated into Contracts, SLA’s and Change Requests which all are then monetized at the expense of the client. Will cloud employee be interested to offer money-saving scheme to client organization, if it doesn’t maximize profit of his employer? Will client’s employee be inclined to do the same?

To be fair – it is reasonable to accept Cloud limitations and impact in organizations that didn’t have IT to begin with and are too small to own their own IT shop. However it is very hard to come up with justification for organization to drop it’s IT department and “move to the cloud” remaining at mercy of provider and contract lawyers. So while it is not in organization’s best interest to part with it’s IT for million reasons, it does make sense for the executives to move in that direction, especially if their IT department is unionized. Move to the cloud removes all the barriers and part of their job that has to do with people. It’s hard to tell person “shut up and do it” but it’s much easier with vendor, especially when vendor is de-personified and is located across the ocean…

Cloud is truly unifying and transcending entity. It’s a Borg. “You will be assimilated. Resistance is futile”.


Quotes above come from “No Logo 10th anniversary edition”.

Democracy is dead. Long live Democracy.

Results are out Canada elected conservative majority after it had been found guilty of contempt and never denied doing so. Democracy is overrated and naivety (stupidity) is endless.

Uneducated masses elected lying, bullying, self-serving and populist government to drive this country further into the ground. History has seen it before.

Everybody is free to make their own conclusions.

After following the results for a while I certainly made mine.