War on Internet: Google will warn Users of State Sponsored Attacks

Hail Google. Google will warn their users of state sponsored privacy intrusions.

From Foreign Policies the Cable

UPDATE: A senior Senate aide confirmed that this evening he received a warning on his Gmail account that Google suspected he had been the target of a state-sponsored cyber attack.

Web giant Google is about to announce a new warning informing Gmail users when a specific type of attacker is trying to hijack their accounts -- governments and their proxies.

Later today, the company will announce a new warning system that will alert Gmail users when Google believes their accounts are being targeted by state-sponsored attacks. The new system isn't a response to a specific event or directed at any one country, but is part and parcel of Google's recent set of policy changes meant to allow users to protect themselves from malicious activity brought on by state actors. It also has the effect of making it more difficult for authoritarian regimes to target political and social activists by hacking their private communications.

"We are constantly on the lookout for malicious activity on our systems, in particular attempts by third parties to log into users' accounts unauthorized. When we have specific intelligence-either directly from users or from our own monitoring efforts-we show clear warning signs and put in place extra roadblocks to thwart these bad actors," reads a note to users by Eric Grosse, Google's vice president for security engineering, to be posted later today on Google's Online Security blog, obtained in advance by The Cable. "Today, we're taking that a step further for a subset of our users, who we believe may be the target of state-sponsored attacks."

When Google's internal systems monitoring suspicious internet activity, such as suspicious log-in attempts, conclude that such activities include the involvement of states or state-backed initiatives, the user will now receive the specialized, more prominent warning pictured above. The warning doesn't necessarily mean that a user's account has been hijacked, but is meant to alert users that Google believes a state sponsored attack has been attempted so they can increase their security vigilance.

Google wants to be clear they are not singling out any one government for criticism and that the effort is about giving users transparency about what is going on with their accounts, not about highlighting the malicious actions of foreign states.

Read the rest here

War on Internet: Anonymous will do a Wikileaks this December

The war on the internet continues.

Despite a string of legal harassment suit waged against activists like Wikileaks, internet activism will persist to haunt governments and their cronies.

Another activist group called the Anonymous announced that they will do a Wiki-leaks expose this December.

From Personal Liberty.com (hat tip Sovereign Man)

The global “hacktivist” syndicate Anonymous wants people all over the world to expose evidence of corruption and injustice by leaking documents to which they have access.

In a recently posted video, the group urges anyone who has access to evidence of corporate or government wrongdoing to purchase a USB drive and document the evidence for publication on the Internet.

“Imagine you purchase a USB drive. Imagine you take it to your work place. Imagine you collect evidence of illegality and corruption. Imagine together we expose all lies. Imagine we leak it all,” scrolls across the screen in a recent video posted by the group.

The initiative, dubbed Project Mayhem 2012, will take place over the 10-day period from Dec. 12 to Dec. 21, during which the video claims “the World will see an unprecedented amount of Corporate, Financial, Military and State leaks that will have been secretly gathered by millions of CONSCIENTIOUS citizens, vigilantes, whistle blowers and insiders worldwide.”

The group claims to be in the process of developing a Wikileaks-style platform called TYLER where the information can be anonymously posted.

Video here.

Politics a Key Factor for Facebook Unfriends

From Slate

Spouting off about political issues on Facebook and other social sites may be bad for your friend count, according to a new study released Monday by the Pew Internet & American Life Project.

Eighteen percent of the 2,253 adults surveyed by Pew said they had blocked, unfriended, or hidden a friend on a social network over a political post. It isn’t hard to see why: The Pew survey found that because people who post about politics tend to be very liberal or very conservative, the offending posts are more likely to be out of line with other people’s views. Indeed, only one in four users surveyed by Pew said they "usually" or "always" agree with their friends’ political posts; 73 percent said they only sometimes or never do.

Though most people—roughly two in three—take no action over political posts they disagree with, some 28 percent said they counter with a comment or competing post, another behavior the Pew survey said leads to friends going their own way.

My experience says that this is very true.

First of all, you can’t please everyone. Second, the truth hurts or stings the ego. Third, I am not after social desirability or about “friend count” or after "likes". I can say stupid abstract emotional themes, which isn't really me, or popular positions based on economic nonsense, just to get the "likes". But I am after speaking the truth from where I see it or where I stand. Lastly, for many politics IS a religion.

Which Social Media Networks will Stand Beside You From Governments

The Electronic Frontier Foundation conducted a study to see which of the 18 major internet companies will stand beside their users against governments intrusions.

The introduction from the study at the EFF.org

The Electronic Frontier Foundation examined the policies of 18 major Internet companies — including email providers, ISPs, cloud storage providers, and social networking sites — to assess whether they publicly commit to standing with users when the government seeks access to user data. We looked at their terms of service, privacy policies, and published law enforcement guides, if any. We also examined their track record of fighting for user privacy in the courts and whether they’re members of the Digital Due Process coalition, which works to improve outdated communications law. Finally, we contacted each of the companies with our conclusions and gave them an opportunity to respond and provide us evidence of improved policies and practices. These categories are not the only ways that a company can stand up for users, of course, but they are important and publicly verifiable.

Their conclusion…

Readers of this year’s annual privacy and transparency report should be heartened, as we are, at the improvements major online service providers over the last year. While there remains room for improvement in areas such as the policies of location service providers, certain practices — like publishing law enforcement guidelines and regular transparency reports — are becoming standard industry practice. And we are seeing a growing, powerful movement that comprises civil liberties groups as well as major online service providers to clarify outdated privacy laws so that there is no question government agents need a court-ordered warrant before accessing sensitive location data, email content and documents stored in the cloud.

Read the entire report here

War on the Internet: 377 Words to use for Uncle Sam to Watch You

Free speech undermines the power of centralized government. So governments will make any excuses to work on repressing free speech.

One way is to make everyone a suspect for politically mandated illegitimate activities as ‘drugs’ or ‘terror’. This by monitoring so called ‘suspicious’ activities, a.k.a. spying. And naturally, where people congregate to share or exchange information, now becomes the hotbed for government intelligence.

A list of 377 sensitive words that you use may trigger Uncle Sam’s monitoring of you.

From Simon Black of Sovereign Man

After vigorous resistance, the Department of Homeland Security was finally forced into releasing it’s 2011 Analyst’s Desktop Binder. It’s a manual of sorts, teaching all the storm troopers who monitor our Internet activity all day which key words to look for.

Facebook, a.k.a. the US government’s domestic intelligence center, is the primary target for this monitoring… though it’s become clear so many times before that various departments, including the NSA and FBI, are monitoring online activity ranging from search terms to emails.

Domestic spying is typically denied in public and swept under the rug. After all, it’s legality has always been questionable… if not entirely Unconstitutional.

Yet month after month it seems, there is new legislation introduced to deprive Internet users of their privacy and make the open collection of data a natural part of the online landscape.

Homeland Security’s key word ‘hotlist’ is really no surprise… they’re just the ones to get caught.

So now we know, at least, what these goons are looking for. Sort of.

According to the manual, DHS breaks down its monitoring into a whopping 14 categories ranging from Health to Fire to Terrorism. It’s a testament to how bloated the department’s scope has become.

Afterwards there is a list of 377 of key terms to monitor, most of which are completely innocuous. Exercise. Cloud. Leak. Sick. Organization. Pork. Bridge. Smart. Tucson. Target. China. Social media.

Curiously, in its ‘Critical Information Requirements’, the manual decrees that analysts should also catalog items which may “reflect adversely on DHS and response activities.”

Absolutely unreal. Big Brother is not just watching. He’s digging, searching, reading, monitoring, archiving, and judging too.

The list of the 377 sensitive words here

Capital Markets in the Information Age: More Financial Innovations

The world does not operate in a vacuum. Given the trend of rapid increases in the imposition of strangulating bank and financial regulations, entrepreneurs have been exploring ways to sidestep or bypass the system, by harnessing advances in technology, where they can profit from serving the consumers.

I have earlier pointed out that the internet has spawned innovative ways of borrowing and lending, of payment systems, and of the financing of commercial projects via P2P Lending and Crowd Funding.

Jeffrey Tucker at the Laissez Faire Books shows us more

Squareup. This is an innovation by Jack Dorsey (Twitter fame) and his friends, and came about only in 2010. The first problem they were trying to overcome was there has to be an easier way for merchants to accept credit cards. They decided to give the hardware away for use on simple mobile phones, and then charge per transaction. Win!

In the course of developing the business, which is valued already at $1 billion, they solved an even stranger problem that all of us have but never really noticed that we have: If we don’t have our wallets with us, we can’t buy anything.

Now this is genius: Square allows you to pay by saying your name. The merchant matches a picture of your on the square system with your physical face. You look each other in the eye and the deal is done. Anyone can sign up. Yes, it is incredible. Simple and wonderful.

The Lending Club. Again, this is mind-blowing. The Lending Club matches up lenders and borrowers while bypassing the banking system altogether. The idea emerged in October 2008, just as the existing credit system seemed to be blowing up. Today, the company originates $1 million in loans per day.

Anyone can become a lender with a minimum investment of $25 per note. Lenders can choose specific borrowers or choose among many baskets and combinations of borrowers to reduce risk.

Any potential borrower can apply, but of course the company wants to keep default rates at the lowest possible level, and these are published daily (right now, they are running 3%). As a result, most applications to borrow are declined (this is good!).

The average rate of interest on the loans is 11%, cheaper than credit cards but more realistic than the Fed’s crazy push for zero. As a result, the average net annualized return is 9.6%.

The focus if of course on small loans for weddings, moving expenses, business startups, debt consolidation and the like. If you are an indebted country with large unfunded liabilities, you probably can’t get a loan. But if you are student with a job who needs upfront money to put down on an apartment, you might qualify.

Dwolla. This is a super-easy, super-slick online payment system that specializes in linking payments through social networks like Facebook and Twitter. Like most of these companies, the idea was hatched in 2008 in response to the crisis. The system was breaking down and needed new services that worked. Dwolla got off the ground in 2009, and today, it processes more than $1 million per week.

An easy way to understand Dwolla is to view it as the next generation of PayPal, but with a special focus on reducing the problem that vexed PayPal in its early years: getting rid of credit card fraud. Dwolla is focussing its product development on ways to pay that do not require sending credit card information over networks.

Dwolla has also taken a strong interest in the Internet payment system called Bitcoin, a digital unit of account that hopes to become an alternative to national monetary systems. It is a long way from becoming that, but it is hardly surprising that a young and innovative company would be interested in competition to failed paper money.

These are a few of the services, but there are hundreds more. None were created by the money masters in Washington. They are results of private innovation, individual entrepreneurs thinking their way through social and economic problems and coming up with solutions. They accept the risk of failure and enjoy the profit from success.

Indeed, as forces of decentralization deepens, we should expect more innovative technology based solutions to emerge and flourish in every industry; finance and money notwithstanding.

Incredible Futuristic Eyeglasses from Google

From KurzweilAI,

In a post on Google Plus, Google X employees unveilved a prototype of the company’s “Project Glass” wrap-around augmented-reality glasses.

The glasses can superimpose information on the lenses and allow the wearer to send and receive messages via voice commands, similar to Siri.

A built-in camera can record video and take pictures.

“We’re sharing this information now because we want to start a conversation and learn from your valuable input,” the Google employees wrote. “Please follow along as we share some of our ideas and stories. We’d love to hear yours, too. What would you like to see from Project Glass?”

See video below

So eyeglasses with many digital based functionalities that can be found in today's Smartphones or the tablet. (X-Ray vision next? Lol!)

The pace of technological advancement has taken on a fantastic leap. And these have been enabled and facilitated by market forces in spite of the current spate of governments interventions.

And this is why I remain cautiously or guardedly optimistic about the future as forces of decentralization gnaws away at the foundations of 20th century centralized welfare-warfare states.

Capital Markets in the Information Age: The Advent of Crowd Funding

I believe that the information age will also introduce material changes in the capital markets. And part of such changes may have emerged through crowd funding, which according to the Wikipedia.org,

signifies as the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the Internet, to support efforts initiated by other people or organizations.

And social media networks are likely to serve as major platforms for crowd funding with Facebook leading the way.

From the Wall Street Journal,

Facebook Inc., with an eye toward future business relationships, wants to be friends with more social-media start-ups.

So it is going after those start-ups' investors.

Facebook's new fbStart program is open to early-stage business investment groups, also known as "seed funds" and business "accelerators," that have social-media developers in their portfolios. Developers at companies supported by the fbStart partner firms will get an advanced look at new tools and features Facebook is creating for its site. In return, Facebook hopes that some of those start-ups could eventually build a business around its platform.

So far partners in the fbStart program include Seedcamp, sFund, 500 Startups, TechStars, and Y Combinator, among others, a Facebook spokesman said.

In documents filed for its initial public offering last week, part of Facebook's pitch to potential shareholders is that it can serve as a platform for other companies, and ultimately take a percentage of those companies' revenue. Since Facebook first opened up to developers in 2007, a growing number of start-ups, such as social-gaming firm Zynga Inc., have built almost their entire business around the social network. Other examples include BranchOut Inc., a professional network, and Color Labs Inc., which provides live phone-based broadcasts to Facebook friends.

"We've been asking Facebook for ways to get better access and advance information for our companies, and this is their way of doing that," said David Cohen, founder and chief executive of TechStars, a Boulder, Colo., start-up accelerator that has helped nearly 100 new businesses raise more than $125 million since 2007.

About half of TechStars' portfolio of more than 80 active companies are expected to make use of the program, he said, ranging from ventures that develop entire platforms on Facebook, to others that incorporate social-media tools and features from the site.

Most of the 70 start-ups in 500 Startups, a $30 million seed fund and business accelerator in Mountain View, Calif., use the Facebook platform in one way or another, said Christine Tsai, a 500 Startups partner. With fbStart, "they're putting a lot more manpower behind working with us in a more formal way," she added.

As internet based crowd-funding grows, we should expect incumbent financial institutions to integrate them or if not social media networks will likely get a larger slice of the capital markets.

The internet has been validating the great F. A. Hayek’s knowledge revolution through the forces of decentralization.

Quote of the Day: Ideas Grow on Blogs

Social networks, like real life, are driven by influencers—not necessarily those with the most friends or followers, but those whose thoughts, ideas and opinions have the biggest impact. Mr. Collegio notes that for political action committees "to seed opinion makers, Twitter is the ultimate platform. Ideas grow into stories on blogs and eventually in the mainstream media." Not the other way around.

That’s from author and former hedge fund manager Andy Kessler in an Op Ed column at the Wall Street Journal. The flow of ideas seem to be reversing; from the mainstream media to the public and now from the public--through social media networks as blogs--to the mainstream.

Online Honesty

It is interesting to know that people seem to be more honest in an impersonal setting like the online environment

Explains another favorite author of mine, Matt Ridley at the Wall Street Journal (bold emphasis mine)

It is now well known that people are generally accurate and (sometimes embarrassingly) honest about their personalities when profiling themselves on social-networking sites. Patients are willing to be more open about psychiatric symptoms to an automated online doctor than a real one. Pollsters find that people give more honest answers to an online survey than to one conducted by phone.

But online honesty cuts both ways. Bloggers find that readers who comment on their posts are often harshly frank but that these same rude critics become polite if contacted directly. There's a curious pattern here that goes against old concerns over the threat of online dissembling. In fact, the mechanized medium of the Internet causes not concealment but disinhibition, giving us both confessional behavior and ugly brusqueness. When the medium is impersonal, people are prepared to be personal…

Deep in our psyches, the act of writing a furious online critique of someone's views does not feel like a confrontation, whereas telling them the same thing over the phone or face to face does. All the cues are missing that would warn us not to risk a revenge attack by being too frank.

The phenomenon has a name: the online disinhibition effect. John Suler of Rider University, who coined the phrase, points out that, online, the cues to status and hierarchy are also missing. Just like junior apes, junior people are reluctant to say what they really think to somebody with authority for fear of disapproval and punishment. "But online, in what feels like a peer relationship—with the appearances of 'authority' minimized—people are much more willing to speak out or misbehave."

Internet flaming and its benign equivalent, online honesty, are a surprise. Two decades ago, most people thought the anonymity of the online world would cause an epidemic of dishonesty, just as they thought it would lead to geeky social isolation. Then along came social networking, and the Internet not only turned social but became embarrassingly honest. The greatest perils most people perceive in their children's social networking are that they spend too much time being social and that they admit to things that will come back to haunt them when they apply for work

My comments:

Much of our actions seem to be guided by social signaling.

Popular impression about the effects of social networking have hardly been accurate.

I find this article very relevant. I find it easier to discuss or debate online, perhaps for the same reasons cited: cues to status and hierarchy become less of an influence.

But online honesty does have harmful effects too, deficiency in diplomatic expression especially against the powers that may lead to undesirable or even adverse personal consequence such as the arrests or incarceration of bloggers in South Korea or Cuba.

Imprudent social networking remarks (in Facebook or in Twitter) have also costs people jobs and personal relationships.

Social Media Is Hayek’s Knowledge Theory At Work

Anyone who says or writes about social media and claims that today’s digital age is NOT about or related to Hayek’s Knowledge theory is dead wrong. They are either misrepresenting Hayek or have not read Hayek but has the chutzpah to make unfounded derogatory remarks.

The information age (third wave) is very much about the growing realization of Hayek’s Knowledge theory.

Proof?

Friedrich von Hayek wrote, (bold emphasis mine)

The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate "given" resources—if "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.

Well here is how technology enabled information gathering has been benefiting businesses, according to the New York Times, (bold highlights mine)

INFORMATION overload is a headache for individuals and a huge challenge for businesses. Companies are swimming, if not drowning, in wave after wave of data — from increasingly sophisticated computer tracking of shipments, sales, suppliers and customers, as well as e-mail, Web traffic and social-network comments. These Internet-era technologies, by one estimate, are doubling the quantity of business data every 1.2 years.

Yet the data explosion is also an enormous opportunity. In a modern economy, information should be the prime asset — the raw material of new products and services, smarter decisions, competitive advantage for companies, and greater growth and productivity.

Is there any real evidence of a “data payoff” across the corporate world? It has taken a while, but new research led by Erik Brynjolfsson, an economist at the Sloan School of Management at the Massachusetts Institute of Technology, suggests that the beginnings are now visible.

Mr. Brynjolfsson and his colleagues, Lorin Hitt, a professor at the Wharton School of the University of Pennsylvania, and Heekyung Kim, a graduate student at M.I.T., studied 179 large companies. Those that adopted “data-driven decision making” achieved productivity that was 5 to 6 percent higher than could be explained by other factors, including how much the companies invested in technology, the researchers said.

In the study, based on a survey and follow-up interviews, data-driven decision making was defined not only by collecting data, but also by how it is used — or not — in making crucial decisions, like whether to create a new product or service. The central distinction, according to Mr. Brynjolfsson, is between decisions based mainly on “data and analysis” and on the traditional management arts of “experience and intuition.”

Essentially this means that businesses don’t rely on top down flow of information. Instead, supported by the rapidly advancing computing capacity of the current generation of computers, data gathering has been decentralized—“increasingly sophisticated computer tracking of shipments, sales, suppliers and customers, as well as e-mail, Web traffic and social-network comments”—which operates on real time basis that allows the businesses to rapidly store and process data “how it is used” and thus employ a “data-driven decision making”

Not Hayek?

More from the late great Hayek,

If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. We must solve it by some form of decentralization. But this answers only part of our problem. We need decentralization because only thus can we insure that the knowledge of the particular circumstances of time and place will be promptly used. But the "man on the spot" cannot decide solely on the basis of his limited but intimate knowledge of the facts of his immediate surroundings. There still remains the problem of communicating to him such further information as he needs to fit his decisions into the whole pattern of changes of the larger economic system.

Again Hayek’s Knowledge Theory extrapolated in today’s social media setting, from the New York Times anew (bold emphasis mine)

STILL, the software industry is making a big bet that the data-driven decision making described in Mr. Brynjolfsson’s research is the wave of the future. The drive to help companies find meaningful patterns in the data that engulfs them has created a fast-growing industry in what is known as “business intelligence” or “analytics” software and services. Major technology companies — I.B.M., Oracle, SAP and Microsoft — have collectively spent more than $25 billion buying up specialist companies in the field.

Well when Hayek said “further information as he needs to fit his decisions into the whole pattern of changes”, applied in today’s lingo they are called “business intelligence” or “analytics” software and services.

Get it? This is very much Hayek’s theory at work.

Experts who pretend that they know, don’t really know.

The presume superior knowledge out of self importance and deceptive conceit by relying on false theories and flawed models from which they extrapolate as foundations for their preferred political theory. (Let them bet on markets and see how they can predict them with consistency. I'll bet they'll be consistently wrong)

Again as Hayek once wrote,

All political theories assume, of course, that most individuals are very ignorant. Those who plead for liberty differ from the rest in that they include among the ignorant themselves as well as the wisest.

And that’s where the Hayek and statists camp differ. It’s in the admission of the knowledge problem.

Yemeni President To Resign: Another Near Victory For ‘Kids With Stones And Facebook’

Another MENA dictator bites the dust: Yemeni President agrees to step down

From the Wall Street Journal

Yemen's president and the country's top general are hashing out a settlement in which both men would resign within days, people familiar with the situation said, raising crucial questions of who will end up leading a key, though embattled, U.S. counterterrorism ally.

The outlines of a peaceful transition, to a civilian-led transitional government, emerged amid rising tension over the standoff between Yemeni President Ali Abdullah Saleh and pro-democracy protesters backed by Gen. Ali Mohsen al-Ahmar. The general this week broke ranks and declared his support for protesters demanding that the president resign immediately.

Opposing tanks from units loyal to Mr. Saleh and to Gen. Ahmar have faced off in the streets of San'a all week and tens of thousands of antigovernment demonstrators vowed to continue their protest Friday in the capital's Change Square.

It’s almost a validation of what I earlier wrote about—rebutting critiques of MENA revolts spearheaded by “Kids with stones and Facebook”

Today’s defection of Yemen’s key army commanders partially rebuts the idea that incumbents “do not easily yield that power to kids with stones and Facebook”. Maybe not easily, but this only shows that “facebook and kids with stones” have the power to turn the army on their sides.

Don’t forget armies are composite of people---who can be swayed by influences (like networks-families, friends or culture-religion).

As a saying goes... It’s not over till the fat lady sings.

Like it or not, “Kids with stones and Facebook” will play a far crucial role in shaping the geopolitical context than most experts would expect.

As I would like to reiterate, politics is an ongoing process.

People participating in these social (MENA) revolutions may not understand liberty (private property, rule of law and voluntary exchange) enough, in as much as they would like their dictators out. As the 18th President of the US, Ulysses S. Grant, once said,

The right of revolution is an inherent one. When people are oppressed by their government, it is a natural right they enjoy to relieve themselves of the oppression, if they are strong enough, either by withdrawal from it, or by overthrowing it and substituting a government more acceptable.

But slowly and surely social media is helping them get there.

Knowledge Revolution: Internet and Freedom

I’ve been writing about how the internet/web has functioned (and will continue to function) as a critical instrument for the widespread dissemination of the principles of freedom based on what I call the Hayekian Knowledge revolution platform—characterized by a decentralized-horizontal flow of information.

You can read my earlier explanations here or here.

And in realizing that the web has been undermining the current political order, governments around the world has, intuitively, resorted to counterbalancing these evolving spontaneous order by attempting to regulate the internet or by imposing censorship. A good example are reports from wikileaks (such as this and this) that has exposed many covert government activities.

Well my observations seem to be getting substantial validations.

Here is the Economist, (bold emphasis mine)

THE number of people with access to the internet has more than doubled in the past five years to over two billion. Many governments have responded with regulation and repression, according to a report published on April 18th by Freedom House, which assigns countries an internet freedom score. Nine of the 15 countries that the Washington-based think-tank assessed in 2009 fared worse this year, among them Iran, Tunisia and China. On the plus side, citizens are growing increasingly adept at sidestepping these threats to their internet freedoms, and the use of social media did much to galvanise political opposition across the Arab world in recent months. Indeed web-users in some countries, such as Georgia and Estonia, have more freedom now than they did two years ago.

Some great charts

The massive growth of Internet Users (Freedom House)

Social media as a widely used application (Internet world stats)

Index of Internet freedom: 37 country score of internet freedom (0 Best, 100 Worst)

A green-colored bar represents a status of “Free,” a yellow-colored one, the status of “Partly Free,” and a purple-colored one, the status of “Not Free” on the Freedom of the Net Index. (Freedom House)

More internet freedom versus less internet freedom (Freedom House)

How Asia has fared.(Freedom House)

Freedom House identifies the typical government’s countermeasures:

(From Freedom House, bold emphasis original)

Key Trends

* Explosion in social-media use met with censorship: In response to the growing popularity of internet-based applications like Facebook, YouTube, and Twitter, many governments have started targeting the new platforms as part of their censorship strategies. In 12 of the 37 countries examined, the authorities consistently or temporarily imposed total bans on these services or their equivalents.

* Bloggers and ordinary users face arrest: Bloggers, online journalists, and human rights activists, as well as ordinary people, increasingly face arrest and imprisonment for their online writings. In 23 of the 37 countries, including several democratic states, at least one blogger or internet user was detained because of online communications.

* Cyberattacks against regime critics intensifying: Governments and their sympathizers are increasingly using technical attacks to disrupt activists’ online networks, eavesdrop on their communications, and cripple their websites. Such attacks were reported in at least 12 of the 37 countries covered.

* Politically motivated censorship and content manipulation growing: A total of 15 of the 37 countries examined were found to engage in substantial online blocking of politically relevant content. In these countries, website blocks are not sporadic, but rather the result of an apparent national policy to restrict users’ access to information, including the websites of independent news outlets and human rights groups.

* Governments exploit centralized internet infrastructure to limit access: Centralized government control over a country’s connection to international internet traffic poses a significant threat to free online expression, particularly at times of political turmoil. In 12 of the 37 countries examined, the authorities used their control over infrastructure to limit widespread access to politically and socially controversial content, and in extreme cases, cut off access to the internet entirely.

The battle rages.

Are Dictatorships Bullish For the Markets?

Dictatorships are bullish for the markets, David Kotok of Cumberland Advisers says so, (bold highlights mine)

In the reality check currently underway, the seats of power (Sultans-Kings-Sheiks-or their sons) do not easily yield that power to kids with stones and Facebook. The king must either be outgunned (Libya) or he wins and the kids are punished harshly. In Saudi Arabia, Bahrain and elsewhere in MENA we are witnessing an outcome that is a blend of policy discussed in two classics. For details, see Metternich and what is called “Realpolitik.” For profiles of the victors in MENA, visit Machiavelli’s “The Prince.” In MENA, bullets triumph over ballots.

Okay, freedom loses. Kids die. It is a sad day for those of us who wish it were otherwise.

But for markets, it becomes a bullish outcome. Markets like stability and predictability. Markets know that kings with armies are stable and reliable. The players in these markets would not like to be born to the common class in those countries. These players like their life in freedom.

First of all, it’s rather sad and unfortunate to hear the hue of schadenfreude undergird such seemingly ‘prejudiced’ statements. These are what give capitalism a bad reputation. [Actually what Mr. Kotok cheers for is a crony based capitalism-dancing with dictators]

Second, is Mr. Kotok suggesting that “kings with armies” represent as stable political economic arrangements? If so, then why the chain of revolts?

Below is an interactive graph from the Economist of some possible factors that may have influenced the MENA revolts

Where dictators corner the resources of a nation at the expense of the majority, does Mr. Kotok honestly expect their constituents to remain forever docilely repressed?

You guys are so fortunate NOT to be on their places!

Three, markets have not been as cooperative with the Cumberland team, since they declared that they went to raise cash holdings from the emergence of MENA’s political uncertainties.

Yet it’s more of Japan’s natural disaster issues that have rocked the boat more than the MENA issues.

Thus seeing the market’s uncooperativeness, the Cumberland shifts from bearish to fully invested.

Fourth, the issue of “Realpolitik” have not been resolved.

The Saudi-led intervention in Bahrain has not entirely quelled dissent.

Politics represents an ongoing process. Thus, whatever short-term gains achieved by the present coercive actions of the consortium of dictators may or may not last.

Today’s defection of Yemen’s key army commanders partially rebuts the idea that incumbents “do not easily yield that power to kids with stones and Facebook”. Maybe not easily, but this only shows that “facebook and kids with stones” have the power to turn the army on their sides.

Don’t forget armies are composite of people---who can be swayed by influences (like networks-families, friends or culture-religion).

As a saying goes... It’s not over till the fat lady sings.

Like it or not, “Kids with stones and Facebook” will play a far crucial role in shaping the geopolitical context than most experts would expect.

Incentives Driving People To Social Networking As Facebook

Adam Hartley at the MSN says that having thousands of Facebook friends don’t reflect on the friendship in the traditional sense because our capacity to have friends is limited.

Mr. Hartley who calls Facebook friend acquisition as “Friend Farming” writes,

According to evolutionary anthropologist Robin Dunbar, 150 is the largest number of people that you can share trust and obligations with, explains psychologist Dr Rebecca McGuire-Snieckus.

That magic number of 150 friends is thought to be a cognitive limit to the number of friends we can maintain, the psychologist adds. "While people can boast hundreds and thousands of friends on Facebook, Dunbar would say that it is impossible to feed and nourish all of these relationships."

So having friends in excess of the Dunbar 150 suggests that social networking has hardly been about friends but about something more.

Mr. Hartley adds, (bold highlights mine)

Recent academic research suggests there are four primary motivations for going on social networking - social (meeting friends, having an online community); information (finding jobs and useful knowledge); entertainment (FarmVille!) and self-status seeking. It is this latter urge that drives friend farming.

Well different people have different incentives to join Facebook or other social networks.

To my account, some of my non-traditional friends, who shares the same ideas, ideals, values or philosophy as I, have been a fountain of informational wealth. In short, I learn alot from them and I am very appreciative of that.

Of course shared interest also means an online community, which is what I have been saying all along as the vertical flow of communication and knowledge dispersion. People with shared interest can exchange ideas directly which results to increased knowledge. Local knowledge is now globalized through Facebook and Twitter. Our personal interests are channeled by niches or by specialization. We form tribes despite the geographical distance.

And there are others whom I also gladly got to know through online games.

And importantly, they connect me real time to my family wherever they are.

While it may true for some or for many where adding or farming friends could be a form of status signalling, I find the zeitgeist of social network sites as expanding the human experience.

And it is why social networking will change the way we live.

The Web As Foundation To The Knowledge Revolution

``The economic problem of society is thus not merely a problem of how to allocate "given" resources—if "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.”- Friedrich von Hayek

Dictators of Tunisia and Egypt have recently been toppled. Autocratic leaders of Yemen, Jordan and Algeria have likewise been under political pressure.

The web’s real time connectivity coursed through social media has allowed for a widespread diffusion of information...and knowledge. And this has lowered the cost of organization and mobilization that has apparently increased the demand for political spontaneous actions in the form of “people power” political movements.

In short, the economics of the web has been transforming the political order[1].

But when we read social media sceptics like such as Stratfor’s Marko Papic and Sean Noonan, who writes[2]... (bold highlights mine)

Social media alone, however, do not instigate revolutions. They are no more responsible for the recent unrest in Tunisia and Egypt than cassette-tape recordings of Ayatollah Ruholla Khomeini speeches were responsible for the 1979 revolution in Iran. Social media are tools that allow revolutionary groups to lower the costs of participation, organization, recruitment and training. But like any tool, social media have inherent weaknesses and strengths, and their effectiveness depends on how effectively leaders use them and how accessible they are to people who know how to use them...

The key for any protest movement is to inspire and motivate individuals to go from the comfort of their homes to the chaos of the streets and face off against the government. Social media allow organizers to involve like-minded people in a movement at a very low cost, but they do not necessarily make these people move.

...we understand that such objections have been founded on superficial premises-mostly from underrating the importance of knowledge and the continued the expectations that political developments flow from top-down dynamics.

Hayek’s Knowledge Revolution

Knowledge, according to the great Friedrich von Hayek[3], never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.

This simply means that everyone’s unique perspective represents as dispersed knowledge. When dispersed knowledge are combined, exchanged, mimicked and improved upon these interactions result to fresh or innovative ideas.

Prolific author and writer Matt Ridley calls such phenomenon as Ideas having Sex[4].

Professor Don Boudreaux expounds[5] on Matt Ridley’s intellectual intercourse.

The easier it is for ideas to get together, check each other out, and jump into bed with each other, the greater will be the number of newly created ideas — ideas that would not otherwise be conceived.

Copulating ideas has also another very important role: coordination of diversified information into the production of goods and services. And this has been the path to our (human) progress.

Matt Ridley, author of the very impressive book the Rational Optimist writes[6]

``the sophistication of the modern world lies not in individual intelligence or imagination. It is a collective enterprise. Nobody—literally nobody—knows how to make the pencil on my desk (as the economist Leonard Read once pointed out), let alone the computer on which I am writing. The knowledge of how to design, mine, fell, extract, synthesize, combine, manufacture and market these things is fragmented among thousands, sometimes millions of heads. Once human progress started, it was no longer limited by the size of human brains. Intelligence became collective and cumulative.

And that’s exactly what the web has been facilitating—an unlimited orgy of ideas—Hayek’s knowledge revolution is essentially being realized through social media.

From Vertical To Horizontal Flow

In the past the flow of information reflected on how economic production had been organized: the industrial age marked by mass production and thus a top to bottom dynamic. This holds true even with the political framework. From the top down economic structure emerged the grand experiments with centralized form of governance in the form of communism, socialism, autocracy, fascism and totalitarianism.

The traditional medium of information for the consuming public had been mostly through TV, radio and newspapers. Because of the limited networks, these institutions discriminated on the information it chose to broadcast, thus the exchange of ideas had largely been constrained.

Governments easily resorted to information control via political censorship in order to regulate “the moral and political life of the population[7]” or when political leaders felt the need to advance their interests.

Controlling the flow of information meant controlling the medium. Thus, political leaders throughout history have attempted to control the medium to preserve political power.

This time is proving to be different.

Today information flows real time and horizontally, enabled by the web.

People can simply self publish their thoughts, unedited, via the blogsphere (which incidentally accounts for an estimated 133 million[8] bloggers and growing) or through privately owned websites.

People can send messages via email or even by text messages via mobile phone.

People can also air blips of short messages or comments via the online community as Facebook and Twitter.

Or produce videos via podcasting and youtube that are being broadcasted via blip.tv or vimeo or video aggregators which has been posing a threat to TV.

And investors have been following the money trail.

As more and more people get wired or become netcitizens AD money spent on the internet has substantially been growing[9] see figure 6.

Figure 6: AD Spending Follow the Money Trail (Morgan Stanley)

Morgan Stanley’s Mary Meeker predicts of the explosion of mobile internet as the major source of growth for the web[10].

Even some TV programs today try to interact with the web by publishing tweets or facebook comments of audiences on air!

The democratization of information from the web or cyberspace has dramatically altered the complexion of knowledge distribution.

Gossip And The Transition To A Horizontally Based Political Order

In the hunter gatherer society, where our ancestors wandered in small tightly knit groups, gossips were used as a tool to evaluate relationships and as form of social discipline.

Aside from useful information, gossips, according to David Brooks of the Biorational[11], served to ``maintained social bonds and enforced social norms. In small groups like our ancestors' hunter-gatherer bands, in which everyone talks to everyone else regularly, liars and social cheats were found out quickly and were dealt with quickly. So lying and social cheating were relatively rare.”

The introduction of the web has basically brought back the traditional role of gossip.

For instance, Wikileaks has spilled the beans on many stealth government activities, and wikileaks has been instrumental in unleashing the popular “Jasmine” revolt in Tunisia[12].

Despite governments attempt to harass and control the founder of wikileaks, the success wikileaks has prompted for the broadening of competition.

As Professor Gary North rightly observes[13],

WikiLeaks has taken this to a new level. Now a disgruntled former WikiLeaks employee is branching out on his own. He has started a new organization, OpenLeaks. This is the kind of competition I love to see. A Reuters story describes what is about to happen. "All across Europe, from Brussels to the Balkans, a new generation of WikiLeaks-style websites is sprouting."...

As the number of these sites increases, it will become more difficult for governments to contain the leaks. The desire of leakers to become important overnight will grow.”

Of course governments can initiate countermoves such as instituting “firewalls” (as in the case of China) or kill-switch strategy[14] or the shutdown of ISP providers or disseminate counterpropaganda.

Cuba’s government for instance has designed a campaign to counter the web. Unfortunately this was again exposed, according to Wall Street Journal’s Mary O’Grady[15]

Last week a leaked video of a Cuban military seminar on how to combat technology hit the Internet. It demonstrates the dictatorship's preoccupation with the Web. The lecturer warns about the dangers of young people with an appealing discourse sharing information through technology and trying to organize.

As in the case of Egypt, the kill switch strategy has ultimately failed[16].

Circulating political propaganda or spreading disinformation can easily neutralized by “local based” knowledge or by speciality sites (e.g. snope.com).

One important development from the web is that it has altered the way governments have been behaving, as governments seemingly become more cautious and possibly less repressive in dealing with transgressors or with the political opposition, as in the case of China.

Borje Ljunggren of Yale Global notes of several incidences and sees[17] that

In case after case since 2004, the internet has dramatically changed the course of an event, forcing the party to maneuver between response and repression.

Mr. Ljunggren further notes that Chinese state control of information has also been under pressure,

He further writes, (bold emphasis mine)

Censorship is an organic part of the party-state and will no doubt remain a crucial weapon, but its usage is increasingly exposed as the Chinese internet society becomes aware of the extent to which entrenched party interests determine their access to information. As a consequence, an idea of a “right to know” is taking shape in China’s rapidly growing online civil society and this could, in Shirk’s analysis, become “the rallying cry of the next Chinese revolution.

While internet freedom clearly is not about to be declared, civil society and new technology will over time push limits beyond the axiomatic boundaries of the party-state.”

As one would notice the vertical-hierarchal structure of governments are constantly held under pressure by the democratization of knowledge.

And this should apply with political ideology too.

Political and economic ideology latched on a vertical top-bottom flow of power will be on a collision course with horizontal real time flow of democratized knowledge.

This would likely result to less applicability of ideologies based on centralization, which could substantially erode its support base and shift political capital to decentralized structure of political governance that would conform with the horizontal structure of information flows.

People will know more therefore control from the top will be less an appealing idea.

The final word from futurist Alvin Toffler[18], who predicted this Hayekian Knowledge Revolution which he molded through as his Third Wave concept.

``Computers can be expected to deepen the entire culture’s view of causality, heightening our understanding of the interrelatedness of things, and helping us to synthesize meaningful “wholes” out of the disconnected data whirling around us....The intelligent environment may eventually begin to change not merely the way we analyze problems and integrate information but even the chemistry of our brains.”

---

[1] See The Web Is Changing The Global Political Order, January 29, 2010

[2] Papic Marko and Noonan Sean Social Media as a Tool for Protest, stratfor.com February 3, 2010

[3] Hayek, Friedrich August von The Use of Knowledge In Society, Individualism and Economic Order, Mises.org, p.77

[4] See Matt Ridley: When Ideas Have Sex, August 11, 2011

[5] Boudreaux Donald J. Promiscuous, Productive Ideas, CATO Unbound, September 10, 2010

[6] Ridley Matt, Humans: Why They Triumphed, Wall Street Journal, May 22, 2010

[7] Newth, Mette Newth The long history of censorship Beacon for Freedom of Expression, 2001

[8] Bradley Phil, Great Blog statistics, Phil Bradley’s Weblog

[9] See The Deepening Of The Information Age: News Sources And Ad Spending, January 7, 2011

[10] Meeker, Mary Internet Trends 2010 by Morgan Stanley Research, slideshare.net 2010

[11] The Bio-Rational Institute Pleistocene brain, mobile phone, May 26, 2006

[12] International Business Times, Wikileaks helped spark Tunisia revolt : FPJ January 29, 2011

[13] North Gary When the Insiders Lose Control, February 3, 2011

[14] Cowie James, Can the Internet Tame Governments? – Part I, Yale Global, February 9, 2011

[15] O’Grady, Mary Anastacia Will Cuba Be the Next Egypt?, Wall Street Journal February 7, 2011

[16] See Egyptian Revolt: Web Censorship Fails, February 1, 2011

[17] Ljunggren Borje Can the Internet Tame Governments? – Part II, Yale Global February 11, 2011

[18] Toffler, Alvin The Third Wave p 175