Re: [friam] Two newly posted presentations

On 6/19/2014 10:18 AM, Mark Miller wrote:
> I've just added two new presentation links to wiki.erights.org:
>
> ...
>
> Interview with Mark Miller
> <http://www.michaelcovel.com/2014/06/16/ep-248-mark-miller-interview-with-michael-covel-on-trend-following-radio-jun-17-2014/>
> -
> about Smart Contracts, Prediction, Singularities, and more.
>
>
> The second is a podcast interview I just gave, after the interviewer saw
> that first talk and read the Digital Path paper <
> http://www.erights.org/talks/pisa/paper/>.
>
>
> At tomorrow's friam meeting, I'd like to discus refocusing erights.org and
> wiki.erights.org away from E and towards electronic rights and
> capability-based smart contracting. I know this is short notice, but if
> people could watch / listen to these before then, that would be helpful.
> Thanks.

It was short notice.  Sorry I missed it.

I listened to the above podcast interview with Michael Covel about smart
contracts, etc.  I hope it's OK with you that I'm commenting to the lists.

There was one aspect of smart contracts that you began by discussing
that I didn't hear you follow up on with a resolution.  You began by
discussing third world countries without effective systems of property
rights that can be depended on to enable long distance contracts that
can then turn informal property rights into 'capital' that can be
leveraged to create wealth.  In your discussion you mentioned the point
in time that may arise if an attempted use of capital doesn't work out
and foreclosure (generally transfer of tangible assets) may be required
to fulfill the terms of the contract.  That's the point where I find it
difficult to imagine smart contracts being bootstrapped in the
developing world.  It's where the "rubber meets the road" - i.e. where
tangible assets finally must be transferred.  At that point why would
anybody accept foreclosure?  If people don't accept foreclosure then you
don't have capital - do we agree about that?

That problem relates to the discussion in the podcast of government
bailouts.  In particular during all the bailout discussions in the US
the thought/complaint was often expressed that if the government can
bailout the large banks, why not bail out the (hard working and down
trodden) individual homeowners who find themselves in the position of
not being able to repay their mortgage?  We still today often see ads
about how 'President Obama' (literally) is making it possible for home
owners to pull more capital out of their homes with lowered interest
rates or lowered collateral requirements via programs like HARP:

https://en.wikipedia.org/wiki/Home_Affordable_Refinance_Program

It seems to me the incentives and mechanisms behind such programs and
such an approach are similar to what incentivizes governments (and of
course the people who compose them) to "nationalize" property and, to
some extent or other, to redistribute it to "the poor".  Such activities
are often called "communist" revolutions - e.g. that in Cuba and similar
activities in many Latin American countries, some ongoing today.  Isn't
it these same lowered interest rates and lowered collateral
requirements, many initially provided for and mandated by the CRA:

https://en.wikipedia.org/wiki/Community_Reinvestment_Act

that gave rise to the initial problems that resulted in the banking
crisis of 2008?

What I would like to see (but presently don't see) is some way that the
electronically enhanced "smart contracts" can help with this problem. 
That is to help with pushing the incentives towards honoring contract
requirements when the "rubber meets the road" and the actual
transferring of physical assets is required to allow the whole system of
capital creation to work.  How can these incentives exist without a
"civil" system with policing and courts that can provide physical force
behind contract enforcement?  How do you imagine such smart contracts to
work in third world countries without developed property rights systems
when the rubber hits the road?

I've been thinking a bit more about such issues of late because my
younger daughter is going to be in Malawi doing pregnancy malaria
research next year.  Malawi is one of the poorest countries in the world
with a nominal per capita GDP ~$250/yr.  Being so poor seems to me the
major contributor to their health problems (e.g. childhood mortality). 
How can a country like Malawi begin to develop a working economy when
they lack an effective civil infrastructure (40+% of their government
income has come from foreign aid that's recently been cut back recently
due to the "Cashgate" corruption scandal)?  Even if Malawi were to
magically get sufficient electrical power (e.g. from solar) and
communications (e.g. from cellular) to enable digital communications,
how would they develop adequate social/civil institutions to
enforce/encourage transfer of tangible assets when required by
contract?  Is that something that you imagine can be facilitated with
smart contracts?

--Jed  http://www.webstart.com/jed/