If It’s Free, You’re the Product

Digital Dissidents Part 2

Al Jazeera (2016)

Film Review

“If It’s Free You’re the Product”

In Part 2, Digital Dissidents reminds us that Google, Amazon, Facebook and Apple daily collect and “monetize” (ie sell) millions of data points about us (including records of financial transactions).

The documentary also features rare commentary by Julian Assange on Sweden’s attempts* to charge him with sexual assault. These charges mysteriously surfaced exactly two weeks after Anonymous hacker Jeremy Hammonds released hacked emails between intelligence contractor Stratfor and the US government about potential charges against Assange under the 2017 Espionage Act. Was this mere coincidence? It seems unlikely.

NSA whistleblowers Thomas Drake and William Binney also talk candidly about the devastating effects of whistleblowing on their personal lives. His career in software systems management ruined, Drake presently clerks in an Apple retail outlet.

Binney, who refers to the NSA as “the Stasi** on super steroids, calls for the total dissolution of NSA. He maintains it has too much power to be reformed.

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*Sweden dropped the sexual assault charges against Assange in Sept 2017. As Assange points out in the film, neither woman filed a police complaint and one accuses the police of inventing the crimes she supposedly accused him of.

**As the intelligence/security service for the former East German Republic, the Stasi was one of the most viciously repressive secret police agencies ever.

The video, which can’t be embedded for copyright reasons, can be viewed for free at the Al Jazeera website: Digital Dissidents

The Real Reason Silicon Valley Moved Electronics Assembly to China?

Death by Design

Al Jazeera (2017)

Film Review

Death By Design is a very concerning documentary about the extremely toxic chemicals used in the production of semiconductors and circuit boards needed for computers, cellphones ipods, etc.

It turns out IBM has been keeping a mortality register since the 1970s showing an extremely high rate of breast cancer, Hodgkin’s lymphoma, brain cancer and melanoma in in electronics assembly workers. Unsurprisingly there are also high levels of carcinogenic and endocrine disrupting chemicals in the ground water of various Silicon Valley neighborhoods. Thanks to the tireless organizing and lobbying efforts of the Silicon Valley Toxics Coalition, in 2001 the EPA declared a number of Silicon Valley companies Superfund Sites* in 2001 (IBM, Intel, National Semiconductor, Hewlett Packard among others).

This, in turn, would lead most Silicon Valley companies to outsource their electronics assembly to China, where environmental regulations are much weaker.

At the moment China also deals with most of the world’s toxic e-waste, a problem significantly compounded by deliberate planned obsolescence on the part of tech companies. Our Smartphones, computers, etc are deliberately designed to cease operating after about four years so we have to buy new ones. The most famous example is the Apple iphone, with the infamous battery that goes dead after 18 months and can’t be replaced.

Apple and their main Chinese contractor Foxconn are also the worst offenders in resisting Chinese environmentalists who are trying to reduce toxic discharges to Chinese rivers and streams.

The part of the film I found most interesting relates to a company called Ifixit, which specializes in teaching Smartphone and computer users how to fix their own devices instead of replacing them. They have even developed a special screwdriver to open Iphones so the batteries can be replaced.

I was also intrigued to learn about an Irish company that builds totally non-toxic and upgradable laptops out of wood (instead of plastic) that last 7-10 years.

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*When the EPA declares a company a toxic Superfund Site, the company is required to develop and pay for removing the toxic chemicals.

French Prosecutors Charge Apple Under Planned Obsolescence Law

Prosecutors in France have charged Apple with deliberately slowing down older iphones when new models come on the market. The strategy, they claim, is to pressure users to upgrade to a new version. In France, it’s illegal for a manufacturer to deliberately decrease the lifespan of a product.

Apple admits to slowing down older iphones “to protect battery life.” They claim the problem can be solved if the user shells out another $30 for a new battery. Consumer advocates the new batteries should be free, as buyers weren’t advised of this additional cost at the time of purchase.

French iphone users are extremely angry. It would seem French consumers are quicker than those of us in the English-speaking world to recognize when they’re being ripped off.

This new scandal comes on the heels of a $13 billion fine the EU has slapped on Apple for tax evasion: Paradise Papers Expose Tax Cheats

And growing evidence about the health dangers of wireless technology The Dark Side of Wireless Technology

Al Jazeera examines the controversy on their current affairs program* Inside Story

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*For younger readers, “current affairs” refers to a type of mainstream media in the late 20th century in which government issues affecting people’s daily lives were objectively examined and critiqued.

 

Paradise Papers Expose Trump Administration Tax Cheats

10 Minutes: the Paradise Papers

Press TV (2018)

This short video provides a capsule summary of the Paradise Papers, 13.4 million electronic files leaked in November 2017 about the wealthy tax dodgers who use offshore tax havens to avoid taxes and conceal illegal financial dealings.

Although the Paradise Papers scandal has received less publicity than the Panama Papers did in 2015, its list of culprits is far more comprehensive. At the top are the Queen of England, Madonna, Bono, Apple, Nike, the Queen of Jordan, the ministers of finance of Canada and Brazil, US Commerce Secretary Wilbur Ross (who used tax havens to conceal illegal dealings with sanctioned Russian businessmen) and Gary Cohen, who wrote Trump’s new tax law. The EU has slapped a $13 billion fine on Apple for tax evasion, which they refuse to pay.

Analysts who have studied both the Paradise and the Panama Papers estimate that approximately $7.8 trillion is held in offshore tax havens or 10% of global GDP.

The best known tax havens are Ireland, the Netherlands, Switzerland and British-controlled Cayman Islands, Bahama, Jersey and the Isle of Mann. There is growing pressure on the British government to crack down on tax and banking policies in their tax haven colonies.

The End of Globalization

From Global to Local: The Making of Things and the End of Globalisation

by Finbarr Livesey

Profile Books Ltd (2016)

Book Review

In From Global to Local: The Making of Things and the End of Globalisation, Finbarr Livesey challenges the common neoliberal claim that globalization is the be-all and end-all of global prosperity.

Livesey’s premise, which he supports with an impressive array of data, is that globalization peaked shortly after 2008 and the world economy is in a period of deglobalization. World trade is slowly declining as a percentage of GDP, and many companies who moved factories to the third world are improving their bottom line by reshoring them to the US and Europe.

Livesey contends that, to a large extent, last year’s vote for Britain to leave the EU and for a US president who promised to withdraw from the TPP and bring back American jobs, merely reflect an economic trend that began nearly a decade ago.

The present deglobalization was triggered by the 2008 financial crash that sucked trillions of dollars out of the global economy. However, Livesey identifies a number of other factors that influence this trend – chief among them the volatility of oil prices and shipping costs (containers must be booked months in advance) and the growing cost of labor in China and neighboring countries. At the same time, technological advances, including 3D printing and “additive manufacturing,” have led to an upsurge in “on demand” industries and consumer frustration with being limited to millions of identical mass produced items.

At present many companies find it more profitable to shorten their supply chain by producing most or all component parts locally or regionally. Between 2010 and 2015, over 1300 companies brought production back to the US. Even Apple and Google have started to reshore significant manufacturing operations.

At present three-fourths of everything bought in the US is made in the US.

Originally published in Dissident Voice

Planned Obsolescence: A Corporate Conspiracy

The Lightbulb Conspiracy

Directed by Cosima Dannoritzer (2010)

Film Review

The Lightbulb Conspiracy is about the history of planned obsolescence, ie deliberate strategies by multinational corporations to reduce the lifespan of common products to increase consumer demand.

The documentary traces the origin of planned obsolescence to 1920, when a secret cartel of lightbulb manufacturers agreed to reduce the lifespan of a lightbulb from 2,500 to 1,000 hours.

It describes a similar conspiracy by the textile industry to make nylon fibers less durable. The first nylon stockings never got runs in them. Manufacturers couldn’t take the risk that women would only buy two or three pairs in a lifetime.

The film also reveals Ipod’s “dirty little secret;” namely Apple’s coy scheme to power the Ipod with irreplaceable batteries that die after 18 months, as well as explaining the secret chip in printers that automatically disables them after a designated number of copies.

Like the victim in the film, about six months ago I started getting a message that my “ink reservoir” was full and I needed to return my printer for servicing. Of course we all know “servicing” cost three times as much as a new printer. Following the filmmaker’s advice, I easily found free software on the Internet that overrides this chip.

The Lightbulb Conspiracy ends by profiling some of the Cradle to Cradle* activists who are fighting back against planned obsolescence and taking active steps to reduce the mountain of electronic waste it creates.

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*Cradle to cradle design is a zero waste approach to the design of products and systems. It models human industry on nature’s processes  – viewing materials as nutrients circulating in healthy, safe metabolisms.

How Big Corporations Avoid Tax

The Tax Free Tour

Film Review

VPRO-Marijee Meerman 2013

The Tax Free Tour is an hour long Dutch documentary (in English) about the highly specialized field of corporate tax avoidance. I found it astounding how many American corporations use overseas tax havens to avoid paying tax in the US. Some of the better known names include Walt Disney, Wells Fargo, Google, AT&T, Apple and even companies that promote themselves as socially responsible, like Starbucks and Amazon.

Apple, one of the worst offenders, pays only 1.9% of their annual income in corporate tax. As a US company headquartered in Silicon Valley, Apple should be liable to the standard 35% corporate tax rate. Their secret is diverting nearly all their income to a subsidiary in Ireland (which has one of the lowest corporate tax rates) – after first passing their royalty income through a Netherlands subsidiary (the Dutch charge virtually no tax on intellectual property revenue), a company listed in Virgin Islands and back to Ireland. In the accounting trade, this is known as a Double Irish with a Dutch sandwich.

The filmmakers calculate that profits offshored for tax avoidance purposes totaled more than $20 trillion in 2010. Approximately 100 of the world’s largest companies have subsidiaries in the Netherlands, owing to their low taxes on intellectual property royalties. Walmart has six Dutch companies, even though they don’t have a single Dutch store. Starbucks also diverts all their royalty income to the Netherlands. Because they have a trademark on “frappuccino,” they declare a certain percentage of the price as a “royalty” (and pay no tax on it).

My favorite part is near the end when a British Select Committee challenges a Starbucks executive on his claim that their British coffee houses have been running at a loss for fifteen years. After asking why they don’t close their British stores, she gets him to admit they avoid $1.6 million pounds in corporate taxes by diverting their UK income to the Netherlands. He won’t tell her how much tax they pay the Dutch government. Allegedly Starbucks and the Dutch government have a secret agreement not to disclose the amount. The committee chair sternly reminds the executive of all the free public services Starbucks receives in the UK, at the expense of other taxpayers.

Amazon avoids corporate tax by diverting a sizable portion of their revenue to Luxemburg. Google shelters their profits in Bermuda. Other favored corporate tax havens include Cyprus, the Cayman Islands, Mauritius, Singapore, Hong Kong, the UAE and Kenya.

The irony is that most of this income can’t be transferred to shareholders. Paying it out as dividends would necessitate repatriating the revenue to the company’s home country – and paying the prevailing corporate rate. Thus much of this money is loaned (as treasury bonds) to deeply indebted western countries – who struggle to balance their books owing to the trillions of dollars lost from tax avoidance.

Crossposted at Daily Censored

The Early Internet Vision: Public and Free

Linux: Free Open Source Alternative to Microsoft Windows

Guest Post by Steven Miller and Satish Musunuru

(Part 2 of a five-part series on the corporatization of Internet surveillance.)

Back to the Future

Back in the early 1990s, the Internet was barely beginning. Everyone was dazzled about the possibilities of a universal communicator, where any could connect to any other individual or any other thing for free. The US Post Office was prepared to offer universal connectivity to everyone. Infinite global networking was on the agenda. The natural cooperative human instinct was in ascendency.

The basic elements of what would become the Internet had all been developed for free, outside of corporations, and had been given away to the public with no concerns for making private profit. The different technologies built upon each other through the efforts of a highly distributed network of engineers all over the world. Each piece built upon the foundation laid by another.

TCP/IP was created as a basic protocol to communicate between computers (3) and was available to everyone, although funded by ARPANET, which was a project of DARPA, which was and still is part of the Defense Department. These days DARPA is working on different technologies, like drones.

TCP/IP established the foundation on top of which came email, which uses protocols such as SMTP, POP and IMAP. The key thing is all these use TCP/IP for the actual transmission. HTTP which is the basis for the WWW also uses TCP/IP. So do Instant messaging and everything else we’ve come to enjoy using.

TCP/IP led to email and HTTP. Tim Berners-Lee, working at CERN, the European nuclear lab, tied the free software TCP/IP (for establishing domain protocols) to the free software for standardize common text for every computer – HTTP. augmented by the equally-free APACHE server, and created open public access for anyone through WWW protocols. A server stores information and sends it to multiple clients when they request it. This is what’s happening when we open our browser and go to weather.com. Then Berners-Lee released the web to the world as HTML markup language in 1989. This standardized web page building and linking. (4)

Suddenly computers anywhere could talk to each other. Soon the University of Illinois gave away MOSAIC – a free graphic interface. The open-source movement added Firefox – a free web browser. The basic open-source platform language LINUX spread around the world and is even grudgingly used by Microsoft.

Corporations for years had constrained the development of digital technology so they could make a private profit off selling privileged access to information. Berners-Lee designed the Internet so that it would be free:

“I had designed the Web so there should be no centralized place where someone would have to ‘register’ a new server, or get approval of its contents.”  (5)

The idea was to establish open peer2peer networks, where the computing power, and therefore the choices, resides at either end. The most popular search engines massive servers, on the other hand, keep that power in the center, and use algorithms to determine which sites are featured first.

Since a server is centralized, it opens the door to the notion of customers. At this point, the contours begin to change as corporations start figuring out this Internet thing and start releasing their own products as competitors to freely available open source products. Corporations moved in for the kill.

The next stage in this trend is in the development of the browser. MOSAIC was the open and free alternative. But Microsoft came along with its own closed Internet Explorer and started giving it away for free with Windows. Mozilla then developed a free and superior open-source browser. Corporations struggled to develop a browser superior to this, but it now carries the bulk of Internet traffic.

Why do corporations give hardware and software away for free? Because they see a lot more profit potential in getting other corporations and citizens locked into their ecosystems. The race is to become the platform. Apple has successfully done this with their complete line of hardware/software products, which are notoriously closed to external developers. Now corporations began to exert control.

Background and Notes

3)  http://en.wikipedia.org/wiki/Internet_protocol_suite

4)  Larry Lessig. The Future of Ideas. 2001 , p 52 – 57

5)  Lessig, op cit, p 44

To be continued.

Reposted from Daily Censored

photo credit: aid85 via photopin cc

Steven Miller has taught science for 25 years in Oakland’s Flatland high schools. He has been actively engaged in public school reform since the early 1990s. When the state seized control of Oakland public schools in 2003, they immediately implemented policies of corporatization and privatization that are advocated by the Broad Institute. Since that time Steve has written extensively against the privatization of public education, water and other public resources. You can email him at nanodog2@hotmail.com

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Satish Musunuru draws upon his training as an engineer and his experience as a professional in Silicon Valley to understand the relationship between technology and corporate capitalism and how it has brought us to the ecological and societal crisis we find ourselves in. You can email him at guruji323@hotmail.com