Thursday, 9 December 2010

Beg for permission to use your money

In recent times, everyone and his poodle have been analysing "the Wikileaks matter" from just about every angle. Is Wikileaks doing the right thing? Is Assange guilty of a sex crime?

Who really owns your money?

One matter which did not get the coverage I believe it deserved, is the decision by PayPal, Visa and Mastercard to "stop processing payments" to Wikileaks.

Little by little we are getting used to viewing our credit/debit cards as simply another way of making a payment - a more convenient way, and one which lends itself well to online or remote payments. This decision by these three companies highlights a major difference between these cards and ordinary money however: someone else, other than yourself, has the right and the power to decide who you're allowed to pay.

With cash, you need nobody's approval to give your money to someone. You just take the money out of your pocket and give it to the other person. Nobody else is involved. You need nobody's permission, and nobody can stop you. Until recently many of us thought that cards and accounts like PayPal were, essentially, a more modern version of the same thing.

Then came Wikileaks. And Wikileaks did something unpopular to a number of important people. Neither the organisation nor its founders or employees were actually charged with committing a crime. There was no court order requiring banks to freeze their assets. Instead, several companies decided unilaterally to prevent you from giving your money to this organisation. Not just you of course, but everybody. Luckily, Wikileaks has substantial support, and it's very unlikely that it will be brought down by this underhanded tactic. But it does raise the question - how much power do credit card companies have over our lives?

A company which depends entirely on online sales can be wiped out by such companies. All they have to do is block them from receiving money from everyone.

Not only that, but these companies can completely control what you spend your money on. Of course this rarely happens, since the more you use their services, the more money they make. However, there should be no more control over how we use our money than if we were using cash - at least not based on a decision by a corporation.

The shady world of banking

I wonder, is it a pure coincidence that all these companies decided to stop payments (and in some cases, actually steal donated money) came right after Julian Assange declared that the next released documents would involve a major bank?

In an interview with Forbes on the 30th of November, Julian Assange said that one of the next targets will be "a major American bank". On the 4th of December, PayPal blocked all donations to the site. This was followed on the 6th December by Mastercard, and the 7th December by Visa.

All sites claimed, of course, that they were doing this because Wikileaks was engaging in illegal activities. This doesn't explain why all three companies had been happy to handle donations to Wikileaks right up to the point that Assange announced that he'd be exposing skeletons in the financial sector.

Since the "official explanation" is sticking in my throat, I decided to come up with some speculations of my own. Theory number 1 is that "a major American bank" gently reminded Visa, MasterCard and PayPal that they are in the same boat, and if a big fat passenger falls overboard off a small boat, the resulting instability could get others wet as well. Theory number two is that, if "a major American bank" is discovered with its hand in the cookie jar, it might also be discovered that the other kids were giving it a hand to reach the jar in return for some of the cookies.

In short, this decision may have done just as much to damage the reputation of the banking and electronic money industries as the documents themselves (which will be leaked at any cost anyway).

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