I had a fun conversation with Bruce Schneier on Techtonic this week. Bruce is well-known for his work as a security technologist: he’s been writing his Schneier on Security blog for over 20 years, as well as over a dozen books, the latest of which is “A Hacker’s Mind: How the Powerful Bend Society’s Rules, and How to Bend them Back.”
I recommend listening to the interview:
• Stream the Bruce Schneier interview
True to its title, “A Hacker’s Mind” is about hacks – but not limited to the sorts of digital hacks that we’re accustomed to hearing about (“my phone got hacked” and so on). Instead, Bruce explores hacking in a more general sense, arguing that – if we define hacking as bending the rules for one’s personal gain – the rich and powerful have been hacking systems for centuries. Maybe millennia.
A good example of a hack is tax avoidance strategies, both for individual rich people and for mega-corporations like the Big Tech giants. Schneier writes about PayPal cofounder Peter Thiel’s hack of the Roth IRA, the account where everyday citizens are allowed to deposit a few thousand dollars a year, tax-free. Thiel deposited money in a Roth that he then used to buy over a million shares in PayPal at the discounted price of $0.001 per share. The appreciation of those shares, now worth $5 billion, is all tax-free. It’s totally against the spirit of the Roth IRA, but the hack is legal, allowing Thiel to avoid millions in taxes.
On an organizational level, there are strategies like the “Double Irish with a Dutch Sandwich,” employed for years by Apple and Google to escape their fair share of federal tax. It ran like a convoluted shell game, with subsidiaries in multiple countries each trading off assets and profits to exploit the requisite loopholes. And it worked. As Schneier writes, “Estimates are that US companies avoided paying nearly $200 billion in US taxes in 2017 alone, at the expense of everyone else.”
That’s an important phrase, “at the expense of everyone else.” Because the point is not just that Thiel, and Apple and Google and other powerful interests, are getting rich(er) with unethical tricks. The real insult is that the rest of us are left to face the consequences: underfunded schools and hospitals, creaking infrastructure, and widening inequality, among other problems.
The hacker’s mindset – finding loopholes, exploiting vulnerabilities – has long been a driving force in the tech industry, guiding software development in so-called “disruptive” startups. Some Silicon Valley companies have gotten very, very rich as a result, leading the founders to bring the hacking mindset elsewhere. Case in point is Toronto.
When Google went sideways
Josh O’Kane was my guest on the July 24, 2023 Techtonic, speaking about his book “Sideways: The City Google Couldn’t Buy,” on Google’s failure to build a surveillance neighborhood in Toronto. This is also a recommended listen:
• Stream the Josh O’Kane interview
Google’s attempt to take over Toronto’s waterfront all started with Larry Page’s idea as a college student, at the University of Michigan, to build a monorail on campus. Page seems to have imagined himself, early on, to be an urban-planning visionary. Now, any fan of the Simpsons will tell you that suggesting a monorail as urban planning is pure comedy. (At least that’s what they say in Ogdenville, Brockway, and North Haverbrook.) The funny thing is that the Simpsons’ monorail episode – Marge vs. the Monorail – aired in January 1993, during Page’s sophomore year at Michigan. If Page saw the episode, it didn’t dissuade him: he was dead serious about his monorail idea.
Of course, the Michigan monorail didn’t get built, as Page lacked the means to put his plans into motion. But within a few years, Page was an oligarch with billions in Google money, looking for places to spread his influence. And so he returned to his urban-planning dreams and asked a team at Google to draw up proposals for a new city, complete with a monorail and lots and lots of surveillance technology pointed at the citizens.
(Side note: Page’s idea for a custom-built city also included, and I’m not making this up, a dome over the city. Which of course is a plot point in The Simpsons Movie, from 2007. It’s entirely possible that Page missed the point of Simpsons satire twice, as he apparently thought that a monorail, and a city under a dome, were both viable urban-planning ideas.)
Page’s team, searching for enough open real estate to build the surveillance city, finally alighted on Toronto, where there’s a stretch of undeveloped waterfront adjoining downtown. Here’s a photo I took of that area in July, on a flight out of Toronto City Airport:
The problem is that Toronto, a famously process-oriented city, was not going to allow Page to roll in and start building with no oversight. Following the approach described in Bruce Schneier’s book, the Google subsidiary called Sidewalk Labs attempted various hacks – routing around various oversight bodies, making intentionally vague promises, and generally trying to sidestep Toronto’s municipal, provincial, and federal levels of regulation. Toronto pushed back: from activists in #BlockSidewalk to journalists (like Josh O’Kane) to the regulators themselves, resistance to Google eventually became so fierce that the company backed out. This trillion-dollar monopoly, accustomed to enjoying its Double Irish with a Dutch Sandwich, was defeated by the power of citizens.
And this is the hopeful note that brings an end to both Schneier’s and O’Kane’s books. Even as monopolies grow in scope and influence, the rest of us can band together to fight for a better society: closing the loopholes, forcing behemoths to pay their fair share in taxes, and standing ready to raise the alarm whenever the next clueless billionaire comes to town talking about a monorail.
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Until next time,
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Mark Hurst, founder, Creative Good – see official announcement and join as a member
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