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Thursday, October 5, 2023

Legal tender

From Wikipedia, the free encyclopedia

Legal tender is a form of money that courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered ("tendered") in payment of a debt extinguishes the debt. There is no obligation on the creditor to accept the tendered payment, but the act of tendering the payment in legal tender discharges the debt.

Some jurisdictions allow contract law to overrule the status of legal tender, allowing (for example) merchants to specify that they will not accept cash payments. Coins and banknotes are usually defined as legal tender in many countries, but personal cheques, credit cards, and similar non-cash methods of payment are usually not. Some jurisdictions may include a specific foreign currency as legal tender, at times as its exclusive legal tender or concurrently with its domestic currency. Some jurisdictions may forbid or restrict payment made by other than legal tender. In some jurisdictions legal tender can be refused as payment if no debt exists prior to the time of payment (where the obligation to pay may arise at the same time as the offer of payment). For example, vending machines and transport staff do not have to accept the largest denomination of banknote. Shopkeepers may reject large banknotes, which is covered by the legal concept known as invitation to treat.

The right, in many jurisdictions, of a trader to refuse to do business with any person means that a would-be purchaser may not force a purchase merely by presenting legal tender, as legal tender needs to be accepted only for debts already incurred.

Etymology

The term "legal tender" is from Middle French tendre (verb form), meaning to offer. The Latin root is tendere (to stretch out), and the sense of tender as an offer is related to the etymology of the English word "extend" (to hold outward).

Withdrawal and replacement

Demonetisation

Demonetisation is the act of stripping a currency unit of its status as legal tender. It occurs whenever there is a change of national currency: The current form or forms of money is or are pulled from circulation and retired, often to be replaced with new notes or coins. Sometimes, a country completely replaces the old currency with new currency. The opposite of demonetization is remonetisation, in which a form of payment is restored as legal tender. Coins and banknotes may cease to be legal tender if new notes of the same currency replace them or if a new currency is introduced replacing the former one. Examples of this are:

During the Nazi occupation of the Netherlands, 500- and 1000-guilder banknotes were demonetised, and after liberation, 100-guilder notes were also demonetised. Anne Frank in her diary entry on March 19, 1943 notes:
Thousand-guilder notes are being declared invalid. That'll be a blow to the black marketeers and others like them, but even more to people in hiding and anyone else with money that can't be accounted for. To turn in a thousand-guilder bill, you have to be able to state how you came by it and provide proof. They can still be used to pay taxes, but only until next week. The five-hundred notes will lapse at the same time. Gies & Co. still had some unaccounted-for thousand-guilder bills, which they used to pay their estimated taxes for the coming years, so everything seems to be above board.
Piet Lieftinck's measure of demonetizing 100-guilder notes was aimed at war profiteers.
On October 6, 1944, 100 franc was demonetized. People having 100 francs were allowed to exchange up to 2000 francs per household for new banknotes. Banks added withdrawal limits and current accounts were frozen.
The Government of Ceylon passed the Prevention of the Avoidance of Income Tax Act on 26 October 1970, demonetized all currency notes of the denominations of Rupees 50 and 100, bearing a date prior to that of the demonetization.
The United Kingdom adopted decimal currency in place of pounds, shillings and pence in 1971. Banknotes remained unchanged (except for the replacement of the 10 shilling note by the 50 pence coin). In 1968 and 1969 decimal coins which had precise equivalent values in the old currency (5p, 10p, 50p – 1, 2, and 10 shillings respectively) were introduced, while decimal coins with no precise equivalent (½p, 1p, 2p – equal to 1.2d (old pence), 2.4d and 4.8d respectively) were introduced on 15 February 1971. The smallest and largest non-decimal circulating coins, the half penny and half crown, were withdrawn in 1969, and the other non-decimal coins with no precise equivalent in the new currency (1d, 3d) were withdrawn later in 1971. Non-decimal coins with precise decimal equivalents (6d ( = 2½p), 1 and 2 shillings) remained legal tender either until the coins no longer circulated (1980 in the case of the 6d), or the equivalent decimal coins were reduced in size in the early 1990s. The 6d coin was permitted to remain in large circulation throughout the United Kingdom due to the London Underground committee's large investment in coin-operated ticketing machines that used it. Old coins returned to the Royal Mint through the UK banking system will be redeemed by exchanging them for legal tender currency with no time limits; but coins issued before 1947 have a higher value for their silver content than for their monetary value.
The successor states of the Soviet Union replacing the Soviet ruble in the 1990s.
The successor states of Yugoslavia replacing the Yugoslav dinar in the 1990s and 2000s.
Currencies used in the Eurozone which were replaced by the euro were then not legal tender, but all banknotes were redeemable for euros for a minimum of 10 years (for certain notes, there is no time limit).
India demonetised its 500 and 1000 rupee notes on 8 November 2016. This action affected 86 per cent of all cash in circulation. The demonetisation action was intended to curb counterfeit notes and black money, the hoarding of unaccounted cash, and sponsorship of terrorism, but also led to long queues from bank runs, leaving more than 30 people dead. The old notes were replaced by new 500 and 2000 rupee notes.
The Philippines has ceased 2 peso and 50 centavo coins of the Flora and Fauna Series in 2000, due to overminting of the coins of the BSP Series that has not included the 2 peso and 50 centavo coins of that series.

Individual coins or banknotes can be demonetised and cease to be legal tender (for example, the pre-decimal United Kingdom farthing or the Bank of England 1 pound note), but the Bank of England does redeem all Bank of England banknotes by exchanging them for legal tender currency at its counters in London (or by post) regardless of how old they are. Banknotes issued by retail banks in the UK (Scotland and Northern Ireland) are not legal tender, but one of the criteria for legal protection under the Forgery and Counterfeiting Act is that banknotes must be payable on demand, therefore withdrawn notes remain a liability of the issuing bank without any time limits.

In the case of the euro, coins and banknotes of former national currencies were in some cases considered legal tender from 1 January 1999 until various dates in 2002. Most countries continued to exchange pre-euro notes and coins for a period of time; only Ireland continues to do so. Legally, those coins and banknotes were considered non-decimal sub-divisions of the euro.

When the so-called "Swiss" dinar ceased to be legal tender in Iraq, it still circulated in the northern Kurdish regions, despite lacking government backing it had a stable market value for more than a decade.

This is also true of the paper money issued by the Confederate States of America during the American Civil War. The Confederate currency became worthless by its own terms after the war, since it could only be redeemed a stated number of years after a peace treaty was signed between the Confederacy and the United States (which never happened, as the Confederacy was defeated and dissolved).

Demonetisation is currently prohibited in the United States, and the Coinage Act of 1965 applies to all US coins and currency regardless of age. The closest historical equivalent in the US, other than Confederate money, was from 1933 to 1974, when the government banned most private ownership of gold bullion, including gold coins held for non-numismatic purposes. Now, however, even surviving pre-1933 gold coins are legal tender under the 1964 act.

Withdrawal from circulation

Banknotes and coins may be withdrawn from circulation, but remain legal tender. United States banknotes issued at any date remain legal tender even after they are withdrawn from circulation. Canadian 1- and 2-dollar bills remain legal tender even if they have been withdrawn and replaced by coins, but Canadian $1,000 bills remain legal tender even if they are removed from circulation as they arrive at a bank. However, Bank of England notes that are withdrawn from circulation generally cease to be legal tender but remain redeemable for current currency at the Bank of England itself or by post. All paper and polymer issues of New Zealand banknotes issued from 1967 onwards (and 1- and 2-dollar notes until 1993) are still legal tender; however, 1-, 2- and 5-cent coins are no longer used in New Zealand.

Cashless society

A cashless society describes an economic state whereby financial transactions are not conducted with money in the form of physical banknotes or coins. Cashless societies have existed, based on barter and other methods of exchange. In modern usage, the term usually refers to financial transactions conducted by transfer of digital information (usually an electronic representation of money) between the transacting parties.

Commemorative issues

Sometimes currency issues such as commemorative coins or transfer bills may be issued that are not intended for public circulation but are nonetheless legal tender. An example of such currency is Maundy money. Some currency issuers, particularly the Scottish banks, issue special commemorative banknotes which are intended for ordinary circulation (though no Scottish banknotes nor notes from Northern Ireland are legal tender in the United Kingdom). As well, some standard coins are minted on higher-quality dies as 'uncirculated' versions of the coin, for collectors to purchase at a premium; these coins are nevertheless legal tender. Some countries issue precious-metal coins which have a currency value indicated on them which is far below the value of the metal the coin contains: these coins are known as "non-circulating legal tender" or "NCLT".

Status by country

Australia

The Australian dollar, comprising notes and coins, is legal tender in Australia. Australian notes are legal tender by virtue of the Reserve Bank Act 1959, s.36(1), without an amount limit. The Currency Act 1965 similarly provides that Australian coins intended for general circulation are also legal tender, but only for the following amounts:

not exceeding 20¢ if 1¢ and/or 2¢ coins are offered,
not exceeding $5 if any of 5¢, 10¢, 20¢ and 50¢ coins are offered,
not exceeding 10 times the face value if the coins offered are greater than 50¢ up to and including $10,
to any value for coins of other denominations above $10.

The 1¢ and 2¢ coins were withdrawn from circulation from February 1992 but remain legal tender.

Although the Reserve Bank Act 1959 and the Currency Act 1965 establishes that Australian banknotes and coins have legal tender status, Australian banknotes and coins do not necessarily have to be used in transactions and refusal to accept payment in legal tender is not unlawful. It appears that a provider of goods or services is at liberty to set the commercial terms upon which payment will take place before the "contract" for supply of the goods or services is entered into. If a provider of goods or services specifies other means of payment prior to the contract, then there is usually no obligation for legal tender to be accepted as payment. This is the case even when an existing debt is involved. However, refusal to accept legal tender in payment of an existing debt, where no other means of payment/settlement has been specified in advance, conceivably could have consequences in legal proceedings.

Australia Post prohibits the sending of coins or banknotes, of any country, except via registered post.

History

In 1901, notes in circulation in Australia consisted of bank notes payable in gold coin and issued by the trading banks, and Queensland Treasury notes. Bank notes circulated in all States except Queensland, but were not legal tender except for a brief period in 1893 in New South Wales. There were, however, some restrictions on their issue and other provisions for the protection of the public. Queensland Treasury notes were issued by the Queensland Government and were legal tender in that state. Notes of both categories continued in circulation until 1910, when the Commonwealth Parliament passed the Australian Notes Act 1910 and the Bank Notes Tax Act 1910. The Australian Notes Act 1910 prohibited the circulation of state notes as money, and the Bank Notes Tax Act 1910 imposed a tax of 10%, per annum, on "all bank notes issued or re-issued by any bank in the Commonwealth after the commencement of this Act, and not redeemed". These Acts effectively put an end to the issue of notes by the trading banks and the Queensland Treasury. The Reserve Bank Act 1959 expressly prohibits persons and states from issuing "a bill or note for the payment of money payable to bearer on demand and intended for circulation".

Canada

In general, Canadian dollar banknotes issued by the Bank of Canada and coins issued under the authority of the Royal Canadian Mint Act are legal tender in Canada. However, commercial transactions may legally be settled in any manner agreed by the parties involved with the transactions. For example, convenience stores may refuse $100 bank notes if they feel that would put them at risk of being counterfeit victims; however, official policy suggests that the retailers should evaluate the impact of that approach. In the case that no mutually acceptable form of payment can be found for the tender, the parties involved should seek legal advice.

Under the Currency Act, there are limits to the value of a transaction for which only coins are used. A payment in coins is a legal tender for no more than the following amounts for the following denominations of coins:

$40 if the denomination is $2 to $10,
$25 if the denomination is $1,
$10 if the denomination is 10c to $1,
$5 if the denomination is 5c, and
25c if the denomination is 1c.

In the case of coins of a denomination greater than $10, a payment is a legal tender for no more than the value of a single coin of that denomination. Where more than one amount is payable by one person to another on the same day under one or more obligations, the total of those amounts is deemed to be one amount due and payable on that day.

China

In the People's Republic of China, the official currency renminbi serves as the unlimited legal tender for all transactions. It is illegal for any public institution or individual to refuse the currency when settling public or private debts.

El Salvador

In June 2021, El Salvador became the first country to accept Bitcoin as legal tender, after the Legislative Assembly had voted 62–22 to pass a bill submitted by President Nayib Bukele classifying the cryptocurrency as such.

Eurozone

Euro coins and banknotes became legal tender in most countries of the Eurozone on 1 January 2002. Although one side of the coins is used for different national marks for each country, all coins and all banknotes are legal tender throughout the eurozone. Although some eurozone countries do not put 1 cent and 2 cent coins into general circulation (prices in those countries are by general understanding always rounded to whole multiples of 5 cent), 1 cent and 2 cent coins from other eurozone countries remain legal tender in those countries.

Council Regulation (EC) No 974/98 limits the number of coins that can be offered for payment to fifty. Governments that issue the coins must establish the euro as the only legal tender. Due to variations on the legislative meaning of legal tender in various member states and the ability of contract law to overrule the status of legal tender, it is possible for merchants to choose to refuse to accept euro banknotes and coins within specific countries within the Eurozone. For example, the Netherlands, Italy, Belgium, Finland, and Ireland have de jure or de facto removed the use of 1 cent and 2 cent coins and adopted cash rounding to the nearest multiple of 5 cents. National laws may also impose restrictions as to maximal amounts that can be settled by coins or notes.

Kosovo and Montenegro, which are not members of the European Union and the Eurozone and do not have a formal monetary agreement with the EU, unilaterally adopted the euro in 2002 as their de facto domestic currency to ensure monetary stability and to continue to avoid the high/hyper inflation seen in preceding decades: this means that the euro is not a legal tender there, however it is treated as such by the government and the people.

France

Legal tender was enacted the first time for gold and silver coins in the French Penal Code of 1807 (art. 475, 11°). In 1870, legal tender was extended to all notes of the Banque de France. Anyone refusing such coins for their whole value would be prosecuted (French Penal Code art. R. 642-3).

Republic of Ireland

According to the Economic and Monetary Union Act, 1998 of the Republic of Ireland which replaced the legal tender provisions that had been re-enacted in Irish legislation from previous British enactments, "No person, other than the Central Bank of Ireland and such persons as may be designated by the Minister by order, shall be obliged to accept more than 50 coins denominated in euro or in cent in any single transaction."

History

The Decimal Currency Act, 1970 governed legal tender prior to the adoption of the euro and laid down the analogous provisions as in United Kingdom legislation (all inherited from previous UK law), namely: coins denominated above 10 pence became legal tender for payment not exceeding £10, coins denominated not more than 10 pence became legal tender for payment not exceeding £5, and bronze coins became legal tender for payment not exceeding 20 pence.

Republic of India

The Indian rupee is the de facto legal tender currency in India. The Indian rupee is also legal tender in Nepal and Bhutan, but the Nepalese rupee and Bhutanese ngultrum are not legal tender in India. Both the Nepalese rupee and Bhutanese ngultrum are pegged with the Indian rupee.

The Indian rupee used to be an official currency of several other countries, including the Straits Settlements (now Singapore and parts of Malaysia), Iraq, Kuwait, Bahrain, Qatar, the Trucial States (now the UAE), Oman, Aden Colony and Aden Protectorate (now parts of Yemen), British Somaliland, British East Africa, and Zanzibar.

In 1837, the Indian rupee was made the sole official currency of the Straits Settlements, as it was administered as a part of India. In 1845, the British replaced the Indian rupee with the Straits dollar after administration of the Straits Settlements separated from India earlier in that same year.

After partition of India and Pakistan in 1947, the Pakistani rupee came into existence, initially using Indian coins and Indian currency notes simply overstamped with the word "Pakistan". New coins and banknotes were issued in 1948.

The Gulf rupee, also known as the Persian Gulf rupee (XPGR), was introduced by the Government of India as a replacement for the Indian rupee for circulation exclusively outside the country with the Reserve Bank of India Amendment Act of 1 May 1959. This creation of a separate currency was an attempt to reduce the strain put on India's foreign reserves by gold smuggling.

Kuwait and Bahrain eventually replaced the Gulf rupee with their own currencies (the Kuwaiti dinar and the Bahraini dinar) after gaining independence from Britain in 1961 and 1965, respectively.

On 6 June 1966, India devalued the rupee. To avoid following this devaluation, several of the states using the rupee adopted their own currencies. Qatar and most of the Trucial States adopted the Qatar and Dubai riyal, whilst Abu Dhabi adopted the Bahraini dinar. Only Oman continued to use the Gulf rupee until 1970, with the government backing the currency at its old peg to the pound. Oman later replaced the Gulf rupee with its own rial in 1970.

On 8 November 2016, Prime Minister Narendra Modi announced that existing INR 500 and INR 1000 banknotes would no longer be accepted as legal tender with a view to curb counterfeiting, tax evasion and the parallel economy. The Reserve Bank of India outlined a scheme for holders of such banknotes to either deposit them into their bank accounts for full, unlimited value, or to exchange the banknotes for new, subject to a cap.

New Zealand

New Zealand has a complex history of legal tender. English law applied, as applicable to local circumstances, either from 6 January 1840 (when the Governor of New South Wales by proclamation annexed New Zealand) or from 14 January 1840 (when Captain Hobson (of the Royal Navy) was sworn in as Lieutenant-Governor of New Zealand). The English Laws Act 1858 subsequently confirmed that English legislation passed prior to 14 January 1840 was and had been the law of New Zealand, as applicable to local circumstances. The (UK) Coinage Act 1816 therefore applied and British coins were confirmed as legal tender in New Zealand. (Unusually, until 1989, the Reserve Bank, established in 1934, did not have the right to issue coins as legal tender. Coins had to be issued by the Minister of Finance.)

The history of bank notes in New Zealand was considerably more complex. In 1840 the Union Bank of Australia started issuing bank notes under provisions of British law but these were not automatically legal tender.

In 1844, ordinances were passed by NZ Parliament making the Union Bank banknotes legal tender and authorizing the government to issue debentures in small denominations, thus creating two sets of legal tender. These debentures were circulated but were traded at a discount to their face value because of distrust of the colonial government amongst the settler population. In 1845 the British Colonial office disallowed the Ordinance, namely the Debentures Act 1844 (NZ), and the debentures were recalled, not without first causing a panic among holders.

In 1847, the Colonial Bank of Issue became the only issuer of legal tender. In 1856, however, the Colonial Bank of Issue was disbanded; and through the Paper Currency Act 1856 the Union Bank was confirmed once again as an issuer of legal tender. The Act also authorized the Oriental Bank to issue legal tender - but this bank ceased operations in 1861.

Between 1861 and 1874, a number of other banks including the Bank of New Zealand, the Bank of New South Wales, the National Bank of New Zealand and the Colonial Bank of New Zealand were created by Acts of Parliament and authorized to issue bank-notes backed by gold, however these notes were not legal tender.

The 1893 Bank Note Issue Act allowed the government to declare a bank's right to issue legal tender. This enabled the government to make such a declaration to assist the Bank of New Zealand when in 1895 the bank encountered financial difficulties that could have led to its failure.

In 1914, the Banking Amendment Act gave legal-tender status to bank notes from any issuer and removed the requirement that banks authorized to issue bank notes must redeem them on demand for gold (the gold standard).

In 1933, the Coinage Act authorized a specific New Zealand coinage and removed legal-tender status from British coins. In the same year the Reserve Bank of New Zealand was established. The bank was given a monopoly on the issue of legal tender. The Reserve Bank also provided a mechanism through which the other issuers of legal tender could phase out their bank notes. These banknotes were convertible into British legal tender on demand at the Reserve Bank and remained so until the 1938 Sterling Exchange Suspension Notice that suspended provisions of a 1936 amendment of the 1933 Reserve Bank of New Zealand Act.

In 1964, the Reserve Bank of New Zealand Act re-stated that only notes issued by the Reserve Bank were legal tender. The Act also ended the right of individuals to redeem their bank notes for coin, effectively ending the distinction between coin and notes in New Zealand. The Act came into force in 1967, establishing as legal tender all New Zealand dollar five-dollar banknotes and greater, all decimal coins, the pre-decimal sixpence, the shilling, and the florin. Also passed in 1964 was the Decimal Currency Act, which created the basis for a decimal currency, introduced in 1967.

As of 2005, banknotes were legal tender for all payments, and $1 and $2 coins were legal tender for payments up to $100, and 10c, 20c, and 50c silver coins were legal tender for payments up to $5. These older-style silver coins were legal tender until October 2006, after which only the new 10c, 20c and 50c coins, introduced in August 2006, remained legal.

Norway

The Norwegian krone (NOK) is legal tender in Norway according to the Central Bank (Norwegian: Sentralbankloven) of 24 May 1985. However, no-one is obliged to accept more than 25 coins of each denomination (of which currently 1, 5, 10 and 20 NOK denominations are in common circulation).

Singapore and Brunei

Singapore and Brunei have a Currency Interchangeability Agreement since 12 June 1967. Under the agreement, Singapore dollar and Brunei dollar are exchangeable at par without charge in both countries. As such, the currency of one country is accepted in the other country as "customary tender".

Switzerland and Liechtenstein

The Swiss franc is the only legal tender in Switzerland. Any payment consisting of up to 100 Swiss coins is legal tender; banknotes are legal tender for any amount.

The sixth series of Swiss bank notes from 1976, recalled by the National Bank in 2000, and the eighth series from the 1990's, withdrawn in 2021, are both no longer legal tender, but banknotes can be exchanged by the Swiss National Bank or other authorized banks for current notes without limitation as to time.

The Swiss franc is also the legal tender of the Principality of Liechtenstein, which is joined to Switzerland in a customs union.

The Swiss franc is also the currency used for administrative and accounting purposes by most of the numerous international organisations that are headquartered in Switzerland.

Taiwan

The New Taiwan dollar issued by the Central Bank of the Republic of China (Taiwan) is legal tender for all payments within the territory of the Republic of China, Taiwan. However, since 2007, candidates to become civil servants in elections in the Republic of China may no longer pay any deposit in coinage.

Thailand

Series 2 banknotes first issued in 1925 during the reign of Rama VI and continuing into the reign of Rama VII added the legend,

Thai: สัญญาจะจ่ายเงินให้แก่ผู้นำบัตรนี้มาขึ้นเป็นเงินตราสยาม
Promise to pay (silver to) bearer on demand in (silver) currency of Siam;

later changed in 1928 to be in line with The Currency Act, B.E. 2471 to

ธนบัตรเป็นเงินที่ชำระหนี้ได้ตามกฎหมาย
This note is legal tender (literal translation, silver in payment of debt) according to law.

The front has a guilloche design with twelve rays, and the back, depictions of the Royal Ploughing Ceremony. These were printed in 6 denominations – 1, 5, 10, 20,100 and 1000 baht – in two types printed by De La Rue of London, England.

United Kingdom

In the UK legal tender specifically relates to the settlement of debts: a debtor cannot successfully be sued for non-payment if they pay the exact amount (change cannot be demanded) into court in legal tender.

Legal tender is solely for the guaranteed settlement of debts, and does not imply a right to pay with cash in other contexts. There is a misconception that somebody due to be paid a certain amount of money—such as a shopkeeper—must accept legal tender if proffered for payment; in reality the payee may choose to refuse or accept any specific type of payment, whether legal tender or not. As a specific instance, following the outbreak in 2020 of the covid pandemic, many shops chose not to accept any form of cash due to the risk of infection, accepting payment cards only.

Throughout the United Kingdom, Royal Mint coins valued 1 pound, 2 pounds, and 5 pounds sterling are legal tender in unlimited amounts. Twenty pence pieces and fifty pence pieces are legal tender in amounts up to 10 pounds; five pence pieces and ten pence pieces are legal tender in amounts up to 5 pounds; and pennies and two pence coins are legal tender in amounts up to 20 pence. In accordance with the Coinage Act 1971, gold sovereigns are also legal tender for any amount. Although it is not specifically mentioned on them, the face values of gold coins are 50p; £1; £2; and £5, a mere fraction of their worth as bullion. Five pound coins, although legal tender, are intended as souvenirs and are almost never seen in circulation.

Current Bank of England notes are legal tender in England and Wales and are issued in the denominations of £5, £10, £20 and £50. Banknotes can always be redeemed at the Bank of England even if discontinued.

To meet the legal definition of legal tender, the exact amount due must be tendered; no change can be demanded.

Maundy money is legal tender but may not be accepted by retailers and is worth much more than face value due to its rarity value and silver content.

In a 1976 case, Miliangos v George Frank Ltd, the House of Lords established that the English courts could order debts to be paid in currencies other than sterling under certain circumstances, overturning two centuries of precedent.

Scotland and Northern Ireland

Royal Mint coins are legal tender in Scotland and Northern Ireland, but no banknotes are. Scottish and Northern Irish banknotes are widely accepted, but are not legal tender anywhere in the UK.

History

In the 19th century, gold coins were legal tender to any amount, but silver coins were not legal tender for sums over 2 pounds nor bronze for sums over 1 shilling. This provision was retained in revised form at the introduction of decimal currency, and the Coinage Act 1971 laid down that coins denominated above 10 pence became legal tender for payment not exceeding 10 pounds, non-bronze coins denominated not more than 10 pence became legal tender for payment not exceeding 5 pounds, and bronze coins became legal tender for payment not exceeding 20 pence.

United States

Before the Civil War (1861 to 1865), silver coins were legal tender only up to the sum of $5. Before 1853, when U.S. silver coins were reduced in weight 7%, coins had exactly their value in metal (from 1830 to 1852). Two silver 50 cent coins had exactly $1 worth of silver. A gold U.S. dollar of 1849 had $1 worth of gold. With the flood of gold coming out of the California mines in the early 1850s, the price of silver rose (gold went down). Thus, 50 cent coins of 1840 to 1852 were worth 53 cents if melted down. The government could increase the value of the gold coins (expensive) or reduce the size of all U.S. silver coins. With the reduction of 1853, a 50-cent coin now had only 48 cents of silver. This is the reason for the $5 limit of silver coins as legal tender; paying somebody $100 in the new silver coins would be giving them $96 worth of silver. Most people preferred bank check or gold coins for large purchases.

During the early American Civil War, the federal government first issued United States Notes (the first greenback notes), which were not redeemable in gold and silver coins but could be used to pay "all dues" to the federal government. Since land purchases and duties on imports were payable only in gold or the new Demand Notes, the Demand Notes were bought by importers and land speculators for about 97 cents on the gold dollar and never lost value. 1862 greenbacks (Legal Tender Notes) at first traded for 97 cents on the dollar but gained/lost value depending on fortunes of the Union army. The value of Legal Tender Greenbacks swung wildly but trading was from 85 to 33 cents on the gold dollar.

This resulted in a situation in which the greenback "Legal Tender" notes of 1862 were fiat, and so gold and silver were held and paper circulated at a discount because of Gresham's law. The 1861 Demand Notes were a huge success but robbed the customs house of much needed gold coin (interest on most bonds back then was paid in gold). A money-strapped Congress, which had to pay for the war, eventually adopted the Legal Tender Act of 1862, issuing United States Notes backed only by treasury securities, and compelled the people to accept the new notes at a discount; prices rose except for those who had gold and/or silver coins.

Following the Civil War, paper currency was disputed as to whether it must be accepted as payment. In 1869, Hepburn v. Griswold found that Henry Griswold would not have to accept paper currency because it could not truly be "legal tender" and was unconstitutional as a legally enforceable means to pay debts. This led to the Legal Tender Cases in 1870, which overturned the previous ruling and established the paper currency as constitutional and proper legal tender that must be accepted in all situations.

With the 1884 Supreme Court ruling in Juilliard v. Greenman, the "Supreme Court ruled that Congress had the right to issue notes to be legal tender for the payment of public and private debt. Legal-tender notes are treasury notes or banknotes that, in the eyes of the law, must be accepted in the payment of debts." The ruling in the Legal Tender Cases (which include Juilliard v. Greenman) led later courts to "support the federal government's invalidation of gold clauses in private contracts in the 1930s."

On the other hand, coins made of gold or silver may not necessarily be legal tender, if they are not fiat money in the jurisdiction where they are proffered as payment. The Coinage Act of 1965 states (in part):

United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes and dues. Foreign gold or silver coins are not legal tender for debts.
— 31 U.S.C. § 5103

Contrary to common misconception, there is no federal law stating that a private business, a person, or a government organization must accept currency or coins for payment. Private businesses are free to create their own policies on whether they accept cash, unless there is a specific state law which says otherwise. For example, a bus line may prohibit payment of fares in cents or dollar bills. In addition, movie theaters, convenience stores, and gas stations may refuse to accept large denomination currency as a matter of policy or safety.

The principal purpose of that statute is to ensure the nationwide acceptance of U.S. currency, consistent with constitutional language that reserves to Congress the power to create a uniform currency that holds the same value throughout the United States. While the statute provides that U.S. money is legal tender that may be accepted for the payment of debts, it does not require acceptance of cash payments, nor does it provide that restrictions cannot be imposed upon the acceptance of cash.

Venezuela

On 11 December 2016, Venezuela's government announced demonetisation following almost 500% inflation in the country. People of the country were given 3 days to get rid of the 100 Bolivar notes (most widely used currency) post the introduction of new note of higher denominations. As of 15 June 2017, there has been 7 extensions (one per month) of the legal use of the 100 bolivares bill notes. The 100 Bolivar notes were still legal tender as of 30 December 2017.

Scholasticism

From Wikipedia, the free encyclopedia

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

Scholasticism was a medieval school of philosophy that employed a critical organic method of philosophical analysis predicated upon the Aristotelian 10 Categories. Christian scholasticism emerged within the monastic schools that translated scholastic Judeo-Islamic philosophies, and thereby "rediscovered" the collected works of Aristotle. Endeavoring to harmonize his metaphysics and its account of a prime mover with the Latin Catholic dogmatic trinitarian theology, these monastic schools became the basis of the earliest European medieval universities, contributing to the development of modern science; scholasticism dominated education in Europe from about 1100 to 1700. The rise of scholasticism was closely associated with these schools that flourished in Italy, France, Portugal, Spain and England.

Scholasticism is a method of learning more than a philosophy or a theology, since it places a strong emphasis on dialectical reasoning to extend knowledge by inference and to resolve contradictions. Scholastic thought is also known for rigorous conceptual analysis and the careful drawing of distinctions. In the classroom and in writing, it often takes the form of explicit disputation; a topic drawn from the tradition is broached in the form of a question, oppositional responses are given, a counterproposal is argued and oppositional arguments rebutted. Because of its emphasis on rigorous dialectical method, scholasticism was eventually applied to many other fields of study.

Scholasticism was initially a program conducted by medieval Christian thinkers attempting to harmonize the various authorities of their own tradition, and to reconcile Christian theology with classical and late antiquity philosophy, especially that of Aristotle but also of Neoplatonism. The Scholastics, also known as Schoolmen, included as its main figures Anselm of Canterbury ("the father of scholasticism"), Peter Abelard, Alexander of Hales, Albertus Magnus, Duns Scotus, William of Ockham, Bonaventure, and Thomas Aquinas. Aquinas's masterwork Summa Theologica (1265–1274) is considered to be the pinnacle of scholastic, medieval, and Christian philosophy; it began while Aquinas was regent master at the studium provinciale of Santa Sabina in Rome, the forerunner of the Pontifical University of Saint Thomas Aquinas, Angelicum. Important work in the scholastic tradition has been carried on well past Aquinas's time, such as English scholastics Robert Grosseteste and his student Roger Bacon, and for instance by Francisco Suárez and Luis de Molina, and also among Lutheran and Reformed thinkers.

Etymology

The terms "scholastic" and "scholasticism" derive from the Latin word scholasticus, the Latinized form of the Greek σχολαστικός (scholastikos), an adjective derived from σχολή (scholē), "school". Scholasticus means "of or pertaining to schools". The "scholastics" were, roughly, "schoolmen".

History

The foundations of Christian scholasticism were laid by Boethius through his logical and theological essays, and later forerunners (and then companions) to scholasticism were Islamic Ilm al-Kalām, literally "science of discourse", and Jewish philosophy, especially Jewish Kalam.

Early Scholasticism

Anselm of Canterbury

Peter Abelard

The first significant renewal of learning in the West came with the Carolingian Renaissance of the Early Middle Ages. Charlemagne, advised by Peter of Pisa and Alcuin of York, attracted the scholars of England and Ireland. By decree in AD 787, he established schools in every abbey in his empire. These schools, from which the name scholasticism is derived, became centers of medieval learning.

During this period, knowledge of Ancient Greek had vanished in the West except in Ireland, where its teaching and use was widely dispersed in the monastic schools.Irish scholars had a considerable presence in the Frankish court, where they were renowned for their learning. Among them was Johannes Scotus Eriugena (815–877), one of the founders of scholasticism. Eriugena was the most significant Irish intellectual of the early monastic period and an outstanding philosopher in terms of originality. He had considerable familiarity with the Greek language and translated many works into Latin, affording access to the Cappadocian Fathers and the Greek theological tradition.

The other three founders of scholasticism were the 11th-century scholars Peter Abelard, Archbishop Lanfranc of Canterbury and Archbishop Anselm of Canterbury.

This period saw the beginning of the 'rediscovery' of many Greek works which had been lost to the Latin West. As early as the 10th century, the Toledo school of translators in Spain had begun to gather translated texts and, in the latter half of that century, began transmitting them to the rest of Europe. After a successful burst of Reconquista in the 12th century, Spain opened even further for Christian scholars, and as these Europeans encountered Judeo-Islamic philosophies, they opened a wealth of Arab and Judaic knowledge of mathematics and astronomy. Scholars such as Adelard of Bath traveled to Spain and Sicily, translating works on astronomy and mathematics, including the first complete translation of Euclid's Elements into Latin.

At the same time, Anselm of Laon systematized the production of the gloss on Scripture, followed by the rise to prominence of dialectic (the middle subject of the medieval trivium) in the work of Abelard. Peter Lombard produced a collection of Sentences, or opinions of the Church Fathers and other authorities.

In the early 13th Century, a syndicate of priests and scholars collaborated and sketched a rough draft of a raw market economy. These scholars and priests fostered Christianity and addressed the philosophical issues of an early economic thought. Christianity being the fundamental faith that shaped moral attitudes of these groups was primarily transitioned from the patristic Christology. Leinsle (2010) confirms the permeation of the patristic Christology into the Scholastic theology by arguing that medieval theology did not develop itself through philosophical contact. It adopted patristic culture and matured its way through the medieval age.

The early set of rules for trade were first introduced by the Christian Theologians. Theologians had spiritual beliefs with morals driven by religion. Novikoff (2012) in his narrative describes the belief system of the Scholastics. He elaborates that scholastics adopted their moral and ethical behaviors from the early theologians. Early theologians, mainly Christians accepted certain set of rules from Christian Bible as their model of outlook. Spiegel (1991) highlights that scholastics economic thought had its principle sources in the Bible. He further emphasizes on the teachings and writings of the Father of the Church which designed the groundwork for exercising economic and moral thoughts. Later, in the ages, the scholastics used the writings of Aristotle to shape their philosophical perspective. Greek Philosophy was deemed foundation for early moral principles which the scholastics exercised. Preaching of such principles was mainly transitioned from Italian to European localities. Greek philosophy became the initiating stance of high scholasticism.

High Scholasticism

Thomas Aquinas

Duns Scotus

William of Ockham

The 13th and early 14th centuries are generally seen as the high period of scholasticism. The early 13th century witnessed the culmination of the recovery of Greek philosophy. Schools of translation grew up in Italy and Sicily, and eventually in the rest of Europe. Powerful Norman kings gathered men of knowledge from Italy and other areas into their courts as a sign of their prestige. William of Moerbeke's translations and editions of Greek philosophical texts in the middle half of the thirteenth century helped form a clearer picture of Greek philosophy, particularly of Aristotle, than was given by the Arabic versions on which they had previously relied. Edward Grant writes "Not only was the structure of the Arabic language radically different from that of Latin, but some Arabic versions had been derived from earlier Syriac translations and were thus twice removed from the original Greek text. Word-for-word translations of such Arabic texts could produce tortured readings. By contrast, the structural closeness of Latin to Greek, permitted literal, but intelligible, word-for-word translations."

Universities developed in the large cities of Europe during this period, and rival clerical orders within the church began to battle for political and intellectual control over these centers of educational life. The two main orders founded in this period were the Franciscans and the Dominicans. The Franciscans were founded by Francis of Assisi in 1209. Their leader in the middle of the century was Bonaventure, a traditionalist who defended the theology of Augustine and the philosophy of Plato, incorporating only a little of Aristotle in with the more neoplatonist elements. Following Anselm, Bonaventure supposed that reason can only discover truth when philosophy is illuminated by religious faith. Other important Franciscan scholastics were Duns Scotus, Peter Auriol and William of Ockham.

By contrast, the Dominican order, a teaching order founded by St Dominic in 1215, to propagate and defend Christian doctrine, placed more emphasis on the use of reason and made extensive use of the new Aristotelian sources derived from the East and Moorish Spain. The great representatives of Dominican thinking in this period were Albertus Magnus and (especially) Thomas Aquinas, whose artful synthesis of Greek rationalism and Christian doctrine eventually came to define Catholic philosophy. Aquinas placed more emphasis on reason and argumentation, and was one of the first to use the new translation of Aristotle's metaphysical and epistemological writing. This was a significant departure from the Neoplatonic and Augustinian thinking that had dominated much of early scholasticism. Aquinas showed how it was possible to incorporate much of the philosophy of Aristotle without falling into the "errors" of the Commentator, Averroes.

Spanish Scholasticism

Late Scholasticism

Protestant Scholasticism

Lutheran Scholasticism

Reformed Scholasticism

Following the Reformation, Calvinists largely adopted the scholastic method of theology, while differing regarding sources of authority and content of theology.

Neo-Scholasticism

The revival and development from the second half of the 19th century of medieval scholastic philosophy is sometimes called neo-Thomism.

Thomistic Scholasticism

As J. A. Weisheipl O.P. emphasizes, within the Dominican Order Thomistic scholasticism has been continuous since the time of Aquinas: "Thomism was always alive in the Dominican Order, small as it was after the ravages of the Reformation, the French Revolution, and the Napoleonic occupation. Repeated legislation of the General Chapters, beginning after the death of St. Thomas, as well as the Constitutions of the Order, required all Dominicans to teach the doctrine of St. Thomas both in philosophy and in theology."

Thomistic scholasticism or scholastic Thomism identifies with the philosophical and theological tradition stretching back to the time of St. Thomas. It focuses not only on exegesis of the historical Aquinas but also on the articulation of a rigorous system of orthodox Thomism to be used as an instrument of critique of contemporary thought. Due to its suspicion of attempts to harmonize Aquinas with non-Thomistic categories and assumptions, Scholastic Thomism has sometimes been called, according to philosophers like Edward Feser, "Strict Observance Thomism". A discussion of recent and current Thomistic scholasticism can be found in La Metafisica di san Tommaso d'Aquino e i suoi interpreti (2002) by Battista Mondin [it], which includes such figures as Sofia Vanni Rovighi (1908–1990), Cornelio Fabro (1911–1995), Carlo Giacon (1900–1984), Tomas Tyn O.P. (1950–1990), Abelardo Lobato O.P. (1925–2012), Leo Elders (1926– ) and Giovanni Ventimiglia (1964– ) among others. Fabro in particular emphasizes Aquinas' originality, especially with respect to the actus essendi or act of existence of finite beings by participating in being itself. Other scholars such as those involved with the "Progetto Tommaso" seek to establish an objective and universal reading of Aquinas' texts.

Thomistic scholasticism in the English speaking world went into decline in the 1970s when the Thomistic revival that had been spearheaded by Jacques Maritain, Étienne Gilson, and others, diminished in influence. Partly, this was because this branch of Thomism had become a quest to understand the historical Aquinas after the Second Vatican Council.

Analytical Scholasticism

A renewed interest in the "scholastic" way of doing philosophy has recently awoken in the confines of the analytic philosophy. Attempts emerged to combine elements of scholastic and analytic methodology in pursuit of a contemporary philosophical synthesis. Proponents of various incarnations of this approach include Anthony Kenny, Peter King, Thomas Williams or David Oderberg. Analytical Thomism can be seen as a pioneer part of this movement.

Scholastic method

Cornelius O'Boyle explained that Scholasticism focuses on how to acquire knowledge and how to communicate effectively so that it may be acquired by others. It was thought that the best way to achieve this was by replicating the discovery process (modus inveniendi).

The scholasticists would choose a book by a renowned scholar, auctor (author), as a subject for investigation. By reading it thoroughly and critically, the disciples learned to appreciate the theories of the author. Other documents related to the book would be referenced, such as Church councils, papal letters and anything else written on the subject, be it ancient or contemporary. The points of disagreement and contention between multiple sources would be written down in individual sentences or snippets of text, known as sententiae. Once the sources and points of disagreement had been laid out through a series of dialectics, the two sides of an argument would be made whole so that they would be found to be in agreement and not contradictory. (Of course, sometimes opinions would be totally rejected, or new positions proposed.) This was done in two ways. The first was through philological analysis. Words were examined and argued to have multiple meanings. It was also considered that the auctor might have intended a certain word to mean something different. Ambiguity could be used to find common ground between two otherwise contradictory statements. The second was through logical analysis, which relied on the rules of formal logic – as they were known at the time – to show that contradictions did not exist but were subjective to the reader.

Scholastic instruction

Scholastic instruction consisted of several elements. The first was the lectio: a teacher would read an authoritative text followed by a commentary, but no questions were permitted. This was followed by the meditatio (meditation or reflection) in which students reflected on and appropriated the text. Finally, in the quaestio students could ask questions (quaestiones) that might have occurred to them during meditatio. Eventually the discussion of questiones became a method of inquiry apart from the lectio and independent of authoritative texts. Disputationes were arranged to resolve controversial quaestiones.

Questions to be disputed were ordinarily announced beforehand, but students could propose a question to the teacher unannounced – disputationes de quodlibet. In this case, the teacher responded and the students rebutted; on the following day the teacher, having used notes taken during the disputation, summarised all arguments and presented his final position, riposting all rebuttals.

The quaestio method of reasoning was initially used especially when two authoritative texts seemed to contradict one another. Two contradictory propositions would be considered in the form of an either/or question, and each part of the question would have to be approved (sic) or denied (non). Arguments for the position taken would be presented in turn, followed by arguments against the position, and finally the arguments against would be refuted. This method forced scholars to consider opposing viewpoints and defend their own arguments against them.

AI safety

From Wikipedia, the free encyclopedia
https://en.wikipedia.org/wiki/AI_safety

AI safety is an interdisciplinary field concerned with preventing accidents, misuse, or other harmful consequences that could result from artificial intelligence (AI) systems. It encompasses machine ethics and AI alignment, which aim to make AI systems moral and beneficial, and AI safety encompasses technical problems including monitoring systems for risks and making them highly reliable. Beyond AI research, it involves developing norms and policies that promote safety.

Motivations

AI researchers have widely different opinions about the severity and primary sources of risk posed by AI technology – though surveys suggest that experts take high consequence risks seriously. In two surveys of AI researchers, the median respondent was optimistic about AI overall, but placed a 5% probability on an “extremely bad (e.g. human extinction)” outcome of advanced AI. In a 2022 survey of the Natural language processing (NLP) community, 37% agreed or weakly agreed that it is plausible that AI decisions could lead to a catastrophe that is “at least as bad as an all-out nuclear war.” Scholars discuss current risks from critical systems failures, bias, and AI enabled surveillance; emerging risks from technological unemployment, digital manipulation, and weaponization; and speculative risks from losing control of future artificial general intelligence (AGI) agents.

Some have criticized concerns about AGI, such as Andrew Ng who compared them in 2015 to "worrying about overpopulation on Mars when we have not even set foot on the planet yet." Stuart J. Russell on the other side urges caution, arguing that "it is better to anticipate human ingenuity than to underestimate it."

Background

Risks from AI began to be seriously discussed at the start of the computer age:

Moreover, if we move in the direction of making machines which learn and whose behavior is modified by experience, we must face the fact that every degree of independence we give the machine is a degree of possible defiance of our wishes.
— Norbert Wiener (1949)

From 2008 to 2009, the AAAI commissioned a study to explore and address potential long-term societal influences of AI research and development. The panel was generally skeptical of the radical views expressed by science-fiction authors but agreed that "additional research would be valuable on methods for understanding and verifying the range of behaviors of complex computational systems to minimize unexpected outcomes."

In 2011, Roman Yampolskiy introduced the term "AI safety engineering" at the Philosophy and Theory of Artificial Intelligence conference, listing prior failures of AI systems and arguing that "the frequency and seriousness of such events will steadily increase as AIs become more capable."

In 2014, philosopher Nick Bostrom published the book Superintelligence: Paths, Dangers, Strategies. He has the opinion that the rise of AGI has the potential to create various societal issues, ranging from the displacement of the workforce by AI, manipulation of political and military structures, to even the possibility of human extinction. His argument that future advanced systems may pose a threat to human existence prompted Elon Musk, Bill Gates, and Stephen Hawking to voice similar concerns.

In 2015, dozens of artificial intelligence experts signed an open letter on artificial intelligence calling for research on the societal impacts of AI and outlining concrete directions. To date, the letter has been signed by over 8000 people including Yann LeCun, Shane Legg, Yoshua Bengio, and Stuart Russell.

In the same year, a group of academics led by professor Stuart Russell founded the Center for Human-Compatible AI at UC Berkeley and the Future of Life Institute awarded $6.5 million in grants for research aimed at "ensuring artificial intelligence (AI) remains safe, ethical and beneficial."

In 2016, the White House Office of Science and Technology Policy and Carnegie Mellon University announced The Public Workshop on Safety and Control for Artificial Intelligence, which was one of a sequence of four White House workshops aimed at investigating "the advantages and drawbacks" of AI. In the same year, Concrete Problems in AI Safety – one of the first and most influential technical AI Safety agendas – was published.

In 2017, the Future of Life Institute sponsored the Asilomar Conference on Beneficial AI, where more than 100 thought leaders formulated principles for beneficial AI including "Race Avoidance: Teams developing AI systems should actively cooperate to avoid corner-cutting on safety standards."

In 2018, the DeepMind Safety team outlined AI safety problems in specification, robustness, and assurance. The following year, researchers organized a workshop at ICLR that focused on these problem areas.

In 2021, Unsolved Problems in ML Safety was published, outlining research directions in robustness, monitoring, alignment, and systemic safety.

In 2023, Rishi Sunak said he wants the United Kingdom to be the "geographical home of global AI safety regulation" and to host the first global summit on AI safety.

Research foci

AI safety research areas include robustness, monitoring, and alignment.

Robustness

Adversarial robustness

AI systems are often vulnerable to adversarial examples or “inputs to machine learning models that an attacker has intentionally designed to cause the model to make a mistake”. For example, in 2013, Szegedy et al. discovered that adding specific imperceptible perturbations to an image could cause it to be misclassified with high confidence. This continues to be an issue with neural networks, though in recent work the perturbations are generally large enough to be perceptible.

All of the images on the right are predicted to be an ostrich after the perturbation is applied. (Left) is a correctly predicted sample, (center) perturbation applied magnified by 10x, (right) adversarial example.

Adversarial robustness is often associated with security. Researchers demonstrated that an audio signal could be imperceptibly modified so that speech-to-text systems transcribe it to any message the attacker chooses. Network intrusion and malware detection systems also must be adversarially robust since attackers may design their attacks to fool detectors.

Models that represent objectives (reward models) must also be adversarially robust. For example, a reward model might estimate how helpful a text response is and a language model might be trained to maximize this score. Researchers have shown that if a language model is trained for long enough, it will leverage the vulnerabilities of the reward model to achieve a better score and perform worse on the intended task. This issue can be addressed by improving the adversarial robustness of the reward model. More generally, any AI system used to evaluate another AI system must be adversarially robust. This could include monitoring tools, since they could also potentially be tampered with to produce a higher reward.

Monitoring

Estimating uncertainty

It is often important for human operators to gauge how much they should trust an AI system, especially in high-stakes settings such as medical diagnosis. ML models generally express confidence by outputting probabilities; however, they are often overconfident, especially in situations that differ from those that they were trained to handle. Calibration research aims to make model probabilities correspond as closely as possible to the true proportion that the model is correct.

Similarly, anomaly detection or out-of-distribution (OOD) detection aims to identify when an AI system is in an unusual situation. For example, if a sensor on an autonomous vehicle is malfunctioning, or it encounters challenging terrain, it should alert the driver to take control or pull over. Anomaly detection has been implemented by simply training a classifier to distinguish anomalous and non-anomalous inputs, though several other techniques are in use.

Detecting malicious use

Scholars and government agencies have expressed concerns that AI systems could be used to help malicious actors to build weapons, manipulate public opinion, or automate cyber attacks. These worries are a practical concern for companies like OpenAI which host powerful AI tools online. In order to prevent misuse, OpenAI has built detection systems that flag or restrict users based on their activity.

Transparency

Neural networks have often been described as black boxes, meaning that it is difficult to understand why they make the decisions they do as a result of the massive number of computations they perform. This makes it challenging to anticipate failures. In 2018, a self-driving car killed a pedestrian after failing to identify them. Due to the black box nature of the AI software, the reason for the failure remains unclear.

One benefit of transparency is explainability. It is sometimes a legal requirement to provide an explanation for why a decision was made in order to ensure fairness, for example for automatically filtering job applications or credit score assignment.

Another benefit is to reveal the cause of failures. At the beginning of the 2020 COVID-19 pandemic, researchers used transparency tools to show that medical image classifiers were ‘paying attention’ to irrelevant hospital labels.

Transparency techniques can also be used to correct errors. For example, in the paper “Locating and Editing Factual Associations in GPT,” the authors were able to identify model parameters that influenced how it answered questions about the location of the Eiffel tower. They were then able to ‘edit’ this knowledge to make the model respond to questions as if it believed the tower was in Rome instead of France. Though in this case, the authors induced an error, these methods could potentially be used to efficiently fix them. Model editing techniques also exist in computer vision.

Finally, some have argued that the opaqueness of AI systems is a significant source of risk and better understanding of how they function could prevent high-consequence failures in the future. “Inner” interpretability research aims to make ML models less opaque. One goal of this research is to identify what the internal neuron activations represent. For example, researchers identified a neuron in CLIP that responds to images of people in spider man costumes, sketches of spiderman, and the word ‘spider.’ It also involves explaining connections between these neurons or ‘circuits’. For example, researchers have identified pattern-matching mechanisms in transformer attention that may play a role in how language models learn from their context. “Inner interpretability” has been compared to neuroscience. In both cases, the goal is to understand what is going on in an intricate system, though ML researchers have the benefit of being able to take perfect measurements and perform arbitrary ablations.

Detecting trojans

ML models can potentially contain ‘trojans’ or ‘backdoors’: vulnerabilities that malicious actors maliciously build into an AI system. For example, a trojaned facial recognition system could grant access when a specific piece of jewelry is in view; or a trojaned autonomous vehicle may function normally until a specific trigger is visible. Note that an adversary must have access to the system’s training data in order to plant a trojan. This might not be difficult to do with some large models like CLIP or GPT-3 as they are trained on publicly available internet data. Researchers were able to plant a trojan in an image classifier by changing just 3 out of 3 million of the training images. In addition to posing a security risk, researchers have argued that trojans provide a concrete setting for testing and developing better monitoring tools.

Alignment

In the field of artificial intelligence (AI), AI alignment research aims to steer AI systems towards humans' intended goals, preferences, or ethical principles. An AI system is considered aligned if it advances the intended objectives. A misaligned AI system pursues some objectives, but not the intended ones.

It can be challenging for AI designers to align an AI system because it can be difficult for them to specify the full range of desired and undesired behavior. To avoid this difficulty, they typically use simpler proxy goals, such as gaining human approval. But that approach can create loopholes, overlook necessary constraints, or reward the AI system for merely appearing aligned.

Misaligned AI systems can malfunction or cause harm. AI systems may find loopholes that allow them to accomplish their proxy goals efficiently but in unintended, sometimes harmful ways (reward hacking). They may also develop unwanted instrumental strategies, such as seeking power or survival, because such strategies help them achieve their given goals. Furthermore, they may develop undesirable emergent goals that may be hard to detect before the system is deployed, when it faces new situations and data distributions.

Today, these problems affect existing commercial systems such as language models, robots, autonomous vehicles, and social media recommendation engines. Some AI researchers argue that more capable future systems will be more severely affected since these problems partially result from the systems being highly capable.

Many leading AI scientists, such as Geoffrey Hinton and Stuart Russell, argue that AI is approaching superhuman capabilities and could endanger human civilization if misaligned.

AI alignment is a subfield of AI safety, the study of how to build safe AI systems. Other subfields of AI safety include robustness, monitoring, and capability control. Research challenges in alignment include instilling complex values in AI, avoiding deceptive AI, scalable oversight, auditing and interpreting AI models, and preventing emergent AI behaviors like power-seeking. Alignment research has connections to interpretability research, (adversarial) robustness, anomaly detection, calibrated uncertainty, formal verification, preference learning, safety-critical engineering, game theory, algorithmic fairness, and the social sciences.

Systemic safety and sociotechnical factors

It is common for AI risks (and technological risks more generally) to be categorized as misuse or accidents. Some scholars have suggested that this framework falls short. For example, the Cuban Missile Crisis was not clearly an accident or a misuse of technology. Policy analysts Zwetsloot and Dafoe wrote, “The misuse and accident perspectives tend to focus only on the last step in a causal chain leading up to a harm: that is, the person who misused the technology, or the system that behaved in unintended ways… Often, though, the relevant causal chain is much longer.” Risks often arise from ‘structural’ or ‘systemic’ factors such as competitive pressures, diffusion of harms, fast-paced development, high levels of uncertainty, and inadequate safety culture. In the broader context of safety engineering, structural factors like ‘organizational safety culture’ play a central role in the popular STAMP risk analysis framework.

Inspired by the structural perspective, some researchers have emphasized the importance of using machine learning to improve sociotechnical safety factors, for example, using ML for cyber defense, improving institutional decision-making, and facilitating cooperation.

Cyber defense

Some scholars are concerned that AI will exacerbate the already imbalanced game between cyber attackers and cyber defenders. This would increase 'first strike' incentives and could lead to more aggressive and destabilizing attacks. In order to mitigate this risk, some have advocated for an increased emphasis on cyber defense. In addition, software security is essential preventing powerful AI models from being stolen and misused.

Improving institutional decision-making

The advancement of AI in economic and military domains could precipitate unprecedented political challenges. Some scholars have compared AI race dynamics to the cold war, where the careful judgment of a small number of decision-makers often spelled the difference between stability and catastrophe. AI researchers have argued that AI technologies could also be used to assist decision-making. For example, researchers are beginning to develop AI forecasting and advisory systems.

Facilitating cooperation

Many of the largest global threats (nuclear war, climate change, etc) have been framed as cooperation challenges. As in the well-known prisoner’s dilemma scenario, some dynamics may lead to poor results for all players, even when they are optimally acting in their self-interest. For example, no single actor has strong incentives to address climate change even though the consequences may be significant if no one intervenes.

A salient AI cooperation challenge is avoiding a ‘race to the bottom’. In this scenario, countries or companies race to build more capable AI systems and neglect safety, leading to a catastrophic accident that harms everyone involved. Concerns about scenarios like these have inspired both political and technical efforts to facilitate cooperation between humans, and potentially also between AI systems. Most AI research focuses on designing individual agents to serve isolated functions (often in ‘single-player’ games). Scholars have suggested that as AI systems become more autonomous, it may become essential to study and shape the way they interact.

In governance

AI governance is broadly concerned with creating norms, standards, and regulations to guide the use and development of AI systems.

Research

AI safety governance research ranges from foundational investigations into the potential impacts of AI to specific applications. On the foundational side, researchers have argued that AI could transform many aspects of society due to its broad applicability, comparing it to electricity and the steam engine. Some work has focused on anticipating specific risks that may arise from these impacts – for example, risks from mass unemployment, weaponization, disinformation, surveillance, and the concentration of power. Other work explores underlying risk factors such as the difficulty of monitoring the rapidly evolving AI industry, the availability of AI models, and ‘race to the bottom’ dynamics. Allan Dafoe, the head of longterm governance and strategy at DeepMind has emphasized the dangers of racing and the potential need for cooperation: “it may be close to a necessary and sufficient condition for AI safety and alignment that there be a high degree of caution prior to deploying advanced powerful systems; however, if actors are competing in a domain with large returns to first-movers or relative advantage, then they will be pressured to choose a sub-optimal level of caution.”

Government action

Some experts have argued that it is too early to regulate AI, expressing concerns that regulations will hamper innovation and it would be foolish to “rush to regulate in ignorance.” Others, such as business magnate Elon Musk, call for pre-emptive action to mitigate catastrophic risks.

Outside of formal legislation, government agencies have put forward ethical and safety recommendations. In March 2021, the US National Security Commission on Artificial Intelligence reported that advances in AI may make it increasingly important to “assure that systems are aligned with goals and values, including safety, robustness and trustworthiness." Subsequently, the National Institute of Standards and Technology drafted a framework for managing AI Risk, which advises that when "catastrophic risks are present - development and deployment should cease in a safe manner until risks can be sufficiently managed."

In September 2021, the People's Republic of China published ethical guidelines for the use of AI in China, emphasizing that AI decisions should remain under human control and calling for accountability mechanisms. In the same month, The United Kingdom published its 10-year National AI Strategy, which states the British government "takes the long-term risk of non-aligned Artificial General Intelligence, and the unforeseeable changes that it would mean for ... the world, seriously." The strategy describes actions to assess long-term AI risks, including catastrophic risks. The British government has announced plans for the first major global summit on AI safety, this is due to take place on the 1st and 2 November 2023 and is an opportunity for policymakers and world leaders to consider the immediate and future risks of AI and how these risks can be mitigated via a globally coordinated approach.

Government organizations, particularly in the United States, have also encouraged the development of technical AI safety research. The Intelligence Advanced Research Projects Activity initiated the TrojAI project to identify and protect against Trojan attacks on AI systems. The Defense Advanced Research Projects Agency engages in research on explainable artificial intelligence and improving robustness against adversarial attacks and The National Science Foundation supports the Center for Trustworthy Machine Learning, and is providing millions in funding for empirical AI safety research.

Corporate self-regulation

AI labs and companies generally abide by safety practices and norms that fall outside of formal legislation. One aim of governance researchers is to shape these norms.[?] Examples of safety recommendations found in the literature include performing third-party auditing, offering bounties for finding failures, sharing AI incidents (an AI incident database was created for this purpose), following guidelines to determine whether to publish research or models, and improving information and cyber security in AI labs.

Companies have also made concrete commitments. Cohere, OpenAI, and AI21 proposed and agreed on “best practices for deploying language models,” focusing on mitigating misuse. To avoid contributing to racing-dynamics, OpenAI has also stated in their charter that “if a value-aligned, safety-conscious project comes close to building AGI before we do, we commit to stop competing with and start assisting this project” Also, industry leaders such as CEO of DeepMind Demis Hassabis, director of Facebook AI Yann LeCun have signed open letters such as the Asilomar Principles and the Autonomous Weapons Open Letter.

Climate change in Greenland

From Wikipedia, the free encyclopedia

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

Climate change in Greenland is affecting the livelihood of the Greenlandic population. Geographically Greenland is situated between the Arctic and the Atlantic Ocean, with two thirds of the island being north of the Arctic Circle. Since the middle of the 20th century, the Arctic has been warming at about twice the global rate. Rising temperatures put increasing pressure on certain plant and tree species and contribute to Greenland's melting ice sheet. This affects and changes the livelihood of the Greenlandic population, particularly the Greenlandic Inuit, which make up to 80 percent of the total population. Besides the decline of fish stocks, the country's landscape is changing: the melting ice reveals minerals, oil and gas. This has attracted interest from local and foreign investors for potential resource extraction. As new industries are accompanied by new job opportunities and potential wealth, lifestyles are changing. Greenland is in transition, in terms of biophysical as well as cultural and social conditions.

Impacts on the natural environment

Temperature and weather changes

Since the middle of the 20th century, the Arctic has been warming at about twice the global rate.Rising temperatures put increasing pressure on certain plant and tree species and contribute to Greenland's melting ice sheet.

Current/past Köppen climate classification map for Greenland for 1980–2016

Predicted Köppen climate classification map for Greenland for 2071–2100

Sea level rise

Due to its geographical location and global climatic patterns such as the North Atlantic Oscillation and volcanic activity, Greenland is exposed to high levels of fluctuations in the natural environment. The Greenland ice sheet is the second largest in the world. Consequently, its melting has a significant impact on a global scale. According to the European Environmental Agency "the cumulative ice loss from Greenland from 1992 to 2015 was 3 600 Gt (Gigatonnes) and contributed to global sea level rise by approximately 10 mm." The mass loss of Greenland over 2009-2018 was likely more than seven times higher than over 1992-2001. The anticipated warming of the oceans and resulting sea level rise result in coastal erosion, melting of permafrost and decreased sea ice thickness. The areas impacted most in Greenland are those with the highest population density.

Impacts on people

Economic impacts

In July 2017, Greenland's population was 57,713. This number is expected to decline to 54,800 by 2030. Historically, the movement of people and the accompanying change of social conditions is nothing unusual for Greenlanders. Recorded shifts were primarily driven by the search for resources (of e.g. seals and cod). At the beginning of the 21st century, climate change has an unprecedented impact on Greenland. The melting ice sheet enables an easier access to oil, gas and minerals, the exploitation of which creates new economic opportunities. This prospect of new jobs, purchasing power, new shipping routes and the possibly resulting entrance into the global market system is linked to the potential of gaining greater independence from Denmark. Putting a damper on previously displayed optimism, the versatility of global commodity markets also poses potential threats.

Besides potential for tourism development which comes with numerous challenges, in south Greenland the melting ice provides more grazing opportunities for farmers. However, there is also apprehension particularly amongst smaller villages that rely on hunting and fishing (primarily Inuit communities), that climate change will contribute to the end of their traditional lifestyles.

Extraction industry

Although becoming increasingly autonomous, Greenland remains dependent on the Kingdom of Denmark since its colonisation in 1721. In 1979, the Home Rule Government was established in Greenland. It gained further rights in 2009, which moved Greenland towards self-rule. The government is financially dependent on Denmark which provides 60% of Greenland's annual budget revenue. One of the country's greatest challenges is to ensure modern life styles introduced primarily through the industrialisation processes and triggered by intensive fishery while pursuing economic wealth creation and further independence. It is for this reason or rather the desire to phase out Denmark's financial support entirely that the Home Rule Government strongly supports and even promotes arising opportunities in the extraction industry. The United States Geological Survey estimated a total of 141 billion barrels of hydrocarbons (approximately 13% of the world's undiscovered oil and 30% of the undiscovered natural gas) to be held beneath Greenlandic surfaces. In 2009, the Greenlandic Government published a lifecycle assessment for the production of aluminium in an Alcoa smelter. The construction of the aluminium smelter is planned in the town of Maniitsoq. In addition, in 2013 the government decided to lift the ban on the extraction of radioactive minerals such as uranium.

Impacts on indigenous peoples

Because of climate change, the Tunumiit Inuit, who reside in east Greenland, are seeing changes to their food systems and cultural interpretations as well. There has been a general change from seal hunting to fishing. Unlike seal hunting, fishing is deemed as a low-status activity to the Tunumiit. Before recent years, the Tunumiit would equate lack of ecological resources to a paucity of collective human respect. This cultural tradition no longer carries the same weight because the Tunumiit believe they are losing agency in controlling the unpredictable weather. Many traditional hunters are shifting towards the tourism sector because they can no longer provide for their families through traditional forms of hunting. Catering to tourists has modified their culture, relationship with food, and increased global carbon dioxide emissions by encouraging more travel to east Greenland.

Traditional ecological knowledge

Widely discussed in academic literature since the 1980s, traditional ecological knowledge cumulatively consists of knowledge, practices and beliefs about the interaction of living beings and their environment. In Greenland, traditional knowledge does not only underpin the life of subsistence hunters and fishermen but also more broadly community life and culture. While climate change is making practical aspects such as the prediction of weather or animal migration more difficult, it also highlights the importance of traditional knowledge for adaptive capacity building in other areas e.g. the recognition of approaching hazards and survival skills. The process of knowledge transfer between generations for building resilience is also important to address as it is weakened by trends of urbanisation and alternative livelihoods. Such trends can further lead to the alienation of people from their environment. This increases the need for the management of ecosystems which are the base of Greenland's economic activities, cultural characteristics and natural services.

The concept of anticipation

Greenlandic Inuit as a societal group are academically recognised for their "finely tuned ability to be flexible, to innovate, and to seize opportunities in the environment." This means that a successful adaptation to changing climatic conditions is attributed to a specific ontology which includes the ability to relate to one's world, making sense of it and reflecting on expectations about it; anticipation. In Greenlandic the term 'anticipation' is divided into two meanings which are primarily used by subsistence hunters and fishermen: neriguaa ("to hope for, or to be hopeful of something") and aarleraa ("to be fearful, especially of bad weather"). This distinction of meanings carries the acceptance of uncertainty as well as potential disappointments and failure.

Mitigation and adaptation

Adaptation

Since the 1950s a stark rise in global temperatures has been observed. As climate change, whether natural or anthropogenic, impacts the livelihoods of people across the globe, responses i.e. ways to prepare and adjust under changing vulnerabilities become important. Such responses are commonly discussed under the term adaptation, "the process of adjustment to actual or expected climate and its effects", as defined by the IPCC.

In order to identify and implement effective measures of adaptation, current developments, such as demographic change and other non-climatic factors of change must be considered simultaneously. A study conducted by the AMAP, a working group of the Arctic Council, distinguishes between short-term and long-term adaptation measures, as well as climate-centered and vulnerability-centered options. In the short-term, adaptation measures can focus on immediate challenges caused by increased extreme weather events, such as heavy rainfalls or melting permafrost (climate-centered). In the long-term, other developments, such as the effects of demographic, social and economic change must be considered when determining how climate change will affect the population (vulnerability-centered).

The Greenlandic Government

At the 2015 United Nations Climate Change Conference, the then Greenlandic Minister for Finance, Mineral Resources and Foreign Affairs, Vittus Qujaukitsoq described climate change adaptation in Greenland as being a policy priority. He underlined the importance of incorporating the knowledge and experience of the Inuit to gain an all-encompassing understanding of the ongoing climatic changes.

The government's website Climate Greenland is both a resource tool to find relevant organizations or stakeholders, as well as information on the impacts of climate change on Greenland and how the country is responding to it. It focuses on the four areas 'citizen', 'trade', 'municipality' and 'education'. Climate Change Adaptation is defined as "being prepared for the challenges caused by the climate changes and about relating to possibilities as well as challenges." The Government publishes adaptation reports for sectors, such as fisheries, hunting or tourism.

In 2009 the Greenland Climate Research Centre was set up in the capital of Greenland, Nuuk. The centre received a grant of DKK 35 million by the Danish Ministry of Science, Technology and Innovation. The aim of the centre is to study the impact of climate change on Greenland and the Arctic and the consequences for nature and society. It is linked to the Greenland Institute of Natural Resources and the University of Greenland, Ilisimatusarfik. Traditional knowledge is important for weather and animal migration, as well as for adaptive capacity building in areas such as the recognition of approaching hazards and survival skills.

The Arctic Council

In 2008, following increased media attention for the Arctic, the five countries adjacent to the Arctic Ocean (Canada, Denmark (Greenland), Norway, Russia and the United States) published the Ilulissat Declaration. This proclaims the Arctic states' responsibility to protect the ecosystem of the Arctic Ocean. In addition, the Council's Arctic Monitoring and Assessment Programme (AMAP) has published a series of reports one of which looks at adaptation in particular. The 2017 Adaptation Actions for a Changing Arctic (AACA) Report covers the Baffin Bay/Davis Strait region which includes the western part of Greenland aiming to offer information "to assist local decision makers and stakeholders [...] in developing adaptation tools and strategies to better deal with climate change [...]." Following extensive stakeholder dialogues, the report identified seven themes of local adaptation:

Living resources
Non-living resources (e.g. mineral extraction)
Education
Human health and well-being
Tourism
Shipping
Infrastructure

The report concludes that it is crucial to consider the cumulative and cascading effects of change in order to build adaptive capacities. Suggested measures are structural/physical, social as well as institutional. Lastly, as a precursor to adaptation measures, the AACA points out six factors (political leadership, institutional organisation, local and regional leadership, the need for usable science and sufficient funding and public support) to build adaptive readiness.

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Thursday, October 5, 2023

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