20 February 2015

And it is, it is a glorious thing

How long has it been, gentle readers, since I last penned a missive against the fraud that is anarcho-capitalism? Well, in truth, there are several reasons I haven’t done it very much recently. The first is that the case gets made for me, all too well and all too often. The second is that there are far better writers than I am out there, keeping up that particular good fight, like Ms. Elizabeth Stoker Bruenig over at The New Republic (see especially these two fine works). And the third is that, quite frankly, my own attention has been caught up in the mendacities of an Anglophone media which is busily pushing a neoliberal economic agenda on other fronts, with all the force of the American military-industrial complex behind it. Calling out techno-utopians and anarcho-capitalists on their errors rather took a back burner.

But actually, I did want to share this article on Aeon Magazine about the rise and fall of ‘the Silk Road’, or Tor Hidden Services, which started out as a techno-libertarian utopia where people could trade in drugs, guns, child porn and other vices not sanctioned by the evil state - but which wound up transmogrified into an amorphous network of miniature states all on its own. The article provides not only an excellent excuse for me to post a bit of Gilbert & Sullivan, but also an excellent run-down of how at every turn, consistent market behaviour has to be guaranteed by a certain level of trust, which can only be backed up in an anarchic world like this by measures such as sanctions and bans. But this part was the real kicker:
They were vulnerable to more profound betrayals, too. Customers had to give mailing addresses to dealers if they wanted their drugs delivered. Under Silk Road’s rules, dealers were supposed to delete this information as soon as the transaction was finished. However, it was impossible for Ulbricht to enforce this rule unless (as happened once) a dealer admitted that he had kept the names and addresses. It’s likely that Silk Road dealers systematically broke these rules. At least one former Silk Road dealer, Michael Duch, who testified at Ulbricht’s trial, kept the names and addresses of all his clients in a handy spreadsheet.

This created an obvious vulnerability – indeed, an existential threat to Ulbricht’s business. If any reasonably successful dealer leaked the contact details for users en masse, customers would flee and the site would collapse. And so, when a Silk Road user with the pseudonym FriendlyChemist threatened to do just that, Ulbricht did not invoke Silk Road’s internal rules or rely on impersonal market forces. Instead, he tried to use the final argument of kings: physical violence. He paid $150,000 to someone whom he believed to be a senior member of the Hells Angels to arrange for the murder of his blackmailer, later paying another $500,000 to have associates of FriendlyChemist murdered too.
A rather peculiar position to take, what, for someone like Ulbricht who set out to ‘use economic theory as a means to abolish the use of coercion and aggression amongst mankind’? But in a way, Ulbricht’s experiment wasn’t completely without merit - its failure would appear to suggest, in fact, that Karl Polanyi was not completely off-base when he suggested in The Great Transformation that what we would consider under the neoclassical synthesis to be ‘market behaviour’ is always already prefigured by the assumption of implicit or explicit violence on the part of the state. Please do read the entire article; I personally hope to see some more on this subject in the near future!

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