Tag: Bitcoin

I’ve been following the story of Ross Ulbricht and his fallen Silk Road empire. For those of you who have been living in cave, Ross Ulbricht is the alleged mastermind behind the buy-illegal-drugs-online-and-have-them-shipped-to-your-mailbox-in-plain-brown-envelope website Silk Road. Through the use of Bitcoins (an anonymous digital currency, “digital cash”) and TOR (an anonymous internet), Ulbricht earned some US$80M in sales commissions, enabling dealers and clients to directly connect without the hassle and expense of street-level middlemen. Sound like a familiar business model? Amazon.com has done quite well with the same.

Last week the FBI finally caught up with Ulbricht, and the Silk Road is no more. All the Bitcoins have been “seized,” though it remains to be seen if the FBI can decrypt Ulbricht’s Bitcoin wallet, where most of the money resides. Ulbricht’s capture represents the beginning of law enforcement’s struggle with online sales of illegal drugs, not the end. Dozens of alternatives, including Sheep Marketplace, are already up and running.

What interests me most about this story is Ulbricht’s self-professed libertarian ideals. From his LinkedIn profile, Ulbricht writes:

“I want to use economic theory as a means to abolish the use of coercion and agression [sic] amongst mankind. Just as slavery has been abolished most everywhere, I believe violence, coercion and all forms of force by one person over another can come to an end. The most widespread and systemic use of force is amongst institutions and governments, so this is my current point of effort.

The best way to change a government is to change the minds of the governed, however. To that end, I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force.”

Somewhere along the way Ulbricht lost track of his non-coercive ideals, and hired a hitman to off his former employee. Still, I’d like to take some time to explore Ulbricht’s vision. It’s easy to write off libertarianism entirely as a kind of sophomoric idealism, but the (libertarian) ideal of Freedom is tagged as “sticky” in the forums of American consciousness, and deserves discussion.

So here’s my thought experiment for the day: What would a less coercive form of government look like? What if police and/or the military could legally use force against a citizen only if that citizen was threatening the life of another citizen? In other words, a police officer could not legally pull a gun (or threaten to pull a gun or use any other form of coercion) on a citizen for any of the following offenses: trespassing, theft, tax evasion, non-payment of rent, using drugs, selling drugs, playing loud music/disturbing the peace, drinking alcohol in a public place, growing psychoactive plants, selling raw milk, etc.

And here’s my teaser: I know a place that already operates according to these rules. I’ll reveal the location at the end of the post.

What Keeps People Behaving Well?

Really it comes down to that question, doesn’t it? If the state can only use force to protect life, what’s going to stop people from going nuts, stealing stuff, vandalizing everything, not paying their taxes, etc.?

Most of the answers are fairly obvious, including:

• Conscience: Non-sociopaths have empathy, and will generally treat other people how they like to be treated
• Shame: Human beings are quite good at shaming others human beings who don’t follow social convention. Don’t believe me? Go try cutting in line somewhere in the U.S. and see how that works out for you.
• Path of least resistance: If rules and laws are reasonable, it’s often easier to just follow them, even if nobody is pointing a gun at your head if you don’t.

Some possibly less obvious factors/trends:

• Information transparency: Which would compel you more to pay your taxes, 1) threat of audit and jail, or 2) every single person who looked at you instantly knowing if you were a tax evader? I think for many people, option 2 would be the stronger motivator, even though it doesn’t involve a gun to your head. Google Glass (or the equivalent) and public tax records could make item 2 a reality, no state coercion necessary.
• Trust in government: Which would compel you to more to pay your taxes, 1) government spending on citizen spying programs, invading foreign states, and “bailing out” profiteering corporations or 2) healthcare, emergency services, roads, and education for your community? These choices reflect my own personal bias, but my larger point is that government spending that reflects the values of citizens requires less enforcement when it comes to tax collections. Obviously not all citizens have the same values, but in this age of Corporatism, citizen values in general are underrepresented.
• Less income inequality: Radical income inequality erodes social trust. In South Africa, homes of the upper class are walled off and barred off. As a contrast, in Denmark, this is how they deal with thieves. Yes, the video is kind of a joke, but the point is that in countries with less extreme states of poverty and wealth, there is a less of a need to enforce property rights with coercive and defensive means.

It’s ironic that a social democracy/welfare state like Denmark can put the libertarian ideal of low coercion into practice. I’m not saying the peaceful wooden pony repo actually demonstrates anything, but Denmark does have a good record of preserving citizen freedoms and protecting human rights. Other European social democracies protect the “freedom to roam“; this would be called trespassing in the United States — behavior a cop could arrest you for (and shoot you if you resisted arrest).

So what would actually change if the threat of force were removed in most cases? This wouldn’t mean that everything illegal would suddenly become legal. But it would mean that a cop couldn’t arrest you and drag you off to jail except in the most extreme cases (such as willfully injuring another person, or threatening to do so). What immediate effects would this have on society?

• Government income from taxation would go down, unless governments could persuade citizens that the money wasn’t being wasted/squandered.
• With the threat of forced eviction removed, it’s possible that fewer people would be interested in being landlords. With less demand, housing prices might go down.
• Fewer silly, pointless laws (few people would obey them and even fewer would care).
• More value might be placed on finding ways to persuade citizens to behave well; “social engineering” via education, nutrition, stable family structures, development of empathy through reading and writing, etc. How do you create a good person that generally behaves well?

A Possible Alternative To State-Sanctioned Coercion: The Citizenship Score

Disclaimer: the following idea is in no way libertarian, though it could potentially result in reaching a libertarian ideal (less use of force by the government, including the use of force to make people pay taxes). In fact, this suggestion veers in the opposite direction, towards that of the ultimate libertarian bogeyman, The Nanny State.

Here’s my idea: instead of using force or threatening to use force against citizens who don’t comply with property, substance, and decency laws (like paying your taxes, not stealing things, not drinking in public, not spray-painting your tag on walls and signs, etc.), implement a citizenship score. Your score would go up for regular compliance with laws, and it would down with violations. You could boost your score by performing community service, and other actions that benefited the public good (like inventing something useful and not patenting it, or publishing works under Creative Commons). Your score would be publicly available.

Corporations already have something like this. It’s called a credit score. It rates the only things corporations care about. That is, do you pay your bills on time?

You could argue that a public citizenship score would be a massive violation of privacy. But arrest records are already public. Why shouldn’t being a good citizen be public? And if a citizenship score could replace state-sanctioned violence against citizens, even libertarians might go for it.

Would the threat of a low citizenship score actually dissuade people from breaking the law? I think it would, if they had any interest in getting a job, dating, making new friends, or any other activity that would require impressing people you didn’t already know, and who might check up on you.

Could it be gamed? Of course it could, just like a credit score can be gamed. I can already see the Tim Ferriss blogpost: “How To Massively Boost Your Citizenship Score In Only Four Hours”. Could it be abused? Probably — there would have to be an appeals process; there would be huge legal and technical overhead and expenses involved in implementing such a system and making sure it was more-or-less fair.

But I still like the idea. I especially like the idea of the state persuading citizens to behave well, rather than using the constant threat of violence for citizens who don’t comply with the law. Consider the following scenario: a teenager is spray-painting on a wall; a cop sees them and tells them to freeze; the teenager panics and runs; the cop catches them and threatens them with the use of deadly force if they resist; the teenager resists; the cop (legally) kills the teenager. Punishment for graffiti = death? This kind of shit really happens. It’s just not civilized. I’m suggesting that the hypothetical graffiti artist should receive a demerit on their citizenship score instead. Nanny state? Yes. Death penalty for street art? No.

We’re nearing a society with 0% privacy. Soon, everything we do will be recorded. If you combine 100% surveillance with 100% coercive law enforcement, you get fascism. But if you combine 100% surveillance with 5% coercive law enforcement (reserving state force for protecting people from bodily harm) then you get what? A Libertarian Nanny State? Whatever you want to call it, it’s better than fascism.

A Functioning Near-Anarchic City

The anarchic ideal is not chaos, but rather a smoothly functioning society that operates without a centralized state threatening to use force against its own citizens to keep them in line.

In Oakland, California, the city I call home, we basically have a functioning anarchy (at least in terms of law enforcement). There are so few police per citizen, and the police are so demoralized, that people can basically do what they want without any fear of law enforcement getting involved.

This is not a good thing. We lead the nation in robberies. In some parts of town people dump their trash in the streets and get away it. It’s hard to find a public object without at least one ugly graffiti tag.

What’s remarkable is that things aren’t worse. Most people are good, and will obey reasonable laws because that’s a sensible thing to do. Huge swaths of the city are attractive, clean, well tended, quiet, and relatively safe. Oakland has huge problems, but it’s remarkable how good things are, considering there is almost zero law enforcement in many parts of the city.

Catch-22

Ross Ulbricht fell into the classic criminal Catch-22; when other criminals don’t play fair, you can’t call the police on them. You have to get your own hands dirty. In order to protect his private property, and avoid going to jail, Ulbricht chose to become the enforcer, and his central ideal went out the window.

I believe violence, coercion and all forms of force by one person over another can come to an end.

Outsourcing the use of force to the state is one of central pillars of society. We allow the police to enforce laws so we don’t have sit at home all day, holding a rifle and guarding our loot. But how far can we roll back this threat of force? With less income inequality and less scarcity, we might eventually abolish (or at least lessen) the need/desire to steal. And with increased surveillance and less privacy, we might be able to use reputation instead of force to motivate behavior.

What do you think?