The Dread Pirate Roberts as Statebuilder

by Henry on February 20, 2015

My new piece at Aeon.

Ulbricht built the Silk Road marketplace from nothing, pursuing both a political dream and his own self-interest. However, in making a market he found himself building a micro-state, with increasing levels of bureaucracy and rule‑enforcement and, eventually, the threat of violence against the most dangerous rule‑breakers. Trying to build Galt’s Gulch, he ended up reconstructing Hobbes’s Leviathan; he became the very thing he was trying to escape.

{ 72 comments }

1

Russell L. Carter 02.20.15 at 5:46 pm

Very nicely done Henry. In my opinion, your emphasis on Ulbricht’s competence is perhaps unnecessary. When dealing with complex security systems interwoven with human social dynamics, every person/organization is eventually incompetent. It’s just a matter of time. Sure, Ulbricht’s half-life was toward the ephemeral region of the distribution, but the best theoretical and practical systems talent that money can buy did not prevent Snowden. And even though that was basically a complete failure of the security of the system (i.e., The State), the system itself might even be stronger now. That might be evidence for the robustness of the all-encompassing security state.

2

Tom Slee 02.20.15 at 6:03 pm

I really really like this essay.

Unlike a lot of other pieces about digital libertarians it treats the ideals of (some of) those involved with respect rather than just scorning their naivete: and there is a very broad romantic appeal to the idea of the peaceful and autonomous self-governing community that does deserve to be taken seriously. And the dual nature of Tor is important. (Bitcoin, on the other hand, has always seemed to me like a very ingenious silliness).

The pressure to introduce rating systems to handle trust is a current bugbear of mine. In many tech circles (and in a chunk of the academic literature) they seem to be accepted as an obvious and effective panacea for problems of trust at scale even though, from what I can see, they are pretty much complete failures in actually delivering on that promise.

3

Z 02.20.15 at 6:03 pm

That’s a very interesting and enjoyable article!

4

Sumana Harihareswara 02.20.15 at 6:05 pm

I am halfway through this piece and loving it and chortling aloud.

5

AcademicLurker 02.20.15 at 6:07 pm

The pressure to introduce rating systems to handle trust is a current bugbear of mine. In many tech circles (and in a chunk of the academic literature) they seem to be accepted as an obvious and effective panacea for problems of trust at scale even though, from what I can see, they are pretty much complete failures in actually delivering on that promise.

They tend to work better when supplemented with hired assassins. As Ulbricht discovered, you need both the carrot and the stick.

6

Henry 02.20.15 at 6:10 pm

Unlike a lot of other pieces about digital libertarians it treats the ideals of (some of) those involved with respect rather than just scorning their naivete: and there is a very broad romantic appeal to the idea of the peaceful and autonomous self-governing community that does deserve to be taken seriously. And the dual nature of Tor is important. (Bitcoin, on the other hand, has always seemed to me like a very ingenious silliness).

China Mieville has a piece somewhere or another on seasteading which I am probably riffing on a little here. I’ve got a weak spot for would be utopians, even when they seem crazy, because it’s only through these kinds of venture that one really explores the possibility space of politics. Speaking of which, I’m reading Jo Walton’s “The Just City” which is among other things a very interesting take on utopian ideals and practices.

7

Adam Hammond 02.20.15 at 6:15 pm

Great! Thanks for sharing that. I guess I am constitutionally prepared to enjoy that article — and I did. I now look forward to reading the arguments of people who think you got something fundamentally wrong.

8

Sumana Harihareswara 02.20.15 at 6:23 pm

If nothing else, for a woman with a bachelor’s in political science who is constantly surrounded by tech industry bullshit which includes too many engineers’ scornful dismissal of the social sciences and humanities, this is top-shelf point-and-laugh schadenfreude. Yes, you dumbasses, the need for governance doesn’t magically go away just because you yourself don’t physically see any uniforms and badges.

OK! Now that I’ve got that out of my system — as with Airbnb and Uber and Couchsurfing figuring out how to govern their own participants (aside from trying to manipulate local governments), as with Wikipedia and Twitter trying to balance liberty and hospitality in their own communities, as with the battles around maintainership in gcc/Emacs and Node.js, over and over we see unreflective libertarians having to reinvent functioning governance from first principles, sometimes consciously realizing what they’re doing, sometimes unconsciously (or crowing as though they’re the first to ever think about these problems). The Silk Road example spotlights a particularly stark example and I love how you dissect and display it.

9

Sumana Harihareswara 02.20.15 at 6:28 pm

OK, I’m unfair in lumping all those together, not least because free software has a high proportion of thoughtful anarchists who quote Jo Freeman’s “Tyranny of Structurelessness” and know what it takes to do noncoercive cooperation sustainably. But the undercurrent’s significant, in all those spaces — as Paulina Borsook pointed out in Cyberselfish in 2000 (I still need to read that).

10

Tom Slee 02.20.15 at 6:37 pm

@Sumana. Genuine question: do you see many thoughtful anarchists among those who have gravitated to free software over the last 5-10 years, or are the lefty-anarchist types mainly older? Open-source (O’Reilly world as opposed to Stallman world) has become very comfortable within existing political and corporate arrangements, and my impression is that the free software world has become more capitalist than ever since Cyberselfish (which is indeed excellent).

Also: excellent links. Thank you.

11

Rich Puchalsky 02.20.15 at 6:45 pm

Articles like this point out some of the well-known failure modes of left anarchism. First people start asking how one could do X,Y, or Z in an anarchist society, and the answer is generally that you don’t want to give people a capability to do X,Y, or Z because that always leads to centralization of power. But then the problem is that there is so much money to be made / resources to be gained in doing these things that people can reliably reinvent the state using the resources from them if the state doesn’t already exist to stop them. This leads directly the centuries-old liberal political tradition: the state as lesser evil against the worse form of the state. I don’t know if Hobbes is really the right source here, since that says that the autocrat is better than anarchy: I think of, first, the American founding liberal political philosophy, which says that the jury-rigged state with mechanisms for internal competition for power is better than the autocratic state.

12

BruceJ 02.20.15 at 6:58 pm

@Rich

I don’t know if Hobbes is really the right source here, since that says that the autocrat is better than anarchy:

Hobbes is aimed at the ideal autocrat. As the old adage goes “The best of all possible forms of government is a benevolent dictatorship…the problem is keeping it benevolent”.

More to the point, the Silk Road case demonstrates my own assertion that a true functioning real-life libertarian society has been with us for a very long time: organized crime is an anarchic libertarian society with only one externally enforced rule: ‘don’t get caught’.

Over and over again through history we see that the end result of this is a rigidly hierarchal, violent structure.

13

Sumana Harihareswara 02.20.15 at 7:06 pm

@Tom: Thank you for the good question, and furthermore for “Seeing Like a Geek”. You may also like my thoughts on the Data & Society whitepaper “Understanding Fair Labor Practices in a Networked Age”, and some factors I’ve observed that make it easier or harder for me to change governance in a free software/open source community, and the various other texts I link in those pieces.

I agree that the RMS-y free software crowd skews older and — somewhat independently of that — skews to people with a longer history of participating in these kinds of communities, and that the “open source” (Raymond-y) faction skews younger and has less experience with participating in these kinds of communities, and is often a lot less ideological and countercultural about participating. The “My First Year of Pull Requests” talk and Q&A (video) a few years ago illuminated this divide; a more experienced contributor asked a newer one whether she was less likely to contribute to a project depending on its license (GPL versus permissive, etc.), and she replied that she basically does not notice the license at all.

I myself have participated in FLOSS outreach efforts where I see, and try to honor, the many different reasons people come into this community. Utilitarianism/efficiency, ambition, anarchism, altruism, job-seeking, peer community, and various other factors all come into play. I definitely do see some thoughtful anarchists among the newer entrants, but then again I am one of those Hacker School/Ada Initiative/UC Berkeley/OpenHatch sorts, an intellectual heir more of Seth Schoen than of Linus Torvalds, and I probably seek them out.

14

Henry 02.20.15 at 7:12 pm

Sumana – I imagine you know that Astra Taylor is thinking about this in some interesting ways too.

15

The Raven 02.20.15 at 8:35 pm

It’s YAFIA – Yet Another Failure of Internet Anarchism – at work. I’ve watched them come and watched them go over the years.

This was right, not left, anarchism; you can tell because they privilege the idea of money. I knew some of the founding cryptoanarchists back when and they had the “the market will sort it all out” rhetoric down pat. And now they have now presented us with YAFIA.

Raymond and Stallman are contemporaries. It’s interesting that Raymond’s ideology has become more popular with younger people; I suspect it has more to do with the spirit of the times (oh, dear, that translates as zeitgeist, doesn’t it? I didn’t mean it! No!) than any particular ideology.

16

Rich Puchalsky 02.20.15 at 8:53 pm

“This was right, not left, anarchism; you can tell because they privilege the idea of money.”

Just in case this was a response to my comment, I wasn’t saying that this was left anarchism. I was saying that this failure points out some of the problems that left anarchists have: it does no good to design a “stateless” system that just turns back into a primitive state. I think that left anarchists are less likely to have direct failures like this, being forewarned by theory, but it does mean that it’s more difficult to act, and it’s more likely that “tyranny of structurelessness” happens due to over preparation against resurgent hierarchy. I’ll give the same link on Occupy that I always give.

17

The Raven 02.20.15 at 9:11 pm

Rich, oh, then we agree. The trolls and criminals have taken down every attempt at anarchism I am aware of. Sorry for the confusion.

18

Emptyskin 02.20.15 at 9:39 pm

Henry, read some Rothbard. Your essay is terrible and I think you are a hack. I would respond with a detailed explanation, but there are so many fundamental misunderstandings of what libertarianism is that I’ve decided it is not worth it save for this: prohibited markets will inevitably create “non-libertarian” flows and rules as they are not purely markets, but markets created by states.

19

The Raven 02.20.15 at 9:41 pm

Sumana, aaargh! No, i don’t agree.

“trying to manipulate local governments”

They are break local law and endangering their customers. Is this any different, really, than what the US banks did when they created MERS, and shadowed something like 60 million (or was it 100 million?) US real estate titles?

Look, these services are potentially good ideas. But ignoring law is one of those tricks that never work; without law they will turn into monsters.

“Wikipedia and Twitter trying to balance liberty and hospitality”

They are failing to deal with trolls who facilitate identity theft and make death threats against women. I use Twitter, and have been known to contribute in a small way to Wikipedia, but they seem to me both examples of YAFIA.

20

The Temporary Name 02.20.15 at 9:42 pm

Thanks for the article. I spent a little time wondering about how many lessons could be drawn from starting with an initial population of obvious Bad Actors. After I while I thought about a friend’s interactions on various non-Tor gardening forums in which exchanges were arranged; the gardeners are at least less likely to murder, but I’ve seen a mug shot.

21

js. 02.20.15 at 9:59 pm

Indeed a great piece — thanks! I don’t want to derail the thread, so I’ll just (obscurely) note the relevance of this to some of the more hilarious suggestions made in another recent thread.

22

Henry Farrell 02.21.15 at 3:13 am

Henry, read some Rothbard. Your essay is terrible and I think you are a hack. I would respond with a detailed explanation, but there are so many fundamental misunderstandings of what libertarianism is that I’ve decided it is not worth it

I very much regret not having the opportunity to learn from your insights. Doubtless though, I’ll get over it with the passing of time.

23

Consumatopia 02.21.15 at 4:47 am

Okay, internet anarchists turn into statists. But what if we’re statist utopians? The interesting thing to me about block chains isn’t that they facilitate law breaking, it’s that they’re publicly verifiable. So I might as well ask, how badly is this going to blow up in my face when, decades from now, we start trying to encode social democracy as a cryptographically checked, distributed protocol? Should I expect an expensive Cybersyn-like boondoggle, a Soviet-like human catastrophe, or the end of civilization/humanity/life? Bear in mind that no matter how you answer my question it will not in any way inhibit my desire to try implementing it, because, well, http://www.theonion.com/video/morbid-curiosity-leading-many-voters-to-support-pa,18865/

24

Brett 02.21.15 at 8:36 am

I very much regret not having the opportunity to learn from your insights. Doubtless though, I’ll get over it with the passing of time.

No wonder he identifies as “emptyskin”. There’s nothing useful there.

I thought the essay was excellent. It’s a very good case example of why you need legal enforcement (or even just effective enforcement of rights, contracts, and excludable property in general) for markets.

25

Matt 02.21.15 at 9:03 am

The interesting thing to me about block chains isn’t that they facilitate law breaking, it’s that they’re publicly verifiable. So I might as well ask, how badly is this going to blow up in my face when, decades from now, we start trying to encode social democracy as a cryptographically checked, distributed protocol?

I’m not sure how exactly you’d encode social democracy in a block chain, but I agree that the block chain concept is fascinating. “Decentralized system for e-money” is just one specialized and highly visible application of it. It’s sort of like how public key cryptography gets thumbnailed as “how you can safely bank and shop online,” even though the invention itself has nothing to do with commerce.

26

Chris Bertram 02.21.15 at 9:11 am

27

Matt 02.21.15 at 9:27 am

…even though the invention itself has nothing to do with commerce.

Although, on second thought, is that true? Public key cryptography wasn’t invented for commerce, but the only reason it became common in the mid 1990s was because Netscape and various businesses wanted to enable secure shopping and banking over the net. Only a tiny number of nerds and idealists used public key cryptography before it was built into Web browsers. Likewise the original Bitcoin paper is clearly motivated by a money concept even if the protocol includes more than you’d need for simple money transfers, and even if the concept is generalizable to higher degrees of flexibility. Insurance companies and banks were big early customers for digital computers and even for the old analog tabulating devices that launched IBM before the World Wars. All these technologies can do much more, but born as they were in a particular historical context, a lot of the early use is about commerce. Similar to how the history of medieval European architecture is entangled with cathedrals and religion even if Christianity didn’t “really” have anything to do with the flying buttress. I’m not sure if the “really” in the preceding sentence deserves scare quotes or not, or if a market economy mode of life “really” has something to do with the mathematical insight that becomes software that becomes Amazon.com and darknets.

28

Peter T 02.21.15 at 10:46 am

Hmm. I spent some time trying to understand organised criminality as a professional endeavour. There are a lot of myths – mostly generated by law enforcement, some life imitating art, and a small but really interesting body of research that actually studies criminality anthropologically. Turns out that violence is mostly not connected to the need to enforce contracts: the successful criminal accepts that they will be cheated a lot of the time and takes a laid back attitude to this (one mid-level cocaine importer thought they lost over well half the value – some to law enforcement, some to cheating, some to carelessness; he also thought he would be a fool to care). The level of organisation is also very low, and obedience pretty haphazard. Criminality is amazingly inefficient, but the mark-ups are high and the overheads low.

Mafia killings and gang wars are not about profits, they are about honour. One mark of an honour society is that each man is sole judge of his own honour and of what is required to maintain it. Hence, even the pettiest or most mis-perceived sign of disrespect can become the cause of a killing. And it is a mark of honour to kill with impunity (a Norse hero boasted that he had killed many men and paid atonement for none).

Ulbricht found himself trying to replicate the state when he got too big, because the costs of cheating and the associated inefficiencies threatened the viability of his business. If he had stuck to the small scale he would have been fine. Like most successful drug dealers, he would have lost 30% or more of his potential profit and not worried about this because he was still making money.

29

chris y 02.21.15 at 12:05 pm

Am I alone in having read the quoted paragraph and thought, “No, the NÖS really was nothing like Galt’s Gulch.”

But a very illuminating article.

30

Tom Slee 02.21.15 at 1:57 pm

@Sumana #13: Thanks for the thoughtful response. My own experience is (via the day job) is as an employee of a Very Large Enterprise Software Company whose attitude to open source has changed significantly over the last five or six years. The enterprise software industryseems to have adopted open source (a la Raymond) as a healthy complement to the profit-making parts of the business, and the open source world has come to meet it with new models of governance (lots of foundations), many variants on just how open it needs to be (eg Android at the non-open extreme of open), and a large amount of control being exercised by (usually paid) core developers, to the point where the word “community” doesn’t really apply in many cases.

31

Zamfir 02.21.15 at 2:35 pm

@Pwter T, every profi criminal I know has stories of rip deals, or direct extortion by those better at violence, or some local established figure who demands a cut simply for owning the turf.

As you say, the attitude towards that is relatively relaxed, part of the business. But it’s not a small part. It’s where a lot of the money goes to, and also a big reason why people leave the field or keep their ambitions low.

And while you say the violence is about honour not profits, it does seem to be profitable anyway for the violent people. (Also dangerous).

32

Main Street Muse 02.21.15 at 3:04 pm

“I have been scammed more than twice now by assholes who say they’re legit when I say I want to purchase stolen credit cards…”

Libertarianism used as a front for outright fraud – a nice illustration of why any community requires rules and regs to protect the community from the crooks. And let’s remember that a few years prior to being named Treasury Secretary, Henry Paulson was lobbying Congress to peel back banking regs. Banksters must be icons to the Silk Road travelers.

Wonderful article Henry!

33

Lee A. Arnold 02.21.15 at 3:07 pm

Great essay, Henry!

Two thoughts:

The libertarian idea that markets can be free is false: they are always institutions, needing centers of rules, policing and power. Competition cannot prevent this.

Tor-hiddenness is the next means for villains to extend empires.

34

Barry 02.21.15 at 4:35 pm

Russell: “but the best theoretical and practical systems talent that money can buy did not prevent Snowden.”

Actually, these were crappy systems where ‘cheap’ ruled. See Charles Stross’ blog post on that.

35

SusanC 02.21.15 at 4:38 pm

Good stuff, Henry.

My reaction to several of the varieties of libertarianism I see advocated on the Internet is “That can’t possibly work – you’ll end up re-inventing the state”, and this is a very nice historical account of a libertarian idea being actually tried, and indeed failing to work.

Ulbricht’s libertarianism was right wing (in so far as that label means anything in this context), capitalist and focussed on technology (the Internet, Tor, Bitcoin etc.)

There’s an another sort of anarchism that is sometimes encountered in Europe, that places heavy emphasis on community and personal connection as the proposed substitute for the state: that tries to supplant the state slowly, by organizing at the local level things that can be done at the local level, and demonstrating that they didn’t really need a state to achieve them. With the idea being: the people doing whatever the activity is get to know each other, and get in the habit of working together. I’m not going to argue in favour of that form of anarchism either, but after reading your article it occurs to me that Tor and other Internet anonymising tools seriously undermine the community and personal connection that this other style of anarchism is relying on to make its political project viable.

36

SusanC 02.21.15 at 4:49 pm

Also, of course, Ulbrich was placing way too much reliance on the technology.

With any technical security mechanism, you need to consider how difficult it is to break versus the amount of effort that an attacker is likely to expend on breaking it. Given Silk Road’s business, it was likely that the US government would expend a fair amount of resources on getting hold of the person behind it. (Probably way more than they would spend on — for example — trying to identify readers of a basically harmless blog such as Crooked Timber). Tor has known limitations, so there was a serious mismatch between likely level of threat versus strength of mechanism.

37

Layman 02.21.15 at 4:51 pm

Barry @ 34

“Actually, these were crappy systems where ‘cheap’ ruled. See Charles Stross’ blog post on that.”

Would you mind posting a link to *which* Charles Stross blog post you mean?

38

Russell L. Carter 02.21.15 at 5:03 pm

“Actually, these were crappy systems where ‘cheap’ ruled. See Charles Stross’ blog post on that.”

So true, and part of the point. The investment was made, and it resulted in crappy systems. What’s interesting to me is that the robustness of a complex system to inherent security flaws seems to be correlated to the amount of capital it controls. Or something. Power, I guess, whatever that is. Anyway I doubt that Russia or China or even Iran are going to be brought down by security failures.

39

Russell L. Carter 02.21.15 at 5:08 pm

“Given Silk Road’s business, it was likely that the US government would expend a fair amount of resources on getting hold of the person behind it.”

Tor worked fine (and is still safe today, if your opsec is otherwise perfect). Ulbricht got found through a configuration error *he* made. In the silk road web server, if I recall correctly.

40

mattski 02.21.15 at 6:29 pm

If you don’t believe government is a necessary condition of civilization, by all means reinvent the wheel. And good luck and good night…

41

Tyrone Slothrop 02.21.15 at 7:00 pm

Henry, your entire piece is a stinky slab of cheese, devoid of aught but gamey waste. I am of a mind to pen a 10,000 word rebuttal, but, alas, I’ve a bit of tennis elbow going at the moment and I’m afraid the outlay in pain would scarce balance against the pleasure of nailing down with precision how your anility ascends to Humpty-Dummy calibre—save for this: Pthhhbbthbbthb.

I have been scammed more than twice now by assholes who say they’re legit when I say I want to purchase stolen credit cards.

This is, and likely shall remain, the best sentence I’ve partaken of for a passel of days…

42

Barry 02.21.15 at 7:03 pm

Layman, here is the post by Charlie (I was posting from an iPad earlier, and was lazy):

http://www.antipope.org/charlie/blog-static/2013/08/snowden-leaks-the-real-take-ho.html

The short story is that in the Old School, agencies recruited people young. They were frequently from elite backgrounds which had conditioned them to being in the middle/upper management of the Establishment. They then had jobs for life, which combined with early marriage and large families ‘locked’ them into the system.

Now, there is a vast army of sub-sub-contractors, on short-term assignments, whose lives have conditioned them to never expect or give loyalty.

43

js. 02.21.15 at 7:27 pm

Barry,

That’s an intriguing piece. Thanks.

44

Bill Benzon 02.21.15 at 8:09 pm

I’m with js, Barry, that’s a fascinating piece.

45

Donald A. Coffin 02.21.15 at 8:37 pm

@39: “…if your opsec is otherwise perfect…”

Uh, that would be, strictly speaking, “never,” wouldn’t it?

46

Peter T 02.22.15 at 3:31 am

It’s rally not an issue of abstract principles. It’s an issue of scale and efficiency. As was observed on a previous thread, a small-scale society can tolerate people just going with their immediate inclinations because they aren’t doing anything that needs tight organisation. And, people being people, most people behave reasonably most of the time because it’s pleasanter that way. But you can’t run a car factory that way: there needs to be chained decision points, monitoring, correction, organised feedback, predictable labour…or no cars. The libertarian fantasy that the market can scale to any size and degree of efficiency required is just that: it’s contradicted by everything around us. Still, the urge to build big bridges using only spaghetti is an old and persistent one….

47

Russell L. Carter 02.22.15 at 4:13 am

“Uh, that would be, strictly speaking, “never,” wouldn’t it?”

I wouldn’t trust myself to never make a mistake, but individual people have before and presumably in the future can do that. I don’t think that extends to any organization of people, over a duration of time longer than say a year.

Again, as Charles Stross implies: if you’re inside the panopticon, best not FU.

48

Metatone 02.22.15 at 2:17 pm

@Consumatopia / @matt

On the blockchain – one thing I think is missing so far is some detailed thinking about how verification scales. It appears at the moment that verification is incentivised through the rewards of mining. Yet, as we’re always being told, those are delimited (and possibly at some point may be less than the costs).

I’m not sure how you get blockchain verification without the financial incentive (at least in this design of the blockchain) and that could really limits other uses.

None of this is to pass judgement and say “Blockchain B0RK3N” but it does seem to be an area where there is a lot of handwaving.

(A further aside, I’m not sure how giving people coins (through mining) in order to keep the verification system going is inherently different to various other transaction costs found in other money systems…)

49

Glen Tomkins 02.22.15 at 5:39 pm

@22,

Emptyskin gave you too easy a target. What I find more revealing than the grandiosity, which I admit is an irresistably tempting target, is the point of the last part of his statement, which you don’t quote.

” …prohibited markets will inevitably create “non-libertarian” flows and rules as they are not purely markets, but markets created by states.”

Whether it’s libertarians or austerians, the go-to rationalization for the failure of reality to conform to free market theory is that the theory wasn’t actually tried, that the real-world conditions of the trial were contaminated by the residuals of state power.

Not having read any Rothbard, I’ll have to take emptyskin’s word for it that that esteemed authority has anticipated the sort of refutation of libertarianism by real-world example presented by the Aeon article. Had emptyskin, speaking for Rothbard, deigned to actually present an argument, it presumably would have gone something like this. It was statist forces that turned Ulbricht into a statebuilder, because there can be no truly free actors in a world distorted by the existence of state power. Those bad actors who blackmailed Ulbricht over revealing customer address lists would not have been at all threatening had there not been a state that would have used coercive force on the buyers had their identities been compromised. Those bad actors only had power to intimidate because of the state’s power, power brought in from outside the Silk Road experiment. And from within that world, the force that is supposed to deter bad actors in a free society’s free markets, the bad reputation acquired from bad actions, is, as the Aeon article points out, systematically disabled in a prohibited market such as Silk Road, which has to be non-transparent because it’s activities are prohibited by the state.

Just for comparison, the sort of explanations that austerians generally turn to in order to dismiss the failure of austerity to produce expansion, or loosened money to produce inflation, or govt debt to turn the US into Greece, rely on distorted expectations generated by whatever state control hasn’t yet been beaten out of the economy. The only reason that bond vigilantes don’t pounce, and confidence fairies can’t generate confidence, is that everyone expects state interventions, and that distorts and diffuses the forces that would otherwise make the experiment come out right.

You can’t actually refute these people, because their escape mechanism from any empirical refutation of their beliefs is theoretically quite sound. But that’s the tell. Any system of thought that has such an escape mechanism is inherently not falsifiable. Libertarianism and austerian theory are self-sealing delusions.

50

Matt 02.22.15 at 9:29 pm

@Metatone:

There are two incentives to keep verifying, mining and transaction processing fees. Right now mining is by far the larger incentive. Eventually, if the original system survives that long, mining will go away completely and only transaction fees will remain.

I think that the mining reward system was a clever bit of psychology rather than something inherently required by a blockchain technology. It attracted a horde of people who wanted to get rich quick on the gold rush. And like e.g. the actual 1849 California gold rush it hasn’t made all that many people rich but it did leave a lot of changes in its wake. It seeded a forest full of individuals and businesses interested in using/exploiting/analyzing/usurping the original Bitcoin system.

Future blockchain applications might dispose with the mining system now that Bitcoin is familiar. Or they might include mining but not include the finite token limit, especially if they don’t have gold/”hard currency” fetishists as their target audience. Blockchain systems don’t have to be money-like systems; see Namecoin for example.

51

Belle Waring 02.23.15 at 4:25 am

All that Tor browserness was and still is working great but you do have to get the damn drugs to your house. It was always the problem. All the way to your door. Right to the end of the driveway. If you don’t tell the people with the drugs, then they can’t get them there. If there were some intermediary service…but they would need to be doubly trusted–by you and by the dealers! It’s twice as bad! And you could sort of rent boxes, sort of, but not really, because you have to say who you are, because the US mail is some real-deal shit, but say you could, the cops could still stake you out there. Worst-case scenario. And really you can’t rent boxes, because the US mail is some real-deal shit. It’s like in the Kafka story where the mole wishes he had a friend who could keep watch on the second entrance to his warren as he goes underground, to make sure no one is following him, but then feels paralyzed with hypothetical fright since the friend would, perforce, still be watching… People that really need to use drugs don’t have time for this bullshit. Wait, or were they going to send you like 500g of heroin? No, they’d be morons to do that, even if you paid them first. Especially if you paid them first. Double-morons. So, no time for that. Those people have to use regular drug dealers. Did people order from like eight different sources and see who came through? How did they have any money? Did they yell at the postman? I was always unclear on the heroin economics of the O.G. Silk Road. The only thing all this post-bust Dark Net is good for now is seeds, it seems to me. But for that it is like some dreamtime 1970s Brunner short-story made real. Do you want to read reviews of all the semi-finalists for last year’s High Times Cup? Like, reaaalllly detailed reviews? Make some wine shit look meagre? You can! Then do you want some nice people in the Netherlands to send you some feminized seeds for 2010’s White Widow variant winner, “Northern Lights”? You can, again! If you order a $10 mug, they will re-send the package if it is intercepted. They’ll send you spores. (That work. That didn’t used to work.) So funny! This is some funny shit, people. Is Brunner alive? Not for a long time. Too bad, because it’s the most Brunneresque thing of all time. This is low-stakes enough to rely successfully on reputation.

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JakeB 02.23.15 at 5:22 am

@Glen at 49 —

When I see that explanation for why yet another libertarian scheme didn’t work, for some reason I always hear Elmer Fudd saying, “Be vewy vewy quiet. We’re hunting wabbits!”

53

Glen Tomkins 02.23.15 at 6:08 am

Elmer Fudd was one of the earliest members of the NRA.

54

Belle Waring 02.23.15 at 7:53 am

People, don’t trust that the invisible hand will ensure you can refer to comments by numbers. “The Man,” in one of his admittedly less intimidating aspects as partially-automated comment-moderating software, has stepped in to make that impossible. You have to use people’s names and short quotes from their comments, like that fucking pinko Trotsky wanted.

I loved that libertarian-guy couldn’t even be bothered to even try to refute Henry. “Rothbard! No backsies! I’m Audi 5000!” I encourage people to use the term “actually existing libertarianism” to talk to people like this. What do places without a state, where private rights-enforcement groups thrive, look like? Somalia. What do markets without state regulation look like? Drug markets, which rely on the most basic forms of violence and coercion to function, and which are rife with “eight-balls” that are insults to the very concept of an eighth of an ounce, and marijuana straight from McCormick’s spice jars. Just as supporters of communism deserved grilling about “actually existing communism” in the form of hard questions about Soviet Bloc countries, so libertarians are justly due these questions, to get out of the “libertarianism cannot fail–it can only be failed” bubble of circular reasoning. Situations in which literal pirates (Somalia) or spectacularly tenacious organized-crime groups like the ‘Ndragheta (Calabria) rule are particularly good counterpoints to libertarians keen on “private rights enforcement groups.” Because there’s no danger that after you beleaguered citizens, in desperation, hire them to run the motley crew of other criminals out of town, they’ll set themselves up in the best bar and turn their guns on you. Nope. That would never happen.

55

reason 02.23.15 at 10:12 am

Henry @22
This seems like it is probably an example of Poe’s law.
Anybody sending up Libertarian apologetics, would seek to find some tiny speck of impurity in the experiment that invalidates the whole. Then again, there really are idiots in the world.

56

Robespierre 02.23.15 at 11:44 am

@Belle Waring 54:

Don’t forget Venezuelan prisons. Don’t you just love the spirit of lawless self-organising?
http://www.theguardian.com/world/2013/feb/05/prisoners-make-mockery-venezuela-jails

57

reason 02.23.15 at 12:07 pm

Barry @42
Funny how appropriate it is. The commonality – loyalty only works when in both directions. Managerialism, really, really hopes that it isn’t true. But it’ll bite them in the ar.. in the end.

58

Henry 02.23.15 at 12:31 pm

But if you’re a really committed libertarian, you might want to bite the bullet and argue, like Peter “Professor Booty” T. Leeson, that Somalian anarchy is an excellent outcome in relative terms. Dunno that he’s written on eightballs yet, but Gambetta has a darker take on the political economy of dubious drug marketing in Codes of the Underworld (grabbed from some random person on Goodreads since I’m not in my office).

The existence of heroin stamps poses two puzzles: first, competitors could adulterate or counterfeit a successful brand, and no court exists to enforce a drug dealer’s trademark. Second, brands offer a clear chain of evidence that could lead law enforcement right back to the seller.

The first puzzle is more serious: how could heroin stamps survive the threat of mimicry? We know that “a few stamps acquired long-term reputations (like POISON, NO JOKE and 91/2 PLUS) and lasted for years” offering quality that was “consistently good,” but very few stamps have been in circulation for more than two or three months, and “many stamps last only a few days before being replaced.” So this question has two horns: first, why do some stamps manage to be stable and reliable over long periods of time despite the threat of counterfeiting, and why do dealers of all sorts continue to put stamps on bags even though the longevity of most of them is so short?

The answer to the first question seems to be that “a major deterrent to counterfeiting labels was that counterfeiters would be, and have been, threatened, assaulted or killed by the real dealers of that particular label.”

…[W:]hat about the smaller dealers, however, the so-called freelancers, who continued putting stamps on their bags even though they expected their brands to be short-lived, and who kept changing them frequently? This defeats the purpose of branding, as the association between signs and quality is disrupted, making it impossible for a reputation to develop… To understand the possible logic of their choice, we have to consider the alternative they faced, namely selling *anonymous* heroin bags.

59

Minnow 02.23.15 at 12:34 pm

What a strange article. Very interesting theoretically and all that but also strangely touching.

It is good to see Martin Scorcese providing some of the dialogue for the Dark Net too:

“I have been scammed more than twice now by assholes who say they’re legit when I say I want to purchase stolen credit cards. I want to do tons of business but I DO NOT want to be scammed. I wish there were people who were honest crooks. If anyone could help me out that would be awesome! I just want to buy one at first so I know the seller is legit and honest.”

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Belle Waring 02.23.15 at 1:41 pm

Apparently NYC had branding for heroin but not anything else. A guy has kept bags of every brand he could from the late 80s till…whenever he cleaned up I guess, now maybe. I read about his collection in the NYT. It seems as if it should be in a museum to the old LES somewhere down between the multi-million-dollar condos. The “poison” guy they busted because he got it done in tiles in the bottom of his pool in P.R. just as it appeared on the bag; very damning. I remember it on the cover of the Post. I imagine counterfeiting usually occurred when people died overdosing on unusually pure heroin or drugs that had been “adulterated” with fentanyl, which would get reported in the New York press, as it was a pretty frequent problem when I lived there in the 90s. Then people would be eager to buy whatever type had been killing people, like actual poison. Honesty in advertising.

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mattski 02.23.15 at 1:46 pm

What I want to know is, are Rothbard and Lenin having sex in heaven? So to speak.

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john in california 02.23.15 at 3:01 pm

Tomkins @49

Perfectly put – whether it’s a real life example or a honed down Gedanken scenario, libers always have an excuse.

63

Tom Slee 02.23.15 at 3:26 pm

One thing that the story shows up is that trust systems live a “two-stage” lifetime, where trust can be sustained in stage one if everyone in the system is motivated by a belief in the system (honour among thieves in this case), but where mimics appear in stage 2 as the financial rewards of scamming become tempting.

A lot of venture capital approaches to building new businesses only have to worry about stage one: they can build it fast and then exit. The problem is (especially in the “sharing economy” reputation systems) society is then stuck dealing with the hard work, which is stage 2.

64

politicalfootball 02.23.15 at 4:31 pm

prohibited markets will inevitably create “non-libertarian” flows and rules as they are not purely markets, but markets created by states.

No true libertarian …

65

LWA (Liberal With Attitude) 02.23.15 at 4:54 pm

@Minnow #59
When I read that quote in the OP, I heard the voice of one of Elmore Leonard’s characters. Come to think of it, the entire story sounds like it was written by him.

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TTN 02.23.15 at 6:43 pm

I finally understand why I was offered Poison when the band played CBGB. I think.

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E Scott 02.23.15 at 9:01 pm

PeterT @ 28

Can you point me to the “small but really interesting research that studies organized criminality anthropologically” that you mention?

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Belle Waring 02.24.15 at 2:09 am

TTN: Yah. ‘One heard’ that it was excellent. The police always said it was ‘adulterated’ with fentanyl, but many felt it was ‘enhanced’ with fentanyl!

69

reason 02.24.15 at 9:01 am

political football @64
It is not only that, it is what it tells us about the resilience of their supposed utopian scheme. If it is so easily undermined, why should we trust it at all? (Applies to Austrian economics as well of course).

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Peter T 02.24.15 at 11:02 am

E Scott @ 67

I’ve been retired 5 years, and I couldn’t take the files with me :(. They were mostly people who interviewed drug dealers/importers in the field or in prison. I remember several good Canadian ones and a couple of US ones. UK Home Office also supported this kind of research. One such effort in Australia was Lorraine Beyer: one of her papers was “Heroin importation and higher level drug dealing in Australia: opportunistic entrepreneurialism”.

Happy to have a dig around and see what I can turn up. Also happy for any of the moderators here to release my e-mail.

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Ronan(rf) 02.24.15 at 11:41 am

E Scott – They’re mostly sociologists but the bibliography at the end of this

http://sociological-eye.blogspot.ie/2012/05/drug-business-is-not-key-to-gangs-and.html

(also people like Andrew Papchristos,Victor Rios, Alice Goffman, Peter Moskos, William Foote Whyte, Jorja Leap, most of who I haven’t read but have had recommended. Stathis Kalyvas on the micro dynamics of civil war violence. Stephen Lubkemann’s ‘culture in chaos’ on the anthropology of war. I’d say as well Jill Leovy’s Ghettoside which is released soon, it’s a journo account but basically the same idea, afaict. Apologees if you know most) )

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Peter T 02.25.15 at 1:24 am

E Scott

UK Home Office research is here:
https://www.gov.uk/government/organisations/home-office/about/research

A quick look at Google Scholar suggested the body of research has grown, with typical articles like Michael Kenney in Global Crime 8,3 2007, Kleemans in Criminology and Criminal Justice Nov 2013 or Calderoni in Crime, Law and Social Change Oct 2102. Apologies if you already know this.

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