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Wendy McElroy: How the Blockchain Provides Private Justice

November 24, 2018 |

How the Blockchain Provides Private Justice

The Satoshi Revolution: A Revolution of Rising Expectations
Section 5: Saving the World Through Anarchism
Chapter 11, Part 6
How the Blockchain Provides Private Justice

The key to…an anarcho-capitalist court system is found in the concept of a “personal judiciary”. [Acting as your own judge.]…The courts’ purpose is to enable men to settle disputes so as to avoid violent resolution as well as aggression-overcompensation cycles. Regarding the courts’ decisions as legitimate is the only way for the litigants to avoid personal judiciary actions.

– Karl T. Fielding, “The Role of Personal Justice in Anarcho-Capitalism”

Justice is a stumbling block for all political systems. It is a particular problem for anarchism because its conception of justice sounds bizarre to many; anarchism uniquely argues that justice should be a commodity or service provided through the free market, rather like insurance. The view of justice also sounds contradictory to some; how can a society based entirely on voluntary exchange deal with crimes such as theft that might require seizing stolen goods and holding criminals against their will?

The latter objection was ably dismissed by Murray Rothbard during a remarkable debate on anarchist justice with Professor of Philosophy John Hospers. Rothbard wrote, “I see no reason whatever why anyone should worry about the consent of criminals to their just punishment. I believe that nothing should be done to anyone without his consent, except for the just punishment of criminals who have already violated the “consent,” the person or property, of their victims.”

The main point becomes whether or not the free market can deliver justice. And the first question to arise on this topic is usually, “What would free-market justice look like?” The unsatisfying answer is that no one knows for sure, any more than people from decades ago knew that communication would look like the Internet or transactions like the blockchain. (More on this later.)

Meanwhile, the principles upon which private justice is based can and must be defined with clarity.


John Locke’s “TINA” Argument


The classical-liberal philosopher John Locke used a “There Is No Alternative” argument in his book Second Treatise of Government. It is a type of either/or reasoning in which disproving the “either” (anarchism) means validating the “or” (the state).

In this article’s opening quote, Karl Fielding used the term “personal judiciary.” The term is based on a political argument presented by Locke, and it refers to the idea that a man has a natural right to be the judge of his own case. Every man has the right to forcefully reclaim his property from a thief, for example, because this is an extension of his right to defend person and property.

Locke acknowledged this right, but he was against practicing it. He wrote, “That in the state of nature every one has the executive power of the law of nature, I doubt not, but it will be objected, that it is unreasonable for men to be judges in their own cases, that self-love will make men partial to themselves and their friends: and on the other side, that ill-nature, passion and revenge will carry them too far in punishing others; and hence nothing but confusion and disorder will follow.”

“The state of nature” refers to human existence without “society,” in the modern sense of that word. In a state of nature, Locke believed all men were equal with the same natural right to judge their own cases. Again, if a possession had been stolen, then the owner could judge the act to be unfair and personally remedy the injury; he could retrieve his property, including whatever compensation he deemed was due. In short, private justice is a matter of right.

Locke believed a private judiciary process would tend sharply toward unfairness, however, because even an honest man sees things from his own perspective and self-interest. Even a well-meaning man could be mistaken about the facts, including the aggressor’s identity. This means a world occupied by people who judged their own cases would lead to discord, especially if the aggressor himself felt aggrieved. An aggressor might think the violence used in retrieving the possession was excessive, for example, or that the compensation added was unreasonable. At that point, the aggressor would judge his own case and find himself to be the victim; he might well seek redress or revenge. Or a falsely-accused non-aggressor might decide to rectify the wrong done to him. The process could easily become an endless loop of violence because the justice was not accepted as legitimate by both parties.

Locke believed that breaking the cycle of “confusion and disorder” required an unbiased judge whose assessment would be seen as legitimate by both sides. Put in crypto terms: decentralized justice needed to be centralized under the authority of a trusted third party. The stakes were non-trivial. Without a trusted third party to judge cases and render legitimate decisions, civil society was not possible.

The need for legitimacy in justice was a major reason—if not the major reason– Locke advocated a limited state. For centuries, this has been a mainstay argument against anarchism and freedom. And the either/or argument is correct, in this case. It is either freedom or it is the state, with justice being a pivot point between the two. (A form of this argument is playing out within the crypto community; it is either anarchism or the state, with recourse against theft and fraud being the pivot point.) Otherwise stated: If individuals cannot render justice, then the state becomes necessary, even for those who view the state as a necessary evil and try to constrain it through checks and balances.

What does this have to do with the blockchain? With the blockchain, the centralization of justice is reversed immediately; control is taken from the state and returned to the individual, without blood or votes or revolution. But if Locke is correct about justice requiring a trusted third party, then the state’s monopoly over justice is likely to establish itself again. What can transparent ledgers do to prevent this?

A definition of justice is a place to start answering. Justice is far too closely associated with police officers, lawyers, courts, and prisons. Such state employees are not justice; they are the ones who come into play when justice breaks down; they are there to protect the state, not individuals or the peace. The state so dominates this area, however, that administrative justice is the first definition that comes to people’s minds.

Ethical justice applies to the conduct of civil and private life. The Aristotelian definition appeals to common sense: everyone should receive what they deserve from each other. Few things are as just as the free market in which two people make a direct exchange for agreed-upon values, and then walk away. A woman who goes shopping, buys a tomato, and goes home is enjoying justice. It may seem as though she is merely enjoying daily life, because that statement is also true. In normal life, the free market generally provides people with what they deserve, even if it is not what they want.

The tricky bit is what to do when the justice of normal life breaks down—a situation that is otherwise known as violence. Eliminating the most pervasive form of violence—the state—would also eliminate most injustice. But a stateless society would experience private violence against person or property.

Two approaches to minimizing private violence and its damage are prevention and punishment. Prevention is the best approach, by far, for a free society. It preserves person and property; it avoids the unpleasant process of correcting an injustice; it greatly reduces the need for procedures or institutions to correct injustice; it does not create an entry point for the state.

The blockchain does not merely promote freedom, it also prevents theft by both the state and by private individuals. A peer-to-peer transfer avoids the trusted third party participation where so much theft occurs; privately-held wallets eschew the need to trust banks, exchanges, or other third parties. The blockchain’s transparency makes it possible to view where every piece of crypto goes. The irreversibly and time-stamping of the transfer were included specifically to prevent theft. The anonymity that is possible with a bit of effort provides protection as well.

The protection of crypto and the blockchain breaks down most dramatically when trusted third parties are once again introduced into the equation. Many of the problems that the blockchain cured return with trusted third party involvement. The greatest theft has occurred in exchanges, for example. With unethical exchanges or centralized ones that function like banks, the user’s trust has been misplaced, and the exchanges become thieves. The ethical but incompetent ones serve as an invitation to hackers, and the user’s trust has again been misplaced. Ones that are both ethical and competent are still risks because they are public; they are like well-locked houses that get burglarized, nevertheless.

Guidelines are available for using exchange in as a safe a manner as possible. Choose a decentralized one, for example, and never surrender private keys. But the crypto community has not adequately addressed the problems created by re-introducing trusted third parties. To my knowledge, no exchange even offers users an insurance policy or charges higher fees as a warranty against theft.

So far, only the impact of the blockchain on economic justice has been discussed, but the possibilities for all forms of justice are immense. Distributed systems can transmit peer-to-peer smart contracts that are self-enforcing. A recent U.S. Senate report stated of smart contracts, “the concept is rooted in basic contract law. Usually, the judicial system adjudicates contractual disputes and enforces terms, but it is also common to have another arbitration method, especially for international transactions. With smart contracts, a program enforces the contract built into the code.” (How smart the current contracts actually are is a debated point, but they are a proof of principle.)

The 19th century individualist-anarchist Benjamin Tucker referred to anarchism as “society by contract.” The contracts could express any exchange, from leases to prostitution, from insurance policies to drug deals. The contracts would not be legal or illegal, only consensual. Just as crypto bypasses central banking and decentralizes economic control down to the individual, smart contracts have the potential of bypassing much of the legal system and returning to the people’s law—contract law. But, like crypto, the contracts would not require a trusted third party.

[To be continued next week.]

Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

The post Wendy McElroy: How the Blockchain Provides Private Justice appeared first on Bitcoin News.

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Trump Fires Back at Chief Justice Roberts

November 22, 2018 |

It didn’t take long for President Trump to respond to a rare rebuke from the chief justice of the Supreme Court. After John Roberts criticized the president for belittling a federal judge who ruled against the White House, Trump took to Twitter to make his case. “Sorry Chief Justice John…
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Wendy McElroy: Crypto as Propriety Justice and a Solution to Private Violence

November 3, 2018 |

Crypto as Propriety Justice and a Solution to Private Violence

Crypto As Propriety Justice And A Solution To Private Violence

by Wendy McElroy

The libertarian view is that human actors are self-owners and these self-owners are capable of appropriating unowned scarce resources by Lockean homesteading − some type of first use or embordering activity. Obviously, an actor must already own his body if he is to be a homesteader; self-ownership is not acquired by homesteading but rather is presupposed in any act or defense of homesteading.

Stephan Kinsella

Self-ownership is the foundation of free-market justice. There are three ways to answer the question “Who owns you?”: you own yourself, which is self-ownership; someone else owns you, which is slavery; or, you are unclaimed goods, like luggage in the lost and found. Anarchism is the belief that everyone owns his body, his property, and the right to peacefully use both.

But what happens if others prefer aggression? Free-market anarchism wrestles with how to provide private justice; that is, how can a peaceful society prevent or remedy the violence individuals commit against each other? To many, free-market solutions sound hypothetical because they have generally been forced to operate in that realm. The state refuses to allow rival systems of justice to compete in parallel with it; the closest it allows to competing systems are religious authorities that exercise limited jurisdiction over consenting members.

Crypto anarchism changes the modus operandi. Just as crypto and the blockchain revolutionized economic exchanges, it has the potential to do the same for other interactions, such as justice. A blast of fresh air is sweeping through old political theories and issues; the experience and insights of past anarchism do not need to blow away. Those blueprints of justice can be held up and compared against the solutions made possible by crypto anarchism. Let the best anarchism win. Let the best aspects of anarchisms merge. Solutions should evolve in parallel on the free market so that individuals can choose.

First, The Specific Principles of Crypto Anarchist Justice

The simplest way of understanding justice is giving people what they deserve. This idea goes back to Aristotle. The real difficulty begins with figuring out who deserves what and why.

– Michael Sandel, American political philosopher

The who of justice is any individual who is deprived of what is rightfully his. This definition eliminates victimless crimes and crimes against the state. Only individuals can be victimized by the denial of their property. The legal realm is reduced to contractual disputes and to torts—that is, to acts that cause loss or harm to others.

The what of justice—its focus-is the specific use of body or other property that is wrongfully taken. With crypto, the denial almost always consists of wealth that is taken by direct violence, threats, or fraud. Justice lies in restoring the status quo to the victim in the form of returning stolen property or its equivalent, along with reasonable compensation for associated losses, such as time, suffering, inconvenience, and the period of denied use. The aggressor may or may not be punished through further social sanctions. The offender’s bad acts could be published on a database that pays for valid information and charges for the use of its service, for example.

The why: Peaceful exchange enriches individuals and creates a free society. By contrast, aggression or violence returns individuals to a Hobbesian state of nature—a war of all against all. That is savagery, not society. Using the institutionalized violence of the state to rein it in is slavery, not freedom.


The How of Justice

The how of justice is the missing piece.

In general terms, self-defense is the how. Self-defense decentralizes justice down to the level of the individual. That’s what the right of gun ownership provides: a decentralized peer-to-peer way for individuals to defend themselves.

Self-defense falls into three rough categories or stages: prevention, direct action, and remedy. (Prevention is discussed in Chapter 9, Part 6.) There is a key difference between direct self-defense and acting to remedy an aggression. Direct defense occurs in real time when a person is confronted by violence, such as a break-in; the use of defensive force on the spot is obviously appropriate. But remedy occurs after the fact, when the aggression is a fait accompli.

Prevention and direct self-defense are not great challenges for anarchism. Both can be addressed through individual action or through a service provider that is hired or fired at will. For most people, it is the remedy stage where anarchism stumbles. That’s where they relegate their self-defense to the centralized monopoly of a trusted third party that cannot be fired: again, the state.

In his article, “Why the Elites Prefer a Centralized Legal System,” historian Chris Calton observes that “the motivation to centralize legal authority was entirely political.” A vital service fell under the control of those in power who imposed an increasingly arcane legal system upon an entire population in the name of consistency. In obscene perversity, “justice” came to be identified with the institutionalized violence of police, courts and prison systems. The situation is similar to believing that the vital service of commerce requires the monopolies of central banking and state-issued money.

Calton continues, “But in the early nineteenth century, consistency was valued less than flexibility in the legal system. When the courts were local, the people of a given community had a vested interest in seeing justice carried out according to the particularities of each individual case….And for those who were not fortunate enough to find themselves at the top of the legal hierarchy – the uneducated, the poor, women, children, and blacks – this flexibility upheld even modern notions of justice – if imperfectly – more effectively than did the centralized and legally consistent courts that followed.”

Most Western systems of justice were built on common law, which has been widely displaced by civil law. Chapter 8, Part 1 of The Satoshi Revolution—“Crypto: Civil Law Versus Common Law”–explains that “common law offers an alternative legal blueprint. Rooted deeply in the English tradition, it is a body of law that develops from the grassroots upward. It involves no presence of Parliament. It comes from the decentralized judicial decisions that arise from real legal disputes…” The answers presented by common law may be right or wrong in any particular case, but they are not codified to benefit the privileged. Common law is so named because it benefits the common person. And it is a giant step toward decentralization. The exercise of every individual’s power over his own life is the ultimate goal.

Why Have Any Trusted Third Party?

When self-defense is decentralized, why shouldn’t people simply administer their own remedies for past aggressions? Certainly, they have a right to do so. They can rightfully reclaim stolen crypto by accessing the digital account of a thief, for example, and hacking back the coins. But there are good reasons why doing so is unwise. The victim may be mistaken about the identity of the criminal, which converts a so-called remedy into an act of violence; achieving restitution can be dangerous, or beyond the victim’s ability; the retrieval can fail; it can also harm innocent third parties, leaving the remedy-seeker with liabilities.

The innocent third party problem is the main argument in favor of hiring a third party to remedy an aggression. To bystanders and to the rest of society, it is usually not clear who is the victim and who is the aggressor. In direct self-defense, bystanders who witness a person being attacked know who the victim is; if he pulls out a gun, the act is obviously one of self-protection and not of aggression. When a woman grabs back a purse that has just been snatched, third parties do not think she is stealing it; she is reclaiming property. The same is not true of personally retrieving stolen coins from the account of a thief. To third parties, such as the company handling the thief’s deposits, the retrieval is an act of theft.

In the preceding examples, the acts of victims and aggressors are basically the same. Both may be pointing guns; a purse is being snatched back and forth. Accounts are being hacked. Unless he sees the violence from its beginning, a bystander cannot know who the aggressor is. This makes personal remedies very risky. Consider: a necklace is stolen and the owner recognizes it around the neck of a person on the street. However, yanking the necklace off of the wearer looks like violence to all of society. A good Samaritan may well intercede to prevent what he believes is an attack on an innocent person. Meanwhile, the real aggressor may yell “Police!” and claim that the victim is the thief. How can people distinguish self-defense from aggression?

There is a simple litmus test: Who owns the property? The answer makes clear which is an act of violence and which is self-defense. To be effective, therefore, a remedy should allow third parties to identify who owns the property involved.


Crypto As Proprietary Justice

In his essay “The Proprietary Theory of Justice in the Libertarian Tradition,” Carl Watner writes, “The proprietary theory of justice is concerned with just one thing: the crucial determination of just versus unjust property titles of individuals in their own bodies and in the material objects around them.”

By far, the best way for individuals to use proprietary justice is by contracting with a trusted third party whose reputation and business depends upon the accuracy of its business practices. In this case, the “trust” is based on merit and performance; the relationship of trust lasts only as long as the victim values the service. The third party’s purpose is to return stolen property, but it also acts as a protection for bystanders, innocent parties who may have involvement, and even the aggressor himself. As a business in a competitive market, the trusted third party has a strong incentive to reduce the expense and complications of injuring anyone.

The most commonly proposed mechanism of proprietary justice is the private defense agency (PDA). This may function in much the same manner as private fire departments with which home-owners contract. The details of how PDAs would operate are mostly speculative because of the state’s monopoly on justice and because predicting how free-market solutions would evolve without the state is not possible. Nevertheless, anarchists have attempted to do so for many years.

David Friedman sketches one vision in his book Machinery of Freedom. Friedman begins by considering “the easiest case, the resolution of disputes involving contracts between well-established firms.” Resolution between well-established crypto exchanges would likely be similar. Many such disputes are settled by arbitration that is specified within the contracts themselves as a way to avoid the expense and unpleasantness of court. “Currently, arbitrated decisions are usually enforceable in the government courts,” Friedman admits, “but that is a recent development; historically, enforcement came from a firm’s desire to maintain its reputation.”

But what of violent disputes? “Protection from coercion is an economic good,” Friedman explains. “It is presently sold in a variety of forms-Brinks guards, locks, burglar alarms. As the effectiveness of government police declines, these market substitutes for the police, like market substitutes for the courts, become more popular. Suppose, then, that at some future time there are no government police, but instead private protection agencies. These agencies sell the service of protecting their clients against crime. Perhaps they also guarantee performance by insuring their clients against losses resulting from criminal acts.” Insurance purchased from PDA becomes the immediate remedy to the victim. Then the PDA proceeds to retrieve the property and the cost of its services from the aggressor, assuming the risk of failure.

Friedman concludes, “What I have described is a very makeshift arrangement. In practice, once anarcho-capitalist institutions were well established, protection agencies would anticipate such difficulties and arrange contracts in advance, before specific conflicts occurred…”

Until proofs of principle are allowed to exist, however, the anarchist system of proprietary justice remains just a discussion. Happily, crypto may provide the elusive proof of principle in the area of theft. For one thing, it solves the pivotal problem posed by Watner: how to establish the property claim that defines whether the use of force is defensive or aggressive. The blockchain does this automatically. Its structure inherently answers the key question of proprietary justice.

[To be continued next week.]

Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

The post Wendy McElroy: Crypto as Propriety Justice and a Solution to Private Violence appeared first on Bitcoin News.

Bitcoin News

Wendy McElroy: In a Stateless Society Crypto is Law and Justice

October 27, 2018 |

In a Stateless Society Crypto is Law and Justice

The Satoshi Revolution: A Revolution of Rising Expectations
Section 5: Saving the World Through Anarchism
Chapter 11, Part 5
In a Stateless Society, Crypto is Law and Justice

The economic analysis of crime starts with one simple assumption: Criminals are rational. A mugger is a mugger…because that profession makes him better off, by his own standards, than any other alternative available to him…. If muggers are rational, we do not have to make mugging impossible in order to prevent it, merely unprofitable….If little old ladies start carrying pistols in their purses, so that one mugging in ten puts the mugger in the hospital or the morgue, the number of muggers will decrease drastically–not because they have all been shot but because most will have switched to safer ways of making a living. If mugging becomes sufficiently unprofitable, nobody will do it.

-David Friedman, “Rational Criminals and Profit-Maximizing Police

The specter of aggression haunts every society. Crimes against person and property cannot be eradicated, unfortunately, because violent impulses are part of human nature, and crime can be profitable. The desire for safety and peaceful exchange is also part of human nature, however. It creates a market demand for the protection of individual “rights.”

How can society minimize and redress the violation of rights? This reduces to how individuals can address crime within an otherwise peaceful society.

Overwhelmingly, the crime against which crypto users must protect and seek redress is theft—not murder, not rape, not battery, not victimless crime, or crime against the state. Theft.

Focusing on one area of crime simplifies the problem enormously. Some argue that crypto’s remedy for theft is contained within the definition of crypto anarchism itself: the use of encryption and technology to achieve personal freedom by enabling privacy, autonomy, and self-empowerment. Encryption and technology. Most of crypto’s features provide specific protections to individuals, including irreversibility, transparency, pseudonymity, time-stamping, and private wallets.

But the protection is primarily against the state, especially against its trusted third party arm—the central banking system. Crypto anarchism needs to address private crime, the crimes individuals commit against each other. Those crimes occur at points of intersection, at points where people access or exchange with each other. Again, the solution is the free market. Safety and the redress of crime are both services, like insuring a car or retaining a lawyer. In a real sense, people realize this. They pay for the service of safety and redress through the collective bill of taxation that funds police and court systems.

Many people discuss the inadequacies of these services. But only anarchists claim the problem is that the services come from the state. People simply take it as a given: the state supervises violence. It is such a deep assumption that protecting against violence is the first and last argument the state uses to justify its existence. Without my presence, the state declares, the street would run red with blood and enemy armies would surge across the border. Odd. It is widely acknowledged that every other service required by society can be provided privately, but security cannot be addressed or redressed through voluntary exchange.

Anarchists disagree. They object to the grave mistake of granting the state a monopoly over a basic human need, which destroys the very possibility of a free society. They understand: private money and self-banking cannot co-exist in narrow parallel with central banking because the state attacks any threat to its authority. This is happening already. The state is playing catch-up in order to rein in the crypto that flows outside its control. The spread of “wild crypto” is irreversible, however, in much the same manner as the black markets that thrive despite or due to repression.

The monetary systems run in parallel only by maintaining a sharp separation. The state is a money and banking monopoly with the goal of social control; crypto is its antithesis. In close proximity, one will destroy the other. The same would be true of any free-market institution that serviced the human need for safety. The state would try to control or destroy it as a threat to its own monopoly. The state and society are either-or. Crypto anarchist and security expert Pavol Luptak explains the schism. “Personally, I don’t like black & white plots, but it seems we will live either in a digitally free society or digital dictatorship. Even now, we can see an intense polarization of society splitting into the government’s controlled dictatorship and parallel free crypto societies at the same time. Unfortunately, I don’t think there is a place for some other alternatives.”

To grasp the depth of this either-or choice, it is useful to sketch a broader context for the conflict.

The State’s Monopoly of Self-Defense Leads to Totalitarianism

A society that robs an individual of the product of his effort, or enslaves him, or attempts to limit the freedom of his mind, or compels him to act against his own rational judgment—a society that sets up a conflict between its edicts and the requirements of man’s nature—is not strictly speaking a society but a mob held together by institutional gang rule.

—Ayn Rand, “The Nature of Government”

Free exchange is natural to the institutions that comprise society, including family, the marketplace, education, and art. These systems evolve spontaneously in response to human needs and desires. They are the reason why individuals band together in the first place, instead of living in isolation. Through natural networks, individuals enrich themselves, fulfilling requirements that are both physical and psychological.

The extent to which violence intrudes into natural institutions is the extent to which the institutions become their own mirror opposites. This is true of the intrusion of private crime. Domestic violence converts a home from a place of safety into one of danger. Fraud transforms a business from a place of mutual exchange into one of victimization.

It is also true of violence that is entrenched within society, as with a state. A key difference? New institutions are created by the state in order to circumvent the human instinct to defend against violence, if only by avoiding where or how it happens. These new and artificial institutions are often monopolies that displace their free-market counterparts. The extent to which such artificial institutions intrude upon society is the extent to which the benefits of society are destroyed. Taxation reduces the benefit of productivity. Central banks introduce third-party theft into commerce. Police use guns and threats to preserve the peace.

The freedom level of a society can be measured by the ratio of its artificial to natural institutions. When there are few to none, the society is called “free”;  the individuals within it receive immense benefits from interacting. When artificial institutions dominate, the society is called “totalitarian”; the individuals within suffer and face unnatural choices. They can live in quiet and obedient despair. They can risk becoming outlaws on the economic or intellectual black market. They can become thugs and join with those who administer the violence. Or they can flee to a place with less entrenched violence. When these are the choices individuals confront, civil society is dead.

Those are the stakes in play on how a society deals with safety: nothing less than freedom versus the state. As long as the state can convince people that its monopoly on the use of violence is necessary to guarantee safety, then the state can justify its existence. Once the state has that monopoly, it has everything.

Crypto “solved” the embedded violence of central banking. It did so through a stunningly brilliant insight and application of political theory: the trusted third party problem. Central banks forced individuals who wished to function in modern commerce to use them as an intermediary and so to participate in the fiat money and fiat banking that defrauded them at every turn. The banks reported personal and financial data to an umbrella trusted third party—the state. Layer after layer of intermediary institutions killed not only personal freedom but also the freedom and benefits of society. Until bitcoin sidestepped the institutional violence.

Equally, crypto needs to develop ways of handling private criminals who rob, extort (ransomware), and defraud. The strategies used on state violence will not work. Bypassing trusted third parties will not work on private crimes that are peer-to-peer. What would work?

Crypto’s Greatest Political Challenge

Private crime is the Achilles Heel of crypto. Users who view crypto merely as a way to make money, rather than as a promise of freedom, want state involvement to ensure a safe haven that is modeled on central banks. Every high-profile case of private crime is used as a reason to call for regulation. The Satoshi Revolution‘s final challenge is to suggest free-market methods by which the community can address private violence. The focus is not on the unpredictable breakthroughs in technology that are destined to change how crypto deals with crime. (Prevention has been discussed previously.) The focus is on the make-up of the institutions and methods through which crypto can minimize crime and provide remedies when it occurs.

Technology is able to adapt in a snap. But this means that economic and social patterns evolve as quickly. Crypto, the blockchain, 3-D printing, and robotics are among the game-changing technologies that are reshaping the world in their own images. And this evolution will only accelerate. The transformation of politics will be extreme. It is about time. Today’s political system emerged from the Industrial Revolution and it grew over centuries of war after war. The state’s characteristics include massive bureaucracy, extreme centralization, nationalism, and crony capitalism. But a new revolution is in town. Crypto’s characteristics include peer-to-peer exchange, decentralization, a flow without borders, and the lack of governmental privilege. Politics has already changed, whether politicians know it or not.

Anarchism, liberty, does not tell you a thing about how free people will behave or what arrangements they will make. It simply says the people have the capacity to make the arrangements. Anarchism is not normative. It does not say how to be free. It says only that freedom, liberty, can exist.

—Karl Hess, “Anarchism without Hyphens”

How will crypto prevent and remedy private crime? It is difficult to say, for many reasons, including the unpredictability of technological advances. Some of the obstacles:

  • The state regulates or bans any threat to its authority. This is especially true of law enforcement and the use of force, which are mother’s milk. One result: few anti-crime institutions exist that have not been defined by their need to comply with laws of the state. Even private police forces mimic state ones.
  • People base their assumptions on what they are taught and what they have seen. If they had been taught that the food supply requires a centralized coordination by the state and they had seen nothing else, then they would laugh at the very idea of the free-market spontaneously coordinating agriculture, transportation, canning factories, and grocery stores. The same is true of the free market coordinating safety.
  • The state does not encourage research and development into alternative forms of justice that are outside of its control. 3D-printed guns are an example. 3-D guns allow individuals to defend themselves without surrendering their privacy to authorities. The state’s response? The pioneer of 3-D weaponry, Cody Wilson, has been arrested on what appear to be “set-up” charges.
  • The entrenched assumptions of the public are against crypto solutions. The assumptions include: one law must cover everyone in a geographical territory, not a mosaic that reflects personal choice; and, the primary purpose of law is punishment, not restitution.

Armed with caveats, the next step is to explore a practical method by which crypto anarchy can deal with private crime. Like crypto itself, the method has to be individualistic, decentralized, transparent, and entirely private. The best place to begin is with an analogy that has already been drawn: car insurance.

[To be continued next week.]

Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

The post Wendy McElroy: In a Stateless Society Crypto is Law and Justice appeared first on Bitcoin News.

Bitcoin News

First Female Supreme Court Justice Now Fully Retired

October 23, 2018 |

Sandra Day O’Connor, the first woman on the Supreme Court, has stepped back from public life. For more than a decade after leaving the court in 2006, O’Connor kept up an active schedule: serving as a visiting federal appeals court judge, speaking on issues she cared about and founding her…
Newser

Justice Dept: We Caught Russians Meddling in Midterms

October 19, 2018 |

The FBI has been warning for a while that the Russians would try to interfere in the midterms, and the Justice Department has just brought a criminal case alleging just that. The feds charged a 44-year-old Russian woman, Elena Khusyaynova, with conspiracy to defraud the US, reports the Washington Post…
Newser

Gregg Jarrett: Jeff Sessions and Rod Rosenstein should leave their top Justice Department jobs soon

October 12, 2018 |

Attorney General Jeff Sessions and Deputy Rod Rosenstein should lose their jobs because of enormous harm they’ve caused.
FOX News

Justice Department approves $69-billion merger between CVS Health and Aetna

October 10, 2018 |

CVS Health Corp.’s plan to buy Aetna Inc. for $ 69 billion was cleared by U.S. antitrust regulators Wednesday, paving the way for the nation’s largest pharmacy chain to acquire one of the largest healthcare insurers.

The deal was approved because Aetna has agreed to sell its Medicare prescription-drug…


L.A. Times – Business

Retired Supreme Court Justice Changes Mind on Kavanaugh

October 5, 2018 |

One of the longest-serving justices in Supreme Court history thinks it would be a mistake to put Brett Kavanaugh on the court. John Paul Stevens, a Republican who served on the court from 1975 to 2010, told a gathering in Florida on Thursday that he had changed his mind about…
Newser

CNN

Justice Dept. indicts 7 Russian intelligence officers in international hacking scheme

October 5, 2018 |

The Justice Department on Thursday announced criminal charges against seven Russian intelligence officers, accusing them in a sprawling indictment of hacking, wire fraud, identity theft and money laundering as part of an effort to distract from Russia’s state-sponsored doping program.
CNN.com – RSS Channel – World