Why the World Still Requires Uncensored Markets

Transactions are more subject to vetoes by middlemen who impose their ideals as trade goes online. Alternatives are required for innocent individuals.

Perhaps you believe eBay took the high way by refusing to aid the resale of out-of-print books that reflect the prejudices of the time, and that there’s no reason to assist anyone in circumventing such progressive corporate censorship.

Take a look at another, older example.

When Sen. Ted Cruz was running for the Republican presidential nomination in 2016, he was derided for defending a Texas law that made the sale of marital aids illegal.

Cruz had responded to a lawsuit challenging the law’s constitutionality nine years earlier as the state’s solicitor general, arguing, among other things, that “there is no substantive-due-process right to stimulate one’s genitals for non-medical purposes unrelated to procreation or outside of an interpersonal relationship.” In 2008, an appeals court, unconvinced by his argument, overturned the statute (the year Satoshi Nakamoto published the Bitcoin white paper).

But what if the restriction had stood, despite the fact that most readers would find it outdated and intrusive?

Without danger of punishment, neither brick-and-mortar nor internet businesses would have been allowed to sell these products to Texans. OpenBazaar, on the other hand, would have provided a new option for scumbags in Texas to get their sex toys. Granted, this would have been classified as “illicit uses.”

However, no one would have been harmed.

bitcoin safe

The P2P frontier

Both of these examples are outliers, but they illustrate a larger point.

Trade is virtually always censorship-resistant by default in the old world of physical storefronts and face-to-face economic exchanges. You give the baker, butcher, or barber your money, and she offers you a brioche, brisket, or buzz cut. No one else has the authority to second-guess or override your decisions. More and more transactions are being channeled via ever-more-powerful intermediaries as business moves online.

Tim Pastoor, an independent researcher on peer-to-peer identification and reputation systems, remarked, “Electronic P2P markets at scale are yet undiscovered territories.” “Sure, humans have been trading P2P since the beginning of time, but digitally and at scale is another of those magical nuts that has yet to be cracked.”

Pastoor sees a practical economic benefit to cracking that nut.

“Removing the intermediary from the process would save money for both the buyer and the seller,” he said. “Think of eBay, Amazon, Netflix, or Spotify, or ordering a pizza from your neighbourhood pizzeria, but without the centralised infrastructure between the buyer and seller, that always comes with some sort of fee for the upkeep of the infrastructure and for the business building and maintaining it to operate.”

Dr. Seuss Enterprises, which holds the rights to the late Theodor Geisel’s writings, stated in March that it will stop publishing six of his 60 books due to racial stereotypes depicted in the drawings. To be clear, this was entirely within the organization’s rights, and reports that a beloved children’s author had been “cancelled” were greatly exaggerated.

Putting expenses aside, the Dr. Seuss example highlights how the veto power of intermediaries becomes a problem when they hinder seemingly innocuous transactions.

Those who are sceptical of my criticism of eBay’s offensive-materials policy should examine how they would react if the company’s officials enforced Ted Cruz’s moral views instead.

In the digital realm, Bitcoin restored censorship resistance to payments. OpenBazaar (the cryptocurrency-powered e-commerce portal that shut down in January) tried to do the same thing for commerce in general, but it didn’t catch on. Nonetheless, it was an admirable effort. I’m hoping someone will continue Hoffman’s (Co-Founder OpenBazaar) team’s work.