The Shutdown That Really Matters: The End Of The Silk Road

While state worshippers fret over the meaningless “shutdown” of the federal government, the supposedly inactive government violently shut down a very important and highly publicized free marketplace. National parks were closed for show, but the domestic terrorism continued from the offices of the FBI which seized the Silk Road website and arrested its alleged operator, the “Dread Pirate Roberts”, Ross William Ulbricht yesterday morning.

Prohibition is the Morally Reprehensible Part, Not Buying and Selling Drugs

Let’s get this out of the way first. To most of the violence-addicted authoritarians still infesting the planet, particularly the US, in overwhelming numbers, the FBI’s takedown of the Silk Road is a triumph of good over evil. The mainstream media and the comments section under the pertinent articles bear this out. Most people think that it’s a good thing that government tells people what they can buy to put into their own bodies. Despite the empirical evidence that prohibition of certain substances for private consumption increases usage and outright abuse while setting up violent underground markets, they still cheer on the war against people and their personal choices. They consider the resulting damage to and loss of life due to kidnapping by the government and murderous regulation among black market competitors to be worth making their personal code of conduct a matter of official gun-backed policy.

To hell with those people. I feel obligated to mention them because their pro-state, anti-freedom noise will be deafening, but they don’t deserve to be given any more respect or consideration than people who support chattel slavery. Make no mistake about it; if you care about free markets and human freedom, the shutting down of Silk Road is a sad event… and the braying of the crowd about just desserts for breaking the law is as ignorant as it is cruel.

The Silk Road made it possible for people to trade very peacefully in spite of the state’s prohibitions which create the violent conditions of the black market. The Road, like the Bitcoin it required participants to use, was a temporary victory of voluntarism using the liberty-enabling tools of the digital age.

Feds Luring Site Operator Into Some Violent Gangsta Stuff

Now that we’ve established how morally sound Silk Road was and how thuggish its detractors and persecutors are, let’s take a look at how it all came apart. Ulbricht was arrested yesterday in San Francisco. While some of the charges against him are for operating a vast, underground online exchange for illicit substances, it was Ulbricht’s attempts to have a thieving former employee beaten and a blackmailer assassinated that let the feds build a case against him. But it was the feds who lured him in, much like they lure patsy mosque attendees into the terrorist plots the feds themselves concoct in an effort to produce bad guys for their terrorism security theatre.

In a rather elaborate undercover sting FBI agents gained Ulbricht’s trust online and got him to agree to arrange a beating and murder, false proof of which the agents then staged in photos they sent to Ulbricht. The supposed extortionist, with the sreen name FriendlyChemist, seems to have been a fiction created by the feds. Plus, according to the White Rock, British Columbia, Canada, records there is no record of a murder corresponding to the name Ulbricht passed on to the fake hitmen or any murders corresponding with the supposed date of the murder. So the thieving former employee did exist but was never beaten up or murdered, while the extortionist was just an FBI ruse. The feds were playing Ulbricht from the start.

This Ross may look about as gangsta as the Ross on “Friends”…but he will pay good money to end you?

I have to take a moment here to inspire outrage and bile in the comments section and defend Ulbricht’s actions. The non-aggression principle we regularly talk about here is not pacificism. One owns one’s actions and their consequences and sometimes private, violent reprisal will be the morally sound result of one’s actions if one deigns to aggress against others. Someone who is threatening to ruin the lives of thousands of people by turning them over to the state in an attempt at extortion is one who initiates aggression and who deserves what they have coming. You should lose about as much sleep over the death of such an extortionist as you would an armed gunman who stuck up the wrong (heavily armed) victim. I see Ulbricht as protecting the lives of thousands of his customers as well as his own interests as best he could in the black market conditions created by prohibition. Of course, the FBI doesn’t agree.

You might say that beatings and murder are no way to resolve disputes…but that’s exactly the kind of violent dispute resolutions state prohibitions force people to enact in the black markets! Prohibition cuts black markets off from non-violent, legal or reputable arbitration systems. Silk Road was an attempt to make the underground free markets as free of the state-spawned violence that infects them in the world of actual street corners and turf wars. In a bit of irony, the state’s agents had to invent a fictional extortionist to lure Silk Road’s operator into the gangster hit. Mind you, the people who are offended that such a libertarian person would privately pay for violence to defend himself are the same kind of people who have no problem with their stolen tax dollar funding the explosive dismemberment of hundreds of thousands of foreign innocents their governments deem acceptable collateral losses.

What Have We Learned?

There are a few important lessons to take away from this.

1) No Bitcoin info was actually “hacked” or anything so ominous as that. The Feds relied on a simple, boneheaded mistake Ulbicht made to figure out who he was when he went looking for help from other software engineers on the Stack Overflow site. They then relied on trickery to get him to ask them to do something scandalously illegal which was emphatically not the state-prohibited free market activities on his notorious site. It was like getting Al Capone on tax evasion instead of dealing in alcohol (which is now legal, by the way) and murder.

2) If you’re going to arrange retaliatory or defensive murder for hire, assume that the people offering these services are federal agents looking to bust you.

3) If you’re going to run the biggest online exchange of prohibited items, do so in a nation-state that isn’t the biggest, most heavily armed and heavily surveilled fascist police state the world has ever seen. Ulbricht would have been much, much better off running his site in a non-Western country that wouldn’t just roll over for the US. He should have gotten a different passport at the very least and perhaps even eventually gotten rid of his US citizenship. Steps like these seem extreme…until the federal police toss you in a cage with the intention of keeping you there for a few decades.

P.S. Just a few days ago we began writing in TDV Homegrown about how the Silk Road could present a unique opportunity to take advantage of prohibition. We are careful not to recommend that our readers actually break the law. We were just pointing out that for certain bolder, liberty-loving entrepreneurial types, encryption and Bitcoin were making it a bit easier to profit from prohibition. Nothing has changed. The seizing and shutdown of the Silk Road is just a temporary setback. There is already another, much less known place where former Silk Road vendors and customers are already migrating. We’ll talk about it a bit more in the next issue of Homegrown. Learn more about signing up by clicking here now.

Gary Gibson cut his teeth writing for liberty and profit as the managing editor of the Whiskey & Gunpowder financial newsletter. He now writes for and edits The Dollar Vigilante. Gary recently stopped playing Russian Roulette by basing himself in the USSA and now spends his days roaming around Latin America.