How Government Is Making Black Markets as Dangerous As Humanly Possible

By Cathy Contributor –

Just as the internet has revolutionized nearly aspect of everyday life, it’s revolutionized the so-called informal economy as well. Online marketplaces have made life far safer for people whose desires take them outside the bounds of legal protection. Which is why it’s so disturbing that government agencies are effectively turning back the clock, and shutting down websites that are helping keep people safe.

By shutting down Silk Road, My Redbook, and kicking people out of their banks through Operation Choke Point, the FBI and DOJ are increasing the levels of violence and usury people must endure, while trampling on speech rights and violating due process at the same time.

The logic behind criminalizing voluntary transactions has always been a little hazy. Generally speaking, pushing interactions into the black market, where police protection and contract resolution must be done without the state, results in more violence. And the results of criminalizing cooperative behavior have been pretty uniformly poor. Banning things doesn’t make people stop doing them, it just makes it much more dangerous for them to do so.

Online bazaar Silk Road helped ameliorate some of that danger by, essentially, replacing broken knee caps with bad user reviews. Instead of fighting for turf, retailers gathered positive feedback from buyers and bolstered demand by sending their drugs to independent testers who would confirm purity, strength, even type. As an aside, my first date when I tried polyamory many moons ago was with one such tester. He was a med student who would review Psilocybin for Silk Road buyers. What a beautiful system!

The entire premise of the drug war is supposed to be public safety. And yet, the market found a way to let people buy and sell drugs in a completely safe manner. To date there is zero violence that can be traced back to the Silk Road. While the alleged operator was accused of murder-for-hire when he was arrested, those charges have since been dropped.

But instead of applauding helpful entrepreneurs for solving an important public safety problem, the FBI instead seized Silk Road, an entirely legal marketplace, selling a variety of goods and services, only some of which were illegal. And it did so before convicting its alleged owner of any crime.

The result has been a new fun game of internet drug marketplace whack-a-mole. Of course the FBI isn’t going to stop people from buying and selling drugs online. But every time one of these sites is seized without due process, all the relationships between trusted buyers and sellers and user data must be re-established. No one’s safer, but everyone is inconvenience, and every time more people end up rotting in prison for nonviolent offenses.

Now the exact same thing is happening with My Redbook, a website where sex workers  share health and safety information and to find clients in a safe environment. Again, most of the violence associated with selling sex results from criminalization. Violence is much more likely when a perpetrator knows a victim won’t call police. Online marketplaces such as My Redbook make work safer for prostitutes. Outdoor work requires snap judgments, and climbing into the car with total strangers. The web makes screening clients far easier, and puts the worker in greater control of where liaisons happen.

So how has the FBI responded to this boon to worker safety? The agency seized the website and shut it down before convicting anyone of any crime. Again, running a health and safety website with forums people can use to find clients is not illegal.

In between the seizures of Silk Road and My Redbook, the DOJ began Operation Choke Point. The purpose seems to be to dump people operating in legal gray areas into the gray market. As a result of pressure from the DOJ, big banks are dropping customers such as gun sellers and sex workers, closing their accounts and forcing them to find banking services elsewhere. Of course elsewhere is the world of online banking, where fees and interest rates are higher than traditional banks.

Again, it’s difficult to see how anyone is safer as a result of having to use an online bank instead of a traditional one.

There is real violence associated with drugs, guns, and sex work. All of it happens in the real world, where bodies meet bodies. Seizing websites and threatening banks into dumping customers does absolutely nothing to solve the problem of real-world violence. In fact, it counteracts the benefits of moving these marketplaces online. Shutting down a legal website before convicting the owner of any crime also violates his or her speech rights and deprives them of due process.

Physical safety for citizens should be the goal of law enforcement. As such, law enforcement should not only let online marketplaces and forums and banks do their jobs in peace, but perhaps even encourage street vendors to move online. Eliminating transactions by shutting down websites is as ineffective as it is illegal. The goal instead should be to make transactions as safe as possible.


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