Monday, February 23, 2015

A Warning to Libertarians: Please Do Not End Up Like Ross Ulbricht

By Robert Wenzel

The trial of Ross Ulbricht, admitted founder of Silk Road, is over. He has been convicted on all the charges brought by the government. It is a terrible tragedy.

An anonymous commenter to the post, where the Ulbricht family expressed shock at how unfair the trial was, explained best what happens when the government has you in their crosshairs;
Having been through a federal criminal trial myself, this description sounds like standard operating procedure. While I feel badly for the mother, she does express an astonishing naiveté of the system and process. A federal trial is not designed to find out the truth, or to have a discussion about the law. It is designed to get a perfunctory rubber stamp from the jury on an outcome that has already been decided.

And the appeal process is designed to rubber stamp what was determined in the district court. I hope for her sake she does not put much hope in the appeal. It's highly unlikely to be reversed.
Ubricht faces somewhere between 20 years to a life sentence. To be sure, from a libertarian perspective, there does not appear to be much that Ulbricht is guilty of. He simply provided a market for individuals willing to exchange, certainly not a violation of the libertarian non-aggression principle. (The government was allowed by the judge to bring up supposed murder-for-hire plots by Ulbricht, but never charged Ulbricht with the plots. Sounds sketchy to me.) BUT, despite the libertarian perspective, he is going to spend a a very, very long time in prison.

This is part of the reason, I find it remarkable that some libertarians are cheering on further efforts in the murky dark internet. Coin Report notes (my bold):
[I]n March of 2014, GRAMS was created.

GRAMS is the Google of the darknet. It is a cross-marketplace search engine hosted on TOR that aggregates listings from major DNMs and lists them in an easy to read, Google-like fashion. Filters sort listings by country, market, price range, and quantity. GRAMS search algorithms are constantly being updated to include more DNMs and listings. This has allowed the casual observer to discover the darknet without the hassle of creating multiple accounts. GRAMS has become so successful that it recently started selling sponsored listings, similar to Google AdSense.

Since the original Silk Road was shut down, the DNM landscape has changed dramatically. It has become more de-centralized. Yet, thanks to sites like GRAMS and the Subreddit r/darknetmarkets, it is still accessible to many people.

The Ross Ulbricht trial marks a turning point for the darknet. Originally created to combat a problem, DNMs have now become a rallying point for the adherents of Libertarian ideology. Ulbricht himself described the Silk Road as an “economic experiment.” Many see him as a martyr and have supported him through it all, from patronizing the Silk Road via contraband purchases to donating over $339,000 via Bitcoin toward his legal defense fund. His downfall was an inspiration to push further, to continue the economic experiment, for the betterment of humanity (hopefully).
A few points need to be made here. First, Silk Road 2.0 has been shut down. It was infiltrated by the government from the start. There are claims that  there are new bitcoin mixing technologies that make bitcoins completely anonymous in use. But how can we know that it is not the government that has set up these mixing exchanges, or infiltrated them after they have been set up? And keep in mind, the buying and selling of drugs on the dark net still requires physical delivery. How do we know the government isn't capturing the physical addresses where the drugs are delivered? How can we know that the government isn't running a major sting to catch sellers?

As long as a commodity needs physical delivery, there is no protection from the government, even if it is done via the dark net--and that supposes the government isn't watching on the dark net in the first place, before physical delivery.

There are just so many things that can go wrong operating in the dark net, with very heavy downside, it makes no sense for a libertarian, qua libertarian, to get involved, especially by running such an operation.

Just becasue libertarians are in favor of free exchange, where does it say they have to run  underground markets?

As Murray Rothbard put it, when discussing libertarian/agorist theory and the underground promoted by Samuel Konkin (my bold):
If the black market should develop, then the successful entrepreneurs are not going to be agoric theoreticians...but successful entrepreneurs period. What do they need with Konkin and his group?  I suggest, nothing at all.  There is a hint in the NLM that libertarians would a priori make better entrepreneurs than anyone else because they are more trustworthy and more rational, but this piece of nonsense was exploded by hard experience a long time ago.   Neither do the budding black marketeers need Mr. Konkin and his colleagues to cheer them on and free them of guilt.  Again, experience has shown that they do fine on their own, and that urging them on to black market activities is like exhorting ducks to swim...

As much as I love the market, I refuse to believe that when I engage in a regular market transaction (e.g., buying a sandwich) or a black market activity (e.g., driving at 60 miles per hour) I advance one iota nearer the libertarian revolution.  The black market is not going to be the path to liberty, and libertarian theoreticians and activists have no function in that market...

Historically, classical liberal political parties have accomplished far more for human liberty than any black markets. 
In other words, if you want to advance liberty, it makes little sense to be operating a black market web site just as it makes little sense to be selling drugs from a street corner to advance liberty. And from a practical perspective, if the government snares you while running a black market site, you are going to pay dearly.

Advancing liberty is not about selling hooch or weed, though there is no reason to condemn those who enter into these noble professions. If you want to advance liberty, you do so by writing, speaking and reading about liberty. This requires that very little be done beyond libertarian study and actual libertarian activities, even at the early stages of developing such a career. Roy Childs, a powerful libertarian speaker, who made an impact with short essays and book reviews. was a janitor before he was recognized and found work as libertarian.

As much as I disagree with a lot of Stefan Molyneux's commentary, you have to give the man credit for launching his first podcasts by recording them while he was in his car driving to work at his then-day job!

I have often thought that the ideal job for an aspiring young libertarian theoretician or essayist is as a grave yard shift security guard . Get a job at the front desk of a building on the overnight shift, where few are going to bother you--and you can read and read and read. Absorb all you can about libertariansim, and, when you are ready, start writing, creating videos or whatever.

Leave the drug dealing to drug dealers, There's this thing called the division of labor and there is no path where drug dealers and libertarians have to pass, anymore than libertarians have to cross paths with fire eaters and sword swallowers, though I doubt many fire eaters and sword swallowers are paying much in terms of taxes, something that libertarians can appreciate, as much as they can appreciate the efforts of drug dealers, without getting into the business.  .

Indeed, just becasue street hookers must operate on the black market doesn't mean we should be encouraging libertarian women to become hookers, even if they would only accept bitcoins.

 Robert Wenzel is Editor & Publisher at and at Target Liberty. He is also author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics


  1. Robert,
    I'm glad to see we are on the same page. I caught a lot of crap from libertarians when I wrote an article titled, Ross Ulbricht is NOT a Hero, after the conviction.

  2. Wenzel,
    Well articulated, spreading ideas would be definitely more productive than mere grass root level activism. Actions make the intended impact when perceived through the right theoretical lens, without a libertarian world view the intentions of Ross Ulbricht can be received in many diverse ways.

    We need individuals to interpret and comprehend reality by employing libertarian ethics and theories, ideas transform the way we reason and act. Eventually the cause of liberty will be advanced only by communicating the right Libertarian ideas.

    "The history of mankind is the history of ideas. For it is ideas, theories and doctrines that guide human action, determine the ultimate ends men aim at, and the choice of the means employed for the attainment of these ends. The sensational events which stir the emotions and catch the interest of superficial observers are merely the consummation of ideological changes. There are no such things as abrupt sweeping transformations of human affairs. What is called, in rather misleading terms, a "turning point in history" is the coming on the scene of forces which were already for a long time at work behind the scene. New ideologies, which had already long since superseded the old ones, throw off their last veil and even the dullest people become aware of the changes which they did not notice before." - Ludwig Von Mises

    1. "We need individuals to interpret and comprehend reality by employing libertarian ethics and theories ..."

      How does one employ libertarian ethics and theories within the scope of government-sanctioned activities?

      At some point you recognize that the government is destroying the economy and then ... freedom?

    2. It's easy to identify some govt institution as wrong when you grasp and analyze it relative to libertarian ideas, but instead if it was relative to progressive thinking then you might believe that more of the same is better.

      To classify something as better or worse you need to have clarity regarding other feasible alternatives, so here possessing the correct ideas make all the difference.

      Good theories lead to effective actions and results, otherwise like majority of the world we will be stuck in a vicious loop of propping up ineffective institutions.

      As Mises emphasizes "The history of mankind is the history of ideas", so we should explain to others the ethical/intellectual framework to comprehend the events in a scientific manner, otherwise they will keep inferring the wrong conclusions.

  3. "If you want to advance liberty, you do so by writing, speaking and reading about liberty."

    And then what are others supposed to do with the information you give them?

    Further, what will be your advice when writing about liberty becomes a black market activity?

  4. Wow, Robert. This may be the best thing you have ever written. Well done. Your writing is getting better.

  5. I became a libertarian in 1973. Around 1974, I noticed that libertarians simply cannot bring themselves to proselytize to socially conservative people and explain that under AnCap, such people could easily live in their own communities free of the people and behaviors that they see as evil or sinful. Similarly, we could point out that the “pious” types would be forbidden from initiating force against the “sinners” but would able to freeing discriminate and boycott such people. And vice versa.

    Thus, I fail to see how facilitating the sale of drugs is any more “heroic” under libertarian theory than organizing a private community that successfully shuns and boycotts such people while drug-testing all of its members voluntarily.

    At the same time, what happened to Ulbricht is horrible. More effort should be placed upon getting the general public to blame the police, prosecutors and judges for drug gang violence, which, of course, is almost exclusively their fault. Further, the entire drug violence problem is easily eliminated (along with the problem of your kids meeting up with druggies) via private AnCap neighborhoods and schools.

    But libertarians just do not want to make that argument. Quit sucking up to the lefties. They’ll hate your guts no matter what you do.

    1. "I became a libertarian in 1973."

      Kudos to you sir. I'm' always pissed off at people who have an internet connection and STILL don't get it. You though figured it out even without the internet (if a person has an internet connection then there is NO excuse. Period). In my view that is a sign of someone with intelligence and mental strength and courage. Great job. If only there were more like you.

      "But libertarians just do not want to make that argument. Quit sucking up to the lefties. They’ll hate your guts no matter what you do. "

      THIS^^^^^ a thousands times! The Idiot Left will only want to undermine anything you do in service to their god, the state. Period. Full stop. They need to be crushed, not kowtowed to. They are idiots, sick and twisted-in-the-head maggots. And they will NEVER stop until your country (name any) is under left-totalitarianism. PERIOD.

    2. FYI, I thoroughly enjoy getting viciously attacked by lefties. Most people probably do not enjoy it as much as I do.

    3. I remember seeing that pic. It is fun to laugh at their stupidity. Heck, I do it all the time. I used to debate these idiots but they're as impenetrable to logic and reason as crazed feminist (or do I repeat myself?). It's as if they're collectively experiencing eternal PMS. LOL!

      BTW, how and why did you become a libertarian?

    4. You are exactly right that many "libertarian issues" are not really libertarian issues. Non-aggression against property is the only real libertarian issue. Once that is secured, the rest is a matter of negotiation among consenting parties.

      But if we are selling a factory that can make anything, why not sell heaters to Eskimos and air conditioners to Bedouins rather than the reverse. This is not sucking up, this is good marketing. Though I agree we need to be honest about what we are really selling and not lose sight of what the core principles really are.

      The whole point of libertarianism is a voluntary drug-free community is just as moral as Silk Road and both can peacefully co-exist.

      The heroism of Ross Ulbricht lies in his principled defiance of the state to reassert freedoms the state abrogates. If Ross fought for drug-free communities this would be no less moral than fighting for Silk Road, but it would not be heroic because the state does not abrogate the freedom to form drug-free communities.

  6. The state has to be confronted through education, direct action, and political action. Black market agorism is not going to beat them. Technology also can't beat power. The state can just hire technologists.

    1. "The state can just hire technologists."

      They can only do this with non-commodity money.

      Which is why black market (i.e. "free market") commodity-money is required, and is the only thing that can stop them:

      War and the Fed | Lew Rockwell

      You can't fight tyranny by adhering to price controls.

  7. This is the classic point of view. It says the good ideas in libertarian articles and books will change the world as people discover and flock to them. 100 years of practical experience has demonstrated nothing of the sort happens.

    We've seen little interest in freedom when people are presented tangible incentives to endorse statism. We’ve seen a feel-good cover story and a few looted pence in pocket be more than enough to induce John Q. Citizen to morph his beliefs to sanction aggression. We’ve seen real-world incentives of goods in hand be about 1,000x more powerful than abstract philosophical ideas alone.

    We see it already with technically illegal businesses like Uber and AirBnB. They were not shut down and instead are now winning battles against governments fearful to clamp down because they are providing large numbers of people so many tangible benefits. Politicians know once exposed to them, people react badly to having material benefits taken away. This is taking a page from the politicians’ own playbook. Supplying goodies reaches people where it counts – their pocketbook and quality of life. Most people are going to need to experience the blessings of liberty first before they can become genuinely interested in the principles of liberty.

    The voting majority are great masses of non-thinkers most interested in what Kim Kardashian is wearing. These folks are simply unwilling and unable to engage in political philosophy at all, much less deconstruct statist subterfuge. The average Joe goes with the flow, accepting news accounts at face value, occasionally voting for one politician or another, mainly just staying heads down in his personal affairs trying to get ahead. That’s where people must be reached - where they currently are focused – getting themselves ahead.

    Rather than continue to repeat what didn’t work, let's learn from the statists’ stratospheric success over the past 100 years and our own woeful shellacking. We learned that correct ideas alone were ineffective at stopping the growth of statism. We learned that tangible incentives must be bundled up with ideas to get the ideas accepted. Well, dark markets, gray markets, any kind of state-disrupting or crony-disrupting business operation can generate those incentives. Incentives that have the power make a difference in ordinary people’s daily lives. This is exactly the kind of relevance we need to have for the ordinary person if we are to have hope of waking up large numbers of people.

    1. Ross Ulbricht took on the feds alone on two key pieces of their power at the same time. The currency and the drug war. The result was predictable and didn't change anything like others before him. It didn't advance anything.

      Uber and airbnb are structures by which many people take on weak taxi and hotel commissions in cities and counties by exploiting cracks in their regulation. That is the logical step that comes from introducing the ideas to people, the implementation where the government is weak. Better yet if it's where government has created high prices, like taxis and hotel rooms. The government is then forced to look bad when it closes the loopholes they lived in and they don't want to look bad.

      Which is another thing, taking advantage of cracks, of loopholes, is entirely different than a frontal assault. If someone bought a garage and dozen cars and started a taxi company without permission they would get shutdown in an instant. His result would be no different than Ulbricht's. But what can government do with a company that is organized as electrons in the ether where any car can be one of the cabs?

      Putting forth libertarian ideas that gets people thinking and then some find cracks to exploit. Nature doesn't destroy huge rock outcroppings with a big hammer. It eats away at them with with wind and rain. With hot and cold. Cracks develop, seeds get into the cracks. Plants take root. The roots grow and open the cracks further and further. Pieces fall off, the outcropping gets smaller and smaller.

      There's going to be no moment where the real video of Ben Richards goes on the air and everyone wakes up at once. That's the thing of sci fi movies. We have to scatter seeds that fall into cracks and grow. Grow into something that gives the masses those tangibles they don't want to live without.

    2. That’s an eminently reasonable approach. Like Uber, exploit loopholes and grow vs. full frontal assault to avoid provoking the beast into a fatal reaction. Or one could also craft ways to bury black market transactions among white market ones so the two are inseparable. Or one could develop technologies the government is unable to block. But this discussion is just about the best tactics for creating sustainable black markets.

      RW above outright rejects the efficacy of black markets whatsoever to advance the cause of liberty. I disagree. I think black markets are uniquely positioned to advance the cause of liberty because:
      A) Black markets provide unique value unavailable from the state. They deliver personal benefits inextricably tied to free market behavior defying the state.
      B) Once profitably trading within a black market people are tangibly incentivized to endorse an ideology that legitimizes that market.

      Statists have shown us if a particular ideology can be associated with a unique good, that ideology will be readily adopted by those coveting that unique good.

      For example, an effective way to get a population to endorse the repeal of anti-pot laws is to first create a sustainable black market in pot. This black market enables masses of people to try and routinely smoke pot, appreciate its pleasures, observe it hurts no one. They then resent having to be criminals to enjoy these benefits. They then support legalization.

      If black markets for pot had not existed in the U.S. over the past 50 years, no one would have tried pot or been smoking pot. Government Reefer Madness propaganda would have been the only knowledge people had of pot. And the widespread public support for recent pot legalizations in multiple states would not have been there. Just a handful of theoretical libertarians forever ineffectually arguing for pot legalization.

      The best way to end the Fed is not to write blog articles decrying its evils that only libertarians read. The best way to end the Fed is to get Bitcoin in widespread use, regardless of legality, so the common man experiences all the benefits of a currency under no state manipulation.

      If Uber had packaged libertarian ideology with its service, and cited Austrian economics in its public statements surrounding its pricing and battles against municipal taxi monopolies, how many people would now be intrigued by and taking far more seriously libertarian ideas associating the awesomeness of Uber with libertarianism, as they rightly should be.

      Finally, consider Ronald Woodroof (Dallas Buyers Club). It would be no stretch to presume his customers suffering from AIDS purchasing his illegal life-extending drugs were receptive to being convinced of the illegitimacy of FDA. Without Ronald’s black market drugs, they would have died still believing in the FDA, not knowing any different than what they were told.

  8. Wenzel vs. Wenzel:

    Ancient Ideas on How to Hide Your Wealth

    I was looking for an article I thought was on EPJ that mentioned how the only reason we have gold and silver now is because people resisted confiscation.

  9. How is this in anyway Wenzel vs. Wenzel?

    1. Because Wenzel, in this article, is saying that libertarians shouldn't engage in black market activities, but in the past article he supports it.

      Hiding your commodity money is black market, too.

    2. Where does Wenzel say libertarians shouldn't engage in black market activities? He says that there is no reason that libertarians must become involved in black market activities and that black market activities have nothing to do with promoting libertarianism. BIG difference, my friend.

    3. "He says that there is no reason that libertarians must become involved in black market activities and that black market activities have nothing to do with promoting libertarianism. BIG difference, my friend."

      Yes, there is reason to do so: Because price controls cause problems for which further controls are sought for remedy.

      If you don't resist regulations, you will get poorer and less free.

  10. This is the kind of content I come for!

  11. This is Bob at his best-- the kind of content for which I visit Target Liberty and EPJ.

  12. "Historically, classical liberal political parties have accomplished far more for human liberty than any black markets. "

    -I won't argue the point of this statement because it was written some time ago. But recently, potheads and pot entrepreneurs in Colorado brought down the war-on-people-using-drugs in Colorado and are the first major chunk of armor in the federal war on drugs, which as we know (and John Legend knows), has been a big reason we have more folks in jail than China does, along with all the murder, crime, and other problems that come with prohibition. This started by many people, though still largely a minority, breaking federal and state laws and opening pot shops, so many that when the feds cracked down on one 5 more opened up, effectively nulllifying the laws BEFORE the laws changed. That is pretty big change from peaceful folks engaging in the black market.

    That said, I don't want my skull cracked by the state, but people who were not afraid made a difference.

    1. That quote from Murray Rothbard struck me the same way. In my own experience, I can't see where any political party has had any beneficial effect on anything. Black markets, on the other hand, have advanced human liberty by helping people survive and even prosper despite tyrannical governments.

    2. Furthermore, should the Mayor of D.C. Obey Federal Law, or Break it?

      What is the moral thing to do?

      Is it worth the risk?


    3. Agreed completely, EdD. I hesitate to differ with Murray, but this quote is off. It sounds tinny and non-resonant with his other positions.

      I can only think he got carried away in his zeal to put down Konkin. I agree with Murray that libertarian black marketeers will not be better businessmen than non-libertarian black marketeers who indeed need no ideological sanction. But it's the next claim that's not right: "The black market is not going to be the path to liberty, and libertarian theoreticians and activists have no function in that market."

      On the contrary libertarians are uniquely capable of packaging an ideology along with a black market product, turning the purchase of that product into a political statement, an act of civil disobedience, and a sanctified assertion of freedom rather than a sordid criminal act to be ashamed of. This transforms the black market act from just a profitable one into also a deeply meaningful one. Human beings live and die for the chance to take actions that have meaning.

      The libertarian theoretician wields negligible impact. The apolitical black marketeer wields negligible impact. The libertarian activist melding ideology with black market transaction creates magic.

    4. It's a difficult statement because it's hard to quantify what Rothbard means by "accomplished".

      I mean, isn't what we ultimately strive for is a society in which "political parties" accomplish nothing?

      Taking the root word of "politics", meaning the practice and theory of influencing other people, I can't help but wonder what context Rothbard meant this in. The "influence" in politics today is "coercion" and a violation of the basic NAP principles. (unlike most-but not all-black markets)

      For example, if he meant "political parties" in the context of a gov't system, it seems obvious to me that gov't, and ALL the parties associated with it, has continually moved in the direction of destroying human liberty.(there might be a slight retrench here and there, but the overall movement can't be denied)

      I can't see the same for for black markets in any way, shape or form. (short of collateral damage via turf wars, which is really no different from gov't in that regard)

      The only time we see liberty returning en masse is when political parties and gov't itself fails....

      I see black markets and their relationship to liberty in the same way as the famous statement that "capitalism breathes through loopholes".

      Now, all that said, back to RW's point...which I think is important, even if some don't agree with how it's being made:

      It makes no sense to put your life in jeopardy if your biggest concern is "liberty" for the common man. RW is simply pointing out the our gov't is so larger & powerful with incredible resources(via the printing press; for now) that it is very hard to successfully hide black market activities from said gov't.

      That folks, is reality. Taking Adam Kokesh as an example, who I like watching from time to time- is he more effective toting guns around forbidden areas and getting thrown in the slammer or out on the street with his "man on the street" type interviews?

      I think we all know the answer to that(even Adam, now anyway). The man is fantastic in his use of the Socratic method and his interviewing techniques, and he's relatively young!

      Him sitting in a jail, rotting away, does nothing for liberty.

      So to wrap up, if you are carrying the liberty torch try not to get yourself thrown in jail, killed, taken off the playing field, etc.

      If you think you are truly one of a small % that can get away with running a black market without being caught, good luck-just don't assume that that has a bigger impact than actually doing something along the lines of Kokesh(or RW, etc. et al).

      RW is just pointing out the obvious really...and trying to further the political persuasion(not coercion) of those outside libertarian thinking by keeping our intellectual warriors on the playing field.

      As brilliant as Kokesh is, the exuberance & naivete of youth had set him back...and I think there's no question that Ulbricht, Kokesh, & others are brilliant in their own way, but also have the capacity to be stupid/naive...and RW is trying to save some of you other brilliant people from making the same mistake.

  13. Let's all be cowards together! That will surely advance liberty.

  14. There are some laws that can be broken with little risk of getting caught. Other laws are more substantial in their penalties and maybe easier to get caught. However, the the black market is the free market after all. If you want something illegal you need to know how to network appropriately among those that have the good that you seek without taking undue risk to yourself. In other words, breaking laws are subjective to the individuals circumstances.