Break The Rules

The world has changed and the lawmakers and regulators are having a hard time keeping up.

A few months ago, the creator of the underground website Silk Road, Ross Ulbricht, was sentenced to life in prison for creating an online space that allowed people to use bitcoins, a cryptocurrency, to buy and sell things anonymously. Some used Silk Road to buy and sell  legal,  as well as illegal, drugs.  Since people do this anyway in the physical world, with or without Silk Road the drug trade marches on.

Break Rules

Ulbricht’s aim in creating Silk Road was to establish a marketplace free of government interference. He believed that some of the methods used by the government to regulate commerce are a form of coercion and aggression.

If you disagree and think the government is not heavy-handed, check out these examples:

  • Don’t pay your taxes, you will end up in jail. (see Wesley Snipes)
  • Don’t pay your property taxes and your house can be purchased by tax lien buyers. In most states, tax liens are senior to mortgage notes. What this law is telling you is that the government’s claim come first.
  • Don’t want to bake a cake for a gay wedding – watch your business get shut down. (Gay Baker Story)

We have been taught that the nation that we live in the freest nation in the world. But, try not paying your taxes and see what happens to you. Or take the example of  The Branch Davidians, who were massacred by the police, resulting in the death of 76 people, for not letting the Federal authorities enter their compound. Many of those killed were innocent women and children.

Ulbricht was convicted of money laundering, computer hacking, conspiracy to traffic narcotics, and procuring murder although the murder charge was later dropped. He claimed he just wanted to let other people engage in peaceful transactions absent the government’s increasing encroachment and force by way of regulation, law, and police actions. Consequently, there is a real need for the entrepreneurs of today to break the government stranglehold of business and create new means for people to determine how they want to work and live.

Take the many issues Uber has had to deal with. For the uninitiated in the transportation world, most cities have a Taxi and Limousine Commission that regulateS the drivers, the cars, the hours they work, the areas that people can be picked up in as well as the rates that can be charged. It’s a lot of laws for a fairly simple transaction! One party needs a ride and the other wants to provide it.

But this is where politics enters the game. All of these laws, rules and regulations add up to lots of fees, tickets and massive revenue for the cities. In addition, given the plethora of regulations, this keeps the flow coming into the cash trough for political donations.  And also realize that given the amount of employees in the transportation industry, it is much easier to organize and coalesce a large block of these voters (union employees) rather than independent entrepreneurs providing the same services.

Currently, regulators are having a hard time deciding which rules apply to Uber and which don’t. Part of the issues is that Uber is really just a platform that connects drivers with people who need a lift. So in every city Uber has tried to enter the marketplace, they have encountered brutal resistance from the political class. The good news is that the politicians have had a hard time stopping Uber due to the enormous popularity with its users and fear they will experience even greater backlash from the voters if they don’t allow Uber’s operation.

Or take the case of Free Ride, whose shuttle service offers exactly that — free rides in New York State, Florida, San Diego, etc., made possible by the low operating cost of the company’s small electric buses and paid for by local businesses advertising on the vehicles. The Free Ride idea seems simple. Like all good ideas, in retrospect it’s hard to believe no one else was doing it. The model now exists where commuters can travel for free. Imagine the backlash that is going to come from all the bus companies and the people they employ!

All of these changes, and the rapidity at which they are occurring,  has the government worried. We are forging ahead with a new communities and, hopefully, a society unfettered by the rules of government. In every area, the technological age is transforming our lives right before our eyes. Actors no longer need the gatekeepers of Hollywood as they can now upload their talents directly to YouTube; authors self-publish via CreateSpace. Need a hotel?  Skip the hassle and get a room via Airbnb and so on.

The overall reality remains that every aspect of our lives is still ruled by the government, with its control implemented and maintained by way of police, courts, jails and weapons (both civil and military). For now, the consequence can still be dire. So caution is the word of the day as you can yet end up on the wrong side of the political class. One need to look no further than the founders of Silk Road to see how badly, in fact, it can end.

Caution. Yes. But optimism for the future.