My wife has long been using internet auctions in her everyday life. They allow her to buy the things she needs and sell all kinds of junk. For those who have never encountered this wonder of progress, let me explain: its essence comes down to strangers buying and selling various things, with prices determined by the results of an auction.
Auctions are beneficial because they allow people to deal directly with each other by leveraging a fundamental economic principle—namely, that what is a “needed thing” for one person is all kinds of junk for another. Therefore, prices at auctions are substantially lower than “market” prices, that is, those where the state sits with its heavy hand of regulation. Moreover, auctions reveal the wonders of the division of labor. For example, a dress is sewn in the USA and still turns out cheaper than a Ukrainian one. And they’ll even ship it to you for a fitting.
However, in this case I am not talking about economics but about politics, or more precisely, about political theory. This theory, in its popular textbook version named after Hobbes and Rousseau, explains the existence of the state through a “social contract.” Its essence varies across different interpretations, but generally comes down to this: people renounce their sovereignty because they simply cannot establish relationships with each other—but this uncle who receives their sovereignty (that is, the right to tell them what to do) knows how things should be done. The especially hardcore Hobbesian version of this construction assumes that people are generally rare bastards, and if you just give them free rein, they’ll… In short, people need some third party to govern them.
Yet the very existence of internet auctions (like other simple observations of nature) refutes these theories. Because if a person always prefers to deceive another person, then no internet auction could ever arise. Unlike ordinary reality, where—according to supporters of the textbook version of the social contract—order is maintained by the presence of a policeman, on the internet there are no policemen. People who are absolute strangers to each other enter into transactions, existing, generally speaking, in the form of accounts, which, with the right skills, could easily be multiplied. Yes, you do register a physical address to which a physical letter with a confirmation code will be sent—but is that really capable of stopping a person, and especially “our person”? He’ll hack the mailbox, bribe the mailman, get himself a hundred apartments, just to rob you through an internet auction. And yes, you will show up at that address, and he’ll tell you that someone learned his address, registered in his name, and went ahead with it. From the point of view of the social contract, internet auctions simply cannot exist. And yet they do.
I am not going, as many probably now think, to prove that “people are good.” I merely want to say that the theory of the social contract proceeds from the premise that “people are evil”—not to mention that they are clinical idiots incapable of interacting with each other. Reality, however, obviously consists in the fact that people are different. They are, at a minimum, good and evil, among other varieties, and all of this depends on the situation. And robbing one’s neighbor is not human nature, constrained only by the policeman, but an option—one whose use, in addition to morality, is determined by the category “profitable-unprofitable,” with all the ensuing consequences.
For example, “our people” in the early days of the internet considered robbing one’s neighbor (more precisely—a distant one) a profitable endeavor worth the effort. At that time, very few of “our people” still used the internet. The response to this robbing was the unwillingness of large services like eBay and PayPal to do business with “our people.” And when the internet came to be used not only by bandits but also by the most ordinary suckers, it turned out that the robbing created a reputation from which now suffer everyone who can be identified as “one of ours.” I will not say anything about the justice of such measures—only that, as we can see, reputation not only exists but is apparently the most effective way of assessing risk. And the one who is incapable of maintaining a certain reputation will simply be kicked out of the process, without any policeman, delegation of sovereignty, or social contract.