What do prostitutes, blackmailers, slumlords, and Bitcoin miners who censor transactions all have in common? What if I told you that they are modern-day heroes of the free market economy, bravely providing their economic services despite facing universal scorn and outlawry? These individuals are unquestionably heroes, forged by the unjust treatment at the hands of society and of the state apparatus. If you don’t like the idea of them being heroes, then the only way to deprive them of this stature is to remove the shackles that misguided people have placed upon them. This rogue’s gallery of scapegoats is worthy of our vindication.
Defending the Undefendable is a 1976 book written by the renowned Austrian school economist and anarcho-capitalist theorist Walter Block. Defending the Undefendable challenges conventional perceptions of morality and economics by examining controversial figures often vilified by society. At its core, the book delves into the realms of libertarianism and economic theory, using provocative examples like the prostitute, blackmailer, and slumlord to illustrate fundamental principles.
The portrayal of a prostitute as an archetype of individual autonomy underscores Block’s defense of voluntary transactions in a free market. Contrary to societal condemnation, Block argues that a consenting transaction between a sex worker and a client is a mutual agreement that should be protected, not prohibited. It emphasizes the concept of self-ownership and the right to engage in activities that do not infringe upon the rights of others.
Similarly, the blackmailer, often reviled as a manipulative extortionist, serves as an example to challenge preconceived notions. Block argues that the act of threatening to reveal embarrassing or damaging information, while morally questionable, is not inherently criminal. Instead, it falls under free speech and can be seen as a form of negotiation. Block highlights the importance of distinguishing between ethical concerns and legal prohibitions, advocating for the non-aggression principle where force or coercion isn’t involved.
The figure of the slumlord, typically depicted as callous and exploitative, serves as another thought-provoking example. Block contends that the much-maligned slumlord provides housing options to individuals with limited resources. Their role, while often misunderstood, fills a market need by offering affordable housing, albeit in less-than-ideal conditions. Block emphasizes the importance of market dynamics and the role of competition in driving improvements in living standards over time.
These controversial examples within “Defending the Undefendable” serve as catalysts for discussions on individual liberty, property rights, and the consequences of government intervention. Block challenges readers to reevaluate their perspectives on morality, economics, and the role of authority in regulating personal choices. Ultimately, the book underscores the value of individual freedom and the unintended consequences of well-intentioned but restrictive policies.
If Block were a Bitcoiner, I think he would find it apt to include Bitcoin miners who censor transactions as part of his list of controversial economic heroes. Recently, the launch of Ocean’s mining pool was met with much backlash within the Bitcoin community for their decision to filter inscription transactions from their block templates. Critics argue that endorsing such conduct undermines Bitcoin’s core attribute of censorship resistance, potentially jeopardizing its foundational essence. While this knee-jerk reaction might seem reasonable at face value, further examination will show that we should be championing this type of market behavior in the same light as Block does for the prostitute, blackmailer, and slumlord. Regardless of your stance on Inscriptions, be they the savior or destroyer of Bitcoin, this type of voluntary behavior in the market economy serves a vital function for accurately expressing and coordinating market behavior.
This issue is fundamentally an issue of property rights, specifically the property rights of the individual who is constructing block templates. While many people would construct blocks based purely on financial profit, aiming to maximize fees, it’s crucial to note that there are more motivations than this. Moreover, this approach isn’t a mandatory consensus requirement within the protocol. An individual may construct a block based on the expected social or psychological profit from their decision. For instance, regarding Inscriptions, one might opt to exclude them from Bitcoin and take steps to censor those transactions from their block template. If enough of the market agrees it could effectively lead to them being deactivated. In a broader sense, someone may act benevolently by crafting a block template that prioritizes low-fee transactions, aiding financially disadvantaged individuals in confirming their transactions on the base layer chain.
By respecting the property rights of the individual constructing block templates, we allow the free market mechanism to function properly and effectively coordinate economic decisions for the network participants. The pursuit of profit directs the decisions of these block template creators, signaling their synchronization with the preferences of network participants. When a block template creator aligns their actions with market sentiment, they might notice an uptick in hashrate. This increase enhances the probability of discovering valid blocks more frequently, thereby boosting potential profits. Conversely, if a block template creator’s actions diverge from market sentiment, they could witness a decrease in hashrate, resulting in reduced profitability, potential financial instability, and ultimately bankruptcy.
The antithesis to the free market approach involves interventionism —pressuring block template creators into shaping blocks against their will. Advocating for such coercion establishes a perilous norm. By restraining individuals from freely constructing blocks, we not only violate their core property rights and autonomy but also invite a market mechanism susceptible to exploitation by the State, potentially enabling attacks on the integrity of the Bitcoin network. This not only erodes individual freedoms but also creates a vulnerability that could be exploited to undermine the very foundation of Bitcoin’s decentralization and censorship resistance ethos.
The Bitcoin network operates with remarkable finesse by orchestrating an extraordinary alignment of economic incentives. Its unparalleled resilience against censorship isn’t enforced top-down through mandates on block constructors; rather, it thrives on the astounding freedom of market forces. The beauty lies in the awe-inspiring ability of individuals: if their transaction encounters exclusion, they wield an astonishing power—simply adjusting the fee rate. This miraculous action instantly galvanizes other miners to prioritize their transaction, showcasing an unbelievable manifestation of the network’s adaptability and the incredible potency of free market mechanisms. It’s an unparalleled display of how the Bitcoin ecosystem ingeniously empowers participants, utilizing the astonishing dynamics of a free market to ensure transactions find their way onto the base layer chain.
In conclusion, “Defending the Undefendable” challenges societal norms and perceptions by illustrating how individuals often vilified by society play critical roles within the free market economy. Walter Block’s provocative examples—prostitutes, blackmailers, and slumlords—serve as catalysts for discussions on individual liberty, property rights, and the consequences of government intervention.
Expanding this framework into the realm of Bitcoin mining, the contentious issue of miners censoring transactions echoes Block’s argument for individual autonomy and property rights. The debate surrounding the inclusion or exclusion of certain transactions within block templates underscores the intricate balance between individual freedom and the functioning of a decentralized network.
Respecting the property rights of those constructing block templates is fundamental to allowing the free market mechanism to coordinate economic decisions for network participants. It’s the alignment of individual actions with market sentiment that drives the network’s resilience against censorship. Coercion or interventionism in dictating block construction not only violates core property rights but also jeopardizes the very essence of decentralization and censorship resistance in Bitcoin.
The Bitcoin network’s remarkable adaptability and ability to prioritize transactions within a free market framework highlight its inherent strength. The system ingeniously empowers participants to navigate and influence the network’s functioning, showcasing the incredible potency of free market dynamics in ensuring transactions find their way onto the base layer chain. Ultimately, whether defending controversial figures or examining the intricacies of the Bitcoin network, the core principles remain: the value of individual freedom, respect for property rights, and the remarkable efficiency of free market mechanisms in coordinating complex systems.
This is a guest post by Michael Matulef. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.