Did Shutting Down Silk Road Make the World a More Dangerous Place?

So long as narcotics are illegal, they will be sold on the black market. Better that it happens on the Web than on the street.


The Silk Road, a Web based black market for illegal narcotics, fake documents, hackers-for-hire and other illicit goods, has been shut down by the FBI, and its alleged mastermind, Ross William Ulbricht, has been arrested in San Francisco, CA. The 39-page criminal complaint filed against him makes for a fascinating read. In less than 3 years, the Silk Road is said to have become “the most sophisticated and extensive criminal marketplace on the Internet today,” facilitating roughly $1.2 billion in sales* among many thousands of anonymous users. Hundreds of kilograms of illegal drugs are thought to have been sold through the site. People would log on using the Internet anonymity tool Tor, browse listings not unlike those at Amazon.com, read reviews left by other customers, place orders, and get ecstasy or LSD or cocaine or meth sent by mail.

The Department of Justice’s version of events should never be assumed correct.  But if their claims are true, authorities had no choice but to shut down the enterprise: among other transgressions, Ulbricht is accused of paying $150,000 to bring about the murder of a hacker who threatened to compromise the anonymity of Silk Road users unless he was paid a substantial sum in blackmail money (the complaint gives us good reason to doubt that a murder in fact happened). Extra-legal violence is often a part of black markets. Ulbricht is said to have created The Silk Road because he wanted to design an economic simulation that would “give people a first hand experience of what it would be like to live in a world without the systemic use of force” by “institutions and governments.” Doing so all but guaranteed that individuals would themselves initiate force.

But for all of the DOJ details that, if accurate, make The Silk Road an indefensible enterprise, I can’t help but conclude, after reading the complaint, that the world is actually going to be a more dangerous place in the absence of the online marketplace. If its facts are correct, the FBI wasn’t wrong to shut down the site, where people were allegedly hired to make hits and break into the computers of innocents**. Good riddance to that. For the vast majority of sellers and purchasers, however, The Silk Road was a marketplace for illegal narcotics, and a strong case can be made that it facilitated a significantly less damaging drug trade than what existed before it. If that's so, the implication isn’t that The Silk Road should be restarted, but that we'd be better off with a sanctioned online narcotics trade.

At its most basic level, The Silk Road served as a middleman that earned a reputation for trust among buyers and sellers. I never accessed the site when it was online. But my conversations with journalists and programmers who explored its listings square with the basic explanation in the FBI's criminal complaint: buyers had to fund their Silk Road accounts with Bitcoins, an anonymous digital currency; upon making a purchase, the necessary funds would be held in escrow by The Silk Road; once the transaction was complete, funds were transferred; and various measures were taken to protect the anonymity of all parties involved. Buyers could also review the products offered by sellers.

It's easy to see why computer-savvy buyers preferred getting their drug of choice on The Silk Road. The purchase could be made without ever identifying oneself to a drug dealer (or undercover cop), going to see him in some potentially dangerous location, or inviting him over. User reviews meant the product was a known quantity. And apparently the drugs were high quality — the FBI said it made numerous purchases on The Silk Road, and that “samples of these purchases have been laboratory tested and have typically shown high purity levels.”

Elsewhere, the FBI states that:

  • “Silk Road has been used by several thousand drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs...”
  • “Based on the postal markings on the packages in which the drugs arrived, these purchases appear to have been filled by vendors located in over ten different countries...”
  • “The narcotics sold on the site tend to be sold in individual-use quantities...”

Think of what that means.

On many thousands of occasions, drug dealers in foreign countries decided that, rather than using armed truck drivers, bribed customs agents, desperate drug mules, thuggish regional distributors, and street level drug dealers who used guns to defend their territory, they’d just mail drugs directly to their far away customers. Of course, folks at the beginning of the supply chain were still often violent drug cartels who one hates to see profit. But from the perspective of the many innocents who suffer from the black market supply chains involved in traditional drug sales, narcotics via mail order would seem to be a vast improvement.

The FBI summed up its case against The Silk Road by writing that “the site has sought to make conducting illegal transactions on the Internet as easy and frictionless as shopping online at mainstream e-commerce websites.” Insofar as it trafficked in violence-for-hire and hacked bank accounts, that was a bad thing — society has an interest in as much friction as possible in the market for hit men! But compared to the epidemic violence that has characterized the drug trade for the entirety of the War on Drugs, and that shows no signs of abating in the foreseeable future, a frictionless drug trade starts to seem like a relative utopia.

The “friction” is often dead teenagers on urban streets.

Successor sites to The Silk Road are inevitable, if not already up and running, but insofar as shutting down the biggest player had any effect on the War on Drugs, isn't it likely to be negative? Some transactions will shift from the online to the physical world. Middleman profits in the United States will accrue to street gangs that commit dozens of murders each year, some of them indiscriminate, rather than a computer programmer who went after a blackmailer. That isn’t to excuse The Silk Road’s purported founder or his alleged excesses, but the fact that shutting him down may make the world more deadly is a powerful indictment of U.S. drug policy and the hopeless task we've given law enforcement.

At present, there is no prospect of U.S. political leaders permitting a legal marketplace for drugs online. If they did, America could drastically reduce if not quite eliminate drug murders, drug gang profits, the thousands of poor young people seduced into the drug trade, the presence of drug dealers on urban corners, corruption among customs officers, the flow of drug mules, the profits of cartels, the ability of terrorists to finance their operations with drug money, and the prison population. Drugs would continue to be available and to be abused — as they are now. Does anyone think that continuing to fight the War on Drugs offers better prospects for reducing misery? The FBI just shut down the biggest online marketplace for narcotics. The drug trade may well be more awful as a result. Assume $1.2 billion in drug transactions will happen, one way or another, in your city. Would you prefer that they happen anonymously online?


*Transactions on The Silk Road were conducted in Bitcoins, a currency that has fluctuated significantly over the last couple years, so pinning down exact dollar estimates is virtually impossible.

**In Wired's telling, The Silk Road “prohibited the sale of weapons of mass destruction, the solicitation of murder, or the sale of stolen bank card data or anything else whose purpose was to harm or defraud.” It will be interesting to see how well the details of the DOJ criminal complaint hold up in coming months.