Thursday, November 21, 2013

The Reality Of The New, Borderless, Digital Age

Online gambling has landed with a thud in the United States. There are so many hands in the pot I'm amazed that there's any actual stew in it. We have some companies hoping to jump on the money train, we have other companies that are fighting it, we have some states that are hoping to tax it, while other states hope to stop it, and still other states that condemn it while still planning to offer it. It is, and this is a scientific term, a fucking mess.

Lost in the hullabaloo is the reality of what is going on: the breakdown of old legal structures in the digital age. Laws are nothing more than rules, enforced with threat of action, on a societal scale. If everyone played Monopoly all day, and anyone who broke the rules would be jailed, than the rules of Monopoly would be called laws.

One of the primary, if not the primary, forms of control is control over an area of land. Basically, law is structured by physical borders. When a person passes a border, they are subject to a set of rules that are grandiosely referred to as the law of the land. If you do something wrong, you can be physically chased, captured, and imprisoned for violating those rules. These are really the oldest forms of laws, since they are the simplest.

Another aspect of control comes in the form of systemic control. Regardless of what Ayn Rand fanatics would like to think, there is no such thing as a "free" market. All markets are social constructions with systems and rules in place that facilitate transfer of value between people. Those social constructions can be designed such that certain actions are impossible or difficult. This usually comes in the form of control over avenues. For example, the UIGEA. What the law did was block the flow of money from American financial institutions. Without the institutions, which control the avenues by which money can travel, it was difficult for money to go from a person's bank account to a casino's bank account.

The digital age is bearing down on both of these forms of control. The fear that this is triggering can be most visibly seen in the firewalls that exist around totalitarian states such as China, Iran, and Russia, the decade-long freakout about online file sharing, and with the recent revelations about U.S. spying and the NSA. Those who benefited from the old forms of control are scared. They are smart enough to see that there will come a point in the future when their efforts will be for naught. Control will be lost.

As such, a wise legal system recognizes that the system has changed, thus the laws and the mode in which the laws exist must also change. Is gambling good? No. But just as drugs, alcohol, and cigarettes are not good but will always exist, so will gambling. The law must accommodate the realities of the world.

Sadly, facing reality has never been a strong suit of politicians and moral crusaders.

Countries have been semi-successful in handling the border problem. As I mentioned, totalitarian states have massive firewalls that are semi-successful at blocking certain information. It has not been fully effective, never will be, and will likely completely fail at some point in the future, but many politicians (because, again, politicians really are that stupid) feel that they have the issue well in hand.

The UIGEA may seem to have been a huge success, but it was actually a total failure. As with so many laws that squeeze behavior out of legitimate circles, all that happened is that the financial transfers were pushed into the "dark alleys" of the Internet. The amount of money being gambled online in the U.S. hasn't changed much, but it's all going to the seediest casinos. For example, if I want to gamble at Pinnacle/Galewind, I have to use my Canadian bank account and go through a proxy. But there are many other casinos that simply ignore the UIGEA entirely!

But even if the UIGEA persists. Even if nothing legal changes. Yet another form of control is crumbling: money.

Previously, money relied on a government backing it on a global exchange. With Bitcoin, that is no longer the case. I was initially doubtful of Bitcoin, and still am, but that's not why I'm interested in it. I'm interested in Bitcoin because it represents a possible future direction. As the Internet becomes a "nation" unto itself, a currency for that nation that obeys no borders or laws could arise. This makes some things difficult, such as where does one turn in case of a dispute or theft, and I can see no solution. The likely just means that no matter how big this hypothetical online "money" gets, there will always be a place for national currencies.

Governments will of course fight this development. They will tilt against the windmill until their efforts just disintegrate entirely. They will ignore the writing on the proverbial wall for years, perhaps decades, as they puff up their chests in the face of an enemy that they don't understand. It is contemptible, really.

People like to gamble. I like to gamble. Gambling is fun. It will always be here. The Internet has broken down two of the most important systems by which governments can control behavior, meaning that online gambling will always be here. Is that good? Is that bad? It doesn't matter. It's here, and we have to deal with it intelligently. We have to allow people who want to gamble to gamble, and we have to protect those who are at risk of hurting themselves and the fabric of society. Because, I'm sorry, society is never going to be perfect. There will be things that some of us wish others wouldn't do, like drugs, gambling, unprotected sex, and watching Fox News. But guess what? It's going to happen. We cannot deny it. We accept the world as we find it, and figure out how to make the best world that we can.

Unfortunately, as is so frequently the case, taking this path — the correct, logical, rational, not-goddamned-stupid path — allows neither moral grandstanding nor tax collection.

Moral mandates and tax collection rely on the same two forms of control, borders and systems, as laws do. Thus, when those two forms of control are degraded as is happening now, the two favorite things of government are degraded. Politicians can't get on their soap box and make classist and racist statements about the dregs of society and they can't squeeze tax revenue from the process. And seeing as politicians are almost universally complete and utter scum, it's no surprise that they don't have much interest in doing what is actually correct.

But as I hope has been communicated in this somewhat rambling post, it doesn't matter. As technology progresses and leaves behind the old forms of control that we as a species have relied upon since our days of living in caves and eating mammoth steaks, those who fight this progress will simply be pushed by the wayside. This future isn't specifically imminent, but it's much closer than most people thing. Within the next one-hundred years, our entire conception of laws will be upended, gambling and all.

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