When I helped create PayPal in 1999, it was in furtherance of a revolutionary idea. No longer would ordinary people be dependent on large financial institutions to start a business.
Our democratized payment system caught fire and grew exponentially with millions of users who appreciated its ease and simplicity. Traditional banks were too slow and bureaucratic to adapt. Instead, the revolution we spawned two decades ago inspired new startups like Ally, Chime, Square, and Stripe, which have further expanded participation in the financial system.
But now PayPal is turning its back on its original mission. It is now leading the charge to restrict participation by those it deems unworthy.David Sacks, “Get Ready for the ‘No-Buy’ List” at Common Sense (July 30, 2021)
But today, PayPal is quick to act against any customer deemed to be a problem to government:
Within days of the Trump-Parler cancellations, most of the finance tech stack (Stripe, Square, PayPal, Shopify, GoFundMe, and even enterprise SaaS company Okta, which wasn’t used by anyone in the events of January 6) declared they were canceling the accounts of “individuals and organizations connected to the [Capitol] riot.”
Now PayPal has gone much further, creating the economic equivalent of the No-Fly List with the ADL’s assistance. If history is any guide, other fintech companies will soon follow suit. As we saw in the case of speech restrictions, the political monoculture that prevails among employees of these companies will create pressure for all of them to act as a bloc.David Sacks, “Get Ready for the ‘No-Buy’ List” at Common Sense (July 30, 2021)
Sacks has also written about the recent, fairly rapid development of a “social credit” system in Canada, as part of the declaration of the Emergencies Act (a version of martial law) in the wake of the Convoy protest in Ottawa against vaccine mandates:
Banks, according to this new order, have a “duty to determine” if one of their customers is a “designated person.” A “designated person” can refer to anyone who “directly or indirectly” participates in the protest, including donors who “provide property to facilitate” the protests through crowdfunding sites. In other words, a designated person can just as easily be a grandmother who donated $25 to support the truckers as one of the organizers of the convoy.
Because the donor data to the crowdfunding site GiveSendGo was hacked—and the leaked data shows that Canadians donated most of the $8 million raised—many thousands of law-abiding Canadians now face the prospect of financial retaliation and ruin merely for supporting an anti-government protest.
Already, a low-level government official in Ontario was fired after her $100 donation came to light. A gelato shop was forced to close when it received threats after its owner was revealed to have donated to the protest. …
When these protestors or those that supported them end up in financial hardship because they lose their job, business, or bank account, what will happen to those who try to help them?David Sacks, “A Social Credit System Arrives in Canada” at Common Sense (February 20, 2022)
He argues that “Policy makers need to build safeguards into our laws that protect citizens’ financial rights against some future emergency that would be used as the excuse to take them away.”
Along those lines, in his article yesterday, Jonathan Bartlett made a critical distinction:
While, ideally, businesses should be able to allow or refuse business to whomever they wish, the problem is that the financial industry is what allows other people to engage in business with these people and organizations. In fact, our increased reliance on digital infrastructure is precisely what is giving so many infrastructure providers control over companies based on their ideals. The roads don’t care who you are or why you are using them. The telephone never interrupts your conversation to tell you that the phone company doesn’t like what you are saying. Dollar bills never complain about who they are coming from or who they are going to. However, the increased digitalization of our society means that every interaction winds up being actively mediated by other organizations.Jonathan Bartlett, “Trudeau’s truckers reveal problems with banking infrastructure” at Mind Matters News (February 21, 2022)
The internet has made many financial transactions easier and less time-consuming. But that came at the price of allowing a great deal more control to large institutions working closely with the government of the day. Many societies may need to look at new rules to restore more everyday control to citizens.
You may also wish to read:
Why is “depublishing” so cool among publishers now? Publishers now Cancel their own books in a righteous fury! It’s because the industry changed. Now, often, it’s about currying favor with government, powerful people, not helping readers understand the world around us.
Trudeau’s truckers reveal problems with banking infrastructure And crypto isn’t the solution you might think it is. Even when not coerced by government actors, banks have been getting politically active in choosing whom to do business with (Jonathan Bartlett)