Earlier this year, we wrote about PayPal starting to “fine” users for “misinformation” and wrongthink. While there is certainly misinformation out there, the alarming Disinformation Governance Board proposal and the Twitter files revelations underline the limits of what Big Government, Big Tech, or Big Business can do beyond simply imposing an official opinion. Of course, the official opinion may be based on a faulty understanding of the problem. The banned individuals may merely be better informed.

PayPal, famously, now often drops customers for what appear to be political reasons, as Indian economist Rupa Subramanya explains:

One by one, they go to start their business day only to find a baffling message from their payments app informing them: “You can no longer do business with PayPal.” …

Then, toward the bottom: “If you have funds in your PayPal balance, we’ll hold it for up to 180 days. After that period, we’ll email you with information on how to access your funds.”

Rupa Subramanya, “What the Hell Happened to PayPal?” at The Free Press (December 13, 2022)

Reasons are generally not given; filing a subpoena may be necessary. So much for “democratizing financial services,” PayPal’s claimed goal. The Electronic Frontier Foundation is not amused but PayPal does not care. And no one outside the company knows how many outfits have been banned.

Now here’s the interesting thing. Among PayPal’s founders were libertarian-leaning Peter Thiel and Elon Musk.

“PayPal will give citizens worldwide more direct control over their currencies than they ever had before,” Thiel said at a company meeting, in late 1999. “It will be nearly impossible for corrupt governments to steal wealth from their people through their old means, because if they try the people will switch to dollars or pounds or yen, in effect, dumping the worthless local currency for something more secure.”

Rupa Subramanya, “What the Hell Happened to PayPal?” at The Free Press (December 13, 2022)

Over 400 million people over the years liked that approach. And what is Thiel saying now about the current authoritarian direction?:

“If the online forms of your money are frozen, that’s like destroying people economically, limiting their ability to exercise their political voice,” Thiel told me. “There’s something about destroying people economically that seems like a far more totalitarian thing.”

Rupa Subramanya, “What the Hell Happened to PayPal?” at The Free Press (December 13, 2022)

And Musk? Subramanya asked him, “Are you worried that a company you helped found — PayPal — is now part of an emerging private social credit system?” I wrote. “And is buying Twitter, in part, an effort to fulfill the mission that PayPal seems to have abandoned?” and his reply was “Definitely!”

It doesn’t help that PayPal takes advice from the controversial “anti-hate” group, Southern Poverty Law Center about who to ban. The banned include evolutionary biologist Colin Wright, who is best known for the now-controversial position that biological sex is real and British journalist Toby Young who expressed doubts about the claims made for COVID vaccines. But there are many others:

It’s not just people whose politics you disapprove of @mrjamesbob. PayPal has also demonetised left-wing accounts. Why should a private corporation be the arbiter of who can and can’t express their views in the public square? As a left-winger, surely you recognise the problem? https://t.co/lVUnklIN1v

— Toby Young (@toadmeister) September 22, 2022

Earlier this year, PayPal pioneer David Sacks warned that we are heading toward a social credit system similar to the one in China:

A social credit system is a system that pretends to give you civil liberties and freedom. It doesn’t overtly send you to the gulag for expressing dissent. Rather, it conditions the benefits of society—economic benefits, the ability to spend your money—on having the correct opinions. If you don’t, then your ability to participate in online platforms is diminished or curtailed entirely. That’s the situation that we are gradually heading towards…

I’m not the one who’s changed. Big Tech changed. I didn’t leave Big Tech. Big Tech left me.

Bari Weiss, “How Big Tech Is Strangling Your Freedom” at Common Sense (March 29, 2022)

What happened? Subramanya argues that the problem grew much worse after the George Floyd riots in 2020:

It was not a conspiracy. Democratic officials were not colluding with the CEOs of Fortune 500 companies and owners of legacy newspapers and cable networks and studio chiefs and university presidents. It’s that, in a matter of a few months, maybe a year, they had all embraced the same leftwing identitarianism, the same slogans, the same hashtags and pronouns, the same statistics, the same talking points, and they reinforced each other, and they made it exceedingly difficult for anyone to challenge the new orthodoxy.

Rupa Subramanya, “What the Hell Happened to PayPal?” at The Free Press (December 13, 2022)

Then, almost immediately, COVID created a brand new opportunity for authoritarianism and censorship without accountability…

Social credit certainly makes it easier for Big Government, Big Business, and Big Tech to control most citizen’s lives. Meanwhile, those who fear that they may be dumped by PayPal might be wise to move on before it happens. PayPal, owned by eBay since 2002, is only 22% of the market. Here are ten other companies that offer similar services.

With all its faults, it’s still a market out there.

You may also wish to read: PayPal can still fine its users $2500 for Wrongthink. It’s possible that PayPal is morphing into something like a church-based credit union, where certain beliefs and behavior are expected of customers. The firm — not especially profitable — could come to need the money from fines for Wrongthink, to pay operating expenses. That’s a risk users run.