Thank You PayPal

Yesterday, I opened what I thought was junk mail or spam from Pay Pal. The message read:

As part of our security measures, we regularly screen activity in thePayPal system. During a recent screening, we noticed an issue regardingyour account. We have reason to believe that your account was accessed by a third party.We have limited access to sensitive PayPal account features in case youraccount has been accessed by an unauthorized third party. We understandthat having limited access can be an inconvenience, but protecting youraccount is our primary concern.

Concerned, I checked my PayPal account and found the following transaction:



Apparently, Gala Networks Europe Limited had tried to steal 100 euros from my account without my authorization. PayPal was able, however, to detect and cancel the fraudulent transaction before any money could be withdrawn from my account. After discovering this, I sent a personal e-mail to the security team at PayPal thanking them for freezing my account and asking them what I could do to help prevent future breaches of security.

I post this here to give PayPal free advertising, but also to make a point. Two of my more controversial stances in recent years have been the privatization of currency and the privatization of basic policing.

I support the privatization of currency because I think that private firms would have incentives to decrease the risks associated with holding currencies (inflation and theft). They would prevent inflation or else see their products traded for more stable stores of value (competing currencies). If Visa and MasterCard, were to start minting and distributing currencies for example, they would each have the incentive to decrease the risk associated with holding a V bill or an MC bill. If either of them failed to do this, more consumers would choose to hold a competing currency and Visa and MasterCard would lose monthly fee revenue. They could prevent inflation by creating a process by which it is difficult to generate new V bills or MC bills, but they could also compete in terms of security. If Visa, for example, were better at detecting theft and fraud of V bills, then consumers would place a higher value on V bills and be willing to pay higher monthly fees to hold them. In the example described above, PayPal is coming close to issuing its own currency. Sure, my account is in dollars, but once my dollars pass into my PayPal account they become a very different kind of dollars because they are protected by PayPal. If PayPal were to instead sell me P bills in exchange for my greenbacks, it would be issuing me a new currency. The only difference is that issuing currency is illegal. The government has to use force and fraud as mechanisms to maintain its monopoly.

The PayPal experience also demonstrates how privatized policing is possible. Not in twenty-two years has a government agent (a police officer) ever protected me from force or fraud. In fact, they impose force and fraud upon me by enforcing taxation laws and charging me traffic fines. I suggest that others have had similar experiences. However, I often see private agencies protect me from force and fraud in order to protect their own interests. In this case, PayPal stopped Gala from stealing from my account because they wanted to preserve me as a customer. They have. So, why can’t the City of Grapevine stop taxing my apartment complex so they can afford to hire a security team, which would increase demand for their property? Why couldn’t that security team simply round up vandals on the property and haul them off to a private court that is supported by voluntary fees paid jointly by security firms who need a place to try vandals? The government must maintain its monopoly and reserve power.

Update: You should not have your PayPal account linked to your checking account. Apparently, this link allows the unauthorized transaction to go through.