Two weeks ago, the company shocked millions of users by radically rewriting the constitution of the democratic republic of Ebay, founded in 1995 not just as an auction site but also as a social experiment in online self-government. For most of those 13 years, Ebay has been run largely as a self-policed island, a place where order was preserved less by real world laws than by norms and customs and expectations and reputations that were almost entirely virtual.

Ebayers governed themselves by rating each transaction using the site’s “feedback” system, where they could report crooks, not to the state but to each other. The theory was that, as in a medieval souk in which everyone knew everyone, everyone on Ebay would know who the crooks were by reading their feedback. Now the company has basically admitted that the cybersouk model does not work: buyers did not tell the truth about sellers, and sellers did not tell the truth about buyers. And in a market where traders lie, the trust that is so central to online commerce cannot flourish.