A popular libertarian Google groups mailing list in Silicon Valley was one of the first communities to discover and seriously explore potential uses and implications of Bitcoin. This community identified the exciting potential of Bitcoin a year or two before the gray market actors and VC speculators started to jump in, and six or seven years before the suits-and-ties began to arrive at the annual Consensus conference in NYC in 2017 or 2018.
Just like neopolitan ice cream, Libertarianism comes in three flavors. The two most popular flavors have been popularized by Ayn Rand and Milton Friedman, and here within this blog post I shall propose a third flavor.
- Ayn Rand’s Libertarianism, the more extreme form, builds on the idea that the coercive power of the state is immoral in and of itself. You can watch Atlas Shrugged on You Tube or Netflix to learn about this flavor (here is Part I).
- Milton Friedman’s Libertarianism, a slightly more pragmatic form, is built on the idea that “you want to create the smallest and most unobtrusive government that can guarantee freedom for each individual to follow his or her own ways and values, so long as this doesn’t interfere with other individuals pursuing their own freedom.”
Friedman believed the only functions necessary in a government to maintain a healthy, functional, and free society were defense, justice, and police, as these are the functions required to protect individuals from attempts of others to limit their freedom.
I find myself to be in full agreement with the mainstream Libertarian view that the modern nation-state, which depends on violence to enforce tax collections and order is morally repulsive. The U.S., Britain, Canada, and Germany all use coercion and threats of violence in order to take the fruits of each person’s labor each and every year. I do not appreciate the status quo arrangement where I am basically in slavery working for the government the first 120 days out of the 365 day calendar, and I am given very little transparency and accountability in terms of where my tax dollars go.
To bring into sharp relief the extent of government millstone that is around my neck today, if you believe John Williams and the true inflation rate has been running over 10% over the past year (due to the actions of the Fed) and if the Federal and State tax rates on capital gains sum up to ~40%, then I need to earn ~16.5% cap gains pre-tax and 10% after-tax just in order to maintain a level of savings with a constant purchasing power. If I don’t earn 16.5% on my investments annually, my savings will lose their purchasing power and I am slowly losing my proverbial ability to keep my head above water.
The Atlas Shrugged video series illustrates well why individuals who work hard over a lifetime in productive enterprise and industry eventually reach a point where they see this reality for what it is, and opting out of the system altogether like John Galt did becomes attractive.
I find this situation that we live in today in the United States to be incredibly unsustainable, and this is one of the reasons I am keen to explore how we can build a more sustainable political-economy for humanity on top of blockchains.
Despite my severe frustration with the unjust nature of the current system, as a pragmatist and student of economic history, I also recognize that the institutions of the Western governments have led to a wildly successful epoch of economic growth and wealth creation over the past 200 years, and all of the wealth that I do enjoy as a middle-class American is due to the success “of the system” that we live inside of here today. For example, I can enjoy many forms of personal savings, my car, fresh water, fresh vegetables, fresh meats and seafoods, indoor plumbing, electrification, the Internet, roadways, libraries, toys for my children, access to healthcare, leisure time for fitness and vacations, and I am grateful to be alive in this place and time.
At the same time, I believe that we can do much better as a human race. And, I feel a strong tension. I recognize that key institutions such as rule of law, private property rights, and the Corporation’s Act — all of which go well beyond the scope of what Milton Friedman and most Libertarians would endorse as functions of government that are acceptable to retain within the system — have been directly and centrally responsible for the enormous economic surplus that American citizens have enjoyed over the past 200 years. At the same time, I cannot accept the unjust means by which the system runs and sustains itself, namely how the modern state coercively steals from us, debases our money, and provides a wildly unfair advantage to the political elite.
Thus while I consider myself to be a Libertarian, for pragmatic reasons I cannot get fully behind the extreme Ayn Rand flavor of libertarianism that advocates for “no government at all”. It seems obvious to me that in as much as mainstream Libertarian thinking is correct to abhor a government that “steals from us” and uses “coercion, slavery, and violence” as a cudgel to extort our wealth via the IRS, at the same time, mainstream Libertarianism is also wrong to ignore the presence and importance of so many public institutions devised in Western governments that provide important public goods, services, and guardrails that have contributed to our wealth and prosperity.
Basically, I have come to view it as a situation where “the means” of the modern nation-state founded on “coercion, violence, and slavery” is terribly unjust, and moreover the great waste, inefficiency, and corruption within the administration of the modern nation-state is such that the entire enterprise exists as a heavy millstone around our necks, furthering our anger with the “unjust means”. Yet, at the same time a great many of “the ends” achieved by the model have been useful, productive, and positive for humanity — arguably essential foundations for the success of the American civilization overall.
To say this in another way, intuitively, Milton’s flavor of Libertarianism seems to be too narrow. It is too simplistic, too spartan, too austere. If we followed Milton’s prescription to the letter of what he spelled out, we would have no public roadways, no schools, no system of recording deeds of title. There would be no guardrail functions, i.e. records of births and deaths to prevent identity fraud, licensure of driver’s and building contractors to keep roadways and buildings safe, regulations requiring the testing of drinking water to prevent water borne disease. It is not clear that the system Milton yearned for would have delivered any of these important public goods. When I visit developing countries that don’t have functioning governments, I quickly miss all of these modern trappings. Indeed, there are many important public services that governments do perform that the citizens of America appreciate and enjoy even if we lack transparency as to how our tax dollars are allocated.
For purposes of this blog, I shall define a third “flavor” of Pragmatic Libertarianism, which is the flavor that I happen to believe has the most potential to allow humanity to progress beyond what has been achieved under the 19th and 20th century institutional models.
My Pragmatic Libertarianism carries the torch of mainstream Libertarianism which recognizes that “coercion, slavery, and violence” to take the fruits of our labor is a moral crime (i.e. the means of the modern nation-state is evil and needs to go), however, it also recognizes the great benefit of public goods and public services, and desires to try to deliver those things through just and honest means.
Assuming that people come together in voluntary communities to pledge their commitment and personal savings to support “common good projects”, “common good services”, and “common good assets” where they can personally see the benefits of their investments with accountable outcomes, and assuming they can opt out whenever they want to do so if they don’t like the results, then this could actually be a healthy, sustainable, and acceptable form of delivery of public goods, imho. It is very different from the government that we have today, as it builds on a legitimate basis of voluntary community participation, with a right to opt out.
If we can accept this form of so-called voluntary community-based provisioning of public goods as Libertarians, then as we shall see over the next several blog posts, it should be possible to deliver these new kinds of “common good initiatives” in the future without any government middle man at all, at least not in the classical sense. Surely, if we can devise a lower-cost, more accountable, and more sustainable model of delivering public goods at the scale of millions of people, we might even drive a renaissance in public goods creation and delivery.
I am motivated to add this idea of “communities of people voluntarily supporting common good projects and services” (emphasis on the word voluntarily) as part of my own definition of acceptable governmental functions, under my own flavor of Libertarianism, because I foresee blockchain systems enabling us to replace most of the functions of the current government middleman comprised of an expensive (and oftentimes incompetent and/or corrupt) human civil service with a neutral technology layer, and community-accountable contractor model, and thus the transaction costs of providing what we used to label governmental services can be dramatically reduced in the future, thus making it efficient to have many more forms of societally pooled/shared projects, services, and assets that humans communities can participate in via dApp Web 3.0 enabled interfaces on blockchain! (sorry, that was a long sentence!)
Probably if Milton knew what we could do with a neutral blockchain layer to replace human-composed governments, with significantly lower transaction costs of administration of the pooled services, and with far less potential for corruption or abuse of power, he would leap for joy in his grave!
For example, with blockchain systems, we can enable community members to use dApps to participate with a few dollars every year in dozens of “purpose-driven communities” with decision making using derivations of direct democracy and liquid democracy. This model would perhaps be most similar either to special districts (e.g. school districts, water districts) which make up the bedrock of the American system at the local level, or, to co-operatives that were the substrate of rural communities in the 20th century. Under this kind of model, members can opt into the communities that they care about and desire to gain services from (eg. education, healthcare, water, social security, public parks), with delivery sourced via contractors and open community review of results, and active voting or pledging of votes via liquid democracy accessed from a dApp interface (thank you Gavin Wood and the original Ethereum community for inventing this new tool).
I believe this general model of voluntary participation via dApp-accessible communities can be the basis for many kinds of sustainable community-driven government-like programs far beyond what Milton Friedman would have articulated as desirable or acceptable.
And, because it is fully voluntary participation, I am OK with it as a Libertarian.
Libertarianism does not need to require that we be oppose voluntarily pooling resources to achieve our individual goals and objectives!
It should be this voluntary coming together of members of a community to accomplish shared goals which cannot be accomplished alone as individuals that is our Occam’s razor for deciding if a public good, service, or asset is really needed in the first place! If there is not organic support, we don’t need it!
Far too much of what our US and state governments do today has no bearing or benefit for me personally, and since I have zero transparency into how my income tax is spent, this is one of the reasons that I have so little trust in our government today.
Imho, the entire enterprise of government needs to be unbundled, and voluntary participation in communities for each individual public good or service needs to become the norm, with accountability for results maintained within each community. This is the Pragmatic Libertarian way!
And, this is the vision of Humanity 3.0!
Humanity 3.0 