A terrific new article just dropped from Toby Shorin, Sam Hart, and Laura Lotti: https://otherinter.net/research/three-body-problem/
The article considers how institutions built on blockchain compare to informal institutions (eg social norms) and formal institutions (eg the law itself), which are the pillars the legacy order is built upon.
Since scholars know and understand norms and laws as classes of institutions pretty well, but have spent nearly zero time focussing on how blockchain institutions differ, it is refreshing to see a team take-up this topic!
My reactions:
I do agree that the very narrowly circumscribed blockchain protocols cause people to sit at home and not interact with others, as they can simply trust the protocols, and hence we lose some of the emphasis on social norms. This is perhaps a positive to the extent it enables cooperation across languages, cultures, and time zones, it is perhaps a negative to the extent it leads to a loss of human social culture, which was how humans coordinated in earlier generations? What do you think? Good or bad for the species?
Another Question for Discussion: is it somehow a limitation of crypto protocols to not need to rely earlier institutional primitives (norms, laws) in order to succeed in also ordering human behavior? Should we judge the new tool as somehow being deficient because it is different from what we know?
Or ought we to seek to describe how and why the new class of blockchain institution-building primitives are different? And the strengths and weaknesses relative to the prior institution-building primitives, ie, norms and laws? In order to harness the new design pattern to its fullest extent? And to strive to design a new order that uses the proper tool for the proper job in each situation in order to achieve the best result for the humanity?
For example, if rule of law is based on a premise of violence, and we can achieve the same ends in terms of establishing money, finance, insurance, elections, public goods via rule of code without needing anymore the premise of violence, do we want to use rule of law as the primary ordering institution in these areas anymore, or normatively speaking should we mostly migrate away from it?
I do think we still need rule of law (incl laws, police, courts… and all of that) for maintaining order in the meat space, ie, to address problems of violence in the streets, murders, vandalism, property theft, terrorism, etc (all the problems Thomas Hobbes argued communities were morally justified to solve with the sovereign and it’s use of centralized violence).
But maybe for all of the white collar digital stuff like money, finance, insurance, elections, and many kinds of public goods, which tended to fit more in the class of commercial and social contracting and enforcement problems, we no longer need rule of law as such an important cornerstone in our society if we have rule of code as a better primitive to achieve these purposes?
With respect to norms, it seems many of the crypto protocols can and do have a normative element built into them, and the enforcement is both proactive and radically more efficient, which makes them entirely different from legacy world norms, where enforcement was very much reactive and highly inefficient.
If you read the work of W.Richard Scott, he classifies norms, traditions, and protocols together as informal institutions, and for a long time I thought that blockchain protocols were just a new way to enforce what we understand to be informal institutions, but over time I noticed these very key differences existed, namely, proactive enforcement and highly-efficient enforcement.
These two differences underpin why Larry Fink’s recent statement about potentially eliminating white collar crime is possibly true, to the extent 100% ofwhite collar activity is on-chain via KYC’d addresses… which I’m not sure would be healthy from the standpoint of people retaining individual freedom and privacy, so that is a very different and very interesting philosophical question about how far to push with this tech?
As a small effort and much less organized then your own, here is my own attempt to describe this new institutional primitive in the jungle the ‘blockchain protocol institution’, which I see as a new class of social technology, wholly different in kind and not merely in degree. https://humanitythree.com/2022/10/15/the…
Your essay has given me a lot to think about, and I will be thinking about it for several days/weeks/months. 🙂
Particularly the deficiencies of BPIs, and specifically where they might lead to basically shitty outcomes for the humanity.
Would love to collaborate on pushing scholarship in this space forwards if you all would like to do more in this area!
Thanks for your terrific article.
Humanity 3.0 