Decentralized Governance: The Next Change to Organized Violence

The monopoly on the use of force that governments have exercised has changed over the millenia hand-in-hand with economic and technological developments. As technology progresses and economies allow for greater individual autonomy, individuals may have a lesser need of traditional government services (i.e. the naked use of force as protection). Blockchain computing (decentralized ledger technology) has the potential to allow for greater distributed security and economic power, changing the relationship between individuals and traditional governments.

Stage Theory Redux

In the landmark paper Economic Consequences of Organized Violence, the historian Frederic C. Lane outlines (sometimes almost satirically) how changes in the protection racket and changes in economic forces are linked. He states that governments are “among the many organizations producing goods and services, and specifically as the producer of a service I will call protection.” This “protection” is sometimes called the “use of force.”

He gives a short history of stages of economic development in this context. The first stage is that of anarchy, where “the use of violence is highly competitive” and groups rule wherever they can successfully plunder. The second stage begins when people group into regional or provincial monopolies of protection. This stage has growing pains (like bickering feudal lords), but ends up with monarchs consolidating “larger, tighter monopolies” which allows them to “reduce costs of production and increase the amount of tribute.”

A third stage is reached when new and varied actors begin to offer different kinds of protection. Basically, the monopoly of protection (force) is being distributed. Merchants begin to collect protection rents (insurance) and landowners collect land protection (rent). These new actors and up receiving more of the economy’s surplus than the central government (who is still ostensibly protecting from external threats).

A fourth stage is reached after those actors use their increased capital to expand commerce and agriculture, and technological innovations “become more important than protection rent as a source of business profits.” Lane states that “[v]iolence-using and violence-producing enterprises come increasingly under the control of their customers as a whole; governments become more democratic.”

This is the case because the protection has evolved from the naked use of force to softer measures, like property records, insurance, inter-regional deal making, as well as a greater individual ability to defend one’s self. Lane’s inclusion of economic forces in this whole rubric seems to indicate that violent enterprises are more democratic because some of them are controlled by market forces as well as more just forms of governance.

The advent of the information age has seen an increased ability of individual choice as well as increased ability for governments (and company’s) to intrude into individual private life. But, innovation in distributed ledger technology gives us hope under Lane’s rubric for various reasons.

First, decentralized and encrypted modes of communication can protect individuals from government overreach in ways that individual gun ownership has in the past (though probably couldn’t now). Second, smart contracts allow for decentralized decision making, and the creation of “trustless” environments that allow for individuals to interact with each other without having a trusted intermediary.

Hopefully, this will lead to truly democratically-decided protection spending based on individuals needing less of a standing army than before, and having a greater ability to broker deals without a government confirming that it’s legit (either through notaries [adorable] or the courts, etc. There are various blockchain companies that are looking into automatic and/or decentralized arbitration to augment automatically-enforcing smart contracts

Changing Sovereignty

Because governments are, and historically have been, coterminous with a given piece of land, a government has a monopoly on protection of the land it inhabits. In places where a government provides -whether through lack of ability or through choice- less protection, its monopoly is in question. Related to that, is the government’s monopoly on other things in that area. A good example of this are the interstitial micro-territories that European governments fought over for centuries where the inhabitants speak multiple languages, and pay taxes to whomever it best suits them at the time. A government’s inability to project power and require conformity led to the inhabitants adopting customs and languages from multiple nation-states/cultures.

With the greater individual autonomy provided by distributed ledger technology, and the increased ability to avoid government overreach and decreased need for some of government’s traditional roles (specifically, protection from force), individuals and groups of like-minded individuals may be able to create their own ‘interstitial micro-electronic territories. Far from being a libertarian’s dream (because a one-person microterritory would offer no advantages), a distributed ledger form of governance will allow for an updated form of anarcho-syndicalism; with direct democracy in many more aspects of life.

Bottom Line

Distributed ledger technology is the next stage in socio-economic evolution. Individuals will have more power for themselves, and require fewer benefits from centralized powers. Hopefully, people (as in ‘The People’) will unite together to decentralize all power structures.




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