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Audrey Pollnow
7 Mar 2022

Web3 and Illiberal Pluralism

Web3 may be more than a libertarian’s playground.

Web3 and Illiberal Pluralism

The disillusionment with liberalism, capitalism, and the internet have become difficult to ignore. They promised pluralism and peace, happiness and freedom, but have instead been a source of homogeneity and incivility, misery, and coercion.

The free inquiry enabled by Wikipedia and the renewal of political freedom wrought by the Arab Spring has calcified into YouTube radicalization, Twitter bickering, and the bastardization of “doing your own research.” By competing on cost, housing developers have converged on a remarkably similar way of building homes, and it has not been pretty. Free Trade Agreements have given people access to new markets, while making their old way of life economically impossible. Social mobility has at least partially run its course. And the increase in efficiency wrought by the dating apps has hardly been an unalloyed good.

It’s tempting to assume Web3 will exacerbate these trends. Many of the most vocal blockchain enthusiasts hope to create a new world in their own libertarian image, while many of Web3’s critics caution that this is exactly what we need to worry about. But perhaps Web3 will also offer a wider array of tools for reversing these trends, allowing us to buffer ourselves from the market and opt into illiberal regimes of our choosing.

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An uncomfortable truth arises out of these aforementioned failures: sometimes giving people the ability to do something makes them worse off – and, in fact, less free – than they’d be without it.

This can come about in a variety of ways. Sometimes giving everyone a new ability can involve giving other people the ability to out-compete you. The introduction of the SAT made legacy applicants to elite universities worse off, insofar as they could be displaced by non-legacy, higher scoring candidates. More objectionably, a new ability can lead to a situation where lots of people engage in activities that are net wasteful, only valuable insofar as they confer a competitive edge; like SAT prep. But the most extreme problems arise when the new ability eliminates abilities that people had previously had, abilities which they would prefer to keep.

As far as I can tell most people who use online dating apps would prefer these apps didn’t exist, but, given their existence, they feel they have no choice but to use them. This is because the presence of the apps has significantly eroded the institutions and conventions that facilitate first dates; it has reduced the average person’s ability to date without using an app. This is a classic prisoner’s dilemma: we would be better off if we could coordinate – if we could agree to not use the new ability – but given that other people are using it, most of us will be better off if we do so as well.

And even if we’re aware of the cost of such freedoms, this doesn’t always settle the ethical and political question of whether the freedom is worth it. Different people value different freedoms, and those who favor the new ability will feel – quite reasonably – that restricting it involves discriminating against their preferred way of life. Similarly, those who fear that the new ability will erode the freedoms they value will feel – also quite reasonably – that to allow the new ability involves effectively discriminating against their preferred way of life. When each group feels their freedom is self-evidently valuable and worthy of protection, and when there’s no social consensus about which freedom should be protected by default, there will be no neutral way to resolve this kind of conflict.

In practice, our society tends to be permissive unless we already have a rule against something, because this can seem like the most “neutral” approach: it doesn’t require us to decide to privilege one way of life over another. Of course this approach is not all that neutral – it involves systematically favoring a specific set of values over others – but it may be the easiest thing to do given our country’s legal tradition, and given that we live in a pluralist society with an at least partially representative government. Unfortunately, this experiment seems to be ratcheting our society in an increasingly unhappy direction, and many people now long for forms of constraint which would enable ways of life which are currently impossible for them.

But is there an alternative? It seems unlikely that our society will be able to agree on a non-liberal set of constraints like those proposed by the Successor Ideologues or the Catholic Integralists. In the absence of such agreement, it also seems unlikely that the violence – physical or otherwise – involved in one group imposing their views on the rest would be justified, even if the values it imposes are good.

But here is one alternative, which would allow constraints while simultaneously promoting pluralism: we develop more ways to opt into binding external constraints, constraints which because they are binding open up possibilities that are currently off the table.

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Americans have already begun to experiment with this sort of illiberal pluralism. For instance, Washington State lets you opt into voluntary gun control, which makes it illegal for anyone to sell you a gun. Arizona, Arkansas, and Louisiana allow couples to opt into a covenant marriage, which makes it more difficult to get divorced. Similarly, religious Americans have creatively drafted contracts with religious arbitration clauses to ensure that the view of justice which the parties to the contract believe in will be what determines how a potential disputes are settled. (The discovery that Muslisms are also allowed to make such contracts led to insinuations of “creeping Sharia law.”)

But we could take these experiments in illiberal pluralism a bit farther, developing a modern analogue to the Ottoman millet system. We could give people the ability to give up certain rights (e.g., alcoholics could opt into prohibition) or the ability to outsource decision making about certain areas of their life to a non-governmental court of their choice (e.g., Catholics could give up their right to remarry unless their prior marriage ends in death or is annulled by a court of Canon Law).

It would of course be necessary to limit what freedoms people have the ability to give up. It does not seem like a particularly good idea, for example,  to allow racists to submit to arbitration by a KKK court. And it’s politically difficult to determine what these limits should be for the same reason it’s politically difficult to decide what abilities to allow. But perhaps we could bypass all the difficult political questions and take matters into our own hands, using Web3?

***

Unlike a traditional contract, a smart contract built on the blockchain doesn’t require enforcement by a judge or approval by a political body. The code will execute automatically, once the specified conditions are met. This means that smart contracts are an excellent way for people to bind themselves to certain commitments, even if the state is unwilling to recognize or support the commitment by which they want to be bound.

Imagine that my friends and I would like to move back to our hometown, but only if a critical mass of our friend group moves back. We decide to set up a smart contract to pressure us to move home, and we write the code to do the following: 1) Accept a specified amount of cryptocurrency from each of us, which the code loans out at interest, 2) Return 20% of their share to the first three friends who move home (and register to vote there), 3) Distribute the remaining cryptocurrency evenly among everyone who has moved home (and registered to vote there) three years after the first person arrived (and registered to vote), with none going to the people who don’t move home. 

This contract would create an incentive to try to move first, and to follow our first three friends once they’re there. And we know it would actually work, whereas I’m not sure whether or not a court would uphold the contract in question. In doing this it would make us more free to live the way we want to, rather than being pushed by market forces and inertia towards the atomized hellscape we find ourselves in.

While most people are unlikely to engage in these kinds of baroque contractual experiments, it is easy to imagine a future in which goods that normal people want – things like work, housing, marriage, membership in a school or religion – are bundled up with smart contractual obligations that could make life better, or worse, either by providing healthy limits (like, whatever the opposite of online dating is) or by requiring people to agree to unacceptable forms of coercion. You could use smart contracts to build the constraints that make for a happier life, but you could also use smart contracts to facilitate the creation of a cult, and in other ways to make it easier for powerful people to dominate those who are weaker than them.

If Web3 is this powerful, and if it can be used nefariously, are we doomed? Should we expect that a brief moment of exuberant Web3 libertarianism will be followed by a period of private fascism, inhumanely enforced by code?

Fortunately, no. The internet is not actually sovereign. To the extent that cryptocurrency can be used to buy things in the real world – to buy goods and services, land, etc. – it will be something that the government has the capacity to regulate. Cash can have as many underhanded uses as crypto, but the government can require you to report what crypto assets you own, and failure to do so might result in an audit and charges of tax fraud.

If people are doing extreme experiments with smart contracts that involve dramatic negative consequences, the state has many ways to intervene. Legislators can criminalize these contracts; courts can find that a person who has received money through the execution of an objectionable smart contract must return it; the state can also ban the use of cryptocurrency, significantly decreasing its usefulness and thus its value.

In other words, if Web3 facilitates new forms of illiberal pluralism, this won’t be because it is more powerful than the sovereign state, but because the sovereign state is permitting it. Perhaps the state will permit a greater diversity of activities via smart contracts than it is willing to directly enforce by traditional contracts. But if the blockchain is to help us in this way, the task is both a technical one and a political one, because besides developing such contracts, we will need to engage in common deliberation about what sorts of contracts to allow.

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