Overthrowing The Network State: Untangling Balaji's Helical Theory of History
For this episode, I'm joined by Kelsie Nabben from Blockchaingov to speak to Quinn DuPont (@quinndupont), a historian of technology who recently gave a talk about his criticisms of TNS at the Commons Stack Unconference. He also recently published an article titled A Progressive Web3: From Social Coproduction to Digital Polycentric Governance. During the episode we interrogate Balaji's misunderstandings of history and proposing the commons as an alternative framework for what is already happen...
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Hello, everyone. You're listening to the Blockchain Socials podcast, and this is another installment of overthrowing the network state, series that I've been doing in collaboration with BlockchainGov. And for this episode, I have actually a double double I'm realizing. I have two people on each of them have had one episode before where I've spoken to them. My cohost will be Kelsey Navan, who is a researcher at Blockchain Gov. And we're gonna be talking to Quinn DuPont, another researcher who has recently you gave a talk, I think it was the, Trusted Seed on conference where you gave some of your sort of, like, initial criticisms and feedback about the network states to this group. So I really want to talk about that since there's a lot of, things that you'd mentioned there that were really interesting and that, of course, I I agreed with. And then you've also written a piece, fairly recently or an article titled a progressive web three from social coproduction to digital polycentric governance. So we will, cover that as well. But so to start off, what I wanted to ask, you, Quinn, is because you're a historian of technology, and in the network state, Balaji, like, kind of what he does, in in my view at least, is that he kind of does, like I think, like, 80% of the book is sort of an attempt at recounting and reinterpreting history largely through, in my opinion, that kind of like Silicon Valley venture capitalist lens. So I was wondering, you know, with your, knowledge as a historian, do you have any, thoughts on, I guess, that type of framework when looking at history that that he does? And what are kind of the more problematic things in the book?
Yeah. Thanks. Hi, both. It's it's great to be to be back here. You're talking about chapter two of the network state, which, like any book that's been appropriately edited, is, like, 10 times the length of every other chapter. So, and that chapter, it's so it's I mean, it's called history is trajectory. And I think there's, like, a I mean, just in general, talking about the network state is very frustrating because, it it's it's hard to sort of take it seriously. But, I'll do my best, and I'll try to see what I can kind of pull out of it. And and I guess, like, the first thing to sort of, reflect on is before even I get into the pause I would say the positive account that Bellagio offers of this notion of history as trajectory, maybe it's helpful just to step back a little. You suggested it's kinda kinda into the Silicon Valley venture venture capital modality. I think that's sort of right, but I think we can actually even do we can go a little further, and we can actually frame, Bellagio's interest in a very particular mode of scholarship, that arose in the mid twentieth century. So roughly maybe post war, post second World War, up to roughly maybe about the nineteen seventies. So nineteen fifties to nineteen seventies, there was two, big trends that were happening in, political science and maybe sociology, but really political science. And and the first is, basically, sometimes it's called, like, modernization theory. It goes back to people like Durkheim and and, you know, sort of classical sociologists, even people like Marx and Smith and all these sorts of folks. And, and it kinda the the challenge of modernization theory sort of tackles is this question about, like, why are some countries doing well and some are not doing well. Right? And then this mantle gets picked up, again by people like Immanuel Wallerstein, who is associated with with it's called world systems theory. And, you know, I just I would just encourage readers to sort of maybe even just go, like, check out Wikipedia or whatever in world systems theory, and it'll give you, like, a pretty reasonable sense of what it's all about and some of the criticisms. But one of the main criticisms, and I think the kinda, like, where this account really falls down, is world systems theory is particularly designed to make analyses of core countries and periphery countries. And in doing so, it strongly reinforces core countries. It strongly reinforces the sort of our analytical lens on them, and it tries to explain basically why periphery countries are you know, struggle and core countries do well. It tries to explain things like extractive measures. You know, why does The United States go over to, you know, pick random country somewhere else and, you know, presumably does its capitalist thing. All of these are claims that are like, well, system theory is has has its virtues. It has its, some some benefits, but all of it is like, let's just call it what it is. It's seventy year old political theory. Like, Balaji's grandparents probably could offer us a better account of the network state having never seen a computer than Balaji just because he's so powerfully swayed by this. And I this is my reading anyways, because I can't explain any other reason why he'd have such an incredible interest in centering the nation state. He claims that he's trying to get to this nation or this this network state. He's trying to move it out of the way. But, I mean, he even says he says well, he says, like, what is one of the main things that the network state needs to do is it needs to, be seen as, what's the term he uses here now? It's, basically, not legitimate, but rather, it needs to have a, a bureaucratic, attachment, to and and and to, you know, establish nation states. Right? And and this just seems like like, I just don't understand the motivation why if we're trying to, you know, if we're being radicals or even just reformists here, why we need to go back and, you know, come to the nation state asking permission to be, seen as representative or legitimate or some way real. I think there's just so many other options today, and and and I'm and I'm happy to kinda, like like, we can get into that. And, for me, one of the big ones, he says right at the beginning, he says, look. DAOs aren't, they're not network states. And I would have thought, like, that would have been a a really good place to start to think about, how how a network state might develop or something like this. Right? At at the very least, we need to come up with an account of, like, organic production. Like, where does this stuff come from? Right? Balaji's account just sort of assumes that people have some intrinsic motivation for this. But that's where we're left at, and we're at left at this really very high superficial level. Yeah. So, I mean, I can say more about the kind of I could even go through and pick apart the actual claims, in in in that long chapter too. But, I think that's sort of its fundamental, limiting constraint is that it's stuck in political theory from seventy years ago.
Interesting. Yeah. I think one of the things that's, it's like there's this obsession with trying to project, like, a particular future, I get the feeling, or like that there's this, like, automatic, like, yes, this is going to happen and this is how it's going to evolve. And he just needed, like, I don't know. Like, I can see why I've I don't know that much about it, but I've read, like, a little bit that there's, like, these links with, like, fascism and sort of, like, futurism as, like, having sort of, like, inevitability of, like, something going to happen. And there are some weird overlaps that maybe I don't want to go into about, like, how Silicon Valley investing or just, like, maybe venture capital investing in general happens of trying to, like, predict a particular future that the world is going to to move towards. And then he has this, like, very strange like, he tries to mathematize history, I guess, in a certain way. Like, this was it he he look kid, like, a helical theory of history or something like this, that I also found very strange. So then he it's like it's like, oh, it there is this trajectory that we're going towards and it's going to happen, but then he also, like, allows for, like, oh, and also we're in this giant cycle of, like, you know, super cycles of, like, things that that I've always I I always come across these, like, weird kinda, like, hippie, like, video type of stuff. In in the past of, like, you know, we're in we're in these, like, five thousand year super cycles of, like, things that are repeating themselves and, you know, whether or not there's any merit to that, I don't really know.
But I thought it was strange. It was like this weird mixing of I think you're on to a couple things there. I mean, the first is he very straightforwardly I mean, his chapter two three two, I'm just looking at it here. Technological truth is the driving force of history. So driving force of history Which is like we have and that there is a driving force of history. Right? V driving force of history. As though there's as though we believe in, you know, teleologies or something. Right? We're like, Aristotelian here. And then the other part of that, the technological truth part, that's just straightforward technocracy, good old fashioned technocracy. And that has, you know, heaps of criticisms and and and and and, like, limitations. And and so and I I guess and, you know, and what he's trying to get at this this driving force, I mean, he makes lots of, like there's lots of sort of just in historical inaccuracies in in in in the account, and and I don't we don't really need to, like, go through those. Unfortunately, they're the kind of thing that, if you're not aware of the inaccuracies, you know, the ideology is more more most likely just kinda sweep over you, and you're gonna take it as accepted. I mean, you know, he actually criticizes this, he he has this, what is it, Gell, Gell Mann amnesia. It's called Gell Mann amnesia, which is actually, you know, it's such a it's such a non idea that it was it was popularized. It was me it was set stated by Michael Crichton, the, the guy that wrote Jurassic Park. So I'm not a scholar. And but the point of that is that when you are reading a the the idea of this this amnesia is that when you're reading a a a piece of media, that you are familiar with and you see it riddled with facts, the conclusion is that you should, cast out the whole thing because it's just, you know, a a pile of lies or whatever. And he is he quite openly, he accuses, like, you know, the New York Times of this. Right? As a a historian of technology, I mean, that just accurately describes this book. It's riddled with facts, and and so the kind of it's very hard to take seriously. But that said, I think this idea of the the the the driving force, what he's trying to get at, my hunches, and this is this helical, history, and he even calls it he says, history can move through the zed axis or z axis. Right? And so he's interested in this very old fashioned idea that he kinda cribs from, a number of thinkers in in including, people like Nietzsche and, where there's a a a a reciprocating nature to the world. There's a there's an eternal return or something. We we we come back. But he's not comfortable with that because Right. You know, he's he's hard drive and so That means resignation if you go back. Yeah. Yeah. So so he says, okay. So what we do is we think of this, the circle, but then let's, like, pull it into another Turn it to a slinky. Yeah. It's just clinky. It really is. It's just slinky. It's it's that's that zed axis. He's he's sort of he he he wants to see. You know? And and and there is there there is a lot of, there's a fairly large tradition that's been, you know, properly discounted at this point around cyclical histories. Right? K waves and on and on and on. There's just, like, loads of books that have been written about trying to see the cyclical nature of of history, and and none of these have ever no serious no historian today, like, takes them seriously. But okay. So what can we get out of this? I will say the one thing that he's not completely wrong about is you mentioned this mathematization he's sort of interested in. I actually I actually do believe that there is an opportunity for using, mathematical models and large datasets that we see associated. The the digital traces on the you know, from from these, these systems interacting and and individuals being taking part of them and so on and so forth to do proper, you know, sociological work, do some computational social science, with with these datasets. I think that's actually right. So I think it's, like, interest in kind of, getting, some math in into the story is right. It's just that he offers us a bunch of options and no way to say we should take this approach or that approach or whatever. And more to the point, he's completely he has no idea about all the literatures that actually do this kind of work. There's loads decades of work on online communities and within information science and information systems. And, you know, people have modeled the dynamics of these systems extensively, qualitative and quantitatively. And, you know, there's lots of important sociological things that have emerged out of that and issues that he doesn't seem to have any interest in, like, simple ones like trust or commitment, you know, legitimacy, you know, just lots and lots of things that are as particular to a DAO or to a, presumably, a network state as they are to Wikipedia or Linux. And this has all been studied, but none of this, of course, is in here.
Always start with a literature review if there's one thing that we've learned. That's right. Yeah. I think that's quite interesting. And what resonates with me from what you've said is, something that has been mentioned in previous episodes, and I'd very much encourage people to go back and listen to some of the recordings in this series, especially the first one. And this idea of challenging the state by creating the same thing. You know, like, to create a state against the structure of the state centers this statehood as as you've pointed out. And I'm quite interested in thinking about, you know, alternatives or kind of going through more of the, dynamics of what you sort of position Web three as in your in your recent paper, which you mentioned in the intro in terms of, a progressive Web three from social coproduction to digital polycentric governance. And so I think this practice of kind of talking about potential alternatives or alternative lenses, is quite important. And so in that paper, you cast a different vision of Web three than spin all the way down, which is one of the references in the in the beginning. So how would you describe what is happening in blockchain communities through a social movement lens and why this idea of either anti establishment or community network in some respect is kind of resonating with, Web three people more broadly. Yeah.
Yeah. I mean, the first thing to say is I don't start from a position of, let's say, ideology. Right? So, I don't find it helpful just to say, well, I'm an anarchist, and therefore, I believe in these sorts of things, or I'm a socialist, and I believe in these sorts of things. Instead, that paper and and I think the insight that would be most germane here is to recognize that we're not trapped into the kinds of conclusions that Balaji wants us to think that we're trapped. And the example I and, you know, I I I really, focus on in that paper, and and it's in the title, digital polycentric governance. Polycentric governance, just just, like, say a few words about that. This is the idea that, it was popularized by Elinor Ostrom. She won a a Nobel Prize in economics for her work, developing this idea of polycentric governance. It's actually her her husband, Vincent Ostrom, that came up with the idea, but she did all this work around it. And polycentric governance has this sort of sound this sounds like, oh, well, all we need to do is just, like, let, to use Glenn's, Glenn Glenn Wheel's term, plurality just kind of explode or whatever. Right? And and we'll when this will kind of all work out. Ostrom says no. No. No. Like, that's not we shouldn't expect polycentric governance to be easy or even efficient, but rather what we have is an opportunity to think about nested interlocking multiscalar, organizations that by the very nature that there are many of them and that they're nesting at multiscalar and all these kinds of things, we can observe in the real world. We can go out and like, this is what Ostrom did. She went around the world and and did all these rich case studies to find examples of people coming together on their own volition, no no outside exogenous force or state requiring them to come together, come together and escape the tragedy of the commons, to escape these, contexts where we, if, you know, where otherwise, we're gonna over extract a resource or we're gonna end up with pollution or we're gonna end up with some kind of collective action challenge. And, you know, there is no one simple answer to polycentric governance. That's what makes it work. It's not that there's one framework or one model. It's a it's a context specific, process. And when I look at Web three, I see quite readily we've got digital comments. We've got these we've got these, you know, tokens and cryptocurrencies that are produced. They need to be managed. They need you know, they're they have, there's an economics to them. And we actually have examples, such as they are. Some of them are a little bit, challenged at times of them being of these digital commons being well managed, well governed. As in other words, examples of real live examples, not fictitious ones like a like a network state, of effective polycentric, governance. And and I think that just isn't like that by itself that the fact that people are able to do this, makes this whole model seem really implausible because we have a completely, realistic option that I think everyone can get their head around, which is like, oh, well, we don't need to be rational egoists in all like, we can actually, step back and say, you know what? I'd be better off if I constrained myself, set up my own set of rules that, you know, made it so that I can't, just abuse the commons, and but we're all gonna be better off. And as it turns out, people are more than ready to do that. That's not a it's not a a fabrication. It's it's a it's an entirely real empirical phenomenon. So that he misses that entirely is, I think, striking.
Yeah. So what I'm hearing you say is that what people are excited about is this capacity or potential to self organize, And that really comes back to the heart of, you know, public blockchains, you know, some of the kind of history of kinda community and ideology that they stem from in terms of the cypherpunks, but also, you know, I would say how they have evolved to, you know, much more kind of heterogeneous expressions from, you know, DAOs to DeFi to, you know, regenerative finance and so on. And I like that, starting point as well. I should say I'm an ethnographer, so I don't I try not to start from an ideological standpoint and then pedal that either. I'm trying to understand, you know, what's going on here through the observation of the practices of people, you know, in their everyday. What do they tell you and and what do they actually do? And so just for the listeners that might find this a new concept, there's a a paper, called from Polyani to Ostrom, and that talks about, you know, three main features of polycentric systems as multiple centers of decision making and overriding overarching set of rules. So one could think about that as, an underarching set of rules in the case of a an l one blockchain protocol. And evolution through spontaneous competition among decision making centers. And there's been some great, scholarship in the blockchain space recently. I'm thinking of Eric Alston on governance as conflict, but how through those interactions between parties or actors in the system, that's where, you know, decision making and other processes of governance occur.
Yeah. I think that's a good I think that's a good summary and good starting point. And it's and you underline the importance of, of dispute, of resolution, and the production of order. Right? That those are you know, then this is what we should assume, not this this isn't this isn't the edge case. This is how polycentric governance works is through these, you know, dispute resolution types of mechanisms. So I think that's really, and that's that's just a form of self governance. Right? That's that's how we that's how we get that self self governance, started. And it has the advantage on unlike, the network state is that it gives us a, like, a psychologically realistic model to think about. Right? Like, we don't have to so, just even step back a little further from, like, Ostrom's work in polycentric governance, it's part of this, shift, that occurred in sort of the last twenty, thirty years towards what's called neo institutionalism. And neo institutionalism moves away from the focus from the last century on rationality, like egoistic rationality, the kind of, like, rational choice type of strong rationality, efficiency, efficacy, these kinds of issues. And instead it replaces that set of concerns with, the softer stuff. So neo institutionalism thinks about legitimacy, trust, as is ordering, affect you know, commitment. Commitment is a huge issue for all of these, mechanisms. Of course, we have high voice exit dynamics. Right? So we need to think about that. We need to you know, people are there's there's commitment becomes a really central, key issue in ways that we all of a sudden we see rationality or even I would even say scarcity and, other, features we might associate with traditional economic rationality. Those all kind of, you know, fade away in many respects. Right? And and I think when you start to take a very significant and serious look at not just Bitcoin, which is the clear focus here. It's, you know, it's borderline that Balaji knows anything but Bitcoin. But when you start to look at the broader crypto space, you see less economic, rational rationality going on in much more socialization, and and just other intrinsic reasons for participation. Right? We can start to think about style. We can start to think about, subcultural belonging. We can you know, all of these are dimensions that, you know, on our new institutional model make sense and give us a lit you know, a a a reasonable story as to how we might see the formation of of a of a network state. The only one that we maybe would have be able to pull out of Balaji's work, implicit in some of that workaround as as mentioned before, world systems theory and this kind of stuff, is usually those accounts start from the division of labor. That's where Durkheim started with. And that's fine. I actually think that's a reasonable place to start with as a when we start to think about, the production of of collectivities of individuals, the division of labor is a good place. We then need to start to take class very seriously, and class is completely absent here. So, you know, it's not like it doesn't help us any, but I think for the the the researcher who's not committed to the network state, that's a a fine place to start. Yeah.
I think it's, it's interesting that you bring up, you know, Eleanor Ostrom and sort of, like, this commons, theory as being a potential just, like, alternative place to look at that is, I guess, yeah, I guess looks at similar types of questions that I guess the network state kind of tries to answer to or, like, the things that people are interested, who are interested in the network state, think that they're interested in act or what they are actually interested in, but then, like, I think fall into the trap of the network states. I think that's interesting because, yeah, like, as as you mentioned before, like, Balaji mentions DAOs, I think, like, two or three times, like, throughout the book. It's not really Not too many times. It's not a huge thing in in the network state when you would think that it would be. Like, I I would have thought that it was going to be talking about DAOs and smart contracts as, like, being the things to handle bureaucratic processes, but it doesn't at all. It it doesn't talk about, yeah, the sort of functionings of the state really much. And to your point about, you said, like, the new institutionalist framework, like, going at the more softer stuff and, like, subcultures, it's almost like he you can tell that he has such a poor understanding of subcultures, I guess, by being, like, whatever subculture you're in, we'll make a network state about it. You know? If you're in the anti FDA subculture aesthetic, like, that you'll just want to live your entire life in that type of in type of world. But I think at the same time, I don't know if it's like a just having an insane amount of wealth. Like, I imagine in his head, he's probably like, oh, well, if if I'm tired of my anti FDA network state, I'll just go and, you know, I'll be a citizen of my, you know, other network state of this other thing that I like. You know? It's
Yeah. Very strange. I I don't actually have a problem with this idea that we can just imagine everyone doesn't have everyone is rich and has no material challenges. You know? We I'm actually fine with that. We we can just we can just start with redigital or whatever, right, and and just black box the the fleshiness of my human reality. I'm I'm actually kind of okay with that. It's just that as as you sort of suggest, like well, he for instance, he he he come he has this, screed against, woke about woke ideology. Right?
Yeah. Woke ism has, infested every single institution surrounded being forced into wokeism. It's just it's just how I don't understand, like, what world do you live in where you believe this? I don't know. I don't know.
I mean, it's one I think that reads too many bad newspapers, but the the what what gets me is, he clearly just doesn't like woke people or whatever. Right? There's a there is the other thing on under implied in all Whatever that means. There's a hard boiled masculinity throughout this book. Right? Like, straight up. Like, women aren't part of it. I mean, he uses the masculine. He's he uses men, I mean, whatever. That might be rhetoric, but I think actually just reading it, you get the sense of a hard boiled masculinity. Like, this is testosterone dripping in testosterone this account. Right? Maybe I wanna be the charismatic founder of my own network state, guys.
Kelsey is a girl boss, actually.
The thing I don't get about wokeness and his his screen against it is that that actually, I think, is a paradigmatic example that he should, be, like, leveraging. Like, the woke ideology, whether you think it's, great or terrible, it's effective. Right? He's so he it's weird. He takes this highly effective networked media saturated phenomenon. Right? And which you would think would be the fabrication of, like, that's the basis of a network state, I would almost think. Right? That's this is the idea of we have these high alignments coming together. But just because he can't get over himself, he's like, well, we gotta dunk on wokeism. And I think actually the opposite. He should have been he should be saying, look. I think woke is stupid, but that's a great example of a proto network state. You know? It's people coming together for all these various reasons, and we could talk we could articulate what that all might be. Right? But he doesn't do any of that.
To be I think he does mention at one point, like, the wokes could, like, become decent or not that wokes are decentralized, but they could become, more more like the crypto people, basically, if if they had wanted to, if they knew how to do it. But, I don't know. I mean, it's definitely, in my view, like, he it's very he uses, like, the trick of threes, like, where like, here are the two, like, seemingly opposing forces out there in the world, and here is this third one that nobody's really thought about but is actually growing, and we should join it. And, you know, this is the only good option. This is yeah. You have the CCP, NYT, BTC, which is like, I don't know, just like a obscene oversimplification.
And this is what makes it difficult because it's hard to is when you're dealing with entities that are so abstract, can you use this it talks about left and right. But also the left is the is right, and right is left, actually. Exactly. And this should just be a a probably a good flag that we're not dealing with anything that's, attached to reality because we don't know what to make sense. I don't know how to make sense of this. Like, what kind of distinctions can I draw from something that is, like, it is and it isn't the same thing? Right? I mean, are are this just sounds like sort of tautological, opinion making.
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So coming back to this perspective about Ostrom and the idea of kind of voluntary organization rather than a coercive state and governance of the commons or or common pool resources, how do you translate that theory to a Web three or a blockchain based context? As we've pointed out, that hasn't really been done in terms of, like, what are the bits and pieces that create, you know, a network state? And one of my observations is, you know, the importance of context. Like, in the studies that Ostrom did, you know, they're very, very context dependent. So how do you pass that, I guess, to Quinn, and and how do you translate that to a blockchain based setting?
Yeah. That I mean, I think you're you're onto something there. The voluntary nature of it, I I think and I think we can draw on Balaji a little little bit here as he as he does recognize the the need for, you know, this alignment of individuals. That's what he calls it. Right? I I I think that's necessary for when we have these voluntary participatory networks of of people. But But we need to other we need to think about all the other characteristics that go into, human beings. So senses of belonging. Right? That's important. I I have to feel like I'm I belong to something. If we take that, social movement lens, we then can think about collective identity. Right? If I belong if I'm a a a boy scout leader, well, that's part of my collective identity. And and how do I go about getting that? Do I start with that collective identity, or do I get it later as part of some indoctrination process or or whatever it might be? You know, I mentioned before issues of commitment, and there's just there's just a whole host of, I think, social and psychological factors that are both and and the other important thing to keep in mind is we've got structural factors, infrastructural, issues, as well as intrinsic, you know, motivations. Right? And and and we need to have a story that can make sense of of both of these, right, of of of the macro and the micro. And there's lots of good work out there that does these kinds of these sorts of issues. And these are fundamental challenges that economists, for instance, deal with. And and and Balaji kind of, like, he sort of crashes up against this, and he realizes the I mean, he just gives up. He says, well, I can't talk about both structural and micro, and he just focuses on one. I mean, his his theory of history I mean, calls it he is very focused on micro history is what he calls. Right? And this is that story that he offers. He says, well, all we need to do is we just need to take facts or history and he doesn't even say facts. He says history as the some of nebulous abstract thing and put that on a specifically Bitcoin blockchain, and that'll that'll give us our verified history that can never change or whatever. I mean, that's the whole thing kinda doesn't make sense because, first, like, what are these facts? I mean, he's he's so critical of of mainstream media. Right? He says, oh, New York Times is nothing but lies. So at the very least, all we can expect a blockchain to record would be the lies of the New York Times. Right? I mean, that's, I think, all we can expect. But I think the more substantial point, what he completely misses, is a there's a subtle move. And I've written in the past about this, a few times. I had this article with with Bill Maher, on in King's Review that opens up the question around, basically, the production of facts in blockchain systems in particular. If we take a slightly more what's called a social constructivist view, less of a realist view of, of the world, it, we can see that what makes blockchains kind of so interesting with regard to history or to facts is that it is the blockchain itself that makes the fact. It's not like facts are external and then they get, you know, verified. They it's and and the two features, I mean, I'll just kinda point out to get this is a little bit heady, but, there's a there's a theorist by the name of Bruno Latour, and he has this idea of immutable mobiles. And I think, actually, blockchains kinda work like immutable mobile mobiles for the following reason. First of all, so immutable mobiles, the idea is that you've got this interaction between something that's mobile. It's it's circulation. It moves. Then, of course, immutable. It's it's it's it doesn't it's static. Right? And it's precisely the tension between there that that's how facts get produced. And so in the case of blockchains, well, immutable, we've we know immutable, that's the blocks. After you know, they they get sealed up and they become immutable. Okay. Check. We got that. Okay. That's great. And mobile, well, that's the economy. That's the circulation of the tokens. And what's interesting is through those that dual process, we produce facts because it after time, we just have to take that, you know, blockchain as authoritative. Like, this is how we get authority. Right? And so it doesn't actually much matter if that fact was, like, speak strictly speaking true or false or whatever. It just becomes true by being immutable and being by being and by being mobile. And there is loads and loads and loads of research in, science technology studies talking about particularly science scientific and technological artifacts as producing facts. You know, this I could, yeah, cite books and books that have have sort of demonstrated this very, reliable, robust, kind of result in science. And and if you have a passing sense of, like, modern science today, you get the idea. Right? I mean, most of the facts that science is scientists talk today are not things that exist out in the real world in any meaningful sense. We're we're we just produce them with the instruments that we we have. And so blockchain being, a a different social, form of very much the same kinds of things that we see happening from, you know, scientific labs, across to universities, to other in a spaces of innovation.
Yeah. I'm very much into that idea of, you know, blockchains as socio technical infrastructures. And, perhaps I'll add something that came out yesterday. I'll send it to to put in the show notes about, you know, Web three as as infrastructures. But you coined the phrase, digital common pool resources in the paper. Would you like to explain, that concept in a little more context?
Sure. The the insight is that, well, there's two insights. One, that I think it's meaningful to try to rehabilitate this Ostrom esque polycentric governance framework because it makes sense of a lot of the sorts of things that we see happening. Right? We see polycentrism in, you know, out there in the world, and we we can at least gives us some sort of dynamics to think about. Right? So so we've got, common pool resources that are inherited from this framework of polycentric governance. Now a common pool resource is, is is a unique kind of resource because it's not a public resource and it's not a private resource. It's sort of in between. And if you go to Wikipedia, you'll see this great little, you know, two by two box that, that shows how, goods can be rivalrous and excludable. And, common pool resources are they sit in the interesting category of let me see if I get this right. Being not excludable, but being rivalrous. This is and this is so we see lots of examples in the, you know, good old fashioned world of compostable resources, like a fishing stock. Right? So we have to manage the fishing fishing, the fish in the the the lake, because if we over extract them, you know, we're gonna have a population collapse and all these sorts of bad things. And, so how do we now make sense of that in web three? Well, things are different. First of all, we're dealing with digital, calm pool resources. They're not material. And so one of the big issues you have emerging with, traditional calm pool resources is crowding or congestion. Right? You if you have too many people coming to a resource, you, you know, effectively you can just bump up against one another. And so that's something you kinda have to manage. In the digital realm, of course, that's not an issue because these are just digital constituent things we've made up. Right? They're art we only have artificial scarcity. But what what we do have instead is, for instance, we have scaling scaling problems. So crowding associated with common pool resources becomes scaling associated with digital common pool resources. And I think there's actually a whole whack of other dynamics we can probably pull out and start to think about how the digital nature is different. So another important one is on blockchain systems, security monitoring and surveillance are effectively you get them for free. That is not the case in most, traditional polycentric governance situations. You one of the challenges, of one of the downsides about polycentric governance is that it's inefficient and costly because you every single little polycentric unit needs to hire their own surveillance team, their own, you know, monitoring and security, apparatuses. We don't actually have such the problems like that in blockchain. You know, we get all that security kind of for free. Now that's not it's not absolute security. The other important thing to kind of be aware of, and and actually, Balaji completely misses it, in his discussion of history, he seems to think that if it's on a, if it's on a a Bitcoin blockchain, it's anonymous and secure. There is at at this point, if you have if if you're relatively up on, deanonymization techniques, and other kinds of attacks on these blockchains, you'll appreciate that none of these are secure fully secure systems, and I can point to lots and lots of examples. Even just Wired magazine has been running articles, mostly, discussing the use of chain analysis. It's called a reactor tool, I think. And it systematically deanonymizes and clusters, supposedly, pseudo anonymous accounts and tracks people down. And they're making arrests all the time, around the world. Child porn rings are getting taken down. Money launderers getting taken down. Terrorists are getting taken down. I have an old joke. I spoke with a FINRA intelligence agent years ago, like, 2014 kinda type thing. And I asked them what they thought about Bitcoin at the time. And he said, you know, Quinn, we don't we don't have a problem with blockchain. We just think it's prosecution futures. And and he turned out he's right. He was right. Today, it is. They're now they're just it's just prosecution futures. Right? And, you know, know, obviously, that's a comp there's a complicated worry there. There are systems that are more secure and less secure and these kinds of things, and we can, you know, make systems secure and we can improve the security and all these kinds of things. But I think that's one of the important ways that we're dealing with a a distinctly different, infrastructure. And so we need to, take the lessons that we get from common pool resources, but update them for a new digital environment. And I that's just a I think a research project,
that we all sort of have to face. Yeah. And if you're not planning to do anything illegal, you can just look at the cybersecurity kind of vulnerabilities, you know, subscribe to rec to r e k t and and see them kind of come through daily in terms of hacks or things that have occurred just of different genes.
It's a weird, like, I don't know the his I think he called it crypto history. It's like this new form of technical truth, I think. It just comes off as very, it's a weird, like, STEM STEM y thing, like STEM superiority, thing that I get sometimes. Like, there's this weird, I think I've talked about it before, but like a weird kind of, like, aestheticization of, like, oh, whether you studied STEM or whether you studied social science that I find very silly. And, yeah, he's definitely sort of coding coding STEM people as being, like, freedom fighters are gonna progress the world into the future, which has a, you know, a right wing tinge to it, of course.
I don't and I don't have any I I actually, you know, I I think, drawing significant focus on, you know, technical infrastructure is really important. I I don't think that's wrong. I would actually be much more satisfied with his book if if if he had of, went and did, you know, a rigorous empirical or statistical study of these kinds of networks.
That that's a But that would that would actually That would that would that wouldn't be have that wouldn't have, sold so well in the crypto world maybe No. Amongst crypto people. So
Yeah. So maybe, coming back to what you call a progressive Web three, you mentioned that, it must address three much more, difficult criticisms. And, you know, these are not really issues that are, covered in the network state, so I'm interested in your perspective of them. And then perhaps after that, we can talk about, you know, how existing Web three also, even though it's not a network state, you know, doesn't necessarily live up to this in all respects. But you talk about financialization, assetization, and quantification. Number two, commodity fetishism. And number three, digital inequality.
Those are just three examples. I think that we need to focus on if we want to imagine a progressive web three. And why I why I highlighted them is because they also they replaced three criticisms that you typically see. One, you see a criticism of technology, not in Balaji, but, people like, Columbia, David Columbia. He, you know, he says, well, or David Gerard, they'll criticize. They'll say the the technology is not ready or whatever. You know, that's a fine criticism, but that's like a you know, these that's just salt and a a version upgrade. Right? So that's not a real criticism. Culture. Another one is culture or or or, ideology or beliefs and things like this. Right? Many people who are kind of new to the space, you know, maybe they heard about Bitcoin just a couple years ago or something like that, really failed to appreciate the tremendous change that has occurred over the first decade. Now I actually think Balaji is a little bit, unaware of some of this change as well. You know, if if you've been involved in Web three in the last year, it's unrecognizable. The people involved, their interests, the, interactions, that's completely unrecognizable to when I started investigating
Bitcoin in 2012. Yeah. I wonder if he participated in a DAO. I'd be fascinated to know, like, what DAOs is he a part of where he's in the forums
and voting. I'm sure he's never
he's never I mean, I imagine he's he might have, like, voted, you know, with a bunch of tokens that he got from, venture capital investments or something like that. But Well, so this is a good point of so,
Kelsey, you asked me to sort of think about, some of the challenges. Okay. So, may maybe then so I replaced those three. So technology, culture, and, gosh. What's the third one? I mean, it doesn't matter. The the point is that we have these more substantial difficult political economic challenges. Right? Inequality. Everybody if you look at, who owns crypto today, you know, it's really, really highly, you know, inequal. Right? How do we solve that? Well, there's lots of potential design solutions. There's, you know, whatever. There's and we can think of, there's progressive coins out there that are trying to do neat stuff. Some of it's misguided. Some of it's awesome, whatever, and other kinds of, of issues. Thinking about commodity fetishism. So we tend to think that the thing itself has some value in it. Some of this is that gold bug kind of stuff that we see with Bitcoin. You know, and and there's any number of political economic kinds of concerns we can, we can think about, and we need to we need to sort of resolve these. But the real the reality you you mentioned, okay. So how do how does Web three actually do this? This isn't actually what we see quite with Web three today. Web three is very inchoate. It's often, you know, people say, oh, it's just a subreddit with a with a bank account. And that's not, like, far off. We're not necessarily dealing with super sophisticated governance here. We're not dealing with super sophisticated dispute resolution. We're dealing with a whole bunch of different attempts at it, and I think in that plurality, in that so there's that's where that vibrancy comes. But the reality is is somewhat different in Web three. And here's a a fact I would kinda like to throw out there to think about. If you look at the voting, on chain voting, go to snapshot.org and look at, the sort of who do does all the voting, you have these delegated voting, mechanisms in in web three. So, I can take my tokens, my governance tokens, and I can send them over to Kelsey, and she can, you know, represent me in some sense or whatever. In web three, what we actually see is a massive, centralization and conglomeration of delegate voting focused on one particular entity, AZ sixteen, the Silicon Valley venture capitalists. They have a massive, presence in web three space and the gov and they they are the governors. No. But they're decentralized. Yeah. Right? So I sort of tell the story about, like, you know, this is, like, it's prefigured. This is something like a web three. We're not we don't have a progressive web three. We have the makings of a progressive web three as we believe, but we don't have one. Not today.
Yeah. Yeah. I agree. I've actually written about that as well in Charles Babbage interfaces. I did a ethnography, which was awesome with an amazing community called Friends with Benefits that does Web three for creatives. But, yeah, their community was in this kind of, yeah, moment of sort of realization and discussion about the role of of Silicon Valley investors in in, yeah, buying up tokens, which is really interesting. Yeah. And just to your point about sorry. Go on.
Well, I just wanted to highlight also Balaji's I know you talked a little bit about this on, the the the episode with, Trima and and Glen and Glen Weal. The idea of this, of this need for a founder. This is something that it's really clear that Balaji is playing from the same book playbook as as a z 16, and and and, AZ sixteen has this influential, blog post called, is there a decentralization playbook? And it's very fascinating to read because what you re realize by by reading is they say, okay. What you need they they sort of tell tell the story of, like, so you wanna start a DAO or you wanna start a, like, a decentralized crypto or whatever. The first thing you're gonna run into, as we all know, is, like, how you're gonna get the users and how you're gonna keep the users and how you're gonna get, like, some strategic vision and how you're gonna get all that energy and all that kind of stuff. And they well, what you need is a a core founder who needs to get some venture capital and then progressively decentralize. And that's an interesting model, but by no means is it that the only model or even remotely the best model. And more to the point, we actually have lots of anthropological evidence that that's not how people come together. They never have. Have. And and a lot of, like, what Balaji has is he uses words like tribes and things like this a lot. Right? Has this imagination of this Hobbesian sort of world where we have humans running around with sticks and, you know, they're hunting dinosaurs or whatever they're doing. No anthropological record indicates this. Right? Humans have always been social. There's no such thing as, a a human that's active from that. And so that's to say, we don't need we don't have there's not that's not how nations bill are built. They don't start with some founder who's like, I'm gonna stand up and speak for the people. Nations don't start that way and other collective collectivities don't start that way. The history throughout the only ones that do are fascistic or, you know, otherwise totalitarian. And so that's the model he's interested in, and he's interested in the one where he has this one central figure. And but that's the aberration. That's not the normal.
Yeah. What is absolutely insane to me, actually, because I'm writing a piece for Outland at the moment, but, I I did a little bit of research. I didn't I have not really read Hobbes much at all, but I found out that it's it it's just, like, very ironic that he would actually use, like, Hobbes, like, to for for this concept because Hobbes Hobbes had, he he wrote that kind of, like, this brutal or brute situation or state of nature of, like, the war of all against all that, like, humans were, like, naturally, like, animalistic, and they would kill each other. But the only way that to sort of prevent that is by a strong undivided govern government. And so he's like he is really into libertarianism. Like, he's spoke I mean, it it's clear in other things he's talking about and throughout the book, but, like, fundamental to his framework is, like, this guy, the philosopher who is, like, really, really into big government, like, really, really into the states and probably like loves the FDA or whatever because it keeps people from, injecting themselves with weird, potions or something.
Yeah. Well, he probably hates the FDA, but I actually think the Hobbs the I was saying Hobbs Hobbs probably loved the would would love the FDA. Yeah. Yeah. Yeah. Yeah. Absolutely. Yeah. The the turn to Hobbs is probably because Balaji is either scared of the possibility of just, like, masses self organizing, or just doesn't see it as realistic or something. He had a failure of imagination, one way to put that. The Hobbs story is really kind of a problematic one because, you know, it it it it it requires, this imagination of a situation where, we really are stuck. And the only way out of being stuck because we're these rational egoists who are gonna murder each other, a very sad vision of what a human is, is is to is to give away the one thing that I think Balaji values the most, our liberty. Give it away to to the sovereign. Right? And and to go back to my sort of earlier point around point centered governance, we have lots of examples, that show us that that's not necessary. We don't need to assume, this characterization. And, you know, we don't even need to be abstract or, fancy in our theory about it. We can actually just point to lots of good examples where, we have collect it's coming together, and there's no there's no, Leviathan
at all. And, Quinn, to that point, we don't even need to look beyond web three for those examples of polycentricity. You know, for example, we're already seeing in DAOs, overarching kind of governance layers and sub DAOs with that you know, there's multiple sort of centers of decision making power and governance occurring, you know, in the interactions between, you know, different, you know, functions in the system. But, you know, I I would also point out that they're not perfectly efficient or effective in their current form either.
Yeah. I think that's right. I don't have anything other other to say that. That that sounds absolutely
right. I think you nailed it. So the next book could be going and doing more empirical research on these things that are actually already occurring, which we're working on. Yeah. Yeah. Well and I think
that goes all the way back to sort of where I and that that's one of the things that makes the network of state so frustrating to talk about is it is clearly a piece of rhetoric and ideology. And, like, that's fine. I I I, my essay on on progressive three is also meant to, support a a a vision of the world. It it it has a rhetorical component to it. So So I I don't have any any problem with that. It's, I I guess the my what what I find so dissatisfying, about the book is that other than a few references to some of the things we see with Bitcoin, but even there, we don't see, you know, we don't see any of the major kinds of discussion points that we would have expected to see even with with Bitcoin. We have very little empirical grounding in Blockchain and crypto in the network state. Like, he he talk he's talking about the interaction between Tesla and the Chinese state and New York Times and The United States and woke people and all these kinds of things. Right? But very rarely does he end up talking about, you know, for instance, the Ethereum merge, a massive, unprecedented success story in governance and change management such that I mean, it's really impressive what the merge did. It reduced the energy consumption of Ethereum by 99.95%. They swapped out effectively the engine while the car was driving down the road. That is, you know, whether you think Ethereum's great or terrible, that's just something to think about. And, like, that's that's very impressive. And then on the on the flip side, of course, we've got Bitcoin continuing to sort of, you know, flounder and not really be able to get their governance sorted out and, you know, and and really respond to the kinds of criticisms that they they need to be responding to. But none of this is in this in in the network state. Like and we don't even have analytical or even intuitive, like, on ramps to have these discussions. Like, I don't know what I would how I'd be able to talk about the scaling debate in Bitcoin, and vis a vis the network state. He doesn't offer us any, sort of story there. Right? There's there's no certainly no design patterns for that. But moreover, there's, like, there's just hardly no mention of it. And so I think that's kinda like the, the really yeah. It's a very frustrating part of part of the book, and it it makes it just so much wishing and hope hopefulness. And I would much rather read a book that actually talked about, the reality of the situation and then offer some, you know, suggestions and points for how we maybe we can get to a a new world. And in in a in a network state, some of the parts are good. I I I think it's interesting to think about, land, actual materialities. I think it's interesting he talks a little bit about how one can how you can have all these different kinds of network stages, archipelagos. That sort of sounds like a polycentrism. We've got alignment of interests. I think that's interesting too. But, none of these have anything to do, unfortunately, with crypto, and so so we're kind of a bit of a loss. Yeah. I think,
the network states definitely sort of like, what what it brings to mind, if I were to see the concept, the network state written, you know, in golden letters in front of me, I would, like, immediately come to mind, thinking about digital governance, like using networks like the Internet for digital governance, that sort of solve this problem of of the nation state being kind of, like, both too big and too small, we talked about in in in the first episode, for a lot of different types of problems and trying to find, you know, some some kind of medium or some kind of, yeah, just alternative to to answers for those really big problems that that require a lot of coordination and a lot of, thinking about solving. But I think Balaji is so obsessed with this with with exits and is so obsessed with kind of not having governance. I think maybe his position as a very, very rich person, he probably finds governance as something that's very annoying. He is probably wanting to deal everything, deal with everything that he probably usually does with his with his with his money. And when you have that type of capital, then you are able to do so.
I just wanted to, highlight something that sort of slipped my mind. I think it's a very important feature of more generally polycentric governance that we should and it's the kind of thing that we should see in Balaji's story, which is the following. He talks a lot about, you know, the evils of the Soviet, you know, empire and all these sorts of, thing. But what he misses is one of the central challenges of, or one of the key challenges of central planning, as we sort of we sort of know, is that, when you have a hierarchical model, you end up with a kind of an epistemological issue. So the centrally planned nation state has, a lot of has masses. It has all the citizens. There's all these mines at the sort of edge of the network, and they all have private information. I have private information about the road condition on my street, that the people over in city hall or even further, the, you know, federal legislative buildings in Canada, they there's an epistemological gap there. They have no understanding of the road the condition of the roads at at at, you know, at my house. And how can they? Because there's just too much, hierarchy between me and them. And this is a limitation. This is a limitation because in our highly complex world, you know, the a world that embraces networks, we, in fact, have lots of interesting opportunities to, fix these this this epistemological challenge, and we can kinda turn it on a head or his head and go bottom up. And so this is the idea behind self governance. If we are able to, use some information infrastructures, in particular, we've got markets and auctions and and other, you know, kinds of polycentric governance mechanisms that we can support, we'll be able to or the idea is, collect the private information from the edges of the network and then put them into these little polycentric, interlocking multiscalar systems. And that is how we can get not centralized top down authority, but rather bottom up authority and bottom up, you know, awareness of the individual preferences and context that people, live in. And and and I think I would think for Balaji, being a strong libertarian, it's emphasis on those individual preferences that I think should be such a compelling reason to discard that hierarchical model. Be because my preferences necessarily are not gonna be taken into consideration by the federal government because they have no way of knowing my preferences. A bottom up polycentric model, it does. There is an opportunity for me to express that. I can express it through my governance token. I can express it through lots of different ways of belonging and engagement in these sorts of networks. So I actually think, like, a libertarian ought to reject this model on epistemological grounds alone. It's it's it's rooted in the nineteen fifties, which we just know is a world that, one, we don't live in anymore, two, just kinda wasn't too effective. Yeah. I hope the libertarians listening, take that to heart.
Yeah. Thanks so much for coming on. I highly encourage people to look into the progressive framework for Web three that you lay out in your paper and give it a look, especially if you are, you know, someone who wants to, like, move crypto away from kind of the the mess that it is at the moment. There are some considerations to think about. You know, if, Quinn's paper is the progressive framework, then Balaji's is certainly a kind of right wing libertarian one. And, you know, in a world that covets decentralization, maybe it's time that we start thinking about different centers of of thinking or logics, to to apply this technology in ways that, yeah, just would would sound better than a network state at the moment in my eyes. So, yeah, thanks so much, Quinn, and thanks a lot, Kelsey, for for co hosting with me. Grateful for the conversation. Thanks. Thank you, Beau.