Blockchain and the material foundations for socialism

You may have heard of bitcoin. But you may not have heard of the underlying technology that powers bitcoin — the blockchain.

The blockchain is a genuine technological breakthrough — it enables reliable and secure economic transactions between individuals without the need of a trusted intermediary, or third party.

The (long) history of money is deeply entwined with the state and taxation. The state is a supra-individual institution that enforces the reliability and security of its currency, and also demands payment of taxes in this currency. In this context, the state is big brother par excellence — it’s the ultimate trusted third party.

Some economists, such as Chartalists, looking at this history, have concluded that money (with determinate value) is impossible without the state. Bitcoin is an important counter-example.

Bitcoin and blockchain was invented by libertarian computer scientists. Libertarians (who should really be called Propertarians) dislike the state. With bitcoin they successfully demonstrated that machines (computers/algorithms) can function as trusted third parties in economic transactions. The state isn’t needed.

The majority of the bitcoin/blockchain community is libertarian and/or profoundly pro-capitalist in outlook. They are blind to the essential act of theft that is at the heart of capitalist property relations. So much of the energy of the community is focused on making existing property relations more efficient.

But it turns out that there’s a great deal to say about the potential application of blockchain-like technologies to building socialist institutions. Here’s a talk I gave on this topic in 2015 in Oxford, UK (which, I would like to add, was before it hit mainstream attention …)

4 Comments

  1. I had a thought tonight about algorithmic socialism, searched for the term, and found your video and blog. I’m still working out the rules / scenarios for my system, but the gist is:
    – An open and agreed upon algorithm responsible for assigning labor to available and willing people.
    – No currency, no trade. Basic needs (food, shelter, power, medical, transportation, etc.) should be high priority and in abundance.
    – People choose their preferred tasks. Task definitions, safety, and a person’s expertise level decide how many workers are needed or who can lead, guide or teach the less experienced. Change your preferred task at whim.
    – People submit requests for tasks / things they want or need.

    Thank you for your work as it has certainly ignited and encouraged me to keep brainstorming.

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  2. The current mining mechanism is based on the power of CPUs or GPUs, and this itself is an origin of inequality. Iā€™m thinking of a mining system, i.e., proving that all transactions listed in the current block are valid, in which all people have potentially equal opportunities. The specific property of Labour is that you can only work for some hours, and all human beings are equal regarding this. Maybe we should replace this with some human mental-labor, or better mental-work, like checking the validity of random transactions.

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    1. Hi Mehdi,

      Thanks for commenting! Yes, POW or POS approaches to blockchain validation necessarily produce inequality. However, manual checking of validity by humans defeats the purpose of the blockchain, which is to eradicate or minimise the reliance on trusted third parties. So, inequality production is a problem, but I don’t think your suggestion, as it currently stands, is a solution.

      Best wishes

      Ian.

      Like

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