It is no exaggeration to say that we are on the verge of an epochal change within society as we know it. As technological discoveries take their course, humanity is discovering that many of the myths passed off by presumably far-sighted thinkers were none other than the ruminations of individuals consciously or unconsciously praising a deus-ex machina capable of directing people towards the shores of prosperity. Despite this entity has shown its voracious and parasitic nature, over and over again, there is still a substantial number of people who reject the idea of its departure. They considers it premature. Is it so? The mechanism that has been instilled in society is now driven primarily by fear. Fear of losing a job, fear of losing a pension, fear of losing the subsidy, etc. But also from greed: living at the expense of others. These feelings have played and play a fundamental role in the current general thought that allows an openly fraudulent and criminal apparatus to get away with it. What would be the state, however, without “scientific” justifications to support its existence?
Politics has never been a game of power and rhetoric at its peak. It has served to darken reality enough to allow an oligarchy of individuals to pursue a single goal: to live to the utmost with minimum effort. The game of mirrors put in place was used only to create an alternative reality to the real one able to convey a simple message: without the support of a central apparatus, nature would have run its course. Although unconsciously, the first social Darwinist was Thomas Hobbes and it is this aspect that most often takes hold of the masses: the fear of death. Without the existence of a savior who can dispel the clouds of earthly uncertainty, the need of most people to find comfort in difficult times is so oppressive that they want to get rid of it. Not everyone is able to bear such a weight, however ephemeral it may be, so they willingly give it to the first barker who can capture their attention with four words: I have the solution.
Really? To submit one’s own judgment to that of others is not the solution, it is only a way to shake off worries and responsibilities. In the case of the state apparatus, the existence of a delegation to a hierarchy of persons — presumably endowed with a superior intellect capable of settling those uncertainties that a “normal” person would take much longer to solve — would be justified. This would jeopardize everyone’s life and well-being, creating injustice and sufferings. Consequently, it is better to entrust the task to those who have a clear vision of what to implement. It was at this that social Darwinism said to remedy: waste. Hobbes laid the groundwork, Malthus erected himself to a prophet of misfortune, and finally Darwin sealed both positions. What is the adaptation to the abuse if not a reflex conditioned by this mentality that invokes the submission of personal judgment?
Only the state is able to eliminate unplanned waste. Where do they come from? In natural processes and in the free market. Why leave to chanche the responsibility of those processes that are highly important for human survival? We need planning, we need a plan. Free trade is enormously wasteful. In fact, free trade is the archetype of all free market processes, and the free market defenders, from David Hume and Adam Smith to Spencer, had used free trade to defend the idea of market freedom. Therefore, the central planners conclude, freedom in the market is a great social evil. It would be like leaving the progress of society in the hands of “inexperienced”. Better to have competence. But who judges it? Five-year elections? Piece by piece, the free market has been dismantled by the theoreticians of central planning, subverting what society has been pursuing since its beginning. Successful mechanisms such as the profit/loss system have been subverted by the prosopopoeia of those who are presumably the bearers of economic prosperity. With the prevailing social Darwinism, the road to a never-ending world did not seem so much an illusion.
The legitimate purpose of state interference would have been to resolve unprofitable activities! Think of the services run by the state, which offer lower rates than those of private companies. People have been taught to look suspiciously at those extremely lucrative industries, since their financial conditions show that they are conducted too much in the interests of managers and shareholders and too little in those of the public. This has become the guiding principle of bureaucrats and companies run by the state: losses testify to efficiency. Do you understand the schizophrenic dualism we face? But the real question is: how do we manage to live with it?
The first step is to affirm the advantage that you have to endorse this path: the central planners are working for us all. They are the true altruists. As pointed out above, submitting one’s judgment to shake off overwhelming concerns and entrust those able to bring them, was considered the acceptable way to avoid a dreadful fate. Nevertheless we wouldn’t have to worry about this disparity, because thanks to public education this disparity would have been overcome. Public education would have made the distribution of knowledge much easier. In other words, central planners, better represented by scientists and teachers, would have raised the level of knowledge and consciousness possessed by the masses. Central planners would have worked to produce a new evolution, and the masses would be allowed to participate in this elevation. They wouldn’t perish in a natural evolutionary leap. There were two ways to elevate man:
- scientific propagation of human beings (artificial selection);
- the rational change of the environment, which means an increase in human knowledge.
Public schools are therefore fundamental in this evolutionary process. They are the agents of change in the new evolution. This means egalitarianism. In the end, would the masses have reached the pinnacle of knowledge and become equal to the central planners? Obviously not. Here is the perennial ambivalence of the social theory of these “evolutionists”: society needs planning and direction, and “society” is mainly composed of the “masses”. They need direction. They need a guide. They cannot resort to their plans and put them into practice through the free market. What is at stake is too important to be left to the incompetent masses, acting as individuals in a free market. The masses are not smart enough and Aldous Huxley understood him very well when he wrote Brave New World. He described the techniques used by certain future states to make mediocrity more comfortable: drugs, orgiastic religion and total control. The goal of equality of total education is a myth. So why such an emphasis on public education? To exercise control! Not so much on what is being taught, but on what can be excluded from teaching. This provides unconscious control on the masses.
After all, it is repeated that central planners are on our side. It was the task of believers in central planning to spread this gospel, putting the proletarians at ease, making them believe that there would exist a Garden of Eden for all of them, as soon as the evolutionary leap would come true. That’s why Gary North defines Marxism as a “religion”. That’s why I call central planning a religion. The divinization of its actions and the conveyance of its precepts through a priestly caste (e.g. mainstream media, schools, etc.), offers believers salvation through cognitive evolution capable of elevating them to the rank of “chosen ones”. But only by following the teachings conveyed by central planning, which, however empirical evidence shows are wrong, are actually “right”. This is despotism. The result, under our eyes, now, is a totalitarian state.
Despite this, the greatest strength of the totalitarian state is proving its greatest weakness. The obsession with central planning has planted the seeds of his own disappearance. Why? Because it has made something of its own that hasn’t invented, so it has no control on it. For example, inalienable rights (life, freedom and the pursuit of happiness) are “discoveries” of moral philosophy and not dictated by authorities, and therefore can be used to evaluate (and possibly reject) authorities and states. They are necessary to create a real consensus, whereas property rights are the product of consensual agreements themselves. Their power to bind is based solely on the power granted them by individuals. These rights are the product of “rules” that must be agreed upon before entering in a community, and we can imagine many different types of rules and organizational structures that would be morally unexceptionable, even if functionally different. In other words, a property right obliges other members of society to comply with certain rules.
Their assignment is largely arbitrary. Take, for example, the sharing of property rights between livestock farmers and farmers. Should the cattle breeder be allowed to leave his livestock free and farmers should be free to fence their land, or should livestock farmers be forced to fence their own space in which the cattle graze? Both rules would work, but it is important that they be clear enough to allow people to formulate expectations about how their neighbors will act and what the community will be able to impose. Furthermore, once people begin to rely on rules, such as buying land for a specific purpose, sudden changes to the rules are perceived as a violation of the contract and would trigger the need to be compensated.
Socially defined rights such as property rights are virtual by nature. If this is true, then how do we know who really owns what? There are a number of mechanisms: for many everyday items, owning an object is the only indication of ownership (for example, there is no national register on pencils that tracks ownership). For other items, there are official documents that can be used as proof of ownership. Or the property could be registered by an authority in a centralized database (e.g. land). Despite this, property rights are much more than the property of an object; they are rules on use and access. For example, an owner of a piece of land could sell mining rights (the right to access and remove certain resources, such as silver) while maintaining land ownership. The owner of an apartment could rent it and renounce his right to enter and use the apartment for a certain period of time. Therefore the property rights don’t concern only the registration of the title deeds; they require us to register who has been granted access or use and how.
At least three things are needed to create a usable property rights system:
- a way to create socially defined rules that are clear enough to be understood by everyone and sufficiently coherent to rely on;
- a way to register these rules and who owns which rights, in order to verify that they are used as promised;
- a way to enforce the rules.
The rules that constitute property rights must correspond to the actions taken in real life. It makes no sense to have a formal set of rules if they are ignored. They must be compatible with the way people organize their lives, since there are local habits and formal standards: a completely different set of rules will be difficult to understand, while formal standards (which can be easily understood by most people) may not capture nuances locally. How can we extend the availability of property rights to the rest of the world? Is there anything that can help us? There is: the blockchain. But what makes the use of a blockchain different from the simple use of a state database? Is there something more in the blockchain technology of simple data digitization?
Blockchain technology can allow transfer of ownership titles without the use of a central authority. The transfer of the title of ownership can take place without an intermediary, in a completely decentralized way, with the use of simple smart contracts. No state employee has to archive and update data, and title ownership can easily be verified with digital signatures. This is the essence to undermine, once and for all, that ridiculous statement dating back to Hobbes that only the state can make contracts credible and reliable.
Smart contracts are a new mechanism to make promises respected, allowing us to honor commitments taken with each other on the blockchain, including commitments with strangers in other countries. Smart contracts are currently applied outside the law, outside the legal jurisdictions, without their application by the state. Because our legal jurisdictions are primarily linked to geographic location, and many countries have fragile or unreliable legal institutions, this represents a tremendous social progress. It means that, given an Internet connection, someone from one of the poorest countries in the world can do business and make credible commitments with someone in Europe as easily as the Europeans could do with him/her. By creating trust where it was none before, the world will be open as never before.
The idea of smart contracts was born in the mid-90s, when Nick Szabo published a series of articles that explained their potential. Like a vending machine, smart contracts are comparable to machines that distribute the application of something. Instead of using physical machines, smart contracts are literally informative code that runs on the blockchain, a kind of open ledger distributed on the computers of thousands of users and that has no central authority. Contrary to their name, smart contracts have nothing to do with artificial intelligence. “Smart” refers to their quality of application. They are immutable, which means that the default code can not be changed. For the purpose of the contract, this is a good thing, since it is impossible to break a promise if you don’t have the chance to do it.
However, this immutability is a special challenge for programmers. All the code has some bugs and the code that cannot be changed must be written carefully to try to minimize the number of errors, since bugs cannot be corrected when done. That is to say, processing a smart contract is tantamount trying to write computer code for NASA: the correct form is very important and the consequences of wrong code can be disastrous.
A smart contract could be as simple as transferring money from one account to another after a certain period of time, or it could be very complicated. However, one of the main limitations is that smart contracts can only transfer digital resources defined on the blockchain, such as cryptocurrencies. This might seem like an obstacle since cryptocurrencies aren’t widely accepted yet, but transferring money under certain conditions is all that makes up most of the contracts today. Also, contracts that include actions with physical objects can potentially be enforced by putting in place obligations that will be lost if the promise is not maintained. Another limitation is that smart contracts cannot access external information unless they are written on the blockchain. For example, a smart contract alone doesn’t have access to meteorological data. For example, to create a temperature contract, there must be a third party picking up data from a weather API and writing it to the blockchain in a way that is accessible to other users.
Although the smart contract technology is still in its infancy, it allows us to engage with other individuals without the supervision of a third party (the state), something that many, for hundreds of years, have deemed impossible. In the coming decades, smart contracts will give people all over the world the power to make agreements between them and thus transform the lives of millions of people. The Internet, which many have initially compared to a “state of nature”, has managed to generate respectability and reliability through an evolutionary process that is rewarding freedom. Social Darwinism is a hoax. It has always been a hoax. Hobbes’s arguments about individuals were a hoax. Man does not adapt, man transforms his surroundings to try to live better. You cannot have control over what you didn’t invent in the first place, and central planning didn’t invent anything. That’s why it is losing. That’s why the free interaction will always prevail in the end.
Pandora’s box is now open, but the troubles are all for central planning.