This writeup is a response to John Palmer ‘Digital Nation States and Digital Political Parties’. He describes how new technologies like Crypto and VR can possibly change the way governments operate.
Politics vs. Business
John points out that the current way of how the (American) government works is exceedingly slow. The System simply doesn’t allow quick changes if the present strategies don’t work, or a better solution occurs.
This Problem doesn’t take place in the business world. Since everybody can put there idea into action, other people and businesses can constantly “vote” with their capital and choose the best idea.
Constantly testing new solutions, so called “A/B testing”, is not possible with only one government in charge.
I’m on John’s side, there happens so little “A/B testing” in a government. Especially if elections already taken place. One possible solution would be that elections occur more frequently. On the other hand, politicians would focus even more on being reelected than actually making people’s lives better. Another (alleged) solution is to distribute the power between members of different political fractions. But as we find out in the next part, this makes A/B testing even more complicated.
Why governmental Innovation is slow
Next, he points out that even if the government is willing to test new ideas, sometimes they aren’t allowed due to it’s own system. The two-party system in America often leads to a deadlock in Congress because the opposite parties can’t cooperate.
But to an extent, slow can avoid dangerous paths.
This situation is even worse in some European countries, especially in Germany. There are even different parties within the government cabinet in charge. So its even harder to change things. But I would disagree with John’s comment on the Lindy Effect. Since we simply want to test new ideas, “dangerous paths” would be avoided before a huge negative impact occurs. Later, he even points out “in the business world, the safe, middle-of-the-road paths never come out on top”. Other question: In the business world, do dangerous (negative) paths ever come out on top? Sure there were some companies which didn’t had the best intensions, but as Dr. Jeff Hester said: “There is no such Thing as a Perfect System”.
Enabling Faster Progress
In this part, John shows how technologies like virtual reality, augmented reality and cryptocurrencies are providing digital infrastructure with the potential to overturn political structures.
With Ethereum, we can create Decentralized Autonomous Organizations (DAOs), where in example, everyone who spends more than 10 dollars will receive a voting token. You can simply join other parties (DAOs) and support their plans, only the former token will be lost.
In this way, A/B testing will be much easier, even starting your own political party would be far more unchallenging.
With virtual reality, hundreds of governments could be tested simultaneously. People could go online and see how it looks like.
I think John has some interesting thoughts there, especially the parties organized as DAOs will be a real thing in my opinion. A side effect will be that people will “vote with their feet”, as Balaji said. Also testing governments through VR seems possible, but I think it’s still a long way to go. People tend to be open for any new form of entertainment, but going from “I’m going to watch a film on the new VR Headset” to “I choose my political party by looking at a possible outcome through my VR Headset” needs a lot time for most of the people.
Software Eating Currency
At the end, John maps out the future for geographically based currencies.
Option 1: they are lagging behind, and people will use universal digital currencies like bitcoin
Option 2: will be even more attached to geographic areas, since everybody will be able to create their own currency. This will enable super efficient markets on a micro scale.
I totally agree with his last two sentences: “Either way, software is eating money. And hopefully government.”. But when it comes to the future of geographically based currencies, I think Option 1 is far more likely than the second. But I need to say that I’m not a Bitcoin maximalist. I strongly believe DAOs, community/voting tokens, etc. based on Ethereum will be a big thing, but when it comes to exchanging value (buying products), Bitcoin will be the main way to go.
But I’m looking forward to be proven wrong!
Big shout-out goes to John Palmer, for having this thoughts already in 2016, truly visionary! Thanks to 1729.com for providing me the input.