In order to understand the proliferating hacker ethos at the beginning of the twenty-first century, you need to go back to the 2008 financial crisis, its fallout, and the ways it shaped the convictions of people who suffered from the crisis.
In 2008, the world’s financial system collapsed. It started with the subprime mortgage market in the United States, and soon the whole shaky structure—built over the preceding three decades with deregulation, speculation, privatization, derivatization, globalization, predation, and downright fraud—was coming down. Major banks faced imminent shutdown, housing market bubbles burst, credit seized up. People lost their jobs, their houses, their retirement savings, their social security nets, and their dignity. Millennials came of age and joined a hard-scrabble labor market in which the workforce had been made intentionally precarious by capital.
Governments bailed out banks by distributing massive amounts of public money and by printing new money that went directly into the hands of financial elites to further their malefaction instead of into rebuilding the real economy. The worst economic downturn since the Great Depression ensued, and for most people it did not end. In Europe, governments reacted to a debt crisis by enacting austerity measures that punished their own populations instead of the bankers and speculators who had manufactured it or the corrupt elites who had made off with the cash. Financial institutions were allowed to turn whole nations, such as Greece, into debtor’s prisons.
At the moment of collapse, Barack Obama had just been elected to office on a platform of transformative change. There was overwhelming support in the American electorate for radical financial reform and the prosecution of bankers. Even the bankers expected it. Yet Obama—the candidate borne into office on a wave of collective intelligence affirming “Yes, we can!”—hesitated. Uh, no, we can’t, he demurred.
People were seized by the outrage of it all. Their eyes were opened to the growing evidence that democratic governments did not carry out the will of the people, no matter who was elected. Obama could have chosen, like Franklin Roosevelt before him, to save Main Street. He could have tried to reinstate the regulated capitalist system and productive economic base that created and sustained a large middle class in America in the mid-twentieth century. But instead, he chose to rescue Wall Street.
Within a few years, the perpetrators of the crisis were profiting from the disaster and piling up an even higher stack of derivatives, fraud, unpayable debt and financially engineered bubbles. There was no regulation of “moral hazard” for them. They were not shunned in the circles they moved in. They still had the support of the technocratic classes that had served and enabled them. To the predators and their enablers went the spoils. People hadn’t even begun to understand how the large-platform monopolies that were forming at the time were further changing the power structures and social contract of the mid-twentieth century. But they had come to understand that although their Western democracies might be democratic in form, they were no longer so in substance.
In 2011, Occupy protests swept across the West. They were a spontaneous, visceral uprising by people against their governments’ failure to pass effective financial reforms and bring bankers to justice. Hackers played important parts in Occupy and in the Arab Spring uprisings that immediately preceded and inspired it. And when Occupy stalled as a people’s occupation of space in the physical world, hackers and the hacking ethos would carry it forward into the cybersphere and the digital era.
The Arab Spring was in some ways the result of the hacker scene going global. With the penetration of the internet globally (and despite companies imposing commercially walled access in developing countries), came the growth of the hacker. The core organizers of the Arab Spring revolutions came from the hacker scene.
The Arab Spring began in Tunisia in December 2010. Tunisia’s local Pirate Party had been calling for internet rights, their members were arrested, and these arrests helped fuel protests. Tunisian activists like Slim Amamou credit WikiLeaks for what happened next. After its leaks revealed the US government no longer backed Tunisian president Ben Ali and would not help him if there was a revolution, the military and top members of Ben Ali’s party refused to shoot at protesters. The protesters lost their fear that the US might push for international action to save Ben Ali.1 Tunisian activists flying under the banner of Anonymous organized further protests, and Anonymous in Western countries jumped in to offer technical support. In the beginning, a small group of hackers made the protests happen, but the ability to use digital tools generalized rapidly. The number of digitally literate unemployed young people around the world was sky rocketing, and it was a demographic that had lots of energy, not much to lose, and time to spend on political life. The result was some very big protests. One of the largest took place in Tahrir Square in Cairo, Egypt.2
In early January 2011, Tunisian Anons and Anons from other countries launched Operation Tunisia. They made DDoS (distributed denial of service) attacks on government websites and got videos out to the world bypassing government censorship. Anons created a “care packet” for dissidents that provided advice on how to hide their identities on the internet and developed a “grease monkey” script (as an extension for Mozilla Firefox) to help them evade government phishing campaigns.3
As the protests spread to other Arab countries, Anonymous engagement spread, too. On January 25, 2011, Anons launched Operation Egypt, working in collaboration with an Egyptian group to restore mirrors and proxies that allowed Egyptians to access websites censored by the government. In Libya, they communicated with freedom fighters through AnonOps. Anons even pulled their signature stunt against Tunisian and Egyptian embassies, placing huge orders for pizza delivery to them, for the lulz. Before the Arab Spring, Anons had been based mainly in North America, Europe, and Australia. After it, their banner spread a lot farther, particularly in the Muslim world.4
The protest camps that formed in Madrid and other Spanish cities in mid-May 2011 with the start of the Spanish Indignados movement took inspiration from the Arab Spring, and the Spanish occupations of city squares in turn inspired the Occupy movement in North America. The Vancouver-based group Adbusters Media Foundation (known for its anticonsumerist magazine, Adbusters) proposed a peaceful occupation of Wall Street. Adbusters cofounder Kalle Lasn registered the OccupyWallStreet.org web address on June 9, 2011. Adbusters sent an email to its seventy thousand subscribers stating, “America needs its own Tahrir.”5 Senior editor Micah White said, “[We] basically floated the idea … and it was spontaneously taken up by all the people of the world; it just kind of snowballed from there.”6
Anonymous encouraged its online community to take part in the physical protests, calling people to “flood lower Manhattan; set up tents, kitchens, peaceful barricades; and Occupy Wall Street.”7 A meme began to circulate of a ballerina dancing on top of the famous statue of the Wall Street bull.
Staged in New York City in Zuccotti Park, not far from the target of its name, the Occupy Wall Street protest began in September 2011, and by October it had swelled to an estimated fifteen thousand people as union members, students, and the unemployed converged on the spot with other citizens. By October 9, 2011, Occupy protests were taking place in 951 cities in eighty-two countries and in over six hundred communities in the United States.8 A leader of the Indignados in Spain had called for a worldwide protest on October 15, 2011.9 By the end of the month, there were Occupy camps in nearly two thousand cities worldwide.10
The movement’s name came from earlier University of California protests held in 2009 and 2010, when students had occupied campus buildings to protest budget cuts, tuition hikes, and staff cutbacks flowing from the recession that followed the financial collapse of 2008. Their slogan was “Occupy everything, demand nothing.”11
Occupy was described as a “democratic awakening.”12 But it was widely criticized for having no concrete program or demands. It seemed to be all over the place.13 Yet there was a coherent constellation of concerns among protesters, centering around the economic system, its negative impact on the majority of people, and its deleterious effects on democratic governance. The New Yorker reported that the instigators of Occupy Wall Street were calling for specific reforms, such as tightening banking industry regulations, banning high-frequency trading, arresting the “financial fraudsters” responsible for the crash, and forming a presidential commission to investigate and prosecute corruption in politics.14 Bloomberg Businessweek reported that protesters wanted employment and better jobs, more equal distribution of income, bank reform, and less influence by corporations on politics.15
Occupy had a lot in common, in fact, with the mass anti-Hoover protests of the Great Depression. The Financial Times found that people at the protests were concerned about “household debt, student debt, the unemployment rate, foreclosures, and the lack of prospects for people graduating from college.”16
The movement had different focuses, but its overarching analysis was that large corporations and the global financial system had come to control the world in a way that disproportionately benefited a minority, undermined democracy, and was unstable. According to Wikipedia, Occupy’s goal was to advance social and economic justice and new forms of democracy.17 The movement’s slogan was “We are the 99%.” This was a reference to two facts: the top 1 percent of the population in the United States held disproportionate wealth compared to the rest of the population, and the after-tax income of the top 1 percent had nearly tripled over the last thirty years, according to a Congressional Budget Office report.18
At the time of Occupy’s global mobilizations on October 15, 2011, occupywallst.org, the website for the New York protest, announced that “neoliberalism” was the cause of most of the wrongs Occupy sought to remedy.19 The term neoliberalism has been criticized as having shifting and indeterminate meanings, but broadly it means a political and economic system that favors trade liberalization, inflows of foreign direct investment, privatization, and deregulation.
Neoliberalism encourages globalization and discourages government intervention. It holds that, in an increasingly complex world, the decisions faced by governments involve too many variables for governments to sort out effectively and are best left to the information-sorting forces of markets. In effect, neoliberalism has tended to give free rein to some of the most pernicious, extractive practices of capitalism.
In the last part of the twentieth century, neoliberalism ushered in a wave of globalization like the one experienced during the second half of the nineteenth century, with a new set of winners and losers. The winners, Occupy protesters held, were the global 1 percent, but they could have pointed to the top 10 percent and adopted the slogan “We are the 90%.” Although the top 1 percent was making all its gains at the expense of the bottom 90 percent, the top 10 percent’s share of American wealth was holding steady, and in the United States, this decentile holds the lion’s share of wealth.20 This 10 percent is the so-called meritocratic or technocratic class—the people earning six-figure salaries and more. In 2016, $1.2 million net worth would put you into the bottom of that class, with $2.4 million you would reach its median, and with $10 million net worth you were at its top.21 This is the essential thing to grasp when thinking about neoliberalism: it is, above all, a class project. It is about consolidating the class power of the 1 percent and the 10 percent. Consider that after four decades of neoliberal policies, most Americans can’t scrape together $500 for an emergency,22 and a third of Americans can’t pay the combined expenses of food, shelter, and healthcare, let alone the cost of a college education on top of these.23 News reports are brimming with similar statistics about the declining conditions of the lower 90 percent in the United States and other Western democracies.
David Harvey—geographer, expert on Marx’s theory of economics, and public intellectual who has written a book on the history of neoliberalism24—has acknowledged that the term has been used in so many ways it has come to seem incoherent. “And people say stop using it,” he says. “Well, great, then. We don’t have to talk about the concentration of class power anymore. Well, fuck you. That’s exactly what we have to talk about. The class power that’s been assembled is more concentrated than ever before, more than it ever has been.”25
In 2011, Occupy was a global manifestation of people’s growing conviction that representative democracy had betrayed them and that participatory democracy had become a necessity. It was a necessity, they realized, for people to be involved in the street, out of doors, as a presence, guiding and disciplining government if not determining matters directly.
Occupy was a movement that more than any other was intent on projecting a collective consciousness. Protesters created a democratic process of “working groups” (where protesters were able to have their say) and of “general assemblies” (where important decisions were taken by consensus).26
It is interesting to compare Occupy to the student uprisings that took place globally in 1968, beginning with the Prague Spring and US antiwar protests. These were a similar democratic awakening and, like Occupy, raised a constellation of related concerns and demands but no formulated political program. The philosopher Jean-Paul Sartre, from the World War II generation that resisted the Nazi invasion of France, interviewed a student leader of the May 1968 strikes in Paris, Daniel Cohn-Bendit, at the time and asked him why the students had not formulated a program:
J.-P. S.: What many people cannot understand is the fact that you have not tried to work out a programme, or to give your movement a structure. They attack you for trying to “smash everything” without knowing — or at any rate saying — what you would like to put in place of what you demolish.
D. C.-B.: Naturally! Everyone would be reassured, particularly Pompidou, if we set up a party and announced, “All these people here are ours now. Here are our aims and this is how we are going to attain them.” They would know who they were dealing with and how to counter them. They would no longer have to face “anarchy,” “disorder,” “uncontrollable effervescence.” Our movement’s strength is precisely that it is based on an “uncontrollable” spontaneity, that it gives an impetus without trying to canalize it or use the action it has unleashed to its own profit.
There are clearly two solutions open to us today. The first would be to bring together half a dozen people with political experience, ask them to formulate some convincing immediate demands, and say, “Here is the student movement’s position, do what you like with it!” That is the bad solution. The second is to try and give an understanding of the situation not to the totality of the students nor even to the totality of demonstrators, but to a large number of them. To do so we must avoid building an organization immediately, or defining a programme; that would inevitably paralyze us. The movement’s only chance is the disorder that lets men speak freely, and that can result in a form of self-organization. For example, we should now give up mass-spectacular meetings and turn to the formation of work and action groups.
Cohn-Bendit spoke about how important it was for people to be able to come to a consensus about the nature of the problems they had to overcome:
It is essential first of all that people should express themselves. They say confused, vague things and they are often uninteresting things too, for they have been said a hundred times before, but when they have finished, this allows them to ask, “So what?” This is what matters, that the largest possible number of students say “So what?” Only then can a programme and a structure be discussed. … We shall make proposals, but give us time. First we must discuss, reflect, seek new formulae. We shall find them. But not today.27
By December 2011, most of the major Occupy camps had been cleared by authorities, and the high-profile camps in London and Washington, DC, were dismantled in February 2012.28
Occupy protesters began to focus their energy on specific issues, forming new groups or joining established ones fighting on economic issues. For example, Occupy Homes formed to work with homeowners who had been victimized by predatory bank practices, with plans to occupy foreclosed homes, block evictions, and protest bank auctions.29
Following the 2008 financial crisis, Occupy was a first attempt to diagnose what was the matter with early twenty-first-century democracies. People were groping to understand what they were experiencing, how the world had been changing around them to dispossess them, and why they seemed to have so little power to protect their interests.
It’s fair to say that Occupy largely failed as an attempt to assert democracy in real space, but like the ’68 uprisings, it left an indelible mark on people’s awareness of existing power structures. And the urgency people felt to assert their popular sovereignty continued to play out after the camps were shut down.
In 2011 and well into 2012 (after the shut down of the Zuccotti Park camp in fall 2011), the online actions taken in the name of Anonymous were frenetic. Anons DDoSed the website of the industrialist Koch brothers for the brothers’ support of Wisconsin governor Scott Walker, who increased of the cost of benefits paid for by public-sector workers and limited their collective bargaining rights. Hackers operating under the Anonymous flag hacked Apple, defense contractor Booz Allen, the Democratic Party of Orange County, Florida, Monsanto, and NATO, among other targets.30 A small group calling itself Lulz Security (LulzSec) emerged from Anonymous chat rooms. Over a short period, its members claimed responsibility for high-profile attacks on media companies (including Fox, News International, PBS, and Sony), games, pornography websites, and the CIA, taunting rival hackers and the law enforcement units that tried to identify them.31 LulzSec launched Operation Anti-Security and a multitude of hacks ensued against law enforcement agencies and contractors in various US states and other countries. Stolen credit cards were used to make donations to the American Civil Liberties Union, the Chelsea Manning Support Network, and the Electronic Frontier Foundation.32
By 2013, many Anons were in jail after being apprehended in Australia, India, the Netherlands, Spain, Turkey, the United Kingdom, and the United States,33but their efforts had been a kind of first attempt to bring Occupy into cyberspace.
In Europe in 2011 and 2012, the urge to assert political agency led to the rise of populist left-wing parties and sustained resistance to austerity policies, particularly in Greece and Spain.
In 2016, people asserted their sovereignty in the seemingly reckless rejection of the status quo in the Brexit vote in the United Kingdom (in favour of the UK leaving the European Union) and in the election of Donald Trump as president of the United States. The people’s agency was evident, too, in the unprecedented support shown for democratic socialist candidates like Jeremy Corbyn in the UK and Bernie Sanders in the US.
Large populations alienated from a system they feel is rigged against them are unpredictable. They can swing to a radical progressive agenda that actually redistributes power and does something for them personally (as Americans did when they enthusiastically embraced Franklin Roosevelt’s New Deal in the 1930s), or they can swing to nationalism and “strong men” who manipulate their fear and anger (as Europeans and British did when they fell in behind fascist leaders like Benito Mussolini, Adolf Hitler, and Oswald Mosley during roughly the same period). Whichever way they swing, these populations share the same insecurities in, and frustrations with, the “democracies” they thought they were living in. “Democracies” that don’t seem to guarantee them rights, don’t provide them with the chance for a decent life, and congenitally do not enact the policies they want, and at the same time, take important issues like trade, labor, monetary policy, immigration, and culture right off the table of public debate and hand them over to technocrats.34
This, then, is the larger political context in which one can understand the recent exponential growth of the hacking scene. It should be no surprise that people are turning to hacking in this era when reform seems out of sight. Since Occupy, hacking has become a practice and a metaphor for civic activism. The hacking ethos is inspiring a new way of thinking and acting as people begin the dogged work of dismantling the concentrations of power, mass surveillance and authoritarianism that have become the defining features of the new century.
A growing wave of citizen activists has developed an understanding that unless ordinary citizens seize the emancipatory potential of new digital technologies, class power will take these technologies over and turn them to the advantage of the upper 1 percent and 10 percent. “Of course, they are going to take this new technology, Artificial Intelligence, and turn it to their benefit,” David Harvey has observed. “Labour lost the fight over automation of manufacturing and new organizational forms. Will they lose it in service also? The big question is, are we going to fight against AI coming in and lose, or are we going to find creative ways to use it and then push with it in certain kinds of ways?”35
As I will describe in the remainder of this chapter, hacking experiments are being tried all over now. These experiments are not only about privacy and transparency, as fundamental as these are to democracy. If you look around you with a little knowledge about what “hacking” is, you will find that people are hacking all kinds of things—not just privacy and transparency, but also monopolies, finance, corruption, censorship, law, electoral politics, and democratic decision making itself. Literally and metaphorically, they are striving to “code in” democratic values wherever they can.
You can see it in all kinds of human activity and at all levels. Yes, as described earlier, farmers are hacking tractors to “free” them from unfair digital restrictions management (DRM); computer programmers are “hacking” copyright to “free” software generally; academics are hacking commercial enclosures of knowledge; cities are hacking internet service providers (ISPs) to take their local economies back into their own hands—and much, much more.
The terms—hackers, hacktivists, tech activists, Indignados, net citizens—and the identities they represent, overlap. The goal they share is to distribute power to the people, to put the people’s hands on matters as local, national, and global citizens. When power is distributed, they believe, many different experiments can be tried in different places at once, and the best solutions can be disseminated widely.
Karl Marx posited that transformative technology brings down the whole superstructure of a society—its social hierarchies, the role of labor, its distribution of wealth, the way it defines value, and the law that underpins it all. In the early part of the twenty-first century, we’re in the midst of just such a transformation.
Daunting though it is, this is a moment of opportunity. Hacking experiments could potentially change the whole political economy.
Many stories could be told about the experiments taking place, but even a small selection demonstrates the “effervescence” of the historical moment. Taken together, these experiments might seem chaotic, and certainly they evince the “positive chaos” Wau Holland advocated in founding the Chaos Computer Club. One way to make sense of them is to understand they are riding a wave of rapid technological change and to categorize them according to the particular technological innovation they are relying on to create decentralized power.
Tech people will be familiar with recent breakthroughs that have been made in digital decentralized solutions, but laypeople may need a quick primer.36 The first innovation in decentralized solutions was “federated technology,” the basic structure of the current internet. In federated technology, multiple, central nodes connect other nodes, like the lines that can be drawn between solar systems in the night sky. Users are free to choose which nodes to interact with and, to some extent, which central “hub” nodes they want to play intermediary for them. Email is an example of an open, interoperable protocol that uses a federated architecture. More recent examples include XMPP for chatting, OStatus for microblogging (tweeting), and OAuth for authentication. Many of the hacking experiments discussed so far in this book utilize federated technology or the basic architecture of the existing internet to create decentralized solutions, often with a free software approach to development and dissemination.
The second innovation in decentralized solutions has been “distributed,” or “peer-to-peer” (P2P), technology. Peer-to-peer networks do not use central servers, like federated networks. Instead, they use ordinary computers to process data and to deliver it to other computers without an intermediary. Most of the success with P2P networks so far has been in file-sharing solutions, like BitTorrent, although there have been numerous attempts to build P2P web services, such as Freenet, that would be resistant to spying and censorship because without a “middleman” server there is no central point to choke or capture data.
The third innovation in decentralized solutions has only recently been invented. It builds on P2P architecture but adds a permanent, tamper-proof, distributed ledger that relies on mathematical computation to record transactions. This is the “blockchain.” Think of a chain that is being forged one link at a time, where each link is a mathematical equation that links to the next and so cannot be excised from the chain or modified after it is created. The blockchain is revolutionary in that it automates trust. You don’t have to trust a central provider of a service, and you don’t have to trust the people you are dealing with. You have to trust only the code, which allows your transaction to be processed using mathematical formulas that verify its authenticity and then to be recorded on a public ledger stored across many computers.
Trebor Scholz gets emails almost every day from all kinds of people—from Uber drivers in South Africa, programmers in India, and dog walkers in Los Angeles—saying, “Hey, how do we do this? What’s next?”37
Recall that when monopoly platforms take over a sector, they make it hard for people to exchange value at their edges. When large incumbent players like Google or Uber enjoy the advantages of network effects, access to data, and path dependency, it is almost impossible for new entrants to take them on with competing business models and platforms. Some of the earliest hacking experiments around privacy in communications services have tried to break through this barrier, using the basic structure of the internet to offer alternative applications and platforms with the hope they might attract a critical mass of users and generate their own network effects. The same is happening with other services as people band together to create cooperative platforms.
You don’t change platform capitalism by criticizing it, Trebor Scholz says, but by creating alternative models that show it up as a failure. Scholz is a professor of culture and media at the New School in New York City. He had been convening the Digital Labor conferences there since 2009, when he met Occupy activist and journalist Nathan Schneider at OuiShare Fest: The Age of Communities in Paris in 2014. They got talking, and later that year, Scholz published a paper, “Platform Cooperativism vs. the Sharing Economy,” and Schneider wrote an article, “Owning Is the New Sharing,” both of which mapped efforts underway to create cooperative platforms in various fields. After the Rosa Luxemburg Foundation published Scholz’s primer “Platform Cooperativism,” the term was “coined,” and people started coalescing around it. Techies and luddites together—platform creators, platform workers, scholars, labor advocates, entrepreneurs, activists, investors, CEOs, New York City councilors—came to an event Scholz and Schneider organized at the New School in November 2015 called “Platform Cooperativism: The Internet, Ownership, Democracy.”38
Platform cooperativism, Scholz and Schneider have written, is about “shared governance and shared ownership of the Internet’s levers of power: its platforms and protocols. Democratic ownership and governance.”39 Yet it is about more than just providing a platform or killer app that is collectively owned by drivers or dog walkers. It is about building processes and ecosystems to support the development of democratic enterprises, not technological solutionism. In addition to the killer app (the technology), Scholz and Schneider emphasize, platform cooperativism requires appropriate forms of finance, law, policy, and culture to support it. “It’s a radical horizon, to be sure,” but not an absolute one, they have said.40 If it flourishes, platform cooperativism will likely be only part of a mixed economy.41
Scholz recently founded the Platform Cooperativism Consortium,42 which is made up of about forty organizations that support the use of cooperative business models with digital tech. It collaborates with the Inclusive Design Research Centre in Toronto, which has a team of about thirty full-time developers and seventy on standby. In January 2018, the Consortium started a legal clinic on platform cooperatives at Harvard Law School to find ways to make it easier to start these ventures legally.43 Currently, the law encourages the creation of capitalist corporations through all kinds of breaks and incentives without questioning whether these incentives would serve society better if they were given to cooperative enterprises.
Scholz maintains that the areas of economic activity for which platform cooperativism can offer practical solutions are endless. The Platform Cooperativism Consortium recently started working with three thousand childcare providers in Illinois, recyclers in Brazil, the only worker coop in the social care sector in Australia, and refugee women who want to start businesses in Germany. “It’s basically grabbing onto the heart, the algorithmic heart of [platform] companies, ripping it out and putting in cooperative values,” Scholz explains, which leads to fair pay, dignity on the job, and the ability to scale coops.44
Stocksy is a stock photo platform owned by about a thousand photographers in Canada that made approximately $11 million in 2017. Daemo, built at Stanford University, is a cooperative marketplace intended to make crowd-sourced work more equitable. Green Taxi is a Denver-based cooperative of more than eight hundred worker-owners that was set up with the help of their union, the Communications Workers of America. It is joining taxi drivers in New York and other cities to develop platform services that can begin to compete with Uber.45 Banyon Project is a consumer cooperative that brings local news reporting to local news markets.46
As a form of economic organization, cooperatives are admittedly rare today. The United States currently has about three hundred to four hundred worker coops. France has 300,000.47 But both Europe and North America have had ambitious economic cooperative movements in the past that innovators today might draw inspiration from. In the US, the National Farmers’ Alliance and Industrial Union was a large network of purchasing and marketing cooperatives in the late nineteenth century that sought to advance both the economic independence and civic education of its members. It employed more than forty thousand lecturers with an urgent mission to increase political literacy among Americans and was organizing politically at the precinct level in forty-three states.48 A similar rural, populist movement in Canada in the early to mid-twentieth century ushered in a stable economic system of producer cooperatives in the agricultural sector that served the country well for many decades. The Cooperative Commonwealth Federation (CCF), a Western-based political party of farmers and labor aimed to transform the capitalist economic system into a “cooperative commonwealth” by democratic means.49 Calling for the socialization of banks and financial institutions and the public ownership of transportation, communication, and natural resources, it became the official opposition party in three Canadian provinces, eventually forming the government in Saskatchewan. The CCF was instrumental in establishing universal healthcare in Canada, which Canadians of all political persuasions would agree is now the bedrock of the country’s social contract.
As of June 2018, Scholz could report the existence of some 240 digital cooperative platform businesses worldwide.50 This tiny but growing sector of the economy could take off if, like the populist progressive movements of earlier times, it can seize people’s political imaginations and get them organizing in earnest for their own economic interests.
Following in the tradition of farsighted, populist reforms proceeding from the rural parts of North America, farmers today are starting to organize digital cooperative platforms to free themselves from the economic oppression of digital monopolies. Farm Hack is a cooperative platform for creating farm equipment with the free software philosophy. “We are a worldwide community of farmers that build and modify our own tools. We share our hacks online and at meet ups because we become better farmers when we work together,” the website states.51 Some of the tools displayed on the site look fairly rudimentary, and there are no giant tractors yet, but there is a “Free Farm Manifesto” that advocates the free software movement’s “four freedoms,” adapted for the farmer—the right to know how a tool works, the right to modify a tool, the right to repair a tool, and the right to distribute both original and modified designs of tools.52
Scholz says he does not know what the odds are that platform cooperativism will win out over platform capitalism in this new digital era, but he knows what they are if people don’t try.53
In addition to cooperative platforms where people are organizing labor and markets for economic purposes, there are many cooperative platform experiments organizing communities for social purposes. In Los Angeles, the Anarcho Tech Collective is hacking the police monopoly on 911 emergency services in light of the number of times police have used deadly force when responding to emergency calls.54 The External Revenue Service is a cooperative platform that has set up an alternative “tax system,” a new way of distributing charitable contributions. Enspiral is a growing collective that shares cooperative platform tools and strategies among social entrepreneurs.55
Important experiments are under way that aim to create cooperative “data commons.” People are looking for ways to wrest control of their data back from governments and surveillance capitalists. The My Data coop in Switzerland, for example, experiments with patient-owned and controlled medical information.56 Myuseragreement is a cooperative formed to provide users with terms and conditions on the use of their data that they can collectively dictate to the companies that interact with their devices.57
Many alternative social media platforms are being developed and offered to the public using the basic federated technology of the internet. Diaspora, an early clone of Facebook launched in 2010 with the help of the crowd-funding app Kickstarter, had some initial success but ran into trouble meeting users’ expectations.58 It was followed by Ello, which unlike Facebook allowed people to use pseudonyms. Ello also flamed out as a serious competitor to Facebook,59 but developers continue to experiment with social network platforms that provide alternatives to the surveillance and datamining practices of the large commercial monopolies.60 GNU MediaGoblin is a federated media publishing platform built with free software that is meant to provide an alternative to services like Flickr and SoundCloud.61 RSS (Rich Site Summary or Real Simple Syndication) is a web feed that aggregates updates on websites and allows users to syndicate their online content across websites.62
Mastodon is an open-source alternative to Twitter. A modified version of GNU social,63 it was released in 2016 by a young coder in Germany.64 It is almost identical to the Twitter platform, except its messages can be up to 500 characters instead of 280, posts can be private, and there is no advertising. It has been more successful than App.net, an earlier attempt to replace Twitter. Mastodon grew rapidly after Twitter rolled out an update that irritated people in the way it presented “replies.” Suddenly, hundreds of new users were joining Mastodon every hour. Any user can set up a server and host their own instance of Mastodon, which its developer encourages so that the costs of running it can be distributed among users.65 Other federated, free software alternatives to Twitter include OStatus, mentioned earlier, a protocol stack that came out of StatusNet, which was eventually abandoned in favor of a group of standards developed by the W3C Social Web Working Group, started by Harry Halpin in 2014. Initially formed to produce a single, simple-to-use standard for federating the social web (for making it interoperable), it had the backing of IBM and interest from Google. Unfortunately, the working group ultimately failed to produce compatible standards because the hackers involved could not agree on which ones to employ. (The committee was composed mostly of semi-employed hackers rather than industry representatives, who more typically compose the working groups developing standards affecting industry interests.)66
Alternative cloud services are also making inroads on established, centralizing monopolies. OwnCloud, released in January 2010, is meant to provide a free software replacement to proprietary cloud storage. It has forked into NextCloud, which is more active now. These services are decentralizing in that they let you pick where you want to store your data, whether on your own private server or elsewhere.67 Raspberry Pi Foundation has developed a kit called “Raspberry Pi” that lets users build their own small external computer out of a set of single-board computers. Many people are building these and using them as personal clouds or ad blockers,68 although the Raspberry Pi single-board computer requires nonfree software to start up.69 Other personal cloud projects include Cozy Cloud and Sandstorm.70
Peer-to-peer (P2P) distributed technology and blockchain technology are still in their early stages of development, but they could offer radical solutions for distributed empowerment not thought possible just a few years ago. Recall that a P2P network cuts out the middleman server. In P2P networks, equal nodes function simultaneously as both “clients” and “servers” to the other nodes on the network. They make a portion of their resources (such as processing power, disk storage, and network bandwidth) directly available to each other. They become both suppliers and consumers of resources.
In the current state of P2P tech development, peer-to-peer networks usually implement some form of virtual “overlay network” on top of the physical topology of the existing internet, where the nodes in the overlay form a subset of the nodes in the physical network. Data is still exchanged directly over the internet’s TCP/IP network and through the physical infrastructure of the internet, but at the applications layer peers are able to communicate with each other directly via the overlay links (each one corresponding to a path through the underlying physical network).71
It is possible to build a separate, physical infrastructure for a peer-to-peer network. The idea of every user having a personal server and acting as a Tor node is a step in this direction, although the data sent by these nodes would still go through the wires and cables of the existing internet and through its continental switching points. Theoretically, a completely new peer-to-peer global internet could be built that does not use any of the physical infrastructure of the existing internet, but as the hackers who are thinking about this would confirm, that is an enormous project that might be overtaken by quantum computing in any case.
The advantage of P2P networks is that they are both resilient and scalable. They are resilient because they have no one point of failure or shut down. They are scalable because as nodes join a P2P network and demand on it grows, capacity and resources also grow.
As mentioned earlier, P2P applications have been used most successfully to date to hack file sharing. Because of the lack of a central authority in P2P networks, governments and the entertainment industry cannot easily delete content on them or stop it from being shared. This has allowed the pirating of copyrighted material, but it also has potential for countering censorship.
Well-known peer-to-peer file-sharing networks include Gnutella, G2, and eDonkey. Freenet, the peer-to-peer web service for censorship-resistant communication and web browsing, uses distributed data storage to keep and deliver information.72 Netsukuku is an experimental peer-to-peer routing system developed by the Italian FreakNet MediaLab around 2005.73 FAROO is an early peer-to-peer web search engine released in 2008 with the plan of sharing up to 50 percent of its advertising revenue with its users. It uses a distributed crawler that stores search data on users’ computers instead of on a central server. Whenever a user visits a website, the information is automatically indexed and distributed to the network. Search result ranking is done by comparing usage statistics.74
Osiris is a program that allows its users to create anonymous web portals via a P2P network that are resistant to denial of service attacks and censorship.75 Peercasting experiments are also being tried by hackers where the P2P overlay network helps peers find a relay for a stream.76 One new experiment from France, PeerTube, intends to become a competitor to YouTube. Supported by the nonprofit Framasoft and launched in 2015, PeerTube uses peer-to-peer technology and a federated group of servers and is being distributed under a GPLv3 free software license. The service is free.77 Textile is a P2P alternative to Instagram for managing and sharing photos on the web.78 Pinoccio is an Internet of Things platform that uses mesh networking,79 and Beaker Browser is an experimental new browser for exploring the peer-to-peer web.80
P2P is best seen as a relational dynamic through which peers can freely collaborate with each other, create value in the form of shared resources, and transfer value without a central authority. It makes a “many-to-many” allocation of resources and determination of norms possible, outside the hierarchical decision making of governments and state-supported markets. In the past, the costs of scaling communication and coordination with predigital technologies made hierarchical decision making by states and markets necessary. P2P technology will not make the state and state-supported markets wither away, but it will make self-organization on a mass scale feasible.81
Theoretically, P2P networks can create virtual supercomputers that are powerful enough to run large ventures such as alternative stock exchanges, banks, central banks, interbank communications systems like the Society for Worldwide Interbank Financial Telecommunication (SWIFT) and international monetary institutions like the International Monetary Fund (IMF). In other words, P2P could lead to the formation of peer-to-peer institutions that could rival current economic institutions. Replacing key economic institutions, in fact, was the dream of populists in the Progressive Era. The National Farmers’ Alliance and Industrial Union proposed public ownership of utilities as well as an alternative currency and banking system. Their Subtreasury Plan was meant to reengineer the country’s monetary policy to reward labor over capital. Ironically, the plan became the rough blueprint for the creation of the US Federal Reserve in 1914, which, as the 2008 financial crisis demonstrated, serves the interests of bankers, speculators, and oligarchs over those of ordinary people.82
In the digital era, P2P technology could be used to transfer value peer-to-peer without a central clearing authority. P2P could create distributed storage systems where data can be stored across computers rather than on corporate clouds—the independent, reliable storage of vast amounts of transaction data being a necessary element of any financial institution. Distributed storage could give citizens control over all kinds of information, so that when hackers scrape government websites to save the climate change research discontinued by the Trump administration, say, P2P technology could be employed to store it in a resilient peer-to-peer network that cannot easily be shut down by authorities.
Granted, studies show that even with good peer-to-peer design there will always be tendencies to centralize. Indeed, in most peer-to-peer systems, the developers play a seemingly unavoidable centralizing role.83 Another challenge for P2P networks is that with ongoing file transfers and swarm/network coordination packets, they use a lot of bandwidth compared to federated networks, where data is transferred only in relatively small quantities and for short intervals. Security is also a problem. Because every user on a P2P network is a server, a successful attack on one can potentially expose the whole network to routing attacks, malware, and corrupted data.
The biggest problem with P2P solutions is trust. You have to trust your peers not to cheat or abuse you, especially when transferring things of value, because there are no central authorities to guarantee, authenticate, or necessarily enforce your transaction.
This is where the blockchain comes in. The third and most recent innovation in decentralized solutions, the blockchain, builds on peer-to-peer technology and largely solves the problem of trust. As described earlier, it adds a permanent, tamper-proof distributed ledger that relies on mathematical computations to record transactions. Like a chain that is being forged one link at a time, each transaction is authenticated with a mathematical equation that links to the next and cannot be cut out from the chain or modified after its creation. The blockchain automates trust: it allows your transaction to be authenticated, recorded on a public ledger, and stored across many computers so that it cannot be erased or tampered with.
A growing number of applications are being found for blockchain technology by hackers and others, based on its capacities when deployed with P2P. These capacities include the secure transfer of value, secure distributed storage, and secure distributed computing.
Bitcoin, the cryptocurrency everyone was talking about at the end of 2017 when its market price soared to nearly $20,000 per “coin,” is a leading proof-of-concept prototype of blockchain technology. It began as a “white paper” attributed to “Satoshi Nakamoto” (likely a fictional character but also the name of a real-life engineer and neighbor of some of the California cypherpunks).84 Released as free software in 2009, Bitcoin has spurred the creation of hundreds of different kinds of “cryptocurrencies,” “altcoins,” or “tokens” since its creation.
The “tokens” transferred through a blockchain may hold monetary value (as in Bitcoin), or they can represent equity, decision-making power, property ownership, licensing power, and other things of value. So the blockchain, deployed with P2P technology, can potentially be used to create a relatively secure decentralized monetary regime, stock exchange, or banking system. And it can be used to create a relatively secure voting system, land transfer record, or credentialing system.
These larger systems would need to rely on the secure distributed storage and secure distributed computing capacities of the blockchain and P2P technologies. But they would also need some way of enforcing a set of rules between peers in each system.
Ethereum is a ground-breaking blockchain project created in 2013 by a nineteen-year-old coder, Vitalik Buterin. Building on earlier work by David Chaum (the cryptographer who inspired the cypherpunks), Buterin developed a new programming language for creating applications that can be executed across a large number of distributed nodes. “Distributed applications” (also known as “smart contracts”) automatically enforce rules scripted in their code using the blockchain. They are like a self-executing contract.
Building on the idea of the “smart,” or self-executing, contract, the blockchain can potentially be used to create decentralized autonomous organizations (DAOs), where many human beings or machines can have their interactions governed by a set of self-executing rules embedded in the code of the DAO’s applications, enforced by the blockchain.
Theoretically, a decentralized, distributed stock exchange could be built one day with the blockchain automatically enforcing all of the rules governments failed to pass after the 2008 financial crisis: rules against derivatives and Libor fixing, against selling something (like physical gold) or loaning money against something (like real estate) many times over, and against high-frequency trading, and fraud. An alternative blockchain-based stock exchange could impose a microtax on transactions. To address the gross inequalities and concentrations of power that the existing financial system has helped to produce, what needs to be redistributed is not necessarily wealth but risk and bargaining power—a redistribution the blockchain could theoretically accomplish. All this might seem a long way off, but people are already experimenting with blockchain solutions for secure storage (Storg is one early prototype) and many more complicated things.
For example, the blockchain is being used to make sure people are paid for their work and to create systems of innovative micropayments. In Berlin, an equivalent of the commercial music streaming service Spotify uses the cooperative business model with the blockchain to pay creators twice as much as they get from Spotify.85 Minds is a blockchain-based social media application similar to Facebook that pays its users.86 SteemIT is an application that pays its users cryptocurrency to write content, and it works with third-party applications like dTube, an alternative to YouTube that uses the InterPlanetaryFileSystem (IPFS). DTube awards Steem currency when users upvote videos.87 Twister is a blockchain-based distributed microblogging system using free software implementations of Bitcoin.88 Filecoin, launched by Protocol Labs in 2017 with a stake of $205 million, is aiming to create a decentralized data storage network by allowing users to pay each other with its blockchain token, filecoin, for the use of spare storage capacity on their computers.89 Brave is a privacy-enhanced anti-DRM browser, which works well and could replace Google Chrome and Mozilla Firefox. It pays its users a “basic attention token,” giving them some reward for their clicks and time. When Brave held an “initial coin offering” (ICO) to raise funding, it brought in $36 million in thirty seconds.90
People are talking about creating low-cost distributed people’s banks using blockchain, where individuals could get “frictionless” loans at low interest rates based on reputation and a wide distribution of risk. People could provide insurance for themselves using blockchain, collecting micropremium payments. Blockchain could furnish important solutions in developing countries, where people often lack credit and insurance, where property and identity records are often flawed, and where government corruption and war can destabilize regular ledger keeping. Ultimately, the blockchain could be used as a regulatory technology for many transactions.91
The blockchain and P2P could be used to create self-enforcing “data commons” in contexts like the city, patient populations, or national census databanks. Blockchain systems could give people some self-determination over their personal data and preempt corporations from gaining proprietary control over information that has important civic uses.
With the blockchain and P2P technology, distributed internet service providers (ISPs) could allow people to make small amounts of money whenever their computers were on, just for providing distributed computing power.92 There could be a decentralized domain name system (Namecoin is one early experiment).
Theoretically, there could be a whole new peer-to-peer, blockchain-secure, (re)decentralized World Wide Web that would be made neutral, secure, and free of censorship by distributing data, processing, and hosting across millions of computers around the world with no centralized control93 and by employing the blockchain to verify transactions and enforce rules automatically. This innovation would overtake (or gather together) earlier attempts to apply peer-to-peer technology to web functions. It would be the realization, in fact, of a new internet, at least at the applications level, built on top of the physical infrastructure of the existing internet.
Tim Berners-Lee, the inventor of the World Wide Web and Harry Halpin’s boss at the World Wide Web Consortium (W3C), seems to be working on this project. But a pall hangs over the work because Berners-Lee, respected elder statesman and Lorax steward of the internet, recently greenlighted a standard for a mechanism that would implement digital rights management (DRM) on that very web.
In his role as executive director of W3C, Berners-Lee was final arbiter of what the standards council’s recommendation on this would be, and he tipped in favor of industry wishes to have a standard. The Electronic Frontier Foundation, Richard Stallman, and many others in the hacker and digital rights community fought vigorously against it. There was a stark lack of consensus. In July 2017, a secret vote by members ran 108 for and 57 against, with 20 abstentions, among the 185 members who voted.94 Nevertheless, one man decided the issue. So much for the Lorax style of “consensus” governance.
To appreciate what a big issue this now is in the technology world, recall the description of DRM and the Digital Millennium Copyright Act (DMCA) statutory regime provided in chapter 8. Hackers and others against the recommendation argued that the W3C would essentially be endorsing the DRM-DMCA model, making it harder to get the regime repealed. More immediately, it would be blessing the insertion by corporations of “black boxes” of code into everyone’s computer through a standard mechanism, the encrypted media extension (EME), built into their web browsers. Black boxes into which corporations could include, in addition to the copyrighted materials that users’ wished to access, all their usual malware to dictate terms of use, invade privacy, compromise security, and otherwise take control of users’ computers. The EME mechanism was designed for video only, but W3C potentially could adopt standards for all kinds of DRM restricted material on the Web, including ebooks, documents, software updates, and pages for web services. Researchers and security experts were prevented from even looking into these black boxes to study what was there because the Digital Millennium Copyright Act made it a crime to do so. The DMCA ran over the rights of “fair use” people had to study what was in the black boxes and to use the copyrighted material itself for fair-use purposes. It effectively killed fair use, an essential element in any copyright regime that aims to promote innovation and knowledge.
According to hackers and digital rights proponents, DRM, DMCA, and EME broke the architecture of the free and open web, making it insecure and unfixable. If users could not monitor what their browser was admitting into their computer, they were hooped. Browsers are the door to everything on the web. DRM, DMCA, and EME injected the poison of black code into the system and made it criminal to clean up the pollutions it spread. It was a model that potentially encouraged a draconian lockdown of everything on the web—the gift to humankind that was supposed to be leading us all forward with its model of sharing and abundance.95
On Tim Berners-Lee’s side was the argument that many browsers, including Chrome, were already shipping with the chosen mechanism, EME, inside them, so there might as well be a standard. Browser makers had decided that they wanted to include the capacity to access material restricted by DRM inside their browsers, and EME was a huge improvement over external “plug-in” mechanisms like Adobe Flash, which did not have open standards and were security nightmares. W3C did not invent DRM, and its role was not to advocate for any given policy position but to set technical standards. “Now [web-based] video is an open technology with common descriptions and APIs,” Jeff Jaffe, the CEO of W3C told a journalist. “It’s still encumbered underneath. We would still like to change that. It’s on the list of things to get done someday.”96 Another argument on the Berners-Lee side was that if W3C created a standard for EME, the organization would have more influence to discourage abuses, and W3C did exhort industry to respect users’ privacy and security.97 Someone suggested this was like inviting a rabid dog into your backyard and hoping the rope you offered to tie it up with would restrain it. EFF asked that W3C at least get members to sign a covenant agreeing that they would not sue security researchers, but this did not happen. In January 2017, W3C offered optional guidelines instead.98
Others went further than just user security and fair-use arguments. They argued unapologetically that W3C should be standing up for the ideal of free software on the web. Ideally, all code on the web should have the “four freedoms.” Nothing on the web should be in a black box. Stallman said that when he launched the free software movement in 1983, his mission had been to create free software alternatives for every piece of software people wanted to use.99 Creators of software could be paid for releases and updates of their code, but people should have alternatives. They should be able to make copies and share their software, to study and modify it, and to offer their modifications to others. No software owner should have complete power over users, especially now that everyone needed software to live in the digital world. Under the free software model, you put out your software, you charge what you want or what the market will bear, and you make money again if you have useful updates and offer useful service, but you also live with the possibility of competing replacements and modifications for your software, so that ultimately software is not made a scarce resource in the hands of a few who forbid its replication or modification and sit on top of it for decades like feudal landlords with complete power over their dependants.
Jeff Jaffe’s office at MIT is across the hall from Richard Stallman’s, and Stallman put a sign on his door so that Jaffe and his visitors would see it daily: “MAKE DRM A FELONY: Those who make, lease or sell devices with DRM should go to prison.”100
As for other creative material delivered over the web, such as music and films, people argued that it was not worth breaking the internet for the comfort of those industries. The music industry was changing rapidly, and Hollywood’s losses to unauthorized copying and sharing on the internet might not even be that great because most people did not mind paying for films to receive ease of delivery and quality viewing.
Finally, some activists took an explicit “free culture” stance, arguing that cultural materials should be just as easily shared and modified as software and that there were emerging business models in music, in which creators gave away their recorded work and made money by other means, cutting out parasitic middlemen in the process. Copyright was not even practical for most things on the web, they argued, because it was impossible to find their creators, which meant that without the ability to obtain formal permissions easily, works under copyright would remain locked down and fall out of use.101
As the conflict revved up, Harry Halpin stated publicly that he would resign if EME were adopted as a W3C recommendation. “I myself believe that the web we want does not include DRM,” he said, “and that this is a responsibility to our children, that the web that they inherit should allow and enable sharing.”102 He left the organization in late 2016, and EFF resigned its membership in W3C in fall 2017.103
Tim Berners-Lee has set up a small team at MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL) to work on his decentralized web project. He calls it a “decentralized, linked data system,” and its name is “Solid.”104 In late 2015, the project received a $1 million grant from Mastercard. It is open source.105 Berners-Lee is hoping to get developers to work on this new Mahabharata (the epic poem with many authors) the way coders collectively worked on GNU/Linux and the Debian project.
“There are people working in the lab trying to imagine how the Web could be different. How society on the Web could look different. What could happen if we give people privacy and we give people control of their data,” Berners-Lee has said.106 “Right now we have the worst of both worlds, in which people not only cannot control their data, but also can’t really use it, due to it being spread across a number of different siloed websites. Our goal is to develop a web architecture that gives users ownership over their data, including the freedom to switch to new applications in search of better features, pricing, and policies.”107 The Solid team also plans to offer a generic platform on top of which developers can build almost any kind of application.108 It might also incorporate a built-in framework for micropayments, something that Berners-Lee worked on in the 1990s and W3C restarted in 2015.109 “We are building a whole eco-system,” Berners-Lee has said.110
The MIT webpage on the project does not mention blockchain, but the capabilities Solid is seeking to develop might suggest that blockchain tech would be involved. It turns out that is not the case—not as Berners-Lee currently conceives it, at any rate. Perhaps he is rejecting a P2P and blockchain design because he wants to build and scale Solid as quickly as possible.
Solid itself is a federated system, based on the central server-client model and on URLs for “linked data.”111 Yet if it is to provide an architecture for a newly decentralized web, it will have to accommodate blockchain and P2P elements in some way at some point because these are swiftly proliferating at the applications layer of the internet. For example, any new architecture will need to develop standards for interoperable distributed ledgers (and get these standards adopted by W3C) so that different blockchain apps can work interoperably on the web.112
The Solid project is immensely important because if it or some other privately funded, ambitious (re)decentralization project takes off, it could be the closest thing to a new civilian internet that we get, assuming it beats the Chaos Computer Club’s “You Broke the Internet” effort and the European Union’s “Next Generation Internet.” It could decide a lot of the digital era “civics” issues now hanging in the balance just by how it is structured and coded. (Whether Solid or some other ambitious project will also beat the Defense Advanced Research Projects Agency’s “Clean Slate” project to remake the internet is yet another question.)
If the race is informed by the hacker ethic, the goal will be an “open” web based as much as possible on the principles of user self-determination, net neutrality, free software, and decentralized power. There will be cooperation and synergies, as well as overlapping networks of participants. In 2016, Berners-Lee and Brewster Kahle, founder of the Internet Archive, organized the Decentralized Web Summit: Locking the Web Open in San Francisco. “With decentralized applications coming on stream and expanding every day,” the first summit’s website asked, “how might that momentum be harnessed to build something millions of people can actually use? What code is working and what is still missing? Can people work together to identify and tackle the roadblock issues?” Kahle told the developers and policy makers gathered at the event, “Let’s use decentralized technologies to ‘Lock the Web Open,’ this time for good.”113 The 2016 summit was followed soon afterward by a high-profile workshop in Cambridge, Massachusetts, titled “Blockchain and the Web,” organized by the MIT Media Lab and W3C.114 A second summit, Decentralized Web Summit 2018: Global Visions/Working Code, took place in the summer of 2018, at which Berners-Lee presented Solid.115
To sum up, in all of its applications, the blockchain, deployed with peer-to-peer (and other) technology, offers the potential of cutting out the middleman—whether it is the data miner, monopoly platform, financier, central bank, big record company, law enforcer, identity authenticator, or government records office. Blockchain offers the possibility that local and virtual communities can provide whole economies of value to each other, peer-to-peer, eliminating surveillance capitalism, government corruption, profiteering, and fraud. It offers communities the potential of expressing their own values in the way they design the blockchain. In “A Declaration of the Independence of Cyberspace,” John Perry Barlow claimed that the legal order in cyberspace would reflect the ethical deliberations of the community instead of the coercive power that characterized real-space government, presciently foreshadowing what an innovation like the blockchain could do.116
Reality checks are in order, however. As the encrypted media extension debate shows, it may not be easy even for like-minded communities to agree on how to build things. Bitter divisions are possible, even within the hacker community. In addition to its idealistic applications, the blockchain offers the possibility for perfect surveillance and a stultifying enforcement of copyright. It could ensure that no transaction can be plausibly denied and no distribution of created material made without payment. If the values of the “old world” are encoded in the blockchain in any way (for example, centralization versus decentralization, scarcity versus abundance, surveillance versus privacy, and extraction versus fair distribution), the effects could be exponential because the code will execute them.
Hackers have been pioneers in the blockchain space, developing leading prototypes like Bitcoin. But although some of them might find ways, with little or no external funding, to pursue projects that are open source, free software licensed, ads- and surveillance-free, nonprofit, and commons-based, big money will be needed to develop large projects like Solid.
The corporate sector is quickly piling in behind hackers to take over start-ups or initiate their own blockchain experiments. By 2016, $1.4 billion was invested in blockchain technology,117 and players like IBM, Microsoft,118 Samsung,119 and Deloitte120 were entering the blockchain space, along with most of the major American, Canadian, and European banks.121 By early 2018, Ethereum, the smart contract innovation of Vitalik Buterin, had a market capitalization of nearly $98 billion.122
Money can corrupt altruistic intentions. Things can go awry. Although Satoshi Nakamoto released Bitcoin’s code into the wild as free software (and also “for free” as in “at no cost” or “free beer”), Bitcoin made its early adopters rich before it could even become a useful alternative currency. It has been reported that 97 percent of Bitcoin is held by 4 percent of Bitcoin addresses.123 That concentration of wealth is worse than the concentrations amassed under the old monetary system of state fiat currencies (1 percent of the world’s population owns about half of all wealth).124
The biggest reality check is understanding how limited the technology remains. The problem is scaling it. Currently, only a few blockchain transactions can be computed per second, and the energy costs for mathematical computation and for storing the blockchain on every participating node are significant.125
Another thing to understand is that as people use this technology to self-order, there is more pressure on them to become digitally adept because they are relying on the code to safeguard their interests and enforce behavior. For example, people who held Bitcoin in December 2017 were scrambling to find the USB keys they’d stored it on and the passwords they’d guarded it with when they had first acquired it for pennies. It is estimated that almost a fifth of the finite number of Bitcoins created have been lost.126 To address the skills gap, intermediaries have inserted themselves everywhere in the cryptocurrency space, and there are many cautionary tales about their security and trustworthiness, and about price manipulation.127
Despite the setbacks, the challenges, and the cold water that is being poured on many hacking experiments, people see their work as prefiguring a new model—as creating and living in a new model now rather than waiting for and relying on others to create it. Talk of a “next system” is spreading, along with debate about what its outlines might be.128
In February 2016, several months before the Brexit vote that would take the United Kingdom out of the European Union, Labour Party leader Jeremy Corbyn’s shadow chancellor, John McDonnell, was talking about system change. For McDonnell, the task was bigger than creating a few more worker cooperatives. The project for Labour in the twenty-first century, he said, was to articulate “how we can change our economy to suit our society. … We need to go much further than simply offering a defence of what we already have. Nor can we simply demand top-down nationalisation as a panacea. The old, Morrisonian model of nationalisation centralised too much power in a few hands in Whitehall. It had much in common with the new model of multinational corporations, in which power is centralised in a few hands in Silicon Valley, or the City of London. It won’t work in a world in which technological change is providing opportunities to decentralise power.”129
Leading up to the June 2016 Brexit vote and the general election a year later that would see Labour nearly sweep the Conservative Party out of power,130 the Labour Party’s political platform strongly supported a principle of public ownership adapted to the digital era. Yes, Labour had plans to renationalize Britain’s abysmal privatized railway service, but for the most part the party’s ideas about public ownership had more to do with Chattanooga’s experiment in local broadband ownership than it did with nationalized railways.131 Corbyn was emphasizing a local approach to public ownership that would encompass a plurality of means. He wanted local councils to become “public entrepreneurs” with greater freedom to choose how to deliver public services and kindle investment in their communities. He said he would give local levels of government more power to roll back the forced neoliberal privatization undertaken by earlier governments.
“Privatisation isn’t just about who runs a service; it’s about who services are accountable to,” he said. “After a generation of forced privatisation and outsourcing of public services, the evidence has built up that handing services over to private companies routinely delivers poorer quality, higher cost, worse terms and conditions for the workforce, less transparency and less say for the public. … It locks people out of decision-making.”132
McDonnell highlighted the growing trend in the United States and the United Kingdom toward a model that uses the power of municipal government, together with the procurement resources of large nonprofit and public institutions, to build locally anchored economic development:
Preston, inspired by the example of Cleveland, Ohio, has developed an extensive programme of work. …
They have got major local employers and buyers—so-called anchor institutions, like the University of Central Lancashire—to drive through a local programme of economic transformation. By changing their procurement policies, these anchor institutions were able to drive up spending locally.
They’re looking to shift a proportion of the joint council’s £5.5bn pension fund to focus on local businesses, keeping the money circulating in Preston.
And the council is actively seeking opportunities to create local co-operatives as a part of local business succession, working with the local Chamber of Commerce. The aim is to sustain high quality local employment, by giving the chance for workers to keep a business in local hands.133
It was clear in early 2016 that Labour was prepared to have a real conversation with the electorate about “system change” in the digital era that would rise above the usual rhetoric of the right and left. “Friedrich von Hayek, who taught for many years at the LSE [London School of Economics], is politically somewhat distant from myself, it’s fair to say,” McConnell said:
But he raised a profound point about how information operates in a society, when he noted that centralised bureaucracies can be overwhelmed by the information processing demands of complex, modern societies. His preferred solution, of allowing the market to act as an information processor, was equally unviable.
Markets can be crude information processors at best, as the crash of 2008 showed. … We should look, instead, to how different forms of organisation can operate in the economy—not just the capitalist firm, or the nationalised industry, but many different ways of organising ownership and production. We need a far more sophisticated argument about ownership that does not just fall into the caricature of either pure privatisation, or pure state control.134
By 2016, the citizen energy of the Occupy movement was plainly flowing forward, beginning to formulate its alternative programs not just on the street but on regional and national political stages, too.