8
Governance in the Twenty-first Century

The ideal organizational structure for human collectives in the twenty-first century is one that is able to adapt and evolve to the changing needs and challenges of society. As the world becomes more diverse, multifaceted, and highly connected, traditional hierarchical structures may no longer be effective in promoting cooperation, innovation, and progress. Instead, we need to explore new forms of governance that are able to facilitate the exchange of ideas and the emergence of new solutions to the problems we face. We now have some understanding of how our species got here, but where do we go next? How do we increase cooperation, maximize innovation, and ensure that our political organizations help rather than hinder our ability to break through to the next energy level? The answer is that we don't know the answer. But we do know how we can find out.

In 1992 American political scientist Francis Fukuyama boldly published The End of History and the Last Man. He declared that with Western liberal democracies we had achieved the final form of government. We had created the global optimum in governing ourselves and ensuring large, peaceful, innovative societies. At the time, this claim seemed right, perhaps even obvious. The only other competing form of governance – communism – had failed with the fall of the Soviet Union in 1991. Even Fukuyama admits that his book could never be written today, when the world witnesses the rise of China as a very different, rather novel political system that still seems to increase overall human welfare and economic growth. But China, too, at least historically, embodies some of the basic elements of efficiently evolving organizations and has the added benefit of being in catch-up mode – borrowing, recombining, and implementing innovations invented elsewhere.

If we define democracy as a government in which laws, policies, and leadership are directly or indirectly decided by the population then China's political system could generously be described as democracy by assent in contrast to WEIRD-style democracy by selection. In a democracy by selection, the will of the people is expressed by selecting people or parties that best represent their interests. In practice, this ability is constrained in some way by within-party politics; the will of swing voters and swing states often has a greater influence on policy; and overall democracy by selection places faith in the general populace's ability to select parties or people that are best suited to governing and representing their interests. But there is no reason to believe that people are particularly good at selecting who is best able to ensure economic growth and enough jobs, to keep crime low and war at bay, and to ensure that roads are drivable and the water is drinkable. What matters to most is that the government in power gets that job done, and there may be ways to ensure that happens other than a government of the people, by the people, for the people.

China's history is marked by long periods of stability punctuated by popular revolutions radically changing societies. The Chinese Communist Party (CCP) knows this history and lives in perpetual fear of that next popular revolution. To keep that revolution at bay, it controls the flow of information and suppresses, even violently, any groups or people with the potential to coordinate or pose a threat. But it also knows that it can spend less on censorship and suppression and continue in power by ensuring continued economic growth. As long as people's lives continue to improve, they'll care less about who's in charge and how they got there.

Under President Xi Jinping many of China's meritocratic selection mechanisms have been dismantled. In any case, even prior to Xi, China was by no means a free country. By no definition is it a liberal democracy. But the desire for freedom is also not a human universal. Desires for food, safety, and a better life for our children are. The CCP's legitimacy and assent by which it rules will be undermined when it can no longer meet these universal needs. As long as these conditions are met, many Chinese citizens will happily support the party through some mix of fear of speaking out, lack of alternative information, and fear of an alternative form of government, but also because they enjoy their rise in material wealth, and take pride in China's rising place in the world. But for the CCP to remain in power in a weakening economy would require far greater suppression or a common enemy, such as a war with Taiwan or the United States.

The recent rise of China can also in part be attributed to it being in catch-up mode, where the need for new innovations is lower. China can copy the West with some recombination for the Chinese context, and can implement policies that have worked elsewhere without dealing with opposing factions. But autocracies traditionally fail when it comes to innovating new solutions. China, though, has potentially solved this traditional autocratic challenge.

The power of liberal democracies, for example, is that by protecting individual rights and freedoms they allow for a diversity of ideas to flourish and recombine in a cooperative and freely thinking collective brain. When combined with mechanisms that allow for the best ideas to rise to the top – from meritocratic college admission to states as ‘laboratories for democracy’, as Justice Brandeis described the United States – this creates an environment that is conducive to social and technological innovation.

Instead of Brandeis's laboratories for democracy approach, China has pursued laboratories for economic growth in the form of special economic zones and promoting provincial leaders on the basis of economic performance at a local level. In principle, this has led to policy experimentation on an unprecedented scale, but in practice it is hampered by three forces. First, smaller coalitions within the CCP cooperate toward corruption, undermining the meritocratic selection. Second, local leaders’ success at a local level doesn't always replicate at a national level, perhaps due to chance, effort, or local activities that artificially raise growth that can't be replicated nationally. And finally, the lack of diversity and freedom of speech and limitations on the free flow of information ultimately weaken China's collective brain and its ability to innovate. China is unlikely to offer a replicable model for economic growth or governance in the twenty-first century.

At the same time, liberal democracies don't seem to scale well to large, diverse, online socially networked populations, at least not without certain prerequisites and certainly not under conditions of limited resources. So what does governance in the twenty-first century look like? One starting point is actively pursuing new democratic innovations and new forms of democratic participation that have been tried in culturally similar countries. For example, Americans love democracy, but Australians might love it even more, continually innovating new democratic policies. Indeed, Australia is the only country with positive migration from America – as a percentage of the population, more Americans move to Australia than Australians move to America.

Australian democratic policies that have stuck around include secret ballots (popularized in Australia and now often called the Australian ballot). Another effective policy is compulsory voting for all citizens over eighteen years. As an added incentive, free or cheap food (BBQ sausage sizzles, also known as ‘democracy sausages’) are available across the many polling stations on election days.

Normatively, voting is seen as a duty to be incorporated into one's day. On voting days, people often pop into a polling place as another errand in their daily routine. It's not uncommon to see people voting in their pajamas, with nothing else planned that day, or in bikinis and board shorts, on their way to the beach.

Voting is in many ways an irrational act. It's a collective action problem where each vote is unlikely to influence any election but high turnout is essential to preventing small cooperative groups from dominating politics.

Compulsory voting solves this problem and also forces politicians to appeal to the large majority of moderates rather than fight over the votes of politically active extremes or well-coordinated special interest groups, as often happens in most other countries. To win an election, politicians and political parties have to have policies that most people want.

Voting is also preferential, such that people rank their candidates. This is another active area of innovation. Parties will often provide voters with a suggested ranking with other parties that best match their positions in case they lose.

From the 1980s to around 2016, if voters didn't want to rank candidates, they could just pick one party and if that party didn't get the majority, the party allocated its votes to the next party that best represented its position. This led to vote trading between parties and so at the moment, Australia is experimenting with forced ranking and with optional ranking where not all parties have to be ranked.

This continual process of innovation in governance is often data-driven, the goal being to balance ease of voting with best representing the will of the people. These measures ensure a vibrant multiparty system where people can vote for minor parties that represent the most obscure preferences they care about without wasting a vote.

Want weaker intellectual property laws? The Pirate Party has you covered. Want free parking? Vote for the No Parking Meters Party. Want weaker gun and fishing laws? The Shooters, Fishers, and Farmers Party has you covered. Want a candidate who has no positions but just votes on issues based on online direct voting? Try the Flux Party.

The preferential voting system ensures that the most preferred party is voted into office and the least preferred party is not. In contrast, consider what happens in Canada.

Canada also has a multiparty system, but if 30% of voters vote for one left-leaning party (e.g. the New Democratic Party: NDP) and another 30% vote for another left party (the Liberals), this split vote would allow the Conservative Party to win with 40% of votes, even though 60% of the country doesn't want a conservative government.

A first-past-the-post system of the kind found in Canada is also what America uses, which reinforces a two-party system and polarization of these two teams. As a result of not using preferential voting, policy changes can only occur within a party. In America, to change the left, the Democratic Party itself must be changed. To change the right, the Republican Party itself must be changed.

Running as an independent in America risks undermining the majority parties. Ralph Nader and Pat Buchanan were accused of undermining votes for Al Gore in the 2000 election leading to George W. Bush's election victory.

Americans may be horrified if they realize that their approach is much like China's CCP, where change can only happen within the party, but with two parties instead of one.

Existing democratic innovations are an adjacent possible, more easily achievable from where we are. Other visions are more radical. Indeed, many visions of the future of governance are utopian. Utopias are unconstrained by the realities of where we are today in terms of current political systems, current norms, and current incentives. As such, they are a fantasy or at a minimum require a nasty shock of war, disaster, or revolution to create a complete overhaul of the system as it is. The truth is, where we should go next is not obvious. If it were obvious, we'd have done it by now. But we can put some boundaries to this thorny question of what the future of governance looks like. For one, given the size and diversity of modern societies, long gone are the days when fifty-five people could sit in a room and make decisions from the top down that affect the other 2.5 million and the future of everyone, as was the case in the founding of America. Our populations are now too large, too diverse, too educated, and too connected for a radical overhaul from the top down.

Instead of trying to design the future of governance or democracy, we must use the principles of democracy itself to help it evolve. But that requires radical diversity combined with meritocratic selection.

When the Roman Empire fell, it eventually made way for new innovations in governance that led to the modern world. The vacuum it left created an environment where new ideas and new approaches could be attempted, the best outcompeting others through cultural evolution, cultural-group selection, and the laws of cooperation, energy, and innovation. But it was a messy, violent process that is best not revisited.

The general principle, however, is possible, and should be revisited. Rather than design efficient institutions, we can design more efficiently evolving institutions.

Indeed, the United States owes its robust democracy to this very approach, enabled by its federal structure and lack of strong central authority. Different states can try different strategies like separate countries trying different policies. If they fail, they fail at a state level. But if they work, they can be borrowed by other states and eventually bubble up to the federal level. Each state, in other words, can operate like a start-up.

The same model has been successfully used by militaries using a so-called team of teams approach. The same approach also helped Hinduism persist. In India, ‘the country of a hundred nations and a hundred tongues, of a thousand religions and two million gods’, as per Mark Twain, it is not uncommon to find pictures with a Hindu pantheon that includes Jesus. It's a model for diversity through syncretism held together by common beliefs such as karma and the samsara reincarnation cycle.

Other institutions that have stood the test of time have used a similar distributed evolutionary approach. The Roman Catholic Church has succeeded in maintaining a central structure for 2,000 years by allowing some degree of autonomy via various orders and regional rules.

Research on the history of protestant churches in America shows a common pattern of conservative rule-enforcing churches maintaining their borders but being outcompeted by more liberal churches. These liberal churches eventually grow too liberal and splinter or fail. To strike the balance between stability and change requires a mechanism for generating innovation.

This approach has been used to rejuvenate corporations. Since 2014 Microsoft CEO Satya Nadella has been revitalizing the company's innovative ability by turning the hierarchical, monolithic behemoth into what can best be described as an ecosystem of start-ups, thereby revitalizing the ageing tech giant and boosting its stock price.

In each of these cases the specifics differ but the general principle is that rather than centralize authority and administration, power moves back down to local rules, cantons, or cities who, like firms in a marketplace, freely cooperate and compete with one another with free movement of people, their labor, and ideas allowing some groups to grow at the expense of others. It's cultural evolution. It's cultural-group selection. It's an empowered collective brain. It's Silicon Valley.

How can we replicate this success for the future of governance? Many approaches speak to the devolution of power down to a local level, but this is a weak version of the ultimate solution. Such devolution rarely changes much more than how things are administered and implemented. Ultimately, institutions and all their rules remain the same with little ability to innovate. In any case, the local level remains geographically bound and solutions are rarely shared.

A radical option in the longer term is programmable politics, which we will discuss in a moment. But in the shorter term, an approach achievable as an adjacent possible from where we are today is that of start-up cities.

Start-up cities

Cities are increasingly where humans live. It has been estimated that 2007 was the first year in history when the world's urban population exceeded its rural population. Some cities, such as Tokyo, Shanghai, Delhi, Seoul, and New York, have become megacities with populations larger than those of many countries.

Singapore and Hong Kong are thriving, wealthy metropolises with well-educated populations, high income, and low corruption. Compared to both the United States and Canada, they have better educational outcomes, longer life expectancy, higher incomes, and lower corruption. Both are remarkable not only for their dominance on almost all metrics of human progress but also because they weren't always this way.

Both Singapore and even more so Hong Kong would once have been derogatorily described as backwater fishing villages. When Hong Kong, for example, was ceded to the British in 1841, it comprised a few coastal villages with a total population of under 8,000.

The secret to the success of both city states is the importation of culture, institutions, and capital from Britain. From here, they culturally evolved and recombined with local culture, implemented, and administered at a city-state level. Today, new measures of culture reveal that Hong Kong is culturally halfway between China and Britain. This same success can be difficult to administer at a large, national level. It's easier to manage a small company than a big one. It's easier to manage a city than a geographically large country.

China understood this. When Hong Kong was returned to China in 1997, it served as an engine of development, able to export culture, institutions, and capital to the mainland. China, rather than replicate Hong Kong throughout the country, used the autonomous city state as a model for special economic zones such as Shenzhen and Guanzhou, which were able to achieve similar trajectories of success. All these cities can be described as start-up cities.

Start-up cities bring the Silicon Valley ecosystem to democracy and governance. I remember when Google first offered free food on its campuses. It seemed like such a waste of funders’ money. But with Google's success, free food and other similar strategies that keep people happy at work were soon copied by other companies.

Start-up cities take the same approach. Successful firms like Google spread their successful practices to other firms via explicit copying or Googlers moving to or starting new companies. Similarly, start-up cities can learn from one another, seed new cities, and help develop the areas around them. This model of economic development is now actively being used by China in an almost neocolonialist manner in dozens of projects primarily in Africa and Asia. Regions are often controlled through debt.

Start-up cities don't have to be neocolonialist and China should not be the only country using this approach unless we are all happy for China to be the only superpower spreading its influence in this manner. Especially because economic development isn't the whole story. Singapore, Hong Kong, and in particular China are placed lower on freedom indices. Lack of unfettered free speech may help with stability but it curtails the potential of the collective brain to generate radical new innovations, limiting it to incremental innovations.

Start-up cities don't have to be implemented in other countries or even by countries. All a start-up city requires is what any group requires by the laws of life: a large space of the possible based on the laws of energy and innovations in efficiency, strong cooperative mechanisms by the law of cooperation, and free-flowing information to adapt, evolve, innovate, cooperate, and share information in a collective brain connected to other collective brains.

Start-up cities require capital, culture, and institutions. An ecosystem of start-up cities competing and cooperating, much as companies do, can lead to new innovations in governance and faster decision-making. Indeed, start-up cities may be more legitimate when they are created as a collaboration rather than implemented from the top down. A bottom-up, collaborative approach is more in line with the spirit of start-up cities and what distinguishes them from more traditional charter cities or special economic zones.

Further, start-up cities don't have to be created de novo, and indeed shouldn't be. A point of failure of US foreign policy in the occupation of Iraq was the purging of Saddam Hussein's Ba’ath Party. It was a failure to understand the culture and need for civil servants with know-how and connections to ensure the real gears that keep society functioning are still there when a new leader emerges. Even terrorists and rebels realize they need to use existing infrastructure when they take over. Thus, start-up cities can take people carrying cultural traits and existing constitutions and institutions as their starting point. Institutions rest on invisible cultural pillars and thus both institutions and norms are essential to success.

When implemented in places where institutions and local norms are more culturally distant, it may be better to borrow from successes nearby which represent a more implementable adjacent possible. A viral tweet from screenwriter Debbie Moon captures how voters can move toward better adjacent possibilities:

Voting isn't marriage, it's public transport. You're not waiting for ‘the one’ who's absolutely perfect: you're getting the bus, and if there isn't one to your destination, you don't not travel – you take the one going closest.

In the same manner, there may be no easy path from the Democratic Republic of Congo to Denmark, but the DRC may have something to learn from Rwanda.

A start-up city may be more ideal when it is created as a collaboration between cultures and institutions that bridge to others because of prior cultural history – such as Hong Kong as a bridge to China or Singapore as a bridge to the rest of South East Asia.

Politically, economically, and culturally, cities increasingly dominate and are expected to grow in dominance. Two-thirds of the human population is expected to be living in cities by 2050. By giving cities greater political control, enhancing and formalizing the way in which they can spawn and create alliances of city states, and creating an ecosystem of start-up cities, we can solve the age-old dilemma between the slow decision-making of democracies and faster decision-making of autocracies. We can more quickly escape suboptimal equilibria that we may be trapped in through path dependence. That trap may include liberal democracy itself, at least in its current form.

Today, many successful WEIRD nations have some form of representative democracy, with wartime powers when decisions have to be made quickly – though it's often a grey area when these emergency powers should and shouldn't be used, creating a second-order speed of decision-making challenge (when to deploy the wartime powers). In contrast, autocracies like China can move a lot faster. But they can move a lot faster in any direction, even the wrong one. The Great Leap Forward was a leap toward death and disaster.

A structured, fast-fail, start-up city environment solves the challenge of evolvability by pooling risk at a lower level and bubbling up successful solutions to a higher level. It is an embodiment of the laws of cooperation and evolution. Setting up diversity and allowing people to vote with their labor and location. Not engineering new solutions to governance, but evolving them.

Before you say wait, Michael, this sounds like a classic tech bro solution – What kind of people would join these cities? What happens if a city fails? – let me say there may be many ways to found a new start-up city. A large company could move headquarters to a less-developed region and become more involved in governance. A group of people could form a community and change the laws of a town. A country could administer a region within another country. A consortium of various groups could come together to revitalize an ignored region. An existing large city could be allowed to expand and merge with nearby cities. The key is creating an environment that tests different laws, constitutions, and missions, competing for people and allowing the best ideas to spread.

Issues with who will join these cities and what happens if they fail are the same issues with business start-ups in the conventional sense that employees face when choosing between an established company and a new start-up. Initially, those early employees who join start-ups will tend to be young and childless. But then those start-ups that grow into large established companies naturally need to attract a wider range of the population. At first, a start-up may offer free food, table tennis tables, and massage credits, but as it grows it needs to also offer childcare and other support for parents. So too with start-up cities. Initial citizens will be younger, full of fire, and risk tolerant. But if the experiment works, the city will grow.

Innovations in democracy have been stagnant for too long. The institutions are cracking under the pressure of an educated, Internet-connected, social-media-consuming, diverse population. Start-up cities are an adjacent possible and achievable way forward. They are a recognition that it is hard to know in advance what works best, but we can arrive there by allowing a thousand flowers to bloom. It's the same principle that makes Silicon Valley so successful.

The secret to Silicon Valley's success is a popular topic with many hypotheses. Was it a founder effect with early microchip companies starting by chance and a community building around them? Was it Stanford and its spin-offs aggressively seeking military funding? Was it the synergy of Stanford, growing capital, growing talent, and companies feeding off each other? The easy mobility created by California banning non-compete agreements in the nineteenth century?

All these factors probably played a part in empowering the valley's collective brain. But what many forget is that Silicon Valley is less a bastion of success and more a graveyard of failure. And that's part of what makes it so innovative. In evolution, there is a delicate balance between diversity and selection; a trade-off between adaptation and adaptability. It's called evolvability. In my commercial work, I am sometimes asked what is the optimal culture of innovation? There are many ways that companies can suppress their innovation potential, but there isn't one single innovative culture. Instead, there are trade-offs in evolvability.

When countries, companies, or people decide to do something different, more often than not they fail. If it was so easy to improve on the average, more people would do it and the average would quickly improve. Instead, large leaps in innovation are rare, hard-won, and hard to predict. Diversity and deviation naturally lead to inequality as the few winners take the large prizes and the losers are left with less than they would have had if they'd followed the crowd. As populations and the marketplace grow in size so the gap grows wider.

On the other hand, without sufficient deviation and diversity there is nothing from which evolution can select. Diversity means deviation from the optimal strategy and there are different ways to do it. One strategy is well captured by Japan.

Japanese culture has created mechanisms such as constant small improvements (kaizen) and following the master for a long time before deviating (shuhari). These philosophies lead to ever greater refinement in many arts, but rarely large deviations. By following the successful scripts, more of the population can ensure they succeed by not failing, reducing inequality in outcomes and ensuring more of the population does well.

In many Asian societies, where competition for limited university places and jobs is high, obedience and persistence are valued over creativity and cutting your losses – focusing on your weaknesses rather than sharpening your strengths. A safe bet leads to better outcomes on average for more individuals but is unlikely to lead to large breakthroughs for the population.

The other strategy, captured by the United States, is to focus on individual freedom or creativity. You be you. A go big or go home strategy over a more cautious risk aversion. Most of the time, at an individual level, the Asian strategy will lead to more success and less inequality of outcomes, but as a population, we may be better off under the American system.

The few successes – the Amazons and Apples – lead to a wealthier country as a whole, even if there is more inequality among its citizens. The question is how best to distribute that wealth. We'll discuss that in the next chapter.

Which of these is a ‘better’ strategy for your company, country, or start-up city? It depends on many factors.

Not all countries, corporations, start-up cities, or individuals for that matter, can afford to fail. For example, size matters. A large country or company is more able to try high pay-off, high-risk skunkworks than smaller countries or companies, who may be better off sticking to a successful script. Similarly, capital matters.

One of the largest predictors of being an entrepreneur is not overconfidence (believing you're better than others; knowing that among those who believe this, most will fail), nor confidence in confidence (confidence that you're right in thinking you're better than others – what often separates entrepreneurs from ‘wantrepreneurs’), nor even good ideas, good education, and good connections, but rich parents. You have to be wealthy enough to have a safety net to handle the risk of failure and stretch your creativity. For the same reason, at a population level, both strong bankruptcy laws and social safety nets predict increases in entrepreneurship. People need to know that they can get back up if they fail.

For every Facebook, Google, Apple, and Netflix there are many many more Myspaces, Cuils, Veetles, and other failed companies you've never heard of or have long forgotten. The astounding successes are called unicorns for a reason. For every deified unicorn founder there are many more overconfident entrepreneurs of similar skill who would have been better off taking a salaried job, but we are all better off for the culture that encouraged them to take the risk. Successful institutions were never designed. What we're seeing are the winners left after the process of evolution. We focus on trying to understand the winners and forget all the losers that had similar traits. The religions that never became Christianity or Islam. The companies that never became Apple or Alphabet. The political organizations that never led to the Westminster parliamentary system, Chinese Communist Party, or United States.

Consider that perhaps the Founding Fathers of the United States may not have chanced upon the ideal form of government, but had key mutations that led them to a better form of government than those of the entrenched powers of old-world Europe. But America has become like old-world Europe. Thanks to the stickiness of path dependence, it is difficult today to make the kinds of changes to American governance needed in a rapidly changing world with urgent problems that require new solutions. At least without taking the traditional European approach of a revolution.

In the technological sphere, the start-up model has led to technological marvels. Start-up cities may do the same in the social and political sphere.

Start-up cities may choose their migration policies, they may be run as anarchies or under the multinational umbrella model of ‘hiring’ citizens. They may be collaborations with not-for-profits, existing governments, or tech companies. But whoever founds the start-up cities and whatever their initial form and established process of change, start-up cities are ultimately still geographically located. This contrasts with modern companies or universities, where people freely move and collaborate and work remotely with little concern for borders. This privileged position leads to great innovation and serves as a model for an entirely new form of political organization for the twenty-first and twenty-second centuries – a radical possibility I like to call programmable politics.

Programmable politics

It is doubtful that Elon Musk would have become the richest man in the world if he had remained in South Africa. Musk happened to have a mother born in Regina, Saskatchewan, allowing him to claim Canadian citizenship, which opened a world of opportunities for him to maximize the returns on his talent.

The world is filled with amazing people but many live their lives in nations with less than amazing governments and infrastructure. Our opportunities are often defined by our citizenship. A person with less potential in a well-run country may have a far better life and make far more contributions to our future than a person with much more potential in a poorly run country. To maximize the use of their talent, people move, but our ability to move is hampered by our citizenship.

Passports, for example, remain an often ignored source of inequality. Some passports allow you to move freely between most countries on earth, rarely thinking about visas, and even when you do, treating them as a mere formality. Other passports make travel an expensive, stressful, and sometimes impossible process. In academic conferences I've helped organize, we have worked hard to diversify the participants, but geographic diversity is almost always hampered by amazing researchers being unable to come and present their work in Europe or North America. Passport privilege is something many people with ‘good’ passports don't fully appreciate.

We live in a world of nation-states, but, for some, borders are effectively open, allowing us to freely and efficiently allocate our talent where it is most valuable. For others, borders are effectively closed no matter how talented we are. It is worth remembering that this world of nation-states is fairly recent, starting around the seventeenth century and becoming the norm around the nineteenth century.

A nation-state is a community of citizens who cooperate through institutions such as government in areas such as defense, roads and other infrastructure, and law-making and law enforcement. At the moment, each generation's starting point is based on the decisions of the past, even by those long dead. As philosopher G. K. Chesterton described it, tradition is the ‘democracy of the dead’. But we now have new technologies that may eventually allow us to govern ourselves more flexibly in a way that empowers cultural evolution and cultural-group selection, allows for rapid innovations in politics and governance, removes the threats of corruption and lower-scale cooperation undermining higher scales of cooperation, and overcomes the challenges of sticky group membership and sticky dependent rules: programmable politics.

Technology has enhanced so many aspects of our lives. The Internet, social media, and other communication technologies connect us as never before. Grandparents can speak to grandchildren across the world. Each of us can forget so much, knowing that we can just look it up with the magic black box in our pockets. We are all able to connect to talented people from all walks of life eager to share their knowledge and skills with the world on so many platforms both paid and free.

Technology has also empowered cooperation. We can meet and date beyond friends of friends without relying on the inefficiency that is randomly meeting someone at a social gathering. Online reputation tracking has enabled indirect reciprocity to facilitate higher scales of cooperation, allowing us to share cars and houses and use the experience of others to more carefully pick restaurants, products, and services. But one area where technology has had a much more modest impact is governance and politics.

Digital interfaces – some better than others – have replaced people and paper forms in government and public services. And some attempts have also been made to introduce technologies like the Git version control system to enable editing and annotation of legislation, just as a programmer might submit a software patch or an academic collaborator might edit a paper. But fundamentally, democracy and voting, the way in which we decide our laws, the way in which we deliberate and discuss, and the way in which laws are implemented, remain as they were long before even our grandparents’ generation.

We are a digital generation still governed by analog systems.

Programmable politics is a way to instantiate all the contracts, rules, and mechanisms for change that make up a nation-state, in a series of programmable polities. The technologies for creating these polities are rapidly emerging in communities such as decentralized autonomous organizations (DAOs). One important technology that may offer the critical breakthrough is blockchain.

You can't go too far online or even in the real world without bumping into someone talking about Bitcoin, Dogecoin, Ethereum, cryptocurrencies, or the many related technologies. The crypto space is a much hyped but nonetheless creative ecosystem of solutions and scams, iterated and feeding off each other with much excitement and capital. But as it stands, blockchain technologies remain a solution looking for a problem. That problem may be the future of the nation-state. Blockchain may be uniquely capable of implementing programmable politics, so it's worth understanding what this technology is and how it emerged.

When money went funny

In 2008 an unknown person or group published a white paper under the name of Satoshi Nakamoto. The title of the paper was ‘Bitcoin: A Peer-to-Peer Electronic Cash System’.

It presented a solution to a long-standing challenge within the digital money community. Digital money sees money as fundamentally about tracking debits and credits similar to an account ledger: who gave you money? and who did you give it to? The problem was who could be trusted to keep this ledger.

Satoshi's solution was to trust no one. A trustless ledger to track money as claims on goods and services based on who pays who what amount and without the problem of double spending – spending digital currency twice. Bitcoin added a supply that goes up – new money could be created by solving a difficult computing problem – but which becomes successively harder to acquire over time. It's like mining a gold supply that's slowly running out. A clever trick was that solving this computing puzzle also confirmed transactions on the ledger.

There are many problems with Bitcoin. Even from the perspective of our theory of everyone, Bitcoin has inflation uncorrelated to growth in the space of the possible, though the relationship to energy consumption for mining is interesting. Nonetheless it was a convincing proof of concept for digital money and a major step forward in removing the power of the state as the sole manager of money.

Who exactly Satoshi Nakamoto is remains a mystery. We don't even know if they are a single person or a group. Their idea was implemented in open-source software in 2009. Nakamoto mined the first Bitcoin block – known as the Bitcoin Genesis Block – with a reward of 50 Bitcoin. They continued mining blocks and then, in 2010, handed over the control of the open-source software, disappearing never to be heard from again.

I first heard about Bitcoin in 2011. It had recently reached parity with the US dollar. Back then you could get free Bitcoins from ‘faucets’. I collected these free, seemingly worthless digital coins and left my computer mining coins when it wasn't being used. After a while I lost interest and, to the best of my knowledge, deleted my wallet when clearing up hard-drive space – a decision that still crosses my mind.

Bitcoin was interesting to me as an engineering problem, but Nakamoto's motives were even more interesting. When a block is mined, information can be stored in the block forever, each new block reliant on the previous chain. In the Genesis Block Nakamoto left the message, ‘The Times 03/Jan/2009 Chancellor on brink of second bailout for banks’ – a headline from Britain's Times newspaper reporting another bailout due to the global financial crisis of 2008.

In a post introducing their software, Nakamoto later explained themselves:

The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.

They were referring to fractional reserve banking, the requirements of banks to have a minimum percentage of money held in reserve when lending. The gap between what they hold and what they lend is where new money is created in the conventional system.

Nakamoto wanted to bring what encryption did – allowing anyone to encrypt anything and thereby control privacy – to money. Money without a gatekeeper. But blockchain technologies allow for far more than currencies. They allow us to create DAOs where the constitution and laws are fully programmed and automatically instantiated.

A contract, for example, requires us to trust the other party to hold up their end of the deal – buying a house, paying your salary, paying out your insurance. If the other party reneges then it requires going to court, which requires trust in the government and judicial system to impartially step in and enforce the contract. In contrast, the programmable political solution is smart contracts. Here the contract is agreed by both parties, instantiated as code, and automatically run when pre-agreed conditions are met. The agreement can be changed as long as both parties agree, but it does not require trust in either the other party or in the impartiality and fairness of the enforcer. The agreement and its enforcement are one and the same, embodied in code.

Currencies are currently tied to central banks. Buying a currency and using it in a particular country is in some sense an investment in that country, subject to its laws and taxes. The relative buying and selling of different currencies affects the exchange rate and ultimately the value of a country's goods and services.

But imagine a world in which currencies are not tied to countries or controlled by central banks. Imagine a world in which different laws and taxes are programmatically embedded in different programmed polities. A world in which contracts are entered and automatically enforced. A world where you can participate in multiple polities and coalitions of polities, much as a lucky few have multiple ‘good’ citizenships. Your passport or citizenship will no longer restrict you.

In this world the equivalent of nation-states, states, regions, cities, and polities and alliances between them are effectively programmed into an ecosystem where they compete with one another. In one programmed polity one might allocate 1% of every transaction to hospitals. Another might fork off – creating an identical copy – but now including funding for schools, firefighters, and police forces who use the currency. Another might include basic income and only charge taxes for large transactions or allocate money to those under some threshold who use the currency. Another might scrap some of these and instead allocate funds to environmental causes and allow users to vote for which causes are supported. Still another might fork and implement quadratic voting – rather than voting for people or voting for all issues, people are allocated votes that they can store up for the things they care about most, as a way to express how much they care about something.

Programmable politics allows for forks, debates, and deliberation over issues large and small or simply over details such as proof of work or proof of stake or how transactions are verified. And programmable polities may work together just as NATO, the European Union, or US states work together. Cryptocurrencies may be exchangeable at fluctuating rates based on demand and usage, just as dollars, pounds, or euros are today.

Some of these ideas are based on real cryptocurrency and DAO projects, but the possibilities for programmable politics are endless. Yet all are complicated and, for many, irrelevant to their lived experience of buying groceries, getting paid, sending their kids to school, or going on vacation. To fulfil the vision of programmable politics requires infrastructure, like DAOs, smart contracts, digital constitutions, and payment platforms, all of which are being actively developed right now. Eventually paying with different cryptocurrencies may be as seamless as using your credit card to pay in foreign currencies; belonging to different programmed polities may be as seamless as buying items from different websites.

In experiments with different virtual political systems playing a public goods game, people will sometimes choose a game where there is no punishment – no peer punishment or institutional punishment. An anarchy of sorts. But players quickly realize that this institution is unable to sustain the public goods provision and so when they are allowed to migrate, they choose to move to punishment regimes. At least in WEIRD countries, an institutional punisher, where a person is selected to extract taxes and punish freeloaders, is preferred. In this world there may be very little actual punishment. The credible threat of punishment is sufficient to ensure people cooperate. This happens very quickly in a laboratory experimental setting. And indeed, the same cultural-group dynamics also happens in the real world as countries grow, shrink, succeed, and fail on the back of their economic policies and political systems, although this process is hampered by corrupt leaders holding their citizens hostage to lack of food or health care until foreign aid or a loan is provided. In the real world it is slow and change is difficult even when the ‘right answer’ is known.

In a world of programmable politics, policies and currencies compete, prices emerge, and exchange rates are set based on which currencies people choose to use. Taxes are automatically extracted without the need for a fallible tax officer or appointed Leviathan. Voting and identity can be stored within this ecosystem and shared between cooperating communities. We will belong to multiple overlapping and embedded communities that may freely coalesce into the equivalent of large nations as they arrive at and agree on the most effective set of rules and institutions, or freely fork into small communities experimenting with different approaches, as a start-up city might.

With the full history of programmable politics available, AI can also help us evaluate and learn from the network to decide what changes to make and where to go next.

Programmable politics will eventually remove the need for liberal democracies and nation-states as we know them, creating a fairer world. Governance in the twenty-first century will not be designed; it will evolve.

This vision creates a radical new way for the law of evolution to explore new ways to optimize the law of cooperation less hindered by path dependence. Ultimately, that cooperation will empower our collective brains, making the laws of energy and innovation more efficient. But to really understand this vision, we must first understand the relationship between politics, money, energy, goods, and services and inequality in all of these.