“It has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time”
While preparing for our class on Blockchain this week, the political junkie in me couldn’t help contemplating all of the possible ways that this technology might be bad for citizens and for democratic institutions around the world.
The fallacy of the Internet is that is the “Great Democratizer” – a great equalizer that gives all citizens access to universal access to information and an opportunity to prosper. But a 2016 report from the World Bank showed that internet adoption has actually coincided with a growth in income inequality. Is there any reason to believe that Blockchain has the potential to lead to equitable economic growth?
Income Growth – Top 1% of Earners vs. Bottom 90% of Earners
With the risk of plagiarizing a Bernie Sanders’s speech, social mobility is becoming increasingly difficult in the United States. In many parts of the U.S., it appears that millennials may be the first generation of Americans with a lower quality of life than their parents’ generation. It’s hard not to read about Blockchain and imagine some dystopian future where social mobility is nearly impossible. Many successful stories about entrepreneurship involve some kind of tale where the founder manages to bluff their way to success. Entrepreneurs fail and manage to convince someone to give them a second chance. Do we really want a shared ledger where all of your red flags and failures are documented?
Then there is the question of trust and privacy. It seems contradictory that a system could enable monetary and non-monetary transactions that are simultaneously efficient, private, secure, and transparent. We naturally assume that the efficiency comes at the expense of security. It seems illogical that a system could be both private and transparent for the parties involved.
Nevertheless, the general consensus seems to be that Blockchain will change democracy and government for the better. Here are some of the ways where Blockchain could change our lives as citizens for the better:
#1. Better elections:
Blockchain could make elections more efficient and reliable. Attempts to introduce e-voting have failed in many countries around the world, but skeptics argue that it is incapable of being fully embraced due to concerns about traditional server technology. The risk of corruption through e-voting would essentially be eliminated by Blockchain as citizens would have the ability to confirm who they voted for and that their voted was counted.
#2. More accountable Government representatives:
The Supreme Court’s decision in Citizens United v. FEC prohibited the Government from placing any restrictions on campaign contributions from corporations. Blockchain has the potential to reduce the influence of corporations in elections and give the power back to citizens to hold their elected officials accountable. Citizens could enter smart contracts with their elected officials where their campaign contribution would be contingent on following through on campaign promises.
#3. Participatory Government:
Could Blockchain eliminate the need for representative democracy? If Blockchain could enable e-voting for elections, perhaps it could also eliminate the need for Senators and members of Congress. The majority of constitutions in the Western World were drafted in an era before aviation travel, phones, computers and other everyday technologies. Blockchain theoretically enable pure, participatory democracy, where people vote and form consensus on policy initiatives directly.
#4. More efficient services for citizens:
Whether you are registering a birth, or buying a house or a car, or trying to access your health records, or registering a company, dealing with the Government can be complicated and time-consuming. From digital property titles to patient-controlled (as opposed to physician-held) electronic health records, Blockchain offers the potential for better delivery of Government services.
#5. Better identity management:
Blockchain will likely lead to better identity management. From the Government’s perspective, this will encourage better intra-agency cooperation aiding national security efforts. Better identity management using Blockchain may also reduce social welfare fraud (which most citizens will be in favor of, however, there already some concerns in Britain that the Government may force recipients to spend welfare payments on specific things).
#6. Democrats and Republicans could work together:
Benjamin Franklin remarked that in this world “nothing can be said to be certain, except death and taxes”. If Blockchain does successfully displace existing intermediary institutions (such as employers, retailers, financial institutions who tend to withhold income taxes, sales taxes, and capital gains taxes and interest taxes), it is only a matter of time until the taxation system is reimagined for a Blockchain world.
It has been 31 years since Congress passed meaning tax reform. If intermediary institutions are displaced by Blockchain, one can expect that both sides of the aisle may finally start to work together.