Diffuse Benefits, Concentrated Costs
How to invert the perverse logic of collective action.
Political scientist Mancur Olson nailed it when he argued our republic—most any republic—will turn into a corporate state due to the problem of special interests. He called it the logic of collective action.
If you pass a regulation or subsidy, some small group will win the spoils. The small group that benefits most from a policy also has the more potent incentive to organize around that policy. The benefits are concentrated on the interest group, but the costs are diffuse; we all pay marginally higher taxes and marginally higher prices. But these are mostly hidden from view.
Thus, We the People have neither the knowledge nor the incentive to organize against every interest group that tweaks the law in vast omnibus bills.
But the tweaks add up. The costs mount but go mostly unseen.
So, special interest groups almost always win. The result is tremendous deadweight loss. Representative democracy ends up serving the Takers at the expense of the Makers.
But what if we could invert the perverse logic of concentrated benefits and dispersed costs?
Inversion
Olsen might have been delighted to see Uber, Airbnb, and bitcoin. They showed us how things can change despite the perverse logic of collective action. These entrepreneurs not only found legal gray areas to exploit, but by exploiting those gray areas, they broke the politically-created cartels of the taxi, hotel, and finance industries.
Ridesharing, couchsurfing, and Sat-stacking are here to stay. But these examples of Makers prevailing over Takers are rare. Are they rare because there are too few legal gray areas? Or are they rare because there are currently too few subversive innovators?
I cannot say. But I hope we can all become subversive innovators.
In my 2018 book, The Social Singularity, I wrote "Every innovation is an act of subversion," which became an underthrow tagline.
Just before Satoshi Nakamoto published his 2008 white paper on the rudiments of Bitcoin, it must have been a bit like holding a lit match over dry forest underbrush. Did he linger for a moment before hitting enter?
Maybe in that moment he closed his eyes and saw flashes from the future: of a thousand pimply geeks becoming millionaires overnight. Of Ross Ulbricht, Silk Road's Dread Pirate Roberts, being led away in handcuffs. Of mutant strains, copycats, forks, and tokens competing in an entire ecosystem of cryptocurrencies as in a digital coral reef. Of booms and busts and troughs of disillusionment.
We don't know. But we do know one thing about Satoshi Nakamoto: he hit enter.
Bitcoin is the dominant player, but it belongs in a vast ecosystem now.
A coder strings together lines of instruction. Once he publishes his code, there is a potential butterfly effect. Technological change, happening moment to moment around us, adds up quickly. Before you know it, people everywhere are taking rides with strangers. Bangladeshi women ply their produce trade on smartphones. Every wingbeat is a potential gale of creative destruction. A billion lines of code, created by millions of coders, represent innumerable wingbeats. Some are amusements. Others are bold experiments in social transformation.
As we've suggested, the government sees cryptocurrency as a threat to its monopolies on money and credit. Government officials guard this power because it enables them to pay for anything they desire while passing on the costs onto citizens. Whether through inflation or taxation, the people pick up the tab. Increased spending (concentrated benefits) and inflation (diffuse costs, which reduce the value of savings) are hallmarks of the current money monopoly.
Turning the Tables
However, as the authorities fight against cryptocurrencies, they might eventually find the tables have turned: The beneficiaries of these diffuse systems are legion and spread throughout the world. The costs of enforcing prohibitions on cryptocurrency are borne primarily by authorities. And enforcement costs will get more and more expensive as more and more people adopt these technologies. This problem will be compounded as the dollar's purchasing power declines. As the enforcers go deeper into federal debt, enforcement will become more difficult and costly as lateralization becomes cheaper and more beneficial.
Such developments turn the logic of collective action on its head.
Thanks to technological progress that introduces new rules and tools—along with the distributed nature of networks—we may no longer be beholden to a regime that thrives at the intersection of power and money. We will see a power shift as the Eros Feminine crashes against the beachhead as the tide comes in.
We can only hope the old order coughs and chokes in the swells, eventually getting pulled away in the undertow underthrow.
There is a logical solution, one that has been around for the 10 million years before criminal governments were invented, the universal natural law that the innocent have .lived by forever. I think I have sent you a copy of my articulation of that law earlier as I have to many people but sometimes I slip up. Here it is. "One's life is one's responsibility in its entirety. Any conceivable innocent act one can take in pursuit of one'sa happiness is one's absolute inalienable natural human right. These include the 5 rights of property of INNOCENTLY acquiring, possessing, using, defending and disposing of any item of property except another human being. 'Innocent' means not harmful to others except in defense. A crime is any act of harm by force or fraud by anyone against the innocent or their property. It is the responsibility of the criminal to make his or her victim(s) whole again, to the extent possible, by a process of restitution."
Six sentences, the law I wrote for myself to live by, the only law I accept and recommend for every other human being. It lists every possible human right, every possible human crime, the responsibilities of everyone and a definition of the word 'innocent'. It is intuitive, a simple combination of common sense and the Golden Rule and can be taught to small children just by example. I think it will bring about Jefferson's view that "The ball of liberty is set so swell in motion that it will spread around the world."
I think I told you about a new virtual nation called Immortalis, 5 months old, with over 1000 members in over 42 countries, and looking around the world to establish a land based city state for physical operations. We publish a monthly newsletter I write for. For more information, look up joinimmortalis.com. In the last newsletter, a video interview with the author of the book "The Death Of Death" was presented. In it, he predicted that within about 40 years, immortality will be possible.
The FED will fight tooth and nail against crypto as Trump eases the market open. One of the things holding them back is "legal" opposition. So far they have only raised questions, creating doubts in peoples' minds. Crypto has a kind of black market feel to it. The lawfare left will get crypto into the courts as soon as they get assurance that the courts will rule against their legal status.