Are DAOs Socialist?

Ethereum’s culture eschews traditional political categories. With DAOs, we encounter capitalists concerned with the “public good.”

AccessTimeIconSep 2, 2021 at 5:39 p.m. UTC
Updated May 11, 2023 at 6:03 p.m. UTC

The Ethereum blockchain and surrounding infrastructure are increasingly seen as public goods.

Public goods are non-excludable and non-rivalrous. Non-excludable means we cannot exclude others from using the good. Examples include natural resources like the air, but also produced goods and services like public radio or the police. Non-rivalrous means in using them we don’t deplete them for others.

Dr. Paul J. Dylan-Ennis is an assistant professor in the College of Business, University College Dublin. Crypto Questioned is a forum to discuss the ideas and philosophies that drive the cryptocurrency industry.

Funding the upkeep of the Ethereum blockchain and its infrastructure is a longstanding concern of Vitalik Buterin and has been addressed pragmatically through the use of quadratic funding in Gitcoin.

The Ethereum blockchain seems an incontrovertible public good. Yet, the Other Internet collective has argued the Ethereum blockchain cannot be considered a public good because the public served is not a public in the broad sense, but large holders known as whales in niche areas like decentralized finance (DeFi). Intriguingly, Buterin rejected their account in a recent post and suggested Ethereum serves a much wider audience than DeFi.

The question of what is a public good in Ethereum remains unsettled. This is even true in practical terms. The issue has consistently arisen because some Gitcoin grants straddle the line between infrastructure and venture. While layer 2 solutions are funded as public goods uncontroversially there is some debate as to whether a podcast about Ethereum is a public good? Or what about a Twitter account disseminating updates about Ethereum?

I think the “whether to fund” problem rests on the lack of clarity regarding the term “public good.” The economics definition drawn from Elinor Ostrom – non-excludable, non-rivalrous – is cited often (as here), but it’s not super helpful in our context.

The Other Internet collective suggest we need to define public goods in a more expansive sense than the economic one and propose first expanding what we mean by public – to now mean the wider community beyond your immediate “squad” – and good to mean a shared value, specifically one people recognize as reflective of their own. In particular, this good should contain a longterm vision of what the community wants to bring about.

Scott Moore, of Gitcoin, argues we can find out what constitutes a public good by identifying what our “shared problems” are. A shared problem renders explicit what implicitly connects a set of shareholders. This lets us recognize we are not disconnected individuals driven purely by economic concerns. Crucially, hinted at here is the question of what would it mean to build with more than the cryptocurrency space in mind. Under the surface, I believe this is what Buterin in public philosopher mode recognizes as lacking in Ethereum: the long term vision of what all this is for.

The public goods discussion is a discussion about what are the “positive externalities” that could be developed by a cryptoculture thinking about the world beyond its own borders. The example used of negative externalities is Web 2.0 social networks that trundled on without any regard for their effects on privacy, disinformation, disconnection or mental health. We should not push blindly outwards like they did just because we can, but try to develop the Ethereum ecosystem consciously and with an eye toward the public beyond ourselves, generating positive externalities.

My position is Ethereum has an unconscious political bias I call mutualist minarchism.

It is mutualist because the community emphasizes cooperativism and collaboration, but also minarchist as it develops new minimalist forms of governance, in that it creates decentralized analogues to the functions of the traditional state. These include alternate forms of finance in DeFi, art and culture in non-fungible tokens (NFT), and organization with decentralized autonomous organizations (DAO). These are social, economic and political ambitions but without a clearly identified politics.

It is a curious state of affairs that we can’t quite articulate what long-term shared values would represent Ethereum as public goods in the expansive sense. Decentralization is our tactic, that is clear, but decentralization for what end?

The answer to Ethereum’s political ambiguity is resolved, fittingly, from DAO culture upward.

In DAOs, however, we can espie a possible political position emerging that can help us answer this question. In the Ethereum ecosystem, we don’t typically encounter socialists/communists or even the right libertarians populating bitcoin culture. Instead, we encounter venture entrepreneurs with a strong inclination toward a public goods philosophy.

There is an online meme now about whether DAOs are socialists or not, but this probably constrains us a little too much by traditional definitions.

Instead, in DAOs public goods are an aperture into an attitude rooted fundamentally in capitalism but not the neoliberal fog of ultra-individualistic capitalism. The sense and feel for entrepreneurship remains, the venture, but there are too many shared problems in our society to discount the centrality of a shared commons. This produces venture commonism: Web 3.0 entrepreneurship with commonist characteristics.

This more sharply encapsulates a political ambition, a vision of ad hoc decentralized groups (what I jokingly call “Dunbar’s”) that spontaneously form to tackle manageable tasks that improve the lot of a shared commons. The answer to what a public goods value might look like is: We want to produce a society respectful of individualism, but contextualizes the individual within a set of shared communal problems. One value might then be “restoration of community” as a higher-level version of Nathan Schneider’s “exit to community.”

The Ethereum political project could then be reimagined as the restoration of community through venture commonism. The answer to Ethereum’s political ambiguity is resolved, fittingly, from DAO culture upward.


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