It is way to crude to portray Friedrich Hayek (1899-1992) as a kind of Ayn Rand style libertarian or anarcho-capitalist. He was not. As an Austrian drenched in German culture he just witnessed the slide of his home culture into abject statism and authoritarianism from across the pond in Great-Britain. He “just” contrasted English classical liberal values, to German (Prussian) values. Real individual freedom versus slavish obedience to the system.

In The road to Serfdom Hayek argues that we have to be super careful not to lose our individual freedoms in war or other crisis times. Germany was completely lost of course, but under the war economy Britain and even the US were just inches away from becoming fascist themselves. In that sense Hayek could have opposed radical Covid measures not for lacking medical merit, or a risk of medical collateral damage, but simply because of the risk that such measures may rip society off its freedom loving bearings.

Talking shops

One theme that repeats itself again and again in The Road to Serfdom: that a democracy should act strongly on issues on which strong agreement exists, and not act at all on the issues with huge disagreement between the parties. He warned that parliaments should not become “talking shops”. Google shows that the term talking shop is widely used to designate parliaments, sometimes even in a positive way: “parliament should remain a talking shop” argues this author.

Let’s assume for a second that Hayek was on to something and that it’s actually a regression for a parliament to become a talking shop. What would strong action on issues with strong agreement look like? Well, why is it possible that there is still child trafficking in the world, or malaria, or homelessness? On such issues it should be fairly easy to get national or even global unanimity. Infrastructure investments would be easy to agree upon too.

Sort that mess out later

How is it possible that we are even doing one single controversial thing, like fighting a war or introducing pronoun laws or even banning abortion. One might be for banning abortion, but doesn’t saving already living and breathing kids from malaria be one whole level of priority above saving babies in the womb? It doesn’t even matter whether one agrees with the original introduction of abortion legalisation or not. We could sort that mess out later and leave the legal situation as is for now. Let’s stop malaria first. Or homelessness: we can argue for years on end what kind of housing should or shouldn’t be provided, but putting up some tents as Donald Trump has proposed, seems a no brainer.

No brainers first

So let’s do the no brainers first. Is that what Hayek is proposing? Or even: let’s only do no brainers with the power of central government and leave the rest to the market, to private charities and to free media to further shape public opinion. Indeed it is remarkable that a nation that put a whole team of astronauts on the moon can’t stamp out child trafficking. Well they couldn’t do the moon thing either of course, but that’s beside the point. The question qui bono? arises. Does Congress like to be an ineffective money grabbing talking shop and are they themselves involved with child trafficking?

Bitcoin consensus

Let’s take the optimistic stance that congressmen are not bought and paid for goons and that they don’t do scary stuff with children. Let’s say it’s just the current parliamentarian system that inevitably leads to a talking shop outcome even if we put a mix of angels, boy scouts and good samaritans in there. What other systems do we have at hand that are better at producing and enforcing consensus? At that point the Bitcoin consensus sprang to my mind. How does that work and how could an Bitcoin consensus analog provide a better legislative engine?

Society coin

Let’s look at the Bitcoin protocol, the way it continuously improves and what a hard fork is. Let’s imagine that we have a Society Coin that’s there to map out and register perfectly on a blockchain all tax and spending related legislation, all taxes ever paid and all benefits ever received by each member of society. Now let’s assume that each member of congress runs a node of the Society Coin protocol. The native token is the Society Coin and at the outset it has a value of 100 vis a vis the non-governmental Bitcoin “Gold” standard. Every member of society owns some and pays their taxes via it. Let’s assume for starters that there is a perfect consensus and all nodes and miners are on the same protocol version. Everybody is happy. People are happy to pay the taxes they pay and others are satisfied and grateful for the benefits they receive.

Scared shitless

Come along the climate crisis. Despite comprehensive education efforts it soon becomes obvious that there is a split of the minds in society. Roughly 60% is scared shitless about the climate and would pay any amount, or have any amount of money printed to get it fixed, and 40% is not convinced and not willing to spend an extra dime. That is not for mitigation. They are willing to create a fund for climate adaptation, and they are willing to adjust the protocol to send 2% of taxes towards it. They call this new protocol Society Coin Classic.

The the scared shitless people have their coders prepare an updated protocol of Society Coin where say 20% of tax revenu is now channeled into climate mitigation solutions like solar, windmills and carbon capture and storage (CCS). On top of that 10% extra money is created to increase the powers of government at the risk of some inflation. They call their new coin Society Coin Climate.

A date is picked on which the nodes will have to upgrade their software. In the months leading up to that date the members of congress go all around the country lobbying and rallying and explaining their points of view. The battle lines are drawn: each member of parliament in line with the opinions and interests of their constituency chooses their preferred protocol. D-Day arrives and as predicted there is no perfect consensus: 60% upgrades to Society Coin Climate and 40% chooses Society Coin Classic with the 2% climate adaptation fund.

Soft power battlefield

Already we have a situation where this society raises just 60% of the money required to do the climate mitigation. The Classic Coiners don’t have to pay for what they don’t believe in. They are pretty much living in their own fiscal world now and of course congress hates it, since rather than having one big “fascist boot to step on peoples faces forever” they now have two smaller separate boots and a resolve of this “civil war” is not in sight. There is no battlefield to battle the disagreement out at the costs of tens of thousands of lives. Or is there? Is there a soft power battlefield maybe to arrive at consensus after all?

Yes there is! In the weeks and months and years that follow a lot is going to happen to the price vis a vis the Bitcoin standard of both coins. The debate rages on, people keep making up their minds and nodes keep switching sides. At some point the people on the Society Coin Climate are getting fed up because their neighbour on the Society Coin Classic just bought a new car because they don’t pay such a heavy climate tax. The price of Society Coin Climate now starts tanking and the Society Coin Classic rises by the same amount. In congress more and more nodes switch to the good old Society Coin Classic protocol. The “market capitalisation” of the Society Coin Climate starts to dwindle and so does the tax revenue it brings in. In the end, even though initially 60% fell for the climate scare, the cooler heads prevail and society moves on on a near perfect Society Coin Classic consensus.

90% free market wisdom

The whole effort to disrupt society and bring everyone over to a Society Coin Climate is a warning to congressmen to not waste too much superpac money on “education of the people” on controversial issues. If perfect consensus is out of reach it’s all just a waste of money and energy. Divide and conquer works like a charm in a simple majority (fake) democracy, but fails completely when consensus for a blockchain protocol is sought over and over again. Central power is only maintained when society sequentially moves from perfect consensus, to perfect consensus, to perfect consensus. Are we talking about a totalitarian state then? No, only the perfect consensus items are regarded at all, at the power center, given that bullying and torturing people into submission is excluded of course. 90% will be left to “free market wisdom” simply because it is out of reach of easy and quick political consensus.

Happily buzzing along

Now let’s show that this fool-and-psychopath-proof set-up works neatly for issues that are easy to be agreed upon. Let’s take child trafficking. A new protocol is proposed that includes a percent of tax money to be spent on an extensive child protection offensive. With relatively small PR efforts the whole society is brought on board. 99% of congressmen (nodes) agree to upgrade to the new protocol on date X. The 1% remaining joins a week later. No hard fork. The whole society remains on one legislative standard. All nodes and miners are happily buzzing along.

Flocking to El Salvador

Of course there remains the possibility of issues where society might split for decades and centuries. In an emptier future world, one could easily imagine people then also physically moving to another country that has the protocol (the laws) they like. Just as Bitcoiners now flock to Portugal and El Salvador. Imagine in Covid time a quick migration of a million people between Sweden (laisser faire) and Austria (medical fascism). But maybe the tax solution works fine: you don’t pay for the wars you don’t support. In any way: Hayek’s idea that parliaments should not be talking shops but strong sequential enforcers of simple perfect consensus items, is worthwhile pondering about.

Below a few educational video’s about soft forks and hard forks:

Title photo by Julian Wallner on Unsplash