This article has a fair bit of nonsense in it, but it's asking an interesting question:
How do we have a flourishing civilization in the 21ˢᵗ century, with rapid progress, without extreme concentration of power?
The author sets up a paradigm where technology has created tools that make big government, big business, and big mob all achieve disproportional growth relative to smaller endeavors. This leads to this statement:
If there is one argument that explains both the rise of America in the 20ᵗʰ century and the rise of China in the 21st, it's a simple one: economies of scale.
One counterbalance to powerful governments and companies gaining more power suggested by the author is "mandating difussion"
What does "mandate more diffusion" mean? First, a few government policy examples:
- EU standardization mandates (eg. most recently USB-C), which make it harder for build proprietary ecosystems that do not play nicely with other technology
- Forced technology transfer rules in China
- USA banning non-compete agreements, which I support on the grounds that they force the "tacit knowledge" inside of companies to be partially open source, so once an employee leaves one company they can apply skills learned there to benefit others. Non-disclosure agreements limit this, but are fortunately very porous in practice.
- Copyleft licenses (eg. GPL), which require any software built on top of the copylefted code to itself be open source and copylefted
I have a very dim view of this sort of solution. It seems to me that there is no way to "mandate" our way out of a government that is concentrating power, and instead such mandates will simply make the government even more powerful. The path I've seen governments take in the 21st century has been one of bending any tool (even those laws that seem objectively good) to increasing governmental control, reach, and entrenchment.
But the author suggests a second solution to which I am much more amenable: adversarial interoperability.
[Adversarial interoperability is] when you create a new product or service that plugs into the existing ones without the permission of the companies that make them. Think of third-party printer ink, alternative app stores, or independent repair shops that use compatible parts from rival manufacturers to fix your car or your phone or your tractor. (quoting Cory Doctorow)
This sounds great, but I'm not clear how one encourages such products. The general trend seems to be shutting such things down. There is a sense that this adversarial interoperability is supposed to be achieved without permission from corporations or assistance from the state -- sort of naturally -- but if this is the case, I wonder what stands in the way?
In general, much value capture in web2 is at the level of the user interface, and so if you can make alternative interfaces that are still interoperable with the platform and its other users using the existing interface, then you can remain part of the network, but opt out of its value capture.
The article ends weakly, I felt: I wanted a clear, strong statement about something...instead we get this:
Slave morality says: you are not allowed to be powerful.
Master morality says: you are commanded to be powerful.
A synthesis morality focused on balance of power might say: you are not allowed to be hegemonic, but you are encouraged to be impactful, and to empower others.
Encouraged, impactful, empower -- these are words that have been well-drained of their meaning at this point. If statements 1 and 2 are the author's attempt to show the historical options, and statement 3 is meant to be his vision for going forward, he really should have tried to make it tighter. Something like:
Diffusion morality says: you only get power by making others powerful.
But such abstract statements probably don't help much in the world. Fun to think about though.
(Vitalik is someone who gets a lot of well-deserved shit for having bonkers ideas; however, I'd rather read bonkers ideas than the same old stuff week after week, so if you find it unpleasant to engage with simply because of who wrote this article, pretend it was someone else who wrote it)
I think he does make an interesting point.
In the economic theory of monopolies, extreme economies of scale gives rise to monopoly power because the largest producer becomes the most efficient one. Smaller shops can't compete.
So Vitalik is saying that technologies enhance economies of scale, thus giving rise to more natural monopolies across all sectors, including enhancing the power of big government. I think it's a reasonable hypothesis.
That being said, another key piece of economic theory is that the threat of alternatives serves to constrain monopoly power. So to me the best way to combat the growing threat of monopoly is to make viable alternatives. I think this goes hand in hand with Vitalik's interoperability argument.
The question, as always, is how do you fund viable alternatives when the fixed cost of development is high? On one hand, we could trust the market. If the demand for an alternative is high enough, trust the market to develop them. Even if they never become big or mainstream, their presence may be enough to deter monopoly power. Another approach is more heavy handed, requiring the big players to follow open standards and to publish their documents and tech specs that would allow the development of alternatives more feasible.
I'm not sure which I support, but I think I lean towards the "right to repair" philosophy of requiring companies to make information more accessible to allow third parties to develop tools and upgrades for their products.
The best place to start is getting rid of all the anticompetitive policies that arbitrarily enhance monopoly power.
Once we have a better look at what markets are actually pushing towards we can see what actual problems might exist.
Do we know what those anticompetitive policies are though? I'm somewhat sympathetic to this idea that we're gonna get more market concentration naturally even without any specific anticompetitive government policy.
There will be a lot sector specific things that I’m unfamiliar with, but the general form they take are costs that small businesses can’t afford.
If you want to employ more than 50 people (I think that’s the general cutoff), you suddenly need an entire HR department and other compliance personnel to make sure you’re within the mountain of red tape that federal, state, and local agencies have spewed out.
Larger employers can get better deals on the employee health insurance they’re required to offer.
Minimum wage laws remove the possibility of competing on non-monetary dimensions, like better work environment.
Occupational licenses keep freelancers from just hopping into the arena.
There are building and parking requirements that are more costly for startups to meet.
Many places prohibit operating a business out of your residence.
Loosely related: Somehow all the mom-and-pops got shutdown during COVID, while the big box stores stayed open. I have no idea what justified that but it made it pretty obvious who’s daddy’s favorite.
Yeah, one of the most ironic things about progressives is that they hate big business but the mountains of red tape they impose make it so that only big businesses can survive.
Which reminds me that there’s also the labyrinth of tax credits, deductions, grants, and other subsidies that are much easier for big businesses to optimize because they can afford the experts who know where all the goodies are.
phones are a pretty good example: there really isn't any widespread device manufacturer that poses a risk to the iphone-android duopoly (it's a little messy because android runs on lots of different manufacturer's devices, but there is something that leads to the two app stores dominance).
Will it take regulation to change this? Or will regulation just distort the market even worse, actually hindering the emergence of a third option?
I can certainly see a world where the market doesn't fix this problem.
Same. Though we also have to distinguish between long-run and short-run. If the duopoly becomes too shitty, they'll still maintain dominance in the short-run, but in the long-run a better alternative is likely to emerge.
The level of their enshittification also depends on the viability of alternatives. If viable alternatives exist, even if they're niche, it could prevent the duopoly from becoming too crappy.
I don’t think things like adversarial compatibility need to be specially encouraged. It would be sufficient to just remove all the arbitrary protections established players enjoy.
Remove barriers to entry, allow competition, and allow imitation.
It’s not even obvious to me that rapid progress and concentrating power are compatible. Progress usually comes in the form of creative destruction. The new eat the old. Rapid progress should be marked by lots of power churn.
Yes. This is what frustrates me about Vitalik -- he should see this: you can't mandate decentralization. Maybe that's what he is trying to get at in his third point, plurality (which I didn't address at all).
But it doesn't seem like it needs to be complicated to me: as you say, remove arbitrary barriers and lets see what happens.
The counter argument might be that if gov't gets weaker, big business or big mob will get more powerful.
Perhaps it comes down to this axiom: a truly free market is always a self-correcting system.
I suspect Vitalik does not agree with this statement. I'm not entirely sure I do, but I'm probably closer to agreeing with it than he is.
We don’t have to traffic in absolutes. Corrective market mechanisms are well known, so letting them function would be better.
If limiting government were actually good for big business then Ron Paul would have gotten all the corporate donors. He didn’t get any. They know on which side their bread is buttered.
Ron Paul's supporters are the people who actually deserve to be in charge of large corporations. So he did win support from the legitimate titans of industry, we've just been jilted out of our birthright, which from the outside makes it seem like big business is inherently pro-government.
If you think US wealth and prosperity is based upon free enterprise how do you explain the serial use of brute military force in the resource hegemony of the USA?
Has to USA not invaded many other nations over its history?
Is the US not a brutal militarist global bully that gains much of its wealth via direct military brute force over other nations and peoples?
Perhaps you enjoy wealth and security as a result of US imperialism and you ignore the facts about how that wealth has been acquired? -
Nations USA has invaded -
(1) American Indian nations (1776 onwards, American Indian Genocide; 1803, Louisiana Purchase; 1844, Indians banned from east of the Mississippi; 1861 onwards, California genocide; 1890, Lakota Indians massacre), (2) Mexico (1836-1846; 1913; 1914-1918;
1923), (3) Nicaragua (1856-1857; 1894; 1896; 1898; 1899; 1907; 1910; 1912-1933; 1981-1990), (4) American forces deployed against Americans (1861-1865, Civil War; 1892; 1894; 1898; 1899-1901; 1901; 1914; 1915; 1920-1921; 1932; 1943; 1967; 1968; 1970; 1973; 1992; 2001), (5), Argentina (1890), (6), Chile (1891; 1973), (7) Haiti (1891; 1914-1934; 1994; 2004-2005), (8) Hawaii (1893-), (9) China (1895-1895; 1898-1900; 1911-1941; 1922-1927; 1927-1934; 1948-1949; 1951-1953; 1958), (10) Korea (1894-1896; 1904-1905; 1951-1953), (11) Panama (1895; 1901-1914; 1908; 1912; 1918-1920; 1925; 1958; 1964; 1989-), (12) Philippines (1898-1910; 1948-1954; 1989; 2002-), (13) Cuba (1898-1902; 1906-1909; 1912; 1917-1933; 1961; 1962), (14) Puerto Rico (1898-; 1950; ); (15) Guam (1898-), (16) Samoa (1899-), (17) Honduras (1903; 1907; 1911; 1912; 1919; 1924-1925; 1983-1989), (18) Dominican Republic (1903-1904; 1914; 1916-1924; 1965-1966), (19) Germany (1917-1918; 1941-1945; 1948; 1961), (20) Russia (1918-1922), (21) Yugoslavia (1919; 1946; 1992-1994; 1999), (22) Guatemala (1920; 1954; 1966-1967), (23) Turkey (1922), (24) El Salvador (1932; 1981-1992), (25) Italy (1941-1945); (26) Morocco (1941-1945), (27) France (1941-1945), (28) Algeria (1941-1945), (29) Tunisia (1941-1945), (30) Libya (1941-1945; 1981; 1986; 1989; 2011), (31) Egypt (1941-1945; 1956; 1967; 1973; 2013), (32) India (1941-1945), (33) Burma (1941-1945), (34) Micronesia (1941-1945), (35) Papua New Guinea (1941-1945), (36) Vanuatu (1941-1945), (37) Austria (1941-1945), (38) Hungary (1941-1945), (39) Japan (1941-1945), (40) Iran (1946; 1953; 1980; 1984; 1987-1988; ), (41) Uruguay (1947), (42) Greece (1947-1949), (43) Vietnam (1954; 1960-1975), (44) Lebanon (1958; 1982-1984), (45) Iraq (1958; 1963; 1990-1991; 1990-2003; 1998; 2003-2011), (46) Laos (1962-), (47) Indonesia (1965), (48) Cambodia (1969-1975; 1975), (49) Oman (1970), (50) Laos (1971-1973), (51) Angola (1976-1992), (52) Grenada (1983-1984), (53) Bolivia (1986; ), (54) Virgin Islands (1989), (55) Liberia (1990; 1997; 2003), (56) Saudi Arabia (1990-1991), (57) Kuwait (1991), (58) Somalia (1992-1994; 2006), (59) Bosnia (1993-), (60) Zaire (Congo) (1996-1997), (61) Albania (1997), (62) Sudan (1998), (63) Afghanistan (1998; 2001-), (64) Yemen (2000; 2002-), (65) Macedonia (2001), (66) Colombia (2002-), (67) Pakistan (2005-), (68) Syria (2008; 2011-), (69) Uganda (2011), (70) Mali (2013), (71) Niger (2013).
Here is a summary of post-1950 avoidable mortality/ 2005 population (both in millions, m) and expressed as a percentage (%) for each country occupied by the US in the post-1945 era. The asterisk () indicates a major occupation by more than one country in the post-WW2 era (thus, for example, the UK and the US have been major occupiers of Afghanistan , Iraq and Korea , leaving aside the many other minor participants in these conflicts). Data is also given for the US: US [8.455m/300.038m = 2.8%], Afghanistan [16.609m/25.971m = 64.0%], Cambodia* [5.852m/14.825m = 39.5%], Dominican Republic [0.806m/8.998m = 9.0%], Federated States of Micronesia [0.016m/0.111m = 14.4%], Greece* [0.027m/10.978m = 0.2%], Grenada* [0.018m/0.121m = 14.9%], Guam [0.005m/0.168m = 3.0%], Haiti* [4.089m/8.549m = 47.9%], Iraq* [5.283m/26.555m = 19.9%], Korea* [7.958m/71.058m = 11.2%], Laos* [2.653m/5.918m = 44.8%], Panama [0.172m/3.235m = 5.3%], Philippines [9.080m/82.809m = 11.0%], Puerto Rico [0.039m/3.915m = 1.0%], Somalia* [5.568m/10.742m = 51.8%], US Virgin Islands [0.003m/0.113m = 2.4%], Vietnam* [24.015m/83.585m = 28.7%], total = 82.193m/357.651m = 23.0%.
Thus in the period 1950-2005 there have been 82 million avoidable deaths from deprivation (avoidable mortality, excess deaths, excess mortality , deaths that did not have to happen) associated with countries occupied by the US in the post-1945 era.
Oh get over it.
Good point. Essentially, big government selects for big businesses that will support more big government.
The military and banking are the primary drivers of US wealth today.
They are Big Business Inc.
They own the US government.
good points.
but if governments want to increase power (largely by increasing their regulatory abilities) and if regulation leads to increased power for corporations (as long as they are the winner), what hope have we to actually place limits on government, much less pull them back from where they are?
The rug pull is our hope. That’s why I dove into this movement.
Go around them and build a parallel system that is prohibitively expensive to regulate.
Governments are fundamental to the wealth and security of nations and their citizens.
Chinas mixed economy applying state capitalism has outplayed USAs crony capitalism where bankers have captured government.
Markets do not fixed all problems- a government that is motivated to build and secure the wealth and security of its citizens is also required.
Any private corporation gaining an unhealthy amount of market power will be swiftly limited by the Chinese government- the same no longer applies in the USA.
Corporate lobbyists (capital) direct the US government and that of most 'liberal western democracies'...that is their ultimate downfall.
The government is great until it's someone else's bigger government bombing the shit out of you.
Unless your government has alliances with others who support you against Putins war crimes or Bibis genocide.
Without government you are helpless against such murderous thieving despotic cunts.
Real life is not a Libertarian economists supply and demand curve abstraction - it is a brutal contest for energy, resources and territory as old as DNA itself.
You're missing it. Only governments can commit genocide. Free markets can't come close to the levels of mass murder that governments enable. Governments don't protect from mass murder, they initiate it, despite using it as a rhetorical excuse to justify their existence.
Free markets cannot build a secure territory, law and order and property rights.
These are abstract human constructs and must be imposed by a government otherwise you exist in a lawless jungle of predators and victims.
That's why you will never leave the cosy rules based embrace of the nation state and venture out boldly into a lawless libertarian nirvana- because you are not that insane or suicidal...are you?
I break the law all the time. What are you even talking about it? There's states everywhere. I don't choose to live within statist borders. They follow me.
You don't have to use Bitcoin though. You voluntarily bought into a currency founded by American reactionaries. You admit that we know better than the government when it comes to protecting your wealth.
I hold Bitcoin because it is a protest against the rentseeking bankers who accompany the criminals who now posture as our governments.
That does not remove the need for a return to a government that represents the people rather than the current ones who are owned by the rentseeking fiat debt slavery bankers cartel...
There was never a need for it, first of all.
But setting that aside, it makes funding the government impossible. If they can't shill their premined scam token, the government would have to resort to intolerable levels of taxation.
All the gains you experience from holding Bitcoin that help you live a better life occur because there's no government inflating its supply. You're evading the mechanisms they rely on for funding.
And since when does the PRC's communist regime or Maduro represent the people? They killed off everyone that disagreed with them in peacetime. They still kill anyone that disagrees. Chavez and Maduro's elections were all rigged. FDR and Biden's elections were rigged. Trump let Mamdani live and you leftists still bitch and moan as though he didn't.
They're the only real source of law and order. That's why you're using Bitcoin instead of government currency. Governments print money because they don't respect property rights.
Bitcoin does not give land title or enforcement of property rights more generally let alone more general law and order and security from thieves and aggressors.
You are confused about the extent of effect Bitcoin provides.
It doesn't need to grant titles. It's physically impossible to confiscate.
Vitalik’s framing around economies of scale and technology’s role in amplifying them is worth serious consideration. The reality is that scale has always been a powerful lever but digital infrastructure supercharges it by removing traditional friction points. This is why monopolistic tendencies evolve faster today than in industrial eras. Global reach, instantaneous distribution and complex network effects mean that once a player secures dominance it can self reinforce at unprecedented speed.
The idea of mandating diffusion runs into the problem that any state intervention designed to decentralize power can just as easily be repurposed to consolidate it. History is full of examples where tools intended for openness ultimately served central authority. That is why adversarial interoperability resonates more strongly. It shifts the constraint from regulation to creative engineering and market pressure. When independent players find ways to plug into closed ecosystems without permission they open cracks through which competition and diversity flow.