The History of Politics and Lessons for DAO Governance

Transcript

[Music] foreign [Music] how are you I'm super happy to be here this is my fourth talk at dthcc so I think I'm better on and this one is a special talk for me because I can tell you that this talk took years to make um so maybe you have seen the Steve Jobs talk about the commencement speech it's time for what he argued that you know we have a some dots that connect in our life things we have done that then started to

make sense and I guess I'm starting to get a bit old because those dots are starting to connect at least in in my case and um let me tell you a bit why I'm from Argentina very far away country well known mostly because of well football meat but unfortunately also well known because of an economic failure right the country used to be in the early 20th century uh economic I mean Powerhouse it was one of the wealthiest countries in the world and after a number of events uh over the 20th century started to lose lots of power time and so um even compared to other countries that

were at the same level when they started so I started to study called economics to try to understand all these and philosophy this is where I studied University I Buenos Aires and I specialized in what we call constitutional economics so understanding how institutions affect economic prospects and economic growth of societies and their success and I read a lot of books of political Theory political philosophy and this is what I want to share with you today because all of these learnings are starting to become very relevant for some things that we are doing about me I'm also fast forward founder of clarus you know clarus anyone knows

Claris yeah oh great awesome well great good Photoshop marketing department okay so all of these things started to connect and close as you know is this interest arbitration protocol but the thing now is governance in Dallas so and we have seen lots of like big failures in governance uh maker Dao Aragon and we we had ourselves our own drama in governance I don't know if you know proof of humanity and all of the the story about this if you don't you have you can read this paper that was written by Jamila and some colleagues from blockchain gov

about uh Dao that went wrong at citizen ethnography so the thing is that software developers they are trying to provide software but not necessarily training political philosophy or political theory on politics so what they want to talk about today is to tell you that many of the governance problems that we have in daos are not new I mean they haven't discussed for Centuries by political philosophers philosophers and theories right and you know as Mark Twain said history doesn't repeat itself but it Rhymes so hopefully we can take some learnings I'm going to show you some issues that were important in the history of political

Theory and try to suggest some learnings for you to dig deeper I'm not making any suggestion in particular because nobody knows how to build all this but um we can learn a lot from what was done in the past so first thing is what's cool about democracy right I I guess this nobody I mean not everyone is clear about this and generally speaking the participation of people in governance is of course a source of legitimacy and also higher diversity in decision making tends to lead to better results so this is not a new idea Aristotle said this in the 4th Century BC

so this is why we should care about about democracy but there are some situations that sometimes tend to move to what I call Democratic fetishism and that we could like um maybe summarize in like hey bros let's make a Dao and start voting and take the governance you know in our hands and all good so you know we tried this with for Humanity I mean we were doing a one-person vote system where everyone could vote and it didn't work very well it ended up full of trolls and governance attacks and lots of different things and honestly it didn't work and it was actually predictable that you would not

work um when they found the fathers of the U.S gathered to make the Constitution um so they had to figure out how to make a governance system for a big democracy and democracies as they call them back then the direct democracies never worked as James Madison very well explained um because there is a problem of knowledge people don't have the knowledge to vote about everything uh Plato in the 4th Century BC um he made this example with people from a ship and the sailors voting for the captain and maybe they will not vote for the person who is the most qualified

maybe they will vote for those who are more popular so he was skeptical of of this type of of voting um and he was especially wary of the influence that theater had on the citizens of of Athens and he called No this governance regime this is a mob rule type of regime like theatocracy we should ask ourselves if we are not kind in a situation where this is a threatography where people get influences from the Twitter and you know um and you know also if you see the people who hold a lot of voting power in

Dallas are basically Twitter celebrities I mean this is nothing against Twitter celebrities I'm just saying that that's it's not enough to be a celebrity on Twitter to be a good Delegate for further down you need lots of more stuff to to do okay so this program is not you just to our meal philosopher 19th century he was one of the big promoters of universal suffrage back then even to women in a time that women of course could not vote and it took a long time for them to vote but he suggested that people with a more education or more knowledge will have more votes in uh Society right and they should have more votes in the topics

that they knew about and the second big danger of democracies is these factions factions meaning and when a group of citizens tried to protect the interest of their own group instead of the common good of of the Dao in this case and this factions can end up crashing the rights of minorities right um so the question that we have to answer is how can we make good decisions and avoid the dangers of our factions while at the same time preserving the the spirit of popular government to earn legitimacy for for daos right and what the founding fathers of the US

did basically was using representation uh and by by people I mean so people vote for representatives and um this representation as a filtering device so Jesus would vote for representatives and those people who Representatives would have more information more knowledge and they will be in a situation to make better decisions than the citizens themselves also they will have more time um but of course what happens if the people choose the wrong Representatives right what happens if they are like seduced by by demagogues so this was a very important problem in all of the history of politics

so how do you recognize other model um there are different definitions but um in general demagogues present themselves as men or women of the Pure or common people and they are opposed to a corrupt Elite the elite can be defined in different ways would be you know businessman I mean the companies whatever but this is one main feature and the other one is that they tend to create a visitor democracy where the majority decides everything you know this idea of let's vote about everything Bros this is a very fertile ground for demagogues to prosper how to defend against demagogues well one option of course is address

their runs with the facts and arguments and another possibility is to use an institution that the ancient Greek had this was called ostracism and every year they they met the assembly and they held a vote where they chose one citizen that they considered too influential and citizens that they could consider that would become a dictator or a tyrant and they wrote the name of the citizen in that place like this one and then if some citizens had more than x amount of votes he was expelled banned from the city for 10 years so that was the practice of Austria season I'm not I mean endorsing it just saying that this is something that was used in the past to protect

cities against against demagogues if you want to learn more two excellent books about this populism a very short introduction and the magogs Playbook back by Eric Posner of course you know Eric Posner is Glenn Weil's co-author in Practical markets okay another key idea to defend against demagogues is separation of powers you know this idea of different powers having different functions in in the governance I'm not going to get much into this because everyone knows what this is but imbalances to to make sure that there is a rule of law and protection of minorities I'm just going to recommend two talks the first is a talk I gave at

the Devcon Osaka where this was the first time I presented how a supreme court could work in the context of adao and then another talk that was held on this stage by Jimmy ragosa a case for separation of powers in in daos okay in this same look at the agency form okay so one thing we could ask ourselves is how can we implement this idea of separation of powers in our Dao it's worth mentioning another thing you know ancient democracies were based in lotteries so if we if we brought an ancient you know Plato here and ask him what he thinks of modern Republics he

will say that they are like a I mean it's a rich man democracy because they thought that elections tended to only choose um like citizens to have more time and money to prepare themselves to campaign for for their position so what they thought was better was the use of lotteries or sortation to select the the people that they were going to to be ruled so they had this token called pinaki and it was an ID token a bronze ID and the selection process used this piece of Stone Cold Clarity and there was a random machine and they put the pinacion into the random machine and then someone I mean official threw some white and black balls on a slide and

then if you had a white ball you were chosen for office if you had a lag one you went home and this is how these different factions that wanted power were mixed through randomization and then there was a rotation it's rotated every year so it was very hard for faction to collude and keep the government for themselves okay this is a very important idea uh that ancient democracies had it was this idea of to rule and to be ruled this idea of rotation very Fascination and every citizen should have a turn to be in the government some books to learn more about sortation here you have a look of the draw the

political revolution of tradition and open democracy um so another question is can we use some lotteries into our Dao procedures okay okay I know I know what you're thinking so let's wait for someone to nail this down and say okay let's then let them come with a perfect Constitution and now let's just adopt that ourselves but this is not so easy so Jeremy Bentham philosopher from the 19th century as well late 18th century he wrote this book where he claimed that basically since human nature was the same for everyone constitutions could be the same for

every country right and they should you could have like one Constitution which was perfect and then copy paste this into all of the all of the societies but there is another vision of this that coming from Montesquieu that he says that the loss of a society need to be adapted according to its cultural and geography there is no a perfect Constitution there is more like a constitutional Society fit that one needs to to look for and 1808 Napoleon invades Spain and what happens in the Queen the king of Spain goes to prison and the American colonies of Spain decide to get the independence and what they do is they create constitutions and this is the Argentina

Constitution that it was basically copied from the U.S Constitution because that was the success model of the time and uh what happened is that the trajectories of the countries were very different as we saw how can two countries basically the same Constitution go through so different trajectories of evolution well there must be something more than just constitutions right and there could be something about the social and the cultural background that the society needs for a democracy to to work for example wealth distribution french guy who went to America to study the American democracy in the early 19th

century he made this observation about the U.S and in he published this in this book Democracy in America Two volumes very long book but very insightful um he said America is basically uh like a middle class Society with lots of equality but what happened in countries like Argentina or in Latin America was that they were very unequal societies so this economic inequality coming from well different Dynamics from The Colony ended up that the world concentration led to political power concentration and

this ended up with non-functioning you know governance systems um said for the Republic to work no Citizens need to be so rich that they can buy another and not so poor that he is compelled to sell himself a very good blog post I recommend from Chris bernitski called the original scene it's about how when you start a Dao and the token distribution starts by some an equal distribution then this can result in very bad Dynamics and Power in voting that can affect the development of the Dao in the in the long run so we need to think when we build our Dao so how does the well distribution

affect these political dynamics that will exist there can this distribution be improved I mean I mean I'm not saying that there should be you know a Communist Revolution and redistributed radically all the tokens as this was tried uh you know in land reform in many places but um there are some ideas that can at least um like mitigate the influence of inequalities in wealth into Political inequalities really because of the prince mostly this manual to get the power but Machiavelli was basically a Republican and he had in this book called these courses on Levy

well he where he proposes uh how are good republics should we should work and he takes inspiration from the constitution of the Roman Republic Roman Republic had an interesting feature that was called the tribunes of the pleb the treatment of the pleb were 10 citizens drawn from the plebeian ranks people that not have people poor that they had a special veto power for some types of well laws and this was a way to make sure that the elites would not concentrate all of their power of course then Julius are to power and this top to work but that was the idea of the Republic of Rome and that was uh what

Machiavelli suggested that the Republic should have if you want to learn more about these ideas you can read Machiavellian moment and Machiavellian democracy this is how to build you know republics and then this would have this could help us see how we can mitigate the power of of wells in our in our Dao and one last topic good governance comes from good laws or a good man this is one of the key questions in the history of political philosophy James Madison said that if men were Angels no government would be necessary right and ambition must be made to

counteract ambition this is basically I mean what they say if you get the government right then all will be good so get the right institutions and then your organization will work and this is basically how we think about this in the crypto industry you know let's get the mechanism right and then everything will flow nicely and of course rely always on incentives and don't assume any moral virtue of any agent right so what about morality and political culture is there some I mean place for for this so there is this book uh called how democracies die that they analyzed the

evolution of the U.S since the Constitution and what they the argument is that look when the family fathers left you know the Constitution uh I mean meetings and they were ratified by the states they were not happy at all they thought that this would not work and the American Constitution has a lot of flaws but these authors argue that it still worked because the society has some unreal rules of mutual Toleration America Americans I mean we used to see at least in the past um you know other the other party um as a political adversary not an enemy to be destroyed so this was an important

um uh you know feature there and also the part in power would not abuse of the power to try to stay they would understand that there should be a rotation so these two features that were more cultural than part of the formal institutions they argued in this book were key for the working of the American Republic when you analyze the declaros and democracy Earth and drama improve of humanity this was clearly not the case there were two factions that were like they saw each other as enemies and I mean in some way you try to use all of the tools to to compete against each other so this of course would not

work if you want to learn more about these ideas of crypto economics and how this affects governance I recommend this paper by Nathan Schneider crypto economics as a limitation on governance and also the response by vitalik and Nathan Schneider on the limits of crypto economics very good read um so questions for us as we build our daos how can we create a culture of Civility and collaboration can we improve the political culture by education um or by religion you know many authors from the 18th century especially I

thought that one of the critical elements for building a society a cohesive Society was having a Civic religion so religion comes from the world on francese in English into Thai and so religion is something that unites people it doesn't have to be something Supernatural so but civic virtue can be inculcated by Festival symbols ceremonies so a religion based on moral values that can be basis for the cohesion of a Dao I guess that's something that's kind of what we are building right and we are still here after many ethc so it's it's working we have our rituals we have a our you know ceremonies so it's working

um so to conclude those are a great opportunity to already think governance from first principles because you don't have to deal with you know all institutional reforms in States you know we kind of like basically build this from scratch um we can learn a lot from the history of political ideas because very smart people have thought about this like a lot it's very important that we collaborate with course discipline teams as I said software developers are necessarily trained in in politics and in political philosophy and political Theory I do recommend that you join if you're interested in this blockchain gov it's

an association that they do research on Dow governance and the whole conferences and so this is a great place to go to the like weekly or monthly calls and get involved into this community this is where all of these big ideas are taking a shape now and finally well let's experiment so this is new um so nobody has done this before on the internet and so we are like the first we are like the founding fathers in the US in the 18th century well we are the digital equivalent of of them and just let me leave you with just one thought from Wilson Churchill at the best way to to learn study history because in

history lies all of the secret of statecraft thank you very much [Applause] one question one question if you want yep yep uh fantastic talk thank you so much super interesting just look at the first principles and how they can apply obviously you've spent quite some time researching this and you talked a lot

about historically what worked and what didn't work what in your view is I don't know maybe a dial that's gotten it right or a constitutional framework where that we can apply to a lot of different dials can I have another 25 minutes for this question um I mean I I really I don't have any answers I mean I just wanted to to to I mean say these are the issues that were discussed in the in the past and we are starting to build you know this and what I try to just do here is point to this element you know separation of powers you know but it's a role for legal culture what is a role should we use solution I mean different elements

um blockchain golf is actually doing this research so you should join them or collaborate with them if you if you want because this is I mean the framework of the future is probably going to come from from there okay thank you guys [Applause]