Capitalism After Satoshi: Blockchains, Dehierarchicalisation, Innovation Policy, and the Regulatory State

Journal of Entrepreneurship and Public Policy, 2018

16 Pages Posted: 28 Dec 2018

See all articles by Chris Berg

Chris Berg

Royal Melbourne Institute of Technolog (RMIT University)

Sinclair Davidson

RMIT University

Jason Potts

Royal Melbourne Institute of Technolog (RMIT University)

Multiple version iconThere are 2 versions of this paper

Date Written: November 13, 2018

Abstract

What are the long-run economic and policy consequences of wide-spread blockchain technology adoption? We examine the structural economic effects of this institutional innovation as disintermediation in markets, dehierarchicalisation of organisations, and growing private provision of economic infrastructure for exchange, contracting and coordination. We predict that these institutional economic dynamics undercut the historical rationale for much modern economic policy, originally formulated to enable capitalism to cope with market power, to control hierarchy, and to furnish public infrastructure for trust. We argue that capitalism built on distributed ledger technology requires different economic policy settings to industrial capitalism, based on centralised ledger technology. We formulate the institutional logic of this dynamic co-evolutionary model, and discuss policy settings for an economy coordinated with blockchain infrastructure and associated distributed digital technologies for economic coordination (Web3, Industry 4.0). We find that much modern economic policy will be differently instantiated (e.g. hard-coded in platforms) or variously no longer necessary (because of new institutional solutions to problems of trust and coordination). We argue that the institutional innovation of blockchain engenders a new post-industrial economic era that requires new policy rules. This paper seeks to explain why this change will occur, and to explore a new framework for economic policy adapted to economic infrastructure built on distributed ledgers.

Keywords: Blockchain, Innovation Policy, Industry Policy, Capitalism

JEL Classification: B00, B52, D7, H00, L5, O3

Suggested Citation

Berg, Chris and Davidson, Sinclair and Potts, Jason, Capitalism After Satoshi: Blockchains, Dehierarchicalisation, Innovation Policy, and the Regulatory State (November 13, 2018). Journal of Entrepreneurship and Public Policy, 2018, Available at SSRN: https://ssrn.com/abstract=3299776 or http://dx.doi.org/10.2139/ssrn.3299776

Chris Berg

Royal Melbourne Institute of Technolog (RMIT University) ( email )

124 La Trobe Street
Melbourne, 3000
Australia

Sinclair Davidson

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000
Australia

Jason Potts (Contact Author)

Royal Melbourne Institute of Technolog (RMIT University) ( email )

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
176
Abstract Views
999
Rank
115,122
PlumX Metrics