Autonomous Business Reality

Abstract

Society tends to expect technology to do more than it can actually achieve, at a faster pace than it can actually move. The resulting hype cycle infects all forms of discourse around technology. Unfortunately, the discourse on law and technology is no exception to this rule. The resulting discussion is often characterized by two or more positions at opposite ends of the spectrum, such that participants in the discussion speak past each other, rather than to each other. The rich context that sits in the middle ground goes disregarded altogether. This dynamic most recently surfaces in the legal literature regarding autonomous businesses. This Article seeks to fill the gap in the current discussion by creating a taxonomy of autonomous businesses and using that taxonomy to demonstrate that automation, standing alone, is not what makes autonomous businesses exceptional. Rather, the capacity of autonomous businesses to make radical governance changes more prevalent in the market pushes the boundaries of current choice of entity and governance paradigms while also illuminating low-technology functional equivalents that may offer more traditional businesses a path to governance reform.

To make these claims, this Article begins in Section I by briefly introducing the two emerging technologies that enable business automation. Section II reviews the existing literature and argues that by focusing on only one specific segment of the current autonomous business landscape, the literature misses key opportunities to evolve business law. Section III builds a map of existing autonomous businesses, demonstrating the differences among them and explaining them as a function of design trade-offs. Section III then uses that map to build a taxonomy of autonomous businesses and offers a framework for considering the broader impacts of autonomous businesses on law. Section IV examines ways that autonomous business reality may incentivize reforms in traditional corporations while simultaneously emphasizing the need for continued research and innovation in choice of business entity, organizational governance, and regulatory compliance.

Keywords: autonomous business, algorithmic entities, blockchain, smart contracts, algorithms,