Dictatorship, Democracy, and DAOs

DAOs unlock fundamental new ways to organize.

Whether it's the Czars of Russia, the Emperors of Rome, or today's corporate CEOs, the evolutionary natural selection process of organizing has seemed to favor autocracy, or rule by one person with absolute power. But is this an inevitable trend, or a more recent phenomenon? It turns out that for about 90% of human history, we lived in relatively egalitarian hunter-gatherer bands, with all members contributing to the survival of the group in their own way. As we evolved into homo sapiens, our prefrontal cortexes grew larger and cooperation, collaboration, and language became our competitive advantage as a species. So why did we so recently slip into authoritarian coordination systems?

When agriculture was invented around 9,000 BC, the production of food enabled the first cities to prosper, allowing merchants to specialize in trades, inventors to make new technology, scribes to read and write, and rulers to harness resources and raise a military. Farming societies relied on military might to survive, which was ultimately a test of autocratic coordination like raising armies, levying taxes, and coordinating resources quickly. If a medieval society of farmers wanted protection from neighboring raiders and safe roads to market, it was more rational to trade a little freedom and pay taxes to the king than to coordinate with neighbors fund their own army.

While autocracies thrive when coordinating costs are high, the sovereign's main goals of retaining power and accumulating wealth are at odds with the prosperity and well-being of the people. One might assume Kim Jong-un of North Korea would pursue policies that increase the wealth of his nation, but it turns out authoritarian regimes often oppose progress since economic growth, education, and prosperity pose a threat to staying in power. A key characteristic of dictatorship, explained in The Dictator's Handbook, is ensuring the loyalty of the essential supporters who are critical to maintaining power. In the case of Kim Jong-un, the loyalty of his military generals and closest advisors is sufficient to control the state. In democracy, the set of essential supporters is drawn from a much wider voting selectorate, protecting citizens from the tyranny of kings and emperors by incentivizing politicians to cater to a large voting coalition instead of feudal lords and aristocrats.

Democracy is not necessarily the most efficient system, but it is more robust and resilient. Winston Churchill famously quipped that democracy is the worst form of government, except for all the other forms that have been tried. Perhaps the biggest contribution that DAOs can offer us is lowering the coordination costs of building democratic systems without a corruptible centralized authority. In Athenian democracy, citizens had to gather in person and vote by raising black and white stones. With coordination costs so high, no wonder authoritarian rule was the norm. Thanks to the internet, blockchains, and DAOs, we can govern ourselves cheaply, vote and direct resources like running water, and unlock fundamental new ways to organize and free ourselves from authoritarian-by-default systems of the past.

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