The most recent episode of the Bankless podcast discussed the potential advantages of authoritarian regimes in the 21st century. The argument stems from the idea that the Chinese and Russian governments allocate significant resources to promote their narratives while the US government takes a more hands-off approach.

In the episode, hosts Ryan Sean Adams and David Hoffman delve into whether authoritarianism could outcompete liberal democracies, featuring insights from economist Noah Smith and Ethereum co-founder Vitalik Buterin.

Efficiency of Authoritarian regimes as a threat to liberalism

Smith argues that liberal democracy was hailed as the optimal societal model at the end of the 20th century, epitomized by Francis Fukuyama’s “The End of History” thesis. However, recent developments have cast doubt on this triumphalism. The rise of China, perceived weaknesses in the US, and the transformative impact of the internet are central to this reassessment.

The internet’s role is pivotal. Smith posits that liberal democracies historically excel at aggregating information through markets, elections, and public discourse. However, the internet’s ability to centralize vast amounts of data potentially reduces this advantage. Authoritarian states can now harness this data to gauge public sentiment, allocate resources more efficiently, and respond swiftly to unrest, as evidenced by China’s rapid policy shifts following the 2022 “white paper protests.”

Moreover, the internet fosters information anarchy, making it easier for disinformation to proliferate. This scenario complicates governance in liberal democracies, where politicians spend substantial time countering false narratives and fundraising, detracting from effective governance.

Buterin expands on this, likening the information landscape to Thomas Hobbes’ concept of a “war of all against all,” where monopolistic control over narratives might emerge as the only stable equilibrium. This metaphor highlights the potential for authoritarian regimes to exploit the internet’s capacity for data aggregation, turning a tool designed for liberal empowerment into one that strengthens centralized control.

Counterarguments to the efficiency of Authoritarian regimes

Smith and Buterin then explore counterarguments. Smith draws a parallel to the printing press, which lowered information costs and led to increased liberalism and societal fragmentation rather than authoritarian dominance. He questions why the internet wouldn’t follow a similar trajectory.

However, Smith explains that the situation today involves nonlinearities. Initially, reducing information costs via technologies like the printing press and telegraph bolstered liberal democracies by improving information aggregation. As these costs approached zero, benefits plateaued while the costs of disinformation and information warfare rose exponentially.

Buterin adds that centralized systems often excel in extraction rather than production, potentially outcompeting more liberal systems in zero-sum conflicts. He emphasizes that defining success solely by economic output might overlook broader impacts on human flourishing.

Buterin then considers the digital world’s fundamental differences from the physical one, particularly in terms of defense mechanisms. Digital defenses, such as encryption and decentralized platforms, offer robust protections without physical analogs, suggesting an inherent resistance to totalizing control in the digital sphere.

Moreover, Buterin notes that the fragmentation of the internet into smaller, more specialized communities could mitigate the negative impacts of information warfare. These fragmented spaces often maintain higher discourse quality compared to large, chaotic platforms like Twitter.

Buterin stated,

“Twitter is the worst of it that you see, and it’s the worst of it precisely because you can see it right if you think about private group chats, for example.

Private group chats consistently maintain higher levels of quality and high levels of productive discourse on smaller social media platforms, whether it’s Farcaster or whatever else they maintain higher levels of discourse.”

He then pointed to an article in 2022 by Smith discussing how the internet wants to be fragmented.

Smith acknowledges this point, agreeing that reducing reliance on broad, contentious platforms could lessen the social costs associated with information tournaments, allowing for more constructive and focused discussions within smaller, more coherent groups.

Despite these reassurances, Smith raises concerns about the global reach of authoritarian influence, particularly through sharp power tactics. He highlights how China uses economic leverage to influence foreign companies and governments, blurring national borders in the digital space. This ongoing cross-border information warfare presents a unique challenge distinct from traditional physical conflicts.

How blockchain could save democracy

During the discussion, Noah Smith raised the question of whether blockchain technology could enable secure communication among citizens in authoritarian states like China and Russia. He wonders if there are ways for people to talk freely and anonymously about political issues, bypassing government surveillance and censorship.

Vitalik Buterin responds by highlighting the work of a company called Rarimo, based in Kyiv. It developed a tool called “Freedom Tool,” which uses zero-knowledge proof technology to allow Russian citizens to prove their citizenship and participate in online voting without revealing their identities.

This system ensures that the results are tamper-proof and visible, creating a form of anonymous, censorship-resistant voting. Buterin sees this as an example of how blockchain and zero-knowledge proofs can provide both privacy and trustworthiness, potentially creating a more secure and resilient infosphere against both centralized and decentralized cyber attacks.

Buterin acknowledges that while blockchain technology might not be necessary for Americans to communicate, it could be crucial for people in authoritarian states to have secure and private conversations about their political situations. This technological capability could help foster internal dissent and democratization efforts within these regimes by providing a safe space for dialogue and organization.

Smith appreciates this perspective and sees potential in developing tools that make the internet landscape more conducive to pluralism, where multiple groups can interact in productive ways. The idea is not to play cat-and-mouse games with oppressive regimes but to create robust systems that support healthy information ecosystems, allowing diverse voices to be heard without fear of retribution.

In conclusion, blockchain technology, with its ability to provide secure, anonymous communication and verifiable voting mechanisms, offers promising avenues for supporting democratic movements and safeguarding freedoms in authoritarian contexts.

By leveraging these technologies, it may be possible to counteract some of the disadvantages liberal democracies face in the digital age, ensuring democracy can continue to thrive even in challenging environments.

Ultimately, the discussion emphasizes the complexity of predicting long-term outcomes in the face of rapid technological advancements. While the potential for authoritarian regimes to exploit these technologies is significant, the inherent adaptability and resilience of liberal democracies should not be underestimated. The future remains uncertain, shaped by the interplay between technological capabilities, political structures, and societal values.

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