While we have considered DAO’s as a base for a stable democracy, it is apparent that they can serve as a base for any computation. Further, given the persistence of a successful DAO (the DAO for Bitcoin has persisted since January 3rd, 2009), it seems inevitable that Darwinian selection will be applied quite vigorously to an ever growing population of DAO’s, all of which are carrying out various useful, or at least DAO-survival-enhancing, functions.
Which raises the obvious question: what enhances the survival probability of a DAO? Today, a DAO survives if it performs some function that causes people to support it. Our economic and digital systems sometimes hide this fact rather well, but it is still the case that people make the wheels of our civilization turn. A DAO that performs some service that some subset of humanity wants, and which cannot be done better in some other way, or which cannot be done better by some other DAO, will be richly rewarded. Those that can’t, will die.
DAOs that incorporate prediction markets and seek to maximize their own profits are obvious, as are self-improving DAOs. The advantage DAOs offer over regular corporations or organizations is a rather radical transparency and incorruptibility. With Bitcoin, you know what you’re getting – or at least, if you’re technically expert enough to understand what Bitcoin is doing, you know what you’re getting. As Mt. Gox demonstrated, extending an interface that is trustworthy, convenient, and easy to understand remains an important requirement of a system that seeks truly widespread acceptance. A system that allows unproven representatives to mediate between a reliable core and consumers can be badly tarnished when those representatives prove less trustworthy than the core.
Still, if the requirement is a global system to carry out a function with maximal transparency, maximal trust, minimal risk of corruption, and minimal risk of disruption than a DAO seems tailor made for the purpose. It’s reasonable to expect absolutely merciless competition for those functions where a DAO seems suitable. Hence the need for a DAO with pretensions of serving as a base for a democratic government to be fundamentally and radically self-improving. Anything less will result in a system that will, at some point, be left behind. The one thing about a democracy that’s difficult to “improve” is the collective welfare metric at its heart.
This, of course, raises a question of great interest: can a DAO Democracy survive the coming Darwinian competition? Phrased another way, will a self-improving DAO that has, as its metric, something other than the collective welfare of its citizens, be able to outcompete a similar DAO that is “burdened” with a collective welfare metric? This question might become acutely interesting to citizens of a DAO Democracy at some point in the not-too-distant future. Arguably, most people would be more willing to support a DAO Democracy than some other form of DAO, as a DAO Democracy obviously and transparently seeks the collective welfare of all its citizens. There are two reasons a person might choose some other DAO. First, they might not be a citizen. This is an obvious argument for a DAO Democracy that includes all humans. Second, they might support a DAO that preferentially favors them over others. For example, a DAO might seek the welfare of its stockholders, and you might be a major stockholder.
The question of interest then becomes whether a DAO that seeks to maximize the welfare of its stockholders can defeat a DAO Democracy, or whether the two would reach some sort of mutual agreement. Today, corporations generally abide by the laws that nations create (although the power of larger corporations and smaller nations sometimes overlaps). Would a DAO Democracy, particularly one which included all humans, dominate other DAO’s? While this outcome seems likely, it does not seem a priori inevitable. Indeed, a DAO that maximized its stockholder’s welfare might be indistinguishable from a DAO Democracy if every human owned one share of stock, and if the bylaws were appropriately chosen. This suggests alternatives to a purely egalitarian system are possible. One can imagine a DAO “Democracy” in which there were two or more classes of citizens. Higher classes of citizenship could be awarded based on good behavior, contributions to the democracy (either financial or non-financial), or on some other basis.
Might there exist some type of DAO “Democracy” which had well defined classes of citizenship which were conferred on some basis that was widely supported?
In some sense, we already have this: age. All democracies limit participation based on the age of citizens, with some minimum age being required before citizens can vote, drink, drive, or engage in other specific activities. Most societies have licensing requirements for participation in many activities. These have, at times, included requirements for voting, though these have often been used to limit participation by unfavored groups rather than for their ostensible purpose. For a DAO Democracy, however, exclusion of some citizens from the metric makes less sense than excluding citizens from voting in a conventional democracy. While it is unreasonable to expect a five year old child to make an intelligent decision about which candidate to vote for in a democratic election (the requirement for participation in today’s democracies) it is perfectly reasonable to conclude that a starving five year old child is unhappy. The only requirement for participation as a citizen in a DAO Democracy is that, somehow, the DAO Democracy be able to reasonably determine a number between 0 and 1. The annual rating by a starving five year old is unlikely to be a 1, whatever the specific mechanism that might be adopted to ascertain this fact. If we don’t exclude some citizens, perhaps we should reward some citizens by weighting them more heavily in the core metric? All animals are equal, but some animals are more equal than others? Using the core metric of a DAO Democracy to reward those who have made contributions seems redundant, for a well-run DAO Democracy will need to maintain a smoothly running economic system with well-defined property rights in order to maintain economic productivity. Such an economic system will automatically reward those who are contributing to the collective welfare without having to make additional changes to the system of governance to reward them yet again. Allowing the rich to change the system would seem to be a side effect of poor governance. A well run government would reward those who contributed to the welfare of others (by, among other things, making them rich), but would refrain from giving them further power based only on the fact that they have wealth.
Which brings us back to our initial conclusion: a DAO Democracy has one metric: the democratic collective welfare of its citizens. The welfare of all citizens is considered equally (that is, democracy is egalitarian). At some fundamental level, the happiness or hurt of one citizen is considered equal to the happiness or hurt of another. If we are considering a Darwinian competition among DAO’s, it is natural to ask if 1) a DAO Democracy or something similar will ultimately win out, or 2) whether a DAO unburdened by concerns about the well-being of humans will be more competitive.
If this is the right lens through which to view the evolution of governance, this subject is very much worth further discussion.