Peer-to-Peer Taxation
by Brian McConnell07/06/2001
Few ideas stand alone.
Behind each useful invention there are countless other inventions without which it would be impossible to build. Transistors would be useless without electricity. Without magnets, the controlled production of electricity would have never happened (nor the countless inventions dependent upon it). Without powerful, lightweight internal combustion engines, airplanes would never be able to get off the ground. Almost every invention is tangled up in a complex web of dependencies upon other inventions.
This is why some ideas fail -- not so much because they were bad ideas, but because they were introduced before other ideas were there to support them.
This has happened repeatedly throughout the history of business, particularly in the technology industry. The reason we are using the World Wide Web today has less to do with the brilliance of its inventor, and more to do with the timing of its introduction.
Had Tim Berners-Lee come up with his idea just a few years later, we might well be using Graphical Gopher instead of Internet Explorer. The whole sequence of related inventions and companies that cascaded from his text web browser would also have been different.
Perhaps this is as true for political and legal inventions as it is for technology. We've heard much hype, mostly unfulfilled, about the Internet's potential to revitalize government and democratic institutions. While some of us can now use it to pay parking tickets online, view electronic brochures for candidates, and so forth, its potential in this domain remains mostly unfulfilled. So, here's an interesting question for you to consider.
|
|
|
Download a PDF version of this article. Brian McConnell has established a Peer-to-Peer Tax web site featuring background information, FAQs, and more. There's also a newsgroup signup if you're interested in following this topic. |
|
In this article: |
How might new political systems (think of them as technologies) have developed had the timing of their introduction been different? In particular, imagine that the concept of socialism or something like it was being developed today. How might things have unfolded if it had been introduced to a world where computing and information technologies were cheap and pervasive? How would it have developed if people had unfettered access to information?
The underlying goal behind socialism was essentially to correct disparities that developed in free market economies. The basic idea was straightforward enough. Pool resources from the society, and redistribute them according to need. This was a noble idea, and many people, especially young people, rallied behind this cause. Unfortunately, the designers of this system turned to central governments as referees in the decision-making process.
What might have been an interesting system, instead gave rise to a self-perpetuating bureaucracy that robbed citizens of their property, made poor economic decisions, and thus stifled innovation. The utopian goal of creating a fairer society was hobbled by the poor performance of the command economy.
We Americans often think that we've escaped the yoke of socialism. Yet, we live with a hidden command economy, one that consumes a third to half of what we earn each year. Like our friends in the former USSR, we have little say in what happens to our money once it is taken from us. The genius of our system is that it has convinced people that they are participants in the process when in most cases they really aren't.
The wisdom of the free market system is that it relies on millions of individual participants, each of them making their own decisions about the relative worth of various products and services. Like biological systems, free markets are self-organizing systems and can operate without supervision from above (although they work best with some oversight and regulation to promote fair play).
Where decisions in a command economy are made in an inefficient, hierarchical manner, free markets operate much more like peer-to-peer networks. After all, a commodity market performs the same basic role for goods and services as Napster and Gnutella do for files. Although peer-to-peer file-sharing services are not financial markets, they create a common meeting place for people who want to exchange information. This ad hoc organization, and the ability of the decision-making "network" to reconfigure itself as needed, is what makes free markets so flexible and efficient.
The problem with the free market system is that its participants are inherently selfish in their daily decision-making. When you decide to buy or sell a product, you're primarily concerned with maximizing your profit (seller), or minimizing your outlay (buyer), not feeding the hungry or funding public transportation. If you have excess funds left over at the end of the day, and you're in a generous mood, maybe you'll write a check to your local charity, but it's not the first thing to come to mind. If you were an architect trying to design a system that would maximize the resources allocated to the common good, this would not be it.
Next:
- Peer-to-peer government?
- The social services market
- Aggregators
- The press: The market's feedback loop
- Creative destruction
- Defection from within
- The bottom line
- Building the network
